American Lumbermen's Casualty Co. of Illinois

In the Matter of LUMBERMEN'S MUTUAL CASUALTY CO. OF CHICAGO, DOING BUSINESS IN NEw YORK AS AMERICAN LUMBEEtMEN'S CAS- UALTY CO. OF ILLINOIS, EMPLOYER and INDEPENDENT INSURANCE AND BANKING EMPLOYEES UNION, PETITIONER Case Nos.. -R-7577 and O-R-7578.Deeided January 07, 1948 Lord, Day di Lord, by Messrs. T. F. Daly and J. R. Mahoney, of New York City, for the Employer. O'Dwyer di Bernstein, by Messrs. Paul O'Dwyer, Sidney E. Cohn, and I. Philip Sipser, of New York City, for the Petitioner. DECISION AND DIRECTION OF ELECTIONS Upon a petition duly filed, hearing in this case was held at New York City, on March 17,18, 24 and 25,1947, before Sidney Reitman, hearing officer. The hearing officer's rulings made at the hearing are free from prejudicial error, and are hereby affirmed, except as indicated in the margin.,, The Employer's request for oral argument is denied inas- much as the record, in our opinion, adequately presents the issues and positions of the parties. Upon the entire record in the case, the National Labor Relations Board makes the following : FINDINGS OF FACT I. THE BUSINESS OF THE EMPLOYER Lumbermen's Mutual Casualty Co. of Chicago, an Illinois corpora- tion, is engaged in the business of issuing casualty insurance policies, and the normal activity attendant thereto in settling and litigating claims arising under the insurance. Its principal office is in Chicago, 1 During the hearing, the Employer offered as exhibits letters from the committees on legal ethics of the American Bar Association , Association of the Bar of the City of New York, and New York County Lawyers Association . The hearing officer rejected these ex- hibits . Under the circumstances of the instant case , however, we admit the exhibits into evidence, incorporating them as part of the record herein 75 N. L. R. B., No. 129. 1132 LUMBERMEN 'S MUTUAL CASUALTY CO. OF CHICAGO 1133 Illinois , but it also maintains a series of branch offices in various cities throughout the United States, including one at 342 Madison Avenue, New York City, with which we are solely concerned in this proceeding. During the year preceding January 20, 1947, the Employer received income from premiums paid throughout the United States in the sum of $36,120,981 .15. During the same period , it received $4,460,000 in- come from premiums in the operation of its New York City branch office. In the course of operating its New York branch office, claims handled by that branch arise in States of the United States other than New York, and the insured in many of these claims is a resident of some State other than New York. The disbursement and settlement of all claims must clear through the main office of the Employer in Chicago, Illinois. The Employer admits, for the purposes of this proceeding, and we find, that it is engaged in commerce within the meaning of the National Labor Relations Act. II. THE ORGANIZATION INVOLVED The Petitioner is an unaffiliated labor organization claiming to represent employees of the Employer. III. THE QUESTION CONCERNING REPRESENTATION The Employer refuses to recognize the Petitioner as the exclusive bargaining representative of employees of the Employer until the the Petitioner has been certified by the Board in an appropriate unit. We find that a question affecting commerce exists concerning the representation of employees of the Employer, within the meaning of Section 9 (c) (1) and Section 2 (6) and (7) of the Act. IV. THE APPROPRIATE UNITS Contentions of the parties The Petitioner seeks a unit consisting of all investigators , adjusters, and attorneys employed in the New York City Branch of the Em- ployer, excluding the claims manager, the assistant claims manager, the attorney of record, the head of the suit department , the head of the compensation claim department , the office manager, and all other supervisory employees . In the alternative , the Petitioner seeks sepa- rate units of attorneys and adjusters , comprised as,follows: (a) all attorneys employed in the New York City branch of the Employer, excluding the attorney of record and all other supervisory employees; and (b ) all adjusters and investigators employed in the New York 1134 DECISIONS OF NATIONAL LABOR RELATIONS BOARD City branch of the Employer, excluding the claims manager, the head of the suit department, the head of the compensation department, the office manager, and all other supervisory employees. The Employer, on the other hand, contends that neither attorneys nor adjusters are appropriately included in any unit. The Employer argues that its attorneys are not employees within the meaning of the Act because they are professional employees, and because they repre- sent management. Furthermore, asserts the Employer, as "officers of the court" and holders of a "public trust" the attorneys are precluded from taking any oath which would in any manner limit the obliga- tion placed upon them as attorneys and fiduciaries. In