St. Joseph News-Press, 474 (2005)

Docket Number:17-CA-20534
 
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St. Joseph News-Press and Teamsters Union Local 460.  Cases 17–CA–20534, 17–CA–20649, and 17–CA–21008

August 27, 2005

DECISION AND ORDER

By Chairman Battista and Members Liebman and Schaumber

On September 6, 2001, Administrative Law Judge Albert A. Metz issued the attached decision.  The General Counsel and the Union filed briefs in support of the judge’s decision.  The Respondent filed exceptions and a brief in support of those exceptions.  The Union filed an answering brief, to which the Respondent filed a reply brief.  The Newspaper Association of America with McClatchy Newspapers, Inc., Knight-Ridder, Inc., North Jersey Media Group, The Belo Corp., The Tribune Company, Advance Publications, Inc., E.W. Scripps, Co., and the California Newspaper Publishers Association, the Missouri Press Association, and Graphic Communications International Union, AFL–CIO, CLC, filed amicus briefs.  The General Counsel filed limited exceptions and arguments in support thereof.

The National Labor Relations Board has considered the decision and the record in light of the exceptions and briefs and affirms the judgeÂ’s rulings, findings, and conclusions only to the extent consistent with this Decision and Order.

The threshold issue presented is whether the Respondent’s newspaper carriers and haulers are employees under the Act.  We find, contrary to the judge, that under the standards of Roadway Package System, 326 NLRB 842 (1998), and Dial-A-Mattress Operating Corp., 326 NLRB 884 (1998), they are not employees, but are independent contractors excluded from the protection of the Act.  Accordingly, we dismiss the numerous allegations of unfair labor practices allegedly committed against the independent contractors.

i.  factual background

The Respondent, Saint Joseph News-Press, publishes early each morning a daily newspaper in Saint Joseph, Missouri.  Haulers pick up the bundled papers at the plant and bring them to common drop points, where carriers1 pick them up.  Carriers who deliver in areas near the Respondent’s plant, however, pick up their bundles directly from the plant.  The carriers can either queue up to receive their bundles as they come off the press, or pick them up later from the loading area.

Carriers deliver papers to the Respondent’s customers.  They also place papers in newspaper racks, deliver to dealers, and drop newspapers at the post office to be mailed to subscribers.  Some carriers, called single copy carriers, only deliver to racks and dealers.

A.  The Parties’ Contract

When hired, carriers do not complete applications.  They sign a contract with the Respondent, expressly describing them as independent contractors.  The contract grants the carrier the nonexclusive right to purchase, sell, and deliver the Respondent’s newspaper in a designated area and to control the method and means of making deliveries.  Carriers sign the contracts as individuals; none are incorporated.  Thirty days’ notice is required for either party to terminate the contract without cause or for the Respondent to modify the contract.  The Respondent can terminate the contract for cause without notice.

The contract, which prohibits carriers from displaying the Respondent’s insignia while delivering newspapers, obligates carriers to provide their services 7 days a week.  It requires that newspapers must be delivered by 6 a.m. on weekdays and Saturdays and by 6:30 a.m. on Sundays.  Carriers must post a bond—the amount of which is individually negotiated—with the Respondent to cover any liability the carriers incur while delivering the newspapers or to cover delivery costs if the Respondent has to take over the route.  The contract also requires carriers to carry automobile insurance.

The contract specifies a wholesale price at which the Respondent will sell the newspapers to carriers and a retail price at which the carriers sell the papers to subscribers.  Under the contract, the Respondent can change the wholesale price on 30 days’ notice, and the retail price is printed on the papers.  The contract also provides for a flat weekly amount to be paid carriers, called the rate adjustment credit, which varies from carrier to carrier.  Carriers who deliver to racks and dealers negotiate a per piece rate for their delivery services.

B.  The Respondent’s Method of Compensation

Most customers pay the Respondent in advance for their subscriptions (PIA customers), but some customers pay their carriers (carrier-collect customers).  Carriers bill those customers, deciding whether and to what extent to extend credit to them.  If a PIA customer fails to pay the Respondent’s bill, the customer is converted to a carrier-collect customer.  The carrier has the discretion to either continue delivering the paper to the customer or to terminate the customer’s subscription for nonpayment.

