The Hearst Corp.

National Labor Relations Board - Board Decisions

Oct 6, 1967

167 N.L.R.B. 689 (N.L.R.B. 1967)

SAN ANTONIO LIGHT DIVISION 689
San Antonio Light Division , the Hearst Corporation
and San Antonio Newspaper Guild, Local 25,
American Newspaper Guild , AFL-CIO, CLC,
Petitioner. Case 23-RC-2852
October 6, 1967
DECISION ON REVIEW AND DIRECTION
OF ELECTION
BY MEMBERS BROWN, JENKINS , AND ZAGORIA
On January 17, 1967, the Regional Director for
Region 23 issued a Decision and Order in which he
dismissed the petition on the ground that the news
vendors sought to be represented by the Petitioner
were independent contractors and not employees of
the Employer. Thereafter, in accordance with Sec-
tion 102.67 of the National Labor Relations Board
Rules and Regulations, Series 8, as amended,
the Petitioner filed a timely request for review of
such Decision. The Employer filed a brief opposi-
tion.
On May 9, 1967, the National Labor Relations
Board by telegraphic order granted the request for
review. Thereafter, the Employer filed a statement
in support of the Regional Director's Decision. The
American Newspaper Guild and the American
Newspaper Publishers Association each were per-
mitted to and did file amicus briefs.
The Board' has considered the entire record in
this case with respect to the issues under review,
together with the parties' briefs on review and the
amicus briefs, and makes the following findings:
The Petitioner seeks to represent a unit of ap-
proximately 28 news vendors engaged in the dis-
tribution of the Employer's newspaper through
street sales, the use of vending racks, and by sale to
newsdealers and other customers in San Antonio,
Texas.
The newspaper vendors involved are required to
sign individual contracts with the Employer." The
Employer establishes districts within which the
news vendors must operate.3 Within their respec-
tive districts, vendors may select locations for
vending racks which they lease or purchase from
the Employer. 4 The Employer establishes the price
at which its publication is sold to the vendors and
the price at which the newspaper should be sold to
the public. The wholesale rate at which vendors sell
to dealers appears to be generally uniform.5 The
vendor's total compensation consists of the dif-
ference between the price he pays the Employer,
less a credit referred to as a "SACA," and the price
at which he sells the paper to his customers, less
operating expenses. The nature of the credit and the
basis on which it is computed is unclear. 6 While the
amount of the credit, once established, remains
basically fixed from week to week, it is different for
each vendor.
The Employer does not maintain payroll records
for these vendors nor does it charge, withhold, or in
any other manner provide for vendors' Federal in-
come tax, workmen's compensation, or social
security taxes. The vendors are free to set their own
working hours. However, the papers are ready for
distribution to vendors at specific times and in order
for the vendors to sell the particular edition of the
papers which they have drawn, they pick them up
as soon as possible after release for distribution.
The vendors make their own arrangements for a
substitute when they want a vacation or holiday and
when they are sick. If and when they employ
helpers or substitutes, they hire and fire them and
establish their rates of pay. Vendors own, operate,
and maintain their own vehicles. The Employer
normally supplies the number of papers requested
by the vendors, the "draw," and credits the vendors
for "returns" (unsold newspapers but not damaged
or lost papers). Although there appears to be no ex-
press prohibition against the sale by vendors of
competitor newspapers, in practice only 2 of the 28
vendors, whose districts are in the downtown area,
sell newspapers published by a competitor. When
a customer loses money in a malfunctioning
newspaper rack, the Employer notifies the ap-
propriate vendor and the vendor is expected to
reimburse the customer for such loss. The vendors
are supposed to furnish the Employer with a weekly
"lay-down," a listing of the customers, and the
number of papers sold.? The Employer furnishes
printed forms for use by vendors in billing their
newstand dealers.8
In determining the status of persons alleged to be
independent contractors, the Board applies a "right
of control" test,`' which turns essentially on whether
' Pursuant to the provisions of Sec 3(b) of the National Labor Rela-
tions Act, as amended, the Board has delegated its powers in connection
with these proceedings to a three-member panel
2 All copies of said contracts are retained by the Employer and none
were placed in evidence
' Although vendors are restricted to the designated districts, on occa-
sion, they have agreed among themselves to overlap distracts for their mu-
tual convenience without the knowledge or approval of the Employer,
"There is evidence which indicates that, on occasion, the Employer's
