Citizen News Co., Inc.

428 DECISIONS OF NATIONAL LABOR RELATIONS BOARD CITIZEN NEWS COMPANY, INC. and MELVIN ERGER . Case No. 21-CA-653. December 12, 1951 Decision and Ordet On October 9, 1950, Trial Examiner David London issued his,Inter- mediate Report in the above-entitled proceeding, finding that the Respondent had engaged in and was engaging in certain unfair labor practices and recommending that it cease and desist therefrom and take certain affirmative action as set forth in the copy of the Inter- mediate Report attached hereto. Thereafter, the Respondent filed exceptions to the Intermediate Report and a supporting brief. Upon consideration of the Intermediate Report, the exceptions and brief, and the entire record in the case then before it, the Board was of the opinion that the record did not contain sufficient information to enable it to make certain findings material to the case. Therefore, the Board, on its own motion, issued an order on December 22, 1950, reopening the record and remanding the case to the Trial Examiner to receive the required evidence and to prepare and issue an appro- priate Supplemental Intermediate. Report. Pursuant to the Board's order a further hearing was held before the Trial Examiner who, on May 16, 1951, issued his Supplemental Intermediate Report, a copy of which is attached hereto, in which he affirmed the conclusions and recommendations contained in his Intermediate Report. The Respondent has filed exceptions thereto. 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 Herzog and Members Houston and Murdock]. . The Board has reviewed the rulings of the Trial Examiner made at the hearings, and finds that no prejudicial error was committed. The rulings are hereby - affirmed. However, the Board > has con- sidered the Intermediate Report, the Supplemental Intermediate Re- port, the exceptions and brief, and the entire record in the case, and, for the reasons indicated hereinafter, finds merit in certain of the Respondent's exceptions. Melvin Erger, the person alleged to have been discriminatorily dis- charged, had been employed by the Respondent in its circulation de- partment as a district agent. In this capacity he was responsible for the daily delivery of newspapers to the Respondent's subscribers within the limits of his assigned territory. He was also continuously ,required to obtain new subscribers. The actual delivery of news- papers to the homes of subscribers and the solicitation of new sub- scribers was accomplished by carrier boys, of an average age of 12 to . 13 years, over whom Erger was in charge. In a previous representa- 97 NLRB No. 61. CITIZEN NEWS COMPANY, INC. 429 tion proceeding 1 involving the employees of the Respondent's circular tion depa'tment, the Board found that the district agents, including Erger, possessed supervisory authority over the carrier boys and ex- cluded them, as supervisors, from the unit of rank-and-file employees found appropriate.2 The record upon which the Intermediate Report was based revealed no circumstance from which it could be inferred that any change had occurred, with respect to the duties of the district agents or their authority over the carrier boys after the decision in the representation case, which might have transformed the status of district agents from supervisors to employees. Moreover, the record indicated, as more fully explicated below, that Erger, up to the time of his discharge, had exercised the usual authority of a- supervisor over the carrier boys. Because Erger's supervisory status had not been asserted as a defense, and as this issue had not been litigated, the Board was of the opinion that further evidence should be adduced to enable it to form a more conclusive judgment regarding Erger's status. Accordingly, the case was reopened and remanded for this purpose.3 At the second hearing, for the first time in this proceeding, the Re- spondent contended that Erger was an independent contractor and therefore specifically excluded from the protection of the Act by the provisions of Section 2 (3). Both the General Counsel and the Re- spondent took the position that the carrier boys were not employees of the Respondent, but were independent contractors. The General Counsel argued therefrom that Erger could not be a supervisor, be- cause such-status•is limited by Section 2 (11) of the Act to individuals possessing supervisory authority over "employees." The Respondent, on the other hand, argued that the statutory definition of a supervisor applies to individuals with the required authority over independent contractors. The Trial Examiner found that the carrier boys were independent contractors and not employees of the Respondent, and rejected the Respondent's argument that individuals who possess supervisory authority over independent contractors are supervisors. He concluded that Erger was an employee whose union activities were protected by the Act, and that the Respondent, as set forth in the Intermediate Report, had discharged him because of these activities in violation of Section 8 (a) (3) and 8 (a) (1) of the Act. We agree with the Trial Examiner that Erger was an employee of the Respondent and not an independent contractor. Contrary to the 1 67 NLRB 363 . The district agents were then designated as circulation agents. ' In its decision the Board , In accordance with the practice then prevailing under the Act before it was - amended, found that the district agents and district managers , a cate- gory similar to district agents, could appropriately constitute a separate unit of supervisor`s. ' Section 7 of the -Act guarantees only the rights of "employees " as defined in Section 2 (3) and not of "supervisors." The Board acted, therefore , to obtain definitive evidence regarding Erger 's status, notwithstanding that the Respondent 's answer admitted the allegation of the complaint that Erger was an "employee." 430 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Trial Examiner, however, we find that the carrier boys are also the Respondent's employees and not independent contractors, and, accord- ingly, that Erger is a supervisor and not an "employee" whose union activities are protected. In concluding that the carrier boys are independent contractors, the Trial Examiner relied upon findings depicting them as "little mer- chants" 4 who buy newspapers from the Respondent and sell them to subscribers, earning as profit the difference between the purchase and selling prices plus a bonus of 50 cents for each new subscriber obtained. The extent of profit earned by the carrier boys, the Trial Examiner found, is determined by the amount of time they voluntarily choose to devote to the solicitation of new subscribers coupled with the energy and resourcefulness they devote to this task. The Trial Examiner noted and relied upon the risk of loss resulting from the Respondent's disallowance of credit for return of unsold papers, the fact that the carrier boys are not as' a matter of right entitled to compensation for collection losses, and that they are permitted to, and do on occasion; hire substitutes and assistants of their own choosing at their own expense. The Trial Examiner conceded that the Respondent reserved some control over the carrier boys, but concluded that this control was so limited as to amount to nothing more than the supervision which an employer may exercise over the work of an independent contractor without converting the latter to an employee. We differ with the Trial Examiner as to the critical findings on which he relied in forming his conclusion that the carrier boys are independent contractors. We note first that they are not vendors hawking newspapers to random customers procured through their own sales efforts, ordering and paying for that number of newspapers they themselves decide they will be able to sell, and sustaining losses because they err in their judgment. They are mere delivery boys who each day receive for distribution. a specified number of newspapers as determined by the district agents over them from records in their possession indicating the exact number of subscribers in each carrier boy's route. Obviously no element of risk is involved, for the carrier boys are given only a quantity of newspapers sufficient to meet their delivery needs. This was affirmed by Rippeto, the head of the Re- spondent's circulation department, who testified that he "didn't think the boys wouldn't (sic) get any more than they needed." More than that, Rippeto testified that if by mistake a carrier boy were to be-given five papers in excess of his needs, this error would be corrected the next day, and he probably would not be charged for these extra copies. -`Nor do we regard the earnings of the carrier boys as profits in the ' The Respondent characterized its relationship with the carrier boys as a "little mer- chant set-up " -CITIZEN NEWS COMPANY, INC. 431 sense that this denotes the income of an independent contractor.' Rather do we consider their earnings as wages in the nature of com- missions, bonuses, or piecework rates paid to sales personnel, route- men, collectors, piece-rate workers and a host of other occupational categories who serve employers as employees 6. The record does not establish the daily transfer of newspapers by the Respondent to the carrier boys as a sale of goods, or the delivery of these newspapers to subscribers as a resale of goods. The carrier boys make no payment to the Respondent for the newspapers, nor are they billed for them as they would be if a sale of goods were involved. The only financial transaction between the carrier boys and the Respondent occurs when the former turn over to the district agents the monthly collections from subscribers, retaining for themselves a sum equal to the difference between