The Sacramento Union, Inc.

National Labor Relations Board - Board Decisions

Sep 30, 1966

160 N.L.R.B. 1515 (N.L.R.B. 1966)

THE SACRAMENTO UNION, INC. 1515
The Sacramento Union , Inc. and Sacramento Newspaper Guild,
Local 92, American Newspaper Guild , AFL-CIO, Petitioner.
Case 20-RC-6850. September 30, 1966
DECISION AND DIRECTION OF ELECTION
Upon a petition duly filed under Section 9(c) of the National
Labor Relations Act, as amended, a hearing was held before William
F. Roche, Hearing Officer of the National Labor Relations Board.
The Hearing Officer's rulings made at the hearing are free from prej -
udicial error and are hereby affirmed. Both the Petitioner and
Employer have filed briefs with the Board.
Pursuant to the provisions of Section 3(b) of the Act , the Board
has delegated its powers in connection with this case to a three-
member panel [Chairman McCulloch and Members Brown and
Zagoria].
Upon the entire record in this case , the Board finds :
1. The Employer is engaged in commerce within the meaning of
the Act and it will effectuate the purposes of the Act to assert juris-
diction herein.
2. The labor organization involved claims to represent certain
employees of the Employer.
3. A question affecting commerce exists concerning the representa-
tion of certain employees of the Employer within the meaning of
Sections 9(c) (1) and 2(6) and (7) of the Act.
4. The Employer , a California corporation , publishes "The Sacra-
mento Union ," a newspaper having a daily and Sunday circulation.
The Petitioner seeks to represent a unit of district dealers who are
engaged in the circulation and distribution of the newspaper. The
Employer , however, contends that the petition should be dismissed
as these district dealers are not employees , but are, rather , independ-
ent contractors.
The Employer employs some 56 dealers , all of whom distribute its
newspapers to carrier boys, retail stores, and street vending racks.
There are 29 city, 13 suburban, and 14 country or rural dealers. It is
the Employer 's practice to require all new dealers to execute a formal
contract, setting forth the basic rights and obligations of the
employer -dealer relationship.
Under the terms of the contract," a dealer agrees to purchase from
the Employer copies of the Sacramento Union for resale to pur-
chasers, and distribution to independent carriers , newsboys , and/or
i The record reflects that 52 of the 56 dealers have written contracts ; the other 4, all
of whom are in the "country" group, are indicated to have oral agreements with the
Employer establishing like status and terms.
160 NLRB No. 117.
1516 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
subscribers in an assigned district. The dealer is not to sell to cus-
tomers outside his territory unless authorized or directed by the
Employer. The Employer may, with proper notice, change the ter-
ritory so as to increase or diminish it.2 The dealer is not granted,
by the contract terms, an exclusive dealership in his territory, and
the Employer may appoint from time to time other dealers in the
territory. Distribution, sale, and delivery of the newspaper by the
dealer shall be at such times and in such manner as the dealer shall
determine in his discretion, except that sale and delivery shall con-
form to "practices customary in the newspaper industry." a The dealer
agrees not to handle any other newspaper without the prior written
consent of the Employer, and to submit to the Employer a complete
accurate list of customers' names and addresses and the status of
their accounts every 6 months, or more frequently, if requested.4 The
dealer is obligated to deliver the "Sacramento Shoppers News," an
advertising weekly, to nonsubscribers in his district, for which serv-
ice he is paid an amount unilaterally determined by the Employer.
The contract provides that the dealer agrees to purchase copies of
the newspaper "at the prevailing wholesale prices," which may be
modified from time to time by the Employer on 24 hours' notice. The
Employer is given the right at any time to limit or reduce the num-
ber of copies it shall sell to the dealer, and all newspaper copies pur-
chased by the dealer irrevocably become the property of the dealer
immediately upon delivery. It is stated that the dealer shall sell the
newspaper to customers "at the retail prices" which shall be estab-
lished by the Employer.5
It is further provided that, on or before the 10th day of each
month, the dealer will pay the Employer for all paper and supplies
ordered by him during the previous month, making no deductions
unless authorized, and that the dealer assumes the risk of loss for
failure to effect collections from customers. While the contract is
terminable by either party upon 30 days' written notice, the Employer
may terminate without notice in the event of a breach of its terms
by the dealer. The contract may not be assigned by the dealer, and he
may not substitute another individual to perform his obligations.6
The contract (section 10) terms the dealer a "licensee" only, in that
It is the Emplo3er's belief that no dealer can handle as many as 20 or 25 carrier
boys properly.
3In actual practice, the dealers are required to distribute early enough each day so
that carriers may complete delivery to subscribers by 6 30 a in
4 It does not appear that the Employer has requi red the submission of these " drop lists"
every 6 months, but did call for lists from its dealers in February 1966
In practice, the dealers appear to exercise very little discretion in determining the
prices at which they buy or sell their papers
6In practice , the dealers engage substitutes from time to time, with or without the
knowledge of the Employer.
THE SACRAMENTO UNION, INC. 1517
it does not confer on him any interest or property rights whatever,
except in the newspaper copies purchased. The dealer agrees to defray
the cost of a bond to insure the faithful performance of his obliga-
tions, payable on a monthly basis.
Under other terms of the contract, the Employer is to hold in
trust all paid-in-advance subscription payments, which shall be
released to the dealer when such payments become due. The status of
the dealer, under section 19 of the agreement. is stated as that cf an
"independent contractor," and all persons employed by the dealer for
the performance of his obligations are deemed to be the dealer's
employees, and subject to his direction and control. Finally, the
dealer agrees to pay workmen's compensation insurance for the bene-
