A. S. Abeolo Publishing Co.

National Labor Relations Board - Board Decisions

Jun 14, 1984

270 N.L.R.B. 1200 (N.L.R.B. 1984)

DECISIONS OF NATIONAL LABOR RELATIONS BOARD
The A. S. Abell Publishing Company and Truck
Drivers and Helpers, Local Union No. 355, af-
filiated with the International Brotherhood of
Teamsters, Chauffeurs, Warehousemen and
Helpers of America, Petitioner. Case 5-RC-
12056
14 June 1984
DECISION ON REVIEW AND ORDER
BY CHAIRMAN DOTSON AND MEMBERS
HUNTER AND DENNIS
Upon a petition duly filed under Section 9(c) of
the National Labor Relations Act, a hearing was
held 14-16 and 28-29 September 1983. On 18 Octo-
ber 1983 the Regional Director for Region 5 issued
a Decision and Order dismissing the instant peti-
tion, finding that the petitioned-for district advisors
are supervisors within the meaning of Section 2(11)
of the Act. The Regional Director found that the
individuals referred to herein as hawkers are em-
ployees of the Employer who are supervised by
the district advisors and not independent contrac-
tors. Thereafter, in accordance with Section 102.67
of the National Labor Relations Board Rules and
Regulations, the Petitioner filed a timely request
for review of the Regional Director's decision,
contending that the district advisors are not super-
visors within the meaning of the Act because the
hawkers are independent contractors and not em-
ployees of the Employer. The Employer filed a
statement in opposition to the Petitioner's request
for review.
By telegraphic order, dated 25 January 1984, the
Board granted the Petitioner's request for review.
The National Labor Relations Board has delegat-
ed its authority in this proceeding to a three-
member panel.
The Board has considered the entire record in
this proceeding and finds, in agreement with the
Petitioner, that the hawkers are independent con-
tractors and, therefore, that the district advisors are
not supervisors within the meaning of the Act.
The Employer, a Maryland corporation with its
principal place of business in Baltimore, publishes,
circulates, and distributes The Sun, The Evening
Sun, and The Sunday Sun newspapers. The peti-
tioned-for district advisors work in the street sales
section of the Employer's circulation department,
which is also comprised of six other sections.
There are 82 district advisors who report to 6 stip-
ulated supervisors.
Each district advisor receives newspapers at the
Employer's facility and loads them into a truck
provided by the Employer. He then delivers them
within a defined territory to stores, newspaper
270 NLRB No. 181
racks, and hawkers. Each receives a salary plus a
commission consisting of the difference between
the wholesale price paid by the district advisor to
the Employer for each newspaper and the amount
paid by the store, hawker, or rack customer. Also,
each district advisor receives vacation and health
insurance benefits and unemployment insurance
coverage.
The 172 hawkers sell newspapers to the public at
places such as on street corners, in front of office
buildings and churches, and in buses. A hawker's
relationship with the Employer and a district advi-
sor may commence in various ways. Thus, some
contact the Employer, who gives the potential
hawker's name to the district advisor in whose ter-
ritory the potential hawker wishes to sell newspa-
pers. Others contact district advisors directly. In
other instances, hawkers find replacements for
themselves when they decide to stop selling news-
papers. In all cases, the district advisor decides
whether any individual will be used as a hawker.
Furthermore, district advisors may decide unilater-
ally to cease delivering newspapers to hawkers.
There are no written agreements governing the re-
lationship between hawkers on the one hand and
district advisors or the Employer on the other.
