Thomson Newspapers, (Michigan), Inc.

National Labor Relations Board - Board Decisions

Dec 14, 1984

273 N.L.R.B. 350 (N.L.R.B. 1984)

350 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
The Daily Mining Gazette, A Division of Thomson
Newspapers (Michigan), Inc. and Graphic Com-
munications International Union, AFL-CIO,
Petitioner. Case 30-RC-4346
14 December 1984
DECISION ON. REVIEW AND -
DIRECTION
BY CHAIRMAN DOTSON AND MEMBERS
, ZIMMERMAN AND HUNTER
-Upon a petition du' ly filed under Section 9(c) of
the' National Labor Relations Act, a hearing was
held on 28 March 1984 in the above-captioned pro-
ceeding. In a Decision and Direction Of Election
issued on 10 April 1984 the Actirig Regional Direc-
tor for Region 30 directed an election 'in .' a unit of
all full-time and , regular part-time mailroom em-
ployees, including drivers, employed at the Em-
ployer's Houghton, Michigan facility. 1 Thereafter,
in accordance with Section 102.67 of the National
Labor Relations Board Rules and Regulations, the
Employer filed a timely request for review of the
Acting Regional Director's decision on the ground
that the Acting Regional Director erred in con-
cluding that the drivers are employees and not in-
dependent contractors within the meaning of Sec-
tion 2(3) of the Act and therefore should be includ-
ed in the unit. The Employer also filed a motion
for stay of election pursuant to Section 102.65 of
the Board's Rules.
By telegraphic order dated 10 May 1984 the
Board granted the Employer's request for review
but denied its motion to stay the election. 2 There-
'after, the Petitioner filed a brief on review.
The National Labor Relations Board has delegat-
ed its authority in this proceeding to a three-
member panel.
, The Board has -considered the entire record in
this case and makes the following findings.
The Employer is a Michigan corporation which
publishes a daily newspaper called The Daily
Mining Gazette (The Gazette) at its Houghton,
Michigan facility. The petitioned-for unit consists
of 10 motor route drivers whose status is at issue in
this proceeding and 5 mailroom employees.3
1 Excluded from the unit found appropriate were substitutes, helpers,
inserters, professional employees, guards, and supervisors as defined in
the Act, and all other employees.
2 The election was conducted on 10 May 1984, the drivers cast chal-
lenged ballots, and all ballots were impounded pending the Board's Deci-
sion on Review
3 The parties stipulated at the hearing that the five individuals sought
in addition to the drivers, Howard Heckel, Steven Koski, Keith Abram-
son, Cvetko Shopp, and Sharmem Joyal, are mailroom employees and
should be included in the unit found appropnate
The motor route drivers deliver the Employer's
newspapers to predetermined locations in three
ways: they drop off bundled newspapers for deal-
ers and carriers, they place newspapers in coin-op-
erated newsracks, and they insert newspapers in
plastic tubes on stakes placed in front of the homes
of individual subscribers. Some drivers have as
many as three kinds of deliveries on their routes
while others have only one. -
Drivers also collect money from the newsracks,
pick up 'damaged newsracks to return to the Em-
ployer's facility for repair, and place newsracks at
locations designated by the Employer. The Em-
ployer assumes the responsibility' for repairing the
newsracks, but drivers will sometimes make minor
repairs in the field themselves.
The Employer determines the initial . composition
of a route. When a route becomes available, the
Employer attracts applicants for the position of
driver by advertising in the newspaper. There is no
written agreement governing the relationship be-
tween drivers and the Employer. The Employer , in-
forms applicants for the position of driver that
drivers are independent contractors and not em-
ployees of The Gazette.
Drivers must provide their own delivery vehi-
cles. License fees, takes, and insurance premiums
for the vehicles are paid by the drivers. Drivers
also pay for the gasoline used in delivering the
newspapers.
Drivers are paid a flat rate set by the Employer
for each run of .deliveries actually completed. In
computing the "base rate" for a run, the Employer
considers factors such as the mileage of the run,
the length of time it consumes, and the number of
tube deliveries and bundle drops it entails. Occa-
sionally, a new driver may negotiate a rate higher
than that offered by the Employer if no applicant is
available and willing to accept the Employer's
rate.4
Most drivers are required to pick up the newspa-
pers each day at the Employer's loading dock.
