Boston Herald-Traveler Corp.

In the Matter of BOSTON HERALD-TRAVELER CORPORATION and NEWSPAPER GUILD OF BOSTON Case No. 1-R-2884.Deeided August W,1946 Ropes, Gray, Best, Coolidge cC Rugg, by Messrs. William F. Sulli- van, Jr., and John W. Bryant, of Boston, Mass., for the Company. Grant cC Ango ff, by Messrs. Samuel F. Angoff and Harold B. Roit- man, of Boston, Mass., for the Petitioner. Issernian,'Isserman d Kapelsohn, by Mr. Morris Isserman, for the American Newspaper Guild. Mr. John A. Nevros, of counsel to the Board. DECISION AND DIRECTION OF ELECTION STATEMENT OF THE CASE Upon a petition duly filed by Newspaper Guild of Boston, herein called the Petitioner,' alleging that a question affecting commerce had arisen concerning the representation of employees of Boston Herald- Traveler Corporation, Boston, Massachusetts, herein called the Com- pany, hearing in this case was held at Boston, Massachusetts, on April 16, 1946, before Robert E. Greene, Trial Examiner. The Trial Ex- aminer's rulings made at the hearing are free from prejudicial error and are hereby affirmed. Both parties and the American Newspaper Guild, CIO, parent of the Petitioner, filed briefs, the latter by special permission of the Board. The requests of the Company and Petitioner for oral argument are denied. Upon the entire record in the case, the National Labor Relations Board makes the following : FINDINGS OF, FACT 1. THE BUSINESS OF TIIE COMPANY The Boston Herald-Traveler Corporation, a Massachusetts corpora- tion with its principal office and place of business in Boston, is engaged in the publication of three newspapers : the Boston Herald, published I The name of the Petitioner appears as amended at the hearing 70 N. L R B, No. 47. 651 652 DECISIONS OF NATIONAL LABOR RELATIONS BOARD every morning except Sunday, and having an average daily- circulation of approximately 140,000 copies; the Boston Traveler, published each evening except Sunday, with an average daily circulation of approxi- mately, 250,000 copies; and the Boston Sunday Herald, published each Sunday, with a circulation of approximately 240,000 copies. ' The circulation of the three newspapers is nationwide. The Company uses newsprint, mats and ink valued in excess of $500,000 annually, sub- stantial portions of which are received from sources outside the Com- monwealth of Massachusetts. The Company utilizes the Associated Press and the United.Press news services, the Dow Jones Financial Service, and several syndicated columns, comic strips and special features. The Company admits and we find that it is engaged in commerce within the meaning of the National-Labor Relations Act. H. THE ORGANIZATION INVOLVED The Petitioner is a labor organization affiliated with the American Newspaper Guild, which is in- turn affiliated with the Congress of Industrial Organizations, claiming to represent employees of the Company. III. THE QUESTION CONCERNING REPRESENTATION On or about January 4, 1946, the Petitioner requested the Company to recognize it as the exclusive bargaining representative of the subur- ban newsdealers 2 who distribute the newspapers published by the Company. By letter dated January 11, 1946, the Company refused to accord the Petitioner such, recognition on the ground that these newsdealers are not its employees but rather independent contractors. The area within about a 15-mile radius of Boston has been divided by the Company into about 28 distribution areas each centering around a suburban community. In each area is located an office which is operated by a newsdealer and staff varying from 18 to 40 individuals consisting of carriers, assistants and clerks. Each newsdealer has the exclusive right to home delivery of the Company's three news- papers in his district. With several isolated exceptions, the news- dealers do not handle anything other than the Company's newspapers. They comprise,a labor force composed almost entirely of mature men who work continuously and regularly at the job of distributing and delivering newspapers, most of them relying upon the income derived therefrom for the support of themselves and their families. The relationship between the suburban newsdealers and the Com- pany dates back to 1929. At that time, the Company abandoned the practice of serving its suburban subscribers through an agency which also distributed the newspapers of its competitors, and inaugurated a 2 The newsdealers are also called branch managers and exclusive dealers. BOSTON HERALD-TRAVELER CORPORATION 653 system of its own. It was then that the Company first established separate offices in each of a number of suburban communities of Boston for the exclusive distribution of its newspapers. It designated certain individuals in its employ as branch managers of each of these offices. The branch managers were responsible for the distribution of the news- papers in their assigned territories through carriers or delivery boys who did the actual delivering to the homes of the subscribers. They