the Respondent's wholesale price and the price charged to the subscribers. This we construe only as a method for computing com- pensation for the services of the carrier boys. As to whether the carrier boys bear the risk for collection losses, we believe the record warrants no reasonable inference that they sustain such losses in whole or in part. Rippeto testified that there appears to be no uniform rule, and that the responsibility for these losses "rests between the agent and the carrier boy." He added that the Respond- ent, under its contracts with the district agents, makes a monthly loss allowance to them based upon the number of newspapers they draw. Erger testified that it was for him to decide whether he or the carrier boys should bear collection losses, but admitted that he received The payment mentioned by Rippeto to compensate him for any losses sus- (;ained. In the absence of any clear evidence that the carrier boys are liable for or sustain collection losses, and in view of the Respondent's allowance to district agents for losses, we draw the more reasonable inference that such collection losses as occur are borne by the district agents rather than by the carrier boys. We disagree with the Trial Examiner's finding that no requirements are imposed by the Respondent concerning the amount of time the carrier boys must devote to the solicitation of new subscribers. Erger testified that he had been specifically directed by his supervisor to spend at least'1 night a week, and 2 or 3 nights a week during contest periods, soliciting new subscribers. As hereinbefore noted, solicita- tion of subscribers was actually performed by the carrier boys, who on these occasions formed carrier sales crews directed by the district 6H. R. Rep. No. 245, 80th Cong 1st Sess. (1947), 18, refers to independent contractors as individuals "who undertake to do a job for a price, decide how the work will be done, 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 profits." See Steinberg d Company, 78 NLRB 211, footnote 40 ; United States v. Vogue, Inc., 145 F. 2d 609 (C. A. 4) ; Capital Life d Health Ins. Co. v. Bowers, 90 F. Supp. 600 (D. C. S. C.) 432 DECISIONS OF NATIONAL LABOR RELATIONS BOARD agents under whom they worked. Thus, in carrying out his super- visor's mandate, Erger necessarily would have required the carrier boys under him to solicit 1 to 3 evenings a week. Erger's testimony that he had discharged about 90 percent of the carrier boys in his last agency, because they were lazy and satisfied just to deliver papers and not to solicit new business, conclusively shows that the carrier boys were not privileged to decide for themselves how much time to spend soliciting, but were compelled to engage in this activity as frequently as Erger required them to on penalty of discharge for noncompliance with his demands. Regarding the Trial Examiner's finding that the carrier boys were permitted to obtain substitutes and assistants of their own choosing at their own expense, the only information on this subject in the record was furnished by Rippeto who testified that "if a boy were sick or going away on a trip, the district agent would attempt to have him get a substitute that was agreeable to the district agent to handle the route that day." Thus, the district agents, not the carrier boys, control the selection of substitutes. In view of the foregoing, the carrier boys emerge as parties to a relationship in which the dominant aspects are those of employer- employee. While no single factor considered apart from all other relevant factors is necessarily determinative of an individual's status as an employee or independent contractor, it is well settled that the most essential characteristic of an employer-employee relationship is the retention by the employer of the right to direct and control the manner in which the employee's work shall be performed, that is, the right to determine not merely the result but the methods and means by which such result is to be accomplished.7 In this connection, it is not necessary that the employer actually direct or control the manner in which the services are performed. It is sufficient if he has a right to do so." An important element bearing on the existence of the "right to control" is the right of the employer to hire and dis- charge the persons doing the work,) and where an employer has the right to terminate the relationship at will it indicates an employer- employee relationship 10 The record discloses that the carrier boys have no contract for a fixed term, and that their relation with the Respondent may be termi- nated by the latter at will. The existence and application of this power to terminate at will is clearly demonstrated by the evidence adverted to above, in which Erger discharged the carrier boys under him who refused to comply with his demand to solicit new business. J. Howard Smith, Inc , 95 NLRB 21 ; 56 C. J. S. 33, Sec. 2. )Jones V. Goodson, 121 F. 2d 176 (C. A. 10). , Casement v. Brown, 148 F. 2d 615, 13 S. Ct. 672 ; United States v. Vogue, Inc., supra. 10 56 C. J. S. 56, Sec. 3 (5). CITIZEN NEWS COMPANY, INC. 433 The extent to which this power was applied by Erger over the carrier boys as a means of compelling obedience to his directions over the accomplishment of their work is exemplified by the following reveal- ing testimony of complainant Erger himself. He testified : I trained my boys. I carefully supervised them. I didn't just tell them what to do. I stayed along with them while they were assisting-I thoroughly exploited the boys in every way I could. I even went so far as to make the boys wear hats and bow low in front of people so people would think they 'were cute. I told the boys to either get this person to start or they would get thrown out of this house and I would say, "you are going to stay in there and get it or else," and I would stand and listen to see. We are satisfied that the control reserved by the Respondent over the carrier boys substantially exceeded the mere supervision of a con- tract to insure its faithful performance. Erger not only trained the carrier boys in the art of soliciting subscribers according to his own standards, prescribing specific techniques which he compelled them to employ, but served ultimatums on them which clearly threatened discharge from their jobs for failure to comply with his instructions or to obtain favorable results. Tested by the above-stated, principles of law, we conclude that these circumstances reveal this Respondent possessed the power to control the manner and means by which the work of the carrier boys was to be accomplished, and hence that its carrier boys were the Respondent's employees 11 We are further convinced that the extent of the Respondent's right of control over the work of the carrier boys is sufficiently counter- vailing to outweigh other aspects of their relationship with the Re- spondent which might indicate independent contractorship. Among ' Dispatch Printing Company, Incorporated, 93 NLRB 1282 , Kansas City Star Com- pany, 76 NLRB 384, and Philadelphia Record Company, 69 NLRB 1232, relied upon by the Trial Examiner, and in which the Board found that the newspaper carriers therein involved were independent contractors , are factually distinguishable from the instant case. No facts were presented in the Dispatch Printing decision revealing control-by the employer in that case comparable to the Respondent's control over the carrier boys in this case. In Kansas City Star, the carriers ordered newspapers , were charged for them, bore the loss for all papers stolen or damaged , and were allowed no credit for return of unsold papers ; they established the order of deliveries , and their own system of making collec- tions ; they would extend credit to customers or demand payment in advance, and were liable for all credit losses; they engaged in other commercial activities on their routes such as selling produce, greeting cards, and miscellaneous personal services ; they were virtually unrestricted by the company in the selection of routes and the determination of their sales areas ; they transferred their routes to others independently of the company which did not require that it be apprised of the terms of the transfers ; they could transfer portions of their routes to one another or to new carriers ; they were free to disregard the instructions of the company 's district men on the handling of routes , they hired from I to 7 assistants, fixed their salaries and conditions of employment, and were responsible for any damage caused by them. Essentially , the entrepreneurial features of ownership in routes and independence of operation free from company control which characterized the carriers in the Kansas City Star case also applied to the carriers in the Philadelphia Record case. 434 DECISIONS OF NATIONAL LABOR RELATIONS BOARD the findings enumerated by the Trial Examiner are the following : The carrier boys are not listed on the Respondent's payroll," funds are not withheld from their earnings for income taxes, social security, and unemployment insurance payments,13 they do not receive paid vacations, holiday, or severance pay,14 the Respondent does not forbid the carrier boys to use news bags on which appear the names of other newspapers and does not require its name to appear on the bicycles or other vehicles used by the carrier boys,15 and they must furnish their own supplies and equipment without allowance therefor by the Respondent Is Having found that the carrier boys are employees of the Respond- ent, and because Erger possessed authority over the carrier boys under him to hire, discharge, and responsibly to direct them, we find that he was a supervisor within the meaning of Section 2 (11) of the Act. His union activities were, therefore, not protected by the Act, and no remedy is available against the Respondent, assuming that Erger was discharged because of his union activities. At the conclusion of the second hearing, the General Counsel ar- gued that even if Erger were found to be a supervisor and the allega- tion that his discharge violated Section 8 (a) (3) were dismissed, his discharge for union activities in the circumstances of this case would still violate Section 8 (a) (1) of the Act. The General Counsel rea- soned that because Erger's organizing activities were in behalf of a group consisting of both district agents and district managers,- his 12 The inclusion of an individual's name on an employer's payroll is not an essential ingredient of an employer -employee relationship . Jones v. Goodson, supra. 