These drivers are assigned pickup times falling be-
tween 1 and 2:45 p.m. according to the length of
their routes. Drivers who pick up newspapers in
the field are not assigned pickup times but are ex-
pected to get the papers out as quickly 'as they can.
The Employer has established a target completion
time for the routes of between 5 and 5:30 p.m.
The Employer reserves the right to unilaterally
change the composition of the routes. When the
Employer alters a route, it recalculates the base
4 The drivers are paid by check in the middle of the month and at the
end of the month Employees on the Employer's payroll are paid every 2
weeks, whenever that date occurs
273 NLRB No. 55
THOMSON NEWSPAPER 351
rate for the route by the same method used to set
the rate initially. If an alteration to a route results
in a change in its base rate, the Employer adjusts
the driver's compensation accordingly.5
Before the Employer starts paying a newly hired
driver, the driver delivers the newspapers for a day
or two accompanied by one of the Employer's dis-
trict managers to ensure that the driver has learned
the route. Thereafter, the driver runs the route
without supervision by the Employer. The Em-
ployer does not monitor the drivers on their daily
runs nor require them to keep records of their per-
formance. 6 Drivers may vary the order in which
they make their deliveries as long as they complete
their runs on time.
The drivers are free to hire substitutes and help-
ers without the Employer's approval. A driver
who cannot make a run for any reason is required
to locate a substitute. The drivers may and do
make whatever employment arrangements they
wish with substitutes and helpers without interfer-
ence from the Employer. The Employer requests
that drivers inform it of the identity of substitutes,
but in practice they often do not do so. A driver
who hires a full-time substitute is still paid and held
responsible for the route, by the Employer.
The Employer does not require that the drivers
operate a particular kind of vehicle, submit the ve-
hicle to Inspection, or maintain a certain level of
insurance. Drivers are not subject to work rules or
a dress code and are not expected to attend compa-
ny meetings. 7 Apart from noting on an "in and
out" sheet how many unsold papers are returned
by the dealers, drivers do not keep records for the
Employer. Occasionally, drivers are asked to deliv-
er free newspapers to nonsubscribers and prizes
won in catalogue contests to carriers on their
routes. The drivers receive no extra compensation
for these deliveries.
Customer complaints about drivers are received
by the Employer. The Employer writes a notice to
the driver describing the complaint and asking the
driver to rectify it. It is the driver's responsibility
to remedy complaints. The Employer will follow
up on a complaint to make sure that it has been re-
solved.
The Employer's circulation manager will warn a
driver who is late picking up or delivering papers,
but the Employer can take no disciplinary action
5 The Employer's circulation manager testified that when he has sub-
tracted from a route he has not penalized the driver
6 The Employer does try to make a practice of sending a district man-
ager with each driver once a year to confirm where the drivers are going
and determine if their rates should be adjusted
7 Two drivers on their own initiative placed insignia of The Gazette
on their vehicles, but drivers are not required to display the Employer's
logo
against an unsatisfactory driver short of replacing
the driver. The Employer cannot dock a driver's
pay and has never suspended a. driver. The Em-
.ployer has fired one driver whose heavy drinking
prevented him from making his run and - another
who made repeated mistakes and finally threw pro-
motional material he was asked to deliver to pro-
spective customers in the trash.
The Employer has placed no restrictions on the
drivers' "ability to hold other jobs or make deliv-
eries in addition to the Employer's newspapers.
One driver delivered laundry on his route without
objection from the Employer.
, About one-half of the drivers are eligible to par-
ticipate in a bonus plan which provides compensa-
tion in addition to the base rate per run. A driver
under the bonus plan receives .34 cents per week
for every tube customer on his or her route in
excess of a base number set by the Employer. Eli-
gible drivers increase their compensation on their
own initiative by soliciting new individual subscrib-
ers. Should a change in a route subject to the
bonus plan result in a reduction in the number of
tube customers, the Employer will decrease the
base number accordingly to preserve the driver's
bonus.5
. The Employer does not withhold money for
taxes or social security from the drivers' bimonthly
checks nor does it make unemployment or work-
men's compensation payments for them. The driv-
ers do not receive vacation or sick time, paid holi-
days, or the Christmas bonus given by the Employ-
er. • They do not participate in the Employer's pen-
sion or life insurance plans.