were paid on a salary or a salary plus bonus basis, and were placed by the Company under the direct control and supervision of a number of supervisors who supervised the sales, promotion and distribution of the newspapers in the suburban communities. Both the supervisors and the branch managers were included in the Company's circulation department. In 1937 the Company advised the branch managers that henceforth they would operate as "independent dealers;" and required each of them to sign a so-called franchise agreement. Coincidental with the signing of this franchise agreement the branch managers were severed from the Company's pay roll, and thereafter their earnings were deter- mined by the difference between the wholesale cost of the newspapers to them and the retail price to the subscribers, less their expenses. The franchise agreement, which bears the signature only of the newsdealer, reserves to the Company rights which are tantamount to complete control over the operations of the newsdealers. It constitutes an undertaking by the newsdealer to pay for newspapers at a fixed wholesale rate and to cooperate with the Company in promotional activities. Although it can be terminated by either party on 30 days' notice, the Company may dispense with the services of the newsdealer upon 24 hours' notice in the event the newsdealer fails, in the opinion of the Company, to provide satisfactory home delivery service. It contains no provision for assignment or sale of the office or route. Testimony indicated that no such right exists in the newsdealers, and there is absent any evidence that a newsdealer at any time purchased or sold any of these branches or routes for any consideration to any individual. Indeed, it is clear` that the Company has installed and summarily removed newsdealers,3 and that, while the newsdealers are 8 On this point , the record discloses , among others , the following incidents : (1) On March 6. 1939, Lloyd F Pulster, assistant branch manager at the Wollaston branch, was told by a representative of the Company that he "was to go out and take over the Dedham Branch on March 13. " The office was already established , an active subscribers file was turned over to Pulster , together with a system and material for maintenance of books and records. ( 2) The newsdealer at the Wellesley branch was summarily removed by the Company in 1939, allegedly on the basis of two complaints from subscribers . ( 3) William J. Doyle, the newsdealer at the Waban branch , at the insistence of Benjamin L. Moltman, the Company 's Assistant Circulation Manager, signed a waiver of his right to the agency as of March 1, 1945, although he objected to doing so Moltman said he "had to have [the waiver] because they had another man that they hired and they wanted to put him in there " The action of the Company was prompted by the fact that an arrangement made by the newsdealer to have an assistant run the branch part time for him while he went to work in a war plant was not acceptable to the Company. 654 DECISIONS OF NATIONAL LABOR RELATIONS BOARD not subject to discharge within the literal meaning of the term,, the Company can demand that a newsdealer dispose of his route and possesses the power to enforce such a demand by refusing to supply him with newspapers. In their day to day activities, the newsdealers are subject to con- siderable supervision and control by the Company, through the super- visors who perform functions in the nature of sales promotion, check the manner in which distribution is handled and in which accounts are paid, check the activities of the carrier boys and make suggestions to them, and recruit and refer boys to the newsdealers to hire as carriers. The Company takes orders for' new subscriptions which sometimes include the sale of one of its insurance policies, and expects the newsdealers to deliver the newspapers to, and collect the premiums from, those subscribers within their districts. Furthermore, the Com- pany adjusts the wholesale price of the newspapers to the size and type of the district or territory involved in order to defray expenses incurred by the newsdealer and to provide an adequate return to him. It credits the newsdealer, for, all returns of unsold newspapers, and appears to limit the delivery charges which the newsdealers can charge the subscribers' It also provides the system for keeping books and records, furnishes certain supplies for use in connection with delivering and collecting for its publications, supervises customer complaints, designates the branch office hours, notifies newsdealers when to stop -deliveries and, in some cases, has ordered reinstatement of deliveries stopped by newsdealers, and has exerted pressure on newsdealers to sign leases for their branch ' offices. In addition, the Company has apparently caused the newsdealers' telephones to be listed under its name in the telephone directory, although they have been listed in the classified section under the