Paperboys Are Employees, not Contractors

The paperboy is an employee, not an independent contractor, according to an unpublished opinion issued in February that was ordered published last week by the Second District Court of Appeal. Antelope Valley Press v. Poizner (2008) __ Cal.App.4th __ poses the specific question whether, for purposes of worker’s compensation insurance, persons who make deliveries of newspapers for the Antelope Valley Press are independent contractors or employees. The issue arises not out of a claim for worker’s compensation benefits, but a dispute over insurance premiums. The court expressly noted that its ruling was limited to this context.

Our review of the facts of this case and relevant law convinces us that the trial court correctly ruled that the administrative record supports the conclusion that the carriers are employees for purposes of workers’ compensation law, not independent contractors. Therefore, we will affirm the trial court’s judgment.

As usual, the court addressed a laundry list of relevant factors that tilted toward employment:

• Home deliveries are made by the carriers, who are paid according to the number of copies of the Press they are given to deliver.
• the per copy rate paid to the carriers varies.
• There are written contracts
• they provide that papers must be delivered in a safe and dry condition.
• If a carrier chooses to wrap the Press in a plastic bag to keep it from getting wet or otherwise harmed, the bag must be yellow or white.
• The carriers also receive approximately 20 complementary copies of the Press each day.
• These free samples, called the “C’s,” are dropped off by the carriers at homes of nonsubscribers.
• The carriers are paid 3 cents for delivering each C. They are required to put the C’s in orange plastic bags, which are provided by AVP
• The routes are checked once a week.
• Carriers also deliver AVP’s magazine-type publication called “Lifestyles.”
• Carriers are required to put Lifestyles in the white plastic bags that AVP provides, and they receive 5 cents per copy they deliver.
• AVP also publishes a free “TMC” (total market coverage) advertisement paper which is called the A.V. As with the C’s, the carriers are required to place the A.V. Express in colored plastic bags (red) that are provided by AVP, and management checks the routes to verify that deliveries of the A.V. Express are made.
• The carriers receive 3 cents per copy of the A.V. Express they deliver, and are charged 23 cents for each copy they do not actually deliver.
• Deliveries by the carriers are made according to AVP’s time schedules.
• The carriers are expected to pick up their bundles of newspapers by a specific time from a specific location.
• If a carrier is late, he or she is charged $35 per hour ($0.58333 per minute) to cover AVP’s cost of having someone oversee the pick-up location until the carrier arrives.
• Additionally, personnel of AVP may begin folding and bagging the tardy carrier’s newspapers after the deadline for pickup so as to facilitate prompt delivery of papers to the customers, and the carrier is charged for the bags even though carriers are not required to put the Press in bags.
• For the pick up location that is not manned by AVP personnel, the carrier runs the risk that the newspapers will be stolen if the carrier is not on site when they are dropped off, and stolen papers are the financial responsibility of the carrier.
• On weekdays, carriers are required to finish their deliveries by 5:00 a.m. on in town routes and 6:00 a.m. on out-of-town routes. On weekends, the delivery deadlines are 6:00 a.m. and 7:00 a.m., respectively.
• The A.V. Express is to be delivered by noon on Saturday.
• Home delivery subscribers pay their subscription fees to AVP, not to the carriers.
• If a home delivery subscriber fails to pay his or her bill, the carrier is not docked unless and until a written stop delivery notice for that customer is given to the carrier.
• The carriers are charged a $2.50 complaint recording fee if a customer does not receive his or her copy of the Press, does not receive it in a timely manner, or it is damaged.
• If there are more than 2 complaints per one thousand paid deliveries and the carrier has elected to have AVP redeliver the Press, the carrier is also charged a $2.50 redelivery fee per complaint. If the carrier has elected to correct subscriber complaints by himself or herself but does not make the correction within one hour of being notified of the problem, or cannot be reached to receive such notification, then if AVP corrects the complaint the carrier is charged $35 per hour and $.31 per mile driven by an AVP employee to correct the problem.
• Invoices are issued to them every two weeks. The invoices list credits and charges.
• The only information the manager seeks from the prospective carrier is whether he or she has a California driver’s license, proof of vehicle insurance, and a social security number.
• The form contract is for a term of one year. Either party can terminate the contract without cause with 30 days written notice. Either party can terminate the contract, effective immediately with written notice, if the other party commits a material breach.
• there was an extreme disparity in bargaining position between the Carriers and AVP.
• "the Carriers wanted work, and they signed what they needed to in order to get it.”
• the lengthy, small print contract was “drafted by sophisticated lawyers and is in no sense the product of arm’s length negotiations, as might occur, for example, in hiring an independent contractor, specialized and sophisticated in the costs of his business, and able to garner trade from other actual and potential customers.”
• There was no evidence that any of AVP’s carriers hold themselves out as being an independent delivery service that happens to have AVP as one of its customers.
• Further, AVP does not cite evidence showing that the carriers have a substantial investment in their AVP delivery duties other than their time and the vehicles they use; and their vehicles are not shown to be other than the vehicles they use for their own personal activities.
• there was no evidence that any of the carriers have a delivery business through which they can distribute that risk and cost.
• Delivering papers requires no particular skill. A carrier’s remuneration is in very large part dependent on nonnegotiated financial terms in the contract rather than on the carrier’s initiative, judgment or managerial abilities.

