Oakland Press Co.

National Labor Relations Board - Board Decisions

Jun 6, 1980

249 N.L.R.B. 1081 (N.L.R.B. 1980)

THE OAKLAND PRESS CO. 108
The Oakland Press Co., a Subsidiary of Capital
Cities Communications, Inc. and Local 372, In-
ternational Brotherhood of Teamsters, Chauf-
feurs, Warehousemen and Helpers of America.
Case 7-CA-13059
June 6, 1980
SUPPLEMENTAL DECISION AND
ORDER
BY CHAIRMAN FANNING AND MEMBERS
PENELLO AND TRUESDALE
On May 6, 1977, the National Labor Relations
Board issued a Decision and Order in the above-
entitled proceeding.' The Board therein adopted,
inter alia, the Administrative Law Judge's finding
that the carriers are not employees and that there-
fore the circulation department district managers
directing them are not statutory supervisors but are
employees with whom Respondent refused to bar-
gain in violation of Section 8(a)(5) of the National
Labor Relations Act, as amended.
Thereafter, Respondent petitioned the United
States Court of Appeals for the Sixth Circuit to
review and set aside the Board's Order, and the
Board filed a cross-application for enforcement of
its Order. On October 4, 1979, the court issued its
opinion wherein it, inter alia, remanded to the
Board the issue of the employee status. 2 The Board
accepted the remand and invited the carriers' par-
ties to submit statements of position with respect to
the issues raised by the remand. The General
Counsel, Respondent, and the Union thereupon
filed such statements with the Board.
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 reviewed its Decision in the light
of the court's opinion and the statements of posi-
tion and has decided for the reasons set forth
below that the carriers are employees within the
meaning of the Act and the district managers are
supervisors within the meaning of the Act.
Respondent, which is engaged in the publishing
and printing of The Oakland Press, has that news-
paper delivered to city and suburban subscribers
respectively by about 1,250 city carriers, whose
ages range from 11 to 14 years, and about 35 to 40
adult motor route suburban carriers. They are di-
rectly responsible to 1 of 15 district managers who
in turn report to the 2 zone managers to discuss
scheduling and other problems that may arise. The
i 229 NLRB 476.
2 606 F.2d 689.
249 NLRB No. 143
circulation manager has overall responsibility for
the entire circulation department.
The carriers are hired by a district manager to
make house-to-house deliveries within a prescribed
route in his particular district. In this connection,
applicants for both city and suburban routes are re-
quired to sign a document3 entitled "The Oklaho-
ma Press Independent Carrier's Route Agreement,"
which provides, inter alia, that (1) the carrier has
"the exclusive right" to service all home delivery
subscribers on a particular route; (2) the carrier
regularly, efficiently, and promptly deliver and sell
the Oakland Press to all home subscribers on the
route "at the established rate"; (3) the carrier does
all in his power to promote and extend the circula-
tion of that newspaper; (4) the carrier does not de-
liver any other newspaper or other type of printed
material not authorized by Respondent; (5) the car-
rier supply a substitute when he is unable to make
deliveries; (6) the carrier regularly and promptly
pay to Respondent the "established wholesale
price" for all copies of the newspaper ordered by
him; and (7) either party may terminate the agree-
ment "without cause" upon 30 days' notice and Re-
spondent may terminate the agreement "without
notice for good and sufficient reason." 4
Pursuant to the terms of the agreement, the city
and suburban carriers sell the newspapers at sub-
scription rates set by Respondent. They usually re-
ceive 4 and 6 cents respectively for each subscrip-
tion copy they deliver. 5 In those situations where
there are too few subscribers to produce sufficient
income to attract and retain carriers, Respondent
"subsidizes" the route by providing the carriers
with a "bonus."
Carriers are encouraged to secure more subscrib-
ers within their own routes.6 Carriers are also ex-
pected to participate in promotional campaigns,
which are financed by Respondent, and are re-
warded with prizes or trips for obtaining additional
subscribers. When Respondent offers "money back
guarantees" to new subscribers, it is Respondent
rather than the carrier who makes such reimburse-
ments to those subscribers who request it.
Carriers must make regular payments to Re-
spondent for all non-paid-in-advance subscribers7
including those who are delinquent. If a carrier
3 Parents of city carriers are also required to sign said agreement after
the district manager explains their duties.
4 An older form of the agreement, which was discontinued about 1973,
referred to the carrier as a separate and independent contractor and re-
quired him to post a bond of $10.
