Hearst Publishing Co., Inc.

LOS ANGELES EVENING HERALD AND EXPRESS 103 No one challenges the validity of the outstanding certification covering the employees named in the petition. As it is plain from all the foregoing that the petition filed herein raises no present question concerning representation of the nonsuper- visory employees in the certified unit, and that the only issue raised by the instant proceeding concerns the unit placement of the Em- ployer's chief engineer, we shall dismiss the petition as such, and shall hereafter treat it in the nature of a request to amend the existing certification by excluding from the certified unit the classification of chief engineer.' The chief engineer prepares the work schedules for the three engi- neers and technicians employed by the Employer at its radio station and assigns those employees to special jobs away from the station as they are needed. His pay is higher than theirs. The chief engineer has also granted time off to engineers and technicians and has made effective recommendations with respect to their hiring. As the fore- going, and the record as a whole, shows that the chief engineer pos- sesses and exercises supervisory powers, we find him to be a supervisor as defined in the Act, even though the classification of chief engineer was included in the unit covered by the bargaining contract referred to above 4 On the basis of all the foregoing, we shall amend the certification issued in Case No. 32-RC-286 so as to exclude the classification of chief engineer from the certified unit. Order IT IS HEREBY ORDERED that the certification of representatives issued in Case No. 32-RC-286 on January 16, 1951, be, and it hereby is, amended so that the certified unit shall exclude the classification of chief engineer.,' AND IT IS FURTHER ORDERED that the petition filed in this case be, and it hereby is, dismissed. 3 Cf. Tide Water Associated Oil Company, 101 NLRB 570, ; Bausch and Lomb Optical Company, 92 NLRB 139. 4 West Virginia Pulp & Paper Company, 89 NLRB 815. This is not to be construed as a new certification. Los ANGELES EVENING HERALD AND EXPRESS DIVISION OF HEARST PUBLISHING COMPANY, INC. and NEWSVENDORS LOCAL INDUSTRIAL UNION No. 75, CIO, PETITIONER. Case No. 21-RC-2514. January 9,1953 Decision and Order Upon a petition duly filed under Section 9 (c) of the National Labor Relations Act, a hearing was held before Daniel J. Harrington, 102 NLRB No. 21. 104 DECISIONS OF NATIONAL LABOR RELATIONS BOARD hearing officer. The hearing officer's rulings made at the hearing are free from prejudicial error and are hereby affirmed. Upon the entire record in this case, the Board finds : 1. The Employer is engaged in commerce within the meaning of the Act. 2. The labor organization involved claims to represent employees of the Employer. 3. The Employer publishes the Los Angeles Herald and Express, an evening newspaper, hereinafter referred to as the Herald, in five editions every weekday. The Petitioner seeks to represent all full- time vendors of the Herald, that is men who sell every edition of the Herald at specific locations on the streets of Los Angeles designated by the Herald. The Employer contends that these vendors are inde- pendent contractors and therefore not employees within the meaning of the Act, which expressly provides in Section 2 (3) that the term "employees" shall not include "any individual having the status of an independent contractor." 1 There are about 220 full-time vendors. Each is assigned to a regu- lar spot, usually a street corner, where he sells from a stand supplied by himself. The Employer delivers to each vendor a predetermined number of copies of each edition of the Herald 2 The vendors are free to sell other newspapers without obtaining permission from the Herald. All do sell other papers, including those of the Herald's 2 leading competitors in the evening newspaper field, the Los Angeles Daily News and the Los Angeles Daily Mirror. Over 50 percent of the vendors also sell magazines. A few sell candy, cigarettes, and miscellaneous small articles. The vendors sell the Herald to the public at 10 cents a copy, pay- ing the Employer 61/2 cents for each copy. These payments are made to their district managers, employees of the Herald's circulation de- partment.3 The difference between the two prices, both fixed by the 1In 1941 the Board , in Stockholders Publishing Company et at, 28 NLRB 1006, found such vendors of the Herald to be employees within the meaning of the term as used in the original Act, which then contained no specific exclusion of independent contractors such as that contained in Section 2 (3) of the Act as amended in 1947. The Board' s subsequent order to the owners of the Herald to bargain with the Peti- tioner's predecessor, certified in that case as representative of the vendors, was upheld by the United States Supreme Court in 1944 in N. L. R. B. v. Hearst Publications, Incorpo- rated et at., 322 U. S. 111. In so deciding, the Court refused to consider whether, under general legal principles , the vendors might be independent contractors , because it believed that the Board might properly disregard ordinary tests of the law of agency in determining whether or not the vendors or any other occupational group were employees within the meaning of the National Labor Relations Act. 2 Each one has a "basic" order based on the Herald's experience with the sales poten- tialities of the particular location . This is increased by specified amounts whenever an edition contains news which the Herald considers should produce greater than average sales If a vendor asks for copies in excess of his basic regular or basic extra order they are furnished to him. 2 The district managers work out of the branch offices . There are 8 branch offices, located in outlying districts, in charge of branch managers. There is also a branch manager at LOS ANGELES EVENING HERALD AND EXPRESS 105 Employer, is the vendor's income from sale of the Herald. Once the papers have been delivered to a vendor, any loss, whether by dam- age or failure of customers