supervisors accompany vendors on their routes and suggest locations at
which they believe a newsrack would be profitable
5 One vendor has entered into an agreement with one dealer to sell the
newspaper at a reduced rate. Street vendor Bodkin, an Employer witness,
testified that one of his dealers has a motel and because of problems pecu-
liar to the sale of newspapers to motel guests, he sells the paper to the
dealer at 3 cents per copy rather than the customary 3-1/2 cents per copy,
but accepts no returns from the dealer
b Although the Employer contends that such credit is negotiated with
the individual vendors, like the Regional Director, we are not satisfied
from the record that such is the case
' It does not appear that the vendors always comply with this require-
ment The Employer's street sales manager testified that we would like
to have it weekly "
8 For certain chain store customers, the vendor services the locations
but the chain store pays the Employer instead of the vendor
"Eureka Newspapers, Inc , 154 NLRB 118 1, The Sacramento Union,
Inc , 160 NLRB 1515.
167 NLRB No. 99
690 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
the person for whom the services are performed
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 contractor. The
resolution of this question depends on the facts in
each case. No one factor is determinative. Here, as
seems typical in cases of this kind, there are present
factors supporting the position taken by both
parties with respect to the vendors' status.
In the instant case, we are satisfied that the news
vendors are employees of the Employer.10 We are
mindful that the evidence discloses several factors
usually present in independent contractor relation-
ships. However, these factors are not pcculiar 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 vendors
provide their own equipment, that the Employer
does not place the vendors on its payroll or make
the usual payroll deductions for them, that the ven-
dors set their own working hours and arrange for
substitutes to work in their absence, or that the ven-
dors hire, fire, and set rates of pay for their helpers.
The result to be accomplished is, of course, the
circulation and sale of the Employer's newspapers.
In accomplishing this result, the vendor bears slight
resemblance to the independent businessman
whose earnings are controlled by self-determined
policies, personal investment and expenditure, and
market conditions. The vendors must purchase
their newspapers at a cost established by the Em-
ployer and sell them at a price no higher than the
published price in the area or territory defined and
controlled by the Employer. In addition, the ven-
dors' risk of loss and capacity to draw upon per-
sonal initiative to increase their earnings, are
minimized to a significant extent by the Employer's
practices and policies which are calculated to
prevent competition between vendors , its ac-
ceptance of returns for credit , its practice of adjust-
ing the wholesale rate apparently to compensate
vendors for fringe benefits , expenses , effective per-
formance , cost-of-living changes, and fluctuations
within a territory affecting a vendor ' s earnings.
Further, the vendors have no proprietary interest in
their routes and are at best licensees who can assign
their routes to another.
On these facts , and the record as a whole, we
cannot accept the Employer 's contention that
its control is limited to the end to be achieved.
We find that the vendors ' opportunities for
profits are limited by the Employer 's regulation
and control of important aspects of the ven-
dor'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 vendor's
work, we conclude that the vendors are not in-
dependent contractors , but employees within
the meaning of the Act. 11
Accordingly, we find that a question affecting
commerce exists concerning the representation of
certain employees of the Employer within the
meaning of Section 9 (c)(1) and Section 2(6) and (7)
of the Act, and that a unit of the following em-
ployees is appropriate for purposes of collective
bargaining within the meaning of Section 9(b) of the
Act:
All news vendors and street salesmen employed
in the circulation department of the Employer's San
Antonio , Texas, newspaper , excluding all other em-
ployees and supervisors as defined in the Act.
[Direction of Election12 omitted from publica-
tion.]
10 In two previous decisions involving the Employer, 130 NLRB 619,
and in Case 23-RC-2662 issued June 2, 1966 (not published in NLRB
volumes ), the Board found that the distributors of the Employer's
newspapers to the carvers are employees.
11 The Vindicator Printing Company, 146 NLRB 871, 875-876; The
Sacramento Union , Inc , supra
12 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 23 within 7 days after the date of this Decision 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 list shall be
granted by the Regional Director except in extraordinary circumstances
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