National Labor Relations Board v. Hearst Publications, Inc.

Me. Justice Rutledge delivered the opinion of the Court.

These cases arise from the refusal of respondents, publishers of four Los Angeles daily newspapers, to bargain collectively with a union representing newsboys who distribute their papers on the streets of that city. Respondents’ contention that they were not required to bargain because the newsboys are not their “employees” within the meaning of that term in the National Labor Relations Act, 49 Stat. 450,29 U. S. C. § 152,1 presents the important question which we granted certiorari2 to resolve.

*114The proceedings before the National Labor Relations Board were begun with the filing of four petitions for investigation and certification3 by Los Angeles Newsboys Local Industrial Union No. 75. Hearings were held in a consolidated proceeding 4 after which the Board made findings of fact and concluded that the regular full-time newsboys selling each paper were employees within the Act and that questions affecting commerce concerning the representation of employees had arisen. It designated appropriate units and ordered elections. 28 N. L. R. B. 1006.5 At these the union was selected as their representative by majorities of the eligible newsboys. After the union was appropriately certified, 33 N. L. R. B. 941, 36 N. L. R. B. 285, the respondents refused to bargain with it. Thereupon proceedings under § 10, 49 Stat. 453-455, 29 U. S. C. i 160, were instituted, a hearing6 was held and respondents were found to have violated §§ 8 (1) and 8 (5) of the Act, 49 Stat. 452-453, 29 U. S. C. § 158 (1), (5). They were ordered to cease and desist from such violations and to bargain collectively with the union upon request. 39 N. L. R. B. 1245,1256.

Upon respondents’ petitions for review and the Board’s petitions for enforcement, the Circuit Court of Appeals, one judge dissenting, set aside the Board’s orders. Re*115jecting the Board’s analysis, the court independently examined the question whether the newsboys are employees within the Act, decided that the statute imports common-law standards to determine that question, and held the newsboys are not employees. 136 F. 2d 608.

The findings of the Board disclose that the Los Angeles Times and the Los Angeles Examiner, published daily and Sunday,7 are morning papers. Each publishes several editions which are distributed on the streets during the evening before their dateline, between about 6:00 or 6:30 p. m. and 1:00 a. m., and other editions distributed during the following morning until about 10:00 o’clock. The Los Angeles Evening Herald and Express, published every day but Sunday, is an evening paper, which has six editions on the presses between 9:00 a. m. and 5:30 p. m.8 The News, also published every day but Sunday, is a twenty-four hour paper with ten editions.9

The papers are distributed to the ultimate consumer through a variety of channels, including independent dealers and newsstands often attached to drug, grocery or confectionery stores, carriers who make home deliveries, and newsboys who sell on the streets of the city and its suburbs. Only the last of these are involved in this case.

The newsboys work under varying terms and conditions. They may be “bootjackers,” selling to the general public at places other than established corners, or they may sell *116at fixed “spots.” They may sell only casually or part-time, or full-time; and they may be employed regularly and continuously or only temporarily. The units which the Board determined to be appropriate are composed of those who sell full-time at established spots. Those vendors, misnamed boys, are generally mature men, dependent upon the proceeds of their sales for their sustenance, and frequently supporters of families. Working thus as news vendors on a regular basis, often for a number of years, they form a stable group with relatively little turnover, in contrast to schoolboys and others who sell as bootjackers, temporary and casual distributors.

Over-all circulation and distribution of the papers are under the general supervision of circulation managers. But for purposes of street distribution each paper has divided metropolitan Los Angeles into geographic districts. Each district is under the direct and close supervision of a district manager. His function in the mechanics of distribution is to supply the newsboys in his district with papers which he obtains from the publisher and to turn over to the publisher the receipts which he collects from their sales, either directly or with the assistance of “checkmen” or “main spot” boys.10 The latter, stationed at the important corners or “spots” in the district, are newsboys who, among other things, receive delivery of the papers, redistribute them to other newsboys stationed at less important corners, and collect receipts from their sales.11 For that service, which occupies a minor portion *117of their working day, the eheekmen receive a small salary from the publisher.12 The bulk of their day, however, they spend in hawking papers at their “spots” like other full-time newsboys. A large part of the appropriate units selected by the Board for the News and the Herald are eheekmen who, in that capacity, clearly are employees of those papers.