to pay the vendor for papers taken from his stand, must be borne by the vendor. A vendor may, however, re- turn without payment any papers unsold at the close of the day .4 The Herald, the News, and the Mirror are generally sold through the same full-time vendors. The 3 publishers guarantee to the ven- dors an aggregate minimum profit of $41.50 a week from the combined sale of the 3 papers, with each publisher responsible for only one-third of the total guarantee.' The Herald's payments are made by weekly checks with no deduction for social security or unemployment taxes. If a vendor wishes to receive payment under the minimum guarantee he must make a report of his sales. Otherwise vendors-except those who act in the capacity of "wholesalers," discussed hereinafter-are not required to keep records. The Herald, the News, and the Mirror also each make a yearly payment of $26.70 known as a "performance refund," to each vendor who has operated at his sales location con- tinuously throughout the preceding year.(, the central office in charge of circulation in the downtown area. Only 2 of the local branch offices and the central branch cover areas where street sales are made through full-time vendors . In these areas there is a total of 36 district managers who are ex- clusively concerned with street sales. Each district manager works under the direct supervision of a branch manager, or his immediate assistant, or, in the case of the downtown area and that immediately adjoining it, under the supervision of supervisors of street sales, of whom there are 3. Branch managers , street sales supervisors , and district managers are all agreed to be employees of the Herald. 4 In the Hollywood branch , vendors pay for their papers on delivery but receive a refund for unsold papers returned. 5 After the decision of the Supreme Court in the Hearst case, supra , the publisher of the Herald and publishers of the Los Angeles Daily News , then the Herald's only real competitor, negotiated with Petitioner's predecessor and entered into successive joint contracts with it. Among provisions of the contracts was the guarantee to full-time vendors of a minimum "profit"-so described in the contract-of $41.50 for a 6-day week, profits to be computed on the combined sales of the Herald and the News with each pub- lisher responsible for no more than its one-half share However, by separate agreement between the two publishers any overage from sales of the Herald, which has a far greater volume of sales, is applied to reduce the obligation of the News on the guarantee. Shortly before the expiration of the last of the Petitioner 's contracts in August 1948, another union made a demand for recognition , and the publisher of the Herald filed an RM petition On August 16, 1948 , the Regional Director dismissed this petition, on the ground that the vendors were "independent contractors " within the meaning of Section 2 (3) of the then recently amended Act. Since then the publisher of the Herald has refused to enter into contracts with the Petitioner, but has continued to give effect to the minimum guarantee , and the publisher of the News has done likewise Sometime in 1948, the Dairy Mirror entered the afternoon newspaper field . The Herald and the News made no attempt to dissuade the full-time vendors from selling the Mirror but informed the vendors that in the future they would each pay only one-third of the $41.50 guarantee. The Mirror then refused the demand of the Petitioner's predecessor that it assume responsibility for one-third of the guarantee, and the full-time vendors refused to sell the Mirror. After 7 months of selling through other vendors, the Mirror assumed responsibility for one-third of the guarantee. Since then the full-time vendors of the Herald and News, with few exceptions, also sell the Mirror. 6 This practice likewise is a carryover from the period of collective bargaining. The joint contracts provided for the payment of a performance refund-so described in the contracts-of $40 by both the Herald and the News. 106 DECISIONS OF NATIONAL LABOR RELATIONS BOARD The heaviest demand for the Herald is between 3 p. in. and 7 p. in. In order to achieve maximum sales at those hours, the Herald utilizes the services of many part-time vendors, most of whom are schoolboys who are not available until 3: 30 or 4 o'clock during the school term. Each district manager is responsible, among other duties, for deter- mining, in conjunction with his superior, approximately how many papers can be sold in his area by this means, for obtaining the boys to sell them, and for designating the sales locations. These locations are usually at intersections where a full-time vendor is already sta- tioned at a corner known as the "main-spot," and the locations selected are at the other corners, known as "off-spots." Occasionally off-spots are not corners but the entrances to office buildings. Papers are not delivered directly to off-spot boys, but usually to full-time vendors who in turn distribute them to such off-spot boys in their vicinity as may be designated by the district manager. Off-spot boys are permitted to retain 31/2 cents for each paper sold. At the close of the day, main- spot vendors collect from their off-spot boys 61/2 cents for each paper sold and later turn over the amounts collected to their district man- agers. Full-time vendors rendering such services are known as "wholesalers" or "check men." As to their wholesaling activities they are admitted employees of the Herald, and carried on its payroll. They receive $ t a week for the first off-spot boy serviced, and $2 for each additional boy, less deductions for social security and unem- ployment taxes. One hundred and twenty-six of the two hundred full-time vendors whom the Petitioner seeks to represent are whole- salers. The News uses these same wholesalers and makes the same payment for their services. The Mirror does not.7 Authorization to sell at a corner is ordinarily obtained through application at the branch offices, usually through the district man- agers. Vendors covering particularly profitable corners, however, sometimes discontinue selling personally and sell or lease to another the so-called right to sell at the corner.8 Before investing in such a venture, prospective "purchasers" or "lessees" usually, but not always, check with the district manager to make sure that the Herald will supply them with papers. The Herald, whether consulted in advance or not, has never refused to supply such a "purchaser" or "lessee" with papers, having found that a man who has paid for his corner will work hard to protect his investment. Except in the case of wholesalers, the Employer does not insist on the personal presence of the vendor so long as his corner is covered 4 The part-time vendors serviced by the Herald and News wholesalers do not sell the Mirror. 