newsdealers' names and both listings have been paid for by the newsdealers and not by the Company. And the Company has seen to it that its supervisors operate the news- dealers' offices in their absence due to illness or in the event they "resign." In fact, when a newsdealer leaves, the supervisor operates the branch office until such time as the Company is able to locate a new man to take over the territory. At the hearing the Company's assistant circulation manager testified that the newsdealers are an integral part of the Company's circula- tion system. That the Company has so regarded them is further emphasized by the fact that during the war period the Company wrote draft deferment requests in behalf of newsdealers; it has also mani- fested its close relationship to these newsdealers by giving financial assistance to several of them in order to aid them in difficult times 'A dealer raised his delivery charges from 90 cents , to 95 cents per•inonth per customer without any interference from the Company , but when he subsequently further increased the charges to $1 per month, he was advised to return to the 95-cent rate BOSTON HERALD-TRAVELER CORPORATION 655 and to compensate them for additional expenses.5 Moreover, the Company has maintained, and at the time of the hearing was main- taining, a staff of employees known as checkers, whom it furnishes to newsdealers, at its own expense on a temporary basis when their carriers fail to report for work, and also for longer periods when the newsdealers are unable to employ a full staff due to manpower shortages.6 We are satisfied from all the foregoing that the economic facts surrounding the relationship between the newsdealers and the Com- pany are more indicative of employee status than of independent enterprise. The employee status of the newsdealers which prevailed before 1937 has remained, in essence, unchanged despite their signing of franchise agreements, the resulting change in their manner of compensation, and the Company's reference to them as "independent dealers."' Indeed the record discloses that the Company has, in effect, perpetuated many elements of the original employer-employee relationship. It has continued to reserve to itself control over the extent of the territories encompassed by its branch offices, over the personnel in charge of such branch offices by assigning and removing newsdealers, and over the manner of the operation of these offices, by providing the system for keeping books and records, by designating the hours for the branch offices, by furnishing supplies for use in con- nection with delivering and collecting for its publications, and by the close supervision of its supervisors over the newsdealers. And it still regulates to a certain extent the compensation ofthe newsdealers by adjustment of the wholesale rates of newspapers. Although it does appear that the newsdealers themselves employ helpers, pay their own operating expenses,-including office rental, heat and light, and that the Company does not have pay-roll lists of the newsdealers , or pay Social Security Workmen's Compensation, or Unemployment Insurance taxes in their behalf, these considerations are not of conclusive significance of and by themselves. In the Hearst case 8 the Supreme Court was confronted with an analogous situation to that presented herein. In that case the newsboys involved were mature men who worked continuously and regularly at the job of selling newspapers and were dependent on' their earnings for their 5 Several newsdealers testified that they had received various sums of money, amounting to approximately $30 in each case , as assistance One dealer, William J. Doyle , testified he requested additional help, and Seaquist , a company supervisor, paid him $10 a week for each of two newsboys hired by Doyle for a period of 10 weeks 8In its brief, the Company contends that due to war conditions and the severe man- power shortage "a certain amount of assistance has been given to the dealers by the Com- pany to help maintain circulation" but that these instances were mere war -time improvisa- tions. However, the record does not support its position inasmuch as many of the incidents of assistance to the newsdealers appear to antedate the war. 7 See Matter of The Park Floral Company , 19 N. L R B. 403. 8 See N. L. R. B. v.•Hearst Publications, Inc., 322 U. S 111 This case came before the Court as a result of the Board's decision in Matter of Stockholders Publishing Company, Inc., 281N. L. R. B. 1006, in which newsboys were found to be employees. 