The newsboys’ compensation consists in the difference between the prices at which they sell the papers and the prices they pay for them. The former are fixed by the publishers and the latter are fixed either by the publishers or, in the case of the News, by the district manager.13 In practice the newsboys receive their papers on credit. They pay for those sold either sometime during or after the close of their selling day, returning for credit all unsold papers.14 Lost or otherwise unreturned papers, however, must be paid for as though sold. Not only is the “profit” per paper thus effectively fixed by the publisher, but substantial control of the newsboys’ total “take home” can be effected through the ability to designate their sales areas and the power to determine the number of papers allocated to each. While as a practical matter this power is not exercised fully, the newsboys’ “right” to decide how many papers they will take is also not absolute. In practice, the Board found, they cannot determine the size of their established order without the cooperation of the district manager. And often the number of papers they must take is determined unilaterally by the district managers.

In addition to effectively fixing the compensation, respondents in a variety of ways prescribe, if not the *118minutiae of daily activities, at least the broad terms and conditions of work. This is accomplished largely through the supervisory efforts of the district managers, who serve as the nexus between the publishers and the newsboys.15 The district managers assign “spots” or corners to which the newsboys are expected to confine their selling activities.16 Transfers from one “spot” to another may be ordered by the district manager for reasons of discipline or efficiency or other cause. Transportation to the spots from the newspaper building is offered by each of respondents. Hours of work on the spots are determined not simply by the impersonal pressures of the market, but to a real extent by explicit instructions from the district managers. Adherence to the prescribed hours is observed closely by the district managers or other supervisory agents of the publishers. Sanctions, varying in severity *119from reprimand to dismissal, are visited on the tardy and the delinquent. By similar supervisory controls minimum standards of diligence and good conduct while at work are sought to be enforced. However wide may be the latitude for individual initiative beyond those standards, district managers’ instructions in what the publishers apparently regard as helpful sales technique are expected to be followed. Such varied items as the manner of displaying the paper, of emphasizing current features and headlines, and of placing advertising placards, or the advantages of soliciting customers at specific stores or in the traffic lanes are among the subjects of this instruction. Moreover, newsboys are furnished with sales equipment, such as racks, boxes and change aprons, and advertising placards by the publishers. In this pattern of employment the Board found that the newsboys are an integral part of the publishers’ distribution system and circulation organization. And the record discloses that the newsboys and checkmen feel they are employees of the papers; and respondents’ supervisory employees, if not respondents themselves, regard them as such.

In addition to questioning the sufficiency of the evidence to sustain these findings, respondents point to a number of other attributes characterizing their relationship with the newsboys17 and urge that on the entire *120record the latter cannot be considered their employees. They base this conclusion on the argument that by common-law standards the extent of their control and direction of the newsboys’ working activities creates no more than an “independent contractor” relationship and that common-law standards determine the “employee” relationship under the Act. They further urge that the Board’s selection of a collective bargaining unit is neither appropriate nor supported by substantial evidence.18

I.

The principal question is whether the newsboys are “employees.” Because Congress did not explicitly define the term, respondents say its meaning must be determined by reference to common-law standards. In their view “common-law standards” are those the courts have applied in distinguishing between “employees” and “independent contractors” when working out various problems unrelated to the Wagner Act’s purposes and provisions.

The argument assumes that there is some simple, Uniform and easily applicable test which the courts have used, in dealing with such problems, to determine whether persons doing work for others fall in one class or the other. Unfortunately this is not true. Only by a long and tortuous history was the simple formulation worked out which has been stated most frequently as “the test” for deciding whether one who hires another is responsible in tort for his wrongdoing.19 But this formula has been by no means *121exclusively controlling in the solution of other problems. And its simplicity has been illusory because it is more largely simplicity of formulation than of application. Few problems in the law have given greater variety of application and conflict in results than the cases arising in the borderland between what is clearly an employer-employee relationship and what is clearly one of independent, entrepreneurial dealing.20 Th,is is true within the limited field of determining vicarious liability in tort. It becomes more so when the field is expanded to include all of the possible applications of the distinction.

