CALIFORNIA EMPLOYMENT COMMISSION v. LOS ANGELES DOWN TOWN SHOPPING NEWS CORPORATION

Reset A A Font size: Print

District Court of Appeal, Second District, Division 2, California.

CALIFORNIA EMPLOYMENT COMMISSION v. LOS ANGELES DOWN TOWN SHOPPING NEWS CORPORATION.

Civ. 14077.

Decided: June 29, 1943

Gibson, Dunn & Crutcher, Henry F. Prince, all of Los Angeles, for appellant. Robert W. Kenny, Atty. Gen., and Clarence A. Linn, Deputy Atty. Gen. (Forrest M. Hill and Doris H. Maier, both of Sacramento, of counsel), for respondent.

Defendant has appealed from a judgment entered in favor of California Employment Commission for the amount of contributions due to the unemployment fund for the period from January 1, 1936, to and including December 31, 1938. The statute of limitations barred recovery for any earlier period. Defendant does not dispute the amount of the judgment, but it contends that its carrier boys were not in such “employment” as is defined by the California Unemployment Insurance Act, Chapter 352, Statutes of 1935, p. 1226, as amended. It contends that the carriers in question were independent contractors and not employees.

Since 1922 defendant corporation has been engaged in the publication and distribution of a paper known as Los Angeles Down Town Shopping News, devoted to the advertising of retail merchandise. The paper had no subscribers, free delivery being maintained throughout the city of Los Angeles, and approximately 1,000 carriers were employed by defendant at wages varying from $2 to $2.50 per week. Most of the carriers were persons under the age of 18 years who attended school and were required to obtain permits to do the work. The compensation of each carrier was based upon the number of papers he delivered and the character of his route. The papers were required to be delivered by 8 a. m. on Wednesday and by 9 a. m. on Saturday but at times “specials” were to be delivered and for this purpose the carriers were permitted to employ helpers. The carriers themselves were hired directly by defendant. They had no personal interest in their routes and could not sell them. The routes could be changed and realigned as the defendant saw fit.

The papers were delivered by a company truck to a specified place on the carrier's route usually his home, early in the morning of the delivery date or in the previous evening. The carriers placed the papers in bags furnished by defendant and started on their routes. Inspectors employed by the company checked on the time the carriers started and the number of papers received. Upon completion of their routes the carriers returned to the specified location and signed check–out sheets stating the number of papers brought back or the number short. The bags were then deposited. If complaints were made concerning delivery of the papers the carriers were required to remedy the situation.

Carriers received both oral and written instructions. They were required to fold the papers and leave one at each single dwelling. At flat buildings, double houses and bungalow courts a folded paper was required to be placed behind the door knob. Carriers were required to return unused papers to the inspector and to sign reports concerning their work. They were instructed not to deliver papers to vacant premises or at any house under construction or at premises which had signs requesting no advertising. They were not allowed to walk across lawns or flower beds and were prohibited from taking dogs with them. They were not allowed to use automobiles, motorcycles, bicycles or roller skates on the routes. Carriers were required to have social security numbers.

The important test by which to determine whether a person is acting as an independent contractor or as an employee involves an answer to the question whether the person is subject to the orders and control of another party. The important element is the right of control, whether that right be exercised or not. Baugh v. Rogers, 138 P.2d 757, filed in this court June 16, 1943; Chapman v. Edwards, 133 Cal.App. 72, 24 P.2d 211; Hillen v. Industrial A. C., 199 Cal. 577, 250 P. 570. In the instant case defendant had the right of control and in fact exercised control. Instructions were given by defendant and followed by its carriers as to how, when and where the papers were delivered. The carriers were required to check in and out, to make reports concerning their work and were subject to discharge if the instructions of the employer were disobeyed. The evidence is ample to sustain the finding of the trial court that defendant “had the right of potential and actual control over said carriers as to the manner and means of the performance of their work”.

Defendant cites cases in which a number of those who are usually called “newsboys” were held to be independent contractors. But the facts in the cases cited are distinguishable from the facts of the present case, particularly in the circumstances that the newsboys bought the papers from the publishers and sold them for their own account. Bohanon v. James McClatchy Publishing Company, 16 Cal.App.2d 188, 60 P.2d 510; Batt v. San Diego Sun Publishing Co. Ltd. 21 Cal.App.2d 429, 69 P.2d 216. A case more nearly in point is Globe Indemnity Co. v. Industrial A. C., 208 Cal. 715, 284 P. 661, where the carrier was held to be an employee under circumstances which were more favorable to those contending for the relationship of independent contractor than are the circumstances in the instant case.

Plaintiff presents the additional contention that in determining whether the carriers were in “employment” under the provisions of the Unemployment Insurance Act the rules fixing the status of an employee and of an independent contractor as used in proceedings before the Industrial Accident Commission and in tort actions are not applicable. Reference is made to section 7 of the Act, as originally enacted, which provides: “An ‘employment,’ means any employment by an employer who is subject to this Act * * * under any contract of hire, express or implied, oral or written, * * *”. Plaintiff points to the absence in the Act of the definitions of employee and independent contractor which appear in the Labor Code and argues that the question whether an employee was at a given time under the complete control of the employer is immaterial in view of the general purpose of the Act to promote the general welfare and alleviate the evils of unemployment. Since we are holding that the carriers were under the complete control of their employer, it is unnecessary to pass upon this additional contention.

To be entitled to unemployment benefits at the time involved in this action a person must have earned in the preceding year not less than $156. It is argued by defendant that the carriers did not come within the terms of the Act for the reason that they were not earning sufficient sums to enable them to obtain the benefits of the Act. Some of the employees were, however, earning sufficient sums from other work to make them eligible to receive present benefits under the Act. It is the duty of the state treasurer to conserve the funds collected for use as need might arise, which might be at some date far in the future. The Act makes no exceptions which would relieve defendant from making the payments, the only exception for minors being found in section 7 subd. (d) of the Act, which exempts from “employment” services performed by a child under the age of 21 in the employ of his father or mother. In effect defendant asks the court to read into the statute an exception which was not placed therein by the legislature. Although the courts in proper circumstances interpret doubtful expressions of the legislature they may not add to or alter the statute or depart from the manifest legislative intent.

The judgment is affirmed.

W. J. WOOD, Justice.

MOORE, P. J., and McCOMB, J., concur.