Virginian-Pilot Ledger Star

National Labor Relations Board - Board Decisions

Mar 29, 1979

241 N.L.R.B. 575 (N.L.R.B. 1979)

THE VIRGINIAN-PILOT LEDGER STAR
The Virginian-Pilot/Ledger Star, Capital Division of
Landmark Communications, Inc., and International
Printing and Graphic Communications Union, Lo-
cal 54, AFL-CIO, Petitioners. Case 5-RC-10427
March 29, 1979
DECISION ON REVIEW
BY CHAIRMAN FANNING AND MEMBERS PENEI.IO
AND TRUESDALE
On June 23, 1978, the Regional Director for Re-
gion 5 issued a Decision and Order in the above-enti-
tled proceeding in which he found inappropriate Peti-
tioner's requested unit of all district supervisors
employed by the Employer in its delivery and circula-
tion department located in Norfolk, Virginia, on the
ground that they are supervisors within the meaning
of Section 2(11) of the Act. The Regional Director
based his conclusion on the finding that district super-
visors exercise supervisory authority over the Em-
ployer's youth carriers who he found are employees
within Section 2(3). Thereafter, in accordance with
Section 102.69 of the National Labor Relations
Board Rules and Regulations, Series 8, as amended,
the Petitioner filed a request for review of the Re-
gional Director's decision asserting, inter alia, that the
record supports a finding that the district supervisors
are employees under Section 2(3), that the petitioned-
for unit is appropriate, and that a substantial question
of law or policy is raised because of the departure
from officially reported Board precedent. The Em-
ployer filed a statement in opposition to the request
for review and a memorandum in support thereof.
On August 28, 1978, the Board telegraphically
granted Petitioner's request for review.
The Board has reviewed the rulings of the Hearing
Officer made at the hearing held on May 1, 18, 19,
and 25, 1978, and finds that they are free from preju-
dicial error. They are hereby affirmed.
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 considered the entire record and the
attached Decision of the Regional Director in light of
the briefs' and with respect to the issues on review,
and has decided to affirm the rulings, findings, and
conclusions of the Regional Director. Accordingly, in
I The Petitioner has requested oral argument. This request is hereby de-
nied as the record and the briefs adequately present the issues and positions
of the parties.
agreement with the Regional Director, we shall dis-
miss the petition.2
ORDER
It is hereby ordered that the petition filed herein
be, and it it hereby is, dismissed.
MEMBER TRUESDALE, dissenting:
In affirming the Regional Director's decision to dis-
miss the petition, my colleagues rely on his finding
that youth carriers, who are allegedly supervised by
district supervisors, are employees within the mean-
ing of Section 2(3) of the Act. That finding, as is more
fully discussed below, ignores the nature of the rela-
tionship between the youth carriers and this employer
and the intermediary role played by parents in that
relationship. These factors, in my view, compel the
conclusion that youth carriers are not statutory em-
ployees and, therefore, that district supervisors are
not statutory supervisors inasmuch as they exercise
no supervisory authority over employees of this em-
ployer.3 Accordingly, I would find, contrary to my
colleagues, that the requested unit of district supervi-
sors is an appropriate one for collective bargaining.
In previous cases involving the issue of employee
versus independent contractor status, the Board has
considered the positions of the parties as well as the
evidence adduced in reaching its decision.4 At the
hearing in this matter, the Employer's stated position
was that carriers were employees. However, the Em-
ployer's past characterization of the carriers belies its
present position. Thus, in its literature, the Employer
characterized a carrier as a "manager of an indepen-
dent business" or a "little merchant," and its district
supervisors were informed that carriers were indepen-
dent contractors especially for the purposes of liabil-
ity and loss. This characterization of the carriers was
maintained until the instant petition was filed, when
the Employer dispensed with the "little merchant" or
"independent businessman" nomenclature, asserting
that it was a mere fiction not descriptive of its rela-
tionship with the carriers. This sudden change in po-
2 In a recent decision on similar facts, the Board dismissed a petition for a
unit of district managers, the equivalent of the district supervisors herein.
based on the finding that youth carriers, over whom the district managers
exercised statutory supervision, are employees within the meaning of Sec
2(3) of the Act. See Philadelphia Newspapers Inc., 238 NLRB 835 (1978).