It is hardly necessary to stress particular instances of these variations or to emphasize that they have arisen principally, first, in the struggle of the courts to work out common-law liabilities where the legislature has given no guides for judgment,21 more recently also under statutes which have posed the same problem for solution in the light of the enactment’s particular terms and purposes.22 *122It is enough to point out that, with reference to an identical problem, results may be contrary over a very considerable region of doubt in applying the distinction, depending upon the state or jurisdiction where the determination is made;23 and that within a single jurisdiction a person who, for instance, is held to be an “independent contractor” for the purpose of imposing vicarious liability in tort may be an “employee” for the purposes of particular legislation, such as unemployment compensation. See, e. g., Globe Grain & Milling Co. v. Industrial Comm’n, 98 Utah 36, 91 P. 2d 512. In short, the assumed simplicity and uniformity, resulting from application of “common-law standards,” does not exist.

Mere reference to these possible variations as characterizing the application of the Wagner Act in the treatment of persons identically situated in the facts surrounding their employment and in the influences tending to disrupt it, would be enough to require pause before accepting a thesis which would introduce them into its administration. This would be true, even if the statute itself had indicated less clearly than it does the intent they should not apply.

Two possible consequences could follow. One would be to refer the decision of who are employees to local state law. The alternative would be to make it turn on a sort of pervading general essence distilled from state law. Congress obviously did not intend the former result. It *123would introduce variations into the statute’s operation as wide as the differences the forty-eight states and other local jurisdictions make in applying the distinction for wholly different purposes. Persons who might be “employees” in one state would be “independent contractors” in another. They would be within or without the statute’s protection depending not on whether their situation falls factually within the ambit Congress had in mind, but upon the accidents of the location of their work and the attitude of the particular local jurisdiction in casting doubtful cases one way or the other. Persons working across state lines might fall in one class or the other, possibly both, depending on whether the Board and the courts would be required to give effect to the law of one state or of the adjoining one, or to that of each in relation to the portion of the work done within its borders.

Both the terms and the purposes of the statute, as well as the legislative history, show that Congress had in mind no such patchwork plan for securing freedom of employees’ organization and of collective bargaining. The Wagner Act is federal legislation, administered by a national agency, intended to solve a national problem on a national scale. Cf. e. g., Sen. Rep. No. 573, 74th Cong., 1st Sess. 2-4. It is an Act, therefore, in reference to which it is not only proper but necessary for us to assume, “in the absence of a plain indication to the contrary, that Congress . . . is not making the application of the federal act dependent on state law.” Jerome v. United States, 318 U. S. 101, 104. Nothing in the statute’s background, history, terms or purposes indicates its scope is to be limited by such varying local conceptions, either statutory or judicial, or that it is to be administered in accordance with whatever different standards the respective states may see fit to adopt for the disposition of unrelated, local problems. Consequently, so far as the meaning of “employee” in this statute is concerned, “the federal law must prevail no matter what name is given to the interest or *124right by state law.” Morgan v. Commissioner, 309 U. S. 78, 81; cf. Labor Board v. Blount, 131 F. 2d 585 (C. C. A.).

II.

Whether, given the intended national uniformity, the term “employee” includes such workers as these newsboys must be answered primarily from the history, terms and purposes of the legislation. The word “is not treated by Congress as a word of art having a definite meaning. . . .” Rather “it takes color from its surroundings . . . [in] the statute where it appears,” United States v. American Trucking Assns., 310 U. S. 534, 545, and derives meaning from the context of that statute, which “must be read in the light of the mischief to be corrected and the end to be attained.” South Chicago Coal & Dock Co. v. Bassett, 309 U. S. 251, 259; cf. New Negro Alliance v. Sanitary Grocery Co., 303 U. S. 552; Drivers’ Union v. Lake Valley Co., 311 U. S. 91.

Congress, on the one hand, was not thinking solely of the immediate technical relation of employer and employee. It had in mind at least some other persons than those standing in the proximate legal relation of employee to the particular employer involved in the labor dispute.24 It cannot be taken, however, that the purpose was to include all other persons who may perform service for another or was to ignore entirely legal classifications made for other purposes. Congress had in mind a wider field than the narrow technical legal relation of “master and servant,” as the common law had worked this out in all its variations, and at the same time a narrower one than the entire area of rendering service to others. The question comes down therefore to how much was included of the inter*125mediate region between what is clearly and unequivocally “employment,” by any appropriate test, and what is as clearly entrepreneurial enterprise and not employment.