The location at which a hawker sells newspapers
appears to be determined at the time of the com-
mencement of the district advisor-hawker relation-
ship in most cases. For example, an individual will
approach a district advisor and tell the district ad-
visor he believes he can sell newspapers at a cer-
tain location. The district advisor then decides
whether to deliver newspapers to that individual
based on his assessment of the potential profitabil-
ity of selling newspapers at that location. However,
in a few instances, district advisors have told hawk-
ers to change locations, for example, when subway
construction changed the flow of pedestrian traffic
in downtown Baltimore. Also, some hawkers who
sell newspapers at intersections have been told by
district advisors to stand on different corners at dif-
ferent times of the day in order to maximize their
contact with pedestrians. On the other hand, hawk-
ers most often are permitted to choose the corner
on which they sell newspapers. Furthermore,
hawkers often determine the number of newspapers
delivered to them by telling the district advisors
how many they believe they can sell. Although
hawkers often are present when their district advi-
sors deliver the newspapers, district advisors some-
times leave newspapers in a nearby rack if the
hawker is not present at the time of delivery. Nor-
mally, district advisors meet with the hawkers at
least twice a day, once to deliver the newspapers
and once to collect money received from the sale
1200
A. S. ABELL PUBLISHING CO.
of the newspapers. Some district advisors meet
hawkers more frequently in order to deliver later
editions of the newspaper. On these occasions, dis-
trict advisors have an opportunity to observe the
performance of the hawkers.
Also in regard to the district advisors' contact
with and control over the hawkers, a stipulated su-
pervisor testified that, when he was a district advi-
sor 15 years prior to the hearing, he had instructed
hawkers how to sell newspapers on buses, how to
ensure that they had enough change before enter-
ing a bus, and how to sell to drivers of automobiles
in traffic. The same supervisor also testified that
currently, when district advisors are hired, he tells
them to tell the hawkers "to keep sales up," "to
keep their manners on the right approach for the
public," to be on time, and that there should be
"no goofing off, running away from the corner."
Occasionally, hawkers' customers complain to the
Employer about the hawkers' performance. In such
cases, the Employer informs the appropriate dis-
trict advisor of the complaint and the district advi-
sor resolves the situation with the hawker. As
noted above, district advisors may unilaterally
cease delivering newspapers to hawkers, but no
disciplinary actions short of termination of the dis-
trict advisor-hawker relationship are taken, and
there are no work rules.
Hawkers receive as compensation the difference
between the cost per newspaper charged by the
district advisors and the price at which each news-
paper is sold to the public. Each hawker is given a
"price card" containing the price charged by the
district advisors. The price charged to the public
by the hawkers is the cover price established by
the Employer, with the exception of newspapers
sold by hawkers to patients in hospitals, which are
sold for 5 cents more than the cover price. Usually,
district advisors do not charge hawkers for the
newspapers when they are delivered to the hawk-
ers. Rather, hawkers pay the district advisors from
the proceeds from sales on a daily or more fre-
quent basis, or the district advisors keep records of
the number of newspapers delivered over a longer
period and collect money from the hawkers less
frequently. Hawkers are not required to keep or
submit to the Employer any financial records and
they do not pay for newspapers they are unable to
sell.
Hawkers are not compensated for lost or stolen
newspapers. However, most hawkers receive a ter-
ritorial allowance, the purpose of which is to com-
pensate hawkers who sell newspapers in less profit-
able locations. The territorial allowance consists of
a payment by the Employer, the amount of which
is determined by the district advisor. Territorial al-
lowance payments range from $1 to S30 per week.
Hawkers receive no vacation, sick leave, holiday,
or unemployment compensation benefits, and no
amounts are withheld from their compensation for
income or social security taxes, but they appear to
be covered by the Employer's workmen's compen-
sation insurance. '
In order to protect district advisors from losses
that could be incurred if a hawker ceased selling
newspapers at a time when the hawker owed
money to the district advisor, and in order to en-
courage hawkers to continue selling the Employ-
er's newspapers and to perform better, the Employ-
er maintains cash bonds for many hawkers. Funds
for the bonds are deducted from the territorial al-
lowances described above2 and are kept by the
Employer in the name of the hawker. A hawker
may withdraw portions of the bond, but only with
the approval of his district advisor. The Employer
keeps written records regarding the bonds and ter-
ritorial allowances.
