The Hearst Corp.

National Labor Relations Board - Board Decisions

Feb 17, 1969

174 N.L.R.B. 934 (N.L.R.B. 1969)

934 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
San Antonio Light Division, The Hearst Corporation
and San Antcnio Newspaper Guild , Local 25,
American Newspaper Guild , AFL-CIO, CLC,
Petitioner . Case 23-RC-3198
'February 17, 1969
DECISION AND DIRECTION OF
ELECTION
BY MEMBERS FANNING, JENKINS, AND ZAGORIA
Upon a petition duly filed under Section 9(c) of
the National Labor Relations Act, as amended, a
hearing was held before Hearing Officer Jere B.
Kemper. Following the hearing and pursuant to
Section 102.67 of the National Labor Relations
Board Rules and Regulations and Statements of
Procedure, Series 8, as amended, and by direction of
the Regional Director for Region 23, this case was
transferred to the National Labor Relations Board
for decision. Both the Employer and the Petitioner
filed briefs.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the
National Labor Relations Board has delegated its
powers in connection with this case to a
three-member panel
The Board has reviewed the Hearing Officer's
rulings made at the hearing and finds no prejudicial
error The rulings are hereby affirmed
Upon the entire record in this case, the Board
finds.
1. The San Antonio Light Division' of The Hearst
Corporation is a Texas corporation engaged in the
business of publishing and distributing newspapers in
and around San Antonio, Texas. During the 12
months preceding the instant hearing, a
representative period, the Employer's gross dollar
volume of sales exceeded $200,000.00 The parties
stipulated, and we find, that the Employer is
engaged in commerce within the meaning of the
Act, and that it will effectuate the policies of the
Act to assert jurisdiction herein.
2. The labor organization involved claims to
represent certain employees of the Employer.
3. The Petitioner seeks to represent a unit of
approximately 27 news vendors and street salesmen
engaged in the circulation of The Light's newspaper
through street sales, the use of vending racks, and
by sale to news dealers and other customers in the
San Antonio, Texas, area. It contends that, with the
exception of four "distributors", a newly-created
title and job, the news vendors constitute a unit
essentially the same as that found appropriate by
the Board in San Antonio Light Division, The
Hearst Corporation, 167 NLRB No 99. The Light
contends that since the Board's decision in that case,
with which it disagreed, its operations have changed,
'Herein called the Employer or The Light
that it has created a distributorship system in which
both the distributors and the news vendors are
independent contractors, and not employees of The
Light.
Under the system in effect at the time of the
Board's earlier decision, there were no distributors.
News vendors each picked up their newspapers at
The Light's premises, and from there distributed
them to their racks, newsstands, etc. Each vendor
had a contract with The Light. Each had established
districts within which he operated, though on
occasion, by mutual agreement, some overlapped
their districts. Each was free to set his own working
hours within the limits demanded by the nature of
distributing a given edition. When sick, or unable to
work for whatever reason, each made his own
arrangements for replacements, and compensated
the replacements as he saw fit Each owned,
operated, and maintained his own vehicles, was not
prohibited from selling competitor's newspapers,
determined to some extent the placement of his
racks, and reimbursed customers for losses. The
Board, in the circumstances of the earlier case,
found that the news vendors were employees of The
Light, as it found that The Light reserved to a large
extent the right to control the manner, means, and
result of the vendors' work. An election was held in
November 1967, in a unit of news vendors and
street salesmen , in which the Union failed to obtain
a majority of the votes.
Under the old system, the news vendors'
individual contracts provided for termination upon
30-day notice. On August 23, 1968, The Light
advised its vendors by letter that it was terminating
all their contracts, and, effective September 23, was
establishing a new distributorship system.'
Thereafter, The Light called in four of its former
vendors and offered each of them a
"distributorship." It was explained to each that he
would be in charge of a specified geographical area
that would encompass a given number of established
routes or districts, and that he would have the
responsibility of seeing that a given number of
vendors serviced those routes satisfactorily. The
Light offered to each distributor a price at which it
would "sell" papers to him, and each was to make
his own arrangements as to the price at which he
would "sell" to his- vendors.'
Each of the distributors was given the names of
the vendors presently servicing the routes in his
area, and it was suggested that they be retained.'
