El Mundo, Inc.

National Labor Relations Board - Board Decisions

Oct 13, 1967

167 N.L.R.B. 760 (N.L.R.B. 1967)

760 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
El Mundo , Inc. and Puerto Rico Newspaper Guild
Local 225, American Newspaper Guild , AFL-CIO,
and Canadian Labor Congress , Petitioner. Case
24-RC-3016
October 13, 1967
DECISION ON REVIEW AND DIRECTION
OF ELECTION
BY MEMBERS BROWN,JENKINS, AND ZAGORIA
On March 14, 1967, the Regional Director for
Region 24 issued a Decision and Order in which he
dismissed the petition on the ground that the
newspaper dealers sought to be represented by the
Petitioner were independent contractors and not
employees of the Employer. Thereafter, in ac-
cordance with Section 102.67 of the National
Labor Relations Board Rules and Regulations, the
Petitioner filed a timely request for review on the
ground that the Regional Director erred in conclud-
ing that the dealers were independent contractors.
The Elployer filed a brief in opposition.
On May 9, 1967, the National Labor Relations
Board by telegraphic order granted the request for
review. Thereafter, the Petitioner filed a brief on
review. The Employer also filed a brief on review
and a motion for oral argument.
The Board' has considered the entire record in
this case with respect to the issues under review,'
together with the parties' briefs, and makes the fol-
lowing findings:
The Petitioner seeks to represent a unit of
newspaper dealers who, pursuant to individual writ-
ten agreements, distribute and sell the Employer's
newspaper El Mundo to stores, newsstands, and
newsboys and by means of vending machines in the
metropolitan area of San Juan, Puerto Rico.
Applicants for dealerships apply directly to the
Employer's circulation department instead of
through the personnel department. Under the terms
of these agreements, the dealers agree to sell the
newspaper El Mundo within an agency or territory
assigned by the Employer and are bound to give
their full attention to the assigned territory without
interfering with other territories. The dealers also
have the right to report any intrusions by other
dealers into their territories. Dealers are not al-
lowed to interfere with the subscription system
established by the Employer, nor solicit deliveries
of domicile subscriptions unless approved in writing
by the Employer.
Pursuant to the provisions of Section 3(b) of the Act, the Board has
delegated its powers in connection with this case to a three^member panel
2 As the record and briefs adequately present the issues and the posi-
tions of the parties , the Employer's request for oral argument is denied.
3 It does not appear that the price which the dealer charges its sub-
agents, either street vendors or carrier boys, is established by the Em-
ployer However, the record indicates that , in practice , dealers generally
charge 7 cents and I 1 cents to camer boys and 8 cents and 12 cents to
The contract sets the price which the dealers
must pay the Employer; i.e., 6 cents for the daily
edition, 10 cents for the Saturday edition. It also
provides that the Employer may increase or change
the price of the newspaper both to the dealer and to
the public whenever necessary or convenient.3
Dealers are required to pay the amount due for
newspapers sold to them every week at the end of
the week. Failure on the part of a dealer to fulfill
this obligation gives the Employer the right to ter-
minate its contract immediately and the dealer will
be obligated to make immediate payment of any
money due the Employer. The contract also pro-
vides that dealers should inform the circulation de-
partment of their daily and weekly operations in
order to determine changes in the number of papers
delivered in the territory. Failure on the part of the
dealer to provide this information and to place or-
ders for papers in timely fashion gives the Employer
the right to fix the number of newspapers sent to the
dealer, based on sales for the 3 previous days.
Furthermore, the dealers' orders for newspapers
must conform to the present demand, as credit for
unsold papers (returns) is given only when express-
ly authorized.
The dealers are not permitted, by contract, to en-
gage in the sale of competing newspapers without
written authorization.4 These contracts may be
rescinded by either party on 1 week's written
notice.
The record shows that dealers own and maintain
their own transportation facilities. The Employer
makes no deductions for income tax, social securi-
ty, workmen's compensation, or unemployment in-
surance for the dealers, and provides no fringe
benefits for them. The Employer provides no writ-
ten manual or instructions and dealers are not
required to attend any meetings. However, the Em-
ployer's supervisors train new dealers and accom-
pany them on their routes for several days, then fol-
low up with daily visits to dropoff points, where
bundles of newspapers are delivered to the dealers,
to assure that all matters relating to the distribution
of the newspaper are handled in an expeditious
manner. In this connection, the supervisors make
sure that the dealers are at the dropoff points to
receive the newspapers, to make sure that dealers
pick up exactly the number of papers sent and to
resolve any discrepancies. They also check delays
of the dealers in getting to the dropoff points and
stay at the dropoff points to receive the newspapers
in cases of delays in deliveries by the truckdrivers.
They see to it that the dealer has a substitute to
newsstands for daily and Saturday editions , respectively
4 This restriction applies to the dealers who are under contract with the
Employer The record indicates that "sub-agents ," such as newsstand
vendors and camer boys , do engage in the sale of competing newspapers,
periodicals, and other articles As for the dealers , it appears that this
restriction is enforced as the record shows that only one dealer sells
magazines - but not competing newspapers
167 NLRB No. 107
EL MUNDO, INC. 761
receive the paper, in case the dealer is absent. They
discuss with dealers any matter concerning the
newspaper distribution or the administration of the
agreements and they transmit to the dealers and fol-
low up on customer complaints.
The dealers make their own arrangements for the
hire of carrier boys and substitutes, establish their
rates of pay, and fire them without knowledge or ap-
proval of the Employer. Eight of the 14 dealers
receive a "rate adjustment" of $15 or $25 per week,
which is a credit granted by the Employer as an in-
centive to those dealers whose territories have a
small sales potential. The Employer provides
dealers with rope and recordkeeping forms, and, on
