Golden State Agency, Inc.

778 DECISIONS OF NATIONAL LABOR RELATIONS BOARD WE WILL notify KAISER ALUMINUM & C HEMICAL CORPORATION in writing that we have no objection to the reinstatement of the above -named employees, without prejudice to their seniority or other rights and, privileges , and will furnish copies thereof to each of the said employees. UNITED CARPENTERS AND JOINERS OF AMERICA, LOCAL No. 720, AFL, Labor Organization. By --------------------------------------- (Representative ) ( Title) Dated-------------------- This notice must remain posted for 60 consecutive days from the date hereof, and must not be altered , defaced, or covered by any other material. GOLDEN STATE AGENCY, INC., STATE FARM MUTUAL AIITomoBILE INSURANCE COMPANY, STATE FARM_ FIRE AND CASUAIIr1Y COMPANY AND STATE FARM LIFE INSURANCE COMPANY and INSURANCE AND ALLIED WORKERS ORGANIZING COMMITTEE , CIO, PETITIONER. Case No. 20-RC-1622. March 20,1952 Decision and Order Upon a petition duly filed under Section 9 (c) of the National Labor Relations Act, a hearing was held before Nathan R. Berke, hearing officer. The hearing officer's rulings made at the hearing are free from prejudicial error and are hereby affirmed. Pursuant to the provisions of Section 3 (b) of the Act, the Board has delegated its powers in connection with this case to a three-member panel [Members Houston, Murdock, and Styles]. Upon the entire record in this case, the Board finds : ^ 1. The Companies are engaged in commerce within the meaning of the Act. 2. The labor organization involved claims to represent certain em- ployees of the Companies. 3. No question affecting commerce exists concerning the representa- tion-of employees of the Companies within the meaning of Section 9 (c) (1) and, Section 2 (6) and (7) of the Act, for the following reasons: The Petitioner seeks a unit of all life, fire, casualty, and automobile insurance agents appointed by and acting for the Companies in the State of California. The Companies contend that the agents sought are independent contractors rather than employees. - ' 1 As the record and brief adequately present the issues and positions of the parties, the Employer's request for oral argument is hereby denied. 98 NLRB No. 119. GOLDEN STATE AGENCY, INC. 779 The Companies write various kinds of insurance in the United States and Canada. The Companies' district managers recruit the local agents sought by the Petitioners, and recommend their appoint- ment to the State agents, who sign the contracts of appointment sub- ject to approval by the Companies. Approximately 408 local agents, some of whom do not represent all 3 Companies, write and service the Companies' insurance policies. Agents' contracts of appointment are subject to such changes as the Companies may promulgate and may be terminated at any time by the Companies or the agents. Agents do not receive a minimum salary or guarantee but are compensated on a commission, service fee, and bonus basis.2 Commissions are based upon the amount of insurance written; fees for,handling policyholders' losses are based upon a percentage of premiums collected; and bonuses are paid on the amount of qualifying insurance in force over a period of time. The Companies advance funds to new agents if necessary until business develops and commissions earned offset the funds advanced. Under State law the Life Insurance Company pays the State license fee for its agents while the agents themselves pay the licensing fees for automobile, fire, and casualty insurance.3 The automobile and life insurance contracts of appointment spec= ify that the duties of agents are to solicit and secure applications for insurance on a "quality basis" in accordance with company rules; to deliver policies; to secure membership fees, initial premiums, and applications for reinstatement' of insurance; to use their "best effort" to keep in force existing policies; to service the policyholders; to make reports as required; and to investigate and handle claims "under the direction of the Company." Agents agree to represent no other insurance carrier in the same line without permission of the Com- panies. In 1951, permission was granted agents in 52 instances to represent competing insurance carriers. In these circumstances, agents exercise independent judgment whether to write policies with the Companies or their competitors. Agents maintain and equip their offices as they desire, seek busi- ness anywhere in the State, set their own working time and vacations, and are not obligated to devote full time to the Companies' business. Some agents pursue other occupations and their business cards so indicate. A number of agents hire office employees and insurance solicitors in the conduct of their agency. The Companies exercise no control over these employees who are directed and compensated by the agents. All office expenses except for a part of advertising costs 2 In addition to service fees, automobile insurance agents receive a percentage of the policyholders' membership fee. 8 The agents involved herein do not write industrial or debit type of life insurance. 