The Employer contends that a unit including
drivers is inappropriate because the drivers are in-
dependent contractors. Section 2(3) of the National
Labor Relations Act specifically excludes inde-
pendent contractors from coverage by the Act.
Whether a person is a protected employee or an in-
dependent contractor within the meaning of Sec-
tion 2(3) is properly -resolved by applying general
principles of the common law of agency. NLRB v.
United Insurance Co., 390 U.S. 254 (1968). The
Board relies primarily on the common law "right
to control" test in determining the status of individ-
uals alleged to be independent contractors. See,
e.g., Fort Wayne Newspapers, 263 NLRB 854
(1982). This test provides that where the one for
whom a service is performed retains the right to
control the manner and means by which the de-
8 It is unclear from the record whether the drivers must pay for lost,
stolen, or damaged papers A driver testified that when he was hired he
was told he had to pay for the newspapers if they got "damaged, burnt
or otherwise" The Employer's circulation manager testified, on the other
hand, that he would not require drivers to pay for damaged papers
352 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
sired result is accomplished, the person performing
the service is an, employee; but if control is re-
served only over the end result, the person per-
forming the service is an independent contractor.
The Board's determination of the nature of the
control retained turns on the particular facts of
each 'case. A.S. Abell Publishing Co., 270 NLRB
1200 (1984).
We have - carefully examined all the evidence
bearing on the relationship between the drivers and
the Employer and conclude that the drivers are in-
dependent contractors' and not employees within
the meaning of Section' 2(3) of the Act.
We find -most significant that the Employer exer-
cises no control over the manner and means by
which the desired result, daily delivery of the
newspapers, is accomplished. See Air Transit, Inc.,
271 NLRB 1108 (1984). Drivers are free to run
their routes in Whatever order they wish as long as
the newspapers are delivered by 'late afternoon
each day. The Employer does not supervise or
monitor -the drivers in the performance of their de-
liveries. Drivers are not subject to work rules or a
dress code and are not required to drive a particu-
lar kind of vehicle or display the Employer's insig-
nia. Moroever, there is no requirement that the de-
liveries be made by the same driver to whom the
Employer originally agrees to assign a vacant
route. Drivers can and do hire full-time substitutes.
The Employer does not retain the right to approve
the substitutes, does not dictate the terms of their
employment, and frequently does not know who
they are. The Employer receives customer com-
plaints but does not discipline drivers for koor job
performance. The Employer has replaced two driv-
ers who proved unable to accomplish their deliv-
eries, but this has little bearing on whether the Em-
ployer controls the manner and means by which
deliveries are to be performed.
In addition,- there are other aspects of the driv-
ers' relationship with the Employer that are recog-
nized at common law as indicia of independent
contractor status. See Restatement 2d, Agency § 220
(1957). Drivers are hired with the understanding
that they will be independent contractors and not
employees. They are not offered the fringe benefits
enjoyed by the Employer's employees, no provi-
sion is made for deductions from their bimonthly
checks, and no payments are made on their behalf
for unemployment or workmen's compensation in-
surance. On the other hand, drivers are permitted
to hold other jobs and make deliveries for clients
other than the Employer while on their newspaper
routes.
Drivers supply the vehicles and gasoline needed
to perform the deliveries. Moreover, drivers are re-
sponsible for their routes even if unable to deliver
the newspapers themselves and must find their own
substitutes. Accordingly, they do not receive leave
time of any kind. The Employer continues to pay a
driver even if the driver has hired a substitute who
is actually running the route.
Drivers are not paid a salary or an hourly wage.