656 ' DECISIONS OF NATIONAL LABOR RELATIONS BOARD livelihoods. They sold their newspapers from established spots, and although they bought and sold these spots among themselves, a signi- ficant attribute of independent contractor status which is not present herein, the publisher reserved the right to approve each spot holder and to remove him from his spot for reasons of discipline or efficiency. The newsboys, who themselves hired helpers to assist them in their sales, were not carried on the publisher's pay rolls, nor did they enjoy the benefits of Social Security or unemployment insurance. Their earnings consisted of the difference between the prices at which they sold the newspapers to the public and the prices at which they pur- chased them, from the publishers, who controlled their supply of newspapers as well as the cost and selling price thereof. Their hours of work and their efforts on the job were supervised and to some extent prescribed by the publishers or their agents, the district managers. Much of their sales equipment and advertising material was furnished by the publishers with the intention that it be used for the publisher's benefit. The Supreme Court in finding that the newsboys were em- ployees within the meaning of the Act referred to that intermediate area in which characteristics of both employee status and independent contractor relationship are present. With respect to relationships within this area the Court said that when "the economic facts of the relation make it more nearly one of employment than of independent business enterprise with respect to the ends sought to be accomplished by [the Act], those characteristics may outweigh technical legal classi- fication for purposes unrelated to the statute's objectives and bring the relation within its protections." Applying the, criteria of that case we are satisfied, as demonstrated above, that the factors of employ- ment outweigh by far those of independent enterprise, and bring the relationship between the Company and the newsdealers within the Act's protection. Accordingly, upon the basis of the foregoing facts and upon the entire record in the case, we are of the opinion that the newsdealers involved in this proceeding are employees of the Company within the meaning of Section 2 (3) of the Act .9 9 See Matter of The Houston Press Company 70 N L . R B. 660 Cf . our decision in Matter of Philadelphia Record Company, 69 N L R. B. 1232 , wherein we applied the principles enunciated by the Supreme Court in the Hearst decision and found that the house - to-house carriers were not-employees There , in contradistinction to the instant case, the house -to-house carriers had virtually complete control of the disposition of their routes whether by sale, transfer or subdivision thereof , chose their own sales areas , received virtually no instructions from the publishers regarding the details of their work, and, because of the freedom they exercised in the operations of their sales areas, their earnings depended in large measure on their own energy and resourcefulness, rather than upon controls set by the publishers In support of its contention that newsdealers are not employees , the Company cites Matter of Federal Ice & Cold Storage Company , 18 N L. R. B . 161, 165, and urges further that the relationship here is that of independent contractor under the Massachusetts law and for taxing purposes under the Federal law - We do not agree. The cited case is clearly distinguishable on its facts . As to the other contention , a similar argument addressed to the status- of the newsboys under State law and for taxing purposes -under Federal law was found to be meritless by the ' Supreme Court in the Hearst decision, 322 U S. 111 at 122-123. BOSTON HERALD-TRAVELER CORPORATION 657 We find that a question affecting commerce has arisen concerning the representation of employees of the Company, within the meaning of Section 9 (c) and Section 2 (6) and (7) of the Act. IV. THE APPROPRIATE UNIT The Petitioner seeks to embrace the approximately 28 suburban newsdealers within its existing unit consisting of employees in the editorial, commercial, advertising, and building maintenance depart- ments. In the alternative, it seeks to represent these employees in a separate unit. The Company opposes the Petitioner's primary unit contention, but agrees that should the Board find the newsdealers to be employees within the meaning of the Act, they properly constitute an appropriate separate unit. The 28 newsdealers work in separate establishments in suburban communities within about a 15-mile radius of Boston, away from the Company's main office and plant. They do not report to the main office and plant at any time. Theyhire and discharge their own per- sonnel and have from 18 to 40 employees working for them. They maintain hours of work which differ from those of the employees at the main office and plant, and are compensated in a manner different from that of the approximately 450 other employees of the Company presently covered in the Petitioner's existing unit. The Petitioner argues, in support of its primary position, that although the newsdealers have supervisory functions with respect to the personnel at their respective branches, they may nevertheless be included within the existing unit because none of their subordinates are in the claimed unit and because of the newsdealers' community of interest with the employees in that unit. We do not agree. In Matter of Hollywood, Citizen-News (Citizen-News Company, a corporation), 67 N. L. R.