Legal Update:
Newsracks & Independent Contractors
Prepared for the N.E.A.C.E. Annual Sales Conference
May 19, 2008  Manchester Village, Vermont
Presented by Paul Guggina
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Disclaimer
This is not legal advice!
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Agenda
• Newsracks
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First Amendment 101
Detecting Constitutionality
Constitutional or Not?
Preemptive Damage Control
• Independent Contractors
• ‘Crash’ course in agency law
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Newsracks
‘Liberty of circulating is
as essential to freedom
of the press as liberty
of publishing; Indeed,
without the circulation,
the publication would
be of little value.’
-- U.S. Supreme Court (1877)
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Municipal Art Society of
New York’s ‘Nasty Newsrack
Photo Competition’
www.streetsblog.org
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First Amendment 101
• Sidewalk is a ‘traditional public forum’
• “. . . immemoriably held in trust for the use of the
public for purposes of assembly, communicating
thoughts between citizens, and discussing public
issues. Such use has, from ancient times, been part
of the privileges, immunities and liberties of
citizens.”
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First Amendment 101
• Sidewalk as public forum:
– Town Crier
– ‘Newsboys’
– Newsracks
Idaho State Journal
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‘Mechanical
Newsboy’
“. . .The week-old
experiment with the
machines has shown
encouraging results,
and if the machines
prove popular, more
will be added in other
locations.”
--Hartford Courant,
October 31, 1954
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First Amendment 101
• Not an Absolute Right
• Regulations on speech are permitted
if they serve ‘legitimate government interest’
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Pedestrian/traffic safety
Smooth flow of foot traffic
Community aesthetics (especially in historic districts)
Avoiding ‘visual clutter’
Access to hydrants, mailboxes, light poles, etc.
• Must be ‘Content Neutral’
– But can restrict ‘Time, Place and Manner’ of speech
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First Amendment 101
• Regulations must be ‘narrowly tailored’
to serve ‘legitimate government interest’
• E.g., cannot ban newsracks to serve interest
of public safety, but can restrict location
• Do not need to be ‘least restrictive’ means
• Must actually serve the identified interest
• Must be ‘ample alternative channels of
communication’
• E.g., stores nearby selling newspapers
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First Amendment 101
• Fees can be no greater than necessary
to pay for enforcement
• Unless public agency has profit-making authority
• Cannot vest ‘unfettered discretion’ in one place
• Must be specific guidelines for enforcement
• Risk of unlawful prior restraint on speech
• Not just sidewalks
• Anywhere public congregates
– Shopping malls
– Airports
– Rest areas
• More lenient standards for less traditional public fora
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Detecting Unconstitutionality
• When analyzing a newsrack law, ask:
• Is the government pursuing a legitimate interest?
– Safety, Aesthetics
• Will the restrictions truly address the identified
interest?
– Is there actual evidence that they will?
• Does the law give unlimited discretion
to one person or agency?
• Is it content-neutral?
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Constitutional or Not?
• Calistoga, Calif.:
– Interests identified:
– Pedestrian safety & convenience;
– Ensure no unreasonable interference with traffic flow;
– Reasonable access for maintenance of poles, signs,
hydrants, mailboxes, etc.
– Reduce visual blight
– “No more than eight racks contained in a
modular newsrack shall be located in any
public right-of-way within the same block”
– Lottery system to determine who gets permit
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Constitutional or Not?
• Court: Calistoga’s restriction on number of
newsracks per block probably unconstitutional
• “It is not clear why the number of newsracks could not be
expanded to accommodate more, if not all publications,
without jeopardizing the City’s asserted interests”
• No evidence to show what city did to come up with the
limitation of 8 per block
• No ‘careful calculation’ of necessity of restriction
• Lottery is constitutional
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Constitutional or Not?
• Beacon Hill, Boston
• Interest: Preservation
of historic district
• Regulation:
Prohibition on all
racks within
historic district
• Results in removal
of 62 racks
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Constitutional or Not?