18 The Respondent would not in any event have withheld funds for these purposes because the pertinent Federal statutes exclude the services of news delivery boys under 18 from the statutory definition of "employment ." USCA, Internal Revenue Code, 1951 , Title 26, Sec 1426 (b) (16) (A), and Pub. Law 734, 81st Congress, Chap. 808, 2d Sess ., entitled Social Security Act Amendment of 1950, Sec. 210 (a) (16) (A). No requirements exist under Federal law for unemployment insurance contributions by employees , and deduc- tions from earnings are required only if the States have enacted laws requiring employee contributions. The record herein reveals no such enactment by the State of California. On the other hand the record does show that the Respondent covers the carrier boys with workmen's compensation insuance , a factor which the Board considers indicative of an employee status. Nelson-Rick's Creamery Company, 89 NLRB 206 34 This circumstance could equally well be a condition of employment. 0 Not all the carrier boys use bicycles or other vehicles . Two routes in Erger's agency over scattered or hilly territory were serviced by older boys who used their own auto- mobiles. As compensation for the use of these vehicles they received bonuses which could be as high as $150 monthly . Boys who had to use bicycles as a means of trans- portation also received bonuses of substantially lesser amounts. 18 Apart from the afore-mentioned bicycles and other vehicles , the only other equipment which the carrier boys use are canvas news bags for carrying papers and rubber bands to keep the papers from being blown away. These items , together with bicycles, are procured by district agents at wholesale from the Respondent . While the record is silent as to whether they are reimbursed by the carrier boys who may possibly use them, conceivably this is the case. Whether the carrier boys are charged for these items or not, we consider this circumstance to be too trivial to be significant in this case. 17 In addition to,the approximately 30 district agents employed in the circulation depart- ment, the Respondent also employs from 1 to 4 district , managers, of whom some are students who work for the Respondent 3 to 5 months 'annually. District managers primar- CITIZEN NEWS COMPANY, INC. 435 discharge necessarily restrained rank-and-file employees, i. e., the- district managers, from exercising their rights under the Act, and that the effect of the Respondent's violation can be remedied only by Erger's reinstatement. The Trial Examiner, in reaching his conclusion that Erger was an "employee" and that the Respondent discharged him in violation of Section 8 (a) (3) of the Act, did not pass upon the afore-mentioned alternative contention of the General Counsel. The General Counsel did not except to the Trial Examiner's failure in the Intermediate Report to pass upon his alternative contention and did not argue this contention before the Board. Under the circumstances 18 we conclude that the General Counsel elected to take his stand on the ground on which the Trial Examiner disposed of the case and has made it un- necessary for us to rule upon the alternative contention once urged before the Trial Examiner. We do not, as the Chairman suggests, make any sub silentio holding on the alternative contention. As the complaint alleges no unlawful conduct independent of Er- ger's alleged discriminatory discharge, we shall dismiss the complaint in its entirety. Order IT IS HEREBY ORDERED that the complaint herein be, and it hereby is, dismissed. CHAIRMAN IIERZOG, concurring in part and dissenting in part : Although I agree with my colleagues that these newsboys are em- ployees and that Erger is a supervisor, it seems to me necessary for the Board to consider an alternative argument made by the General Counsel to the Trial Examiner. The General Counsel argued that even if Erger were a supervisor his discharge for activities on behalf of a union admitting rank-and-file-employees to membership violated Sections 8 (a) (1) of the Act, because it discouraged the rank-and-file employees from joining and remaining members of that union.- The Trial Examiner did not reach this in his consideration of the case because he found Erger to be nonsupervisory and his discharge a violation of Section 8 (a) (3). But the Board, having reversed the Trial Examiner on that finding, must necessarily face up to the other question which now is decisive. My colleagues' failure to do so leaves an important aspect of this case to a sub silentio holding which has not been discussed or considered by the Board. ily serve as temporary replacements for district agents absent on vacation or for sickness. They may also be trained for permanent positions as district agents . The Respondent asserted at the hearing that district managers do not possess authority to hire or discharge "employees," and are themselves employees and not supervisors . The General Counsel did not oppose this position. 18 We also note that the complaint i tself did not allege any violation of Section 8 (a) (1) based upon this alternative contention. " Cf. Panaderia Sucesion Alonzo , 87 NLRB 877. 436 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Intermediate Report STATEMENT OF THE CASE Upon an amended charge filed May 16, 1950, by Melvin Erger, the General Counsel of the National Labor Relations Board,' by the Regional Director for the Twenty-first Region (Los Angeles, California), issued a complaint, dated May 19, 1950, against Citizen News Company, Inc., hereinafter referred to as Respondent. The complaint alleged that Respondent had engaged in and was engaging in unfair labor practice affecting commerce ' within the meaning of Section 8 (a) (1) and (3) and Section 2 (6) and (7) of the National Labor Relations Act, as amended, Public Law 101 '80th Congress, 1st Session, herein called the Act. Copies of the complaint, the amended charge, and notice of hearing were duly served on Respondent. With respect to the unfair labor practices, the complaint alleged, in substance, that : (1) On or about August 9, 1949, Respondent discharged its employee, Erger, and since that date has refused to reinstate him for the reason that he engaged in concerted activities with other employees for their mutual aid and protection ; and (2) since oh or about August 9, 1949, Respondent has interfered with, restrained, and coerced its employees in the exercise of their rights guaranteed in Section 7 of the Act. By its answer, Respondent admitted that it discharged Erger on August 9, 1949, and has since refused to reinstate him, but otherwise denied that it had engaged in any unfair labor practices as alleged in the complaint. Pursuant to notice, a hearing was held at Los Angeles, California, on August 15, 1950, before the undersigned 'Trial Examiner, duly designated by the Chief Trial Examiner. The General Counsel and Respondent appeared by counsel and the charging party in person. Full opportunity to be heard, to examine and cross-examine all witnesses, and to introduce evidence pertaining to the issues was afforded all parties. Prior to the close of the hearing, the General Counsel's motion to conform the pleadings to the record as to formal matters was granted without objection. Since the close of the hearing, the General Counsel and Respondent have filed briefs which have been duly considered by the undersigned. Upon the entire record in the case, and from my observation of the witnesses at the hearing, I make the following : ' FINDINGS OF FACT I. THE BUSINESS OF THE RESPONDENT Citizen News Company, Inc., is a corporation organized and existing under the laws of the State of California, having its principal office at Hollywood, California. It owns, conducts, and sells the Hollywood-Citizen News, a daily newspaper distributed in California. It is engaged within the State of California in buying, selling, transmitting, and receiving news and intelligence. Respond- ent is a member of the Associated Press, and purchases the services of the United Press, both of which are national organizations engaged in the purchase, collec- tion, and transmission of news and intelligence from places within and without the continental limits of the United States. In addition to the foregoing, Re- spondent purchases syndicated material from various firms and syndicates main- taining their principal offices outside the State of California, from which offices a substantial portion of the materials, feature articles, cartoons, and photographs purchased by Respondent is sent from outside the State of California and is 1 The General Counsel and his representative at the hearing are herein referred to as the General Counsel, and the National Labor Relations Board as the Board. CITIZEN NEWS COMPANY, INC. 437 transmitted by means of interstate or foreign commerce to Respondent's office at Hollywood , California. Through its newspaper , Respondent aids in the Nation- wide distribution of various syndicated articles , cartoons , and news features. Through its newspaper columns, Respondent also aids in advertising certain products on a Nation -wide basis of which the national advertising is approx- imately 10 percent of the total advertising carried by said newspaper during the year 1949 . Various supplies , machines, and equipment used by Respondent in the preparation of the Hollywood -Citizen News are purchased in and shipped from States other than the State of California and from foreign countries. During the year 1949 Respondent purchased newsprint in an amount in excess of $250,000, all of which was shipped from points outside the State of California to Respondent's plant at Hollywood , California. Respondent admits, and I find, that it is engaged in commerce within the meaning of the Act. U. THE LABOR ORGANIZATION INVOLVED Los Angeles Newspaper Guild, CIO, is a labor organization admitting to membership employees of Respondent. III. THE UNFAIR LABOR PRACTICES A. Background and chronology of events Melvin Erger was employed by Respondent in September 1945 as a district agent in its circulation department and remained in such employment until August 9, 1949, when he was discharged. Two or three weeks after he was first employed, Erger joined the Los Angeles Newspaper Guild, CIO, hereafter called the Guild, and maintained his membership in that organization through the date of the hearing herein. Shortly after joining the Guild, he actively engaged in an organization campaign in its behalf, "spoke to just about everybody in the circula- tion department" concerning the Guild, and signed up four or five members. On April 16, 1946, on petition of the Guild, the Board ordered an election 2 to be held among Respondent's circulation agents and district managers to determine whether they desired to be represented by the Guild for the purposes of collective bargaining. Such an election was held on May 7, 1946, as a result of which the Guild was certified as such bargaining representative. Thereafter, so long as the Guild continued as such representative, Erger participated in practically all contract negotiations with Respondent, and a conference concerning a Board charge arising out of a grievance. The contract with the Guild was executed in August 1946 and expired on July 31, 1947. In the interim, a large turn-over of employees occurred among Re- spondent's district agents and Printing Trades Union, Inc., an unaffiliated labor organization, began an organization campaign among the employees then rep- resented by the Guild. During the life of the Guild contract, Erger observed employee Mary Shea "doing some work for a couple of the agents who were try- ing to organize the Printing Trades Union." Erger expressed surprise to Miss Shea that she would be so engaged and was curtly told she would "do what she felt like doing." The following day, Erger was called to the office of Young, Re- spondent's business manager, who there confronted him with a typewritten and exact report of Erger's conversation with Miss Shea. Young told him that he "was causing enough trouble around there [and instructed him] to stay in [his] own department and not to go around to other departments and bother people." At the time, Respondent had no rule in effect concerning union activities by its 2 67 NLRB 363. 986209-52-vol. 97-29 438 DECISIONS OF NATIONAL LABOR RELATIONS BOARD employees. During the same period, Avison, Respondent's circulation manager, said to him, "We know what you have been doing around here. You had better keep your nose clean. You have got to do better work than the average guy tak- ing your job." An election, not conducted by the Board, held after the expiration of the Guild contract in 1947, resulted in an overwhelming vote in favor of representation by Printing Trades Union, Inc.' Though Erger maintained his membership in the Guild, he engaged in no further activities in its behalf from August 1947 until about 4 months prior to his discharge on August 9, 1949. During that entire period he had charge of Agency 7, referred to in the testimony as a "Siberia," because of its "vastness" and distant location from the central point of Respond- ent's circulation and reader interest. His supervision of approximately 20 routes in that agency was apparently highly satisfactory as evidenced by the prizes awarded him for outstanding performance. In May 1949, a Guild organizer "reactivated" him and he renewed his efforts in behalf of the Guild. From that time until he was dismissed, he talked about the Guild either individually or in groups, to practically every employee in the circulation department and succeeded in "signing four people." At about the same time, May 1949, Harlan G. Palmer, Respondent's president and general manager, decided to reduce his staff and to discharge a Mrs. Moor- head as district agent for Agency 19, another comparatively isolated district. On recommendation of Clarence M. Rippeto, Respondent's circulation director, Erger was placed in charge of that agency. Though Mrs. Moorhead had been in charge of the district for approximately 6 years, Barrett, Erger's supervisor at the time, told him that Respondent "couldn't do anything with it. We need some- body in Agency 19 to build it up." On May 15, 1949, Erger went on vacation and did not return to duty until June 6. On or shortly prior to August 9, Palmer decided to further reduce the staff. He called Rippeto for "his records' on vari- ous district men." The latter produced only a record for the preceding 3 months-April, May and June, 1949. According to Palmer's own testimony, "he noticed that Erger was down in the bottom group so far as promotion and . . . service was concerned." H ethen inquired of Rippeto whether Erger was "doing a better job on Mrs. Moorhead's district than Mrs. Moorhead did," and upon re- ceiving a negative answer, ordered Erger's discharge. On August 9, Eiger was called to Rippeto's office and was there informed by the latter that for "economy reasons" and because Erger's "work has, been pretty poor lately," it would be necessary to terminate his service at the expiration of 3 weeks. When Erger remarked that he knew why he was being fired, his discharge was made effective that day. B. Concluding findings Being ever mindful of the rule that the burden rests on the General Counsel to prove that Erger was discharged because he had "engaged in concerted activities with other employees for their mutual aid and protection," I have no hesitation in finding and concluding that Erger was discharged for the reason alleged in the complaint. To sustain that burden, it is incumbent on the General Counsel to prove that: (a) Erger was engaged in a protected activity; (b) Respondent had knowledge thereof; and (c) Erger was discharged because he had engaged in such activity. 8 This is the same union which in Citizen-News Company, 8 NLRB 997 , was disestab- lisbed by the Board as being company dominated. CITIZEN NEWS COMPANY, INC . 439 Little further need be added to what has previously been found to demonstrate that Erger was engaged in an activity protected by Section 7 of the Act. And, notwithstanding Palmer's unconvincing denial that he had knowledge of any Guild activity by Erger or indeed that he was a Guild member, is there any doubt in my mind that Respondent, iii its capacity as Erger's employer, is chargeable with knowledge of such activity. Not only was there no attempt by Respondent to impeach Erger's uncontradicted and credited testimony, that in the 4 months preceding his discharge in August 1949, he talked about the Guild "to just about everybody in the circulation department," but there was no cross-examination of him by Respondent for the purpose of attacking or casting doubt upon that testimony. The May 1949 conversations took place in Respondent's comparatively small circulation room used from time to time by the approximately 30 district agents, and in which room were also located the desks of Salisbury, Holmes, Barrett, and Oehl, all of whom were district supervisors, and admittedly supervisors within the meaning of the Act. Under such circumstances, it becomes appropriate to invoke the well-established prin- ciple, reiterated by the Board in a recent case against this very Respondent (88 NLRB 1413), that knowledge of Erger's union activities by Respondent may be inferred.4 Furthermore, there is direct evidence that Respondent had knowledge of such activities. Thus, on one occasion during the 4-month period preceding his discharge, Erger, in close proximity to Supervisor Salisbury, handed Guild application cards to one of the employees who had just made application for such membership, instructed him to give it "to the other fellows," and made the observation that "maybe some of the other fellows around there would get some guts and sign the card." Salisbury looked up from his desk, caught Erger's eye, and overheard the conversation. On another occasion in June 1949, Erger told Supervisor Holmes : "What this place needs is a good union and a good contract, we are getting pushed around too much," Holmes replied : "Man you don't want to be like that ; why don't you behave yourself 1" We turn then to the crucial question : What motivated Respondent in dis- charging Erger on August 9? Here, as in most cases of this nature, direct evidence of discrimination is lacking. Resort may be, and appropriately is, had to every circumstance and incident from which the General Counsel claims a discriminatory motive may be discerned. In the evaluation of such circum- stances, consideration must be given to human experience which has demon- strated that the normal employer, when confronted with a situation which re- quires a staff, reduction, retains in his employment those who have rendered long and competent service Apparently, however, that norm was not applied to Erger. He was one of the oldest in the point of service of all the district agents employed by Respondent. Except for the disapproval expressed by Palmer on or about August 9 of Erger's failure to improve the record established by Mrs. Moorhead in Agency 19, no attempt was made by Respondent to challenge the General Counsel's otherwise uncontradicted testimony that Erger's work record was among the best of Respondent's district agents. Thus, of the approximately 10 promotion contests conducted during the course of Erger's employment, and in which all of the approximately 30 district agents participated, Erger failed only once to achieve his quota. He won a first prize of $125 cash in one contest, a second prize in another, and a gold cup in a special competition. He was almost always among the 10 top men. In connection with these contests, Re- spondent issued weekly bulletins which reported the standings of the various district agents with respect both to customer complaints and new subscriptions I See also N. L. R. B. v. Link-Belt Co., 311 U. S. 584, 603; Eallaher and Mee, Inc., 87 NLRB 410; Quest-Shon Mark Brassiere Co., Inc., 80 NLRB 1149. 