Most hawkers are permitted to sell publications
of the Employer's competitors. The hawkers do
not wear uniforms and there is no dress code. Most
do not wear any articles of clothing bearing the
Employer's insignia, but some wear buttons, hats,
shirts, or coin aprons with the Employer's insignia.
Hawkers have no proprietary interest in the areas
in which they sell newspapers, and their relation-
ship with the Employer and the district advisors
requires no investment of money.
As noted above, the Regional Director found
that the hawkers are employees of the Employer
and that the district advisors who use hawkers are
supervisors of the hawkers. Relying on the evi-
dence that the district advisors control the hiring,
training, and location of the hawkers as well as the
manner in which they sell newspapers, and also re-
lying on the evidence that the district advisors are
involved in resolving customer complaints about
hawkers, the Regional Director concluded that the
I The record is unclear regarding the issue of whether the hawkers are
covered by the Employer's workmen's compensation insurance. Thus. al.
though hawkers are not listed as a covered employee classification in the
Employer's workmen's compensation insurance policy, the Employer's
assistant director of circulation testified that hawkers and home delivery
carriers jointly are referred to as "newsboys" in the policy. Furthermore,
the record contains evidence regarding only one claim by a hawker or a
hawker's family for workmen's compensation benefits. In that case, the
Employer appears to have taken the position at the time the claim was
made that the family of the deceased hawker was not entitled to such
benefits because the hawker was an independent contractor, but the State
Workmen's Compensation Commission ruled that he was an employee.
The commission awarded benefits to the hawker's widow, and there is
evidence that benefits were paid to her by the Employer's insurance com-
pany.
' Some hawkers' bonds may consist of money withheld from the
hawkers' profits by the district advisors, but the record is not clear on
this point.
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DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Employer controls the manner and means by
which newspapers are sold by the hawkers. 3 Ac-
cordingly, and inasmuch as the Petitioner is not
willing to proceed to an election in a unit consist-
ing only of the district advisors who do not use
hawkers, the Regional Director dismissed the peti-
tion. For the following reasons, we disagree with
the Regional Director and we shall reinstate the
petition.
The Board applies a "right of control" test when
determining the status of persons alleged to be in-
dependent contractors.4 If the alleged employer re-
tains the right to control the manner and means by
which the results are to be accomplished, the
person who performs the service is an employee. If
only the results are controlled, the person perform-
ing the services is an independent contractor. The
Board's determination of which type of control is
retained by the alleged employer turns on the par-
ticular facts of each case.
In this case, as is typical in most cases involving
similar issues of employee-independent contractor
status, there are factors present that support the po-
sition of each party. Thus, in the instant case, fac-
tors tending to support a finding of employee status
include the open-ended duration of the hawkers'
relationship with the Employer, the Employer's
unilateral determination of the wholesale and retail
prices, the lack of any proprietary interest or in-
vestment by the hawkers, and the absence of any
risk of loss resulting from unsold newspapers. Also,
the Employer's control of the hawkers is indicated
by the district advisors' role in the commencement
and termination of the hawkers' involvement with
the Employer's product, the district advisors' de-
termination of the location at which some hawkers
sell newspapers, and their handling of customer
complaints regarding the hawkers' performance. In
addition, the Employer itself exercises some con-
trol over the hawkers by granting territorial allow-
ances, maintaining cash bonds for the hawkers, and
keeping records of both. However, on closer exam-
ination, many of these factors are of little probative
value. For example, the district advisors' involve-
ment in training the hawkers, determining the
hawkers' locations, and handling customer com-
plaints regarding the hawkers is infrequent; for the
most part, the district advisors' contact with the
hawkers is limited to the delivery of newspapers
and the collection of money. As for the Employer's
payment of territorial allowances and its mainte-
nance of cash bonds, although these facts show
3 In so concluding, the Regional Director relied on Oakland Press Co.,
249 NLRB 1081 (1980); Philadelphia Newspapers, 238 NLRB 835 (1978);
and A. S. Abell Co., 185 NLRB 144 (1970).
