## Facts

- Four Los Angeles newspaper publishers used “newsboys” to sell and distribute papers on city streets.
- A union petitioned the National Labor Relations Board (NLRB) to be certified as the bargaining representative of specified groups of full-time newsboys (and related workers).
- After consolidated hearings, the NLRB found the regular full-time newsboys were “employees” under the National Labor Relations Act (NLRA), directed elections, and certified the union after it won.
- The publishers refused to bargain; the NLRB found unfair labor practices for refusing to bargain and interfering with protected rights.
- The NLRB found evidence that the newsboys worked continuously, relied on earnings for support, and were subject to publisher control over key aspects of the work, including prices, markets, supply of papers, and some supervision of hours and efforts, with publishers providing equipment and advertising materials.
- The publishers contended the newsboys were independent contractors because they bought papers for resale, retained profit opportunities, bore some risk, and were not on a conventional payroll.
- The Ninth Circuit set aside the NLRB’s orders, concluding the newsboys were not “employees” within the NLRA.

## Issues

1. Whether the newsboys were “employees” within § 2(3) of the NLRA or independent contractors outside the Act.
2. What level of judicial review applies to the NLRB’s determination that workers fall within the Act’s definition of “employee.”

## Decision

- The Supreme Court reversed the Ninth Circuit and directed enforcement of the NLRB’s orders.
- The Court held that “employee” under the NLRA is not confined to common-law master–servant categories and must be determined in light of the Act’s purposes and the economic facts of the relationship.
- The Court upheld the NLRB’s classification of the newsboys as employees, concluding the determination was supported by evidence and had a reasonable legal basis.
- The Court sustained the NLRB’s bargaining-unit determinations as within the Board’s discretion.

## Legal Principles

- The NLRA’s term “employee” is interpreted functionally, considering statutory purpose and the economic realities of the work relationship, not solely traditional common-law classifications.
- When an agency applies a broad statutory term it administers to a concrete labor relationship, judicial review is limited; the agency’s decision stands if it has warrant in the record and a reasonable basis in law.
- Employer control over pricing, markets, supply, and work instrumentalities, and workers’ economic dependence, are relevant indicators supporting employee status under the NLRA.
- The NLRB has discretion to define appropriate bargaining units; courts will not overturn unit selections absent abuse of discretion.

## Conclusion

The Court enforced the NLRB’s order, holding that the NLRA’s coverage of “employees” extends beyond strict common-law categories and that courts must sustain the NLRB’s worker-status determinations and unit selections when supported by the record and grounded in reasonable statutory interpretation.


NLRB v. Hearst Publications, Inc., 322 U.S. 111 (1944)