'One vendor , Paloma , apparently received notice on August 22 Another,
Jarvis , discussed herembelow, received no notice, but did sign a
distributor ' s agreement in late September
'Under the old system , each vendor was given a refund , apparently based
upon a formula that took into account the size, area , and distribution
difficulties of his routes Thus, the amounts of refund varied Under the
new system, distributors are sold papers at different rates, with no refund
from The Light While two of the distributors appear to have negotiated as
to rates , the other two accepted without discussion the rates offered them
The rates offered to one were later changed by The Light
'In one case, a distributor notified a "former" vendor that he was
174 NLRB No 97
SAN ANTONIO LIGHT DIVISION 935
The Light advertised in its own columns for needed
vendors, or "wholesale dealers", and referred
applicants to the distributors.' The distributors made
their own arrangements with their vendors for the
price at which they would sell to vendors, and signed
contracts with them.6
Under the new system, The Light's own drivers
and trucks deliver papers to the distributors at
certain dropoff points, previously designated by The
Light. The distributors were instructed how many
papers each vendor would "draw" daily.' At the
dropoff points, the distributors break down the
papers into the numbers needed by each of their
vendors, and the vendors report to pick up their
papers.8 When distribution is completed, each
vendor returns his unsold papers to his dropoff
point, and receives a credit from the distributor for
the number returned. The distributor turns these
back to The Light, and is in turn reimbursed for the
returns' At the time of the hearing, The Light's
"assistant distribution coordinator", Penaloza, was
working alongside one of the distributors to show
him the system, 10 was training at least one vendor,"
and was generally checking up on the vendors'
operations. Whether The Light will continue to
police distribution points, and suggest locations for
news racks, etc., is not established, although Morris
did, following the start of the new system, promise a
caller that he would see to it that a rack was placed
in her business establishment, and it appears that
both Morris and Penaloza have shown distributors
where racks have been placed in the past. As before,
The Light owns the racks, and the vendors "lease"
them at rates set by The Light.' z As before, each of
the vendors (now, distributors also) owns and
maintains his own vehicles," is free to set his own
working hour S,14 makes arrangements for his
replacements, is not prohibited from selling
competitors' newspapers,15 reimburses customers for
their losses, sells to his "dealers" (I.e. the
newsstands, etc , that he supplies) at generally
uniform rates,' 6 bills the dealers and collects from
them," is restricted to a designated district,18 and
must supply a performance bond "
discharged , as he, the distributor , was personally taking over his district
The vendors suggested they might strike over this issue , and the distributor
relented One former vendor was told by Morris, The Light' s distribution
coordinator , in the presence of many of the vendors , that he was not fired
by virtue of the cancellation of his contract , that Ray Flowers (a
distributor ) would hire him right back Others then asked and were told
whom they would be "working for"
'In one case , a distributor was instructed that he must supply a certain
person , one considered by the vendors a "bootlegger ," who did not sign a
contract with his distributor
'These contracts , all identical , were suggested by and supplied to the
distributors by The Light
'The Light 's circulation manager testified that The Light still retains the
right to reject an unreasonable or unrealistic draw request
'in some cases , The Light's trucks deliver papers to vendors at various
points in the city No charge is made to vendors or distributors
'Whether the returns are made by the distributors to the drivers, or to
The Light's place of business , does not appear
"Distributor Ramirez testified that Penaloza is running his business until
he can learn enough to take over He is not paying Penaloza for this
service
In the earlier case, cited above, the Board stated
that, in determining the status of persons alleged to
be independent contractors, the test is whether the
person for whom their 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. If only the result
is controlled, the status is that of an independent
contractor. All the facts in each case must be
assessed. After such an assessment in the earlier
case, the Board concluded that The Light controlled
the manner and means of distributing its newspapers
to the ultimate customer, as well as the result, and it
therefore concluded that the news vendors under the
old system were employees of The Light within the
meaning of the Act.
In this case, after carefully assessing all factors
presented to us, we are satisfied that the news
vendors under the present distributorship system are
employees of The Light The changes effectuated by
The Light are changes in form. The nature of the
employing relationship has changed but little. Prior
to the change, vendors dealt directly with
supervisory officials of The Light, and their districts,
routes, and operations generally were overseen by
the coordinator of distribution. Now, distributors
are doing basically the supervision previously
performed by one or two persons, and indeed at the
time of the hearing one distributor was still "in
training." The place where vendors pick up their
papers has been changed, and they now pay for their
papers indirectly, through the distributors, but the
basis of compensation remains the same.
