Long Beach Press-Telegram

National Labor Relations Board - Board Decisions

Oct 11, 1991

305 N.L.R.B. 412 (N.L.R.B. 1991)

412
305 NLRB No. 46
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
1 The Board, however, did not reach the issue of whether the area
managers and district advisors are statutory supervisors of the car-
riers as it denied review of the Acting Regional Director’s finding
that the carriers are independent contractors. Member Oviatt, dis-
senting in part, also would have granted review as to the Acting Re-
gional Director’s finding that the carriers are independent contrac-
tors.
2 237 NLRB 205 (1978).
Twin Coast Newspapers, Inc. d/b/a Long Beach
Press-Telegram and Los Angeles Newspaper
Guild, Local 69, AFL–CIO, Petitioner. Case
21–UC–337
October 11, 1991
DECISION ON REVIEW AND ORDER
BY CHAIRMAN STEPHENS AND MEMBERS
DEVANEY AND RAUDABAUGH
On August 31, 1989, the Acting Regional Director
for Region 21, issued a Decision and Clarification of
Bargaining Unit in the above-entitled proceeding, in
which he found that the area managers and district ad-
visors employed in the Employer’s home delivery de-
partment are not managerial employees, nor are they
statutory supervisors of the Employer’s newspaper car-
riers. The Acting Regional Director further found that
the carriers are independent contractors, that the area
managers are not supervisors of the district advisors,
but that the photo editor and regional editor are statu-
tory supervisors and, therefore, excluded from the bar-
gaining unit.
Thereafter, in accordance with Section 102.67 of the
Board’s Rules and Regulations, the Employer filed a
timely request for review of the Acting Regional Di-
rector’s decision on the managerial and supervisory
issues with respect to the area managers and district
advisors, and the independent contractor issue. The
Board, by Order dated March 25, 1991, granted the
Employer’s request for review, solely with respect to
the managerial status of the area managers and district
advisors.1
The Board has considered the decision and the entire
record in this case in light of the Employer’s conten-
tions and the parties’ briefs, and has decided to affirm
and adopt the Acting Regional Director’s Decision and
Clarification of Bargaining Unit, for the reasons set
forth therein.
The Acting Regional Director’s decision (relevant
portions of which are attached as an appendix) finds
that the duties and responsibilities of the area managers
and the district advisors are either subjected to inde-
pendent investigation by their superiors, or performed
within a narrow framework of established company
policy from which they have no authority to deviate.
Significantly, as detailed in the decision, there is no
evidence that, in performing their various duties and
responsibilities, these employees have the authority
substantially to affect the economic terms of employ-
ment of the carriers. Thus, unlike the county district
supervisors in Eugene Register Guard,2 the Employer’s
area managers and district advisors do not negotiate
the terms of carrier contracts or determine the number
of carrier positions to be filled; do not independently
determine if and when routes should be split or con-
solidated or extend credit to carriers; and although they
can recommend that a carrier’s compensation be in-
creased, such recommendations are not accepted rou-
tinely but are independently reviewed by their superi-
ors. We also note that the area managers and district
advisors play no role in collections, as the Employer
does its own billing; nor do they establish the rates at
which carriers purchase papers, as the carriers do not
buy and resell the Employer’s papers. Thus, the Board
agrees with the Acting Regional Director that the area
managers and district advisors do not formulate or de-
velop the Employer’s policies or effectuate them with
sufficient independent judgment or discretion in per-
forming their duties and, therefore, they are not mana-
gerial employees.
ORDER
The National Labor Relations Board adopts the De-
cision and Clarification of Bargaining Unit of the Act-
ing Regional Director.
APPENDIX
Area Managers and District Advisors
The Employer is engaged in the business of publishing a
daily newspaper in Long Beach, California. It provides home
delivery to subscribers as part of its operation. This function
is the responsibility of the home delivery department within
the circulation department.
The Employer’s home delivery department is structured in
a highly stratified manner to ensure timely newspaper deliv-
ery. Thus, a home delivery manager, Jack Borland, is in
charge of the department. His supervisor is Patrick Elster,
vice-president-circulation. Three regional home delivery man-
agers (RHDMs herein), with responsibility over geographic
areas, report to Borland. The newspaper delivery area is fur-
ther divided into seven ‘‘areas,’’ each of which has an area
manager (‘‘AMs’’); these managers report to one of the
RHDs with responsibility over the particular area. The areas
are further divided into districts, each of which is to have a
district advisor (‘‘DA’’). The smallest distribution unit, each
of which is part of a district, is the route. Actual newspaper
delivery within these routes is the primary responsibility of
the approximately 400–430 carriers or distributors. There are
seven ‘‘satellite’’ offices which AMs and DAs operate out of
and where carriers pick up the newspapers for delivery.