addition, the Employer contends that an attorney's membership in a union would violate the Canons of Ethics of the American Bar Association. The Employer would exclude the adjusters from any unit because of its contention that they represent management. In any event, the Em- ployer contends, two separate units, one for attorneys and one for adjusters and investigators, should be established, in conformance with the Petitioner's alternative request. The Attorneys The New York City branch of the Employer maintains a claim department, which investigates, adjusts, and/or litigates all claims which arise within its jurisdiction. This department is subdivided into claim and legal divisions, the investigative and adjusting func- tions resting with the claim division, and the litigation functions rest- ing with the legal division. A claims manager heads the claim de- partment, and directs and supervises the work of both the claim and the legal subdivisions. The legal subdivision is headed by an attorney of record, who has approximately 10 or 11 attorneys under him. He assigns certain courts to each of his attorneys, and all cases that are to be litigated in these courts are tried by the assigned attorney, who performs the usual functions of an attorney in the preparation of pleadings and the conduct of the trial of the case, and, in addition, is required to submit a trial report upon the conclusion of the trial. The individual attorney has no right to select those cases which he shall try. He is subject to the control and direction of the Em- ployer in the course of his work, and may be disciplined by the attorney of record and the claims manager for refusal to follow instructions. Although the attorneys use their own discretion at all stages of the pre- trial and trial work, they are governed generally by policies set forth by the Employer. The Employer prescribes the type of cases for which a jury trial is not to be requested. Various affirmative defenses LUMBERMEN 'S, MUTUAL CASUALTY CO. OF CHICAGO 1135 are required to be pleaded in certain types of actions, such as the defense of contributory negligence in any action involving the death of a plaintiff. In addition, the attorneys are not permitted to settle any case without the express consent of the Employer. The attorneys are hired in the same manner as are other employees of the Employer. Like the other employees, they are subject to with- holding tax, unemployment insurance; social security taxes, and Work- men's' Compensation Insurance; like the other employees, they work regular hours (from 8: 55 a. m. to 5: 00 p. in.) ; like the other em- ployees, they are'required to be covered by health and accident insur- ance; like the other employees, they carry identification cards issued by the Employer; and like the other employees, they receive vacations based on length of service. Unlike the other employees, however, the attorneys are professional personnel. And unlike the other employees, they are "officers of the court" and fiduciaries. We shall first consider whether the attorneys' professional status is sufficient to deprive them of the benefits of the Acts We have in the past certified labor organizations as the bargaining representatives of professional employees.2 This practice has been inferentially endorsed by the Labor-Management Relations Act, 1947, which con- templates the establishment of separate units of professional em- ployees.3 We are of the opinion, therefore, that the mere fact that the attorneys are professional personnel does not preclude them from being employees within the meaning of the Act, and entitled to its benefits, and we reject the Employer's contention in this respect. Nor are these attorneys, in our opinion, either supervisory, manage- rial, or confidential employees. The attorneys sought herein admittedly do not exercise supervisory authority. The only other employees of the Employer who "work for" the attorneys to any degree are the steno- graphic and clerical personnel, and none of the attorneys sought by the ' See, e g, Matter of Spicer Manufacturing Corporation , 55 N L R B 1491 , Matte) of Boston t7di,on Company, 51 N L R B 118 , Matter of Wagner L'lectric Corporation, 67 N L R B 1104. Matter of Aluminum Company of America, 62 N L R. B 318 B Section 2 (12) of the Act, as amended, defines "professional employee" as follows "(a) any employee engaged in woik (i) predominantly intellectual and varied in charac- ter as opposed to routine mental, manual, mechanical or ph-sical work, (ii) involving the consistent exercise of discretion and judgment in its performance; (iii) of such a character that the output produce(] or the result accomplished cannot he standardized in relation to a given period of time, (iv) requiring knowledge of an advanced type in a field of science or learning customarily acquired by a prolonged course of specialized -atellectual instruction and study in an institution of higher learning or a hospital as