Distributors are performing The Light's
bookkeeping for it, and are acting as supervisory
personnel (see below). The Light's interest in the
One vendor was, at the time of the hearing , being paid by The Light
while being trained to take over a district
"This is true even though in some cases vendors under the old system
had leased or paid rent , were no longer doing so, and supposedly "owned"
their racks All racks have once again been "returned" to the ownership of
The Light, and leases are to begin anew
"It appears , however, that at least distributors , when in need, may
borrow a truck from The Light at no cost to them
''This, of course , as before , is dictated by the demands of each news
edition An edition that hits the stands too late will not sell Each vendor's
contract with his distributor provides that he "warrants prompt and
efficient performance of all his obligations , each being of the essence "
"As in the earlier case , it appears that only two of the vendors sell any
competitors' newspapers
"As in the earlier case , it appears that there is only one exception to
this, one vendor sells at a reduced rate to one dealer , but only because the
dealer is not thereafter reimbursed for unsold papers
"At the time of the hearing , The Light was still supplying forms for
billing by the vendors, although it is alleged the vendors will begin to
supply their own The record indicates , however, that the system of having
chain store customers pay The Light directly will continue
"Again, while on occasion vendors may agree among themselves to
overlap districts for their own mutual convenience , this is done without the
knowledge or approval of the distributor or The Light.
"Prior to the new arrangement , the vendors supplied The Light with a
performance bond directly. Now, each vendor is obliged by contract to
supply his distributor, and each distributor in turn is obliged to supply The
Light, with a performance bond We view this as a distinction without real
difference
936 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
papers does not cease once they are "sold" to the
distributors. The distributors' obligations to The
Light continue; they must see to the proper and
satisfactory distribution to the ultimate patron of
the newspapers. They do not own or control their
distributorship. That is, they cannot assign or sell it,
and The Light may end their contractual
relationship, such as it is, by 30-day notice. The
limits of their territory are determined by The
Light, not by the extent of their entrepreneurial
efforts.
Upon the entire record, we find that The Light
has reserved to itself the right to control the basic
manner and means, as well as the result of the
distributors' work, and through them the work of
the vendors. We thus find that vendors are not
independent contractors, but employees of The Light
within the meaning of the Act. We see no real
difference in the employment relationship from that
which existed at the time of our earlier Decision,
supra
Accordingly, we find that a question affecting
commerce exists concerning the representation of
certain employees of the Employer within the
meaning of Sections 9(c)(I) and 2(6) and (7) of the
Act.
4. The appropriate unit
The Petitioner contends that the distributors are
supervisors within the meaning of the Act, and
should thus be excluded from a unit of vendors and
street salesmen. The Light makes no contention in
this regard, as it views both distributors and vendors
as independent contractors. However, the facts with
regard to the distributors' powers are not in dispute.
They can and do exercise the power to hire and fire
vendors, and we find that they are supervisors within
the meaning of the Act.
One individual vendor, B. E. Jarvis, was not given
notice of termination of his contract, as were others,
in August. In fact, just 2 days prior to the instant
hearing, he signed a "new" contract, identical to
those signed by the four distributors spoken of
throughout. His contract supposedly makes him a
distributor, also. The record shows, however, that
his arrangement with The Light is precisely what it
was before as a news vendor, except that he gets a
better rate and no refund. However, he still picks up
his own papers and services his own territory (that
is, he has no vendors). While, by virtue of his
contract, he may be said to possess supervisory
authority, as do the other distributors, it does not
appear that he ever intends to hire vendors We
shall allow him20 to vote subject to challenge
Accordingly, we find that a unit of the following
employees 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 business, excluding all
other employees, distributors (except B. E. Jarvis),
and all other supervisors as defined in the Act.
[DIRECTION OF ELECTION21 omitted from
publication.]
"Mr B E Jarvis testified that he no longer is under contract, but rather
his wife has taken over his territory The distributor 's contract is signed
only "B E Jarvis", as is the agreement as to rate The latter , however, is
addressed to "Mrs B E Jarvis " Our finding is the same , whichever
Jarvis is now the "distributor " This is a factual question to be determined
by the Regional Office at the time of the election If both seek to vote,
then both shall vote subject to challenge
"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