The present structure was instituted in early 1983. In a
process it referred to as ‘‘a.m. conversion,’’ the Employer
discontinued afternoon home delivery and restructured its
distribution system. Prior to conversion, the responsibility for
overseeing carrier delivery rested with the district managers.
413LONG BEACH PRESS-TELEGRAM
Preexisting district boundaries were realigned after conver-
sion and the seven ‘‘areas’’ were superimposed over districts.
The new classifications of area manager and district advisor
were created in connection with this reorganization. In addi-
tion to that of district manager, the relief district manager
classification was abandoned. Also, as a result of conversion,
the number of full-time positions was decreased, with AMs
the only positions to remain on this basis. Individuals who
worked as full-time district managers, however, did not suf-
fer any reduction of hours or benefits, as the number of full-
time positions was actually reduced by attrition. Former dis-
trict managers were gradually assimilated into the new posi-
tions, either becoming AMs or DAs. Since the DA positions
are to be filled by employees working less then 40 hours per
week, the full-time DAs are sometimes referred to as ‘‘area
managers in waiting.’’ Final boundary adjustments were
made in the summer of 1987, at which time the Union and
the Employer agreed to a one-time bidding process to allow
AMs and DAs affected by the reorganization to bid for areas
and districts of their choice.
Distribution of the newspaper is performed by the carriers,
who are signed to a ‘‘Newspaper Distribution Agreement’’
with the Employer. By entering into such agreement, they
agree to deliver promptly to each subscriber a complete
newspaper in a dry condition and in a convenient and proper
place; not to stamp upon, insert within, or attach to copies
of the newspaper any material not furnished by the Em-
ployer; to pay a security deposit; to hold the Employer harm-
less from any liabilities, claims, costs, taxes, or expenses in-
cidental to and arising out of the delivery and sale of the
newspapers; to provide workmen’s compensation insurance
for the benefit of its employees; to maintain adequate auto-
motive insurance; to pay all payroll taxes, and all other state
and federal employee contributions that are measured by
compensation paid by the distributor; to file its own tax re-
turns on the basis of his/her status as an independent con-
tractor and to reimburse the Employer for any and all taxes,
payments or contributions it may be required by law to pay
on the distributor’s behalf; and, to provide any pay for a sat-
isfactory substitute whenever it is unable to fulfill the terms
of the agreement. The Employer, in turn, agrees to suggest
and give advice and assistance concerning matters of pro-
motion, sale, distribution, collection, and subscriber service.
Both parties agree, as stated in paragraph 1 of Section C,
that:
1. The Distributor is a self-employed independent
contractor, not an employee, for federal tax purposes.
The manner and means to be employed by the Dis-
tributor in the operation of his/her business are matters
entirely within the Distributor’s authority and discre-
tion. The Distributor is free to engage in other business
activities, including the delivery or sale of other publi-
cations or products, so long as such other business ac-
tivities do not interfere with the performance of this
agreement or violate the provisions of paragraph A.4 or
A.6 above. The Distributor will be responsible for all
costs of conducting and operating his/her business and
will comply with all applicable laws.
Portions of the Agreement have become obsolete due to
changes in the Employer’s operations, namely, those that
pertain to the manner of carrier compensation and customer
billing.
Carrier compensation is based on a formula which seeks
to guarantee the equivalent of a $4.30/hr. wage rate. A Route
Profit Analysis is prepared by an AM or a DA, usually when
the route ‘‘turns over,’’ for the approval of the RHDM. A
‘‘profit’’ is calculated based on the number of newspapers
expected to be delivered. Expenses, i.e., supply charges, dis-
tribution copy, and auto expenses, are subtracted to arrive at
a net profit. If this net figure is less than the equivalent of
$4.30/hr, a ‘‘subsidy’’ is added. The subsidy is given, and
on occasion increased, in order to make the route sufficiently
profitable for a carrier to take. An AM or a DA can rec-
ommend that this subsidy be increased. This recommenda-
tion, however, is closely scrutinized by the RHDM who con-
ducts his own independent investigation to determine if the
increase is warranted; the RHDM must also decide if the par-
ticular subsidy is appropriate in light of overall budgetary
considerations. The home delivery manager further reviews
the recommendation, observing maps of the rute in question,
talking to the RHDM as necessary, and touring the route if
desired. No withholdings are made from the payments to the
carriers, which are listed in year-end tax forms as ‘‘direct
sales . . . to a buyer (recipient) for resale.’’ Carriers receive
no other company compensation or fringe benefit.
All billing is done by the Employer by mail. Carriers are
not charged for subscriber delinquencies. They are not ex-
pected to solicit new subscribers, but if they are responsible
for a ‘‘new start,’’ distributors receive the premium, or
‘‘finder’s fee,’’ any other person responsible for a new start
receives.