• Court: Prohibition on newsracks
on Beacon Hill is constitutional
• ‘Thorough approach’
– Survey, public hearings, report
• ‘Presence of racks on sidewalk clearly detracts from
the historic and architectural character of the
District’
• Alternative channels of distribution
– Home delivery; Store sales; Street vendors; Mail
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Constitutional or Not?
• Court: Prohibition on newsracks
on Beacon Hill is constitutional
• ‘Thorough approach’
– Survey, public hearings, report
• ‘Presence of racks on sidewalk clearly detracts from
the historic and architectural character of the
District’
• Alternative channels of distribution
– Home delivery; Store sales; Street vendors; Mail
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Damage Control
• Work with municipalities
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Shared interest in safety, aesthetics
Corporate citizenship
Unique knowledge of industry
Alternatives to ordinance
Insight into effect of ordinance
Damage Control
• Document impact
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Damage Control
• Document impact
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Damage Control
• Document impact
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Independent Contractors
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Independent Contractors
• Distinction between IC & employees
important for:
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Personal injury claims by third parties
Worker’s compensation claims
Erisa benefit claims
Confidentiality
• * Massachusetts is unique
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Independent Contractors
• Advantages of IC:
– Savings
– Expertise
– Flexibility
• Advantages of employees:
– More control over activities & schedule
– Consistency
– Certainty
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Independent Contractors
• Criteria depend on context:
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ADA, FMLA, FLSA, NLRA
US, state & local tax laws
Civil rights
Personal injury / negligence claims
Worker’s compensation laws
Independent Contractors
• Areas of analysis:
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Pre-relationship
Contract
During relationship
Termination
Independent Contractors
• Pre-relationship issues:
– Advertising
• State IC position / ‘Business Opportunity’
• Emphasize contract, not employee
– Application form
• Don’t use standard employment application
• Require worker’s compensation coverage
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Independent Contractors
• Contract
– Important but not controlling
– “Contractor,” not “carrier”
– Negotiability
• E.g., rates, areas of distribution, route boundaries
• Consider proposed changes by contractor
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Independent Contractors
• Contract
– Non-negotiable elements:
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Contractors have financial responsibility
Subcontracting allowed
Emphasize IC status
1099, not W2
No withholding
Independent Contractors
• Contract
– Non-negotiable elements (cont.):
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No benefits (vacation, insurance)
Specific term
30-days notice for termination w/o cause
Prohibit use of newspaper logo
Indemnification clause for contractor marketing
Independent Contractors
• During Relationship
– No employee handbook
• “suggested best business practices” okay
– No “periodic, ongoing detailed training”
• Orientation sessions okay, off-premises preferred
– Subcontracting okay, w/o approval by company
– No exclusivity
– Don’t control means of delivery
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Independent Contractors
• During Relationship
– Support for IC status:
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Delivers outside strict boundaries
Charges more than suggested retail
Has invested time & money in new subscribers
Can decide whether to use tubes, polybags
Controls billing, collection, cancellation
Delivers other publications
Employs helpers
Independent Contractors
• During Relationship
– Support for IC status (cont.)
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Responsible for lost/stolen/unsold newspapers
Sets own hours
Determines sequence of route
No training for how to deliver
Unsupervised, unmonitored
All services performed off-premises
Independent Contractors
• During Relationship
– Communications
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Refer to contract
No employee-like discipline
“Breach of contract”
Not included in employee email
No inter-office memos
Different material than employees
Independent Contractors
• During Relationship
– Communications (cont.)
• Train key personnel about distinction
– Zone managers
– Customer service clerks
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Independent Contractors
• End of Relationship
– Termination terms in contract
– Breach of contract
• Not “fired” or “terminated for cause”
– May owe liquidated damages for early
termination
– No severance pay
– If renewal, renegotiate
• No automatic renewals
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Independent Contractors
• Examples
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Paul Guggina
Tyler Cooper & Alcorn, LLP
Pguggina@tylercooper.com
www.tylercooper.com
(860) 725-6200
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