Rather, they are paid a lump sum for each run
completed.' Some drivers can receive additional
compensation in the form of the bonus offered for
new subscribers they can solicit on ,their own initia-
tive. The drivers' bimonthly checks represent the
total of payments due for completed runs plus any
applicable bonus. -_
We are mindful that there are factors absent in
this case that, if present, would more strongly
compel a finding that the drivers are independent
contractors. The drivers do not have a proprietary
interest in their routes: drivers do not buy and sell
the routes and the Employer reserves the -right to
add to or subtract from them. Drivers do not pur-
chase the newspapers - from the Employer and
assume the entrepreneurial risk associated with
trying to make a profit by reselling them. We also
recognize that the Employer's virtually unilateral
control over the drivers' compensation and its abili-
ty to terminate drivers at will are more commonly
found in employer/employee relationships. We
find, however, that this evidence suggesting em-
ployees status is outweighed by the factors sup-
porting the conclusion that the drivers are inde-
pendent contractors discussed 'above.
As we have concluded that the drivers are inde-
pendent contractors, we shall exclude them from
the unit. Accordingly, we find that the following
constitutes a unit appropriate for the purpose of
collective -bargaining within the meaning of Section
9(c) of the Act:
All full-time and regular part-time mailroom
employees employed at the Employer's
Houghton, Michigan facility, excluding dnv-
eis, substitutes, helpers, inserters, professional
employees, -guards, and supervisors as defined
_ in the Act, and all other employees.
We shall therefore remand this case to the Acting
Regional Director for Region 30 for the purpose of
opening and counting the impounded ballots in the
unit found appropriate.
DIRECTION
It is hereby directed that the Acting Regional
Director for Region 30 shall, within 10 days of this
Decision on Review and Direction, open and count
the impounded ballots in the above-described unit,
prepare and serve on the parties a tally of ballots,
THOMSON NEWSPAPER 353
and proceed thereafter as is appropriate in accord-
arice with this decision.
MEMBER HUNTER, dissenting in part.
I agree with my collegues' conclusion, contrary
to the Acting Regional Director, that the Employ-
er's newspaper delivery drivers are independent
contractors and as such must be excluded from the
bargaining unit sought to be represented by the Pe-
titioner. However, I disagree with my colleagues'
direction to the Acting Regional Director to open
and count those impounded ballots from the 28
March 1984 election which form the unit found ap-
propriate herein. In my view, the proper course of
action is to direct the Acting Regional Director to
conduct a second election.
The Acting Regional Director's Decision and
Direction of Election informed employees that the
election would be held in a unit of 101 full-time
and part-time -mailroom employees, including driv-
ers, employed at the Employer's Houghton, Michi-
gan facility." Under the Acting Regional Direc-
tor's decision, the unit consisted of the 10 drivers at
issue herein plus the 5 mailroom employees who
were stipulated to be in the unit. Excluding the 10
drivers, as the Board's decision does today, there-
fore has the result of diminishing the unit to only
one-third its original size.
' Exclusions from the unit are listed at fn I of the majority's decision
As the Second Circuit suggested in a recent case
involving similar facts, Hamilton Test Systems v.
NLRB, 2 employees may vote differently depending
on what they know about the size or scope of the
unit. Of the several reasons posited by the court as
to why the employees in that case might have
voted differently had they known the "true nature"
of the unit (which the court found to be consider-
ably smaller than that found by the Board), two
reasons stand out as being also possible here: the
five mailroom employees might have believed that
'a smaller bargaining unit would provide insufficient
bargaining *power; or they might have believed that
a- small writ could produce divisiveness and tension
• in the' wOrkplace. 3 Thirs, by Changing the bound-
aries of the approprite bargaining unit after the
election, my colleagues in the majority have effec-
tively denied the employees in the appropriate unit
the right to make an informed choice in the selec-
tion 'or rejection Of a bargaining representative. In
my view, at this stage in the proceedings only the
holding of a' second election can rectify the now
misleading choice of the first election.
. 2 743 F 2d 136 (2d Cu- 1984), denying enf to 268 NLRB No 175
(Feb ' 27, 1984) (unpublished) In agreeing with the Board's granting of
the General Counsel's Motion for Summary Judgment in the technical
8(a)(5) proceeding in that case, I noted that I had not participated in the
underlying representation case and accepted the findings therefrom only
for institutional reasons
3 .743 F 2d at 141