780 DECISIONS OF NATIONAL LABOR RELATIONS BOARD in local newspapers are borne by the agents.' The Companies fur- nish throwaway cards at reduced cost as well as policy forms, rate manuals, proofs of loss, report forms, and return envelopes. Agents fix their own business quotas after discussion with the dis- trict manager but are not required to fulfill their quotas. Such records are kept as are required by the State insurance department but no inspection of agents' records is made by the Companies. Agents are required to file monthly reports with the Companies' State office showing the number of claims handled and the hours worked on the claims as a prerequisite to receiving service fees. Attendance at monthly meetings and training sessions held in the district man- ager's office is optional though new agents generally attend and receive a manual on how to write policy applications and service policy- holders. Detailed instructions are not furnished agents on matters connected with servicing policyholders. In difficult cases, agents may call upon the assistance of the district manager but are not re- quired to do so. The Companies withhold income tax, make social security contri- butions, and provide a retirement plan for the agents. The agents make all income tax deductions and social security contributions for their own employees. The Companies do not carry workmen's com- pensation insurance for the agents nor do the Companies require that the agents secure liability insurance on their automobiles or their offices. The Companies assert that the agents are independent contractors because they are subject to control only as to the results and not as to the details of performing their functions. We agree. It is clear that the right of the Companies to exercise control over the methods and manner by which insurance policies are written and serviced is not reserved by such general references in the agents' contracts of appoint- ment as "under the direction of the Company." Indeed the method of operation demonstrates that the agents involved herein enjoy wide latitude in implementing the contracts of appointment. It is signifi- cant in this connection that agents choose their working time, main- tain their own offices, hire, discharge, and direct employees in further- ance of agency operations, and represent competing insurance carriers. In addition, agents make only limited monthly reports, are not required to attend company meetings, set their own insurance quotas which are not mandatory, and function with little or no supervision. Though the manner of compensating agents is essentially on a com- mission basis, the entrepreneurial nature of the relationship in ques- ' The contracts of appointment provide that the compensation paid an agent shall be regarded "as his personal remuneration and as reimbursement for his necessary business expenses in carrying out the provisions of this appointment." CINCH MANUFACTURING CORPORATION 781 tion is also evidenced by the fact that ultimate financial return is dependent-upon the extent to which deductions for operating costs result in profit or loss. In view of the foregoing and upon the entire record, we conclude that the Companies' insurance agents are independent contractors and not employees within the meaning of the Act.5 Accordingly, we shall dismiss the petition herein. Order Upon the basis of the entire record in this case, the National Labor Relations Board hereby orders that the petition filed in the instant matter be, and it hereby is, dismissed. E Southwestern Associated Telephone Company, 76 NLRB 1105; Roy C. Martin Lumber Company, Inc., 83 NLRB 691; J. Howard Smith, Inc., 95 NLRB 21. Cf. N. L. R. B. v. Phoenix Mutual Life Insurance Company, 167 F. 2d 983 (C. A. 7), where insurance agents were found to be employees because of the close control over their manner of operation exercised by the employer. See, also, Life d Casualty Insurance Co. of Tennessee, 5^ NLRB 1196; Metropolitan Life Insurance Co., 43 NLRB 962. CINCH MANUFACTURING CORPORATION 1 and INTERNATIONAL UNION OF ELECTRICAL, RADIO AND MACHINE WORKERS, CIO, PETITIONER. Case No. 35-BC-6110. March 20, 1952 Decision and Direction of Election Upon a petition duly filed under Section 9 (c) of the National Labor Relations Act, a hearing was held before Alan A. Bruckner, hearing officer. The hearing officer's rulings made at the hearing are free from prejudicial error and are hereby affirmed. Pursuant to the provisions of Section 3 (b) of the Act, the Board has delegated its powers in connection with this case to a three-member panel [Members Houston, Murdock, and Styles]. Upon the entire record in this case, the Board finds : 1. The Employer is engaged in commerce within the meaning of the Act. 2. The labor organization involved claims to represent certain employees of the Employer.2 3. A question affecting commerce exists concerning the representa- tion of employees of the Employer within the meaning of Section 9 (c) (1) and Section 2 (6) and (7) of the Act. I The name of the Employer appears as amended at the hearing. 2 At the hearing the Employer contended that one or more supervisors as defined in the Act sponsored and actively assisted in the Petitioner's membership campaign and that the petition should therefore be dismissed . In view of our findings herein as to the status of employees classified as "supervisors " at the Employer's plant, we find no merit in this contention. 98 NLRB No. 118.