Simplex Industries, Inc.

SIMPLEX INDUSTRIES, INC Simplex Industries, Inc.' and International Union, United Automobile, Aerospace and Agricultural Im- plement Workers or America (UAW), Petitioner. Case 7-RC- 14697 June 27, 1979 DECISION ON REVIEW AND DIRECTION BY MEMBERS JENKINS, MURPHY, ANI) TRUESDAI.. On March 20, 1978, the Regional Director for Re- gion 7 issued a Decision and Direction of Election in the above-entitled proceeding in which he directed an election in the Petitioner's requested unit of office clerical employees, rejecting the Employer's conten- tions that certain positions should be excluded on the grounds that they are confidential or managerial. Thereafter, in accordance with Section 102.67 of the National Labor Relations Board Rules and Regula- tions, Series 8, as amended, the Employer filed a timely request for review of the Regional Director's decision on the grounds, inter alia, that in resolving various unit placement issues he made erroneous find- ings as to substantial factual issues and departed from officially reported precedent. The National Labor Relations Board, by tele- graphic order dated April 18, 1978, granted the re- quest for review, only with respect to the status of Ford, Marlow, and Cowper.2 Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the Na- tional Labor Relations Board has delegated its au- thority in this proceeding to a three-member panel. The Board has considered the entire record in this proceeding with respect to the issues under review and makes the following findings: The Employer, a Michigan corporation, is primar- ily engaged in the production and distribution of pa- per products, through its Simplex Products Group. It maintains manufacturing and processing facilities in Adrian, Constantine, and Palmyra, Michigan, and Jacksonville, Florida. The Adrian office facility, which is physically separate from all production fa- cilities, serves as the national headquarters of its pa- per products operations. The employees at this loca- tion are the subject of the instant proceeding. There is no history of collective bargaining affecting any of these employees. The parties agreed that a unit of all office clerical employees employed at the Employer's headquarters office located at 3000 West Beecher Road, Adrian, I The Employer's name appears as amended at he hearing I We take administrative notice of the fact that an election Asas conducted in this proceeding on April 18. 1978, and that the ballots have been im- pounded pending our decision on review. Michigan, is appropriate for the purposes of collec- tive bargaining. We granted review of the Regional Director's determinations with regard to the manage- rial status of Francis Ford, credit manager: John Marlow, buyer; and Norman C. Cowper, manager of transportation. The Supreme Court and the Board, in determining managerial status, weigh the facts elicited to deter- mine whether or not the persons at issue are involved in the formulation, determination, and effectuation of management policies by expressing and making op- erative the decisions of their employer, and whether they have discretion in the performance of their job duties independent of their employer's established policies.3 Having stated the "proper legal standard," was must now apply it to the instant proceeding in order to determine whether or not the following posi- tions enjoy managerial status. Credit Manager The Regional Director rejected the Employer's contention that Credit Manager Francis Ford should be excluded as a managerial employee. Ford is in charge of establishing and reviewing lines of credit for corporate customers. He utilizes guidelines accepted in the credit industry, such as Dun & Bradstreet re- ports, to initially determine credit ratings. Upon ex- amining the Dun & Bradstreet report, Ford deter- mines if there is a need to make further credit inquiries. Ford evaluates the information available to him and unilaterally decides whether or not to extend credit and in what amount. He has no ceiling on the amount of credit he can extend to a customer other than his own determination of what the customer should have.4 If a customer requests a higher limit than he thinks the customer should have, Ford de- cides whether or not to seek counsel from his supervi- sor, Stephen Shade, controller of Simplex Industries. Based upon his evaluation of a customer's situ- ation. Ford also makes unilateral decisions to deny credit authorization.5 When Ford's decision to deny credit interferes with the efforts of the sales depart- ment officials to effectuate sales, the decision may be reviewed by his supervisor. In the only case of this kind testified to, Ford's decision prevailed over the sales department's objection. Ford's additional duties include preparation of an internal monthly credit re- port and efforts to collect overdue accounts, including ' N LR B . Be/Il Aerosrpa(e CoTrnRam. Dsv.n f Tevtron. In(. 416 U.S. 267 (1974): General Dynamics Corporatiln, ec.. 213 NI.RB 851 1974): Bell Aerospace. 