- B. 363, we were confronted with a somewhat analogous situation. The petitioner in that case contended primarily for a unit of all circulation department employees including, among others, dis- trict managers and circulation agents, and excluding, among others, newsboys; it requested alternatively, a separate unit of district man- agers and circulation agents. We there rejected the petitioner's primary position and established a separate unit of district managers and circulation agents in accordance with its alternative position, holding that "in view of the fact that [the circulation agents and district managers] possess supervisory powers over the newsboys, they would necessarily be placed in a unit separate from other employees, if they are to be represented." Contrary to the Petitioner's contention herein, our reference to "other employees" in the context quoted above was both to the subordinates of the circulation agents and district 658 DECISIONS OF NATIONAL LABOR RELATIONS BOARD managers and to rank and file employees not in such relationship to the agents and managers 10 Accordingly, applying the criteria of the cited case, we are satisfied that the newsdealer, in view of their supervisory, status, must be established in a separate unit from other rank and file employees. Moreover, apart from this consideration, we are persuaded that these employees lack a sufficient community of interest with the employees in the existing unit. We are mindful that, as the union con- ,tends, the newsdealers, perform an essential part in the distribution of the Company's newspapers and previously have been treated by the Company as forming part of the circulation department, that return- ing servicemen who were.formerly newsdealers are either reinstated by the Company to their former newsdealer's agency or put on the newspaper staff as a supervisor or a checker, that all outside circula- tion supervisors come from the ranks of newsdealers or agents, and that newsdealers have contact with the checkers who are assigned by the Company to assist them, and with the delivery men who deliver the newspapers to them, all of whom are in the existing unit. How- ever, the over-all dissimilarity in the interests of the newsdealers to those of the employees in the existing unit is amply demonstrated by the differences in their hours of work, their working conditions, and their methods of compensation, and by the fact that the newsdealers have no contact with the great bulk of the Company's other employees. We find, therefore, in accordance with the Petitioner's alternative position, that the Company's suburban newsdealers constitute a unit appropriate for the purposes of collective bargaining within the mean- ing of Section 9 (b) of the Act. DIRECTION OF ELECTION As part of the investigation to ascertain representatives for the 'purposes of collective bargaining with Boston Herald-Traveler Cor- poration , Boston, Massachusetts , an election by secret ballot shall be conducted as early as possible, but not later than thirty ( 30) days from the, date of this Direction, under the direction and supervision of the Regional Director for the First Region , acting in this matter as agent for the National Labor Relatlions Board, and subject to Ar- ie The Petitioner adverts, in this connection , to footnote 4 in the Hollywood Citizen- News decision , in which we stated • "The record does not reveal the department of which the newsboys are a part." However, we perceive no warrant for concluding therefrom that the Board 's decision turned on , or was affected by , the lack of this specific information. The Petitioner cites -fatter of Tribune Publishing Company, 35 N. L. R B 690, and Matter of Brooklyn Daily Eagle, 13 N L R. B. 974, in support of its primary position. To the extent that these cited decisions are inconsistent with our Hollywood Citizen-News decision , as further clarified heiein , they are herewith overruled BOSTON HERALD-TRAVELER CORPORATION 659 title 111, Sections 10 and 11, of National Labor Relations Board Rules and Regulations-Series 3, as amended, among the employees in the unit found appropriate in Section IV, above, who were employed on the date of this Direction, including employees who did not work on that date because they were ill or on vacation or temporarily laid off, and including employees in the armed forces of the United States who present themselves in person at the polls, but excluding those employees who have since quit or been discharged for cause and have not been reinstated prior to the date of the election, to determine, whether or not they desire to be represented by Newspaper Guild of Boston for the purposes of collective bargaining. MR. GERARD D. REILLY took no part in the consideration of the above Decision and Direction of Election. 712344-47-vol. 70--43