The court was not concerned about the parties' written arrangements characterizing the relationship as one involving contractors.

The Borello and JKH Enterprises courts also determined that the workers in those cases were employees despite their having signed agreements (migrant farm workers in Borello) or other writings (delivery service drivers in JKH Enterprises) that stated they are independent contractors.

Even though the case arose out of an insurance premium dispute, because the contractor/employee issue arises frequently with wage and hour implications, the opinion is a worthwhile read. You can download the full text of Antelope Valley Press v. Poizner here in pdf or word format.

Comments

boy?

[Randy Hornibrook]

Your heading and first sentence are just plain wrong - very sloppy law. Taken at face value, you claim that the court here settled the issue of whether carriers can be independent contractors. The court indeed found, based upon disputed evidence, that *in this case with these facts* and *solely for the administrative purpose of worker's compensation insurance* these carriers were to be classified as employees. (Hint: This is why Callahan is now representing the AVP carriers in a civil suit against the AVP)

Anyone who has worked with clients who utilize ICs understands how fact-driven each case is, whether judged by traditional control tests or the Borello factors. The AVP handled their ICs unlawfully, but that neither means all carriers are or should be classed as employees or that other publications have the same exposure if their procedures are different.

I realize this is not peer-reviewed prose, but try to be accurate. The court did not certify for publication, and narrowly tailored the finding, for a reason.

[Michael Walsh]

Are you trying to Swiftboat us, Randy? Surely you are capable of catching the distinction between "the paperboy" and "all paperboys", and can comprehend the import of the clause in the second sentence that explains the limit in scope of the statement in the first, specifically, that the case "poses the specific question whether, for purposes of worker’s compensation insurance, persons who make deliveries of newspapers for the Antelope Valley Press are independent contractors or employees."

To fail to make that distinction is akin to reading a headline that says "the butler is a murderer" and assuming that we are trying to call all butlers murderers. Taken at face value, the post simply declared that the court here settled the issue of whether carriers at the Antelope Valley Press were independent contractors, and explained why and how it came to that conclusion, making it potentially relevant to many other cases involving newspaper carriers. If your paper carrier case is dissimilar, it is possible, though unlikely, that you'll experience a different outcome.

[Tom]

Randy tries to be lawyerlike with a call to "try to be accurate" and then ends his argument with the inaccurate statement that "[t]he court did not certify for publication, and narrowly tailored the finding, for a reason." Sorry, Mr. Hornibrook, the court did certify the case for publication. The citation is Antelope Valley Press v. Poizner (2008) 162 Cal.App.4th 839. Next time you scold someone for what you think to be their error, you should try to come with a correct statement.