I Carriers receive somewhat less when delivering sample copies which
Respondent makes available without charge to potential subscribers.
6 However, carriers who do not live within their assigned routes are
permitted to serve their own family and immediate neighbors.
7 All paid-in-advance subscribers make their payments directly to Re-
spondent
THE OAKLAND PRESS CO. 1
1082 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
fails to deliver any of the copies he has ordered,
Respondent bills him for them. However, Respond-
ent replaces without cost to the carrier copies
which are damaged or lost for any reason.
Respondent does not make deductions on behalf
of the carriers for social security and income tax
purposes. They do not receive any of Respondent's
fringe benefits such as those pertaining to vacations
and hospitalization and are not covered by work-
men's compensation, but Respondent pays part of
the premium for accident insurance if a carrier de-
sires such coverage.
Respondent, which no longer requires new carri-
ers to post a bond, does not sell routes to new car-
riers and forbids departing carriers to do so. Re-
spondent furnishes carriers without charge collec-
tion cards and routebooks and provides without
cost to suburban carriers tubes in which they are
required to deposit the newspapers they deliver.
Suburban carriers also receive a vehicle allowance,
the amount of which is calculated by the district
manager who determines the mileage by accompa-
nying the carrier on his rounds. Thus, carriers
incur no expense of their own in taking over a
route except for the nominal cost of a bag which,
however, is not mandatory, and may be given to
them without charge by their predecessors.
The district managers see to it that the carriers
perform their duties properly. As indicated above,
they explain to newly hired carriers, whose aver-
age length of service appears to be from 6 months
to a year, what is expected of them with respect to
prompt delivery in a dry location, collections, and
participation in promotion campaigns. In some
cases, district managers accompany new carriers to
point out the best way to handle the route. Gener-
ally, however, new carriers are shown the route by
their predecessors. Thereafter, the district manag-
ers check on the various aspects of the perform-
ance of the carriers, about 30 percent of whom re-
quire special attention.
As indicated above, district managers carefully
monitor the carriers in regard to collections and
insist that they turn them in promptly. In the event
that a subscriber is delinquent or a "slow payer,"
the district manager accompanies the carrier to
straighten out the matter with the subscriber and, if
necessary, cancel the subscription. The carrier's au-
thority in this regard is limited to situations where
a subscriber has moved away.
Upon receipt of complaints from subscribers as
to poor service or litter at bundle drop locations
where newspapers are picked up by carriers, the
district manager takes up the complaint with the
carrier and telephones or visits the subscriber to
settle if. The district managers also handle the car-
riers' grievances as to difficulties in dealing with
certain subscribers.
Although carriers are expected to provide substi-
tutes who must be satisfactory to the district man-
ager, if they are unable to work at any time, the
district manager has the responsibility to find a sub-
stitute when the carrier fails to do so. 8 If the sub-
stitute is inexperienced, the district manager in-
structs him as to the rules regarding proper deliv-
ery and collections.
The district managers decide whether to split or
consolidate routes and set the boundaries thereof.
They also transfer the carriers from one route to
another and make recommendations as to which
carriers should be cited for excellent performance
or deemed eligible for participation in a paid schol-
arship program. Finally, the district managers
decide whether to terminate carriers who refuse to
make deliveries in designated locations, persist in
refusing to participate in promotional campaigns,9
or otherwise perform their duties in an unsatisfac-
tory manner.
Respondent contends that the carriers are em-
ployees and that the district managers who direct
their activities are statutory supervisors with whose
representative it has no duty to bargain. However,
the General Counsel and the Union argue that the
carriers are independent contractors, that Respond-
ent's past characterization of them as such belies its
present position, and that therefore the district
managers cannot be deemed statutory supervisors
despite their role in exercising authority over the
carriers.
The first issue to be resolved is the status of the
carriers. In determining whether individuals are in-
dependent contractors or employees under the Act,
the Board has consistently applied the right-to-con-
trol test. Under this test, an employer-employee re-
lationship exists when the employer reserves the
right to control not only the result to be achieved
but also the means to be used in attaining the
result. However, when the employer has reserved
only the right to control the ends to be achieved,
an independent contractor relationship exists.
Certain factors point toward the independent
contractor status of the carriers. Thus, (1) carriers
are not on Respondent's payroll and are required
to sign an agreement which gives them "the exclu-
sive right" to service all subscribers on their partic-
ular route. (2) Their income, which is not in the
form of wages or salaries, usually constitutes the
difference between the price of each copy and the
s Substitutes are paid by either carriers or Respondent.