440 DECISIONS OF NATIONAL LABOR RELATIONS BOARD obtained. In these bulletins, Erger's work was pointed to with pride and as an example to other agents. Thus, in a whole series of bulletins, attention was called to the fact that there were no complaints from Erger's territory ; twice he was "tops with three [weeks] in a row" without complaints. When his zero record on complaints reached 4 weeks, he was referred to as "eager" Erger, and when it was extended to 5 weeks, he was called "'What a man' Erger." On another occasion in speaking of contest standings, he was described as "Mel Erger . . . `The Great' . . . high man " In the light of such recognition, it was not surprising that Respondent made no claim, at least until he was transferred to Agency 19, that Erger's work record was other than highly satisfactory. Why then was Erger selected for discharge? Palmer testified that during all of 1949, there was a decline in every branch of Respondent's business and that economies were necessary. He further testified that he personally selected Erger for discharge without inquiry of Rippeto or request for the latter's opinion or recommendation with reference thereto. This, notwithstanding Rippeto's responsibility as circulation director and Palmer's own testimony that he "wouldn't want to make a move-in the circulation department without having his opinion." Indeed, it was upon Iippeto's recommendation that Palmer, "re- ,luctantly" ordered the discharge of Mrs. Moorhead and assigned Erger to her territory. Palmer testified that he considered only two factors: (a) The exhibit reflecting all the agents' work record from April through June 1949, and (b) Rippeto's observation that Erger had not done better, than Mrs. Moorhead in District 19. However, when asked whether it was Respondent's general policy in making staff reductions to "give no consideration to the record in the prior 6 months, or a year or two or three years," he equivocally answered, "Well, I wouldn't say that we wouldn't give none."- In the case of Erger, however, he significantly failed to ask Rippeto for his recommendations or to make any in- quiry for reports reflecting performance for any period prior to the last 3-month period for which records were available. I am not persuaded that it was Erger's low performance record in the April- June exhibit which motivated Palmer in his decision. By that very exhibit there was at least one other agent, Baker, with a lower performance record on the two items covered by the limited report. When asked on cross-examination why Baker was not selected for discharge instead of Erger, Palmer for the first time disclosed that he in fact asked Rippeto about Baker. His testimony with reference to Baker was as follows : "I asked Mr. Rippeto in reference to Baker and received the information that he was on a reassigned route, that he (Rippeto) had given instructions to the supervisor to straighten him out and Dlr. Baker had a very good-record, and he (Rippeto) knew as soon as the overlapping of a couple of districts would be straightened out, Mr. Baker's work would be straightened out." [Emphasis supplied.] This admission, in light of the entire record, bespeaks discrimination. Thus, in attempting to justify his retention of Baker, an agent with a lower perform- ance record, Palmer apparently gave consideration to the fact that Baker was on a "reassigned route." But so was Erger, as Palmer well knew, because he ordered Erger's "reassignment" 3 months earlier. While this was considered an extenuating circumstance so as to operate in Baker's favor, it was not con- sidered in the case of Erger, nor was the fact that Erger was on vacation from May 15 to June 6, 1949." Another circumstance invoked by Palmer in behalf of Baker was the latter's alleged "very good record." Respondent, however, offered no factual testimony to support such a conclusion. Certainly the facts hereto- fore found as to Erger's past performance indicate that his record was no worse, Erger's substitute during 'this' peiibd diari ied on Bo poorly ` that he was discharged CITIZEN NEWS COMPANY, INC. 441 if indeed it was not very much better, than Baker's. Apparently, however, past performance, good or bad, operated to save Baker's job, but outstanding service was not a factor to be reckoned with in dealing with Erger.° Similarly, in ap- praising Erger's record for the preceding 3 months, Respondent failed to give consideration to the complete reorganization of carriers and carrier services which Erger found necessary in supervision of Agency 19. Nor in appraising Erger's record on service complaints, did Palmer make-any allowance for - m-avoidable motor breakdowns, a circumstance which did not, and could not, occur in most of the other agents' districts because they did not require motor service. And, while Baker's supervisor was going "to straighten [Baker] out" there was no thought given to consultation with, or help from, Barrett, Erger's im- mediate supervisor. Barrett was never advised by either Rippeto or Palmer why Erger was discharged. Indeed, the discharge took place while Barrett was on vacation, a fact, however, of which Palmer made no mention.7 Barrett was "stunned" when he heard about Erger's discharge, "didn't know what hap- pened . . . and couldn't get any information." Supervisor Salisbury couldn't "understand it" and Supervisor Oehl was "quite surprised."' When Barrett was pressed by Erger for an explanation, the latter finally told him : "That is what you get for trying to save the world." Respondent, in its brief, argues that if it "sought to discharge Erger, because of his Guild activities, it most certainly would have done so at an earlier op- portune time," when Agency 7 was abolished. It will be recalled, however, that in the 2 years preceding Erger's transfer to Agency 19, he engaged in no Guild activity, and that it was only since May 1949, about the time of his transfer, and thereafter, that he and a Guild organizer actively sought to again advance the interests of the Guild in Respondent's plant. All of the foregoing, coupled with the summary and precipitate, manner in which Erger's discharge was made effective immediately,' compel the conclusion that Erger was discharged because of his union activities and I so find. IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The activities of Respondent described in Section III, above, occurring in con- nection with its operations as described in Section I, above, have a close, inti- mate, and substantial relation to trade, traffic, and commerce among the several States, and such of them as have been found to constitute unfair labor practices tend to lead to labor disputes burdening and obstructing commerce and the free flow of commerce. V. THE REMEDY Having found that Respondent has engaged in certain unfair labor practices, I shall recommend that it cease and desist therefrom and take certain affirma- tive action in order to effectuate the policies of the Act. Having found that Respondent discriminatorily discharged Melvin Erger, I shall recommend that Respondent offer him immediate and full reinstatement to his former or substantially equivalent position 10 without prejudice to his sen- e According to Erger's credited and uncontradicted testimony , his subscriptions increased "steadily every day" from July 25 to August 9, 1949, the day he was discharged i When Palmer was asked whether it was "company policy not to discuss the quality of the work of an employee with his immediate supervisor before he is discharged?" his answer was : "It' all depends on the circumstances " The only witnesses called by Respondent were Palmer and Rippeto. See N. L. R B . v. Bank of America National Trust and Savings Association , 130 F. 2d 624 (C A 9) ; N L. R B v William Davies Company, Inc, 135 F 2d 179 (C. A. 7). 