The Kansas City Star Co.

In the Matter of TJ1 r KANSAS CITY STAR COJI rAN y and NrwSrApER CARRIERS ' CooPER ATIvE ASSOCIA'I,ION OF GREATER K.\NSAS CITY No. 526, AFFILIATED WITH INTERNATIONAL PRINTING PRESSMEN .AND ASSISTANTS' UNION OF NORTH AMERICA, AFL, PETITIONER Case No. 17-R-1701.Decided February 16, 1948 Messrs. Charles E. Whittaker and Carl E. Ei?ggas, of Kansas City, Mo., for the Company. Messrs. Cldf Langsdale and John J. 111anlning, of Kansas City, Mo., for the Petitioner.1 Messrs . Hens y Depping, William S. Hogsett, and Guy W. Rice, of Kansas City, Mo., for the Intervenors. DECISION AND ORDER Upon a petition duly filed, hearing in this case was held on various dates between March 5 and May 23, 1947, before Harry L. Browne, hearing officer. The Petitioner, The Kansas City Star Company, herein called the Company, and 128 newspaper carriers, whose motions to intervene were granted and who are collectively referred to herein as the Intervenors, appeared and participated. The hearing officer's rulings made at the hearing are free from prejudicial error and are hereby affirmed.' Upon the entire record in the case, the National Labor Relations Board makes the following: FINDINGS OF FACT 1. THE BUSINESS OF THE COMPANY The Kansas City Star Company, a Missouri corporation , is engaged principally in the publishing of morning , evening, and weekly news- 1Jli• Joseph If Jacobs, of Chicago, Illinois, originally appeared for the Petitioner, but withdrew from the matter dui ing the hearing 2 In the course of the proceeding, the Intervenors filed seveial motions to dismiss the petition on vaiious grounds As indicated in Section III, infra, Ave are dismissing the pe- tition on the ground that the individuals in issue are not "employees" within the meaning of the Act, as amended Accordingly, all other giounds are preternutted The requests of the Company and the Intervenors for oral argument are denied, inasmuch as the record , in our opi nion , adequately presents the issues and the positions of the parties 76N L.R B.,No.52. 384 THE KANSAS CITY STAR COMPANY 385 papers in Kansas City, Missouri. During 1946, the average daily, except Sunday, circulation of the Company's morning and evening newspapers was in excess of 700,000 copies, of which approximately 31 percent was distributed to points outside the State of Missouri. During the same period, the average circulation of the Company's Sunday newspaper was over 361,000 copies, of which approximately 3 "0 percent was distributed to points outside the State. In addition, the Company used raw materials valued in excess of $1,000,000, all of which was received from sources outside the State. The Company admits and we find that it is engaged in commerce within the meaning of the National Labor Relations Act. II. THE ORGANIZATION INVOLVED The Petitioner is a labor organization affiliated with the American Federation of Labor, claiming to represent the home delivery carriers of the Company. III. THE RELATIONSHIP OF THE COMPANY TO THE CARRIERS The Petitioner seeks a unit composed generally of all non-super- visory home delivery carriers of the Company in "Greater Kansas City (City Circulation Zone)." 3 The Company and the Intervenors assert that these carriers are "independent contractors," and not "em- ployees," within the meaning of the Act and the amended Act.' For purposes of the home delivery of its newspapers, the Company has divided the Greater Kansas City area into about 230 geographical divisions or routes. These routes, are serviced by approximately 207 carriers, each of whorl operates from 1 to 3 routes under individual contracts entered into with the Company. The carriers have the option of receiving their papers either at the Company's plant or at "bundle stations" located on or near their routes. And each carrier is thereafter responsible to deliver the papers regularly and promptly to all subscribers at their respective residences or places -of business in his district. , ,. The gross earnings of the carriers are determined by the, difference between the retail prices established by the Coinpany and the wholesale rates fixed in the carriers' contracts with the Company. The latter i Specifically, the requested unit would include all route owners performing any work as carriers, and lessees, but would exclude helpers , absentee owners and their employees, lee ors, and joint operators w ho are not route owners The Company and the Intervenors took no positions on the composition of the unit. ' Section 2 ( 3) of the original Act made no specific reference to "independent contrac- tors" llowver, Section 2 (3) of the amended Act pro%ides that "The term `emplolee' shall not include , , any individual having the