Although Ronald Hoadley, one of the district managers, testified that
he would "probably" take no action against such a carrier, Circulation
Manager Richard Land testified that district managers have the authority
to terminate carriers for that reason.
THE OAKLAND PRESS CO. 1083
subscription rate. (3) Respondent does not withhold
social security and income taxes on behalf of the
carriers. (4) Respondent does not provide work-
men's compensation for the carriers. (5) Respond-
ent does not grant carriers any fringe benefits
except for the option as to accident insurance. (6)
Carriers are given an opportunity to enhance their
income and are eligible for prizes and awards by
obtaining new subscribers. (7) Carriers assume the
risk of loss when subscribers on their route are de-
linquent and Respondent bills carriers if they fail to
deliver any copies they have ordered. (8) Carriers
who desire to have shoulder or saddle bags must
purchase them unless their predecessors provide
them with used bags without charge.
However, the foregoing factors are clearly
outweighed by the following factors which, not-
withstanding the characterization of the carriers in
the route agreement as "independent," demonstrate
their employees status:
(1) Respondent establishes the wholesale and
retail price of the newspaper, thereby controlling
to a great extent the carriers' income. (2) The op-
portunity for additional income through the carri-
ers' efforts in securing new subscribers is limited
because (a) the carriers must, with the exception of
their own parents and immediate neighbors, deliver
newsapers only within their assigned route and (b)
the carriers are prohibited from delivering any
other newspapers or printed material without au-
thorization by Respondent. (3) Respondent has the
unilateral right to change the size of the route. (4)
Carriers are subject to transfer by the district man-
agers. (5) The carriers have no proprietary interest
in their routes and are not required to post a bond
or pay for the route or the subscriber list. (6) Carri-
ers do not have to pay Respondent for copies
which are damaged or lost for any reason. (7) Al-
though carriers bear the loss in the event of a sub-
scriber's delinquency, their risk is minimized by the
district manager's assistance in seeking to collect
from such subscribers. (8) Respondent finances pro-
motional campaigns. (9) District managers have
substantial control over the carriers by training
newly hired carriers and substitutes, instructing
them as to their duties, checking on and evaluating
the carriers' performance, assigning them to new
routes, resolving the complaints of subscribers and
the grievances of carriers, and terminating carriers
when their work is unsatisfactory.
In view of the substantial control by the district
managers over the carriers, the absence of the pro-
prietary interest on the part of the carriers, their in-
sulation from most losses, and the limited opportu-
nity for significantly increasing their income, we
now reverse our earlier finding and conclude in the
light of the Board's more recent Decisions that the
carriers are employees within the meaning of the
Act. o
We turn now to the question whether the district
managers are employees or supervisors within the
meaning of the Act. It is clear from the foregoing
that the district managers hire, discharge, assign,
transfer, and responsibly direct the carriers whom
we have found to be employees. We therefore find
that the district managers are supervisors within
the meaning of Section 2(11) of the Act. As em-
ployers do not have a statutory obligation to bar-
gain with their supervisors, we withdraw our pre-
vious finding that Respondent violated Section
8(a)(5) of the Act by refusing to bargain with the
Union on behalf of the district managers. We shall
therefore modify our original Order accordingly.
ORDER
It is hereby ordered that the complaint herein is
dismissed insofar as it alleges that the Respondent,
The Oakland Press Co., a Subsidiary of Capital
Cities Communications, Inc., Detroit, Michigan,
violated Section 8(a)(5) of the Act by refusing to
bargain with Local 372, International Brotherhood
of Teamsters, Chauffeurs, Warehousemen and
Helpers of America, on behalf of the circulation
department district managers.
MEMBER TRUESDALE, dissenting:
The facts in this case are, in most critical re-
spects, the same as those in The Virginian-Pilot/
Ledger-Star, 241 NLRB No. 81 (1979), in which I
dissented from the majority's findings there that the
newspaper carriers were employees and that the
district managers were supervisors within the
meaning of Section 2(11) of the Act. For the rea-
sons stated in my dissent in Virginian-Pilot/Ledger-
Star, and those explicated below, I would find-
contrary to my colleagues-that the newspaper
carriers here are independent contractors, that the
district managers are employees within the mean-
ing of Section 2(3) of the Act, and that Respondent
therefore unlawfully refused to bargain with the
Union representing the unit of district managers.