fit of his employees,' and adequate liability insurance on motor vehi-
cles used in his work.
The record reflects that dealers own and maintain their own trans-
portation facilities, and carry their own insurance. They are required
to purchase their bonds from a private bonding company, selected by
the Employer. The Employer makes no deductions for social security
or withholding tax for the dealers, who receive no fringe employment
benefits. Dealers determine their own vacation time, and hire and pay
their replacements, who may be other dealers. Dealers also hire and
pay carrier boys to help in the distribution of the newspapers, paying
the carrier boys the exact rate suggested by the Employer ; i.e., 45
cents per subscriber per month.
The Employer assists dealers in obtaining new subscribers through
promotional programs and contests financed by the Employer, and
issues frequent notices and bulletins to the dealers, with suggestions
or directions as to their operations. The Employer does not provide
at its plant desk space or telephones for the dealers, but each dealer
is provided there with a pigeonhole in which his notices, bulletins,
complaints, etc., are deposited. The Employer requires, or at least,
requests, that dealers telephone the Employer's office three times each
morning in order to receive complaints.8
The record further establishes that the Employer has advised the
dealers that the dealership is a "full-time job," and that they should
not engage in any other employment. However, it appears that at
least 12 of the 56 dealers have other jobs at the present time. The
dealers appear to work under the loose supervision of four "super-
visors" or "advisors" who, on occasion, ride with the dealers through
their territories, observing them at work, making suggestions, and
giving advice.
7 In practice , this does not appear to be done.
8 The record reflects that not all dealers observe this requirement.
1518 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
In determining the status of persons alleged to be independent con-
tractors, the Board applies a "right of control" test; which turns
essentially on whether the person for whom the services are per-
formed 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 dealers. However, we agree with the
Petitioner that the record shows them to be employees.
The result to be accomplished is, of course, the circulation and
sale of the Employer's newspapers. However, a dealer's success is
not essentially a product of his self-determined policies, personal
investment and expenditures, pursued in and adapted to a general
market situation. Rather, the Employer controls the ways and means
of carrying out the enterprise. Thus, the dealers purchase their
newspapers and sell them at prices determined by the Employer. The
area or territory in which they can operate is also controlled by the
Employer. Further, the dealers have no investment or proprietary
interest in their routes. At best they are only licensees who cannot
assign their routes to another without the Employer's written con-
sent, and if a dealer's routes grow beyond the point of requiring
around 20 or 25 delivery boys, the Employer can and does transfer
part of his territory to another dealer. The dealers are forbidden to
engage in any other business or to distribute periodicals other than
the Employer's newspaper. They are required by the Employer at a
price it sets to distribute an advertising weekly to nonsubscribers. If
a dealer breaches his agreement with the Employer, the Employer has
by the contract's terms the right to terniniate.''° In these circumstances,
a dealer's opportunities for profits are, we believe, limited by the
Employer's regulation and control of the important aspects of the
dealer's work. Consequently, as the Employer has to a large extent
reserved the right to control the manner and means, in addition to
the result, of a dealer's work, we find that the dealers are not inde-
pendent contractors, but employees."
Accordingly, we find that a unit of the following employees is
appropriate for the purposes of collective bargaining within the
meaning of Section 9 (b) of the Act :
8 See, for example , Eureka' Newspapers , Inc, 154 NLRB 1181 ; American Broadcasting
Company, 117 NLRB 13.
10 ,Sate Oil Company of Missouri , 137 NLRB 1274, 1287.
u The Vindicator Pi anting Company, 146 NLRB 871 , 875-876; Lindsay Newspapea s,
Inc, 130 NLRB 680, 681-682
JOHN'S BARGAIN STORES CORP. 1519
All circulation department employees of the Sacramento Union
engaged in the delivery and distribution of the newspaper as city,
suburban, and country dealers, street salesmen, and dealers known as
adult carriers, but excluding the circulation director or manager,
assistant circulation directors or managers, office managers, home
delivery and country supervisors and roadmen, carrier boys and
motorized carrier boys, and all other employees in the circulation
department, confidential and professional employees, guards, watch-
men, and supervisors within the meaning of the Act.
[Text of Direction of Election omitted from publication.] 12
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 20 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.
John's Bargain Stores Corp .' and Chicago Truck Drivers , Chauf-
feurs and Helpers Union of Chicago and Vicinity (Inde-
pendent ), Petitioner. Case 13-RC-10786. September 30, 1966
DECISION AND DIRECTION OF ELECTION
Upon a petition duly filed under Section 9(c) of the National
Labor Relations Act, as amended, a hearing was held before Hear-
ing Officer Roderick C. MacLeod. The Hearing Officer's rulings made
at the hearing are free from prejudicial error and are hereby affirmed.
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, by direction of the Acting Regional
Director for Region 13, this case was transferred to the Board for
decision. Briefs have been filed by the Employer, the Petitioner, and
the Intervenor.'
Upon the entire record in this case, the Board finds :
1. The Employer is engaged in commerce within the meaning of
the Act.
2. The labor organizations involved claim to represent certain
employees of the Employer.
1 The name of the Employer appears as amended at the hearing
' Retail Stores Employees Union Local 300, chartered by Retail Clerks International
Association , AFL-CIO , was allowed to intervene on the basis of its then -current collective-
bargaining agreement with the Employer, which is not claimed by any of the parties as a
bar to this proceeding
160 NLRB No. 113.