status of an independent contractor 386 DECISIONS OF NATIONAL LABOR RELATIONS BOARD rates are not uniform, but depend, in general, upon the nature of the particular route involved. The carriers are permitted to order a num- ber of papers equal to the total number of their subscribers, plus a maximum overage of 1 percent. They are charged for all papers ordered, bear the loss of any papers stolen or damaged, and are not allowed to return any unsold papers for credit. The carriers are not listed on the Company's pay roll; their income taxes are not withheld by the Company; and they are not subject, by reason of the relationship in question, to the benefits of Social Security, Workmen's Compensa- tion, or Unemployment Insurance. The carriers are accorded a wide latitude for individual initiative in servicing their routes. Thus, they select the means of conveyance to be used in effecting deliveries, establish the order of such deliveries, and hire any "helpers" and/or "collectors" deemed necessary to aid in the operation of their routes.s They separately fix the salary and other conditions of employment of their assistants, and are responsible for any damages caused by such personnel. And, although supplies used in making deliveries, such as rubber bands and wax paper, are made available to the carriers by the Company at cost, the carriers are not obliged to purchase these items. In addition, the carriers are free from any Company control of their equipment and they are not com- pelled to place the Company's name thereon. Each carrier establishes his own system of making collections from his subscribers. The carrier, at his option, may demand payments in advance or may extend credit, and, in the latter event, all credit losses are borne by him. Moreover, the carrier is not required to use the col- lection cards supplied by the Company, but may adopt any means which he desires to facilitate the collecting of his accounts. While each carrier maintains route books furnished by the Company, which pro- vide for the names and addresses of all subscribers and the status of their accounts, and these books are audited periodically by the Com- pany, such audits are essential to effect compliance with the directives of the Audit Bureau of Circulation and with postal regulations. Each carrier determines the number of hours to be devoted to his, newspaper operations and he may absent himself from his route at any time without permission of the Company. During such absences, lie generally provides his own substitute, and, if his absence will be prolonged, he notifies the Company as to his forwarding address. Although the carriers are not permitted to distribute any newspapers other than those of the Company, without the latter's consent, it ap- s Any "overs" not otherwise used may be distributed by the carrier on his route in ally manner which he desires. 6 Almost all the earl Hers employ from one to seven assistants THE KANSAS CITY STAR COMPANY 387 peals that they are not precluded from engaging, and some of them do engage, in non-competitive commercial activities on their routes, such as selling produce, greeting cards, and miscellaneous personal services. In addition, some carriers work at other jobs concurrently with their newspaper vending. The carriers are virtually unrestricted by the Company in the selec- tion of their routes and in the determination of their sales areas. In practice, a route is usually transferred by virtue of an agreement entered into between the established carrier and the new carrier inde- pendently of the Company. The Company does not require that it be apprised of the terms of this agreement, and it has seldom refused to execute a contract with the new carrier if the latter posts the necessary bond or deposit in an amount equal to 1 week's supply of papers.? Similarly, portions of routes may be transferred between carriers or to a new carrier, and the Company thereupon enters into new agreements with the parties concerned. Although the Company can demand that a carrier dispose of his route and has the contractual power to enforce such demand by terminating the relationship on 4 clays' notice, it has rarely made such demand and there is no evidence that the Company has ever teritii noted a contract by notice. The Company employs approximately 12 "district men"' principally to conduct the periodic audits of the route books mentioned above, to assist the carriers in emergencies, and to aid in the settlement of com- plaints by subscribers which cannot be resolved by the carriers them- selves. The district men serve under the immediate supervision of the city circulation manager of the Company and have no authority to "hire, discharge or