4 Division of Texlron. Inc. 219 NLRB 384 1975) ' Ford testified that he has approved credit limits up t Sl100.000 without consulting anyone else in management ' Ford also has the authority to revoke credit aulthorlzltion for a customer. without prior consultation. and the record shows hat he has exercised this aulthoriy 243 NLRB No. 13 I II I)lt('ISIONS OF NAFIONAl I.ABOR R:lI.AI(IONS BOARD turning said accounts over to a collection agency. His monthly report assists Ford in monitoring and adjust- ing the extent of customer credit. When considering the managerial status of credit managers and other employees who are in a position to extend the credit of their employers, we place prin- cipal reliance on the independence with which said employees exercise their discretion.6 The mere posses- sion of authority to extend the employer's credit is not controlling. The Regional Director concluded that close deci- sions, including decisions to deny credit and decisions with which salesmen or customers take issue, are re- ferred to higher management. Further, he found that Ford acts only within the prescribed criteria of the credit industry in making decisions regarding extend- ing credit. Under these circumstances, the Regional Director found that Ford does not exercise discretion independent of guidelines in the performance of his duties and thus included him in the appropriate unit. We disagree. Ford exercises broad discretion in the course of performing his job as credit manager. The Regional Director neglected to mention that Ford himself de- cides what is a close decision and if he should consult with management regarding same. In addition, as stated above, the record discloses only one case of the latter instance, and Ford's decision prevailed over the sales department's objection. Ford gathers credit data and unilaterally decides whether or not to extend credit, determines the amount to be extended, and also determines when credit is to be revoked. His sole limitation, as would be expected, is industry-established criteria of proper credit practices.7 This limitation does not preclude him from being a managerial employee, for his discre- tion is not narrowly circumscribed by his Employer's set policies and guideline. Therein lies the critical dis- tinction. Accordingly, we find that Ford is a manage- rial employee and exclude him from the appropriate unit. Buyer The Employer contends that the Regional Director erred in not finding Buyer John Marlow to be a man- agerial employee. Marlow is responsible for purchas- ing all of the scrap paper used in the Employer's papermills. Scrap paper is the raw material used in See Fairfax Family Fund, Inc., a wholly owned subsidiar, of Spiegel, Inc., 195 NLRB 306, 307 (1972), and Lockheed-California Company, A Division of Lockheed Aircraft Corporation, 217 NLRB 573 (1975). 1 Ford's job description states that he is to "establish credit limits for all new customers based on accepted criteria." According to the uncontradicted testimony. "accepted criteria" refers to criteria normally accepted on an industrywide basis for establishing credit limits. manufacturing various grades of heavy paperboard known as "chip."6 He is also responsible for purchas- ing all of the raw materials used in manufacturing Thermo-ply (an insulated sheathing material used in the construction industry), including aluminum foil, adhesives, and chip, which is also purchased from outside suppliers. Further, Marlow is responsible for purchasing other miscellaneous goods and services. Because of his responsibility for chip purchases, Marlow is responsible for scheduling production of this material by the Fnmplover's two papermills. lie determines whether to make each particular type of grade of chip in the Employer's papermills or to bug it on the outside, and schedules the different grades of chip for production in the papermills. The annual dollar volume of purchases for which Marlow is responsible is approximiatels $5.75 million. About $1 million reflects purchases on a blanket or- der under a requirement-type contract and the re- mainder reflects individual orders which mav be in any dollar amount. On the purchases for which he is responsible. Mar- low issues and executes the purchase orders without any approval or review of his actions. The Employer has not promulgated an procurement policies to guide Marlow: thus he bases his purchasing decision on "price, delivery, quality." Marlow exercises com- plete discretion with respect to price and delivery, but his discretion is limited with respect to quality by the standards established by the quality control depart- ment. Marlow has authority to initiate contacts with new suppliers and to change suppliers unilaterally, pro- vided quality control standards are met. He has es- tablished a 6-percent differential as his guide in deter- mining the need to change vendors. Marlow is nominally supervised by Lee Keller, di- rector of purchasing, who reports to David Flotow. vice president of operations. Flotow testified that Marlow and Keller share the actual purchasing duties and individually have primary responsibility for spe- cific product lines: however, Keller administratively runs the department. The Regional Director concluded that Marlow is restricted to an approved list of vendors, must seek higher management approval to go beyond the list, and must eventually secure requisition forms from the factory management when making other than regu- larly scheduled purchases. Further, he found that Marlow's discretion in scheduling production is lim- ited by the sales statistics provided by the sales de- partment. He therefore concluded that Marlow C hip is the sole product manufactured in the Employer's papermills and constitutes a major component of the lEmployer's fabricated products. 