distinguished from it general academic education or from an apprenticeship or from training in the performance of inutine mental. manual, or plivsical processes. of "(b) and employee, who (i ) has completed th'e courses of specialized intellectual instruc- tion and study described in clause (iv) of paragraph (a) and (ii) is performing related work under the' supervision of a professional person to quality himself to become a piotessional employee as dehned in paragraph (a) " 1136 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Petitioner has any authority with respect to these stenographers and clerks, who are drawn from a common pool as they become available. The attorneys, in addition, are not in a position to formulate, deter- mine, or effectuate management policies generally, and they are not concerned with the Employer's labor relations policies either directly or indirectly. They are not, therefore, either managerial or confiden- tial employees. All of the Employer's attorneys are salaried, being paid from $1,500 to $3,000 per year. They represent the Employer in court, although none of the attorneys sought by the Petitioner tries cases other than in the Municipal, City, and County Courts.4 As we have previously in- dicated, their discretion is limited by certain rules prescribed by the Employer, and they are not permitted to settle any case without the con- sent of the Employer. Any employee may be said to act for management to some extent, inasmuch as he is paid by his employer, and owes a certain duty and loyalty to that employer. For example, a salesman acts for manage- ment by taking orders for his employer, and a receiving clerk acts for management by signing for the receipt of merchandise for his em- ployer. But, as we stated with respect to nurses in a recent case,, ". . . there is no necessary conflict between self-organization and collective bargaining, and the faithful performance of duty." As the record reveals, and as we have previously found, the attorneys herein are not supervisory personnel; they do not formulate policies for the Employer, either generally or in the field of labor relations; nor do they act in a confidential capacity to persons who do formulate such policies; and the discretion which they exercise in the performance of their duties is limited. We would not ordinarily impute actions of these attorneys to the Employer so as to warrant an unfair labor practice'finding against the Employer. Because the usual incidents pertaining to an employer-employee relationship here exist, because they are neither supervisory, managerial, nor confidential, none of these contentions made by the Employer persuades us that the attorneys are not employees, or that they should be deprived of the benefits of self-organization guaranteed them by the National Labor Relations Act, as amended. In our opinion the fact that the attorneys sought herein are, like all attorneys, officers of the court and fiduciaries, is not a sufficient basis for denying them the benefits of the Act. Attorneys, in gen- eral, including the Employer's attorneys, are subject to various rules None of these courts has a maximum jurisdiction of more than $3 000 Matter of Bethlehem-Alameda Shipyard, Inc, 59 N L R B 1525 LUMBE'RMEN'S MUTUAL CASUALTY CO. OF CHICAGO 1137 of conduct prescribed by the courts. The wages, hours, and condi- tions of employment of these attorneys, however, remain matters to be determined by their Employer, rather than by the courts. Thus, as we have stated, the usual incidents of an employer-employee re- lationship exist here. Unlike attorneys generally, this Employer's attorneys are salaried; unlike attorneys generally, they work regular hours and receive regular vacations; and unlike attorneys generally, their activities are greatly limited by policies set forth by their Employer. In this situation, the statutory objectives, including the right to collective bargaining, may be achieved despite any limitations imposed on the attorneys by virtue of their status as officers of the court. The Employer also asserts that the relationship of client-attorney existing between it and these employees precludes the existence of an employer-employee status. We do not agree. The entire asso- ciation between the Employer and its attorneys is pervaded by an employer-employee relationship. The attorneys are hired, discharged, and promoted in the same manner as the other employees of the Employer. They have the same working conditions as other em- ployees. Furthermore, in the performance of their duties as attorneys, they are directed and controlled by the Employer. They are not paid a fee for each case which they try, but receive an annual salary in payment for all the work which they perform during the year at the direction of the Employer. Bouvier's Law Dictionary (Rawle's Third Revision, on page 284), states: "In estimating the value of services rendered by an attorney it is proper to take into account the