It will not do, for deciding this question as one of uniform national application, to import wholesale the traditional common-law conceptions or some distilled essence of their local variations as exclusively controlling limitations upon the scope of the statute’s effectiveness. To do this would be merely to select some of the local, hairline variations for nation-wide application and thus to reject others for coverage under the Act. That result hardly would be consistent with the statute’s broad terms and purposes.

Congress was not seeking to solve the nationally harassing problems with which the statute deals by solutions only partially effective. It rather sought to find a broad solution, one that would bring industrial peace by substituting, so far as its power could reach, the rights of workers to self-organization and collective bargaining for the industrial strife which prevails where these rights are not effectively established. Yet only partial solutions would be provided if large segments of workers about whose technical legal position such local differences exist should be wholly excluded from coverage by reason of such differences. Yet that result could not be avoided, if choice must be made among them and controlled by them in deciding who are “employees” within the Act’s meaning. Enmeshed in such distinctions, the administration of the statute soon might become encumbered by the same sort of technical legal refinement as has characterized the long evolution of the employee - independent contractor dichotomy in the courts for other purposes. The consequences would be ultimately to defeat, in part at least, the achievement of the statute’s objectives. Congress no more intended to *126import this mass of technicality as a controlling “standard” for uniform national application than to refer decision of the question outright to the local law.

The Act, as its first section states, was designed to avert the “substantial obstructions to the free flow of commerce” which result from “strikes and other forms of industrial strife or unrest” by eliminating the causes of that unrest. It is premised on explicit findings that strikes and industrial strife themselves result in large measure from the refusal of employers to bargain collectively and the inability of individual workers to bargain successfully for improvements in their “wages, hours or other working conditions” with employers who are “organized in the corporate or other forms of ownership association.” Hence the avowed and interrelated purposes of the Act are to encourage collective bargaining and to remedy the individual worker’s inequality of bargaining power by “protecting the exercise ... of full freedom of association, self-organization, and designation of representatives of their own choosing, for the purpose of negotiating the terms and conditions of their employment or other mutual aid or protection.” 49 Stat. 449, 450.

The mischief at which the Act is aimed and the remedies it offers are not confined exclusively to “employees” within the traditional legal distinctions separating them from “independent contractors.” Myriad forms of service relationship, with infinite and subtle variations in the terms of employment, blanket the nation’s economy. Some are within this Act, others beyond its coverage. Large numbers will fall clearly on one side or on the other, by whatever test may be applied. But intermediate there will be many, the incidents of whose employment partake in part of the one group, in part of the other, in varying proportions of weight. And consequently the legal pendulum, for purposes of applying the statute, may swing one way *127or the other, depending upon the weight of this balance and its relation to the special purpose at hand.

Unless the common-law tests are to be imported and made exclusively controlling, without regard to the statute’s purposes, it cannot be irrelevant that the particular workers in these cases are subject, as a matter of economic fact, to the evils the statute was designed to eradicate and that the remedies it affords are appropriate for preventing them or curing their harmful effects in the special situation. Interruption of commerce through strikes and unrest may stem as well from labor disputes between some who, for other purposes, are technically “independent contractors” and their employers as from disputes between persons who, for those purposes, are “employees” and their employers. Cf. Drivers’ Union v. Lake Valley Co., 311 U. S. 91. Inequality of bargaining power in controversies over wages, hours and working conditions may as well characterize the status of the one group as of the other. The former, when acting alone, may be as “helpless in dealing with an employer,” as “dependent ... on his daily wage” and as “unable to leave the employ and to resist arbitrary and unfair treatment” as the latter. For each, “union . . . [may be] essential to give . . . opportunity to deal on equality with their employer.” 25 And for each, collective bargaining may be appropriate and effective for the “friendly adjustment of industrial disputes arising out of differences as to wages, hours, or other working conditions.”26 49 Stat. 449. In *128short, when the particular situation of employment combines these characteristics, so that the economic facts of the relation make it more nearly one of employment than of independent business enterprise with respect to the ends sought to be accomplished by the legislation, those characteristics may outweigh technical legal classification for purposes unrelated to the statute’s objectives and bring the relation within its protections.