Carriers are free to choose the manner in which they will
deliver the papers. They own their automobiles and carry
their own insurance. They can hire employees or use others
to help them make deliveries. Distributors can allow another
person to substitute for them, but these substitutes must be
acceptable to the Employer; if substitutes perform the work,
carriers still receive the payment. Although the Employer
provides a detailed route list, it is up to the carrier to follow
or disregard the order of distribution contained in the list.
Carriers can choose to place the newspapers in bags even
though not required by the Employer. They can also place
the inserts in the newspapers at the satellite facility or in
their cars. Subscribers can make special service requests to
the Employer; carriers can contact the customer to make their
own arrangements regarding delivery of the newspaper. Car-
riers are free to deliver other newspapers as long as it does
not interfere with the delivery of the Employer’s newspaper.
Carriers work the route(s) they have been contracted to
work. They cannot buy, sell, or otherwise transfer their
route(s). The Distribution Agreement provides that the rights
and obligations under the agreement may be assigned subject
to the Employer’s approval, which cannot be unreasonably
withheld. Distributors cannot split or consolidate routes.
Carriers must report to the satellite office to pick up the
newspapers. There is no companywide arrival time, although
all papers must be delivered by a specified time. If delivery
problems have occurred, the DAs, AMs, or RHDMs can set
the arrival time for carriers within the particular area. They
are not required to return to the office at the completion of
the route(s).
414 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
Customer service representatives are available at the Em-
ployer’s headquarters to answer delivery complaints from
subscribers. These complaints are relayed to the field offices.
Replacement newspapers are then generally delivered by
complaint carriers or by AMS or DAs, who also are the ones
who communicate with subscribers about the complaints.
Carriers cannot bypass this complaint-handling system, al-
though at times they speak to subscribers about the com-
plaints. The Employer deducts 25 cents per missed news-
paper from the carrier’s compensation.
The Employer sets certain standards and implements var-
ious policies intended to ensure timely and satisfactory deliv-
ery. Thus, delivery must be completed by 6 a.m. on week-
days and 7 a.m. on weekends. Newspapers are to be bagged
if there is a 20 percent chance of rain. To keep down the
number of complaints, ‘‘minimum service requirements,’’
measured in terms of number of complaints per thousand de-
liveries, are set for various delivery areas.
In the Employer’s highly stratified delivery system, the
DAs and AMs have initial responsibility for ensuring that the
Company’s policies are followed and that the newspaper is
properly delivered. Although organizationally one echelon
higher than the DAs, the AMs perform essentially the same
tasks as the DAs. They are each responsible for servicing
certain geographic areas. In some areas, there are ‘‘open’’
districts, i.e., districts without a DA, which are covered by
other DAs, the AM, or both. Area managers regularly sub-
stitute for DAs on their days off and, conversely, the DAs
act as AMs on their days off. They all start work at the sat-
ellite sations during the early morning hours and prepare to
receive the carriers, i.e., they help unload newspapers and
distribute mail. Once the carriers start arriving, DAs and
AMs communicate delivery instructions if necessary, answer
questions, and help prepare the newspaper. If necessary, both
AMs and DAs deliver the newspaper in ‘‘down’’ routes,
namely those for which a carrier or substitute are not avail-
able on any given day. The DAs and AMs also regularly de-
liver ‘‘complaint,’’ or missed, copies, especially in areas
where the classification whose primary function is to deliver
them, complaint carrier, is nonexistent. They also respond to
customer complaints.
The AMs’ and DAs’ performance is judged by how well
they uphold company service standards, particularly the
‘‘minimum service requirement.’’ In monthly written per-
formance evaluations, which are prepared by the RHDMs for
each AM and DA, problems are pointed out, e.g., below-
standard delivery levels, and potential causes for these prob-
lems are noted, e.g., weak substitutes, ‘‘doubled up’’ routes,
leaving it to the AM or DA to investigate the actual causes
and to take steps to improve delivery in the area or district.
On some occasions the RHDM requires that a plan of action
be prepared. In some instances, discipline, or the threat of
discipline is conveyed by memoranda for the failure to main-
tain desired performance levels.
Area managers and DAs can also take steps on their own
to improve delivery and to maintain good numbers. In addi-
tion to companywide bonuses or other incentives, money is
given to them, based on the number of carriers in their areas,
so that contests can be arranged to motivate carriers to per-
form better. Area managers and DAs must participate in
these programs, but they can devise thei particular contests
generally based on ‘‘minimum service requirements’’ num-
bers. The RHDMs often provide suggestions and other input
into the contest process. Area managers and DAs can also
elect to ‘‘bag’’ newspaper in situations where the chance of
rain is less than the companywide 20 percent.