Until recently, Respondent maintained that the
carriers were independent contractors." Its pres-
ent position, as announced at the hearing in this
matter, is that newspaper carriers are employees.
However, the record evidence, including Respond-
o See Philadelphia .Vewspapers. Inc., 238 NLRB 835 (1978). See also
The Virginian-Pilor/Ledger Star. Capital Division of Landmark Communi-
cations, Inc., 241 NLRB No 81 (1979), wherein the carriers were found
to be employees despite the employer's past characterization of them as
independent contractors
II In 1970, hen a petition was filed seeking a unit of district manag-
ers, Respondent asserted that the unit was inappropriate because both the
district managers and carriers were independent contractors
THE OAKLAND PRESS CO~~~~. 1.
A A
1084 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
ent's past characterization of its business relation-
ship with the carriers, belies its present position.
Thus, Respondent's current agreement governing
its relationship with the carriers refers to the carri-
er as an "independent carrier." Also, Respondent's
insurance policy specifically uses the legal term
"independent contractor" in referrring to the carri-
er. While these facts are not alone controlling, they
do manifest Respondent's intention to avoid creat-
ing an employer-employee relationship with the
newspaper carriers.
When the foregoing is considered in conjunction
with the evidence, infra, showing that Respondent
has clothed the carriers with the indicia of an inde-
pendent contractor, it becomes clear that the rela-
tionship Respondent has established with its paper
carriers is that of employer-independent contractor.
Unlike its regular employees, carriers are not on
Respondent's payroll and do not receive any of the
fringe benefits accorded to regular employees. Car-
riers are also not entitled to workmen's compensa-
tion. Rather than wages or salaries, the carriers'
compensation consists of the difference between
the wholesale price of the newspaper and the
amount collected from customers at the suggested
retail price. Also, no deductions for Federal and
state taxes are made by Respondent from the carri-
ers' profits. Significantly, carriers, unlike regular
employees, are required to sign an agreement, enti-
tled "Oakland Press Independent Carrier's Route
Agreement,"' 2 before they can assume responsibili-
ty for the route.
Of particular importance to the carriers' inde-
pendent contractor status is the fact that the carri-
ers' parents are present when the agreement is
signed, thus signaling the important intermediary
role played by the parents in the relationship be-
tween the carrier and Respondent. This role is
born of the fact that Respondent has no authority
to discipline the carrier and therefore Respondent
undoubtedly prevails upon the parents to exercise
their authority to see that the paper is delivered. In
addressing this point in my dissent in Virginian-
Pilot/Ledger-Star, I stated:
12 The agreement requires either party to give 30 days' notice of an
intent to terminate the agreement. Respondent, however, may terminate
the agreement "without notice for good and sufficient reason "
As a natural corollary of their youth, carri-
ers necessarily require the continued guidance
and supervision of their parents in their daily
activities. Because of this continuing responsi-
bility of parents for their children, it is only
natural that the Employer actively recruits
their aid in controlling the carriers in the oper-
ation of their routes. However, by interposing
the parents into that relationship between the
carrier and itself, the Employer has effectively
severed its lines of control over the carrier. As
a result, the intermediation of the parents into
this relationship, along with other factors dis-
cussed above, compels the conclusion that car-
riers are independent contractors.
The carrier's independent contractor status is
also evidenced by the fact that the carrier's overall
opportunity for profit or loss lies almost entirely
within his own efforts. Further, the carrier's risk of
loss, when measured against the small scale of his
business, is also substantial. Thus the carrier alone
bears the loss when he is robbed, when papers are
damaged, or when the customer fails to pay.
Finally, the large number of carriers for whom a
district manager is responsible strongly militates
against the finding of employee status. Thus, the
district manager is responsible for approximately 90
carriers who perform their delivery tasks at rough-
ly the same time every day. The majority's finding
that Respondent exercises substantial control over
the carriers' delivery tasks is therefore clearly un-
founded, especially in light of the short-term char-
acter of the delivery schedule and the relatively
simple and routine nature of the delivery tasks. In
short, the evidence indicates that Respondent's sole
concern is with the end result-the timely delivery
of the newspaper and the prompt payment of sums
owed to it.
In light of all the foregoing, I would find that
the carriers are independent contractors and would
accordingly find that the district managers are em-
ployees and constitute a unit appropriate for collec-
tive bargaining under the Act. I would therefore
find that Respondent has violated Section 8(a)(5) of
the Act by refusing to bargain with the Union that
currently represents the district managers.