To eliminate the causes of labor disputes and industrial strife, Congress thought it necessary to create a balance of forces in certain types of economic relationships. These do not embrace simply employment associations in which controversies could be limited to disputes over proper “physical conduct in the performance of the service.”27 On the contrary, Congress recognized those economic relationships cannot be fitted neatly into the containers designated “employee” and “employer” which an earlier law had shaped for different purposes. Its Reports on the bill disclose clearly the understanding that “employers and employees not in proximate relationship may be drawn into common controversies by economic forces,”28 and that the very disputes sought to be avoided might involve *129“employees [who] are at times brought into an economic relationship with employers who are not their employers.” 29 In this light, the broad language of the Act’s definitions, which in terms reject conventional limitations on such conceptions as “employee,” “employer,” and “labor dispute,”30 leaves no doubt that its applicability is to be determined broadly, in doubtful situations, by underlying economic facts rather than technically and exclusively by previously established legal classifications. Cf. Labor Board v. Blount, supra.

Hence “technical concepts pertinent to an employer’s legal responsibility to third persons for acts of his servants” have been rejected in various applications of this Act both here (International Association of Machinists v. Labor Board, 311 U. S. 72, 80-81; H. J. Heinz Co. v. Labor Board, 311 U. S. 514, 520-521) 31 and in other federal courts (Labor Board v. Condenser Corp., 128 F. 2d 67 (C. C. A.); North Whittier Heights Citrus Assn. v. Labor Board, 109 F. 2d 76, 82 (C. C. A.).; Labor Board v. Blount, supra). There is no good reason for invoking them to restrict the scope of the term “employee” sought to be done in this case. That term, like other provisions, must be understood with reference to the purpose of the Act and the facts involved in the economic relationship.32 “Where all the conditions of the relation require protection, protection ought to be given.” 33

*130It is not necessary in this case to make a completely definitive limitation around the term “employee.” That task has been assigned primarily to the agency created by Congress to administer the Act. Determination of “where all the conditions of the relation require protection” involves inquiries for the Board charged with this duty. Everyday experience in the administration of the statute gives it familiarity with the circumstances and backgrounds of employment relationships in various industries, with the abilities and needs of the workers for self-organization and collective action, and with the adaptability of collective bargaining for the peaceful settlement of their disputes with their employers. The experience thus acquired must be brought frequently to bear on the question who is an employee under the Act. Resolving that question, like determining whether unfair labor practices have been committed, “belongs to the usual administrative routine” of the Board.34 Gray v. Powell, 314 U. S. 402, 411. Cf. Labor Board v. Standard Oil Co., 138 F. 2d 885, 887-888.

In making that body’s determinations as to the facts in these matters conclusive, if supported by evidence, Congress entrusted to it primarily the decision whether the evidence establishes the material facts. Hence in reviewing the Board’s ultimate conclusions, it is not the court’s function to substitute its own inferences of fact for the Board’s, when the latter have support in the record. Labor Board v. Nevada Copper Corp., 316 U. S. 105; cf. Walker v. Altmeyer, 137 F. 2d 531 (C. C. A.). Undoubtedly questions of statutory interpretation, especially when arising in the first instance in judicial proceedings, are for *131the courts to resolve, giving appropriate weight to the judgment of those whose special duty is to administer the questioned statute. Norwegian Nitrogen Products Co. v. United States, 288 U. S. 294; United States v. American Trucking Assns., 310 U. S. 534. But where the question is one of specific application of a broad statutory term in a proceeding in which the agency administering the statute must determine it initially, the reviewing court’s function is limited. Like the commissioner’s determination under the Longshoremen’s & Harbor Workers’ Act,35 that a man is not a “member of a crew” (South Chicago Coal & Dock Co. v. Bassett, 309 U. S. 251) or that he was injured “in the course of employment” (Parker v. Motor Boat Sales, 314 U. S. 244) and the Federal Communications Commission’s determination36 that one company is under the “control” of another (Rochester Telephone Corp. v. United States, 307 U. S. 125), the Board’s determination that specified persons are “employees” under this Act is to be accepted if it has “warrant in the record” and a reasonable basis in law.