The record evidence does not establish that either AMs or
DAs have the authority to split or consolidate routes. On one
occasion, Area Manager Violet Moea’i testified, a DA came
to her and complained that the route was too difficult for one
carrier. She spoke with the carrier and agreed with the need
to split the route, something she did without checking with
her RHDM. A DA, Lisa Begley, testified that she split a
route on her own, only showing the end result to her AM
to ask him if it had been done right. Several other witnesses,
however, testified that DAs and AMs did not have the au-
thority to independently split or consolidate routes. The Em-
ployer has not communicated to the employees whether they
have such authority. On the contrary, the vice president of
circulation, whose responsibility includes home delivery, tes-
tified that he split or consolidation of routes was something
for the AM and DA to work out with the RHDMs.
Area managers and district advisors possess similar author-
ity over carriers. Once they receive completed applications
from the personnel office, they interview prospective carriers.
If the individual has an acceptable vehicle and is agreeable
to the terms of the contract, a Distributor Agreement is
signed by the carrier and the DA or AM, subject to the fur-
ther signature of the home delivery manager. The latter sig-
nature is routinely affixed to the contract in most cases with-
out any independent or additional inquiry into the distribu-
tor’s qualifications. Carriers are in regular contact with the
AMs and DAs and receive work instructions from them.
These instructions generally embody company policy regard-
ing delivery of the newspapers. The penalty for disobedience
is termination. Warnings or counseling can precede the ter-
mination, but the Employer has no formal warning system
that applies to distributos. The decision to warn or terminate
is made by the AM or DA without the need to obtain prior
approval from anyone else. The amount of time carriers and
AMs or DAs spend talking to each other is relatively small,
an average of 5 minutes per day.
Area managers and DAs train new carriers, a task which
is sometimes performed by the prior carrier, and which gen-
erally consists of showing him the new route. Spot checks
are later made to see if the new carrier has learned the route.
Checks are also made in instances where there have been nu-
merous complaints about a particular distributor. An area
manager testified that he also follows carriers on some occa-
sions if he is concerned about their personal safety.
Compliance with company policies is closely monitored by
the RHDMs and the home delivery manager. Service statis-
tics are constantly reviewed. As noted above, performance
reviews are used to point out specific deficiencies and to
offer specific suggestions or directions, as well as to praise
good service. Regional home delivery managers are in daily
contract with the field offices, either visiting them or provid-
ing them with written messages. The written communications
range from those dealing with specific customer complaints
to those stating general company policy. Field employees are
also frequently provided with annotated statistical summaries
of their performance. Each day, usually after the RHDMs
have visited the stations within their region, the home deliv-
415LONG BEACH PRESS-TELEGRAM
ery manager meets with the RHDMs to discuss the delivery
operation.
The Employer initially argues that AMs and DAs are man-
agerial employees and that, therefore, they should be ex-
cluded from the unit. The Board defines managerial employ-
ees as those who make and implement significant manage-
ment policy and those who have discretion in important mat-
ters independent of established policy. Eugene Register
Guard, 237 NLRB 205, 206 (1978). The Employer relies on
several factors it argues demonstrate the existence of mana-
gerial status, including the authority to hire and fire carriers;
the ability to enter into and cancel contracts; the ability to
split or consolidate routes; the ability to make suggestions to
improve the quality of customer service; the ability to set
distribution policy, i.e., bagging and porching; and the au-
thority to develop contests. The record reveals, however, that
the above and similar actions of the AMs and DAs are either
subjected to independent investigation by their superiors, or
made within a narrow framework of allowable company pol-
icy. They have no authority to deviate from established pol-
icy. Their superiors issue memoranda and other written direc-
tives encompassing virtually every item over which the AMs
and DAs are to exercise discretion, closely oversee the im-
plementation, and review the results in a very systematic and
regular fashion. I therefore find that the employees in ques-
tion do not make or implement significant policy or have dis-
cretion in important matters of established policy as required
by the Board in order for them to be managers. Sampson
Steel and Supply, Inc., 289 NLRB 481, 482 (1988); The
Washington Post Co., 254 NLRB 168, 181–183 (1981). Cf.
Eugene Register Guard, supra, in which the county district
supervisors at issue had authority not only to contract and
terminate carriers, but also to establish independently the
number of such positions which would exist, the boundaries
and number of routes, and the size of the carriers’ commis-
sions. The fact that AMs and DAs enter into contracts with
the carriers is not sufficient to alter the foregoing conclusion,
as they do not negotiate the terms of the contracts, which
contracts must also be signed by their superiors. Trial Man-
agement Corp., 287 NLRB 1239 (1988).