Las Vegas Sun, Inc.

National Labor Relations Board - Board Decisions

Jul 30, 1975

219 N.L.R.B. 889 (N.L.R.B. 1975)

LAS VEGAS SUN, INC. 889
Las Vegas Sun, Inc . and General Sales Drivers, Deliv-
ery Drivers & Helpers Local No. 14, affiliated with
the International Brotherhood of Teamsters, Chauf-
feurs, Warehousemen and Helpers of America, Pe-
titioner. Case 31-RC-2910
July 30, 1975
DECISION ON REVIEW AND ORDER
BY CHAIRMAN MURPHY AND MEMBERS KENNEDY
AND PENELLO
On November 26, 1974, the Regional Director for
Region 31 issued a Decision and Direction of Elec-
tion' in the above-entitled proceeding. Thereafter, in
accordance with Section 102.67 of the National La-
bor Relations Board Rules and Regulations, Series 8,
as amended, the Employer filed a timely request for
review of the Regional Director's decision, contend-
ing that the Regional Director erred in failing to find
that the-home delivery dealers are independent con-
tractors and not employees within the meaning of
Section 2(3) of the Act, and that the petition should
therefore be dismissed.
By telegraphic order dated April 7, 1975, the Na-
tional Labor Relations Board granted the request for
review and stayed the election pending decision on
review.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the Na-
tional Labor Relations Board has delegated its au-
thority in this proceeding to a three-member panel.
The Board has considered the entire record in this
case, including the briefs of the parties and makes
the following findings:
The Las Vegas Sun, Inc.,2 is a Nevada corporation
with its principal office and place of business in Las
Vegas, Nevada, where it is engaged in the publication
and distribution of daily and Sunday editions of a
newspaper known as "The Las Vegas Sun." The
Company's circulation of the paper is handled by its
circulation department through the use of city home
delivery dealers who service the Las Vegas metropol-
itan area, country dealers who operate in the remain-
der of Nevada and parts of Arizona and California,
street sales dealers who service newsracks and com-
mercial establishments , and out-of-state dealers.
The dealers sought herein are the 24 home delivery
dealers.; Dealers are assigned territories geographi-
The appropriate unit is : "All home delivery dealers ; excluding all other
employees , including temporary employees , all country dealers, street sales
dealers , guards, watchmen and supervisors as defined in the Act , as amend-
ed."
2 Herein also referred to as the Employer, the Company , or the Sun.
cally defined by the Sun, which they may not alter or
exchange without the prior consent of the Company.
However, the dealers may and have temporarily ex-
changed routes within their territories without having
to consult with the Company.
In order to perform their duties, dealers purchase
and maintain their own transportation vehicles
which do not bear any insignia identifying them with
the Sun and purchase their own newsracks. They also
purchase their own supplies, usually from the Sun,
although some purchase their supplies elsewhere.
For the actual delivery of the newspapers, a dealer
will either deliver them himself or employ "carriers."
Each carrier operates under a contract with his deal-
er. These contracts, along with an optional carrier
bond contract, are supplied to the dealers by the Sun.
The Sun also advertises for carriers at no charge to
the dealers; however, the dealer is free to employ
whomever he wishes and is solely responsible for the
hire and payment of his carriers. At one time, the
Sun required a minimum pay for carriers, but that
policy is no longer in effect.
Each dealer purchases his newspapers from the
Sun at a rate set by the paper. The rates charged the
dealers vary and are determined on the basis of a
number of factors, including the amount of circula-
tion in a territory, the distance that a dealer must
travel to service his territory, and the "loss factor" °
involved in servicing a territory. Dealers are not giv-
en any credit for unsold papers and must also absorb
the loss for stolen or damaged papers. In the event of
property damage, the dealer or his carrier and not
the Sun is to bear the liability. Dealers also bear the
loss for nonpaying subscribers and, unless the carrier
is bonded, for the loss sustained by the carrier's fail-
ure to pay his dealer. A dealer' s income is normally
not supplemented by subsidies, bonuses, and the
like; however, when a dealer is assigned a large terri-
tory with relatively few subscribers, or is assigned a
territory with a high loss factor, he is given a subsidy
to make the territory more attractive.