'Although the Regional Director found it unnecessary to determine the
status of adult carriers, motor route camers, and neighborhood counselors.
who are alleged by the Employer to be employees supervised by district
supervisors. it is clear from the record, as is more fully discussed below. that
the Employer has clothed them with the indicia and status of independent
contractors.
4 See. e.g.. Philadelphia Newspapers. Inc. supra, The Suburban Newspaper
Group--Moorestown News, Inc.. 195 NLRB 438 (1972); Newsday. Inc., 171
NLRB 1456 (1968); cf. The Oakland Press Co. a Subsidiary of Capital Cities
Communications, Inc. 229 NLRB 476 (1977).
241 NLRB No. 81
575
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
sition is entitled, however, to little weight in view of
the fact that the change occurred subsequent to the
filing of the petition herein.'
Consistent with its characterization of carriers as
independent contractors, the Employer has always
treated carriers as nonemployees. Thus, unlike its
regular employees, carriers are not on the Employer's
payroll. Rather than wages or salaries, the carriers'
compensation consists of the difference between the
wholesale price of their newspapers and the amount
of money they collect from their customers at the re-
tail price. No deductions are made by the Employer
from the carriers' profits for state and Federal taxes.
They are not eligible for unemployment compensa-
tion, vacation benefits, or a Christmas bonus. Identifi-
cation cards are not issued to them. Furthermore, car-
riers over 17 are required to sign a special agreement
before assuming responsibility for delivery of a
route;6 carriers under 17 must have their parents sign
a carrier-parent agreement secured by the posting of
a $200 bond.' And, until the instant petition was filed,
the Employer also required carriers to pay 25 cents
per week for general insurance.
Also indicative of their independent contractor sta-
tus is the fact that the carriers' overall opportunity for
profit or loss lies almost entirely in their own efforts.
Thus, as a general matter, carriers may increase prof-
its through efficient operation of their route and by
filling special delivery requests which may yield a tip.
Profits can also be increased through optional solici-
tations of new customers on their routes. Extra earn-
ings can also be gained by participation in the many
contests offered by the Employer.
Similarly, the carriers' risk of loss is substantial,
and they must determine how best to insulate their
operations from loss. Thus, the carriers alone bear the
loss when they are robbed or when a customer fails to
pay. s If they provide poor service, their collections
and tips may be affected, and they may lose custom-
ers. They must also decide whether to employ others
and, if they do, they must determine the manner and
amount of their compensation. All of these decisions,
and others, materially affect the amount the carriers
earn.
While the carriers' ability to increase their profits
and their risk of loss is generally small, it is, as noted,
not insubstantial but is commensurate with the small
scale of their businesses. Recognition of this fact
ISee Puritv Food Stores, Inc., 160 NLRB 651., 658, fn. 16 (1966).
6 The record does not show the number of carriers over age 17.
'The overwhelming majority of carriers are under age 17. The average age
of carriers is 13 on the morning paper and 14 on the evening paper.
I While, on occasion, the Employer has absorbed the loss when a carrier
has been robbed and the carrier's parents refused to make up the loss, it is
uncontroverted that the Employer's general policy is to hold the carrier and
parent liable for such loss.
prompted the Fourth Circuit in N.L.R.B. v. A. S.
Abell Company9 to state:
It is true that the profit realized by the carrier is
not great and the risk undertaken not so large as
that borne by many independent contractors, but
this is so not because of publisher control but
because the business is a small one.
With regard to the exercise of control by the Em-
ployer over the carrier's delivery operation, consider-
ation must be given to the number of carriers vis-a-vis
the number of district supervisors. The Regional Di-
rector found that district supervisors exercise substan-
tial control over the carrier's day-to-day dealings.
