Hearst Publishing Co., Inc.

National Labor Relations Board - Board Decisions

Jan 9, 1953

102 N.L.R.B. 103 (N.L.R.B. 1953)

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.