Dealers are free to obtain as many subscribers- as
they wish in their respective territories, either
through their own methods or by use of a Company-
operated solicitation service for which the dealer
pays a fee for every subscriber so obtained. However,
a dealer has the right to instruct the Company to not
solicit his territory. A dealer also has the right to re-
fuse to service a subscriber when that subscriber is in
arrears on his bill or lives in an inaccessible area.
The Sun suggests a retail subscription price for the
dealers to charge their customers and, while they are
3 Hereinafter referred to as the dealers.
4 The "loss factor" is determined by the number of subscribers who fail to
pay their bills
219 NLRB No. 160
890 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
not required to sell at this price, all but one of the
dealers in fact do so. The Company also provides
"Order For Service" forms on which the suggested
retail price is printed.
Subscribers may pay their bills directly to the Sun
or to the dealer or carrier who uses cards supplied by
the Company for door-to-door collection with the
subscriber's bill noted. When payments are made di-
rectly to the Company, the dealer's account is cred-
ited with his portion on a monthly basis. If a subscri-
ber pays the dealer directly by check, these checks
are usually made out to the Sun and the dealer will
use them in paying his bill with the Company. If the
dealer is paid in cash, he pays the Company whatever
he owes and retains the balance.
Dealers are required to be bonded. The Sun retains
the bonding company itself and passes the cost on to
the dealer, or the dealer has the option of posting a
cash bond. The Sun makes no deduction for social
security or Federal withholding. It does, however,
permit the dealers to participate in a group insurance
plan offered to its regular employees, but the dealers,
unlike the employees, must pay their own premiums.
The Sun has no pension, holiday, or vacation plan
for the dealers. Whenever a dealer is sick or on vaca-
tion, it is his responsibility to find a replacement.
There is a 6 a.m. delivery deadline imposed by the
Sun. In order to meet the deadline, there is a "load-
ing order" at the Sun's premises which is determined
by the Sun according to the distance each dealer has
to travel to complete his route within the deadline.
During the day, dealers are required to call in at 8:30
and 11 a.m. to be advised of any complaints. It is
then the dealer's responsibility to correct the prob-
lem. If a dealer fails to call in, the Company will call
him, and if a complaint persists, the circulation man-
ager will call in the dealer to discuss the problem. It
should be noted that when a customer calls in a com-
plaint he or she is usually informed that the dealer is
an independent contractor, but the complaint will be
passed on to him. The Company also encourages the
dealers to maintain direct communication with their
customers.
Dealers are required to maintain route lists which
must be turned in to the Company twice a year. And,
whenever the paper is running behind, the Sun re-
quires that the dealers come in to "tie out inserts" for
which the dealers are separately compensated .6
Contact between the dealers and their supervisor is
S Approximately 5 percent of the customers make their payments directly
to the Sun.
6 It would appear that this additional work is an infrequent occurrence.
The record is unclear as to whether this requirement was one voluntarily
entered into as the result of a suggestion by one of the dealers or if it was
imposed by the Company's previous circulation manager.
limited to biweekly meetings called by the circulation
manager at which sales, service, circulation, and car-
rier promotion are discussed. In the past, attendance
at these meetings was mandatory, but that no longer
appears to be the case. Dealers are permitted to have
outside jobs 7 and at least one dealer handles a com-
peting newspaper. They are permitted to dress as
they choose and may set their own work schedules.
Finally, a dealership is not assignable without the
consent of the Company, and the relationship be-
tween the Sun and a dealer is terminable upon 30
days' written notice.
In the instant case, while we realize that there are
certain aspects of the relationship between the Sun
and the dealers which may support a conclusion that
the dealers are employees, these factors are, in our
view, outweighed by the evidence demonstrating in-
dependent contractor status.
Thus, in the uniform contracts that were at one
time used by the Sun as the base for its relationship
with the dealers, the dealers were specifically de-
scribed as independent contractors.r Additionally,
whenever the Company receives a complaint from
one of its subscribers, it informs the customer that
the dealer is an independent contractor to whom the
complaint will be passed on. Moreover, as one dealer
testified, they consider themselves independent con-
tractors "for tax purposes." Also, it is the dealer, and
not the Company, who is liable for any property
damage that occasionally results during the delivery
of a newspaper.