8 About 30 of the 220 full-time vendors "purchased" their corners or pay rent to pred- ecessors Prices paid ranged from, $100 to $3,500 and rentals from $676 to $1,300 per year One "lessee" has paid as much as $6,760 In the course of 10 years. LOS ANGELES EVENING HERALD AND EXPRESS 107 throughout the period during which the Employer believes a reason- able volume of sales may be expected. These hours vary somewhat with location and vendors are usually advised of them by the district managers. Many full-time vendors employ regular reliefmen, who substitute for them while they are at lunch or away for any other reason. Several do not work on Saturdays and cover their corners with such reliefmen. Vendors not only fix the compensation of the reliefinen themselves but, except for those who are wholesalers, do not have to get prior approval for their substitutes from the Herald even in cases of extended absence .9 Similarly those few vendors who con- trol more than one corner make their own selections of men to sell on the second corner and make their own financial arrangements with them. Some main-spot vendors who are not wholesalers employ off- spot boys and make their own arrangements with them as to compen- sation. Similarly some vendors who are paid by the Herald for "wholesaling" to off-spot boys designated by the Herald, employ on their own terms, additional boys. The district managers circulate through their districts daily sup- plying vendors with extra papers when needed, redistributing papers in accordance with varying demand, and observing methods of dis- play. Although some district managers regularly urge upon vendors particular methods of display,1° many vendors apparently feel free to ignore their instructions. No vendor has ever been refused papers for failure to comply with such instructions. The aforementioned conduct of the Employer is not inconsistent with a vendor-vendee relationship between it and the vendors, because it is not uncommon for a seller of merchandise to place limitations upon the disposal method of those who purchase from him. Upon careful consideration of this entire record, we do not believe that these factors, or any other of the factors appearing in the record, clearly establish an employer-employee relationship between the Employer and the vendors in question. As already noted the present Act specifically excludes "independent contractors" from the category of "employees." The legislative his- tory of the 1947 amendments 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, 0 Wholesalers, on the other hand, must inform their district managers of intended absence and any proposed substitutes must be approved . In some cases district managers have insisted on selecting the substitute. 20 For example in the downtown Los Angeles area vendors are sometimes urged to hold the Herald up in the right hand. In Hollywood they are regularly instructed to hold their papers under the left arm with the Herald on the outside. 108 DECISIONS OF NATIONAL LABOR RELATIONS BOARD materials, and labor and what they receive for the end result, that is, upon profits.11 Applying such standards to the instant case, we conclude that the news vendors sought by the Petitioner in this case are independent contractors, and are not employees within the meaning of the Act.12 In view of the foregoing, we find that no question affecting com- merce exists concerning the representation of employees of the Em- ployer within the meaning of Section 9 (c) (1) and Section 2 (6) and (7) of the Act. Accordingly, we shall dismiss the petition filed herein, without prejudice however to the Petitioner's filing, if it so desires a petition seeking to represent the "wholesalers" as to their "wholesaling" activities only, concerning which they are admittedly employees. Order Upon the basis of the above findings of fact, and upon the whole record in this proceeding, the National Labor Relations Board hereby orders that the petition filed herein, be, and it hereby is, dismissed. MEMBER HousTON took no part in the consideration of the above Decision and Order. 11 80th Congress, 1st Session, House of Representatives, Report No. 245, April 11, 1947, page 18. 11 Hearst Consolidated Publications, Inc., 83 NLRB 41. MAINE FISHERIES CORPORATION and ATLANTIC FISHERMEN'S UNION, SEAFARERS' INTERNATIONAL UNION OF NORTH AMERICA, AFL, PETI- TIONER. Case No. 1-RC-t914. January 9, 1953 Supplemental Decision and Order On October 24, 1952, pursuant to a Decision and Direction of Elec- tion issued by the Board herein on October 2, 1952,1 an election by secret ballot was held under the direction and supervision of the Re- gional Director for the First Region, among employees in the unit found appropriate. Following the election, a tally of ballots was furnished the parties. The tally shows that, of approximately 40 eligible voters, 33 cast valid ballots, of which 8 were for the Petitioner, 6 were for the Intervenor,2 and 19 were against participating labor organizations. There were 2 challenged ballots. On October 30, 1952, the Petitioner timely filed objections to the con- duct of the Employer which it alleged affected the results of the elec- 1 Not reported in printed volumes of Board decisions. z Seafood Workers Union, ILA, Local No. 2, Series 1572, AFL. 102 NLRB No. 9.