time necessarily employed in and the success of the litigation; the amount of values involved; and recovered; the ability, learning and expe- rience of the attorney and his standing in the profession; the char- acter of the claim and the amount of the services to be rendered." These are not the considerations by which this Employer's attorneys are compensated. The character of a particular claim, the amount of values involved and recovered, and the time necessarily employed in and the success of the litigation are not taken into account in the payment of these attorneys. They are paid by the year, not on a case-to-case basis. For all these reasons, we are of the opinion that, although a client-attorney relationship is coexistent with that of an employer-employee in this case, the client-attorney relationship does not preclude these employees from exercising their statutory right to bargain collectively with respect to conditions of employment. That the attorneys have a statutory right to self-organization cannot be denied. If doubt ever existed, it has been removed by the Labor- 1138 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Management Relations Act of 1947, which defines "professional em- ployees." The legislative history of this Act clearly indicates that attorneys are included in this definition. In the "Report on Confer- ence Bill By Managers on the Part of the House," it was stated : - The House bill did not contain any definition of the term "professional employee," but section 9 (f) (2) thereof gave pro- fessional personnel .. . an opportunity to exclude themselves from larger bargaining units in which it was proposed that they be included. The Senate amendment accorded a similar treat- ment to professional employees and defined the term. This defini- tion in general covers such persons as legal, engineering, scientific and medical personnel together with their junior professional assistants. The conference agreement contains the same definition of "professional employee" as that contained in the Senate amend- ment, and accords to this category the same treatment which was provided for them in Section 9 (f) (3) of the House bill. [Italics supplied.] The Senate Labor Committee Report, too, manifests the intent of Congress that attorneys be included in the definition of professional employees, for it states, in part: Although there has been a trend in recent years for nianufactur- ing corporations to employ many professional persons, including architects, engineers, scientists, lawyers, and nurses, no corre- sponding recognition was given by Congress to their special problems. [Italics supplied.] We have in the past certified labor organizations which admitted to membership'non-professional employees as the collective bargaining representatives of professional employees.6 And the Labor-Manage- ment Relations Act, 1947, together with its legislative history, clearly confirms our practice in this respect, merely requiring that we not place professional and non-professional employees in the same unit unless a majority of the former are willing." We shall not deprive these attorneys of their right to be represented by a labor organization for the purposes of collective bargaining, even though the labor organiza- tion admits non-professional employees to membership. But we 6 See, e g , Matter of Spicer Manufacturing Corporation, sapia , Matter of Boston Edison ,Coinpany, sepia , Matter of Wagner Electric Corpo,ation , supIa. 7 Under the Act, guards are the only employees who cannot be represented by a labor organisation which admits to membership other employees The Act, in fact, permits ,professional employees to be bargained foi, eien in the same unit, by laboi organizations which admit to membership non-piotessional employee,,. Piosided, That in a self-deter- mninatmn election the professional employees indicate then own desire to do so LUMBERMEN ' S MUTUAL CASUALTY CO. OF CHICAGO 1139 believe that any problems which may arise with respect to the attorneys may best be solved by their representation in a separate unit. We shall, accordingly, place them in a unit of their own. The Adjusters and Investigators, The Employer's objectio^i to the establishment of the adjusters either as a separate unit or as part of a more comprehensive unit is based on its contention that the adjusters are representatives of management. The evidence at the hearing was conflicting with respect to the settlement authority of the adjusters generally. Testimony to the effect that all adjusters were limited to $2500 in settling a case, and that this limita- tion was further governed by a "reserve" set on the insurance policy by the Employer, was contradicted by other witnesses , who testified that some adjusters had no general limitation placed upon their authority to settle a case, and that others, who were limited, could pay consider- ably more than the limitation called for in exceptional cases if the facts so warranted. One