occasion, soft drinks and tickets to sports events for
distribution to their carrier boys. The dealers' total
compensation consists of the difference between
the price he pays the Employer, less the "rate ad-
justment," where applicable, and the price at which
he sells the paper to his customers, less operating
expenses. In this connection, dealers are responsi-
ble for making their own collections of money due
from their customers.
In determining the status of persons alleged to be
independent contractors, the Board applies the
"right of control" test,5 which turns essentially on
whether the person for whom the services are per-
formed retains the right to control the manner and
means by which the result is to be accomplished, or
whether he controls only the result. In the latter
situation, the status is that of an independent con-
tractor. The resolution of this question depends on
the facts in each case. No one factor is determina-
tive.
In the instant case, we are satisfied that the
dealers are employees of the Employer. We are
mindful that the evidence discloses several factors
usually present in independent-contractor relation-
ships. However, these factors are not peculiar to
such status and are not uncommon in employment
relationships. Thus, we are not persuaded by and do
not regard as controlling the facts that the dealers
provide their own equipment; that the Employer
makes arrangements for the dealerships through its
circulation department instead of its personnel de-
partment; that it does not place the dealers on its
payroll or make the usual payroll deductions for
them; that dealers hire, fire, and establish rates of
pay for their carrier boys and substitutes; that they
make their own collections; or that the Employer's
supervisors do not regularly accompany the dealers
on their routes.6 The result to be accomplished is,
or course, the circulation and sale of the Employer's
newspapers. In accomplishing this result, the
dealers herein bear slight resemblance to the inde-
pendent businessman whose earnings are controlled
by self-determined policies and personal invest-
ment, for the record shows that the dealers must
purchase their newspapers at a price fixed by the
Employer and sell them at a price effectively deter-
mined by the Employer-set retail price within terri-
tories defined and controlled by the Employer.
Moreover, the dealers' risk of loss and capacity
to draw upon personal initiative to increase their
earnings are minimized to a significant extent by the
Employer's practices and policies which are calcu-
lated to prevent competition between dealers; its
practice of adjusting the wholesale rate to compen-
sate for fluctuations within a territory affecting a
dealer's earnings; its reserved right to change uni-
laterally the price of the newspaper both to the
dealer as well as to the general public whenever the
Employer deems it necessary or convenient; and its
control over the number of newspapers which
dealers may receive.
Further, the dealers have no proprietary interest
in their routes and, on termination of the contract,
the route reverts to the Employer. The dealers are
forbidden by the contract to engage in any other
business or to distribute publications other than the
Employer's newspapers, and, if they breach any of
the terms of the agreement, the Employer has the
right to terminate the agreement immediately upon
notification. 7
On these facts, and the record as a whole, we can-
not accept the Employer's contention that its con-
trol is limited to the end to be achieved. We find that
the dealer's opportunities for profits are limited by
the Employer's regulation and control of important
aspects of the dealer's work.
Consequently, unlike the Regional Director, as
the Employer has to a large extent reserved the
right to control the manner and means, in addition
to the result of a dealer's work, we conclude that the
dealers are not independent contractors but em-
ployees within the meaning of the Act.8
The Employer also contended that the dealers are
supervisors within the meaning of the Act. We find
no merit in this contention, as the record fails to
establish that the substitutes and carrier boys hired
by the dealers are employees of the Employer.
Therefore, as it appears that the dealers do not ex-
ercise supervisory authority over any employees of
the Employer, we find that in their employment
relationship with the Employer, which is alone rele-
vant here, the dealers are not supervisors within the
meaning of the Act.9
Accordingly, we find that a question affecting
5 See Eureka Newspapers, Inc, 154 NLRB 1181, The Sacramento
Union, Inc, 160 NLRB 1515
6 Unlike the Regional Director, we do not regard the daily visits of the
Employer's four supervisors at the "drop-off points" as merely "the nor-
mal policing of the contract " The extent to which these supervisors in-
volve themselves in the manner in which these 14 dealers are engaged in
the distribution of the Employer' s newspaper indicates to us that the su-
pervisors direct the work of the dealers and are not merely policing the
Employer's contracts with them
'Sue Oil Company of Missouri, 137 NLRB 1274, 1287
" See The Sacramento Union, Inc , supra, The Vindicator Printing
Company, 146 NLRB 871, 875, 876
" Buffalo Courier-Express, Inc, 129 NLRB 932, 937, Textile Workers
Union ofAmerica, 139 NLRB 800,802
762 DECISIONS OF NATIONAL
commerce exists concerning the representation of
certain employees of the Employer within the
meaning of Sections 9(c)(1) and 2(6) and (7) of the
Act, and that a unit of the following employees is
appropriate for the purposes of collective bargain-
ing within the meaning of Section 9(b) of the Act;
All distributors of newspapers employed in the
10 An election eligibility list, containing the names and addresses of all
the eligible voters , must be filed by the Employer with the Regional
Director for Region 24 within 7 days after the date of this Decision on
Review and Direction of Election The Regional Director shall make the
list available to all parties to the election No extension of time to file this
LABOR RELATIONS BOARD
circulation department of the Employer's San Juan,
Puerto Rico , newspaper El Mundo , excluding all
other employees, professionals, office clerical em-
ployees, and supervisors as defined in the Act.
[Direction of Election 10 omitted from publi-
cation.]
list shall be granted by the Regional Director except in extraordinary cir-
cumstances Failure to comply with this requirement shall be grounds for
setting aside the election whenever proper objections are filed Excelsior
Underwear Inc , 156 NLRB 1236