10 The Chase National Bank of the City of New York, San Juan , Puerto Rico, Branch, 65 NLRB 827. J 442 DECISIONS OF NATIONAL LABOR RELATIONS BOARD lority or other rights and privileges , and make him whole for any loss of pay suffered by him as a result of the discrimination by payment to him of a sum of money equal to the amount he would have earned from the date of his discharge to the date of offer of reinstatement, less his net earnings," to be computed on a quarterly basis in the manner established by the Board in F. W. Woolworth Company, 90 NLRB 289. Earnings in one particular quarter shall have no effect upon the back-pay liability for any other such period. It will also be recom- mended that Respondent make available to the Board upon request payroll and other records to facilitate the checking of the amount of back pay due.'2 In view of the nature of the unfair labor practices committed and Respondent's history of prior violations, I shall also recommend that Respondent cease and desist from infringing in any manner upon the rights guaranteed in Section 7 of the Act. Upon the basis of the foregoing findings of fact, and upon the entire record in the case, I make the following: CONcLusIONS OF LAW 1. Los Angeles Newspaper Guild, CIO, is a labor organization within the mean- ing of Section 2 (5) of the Act. 2. By discriminating in regard to the hire and tenure of employment of Mel- vin Erger, thereby discouraging membership in Los Angeles Newspaper Guild, CIO, Respondent has engaged in and is engaging in unfair labor practices within the meaning of Section 8 (a) (1) and (3) of the Act. 3. The aforesaid unfair labor practices are unfair, labor practices affecting commerce within the meaning of Section 2 (6) and (7) of the Act. [Recommended Order omitted from publication in this volume.] Appendix A NOTICE To ALL EMPLOYEES Pursuant to the recommendations of a Trial Examiner of the National Labor Relations Board, and in order to effectuate the policies of the National Labor Relations Act, we hereby notify our employees that : WE WILL NOT discourage membership in, or activities on behalf of Los ANGELES NEWSPAPER GUILD, CIO, or in any other labor organization, by discriminating in regard to hire or tenure of employment or any term or condition of employment. WE WILL Nor in any other manner interfere with, restrain, or coerce our employees in the exercise of their right to self-organization, to form labor organizations, to join or assist Los ANGELES NEWSPAPER GUILD, CIO, or any other labor organization, to bargain collectively through representatives of their own choosing, and to engage in concerted activities for the purpose of collective bargaining or other mutual aid or protection, or to refrain from any or all of such activities except to the extent that such right may be affected by an agreement requiring membership in a labor organization as a condition of employment as authorized in Section 8 (a) (3) of the Act. WE WILL OFFER to Melvin Erger immediate and full reinstatement to his former or substantially equivalent position without prejudice to seniority 11 Crossett Lumber Company, 80 NLRB 440, 497-8. 12 P. W. Woolworth Company, supra. CITIZEN NEWS COMPANY, INC . 443 or other rights and privileges enjoyed and make him whole for any loss of pay suffered as a result of the discrimination against him. All our employees are free to become or remain members of the above-named union or any other labor organization. CITIZENS NEws COMPANY, INC., Employer. - Dated ---------------------------------- By ------------------------------ (Representative) (Title) This notice must remain posted for 60 days from the date hereof, and must not be altered, defaced, or covered by any other material. Supplemental Intermediate Report On October 9, 1950, the undersigned Trial Examiner issued his Intermediate Report in the above-entitled proceeding finding that Respondent had discrimina- torily discharged Melvin Erger, a district agent employed in its circulation department, and recommended that Respondent reinstate said employee with back pay. In the hearing that preceded that Intermediate Report, Respondent made no contention that the relationship between it and Erger was other than employer and employee. Indeed, in its brief to the undersigned it took the position that "the only question is whether or not Erger was dismissed because of his union activities." (Emphasis supplied.) Respondent thereafter filed ex- ceptions 'to the Intermediate Report in which no claim was made that Erger was other than an employee of Respondent. Upon consideration of said ex- ceptions, however, the Board was "of the opinion that the record does not contain sufficient information to enable it to determine whether Melvin Erger and the Respondent's other district agents and district managers are employees or super- visors as defined in the Act and whether the Respondent's circulation super- visors . . . are employees or supervisors as defined in the Act. [It also found] that the record does not contain adequate information concerning the bargaining unit in whose behalf Erger conducted his union activities." As the Board deemed the determination of these matters essential to final disposition of the issues involved in the case, it ordered, on December 22, 1950, that the record herein be reopened and that a further hearing be held to adduce additional evidence pertaining to the afore-mentioned matters. Pursuant to said order of remand, and upon due notice to all the parties, a further hearing was held before the undersigned Trial Examiner, at Los Angeles, California, on February 26, 1951. The General Counsel and Respondent were represented by counsel and the charging party appeared in person. All of the afore-mentioned participated in the hearing and were permitted to examine and, cross-examine witnesses and to introduce evidence. At the close of the hearing, brief oral arguments were presented by the General Counsel and Respondent. All parties were given opportunity to file briefs, but only the General Counsel availed himself of such opportunity. Upon the entire record herein, including that made at the original hearing,. I make the following : SUPPLEMENTAL FINDINGS OF FACT As described in the Intermediate Report, Erger was first employed by Re- spondent as a district agent in its circulation department in September 1945. According to the testimony of C. M. Rippeto, Respondent's circulation director, district agents, up to 1941 or 1942, were employed on a salary basis. At that 444 DECISIONS • OF NATIONAL LABOR RELATIONS BOARD time the method of computing the earnings of district agents was changed to that which prevailed when Erger 's services were terminated on August 9, 1949. The relationship between Respondent and Erger on that date was established by a written "Agency Contract" dated April 1, 1949.' By the terms of that agree- ment Respondent , for a consideration of 1 dollar, "leased" a specified territory to Erger for an indefinite period and agreed "to sell the Hollywood Citizen News to the Agent for delivery in said Territory at rates that will permit, with efficient handling , gross earnings, . . . the basic minimum" of which was to be at least $3 1 0 per month , plus $3 for each increase of 25 copies above 1,100. In addition , Respondent made an allowance- ' for collection losses on the basis of 1 dollar for each 100 newspapers drawn on the 26th of the month. Other pertinent provisions of the contract are alluded to in later portions of this Report. The form and substance of this contract was apparently the result of bargain- ing negotiations between Respondent and Printing Trades Union , Inc., it being identical with that prescribed in a form attached to the contract between Re- spondent and said Union dated and effective November 1, 1948, and expiring on October 31, 1949. Respondent divided its local circulation territory into approximately 30 dis- tricts, each under the control of a district agent. Each district in turn was divided into routes. Erger had approximately 20 such routes, each serviced by a boy carrier . Respondent fixed the price to be charged each carrier for the papers delivered by him as well as the price ultimately charged the subscriber. The difference between the two was the profit realized by the carriers . The dif- ference between the price charged by Respondent to the district agents and the amount the latter received from the carriers was the compensation earned by the district agent, subject , however, to the $310 minimum heretofore mentioned and the other allowances specified in the contract. During the 4 months preceding Erger's termination , the latter reported at Respondent's circulation department for work, daily , at about noon. There, by telephone, at a desk provided by Respondent , he contacted readers who had canceled their subscriptions and sought to resubscribe them. By the same means he verified new subscriptions secured by carriers and for which they might be entitled to additional compensation . He then prepared , in writing, his "draw" of papers, specifying the number required for each route , following which he conferred with his circulation supervisors about the problems arising in his district. Erger then received the papers required by his carriers and conveyed them to a central point in his district where they were picked up by the carriers. If any boys failed to appear, he "would chase them down and see that they did." From that time to about 6: 20 p. in., Erger called the circulation department several. times to ascertain whether any complaints concerning delivery or non- delivery had been received . If they were , it was Erger's duty to make certain that proper delivery was made. Three or four nights a week he would go out with the carriers until 9 or 9: 30 p. in. soliciting new subscribers. 