of the witnesses , who testified at one point that there was no limitation on the settlement authority of adjusters, later stated that there was a limitation, but that it was not always enforced. On the basis of the entire record, we are of the opinion, and find, that the adjusters are limited to a great extent as to the amount of settlement in any case. It is true that in making settlements the adjusters exercise discretion within these limits, and that it is to the Employer's interest that a settlement be made in the lowest .amount possible. We do not believe, however, that the judgment, discretion, and loyalty of the adjusters in making settlements favorable to the Employer would be affected by permitting them to organize , within the framework of the Act, for the purposes of collective bargaining with respect to their own wages, hours, and conditions of employment. These adjusters are not super- visory personnel, they are not confidential employees , and they are not managerial employees, nor do they assist anyone who is on a policy- making level for the Employer. Under all the circumstances, we are of the opinion that they comprise an appropriate unit within the mean- ing of the Act. There remains for consideration the inclusion , in the unit of adjusters and investigators , of certain adjusters classified as "supervisors." Although testimony adduced by the Employer at the hearing indicates that there are three classifications of adjusters-outside adjusters, in- side adjusters, and supervisors-other testimony seems to indicate that the inside adjusters and supervisors are the same , the titles being used 766972-48-vol. 75--73 1140 DECISIONS OF NATIONAL LABOR RELATIONS BOARD interchangeably. The Employer's brief fails to clarify the matter, for at one point it divides adjusters into two classes, and at another point it divides the same adjusters into three categories, separating the inside adjusters from the so-called supervisors. This confusion emphasizes the lack of any real distinction between those adjusters asserted by the Employer to be supervisory and the other adjusters in the New York branch of the Employer. The record reveals that none of the em- ployees classified as "supervisors" has the authority to hire, promote, or discharge any other employee, or effectively recommend such action. Any distinction that may exist would appear to be in the type of claim handled; the record shows that the "supervisors" deal primarily with automobile and accident claims. Accordingly, we are, of the opinion that the "supervisors," including the heads of the suit and compensa- tion department, do not in fact possess supervisory authority, within the meaning of the Act, as amended ; we shall include. them in the unit of adjusters. We shall exclude from this unit, however, the claims manager, the attorney of record, and the office manager, who, all parties agree, are supervisors." We find, accordingly, that the employees in the following groups, excluding all supervisors, constitute separate units appropriate for the purposes of collective bargaining within the meaning of Section 9 (b) of the Act : 1. All attorneys employed by the Employer in its New York branch office, excluding the attorney of record. 2. All investigators and adjusters employed by the Employer in its New York branch office, excluding the claims manager and the office manager. DIRECTIONS OF ELECTIONS As part of the investigation to ascertain representatives for the purposes of collective bargaining with Lumbermen's Mutual Casualty Co. of Chicago, doing business in New York as American Lumbermen's Casualty Co. of Illinois, New York City, elections by secret ballot shall be conducted as early as possible, but not later than thirty (30) days from the date of this Direction, under the direction and supervision of the Regional Director for the Second Region, and subject to Sec- tions 203.61 and 203.62, of National Labor Relations Board Rules and Regulations-Series 5, among the employees in the units found ap- propriate in Section- IV, above, who were employed during the pay- roll period immediately preceding the date of this Direction, including 8 The Petitioner requested the exclusion from any unit or units found appropriate of the "assistant claims manager ." It appears from the record , however, that this classification does not exist in the New York office of the Employer. LUMBERMEN'S MUTUAL CASUALTY CO. OF CHICAGO 1141 employees who did not work during said pay-roll period because they were ill or on vacation or temporarily laid off, but excluding those employees who have since quit or been discharged for cause and have not been rehired or reinstated prior to the date of the election, to deter- mine whether or not they desire to be represented by Independent Insurance and Banking Employees Union for the purposes of collective bargaining. MEMBERS MURDOCK and GRAY took no part in the consideration of the above Decision and Direction of Elections.