In this case the Board found that the designated newsboys work continuously and regularly, rely upon their earnings for the support of themselves and their families, and have their total wages influenced in large measure by the publishers, who dictate their buying and selling prices, fix their markets and control their supply of papers. Their hours of work and their efforts on the job are supervised and to some extent prescribed by the publishers or their agents. Much of their sales equipment and advertising materials is furnished by the publishers with the intention that it be used for the publisher’s benefit. Stating that “the primary consideration in the determination of the applicability of the statutory definition is whether *132effectuation of the declared policy and purposes of the Act comprehend securing to the individual the rights guaranteed and protection afforded by the Act,” the Board concluded that the newsboys are employees. The record sustains the Board’s findings and there is ample basis in the law for its conclusion.

III.

The Board’s selection of the collective bargaining units also must be upheld. The units chosen for the News and the Herald consist of all full-time37 newsboys and check-men engaged to sell the papers in Los Angeles. Boot-jackers, temporary, casual and part-time38 newsboys are excluded. The units designated for the Times and the Examiner consist of newsboys selling at established spots39 in Los Angeles 40 four or more hours per day five or more days per week, except temporary newsboys.41

The Board predicated its designations in part upon the finding that the units included, in general, men who were responsible workers, continuously and regularly employed as vendors and dependent upon their sales for their liveli*133hood, while schoolboys and transient or casual workers were excluded. The discretion which Congress vested in the Board to determine an appropriate unit is hardly overstepped by the choice of a unit based on a distinction so clearly consistent with the need for responsible bargaining. That the Board’s selection emphasizes difference in tenure rather than function is, on this record certainly, no abuse of discretion.

Nor is there substance in the objection that the Board’s designations on the one hand fail to embrace all workers who in fact come within the responsible or stable full-time category generically stated, and on the other hand fail to exclude all who in fact come within the schoolboy or more volatile part-time category. The record does not suggest that the units designated, at least so far as Los Angeles newsboys are concerned, do not substantially effectuate the Board’s theory or embrace a large portion of those who would make up a stable bargaining group based on responsible tenure and full-time work. In these matters the Board cannot be held to mathematical precision. If it chooses to couch its orders in terms which for good reasons it regards effective to accomplish its stated ends, peripheral or hypothetical deviations will not defeat an otherwise appropriate order.

Another objection urged by the Times, the Herald and the Examiner is to the Board’s exclusion of suburban newsboys42 from the units on the ground they were not organized by the union. The Board found that although all vendors in metropolitan Los Angeles were eligible for membership, the union had not been extended to the suburban groups generally and that no other labor organization was seeking to represent respondents’ employees. There is no suggestion either that the union deliberately *134excluded suburban newsboys who sought admission or that suburban newsboys have displayed any interest in collective bargaining or self-organization.

■ Wide variations in the forms of employee self-organization and the complexities of modern industrial organization make difficult the use of inflexible rules as the test of an appropriate unit. Congress was informed of the need for flexibility in shaping the unit to the particular case43 and accordingly gave the Board wide discretion in the matter. Its choice of a unit is limited specifically only by the requirement that it be an “employer unit, craft unit, plant unit, or subdivision thereof” and that the selection be made so as “to insure to employees the full benefit of their right to self-organization and to collective bargaining, and otherwise to effectuate the policies of the Act.” Pittsburgh Plate Glass Co. v. Labor Board, 313 U. S. 146. The flexibility which Congress thus permitted has characterized the Board’s administration of the section and has led it to resort to a wide variety of factors in case-to-case determination of the appropriate unit.44 Among the considerations to which it has given weight is the extent of organization of the union requesting certification or collective' bargaining. This is done on the expressed theory that it is desirable in the determination of an appropriate unit to render collective bargaining of the company’s employees an immediate possibility.45 No *135plausible reason is suggested for withholding the benefits of the Act from those here seeking it until a group of geographically separated employees becomes interested in collective bargaining. In the circumstances disclosed by this record we cannot say the Board’s conclusions are lacking in a “rational basis.”

The judgments are reversed and the causes are remanded for further proceedings not inconsistent with this opinion.

Reversed.