I told my husband when he goes in tonight to get that paper back and I was going to call The Oregoinian and ask them if this is there policy. (a) Your husband should try to get copies of the papers he signed. He needs to see exactly what they say. (b) YOU shouldn't call anyone. You are not a party to your husband's employment relationship. If your husband has questions or concerns, he should contact HR or management at the newspaper.
Is this even legal? That's difficult to say since it's not clear what your husband signed. Since he's an independent contractor (which he likely is since he's just delivering newspapers) then he's not an employee - he's a supplier, and it isn't illegal to build "penalties" into agreements with suppliers.
The least expensive way for your husband to get answers to his situation is to get a copy of whatever paperwork he signed and then contact your State's Department of Labor and ask their opinion.
A person, who is nice to you, but rude to a waiter, is not a nice person. (This is very important. Pay attention. It never fails.)