transfer" the carriers, or effectively to recommend such action. Although they have, on occasion in the past, issued in- structions to the carriers on the handling of their routes, the carriers have felt free to disregard these constructions and no punitive action has apparently resulted therefrom. The record discloses that the average earnings of the carriers from their routes are higher than the salaries received by the district men,' and that at least one district man has been employed as a collector by a carrier during the former's off-duty lion rs. At the hearing and in its brief, the Petitioner contended, inter alia, that these carriers are comparable to the house-to-house newspaper T The Company has apparently withheld its approval of route transfers in only two of the numerous instances of such transfers . In one instance , its refusal was based on the previous inept handling of a route by the prospective carrier, and in the other instance, the proposed transferee was deemed irresponsible by the Company 6 The annual earnings of the carriers, which range from about $2,500 to $10,000, average ,approxmialely $3.600 whereas the district omen received salaries of approximately $3,000 per year 781902-48-vol 76-26 388 DECISIONS OF NATIONAL LABOR RELATIONS BOARD carriers in the Pulitzer case,° who were found by us to be employees of the companies whose papers they distributed. The Company and the Intervenors, however, argued the close similarity between the carriers herein and those found by the Board to be independent contractors in the Philadelphia Record case,10 and, in addition, relied upon the impact of the amended Act on the status of these carriers. Although we are persuaded that the facts in this proceeding are more nearly apposite to those in the Philadelphia Record case, we find it unnecessary, in view of the amended Act, to place any reliance on the reasoning in that case. The amended Act, as already noted, specifi- cally excludes "independent contractors" from the category of "em- ployees." The legislative history, in this connection, shows that Congress intended that the Board recognize as "employees" those who "work for wages or salaries under direct supervision," and as "inde- pendent contractors," those who "undertake to do a job for a price, decide how the work will be clone, usually hire others to do the work, and depend for their income not upon wages, but upon the difference between what they pay for goods, materials, and labor and what they receive for the end result, that is, upon profit The aforesaid criteria, when applied to this case, clearly establish that these particular carriers are independent contractors. Thus, as previously found, the carriers are not paid wages or salaries by the Company; rather they receive gross earnings frond their newspaper operations measured by the difference between the retail and wholesale rates for the papers, and these earnings are ultimately controlled, in part, by the carriers' diligence and efficiency in effecting the delivery of their papers and the collecting of their accounts. In addition, the carriers establish their own methods of servicing ttl;,ir routes, hire their own assistants, and supply alino4t all their own equipment. The Com- pany, in turn, exercises virtually no supervision over the carriers and, in general, is interested only in the ends sought to be accomplished by the carriers under their contracts and not the means whereby these ends are attained. And, finally, the entrepreneurial nature of the relation- ship in question has been recognized) by the Company, as evidenced by the manner in which routes are selected, transferred and divided, and the failure of the Company ever to terminate such relationship by notice. Upon the entire record and in view of the foregoing, we conclude, therefore, that the Company's home delivery carriers are "independent I Matter at The Puletder Publishing Company, 62 N L R B 229. "Matter of Philadelphia Record Company, 69 N L. R B. 1232. 1180th Congress, 1st Session, House of Representatives Report No. 245, April 11, 1947, page 18 THE KANSAS CITY STAR COMPANY 389 contractors ,'' and not "employees," within the meaning of the amended Act. Accordingly, we shall dismiss the petition herein. ORDER IT IS HEREBY ORDERED that the petition for investigation and certifica- tion of home delivery carriers of The Kansas City Star Company, Kan- sas City, Missouri, filed by Newspaper Carriers' Cooperative Associa- tion of Greater Kansas City No. 526, affiliated with International Printing Pressmen and Assistants' Union of North America, AFL, be, and it hereby is, dismissed. MEMBERS MuRnocx and GRAY took no part in the consideration of the above Decision and Order.