Yet, there are over 3,400 carriers, 100 motor route
carriers, and 200 neighborhood counselors which 82
district supervisors purportedly oversee. Indeed, the
average district supervisor is responsible for between
40 and 90 carriers, all of whom perform their delivery
tasks at approximately the same time each day, de-
pending on whether they deliver the morning or eve-
ning paper. Thus, the substantial control found by the
Regional Director is unfounded in light of the num-
ber of carriers for whom a district supervisor is re-
sponsible, the short daily delivery schedule, and the
relatively simple nature of the newspaper delivery
tasks. Although some district supervisors may make
suggestions concerning the manner and schedule of
delivery, the carriers are free to deliver in any manner
which results in timely delivery of the paper. The Em-
ployer's sole concern is with the end result-the
timely delivery of the paper without customer com-
plaint and prompt payment of amounts owed to it.
As noted, prospective carriers under age 17 must
have their parents sign a carrier-parent agreement be-
fore a carrier can start working. This agreement un-
derscores the unusual and important intermediary
role played by parents in the carrier-employer rela-
tionship. The extensiveness of this role is reflected in
the fact that when a child exhibits an interest in being
a paper carrier, the district supervisor conducts the
interview with both the parent and child present.
When there is a misuse of money, a complaint, poor
performance, or any other similar problem, the dis-
trict supervisor often deals directly with the parent in
resolving the problem. Indeed, the record establishes
that the district supervisors have no authority to insti-
tute any discipline short of termination. l Thus, one
district supervisor testified that as independent con-
tractors, carriers could not be "discharged" or "fired"
but only "terminated" since they were not employees.
9 327 F.2d 1, 7 (4th Cir. 1964).
'0 The Employer's contract specifically reserves neither the authority to
discipline carriers or the authority to control the details of their distributive
process. By so doing, the contract evidences the Employer's intention to
avoid creating an employer-employee relations.
576
THE VIRGINIAN-PILOT LEDGER STAR
The Employer's brief cites the testimony of a district
supervisor who said she had been told by supervisors
that "you do not fire carriers ... you replace carriers
Consistent with their limited authority, the district
supervisor often consults with and relies on the parent
to exert pressure on the carrier to improve or to have
them withdraw their consent for the child to perform
as a carrier. The parents are also contacted by the
district supervisor whenever there is a question of li-
ability arising from damage to the property of a third
party caused by the carrier or his substitutes and
helpers, or when there is nonpayment of a bill to the
Employer. Moreover, the parent sometimes substi-
tutes for the carrier.
As a natural corollary of their youth, carriers nec-
essarily require the continued guidance and supervi-
sion of their parents in their daily activities. Because
of this continuing responsibility of parents for their
children, it is only natural that the Employer actively
recruits their aid in controlling the carriers in the op-
eration 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 intermedia-
tion of the parents into this relationship, along with
other factors discussed above, compels the conclusion
that carriers are independent contractors.
Newspapers with carriers, moreover, enjoy an ex-
emption from most child welfare legislation on the
theory that a newspaper route provides valuable
training experience in the responsibilities of life for a
young person. Because the carrier's job is viewed as
one step in the child's learning process, the compensa-
tion received by carriers is considered incidental to
their primary concerns of education and maturation.
Recognizing the uniqueness of the carrier experience
and his relationship with employers, the Board, in a
number of cases, has held that paper carriers are not
statutory employees.' 2
In reaching the conclusion that carriers are in-
dependent contractors, I have not overlooked other
factors which, according to the Regional Director,
show that carriers are employees. These factors, how-
ever, relate almost entirely to the result sought to be
accomplished rather than the manner or means of its
accomplishment. Thus, the Regional Director viewed
geographic boundaries and delivery time frames as a
function of the Employer's control. Yet, the former
merely defines the job territory while the latter is a
H Employer's brief. p. 23.