1 This contract and several others between Respondent and Erger were alluded to in the testimony given on the remand, but were not then available in the hearing room. By stipulation , approved by the Trial Examiner , it was agreed that copies thereof might subse- quently be furnished and incorporated in the record Since that time, the parties have submitted verified copies of contracts between the Respondent and Erger dated February 1, 1946, August 1, 1946, and April 1, 1949, identified as Respondent 's Exhibits 4-a, 4-b, and 4-c, respectively , the last being the contract just referred to in the text . All of said exhibits are hereby received . in evidence. CITIZEN NEWS COMPANY, INC. CONCLUDING- FINDINGS Status of Erger and the Carriers 445 As noted above, Respondent, -at the time of the original hearing, made no claim that Erger's status was other than that of employee. Respondent was repre- sented at that hearing by able counsel, experienced in labor relations law 2 The complaint specifically alleged that Respondent had discriminatorily discharged "its employee Melvin Erger." Respondent's answer, verified by H. G. Palmer, its president, as being "true of his own knowledge," specifically admitted that Respondent had "discharged its employee Melvin Erger." (Emphasis added.) Though several motions for dismissal were made during the original hearing on other grounds, none even suggested that there had been a failure to establish an employer-employee relationship. Indeed, there was not the slightest sugges- tion or intimation during the original hearing that Respondent did not consider Erger to be an employee entitled to the protection of the Act. Its brief submitted to the Undersigned after the hearing stated that "the only question is whether or not Erger was dismissed because of his union activities." (Emphasis supplied ) Even in its exceptions to the Intermediate Report, which Respondent filed with* the Board, no exception was taken to the finding that Erger was "employed by Respondent" or to the conclusion of law that the discrimination found was "in regard to the hire and tenure of employment of Melvin Erger." It was not until the supplemental hearing held pursuant to the Board's su , sponte remand that Respondent took the position that Erger was other than an employee entitled to the protection of the Act. Even then it did not unequivocally classify or characterize Erger's status. Its position, as announced by its counsel at the close of the supplemental hearing was: "Number one, he was not an employee, he was an independent contractor. Number two if he was an employee, he was a supervisory employee in that he supervised carriers whom we believe were independent contractors, and if they [the carriers] were not independent contractors, then they were employees." Examination of the entire record compels a finding that Erger, on August 9, 1949, was an employee of Respondent in the broad sense of that word Even if Respondent had not made the admissions in its answer and brief that Erger was its employee, and putting aside the effect of the inconsistent position earlier taken by Respondent, the testimony and exhibits received in evidence require the finding just made. To begin with, I find that the Board, by its decision in the representation proceeding (67 NLRB 363) establishing the appropriateness of the unit, has already held that district agents ' were employees' and not independent contrac- tors. If district agents were independent contractors, they would not, and could not, have been included in the unit found appropriate by the Board. Nor am I 2 Its president and general manager, Harlan G. Palmer, who also appeared as its counsel, was frequently referred to as "Judge Palmer " 9 While that decision speaks of "circulation agents" rather than "district agents," the duties of the former, as described in the Decision, are identical with those performed by Erger. "The Board looks to the specific work performed by the employee concerned, rather than the employee's job classification." See the Fifteenth Annual Report of the National Labor Relations Board, pp. 49, 53. 4 Although the unit established by the Board was composed of supervisory personnel, it will be recalled that this was prior to the Taft-Hartley Act which forbade, after August 22, 1947, use of Board machinery to establish bargaining units for supervisors. At the time of the representation proceeding, while supervisory personnel were placed in separate units, they were nevertheless "employees" under the Wagner Act. Packard Motor Car Company, 71 NLRB 4; Jones & Laughlin Corporation, 66 NLRB 386 A46 DECISIONS OF NATIONAL LABOR RELATIONS BOARD persuaded that the language of the contract between Respondent and Erger, dated April 1, 1949, although entitled "Agency Contract" and purporting to "lease" certain territory to Erger, truly reflects the relationship which the nomenclature implies. "Attempts to label a relationship created under a contract are not controlling." Toledo Scale Company, 82 NLRB 823. It is the duty of every trier of fact to determine from all the facts the true relation- ship between the parties. The Act does not define the term "employee." Section 2 (3) thereof, as amended by the Taft-Hartley Act, merely provides that " . . . the term 'em- ployee' . . . shall not include ... any individual having the status of an independent contractor." In Hearst Consolidated Publications, Inc., 83 NLRB 41, 43, the Board noted "that the legislative history of the Act shows that Congress intended that the Board recognize as employees those who `work for wages or salaries under direct supervision,' and as independent contractors, those who `undertake to do a job for a price, decide how the work will, be done, 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 "' Here, Erger worked for a minimunp wage of $310 per month, plus $3 for each 25 copies of the Hollywood News handled by him. Respondent also paid him $6 per thousand copies of "porched delivery" of the Hollywood Advertiser, Wilshire Advertiser, and/or Valley Advertiser and Hollywood Shopping News. It also agreed to pay him a bonus of 50 cents per thousand, or a minimum of $2.50 per delivery, for Sunday delivery of the last 3 mentioned papers. Both Rippeto and Erger testified, without contradiction, that Erger worked "under direct supervision" of the circulation supervisors. All the foregoing furnish the most persuasive evidence that Erger was an "employee" within the definition of that term as laid down by the Board. Other provisions of the contract between the parties strengthen the conclusion that Erger is not an independent contractor. Thus, by Section 3 of the contract, Respondent, and not Erger, pays the "bonuses" received by the carriers. Section 5 provides that "the handling of retail outlets by an agent will be at the option of the newspaper," with an arbitrary compensation to the agent for such outlets withdrawn which has no relation to the loss which might otherwise be suffered by the agent. Section 7 reserves to Respondent the right to fix the price at which the papers are sold to the carrier boys. Section 8 provides for mileage allowed for use of automobile, with a minimum of $70 per month ; Section 9 fixes an arbitrary amount of compensation if "any agency is split." Section 15 provides for termination of the contract at any time on 14 days' notice in writing, and that Respondent "shall have the right at any and all times, to take charge of dis- tribution or collection in said territory, if in its judgment its best interests are endangered." Of further import relative to the control exercised by Respondent is the fact that Respondent ordered Erger "to get rid of the office" which he bad main- tained in Westwood, and wanted to maintain, in order to improve service, but "which for some reason [Respondent] did not want [him] to have." Significant, too, is the fact that the contract between Respondent and Erger was identical In form with that prescribed by the contract between Respondent and the Print- ing Trades Union, Inc. Indeed, the contract between the parties was identical to the form contract attached to and made a part of the afore-mentioned bargain- ing contract. By that bargaining contract, Respondent specifically recognized the Union "as the sole bargaining agency for all district managers and district agents in the circulation department [with] power to negotiate wages, hours, and CITIZEN NEWS COMPANY, INC . 447 working conditions." (Emphasis supplied ) By that contract, grievance pro- cedures governing all controversial matters were specifically provided for. Provision Is also made for the payment of $7.50 to the district agent for each of six recognized holidays, for severance pay based on tenure of service, for an- nual vacation of 2 weeks "with full pay," the date of which is fixed by the contract. Section 14 specifically provides "that because of the fact that the Printing Trades Union, Inc., does not seek a closed-shop provision in this con- tract, it does not thereby waive any right it may have to open this contract for such negotiations at any future time."' And while it is true that Respondent paid no unemployment insurance, social security taxes, and did not withhold income tax, it did carry unemployment insurance on its district agents. The fact that it did not pay or withhold the other type of taxes is "not controlling. . . . Although the latter factors are some evidence of an independent contractor status, they must be weighed against the evidence of an employer-employee relationship." Toledo Scale Company, 82 NLRB 826, 828. On the entire record I conclude and find that Erger on August 9, 1949, was an employee of Respondent and not an independent contractor. Consideration must now be given, however, to the second alternative sug- gested by Respondent, I. e., that Erger was a supervisory employee of carrier employees and therefore sot entitled to the protection of the Act. Analysis of the entire record has brought me to the conclusion that the carriers are inde- pendent contractors and not employees. Rippeto, Respondent's circulation director and highest in authority in Its circulation department, testified that prior to Erger's employment, Respondent's carriers were employed on a strict salary basis pursuant to written contracts. In the period between 1940 and 1942, distribution by carrier boys was "changed from an employee set-up . . . to a little-merchant setup," and since that time Respondent has had no written