It is also clear that in the actual mechanics of the
delivery, aside from the delivery deadline imposed by
the Company, it is the dealer who determines the
route, dress, time off, substitute, and help to be used
in the delivery. The dealer also determines whether
carriers are needed, and selects those he will employ;
he sets their wages and decides whether or not they
will be bonded.
It is the dealer's responsibility to correct any com-
plaints received by the Company and he is, in fact,
encouraged to have a line of communication with his
customers so that he may receive complaints directly.
The dealer is free to arrange the method and
means of payment by a subscriber and he is free to
set a retail price different from that suggested by the
Sun. In addition, he can refuse to service a customer
who defaults or is in arrears on his bill and may re-
fuse to service a customer whose location is inacces-
sible. It is the dealer who determines hotw, many pa-
pers he will need and he-may increase or decrease his
I It appears that two or three dealers currently hold otherjobs
S While there are currently no'wntten contracts in effect, the last one
having been entered into in 1969 , the dealer witnesses testified that they still
use the expired contracts as the basic guide of their rights and responsibili-
ties with respect to the Sun.
LAS VEGAS SUN, INC.
draw as he sees fit. Finally, the dealer is free to have
other employment and may carry other papers if he
so chooses.
In our view, the factors involving profit-and-loss
opportunities here require a finding of independent
contractor status. A dealer determines how many pa-
pers he requires for which he pays-the Company. If
he is unable to sell all of his papers, he cannot return
the unsold papers and must bear the loss incurred.
He is solely responsible for lost, stolen, or damaged
papers and, as noted earlier, he is liable for any prop-
erty damage that occurs in their delivery. Unless he
bonds his carriers, he suffers the loss resulting from
their failure to pay. He bears the prime responsibility
for the collection of his subscribers' bills and absorbs
any losses from their failure to pay. When a dealer is
paid directly by a customer, he retains the money,
paying the Company what it is owed and keeping the
balance.
Regarding earning potential, a dealer is free to ob-
tain as many subscribers in his territory as his own
initiative and ability can provide.- Should he use the
Sun's subscriber solicitation service, he must pay the
Sun for any customers so obtained. He may also bar
the Company from sending its solicitors into his ter-
ritory.
The bonding requirement proposed by the Compa-
ny is negotiable and the dealer has the option of us-
ing the Company's bonding service or posting a cash
bond,
.. Thus, it is clear that a dealer's income is based on
the difference between the price at which he sells the
papers, less the price- he pays-the4-Company - for-the
papers and the labor costs and losses incurred. Also
evident is the fact that it is the dealer, and not the
Company, who makes the essential business deci-
sions involved in the dealership.
891
While a dealer does not have a proprietary interest
in his dealership, he nevertheless makes a substantial
investment in the operation thereof. He owns, oper-
ates , and maintains his own vehicles and he buys the
newsracks that are used in --his territory. He must-also
purchase all of his equipment and supplies.
A careful review of the facts herein convinces us,
and we find, that the dealers are not "employees"
within the meaning of the Act, but are independent
contractors who, in performing their tasks, control
the manner and means of their performance.9 The
limited control which the Company exercises is di-
rected toward accomplishing the ultimate goal com-
mon to both the dealer and the Company, i.e., the
sale and delivery of the newspapers to the home of
the subscriber at an hour sufficiently early to satisfy
the customer. Thus, the Company's delivery dead-
line, its complaint department, and its biweekly
meetings with dealers are all efforts directed toward
the accomplishment of that ultimate goal and are not
the type of "manner and means" control necessary
for a finding of employee status.10
As we Piave concluded that the dealers sought
herein are independent contractors , we shall dismiss
the petition.
ORDER
It is hereby ordered that the petition herein be, and
it hereby is, dismissed.
MEMBER KENNEDY , concurring:
, _Irconcur in the result.
9Cf. Douglas Brown. at aL v,,N.L.R.B., 462 F .2d 699 (C.A. 9, 1972):
N L R. B. v. A S Abell Company and`i bns®/lAvi i PuWhcations, 327
F.2d I (C.A. 4. 1964): The Denver Post, Inc, 196 NLRB 1167 (19 w
10See The Beacon Journal Publishing Company, 188 NLRB 218 (1971 ): E7-__
Mundo, Inc. 167 NLRB 760 (1967).