Each month, every carrier receives a statement tabulating the amounts he or she owes, and is owed by, the Respondent.  The statements show the number of newspapers purchased by the carrier and the amount the carrier owed the Respondent for those papers.  It also shows the amount of money the Respondent owes the carrier for newspapers subscribed to by customers who have paid the Respondent in advance.  That amount is credited to the carrier, along with the carrier’s rate adjustment credit, which is reflected on the statement.  If the carrier services a newspaper rack, a $1 per month charge for rental of the rack is shown.  Carriers are also charged for any sales tax they collected from customers they bill directly and for a $1 per month service charge for processing sales tax.  The net credit is remitted to the carrier by check.

The Respondent does not withhold income taxes or pay workers’ compensation. In addition, carriers receive no fringe benefits.  At the end of the year, the Respondent issues carriers a 1099 form.

C.  The Means of Work

Carriers provide the vehicles they use to service their routes.  The Respondent does not specify a particular type or make of vehicle.  Instead, Respondent only requires that the vehicle be large enough to carry the number of papers necessary to service the route, that it provide cover for the newspapers in case of rain, and that it be reliable.  Carriers maintain their vehicles, and are not reimbursed for any maintenance or operating costs, although they receive a gas subsidy the Respondent initiated to offset higher gas prices.  If the carriers are unable to use their own vehicles, they are responsible for finding replacements.

Carriers pay for their own supplies, such as plastic bags and rubber bands, which they can purchase from the Respondent or another vendor.

D.  The Extent of the Respondent’s Control Over Carriers

The Respondent communicates with carriers primarily through memos left for them on top of their bundles.  Notices of new customers and customer lists are provided to carriers in their bundle tops.  The circulation department’s district managers are the Respondent’s representatives primarily responsible for contact with the carriers.  The district managers occasionally call or meet with carriers.  The district managers are generally at the plant from 9 a.m. to 5 p.m., while the carriers are usually at the plant at around 2 a.m.  The carriers are not required to return to the plant after completing their routes.

Customer complaints are usually lodged with the Respondent’s customer service department and the district managers relay them to the carriers.  District managers do not discipline carriers who fail to correct problems complained about by customers, and carriers are not covered by the Respondent’s employee handbook or any other extracontractual work rules.  If customers consistently complain about a carrier’s service, district managers have, on occasion, terminated a carrier’s contract.

E.  Entrepreneurial Potential

Although carriers may not subcontract their routes formally, they can, without any notice to the Respondent, hire substitutes to make deliveries for them.  The terms and conditions of the substitutes’ employment are set by the carrier.  The Respondent puts no limits on how often a carrier can use a substitute, and some carriers use full-time substitutes.

If a customer complains that a carrier failed to deliver a newspaper or that the newspaper was damaged upon delivery, the carrier is notified and can choose to redeliver the newspaper or have the Respondent make the redelivery.  If the Respondent makes the redelivery, the Respondent charges the carrier for the service.  The Respondent employs a few drivers for the purpose of making redeliveries, restocking empty newspaper racks, and delivering newspapers on unassigned routes.

Carriers can solicit new customers on their own.  The contract provides for free copies of the newspaper to aid carriers in promoting new subscriptions.  The Respondent also runs circulation promotions, in which carriers participate.  In addition, the Respondent uses telemarketers to solicit new subscribers.  If the Respondent solicits a new subscription from a customer who a carrier previously terminated for nonpayment, the carrier can refuse to deliver to that customer.  The carrier can also refuse to service a new subscriber who lives too far from the carrier’s route or whose home is inaccessible.

The Respondent determines the routes and can alter them.  The Respondent sometimes splits routes that become, in its view, too large.  The Respondent does not grant exclusive rights to routes, and some carriers deliver to racks or dealers that are located within another carrier’s route.  The Respondent also delivers on the routes, if necessary, to replace a missed or damaged paper or to restock...

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