contract with the boys. During all times ma- terial herein, their earnings, other than a negotiated "bonus" for the vehicle allowance hereafter discussed, plus 50 cents for each new subscription obtained, are determined by the amount of collections made by them from their subscrib- ers, less the amount paid for the papers sold to them. The carriers are not allowed to return unsold papers for credit; are not entitled, as a matter of right, to compensation for collection losses ; do not receive paid vacations, holiday pay or severance pay ; and are not listed on Respondent's payroll. Income tax is not withheld for the carriers and they are subject to neither social security nor unemployment insurance deductions. While Respondent does carry workmen's compensation on the news boys (a continuation from their employee status days), this is done under a company belief that "workmen's compensation law does permit an employer to protect independent people too." All supplies and equipment used by the carriers must be furnished by them and they receive no allowance therefor. However, news bags, bicycles, and other items of equipment may be purchased at wholesale cost from Respondent. Car- riers who use motor vehicles in the delivery on their routes use their own vehicles and receive neither mileage nor actual cost allowance for car expense. How- ever, a negotiated bonus paid on such routes is based, in part, on the necessary 0 It may be suggested that Printing Trades Union, Inc., was not a labor organization of employees, but rather an association of independent contractors . It must be clear from the foregoing, however, that most of the provisions of that contract are similar to those generally found in a labor bargaining contract. Of importance, too, is the fact that the contract covered both district agents and district managers, the latter admittedly salaried employees of Respondent. And while the current contract was with the Printing Trades Union, that factor was the result of an election by which that organization was chosen to succeed the Los Angeles Newspaper Guild, CIO, which no one contends to be other than an organization of employees. 448 DECISIONS OF NATIONAL LABOR RELATIONS BOARD use of the vehicle. Respondent does not require the placing of its name on either bicycle or other vehicles used in route delivery and there is no company rule against, nor reprimand for, carriers' using news bags which carry the name of another newspaper. The average age of a news carrier is 12 to 121/ years. All of them go to school and some of them engage in other work. Carriers are per- mitted to, and do on occasion, hire substitutes and assistants of their own choos- ing, at their own expense. The boys are not subject to any company rules or regulations. While the record refers to the "hiring" and "firing" of the carriers by the district agents, these terms were used in their nontechnical sense. The control asserted over the carriers in this respect was of a type directed to the end to be accomplished, i. e , the termination of the relationship when that was deemed advisable. No requirements are imposed by Respondent as to the amount of time the carriers are to devote to the solicitation of new subscribers. That element, together with the energy and resourcefulness devoted to the task, deter- mines the profit made by each boy. There is no absolute rule for determining whether one is an independent con- tractor or an employee, nor is any one factor indicating one relationship or another, controlling. Each case must be determined on its own facts and by all the facts. "Ordinarily, the Board finds an employee-independent contractor relationship to exist where the employer's right to control is limited to the result to be accomplished by the work ; whereas an employer-employee relationship is considered present where the person for whom the services are performed re- serves the right to control the manner and means by which the result is accom- plished " 6 As a practical proposition, every contract for work to be done re- serves to the employer a certain degree of control, at least to enable him to see that the contract is performed according to the agreement. The employer may exercise a limited control over the work without rendering the employee a mere servant, for a relation of master and servant is not inferable from a reservation of powers which do not deprive the independent contractor of his right to do the work according to his own initiative, so long as he does it in accordance with the contract. 27 American Jurisprudence, 488. Applying these rules to the facts heretofore found, I conclude and find that the limited control' reserved by Respondent over the carriers "is limited to the re- sult to be accomplished by the work [and not to] the manner and means by which the result is accomplished." Accordingly, I find that Respondent's carriers are independent contractors and not employees within the meaning of the Act. .Philadelphia Record Company, 69 NLRB 1232; Kansas Cit+/ Star Company, 76 NLRB 384; Dispatch Pratt ing Company, Incorporated (Ohio State Journal Davi- . sion) , 93 NLRB 1218 ' In view of the finding just announced, there remains for consideration the relationship between the district agents and the carriers. Though the latter are independent contractors, the district agents are vested with authority to terminate that relationship. They therefore appear to possess some of the at- tributes of a supervisor specified in Section 2 (11) of the Act. That section, how- ever, requires that supervisory authority be exercised over "employees" 8-a status which the carriers did not occupy. Section 2 (3) of the Act specifically excludes from the definition of employee "any individual having the status of an independent contractor." Accordingly, as the district agents did not supervise d Fifteenth Annual Report of the National Labor Relations Board, p. 55. ' While at first blush it may appear to be incongruous to hold that ai independent contiactor is subject to direction by the other party to the contract, that mental block vanishes when the direction is limited as it has been found to be in the instant case. 8 Section 2 (11) provides : "The term 'supervisor' means any individual having authority I. the interest of the employer to hire . . . or discipline other employees, or responsibly to direct them or to adjust their grievances. . . . [Emphasis added.] THE OFFICE TOWEL SUPPLY COMPANY, INCORPORATED 449 employees as defined in Section 2 (3), I reject the employer's contention that the district agents are supervisors within the meaning of the Act. Great Lakes Sugar Company, 92 NLRB 209. Responding further to the Board's Order of Remand, I find : (1) As noted in an earlier portion of this Supplemental Report, the Board, by its Decision and Direction of Election issued on April 16, 1946 (67 NLRB 363), held that "circulation and district managers in the circulation division of the Company constitute a unit appropriate for the purpose of collective bargain- ing within the meaning of Section 9 (b) of the Act." The evidence is undisputed that the district agents employed by Respondent at the time of Erger's termina- tion are the same type of employees, and perform the same services as the cir- culation agents referred to in the above decision. The district managers alluded to in the Board's Decision are admittedly salaried employees of the Respondent, approximately three or four in number, whose principal function is to substitute for district agents when the latter are on vacation or are otherwise incapacitated. It was in behalf of this uAlit that Erger conducted the Guild activities described in the Intermediate Report. Indeed, the principal objects of his solicitation for Guild membership were district managers. (2) Circulation supervisors,' according to the uncoutradicted testimony of Rippeto, "direct the activities" of district agents and district managers, and devote their full.time to "working with the district agents and district managers " It was from the circulation supervisors that the district agents received "almost all of what supervision they had in the conduct of their work." They "worked all the time toward getting the delivery service improved." While they had no authority to hire or fire district agents or managers, they made recommenda- tions concerning such action to Rippeto and sometimes handled "the mechanics" of termination. Erger consulted his supervisor daily "about different problems [he] may have had." According to Erger's undisputed testimony the supervisors "would come around-every once in a while-to check whether the paper was being delivered correctly" ; they kept a daily record of complaints and prepared charts and bulletins showing the relative standing of the agents. Significant, too, is the fact that these men were referred to by all witnesses as supervisors, and that each of them had from 10 to 20 agents under his supervision. Accord- ingly, I find that Barrett, Salisbury, Oehl, and Holmes are supervisors within the meaning of the Act. In light of the foregoing findings, I find no occasion to alter or amend the sections -of -the previously filed Intermediate Report entitled "The Remedy," "Conclusions of Law" and "Recommendations," and hereby reincorporate said sections as a part of this Supplemental Report. Included in this group are supervisors Barrett, Salisbury , Oehl, and Holmes. THE OFFICE TOWEL SUPPLY COMPANY, INCORPORATED and CONGRESS OF INDUSTRIAL ORGANIZATIONS THE OFFICE TOWEL SUPPLY COMPANY, INCORPORATED and THERESA JENIFEIt. Cases Nos. 3-CA-3418 and 3-CA-344. December 12,1951 Decision and Order On June 27, 1951, Trial Examiner Robert E. Mullin issued his Intermediate Report in the above-entitled proceeding, finding that the 97 NLRB No. 74.