12 See The Oakland Press Co., supra, El Mundo, Inc., 167 NLRB 760
(1970); Eureka Newspapers, Inc., 154 NLRB 1181 (1965); Buffalo Courier-
Express, Inc., 129 NLRB 932 (1960).
necessary product of satisfying customer desires. In
short, neither is particularly probative of an em-
ployer-employee relationship.
The Regional Director also noted that the carrier
does not purchase and cannot sell his route. This find-
ing, however, ignores the sizeable liability undertaken
in the carrier-parent agreement and ignores the carri-
ers' personal investment in supplies (such as plastic
sleeves, bands, and calendars) and equipment (such
as a coaster wagon, bicycle, bag, or even a car). Fur-
thermore, while there is a technical absence of a pro-
prietary interest in the route, other factors, such as
the entrepreneurial aspects, risks of loss, and opportu-
nities for profit, outweight the importance of this fac-
tor."3
Contrary to the Regional Director's finding, the
record evidence establishes that paper carriers per-
form the actual physical delivery of the newspapers
largely uninhibited by employer control. The carriers'
contacts with the district supervisor, in the absence of
complaints by customers, are generally few and rou-
tine. Thus, the substantial opportunity for the exer-
cise of business discretion available to the carrier, as
well as the large measure of control retained by him
over the means and manner of delivery of the news-
paper, and the Employer's prepetition position, as
evidenced by its literature and its statements to its
district supervisors that carriers are independent con-
tractors, clearly requires the conclusion that carriers
are independent contractors.
In view of his finding that paper carriers are em-
ployees, the Regional Director found it unnecessary
to determine the status of the motor route carriers
and neighborhood counselors who are allegedly su-
pervised by the district supervisors. Inasmuch as I
consider his finding regarding the paper carriers to be
error, it is necessary to resolve their status.
In its brief, the Employer takes the position that
neighborhood counselors are statutory employees.
However, its agreement with neighborhood counse-
lors, which is terminable on 30 days' notice, charac-
terizes the relationship between the parties as "that of
owner and individual contractor." The Employer's
instructional booklet, which is distributed to prospec-
tive neighborhood counselors, states that the neigh-
borhood counselor is "not an employee" of the Em-
ployer, but is one who "owns and operates an
independent business."
As with paper carriers, the Employer treats neigh-
borhood counselors as independent contractors. They
are not paid wages, taxes are not withheld, and they
do not receive any of the benefits accorded to regular
" See Brown v . N.L.R B. 462 F2d 699 (9th Cir. 1972).
577
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
employees. They personally sustain losses from
money stolen from them and appoint their own sub-
stitutes and helpers at wages determined solely by
them.
Similarly, motor route carriers also sign an agree-
ment with the Employer which states that the carriers
shall perform the agreement "according to his own
means and by his own methods, which means and
methods shall be under [his] exclusive ownership
and/or control." [Emphasis supplied.] Like the neigh-
borhood counselor agreement, the motor route agree-
ment is terminable on 30-days' notice. Under the con-
tract, the carrier undertakes all liabilities and is solely
responsible for the purchase and maintenance of a
motor vehicle. Motor carriers also appoint their own
substitutes, hire their own helpers, and schedule their
own vacations. Because of the distances traveled by
motor carriers on their route, their contacts with dis-
trict supervisors are few and routine. Indeed, one dis-
trict supervisor testified that she had never met a mo-
tor route carrier assigned to her.
As is clear from the above, the Employer's con-
tracts with neighborhood counselors and motor route
carriers specifically disavow any intention to control
the details of the distributive process and attempt to
insulate the Employer from any liability arising from
their distribution operations. By so doing, the con-
tracts both implicitly and explicitly define the rela-
tionship they create as that of independent contrac-
tor.
In conclusion, I am satisfied that the record estab-
lishes that neighborhood counselors, motor route car-
riers, and paper carriers are independent contractors
and not employees of this Employer. Accordingly, in
the absence of supervision over statutory employees, I
would find that the district supervisors are employees
and, thus, constitute an appropriate unit for collective
bargaining.
578