4 Fort Wayne Newspapers, 263 NLRB 854 (1982).
some exercise of control by the Employer over the
hawkers, we note that these financial arrangements
are quite different from those usually found in em-
ployment relationships.
On balance, we conclude that the indicia of em-
ployee status noted above are outweighed by the
factors supporting a finding that the hawkers are
independent contractors. First, and most signifi-
cant, most hawkers are permitted to sell the publi-
cations of the Employer's competitors, and many
do so. Also, the major portion of the income of
most hawkers, and the only income of many hawk-
ers, is the profit made on the sale of newspapers.
The amount of their income therefore depends on
the number of newspapers they sell which, in turn,
depends on their own efforts to increase sales and
their own determination of the number of newspa-
pers delivered to them. The hawkers also bear the
risk of loss resulting from any lost or stolen news-
papers. Also with regard to their compensation, the
Employer withholds no income or social security
taxes and grants no benefits to the hawkers. As for
the Employer's control over the hawkers, most of
the hawkers' activities are not directly supervised
or even observed by the district advisors or any of-
ficial of the Employer, there are no work rules or
dress codes, and most hawkers wear no employer
insignia.
Based on the foregoing, we find that the Em-
ployer does not control the manner and means by
which the hawkers' selling of newspapers is accom-
plished and that the record establishes that the
hawkers are independent contractors. In so finding,
we emphasize particularly that, with the exception
of territorial allowances that are paid to most but
not all hawkers, it is clear that the hawkers' income
derived from their sale of the Employer's newspa-
pers consists of the difference between the price
paid to them by customers and the price they pay
their district advisors, minus the wholesale value of
any lost or stolen newspapers. 5 Also significant to
our finding of independent contractor status is the
ability of most hawkers to sell publications of the
Employer's competitors. Furthermore, there is no
direct supervision during much of the time when
hawkers are selling newspapers, and hawkers have
discretion regarding where they locate themselves
in most cases. Accordingly, contrary to the Re-
gional Director, we conclude that the hawkers are
independent contractors and not employees within
the meaning of Section 2(3) of the Act 6 and, con-
' See Fort Wayne Newspapers, supra.
e We find the cases relied on by the Regional Director to be factually
distinguishable. The individuals alleged to be independent contractors,
and whom the Board found to be employees in Oakland Press, supra;
Continued
1202
A. S. ABELL PUBLISHING CO.
sequently, that the district advisors are not supervi-
sors within the meaning of Section 2(11) of the Act
because they do not supervise employees.
Accordingly, we shall reinstate the petition and
remand this case to the Regional Director for fur-
ther processing.7
Philadelphia Newspapers, supra; and A. S Abell Co., supra, were home de-
livery carriers with specified routes for the delivery of newspapers to the
homes of subscribers, and not, as in the instant case, hawkers who sell to
the general public. Also, the facts in those cited cases established signifi-
cantly more control by the employers over the manner and means by
which the carriers accomplished the result of home delivery than the
control exercised by the Employer over the hawkers in the instant case.
I In dismissing the petition on the ground that the district advisors are
supervisors, the Regional Director also noted that the Employer had
raised the alternative argument that if the district advisors were found to
be employees the requested unit is inappropriate because it excludes cer-
ORDER
The petition is reinstated and the case is remand-
ed to the Regional Director for further appropriate
action.
tain other employees. However, the Regional Director did not reach the
unit scope issue in his Decision and Order. The Employer did not request
review of the Regional Director's failure to reach the issue, but it does
contend, in its statement in opposition to the Petitioner's request for
review, that a unit limited to district advisors would be inappropriate. In
these circumstances, we deem it appropriate to remand the case to the
Regional Director for a decision on the unit scope issue absent agreement
by the parties.
1203