112 SlIMPI X INI), SI RItS. IN( lacked that discretion required of a manIagcerial eCil- ployee and included him in the unit. As is obvious from the facts stated aho e the Re- gional Director's conclusions are not supported by the record. Marlow performs his job as huer without the assistance of any Emnplo\ er-imposed procurement policies. Thus, he bases purchasing decisions on price. delivery, and quality, and is restricted onlN with re- spect to quality control standards set by the qualit\ control department. In addition to the absence of pro- curement policies, there is no Emploer-approved list of vendors. Marlow is authorized to initiate contacts with new suppliers and to change suppliers unilater- ally. Further, the sales statistics, found to be limita- tions on Marlow's discretion by the Regional Direc- tor, are in fact sales forecasts which Marlow utilizes in determining how much material will be required and when it will be required. hen. with respect to chip. Marlow decides whether to make it in the Eim- ployer's papermills or to buy it on the outside. (learly Marlow's discretion is broad in handling managerial matters and is obviously not restricted by fixed poli- cies established by the Employer. Thus, we find that Marlow is a managerial employee and is excluded from the appropriate unit. Manager of Transportation The Employer disputes the Regional Director's finding that Transportation Manager Norman Cow- per is not a managerial employee. Cowper is totally responsible for the overall distribution and transpor- tation of all the Employer's inbound raw materials and outbound finished products. Inbound materials and outbound products are received and shipped by both motor freight and rail transportation. and Cow- per is responsible for making the most economical arrangements possible for the Employer's transporta- tion and for approving all freight bills before they are paid. To perform this task Cowper maintains an exten- sive library of looseleaf services which list approved and proposed freight rate tariffs and are updated on a daily basis. He analyzes this data in order to identify any proposed charges which may adversely affect the Employer. He also decides whether or not to protest a proposed freight rate charge, and, upon deciding to file a protest, he prepares it and files it with the Inter- state Commerce Commission, and appears before the Commission on behalf of the Employer. Cowper further continually analyzes freight rates and routing information in order to discover more economical transportation arrangements. When he determines that it is advantageous to do so. Cowper assists selected carriers in obtaining approval of fa- vorable rates of transportation of the Employer's products. In these cases, (Cowper also prepares plead- ings and other docuiments for fli l g wit I the Interstate (Commerce Commission and appears before the (om- mission on the mploer's behal If. !:urther C(owper is responsible for all ofI the licens- ing arrangemients for the Employer's fleet of trucks and for preparing and filing all the mplo>er's high- way use tax returns and fuel use tax returns. lie is also responsible for nregotiting truck leases for the I-mplo er' s fleet, which he presents to the president of the corporation or his signature and review. Cowper quotes rates to the sales emplo ees and he reports to the ma;nager of sales administration. No one else in managelment has transportation expertise thus (owper had broad discretion to make decisions on all matters within his area of responsibility. The Regional Director found that ('owper acts within previously established Employer policies with respect to most of his duties. Based on the foregoing and the record as a whole. we disagree. As stated above. Cowper bears total responsibility for the over- all distribution and transportation of all the Employ- er's inbound raw materials and outbound finished products. Cowper is responsible for accomplishing this task in the most cost-efficient manner possible and he is authorized to make the necessary decisions to achieve this end. Cowper clearly formulates. deter- mines, and effectuates the t-Employer's policies with respect to transportation.' We find that he is a man- agerial emploee arind exclude him frorm the appropri- ate unit. In summary we find that Ford, Marlow and Cow- per are mainagerial employees and thus are not in- cluded in the appropriate unit. Consistent with the fregoing, we find that the fol- lowing employees of the Employer at its corporate headquarters located at 3(X) W. Beecher Road, Adrian. Michigan. constitute a unit appropriate for purposes of collective bargaining within the meaning of Section 9(h) of the Act: All full-time and regular part-time office employ- ees employed by the Employer at its corporate headquarters located at 3000 W. Beecher Road. Adrian. Michigan. including customer service representatives: ut excluding the credit man- ager, the buger. the transportation manager and all other managerial employees, commissioned salesmen, confidential employees, guards and su- pervisors as defined in the Act. DIR ECTI ON It is hereby directed that the Regional Director for Region 7 shall, pursuant to the Board's Rules and ' See ( I S/ Itte (,rpo,rraltt. 196 Nl RB 470) (1972) I I I)E('ISIONS OF NATIONA LABOR RELATIONS BOARI) Regulations, Series 8, as amended, within 10 days from the date of this Decision on Review and Direc- tion, open and count the valid ballots cast in an elec- tion held on April 18, 1978, and prepare and cause to be served on the parties a tally of ballots in accord- ance with Section 102.69 of the Board's Rules and Regulations. Series 8. as amended, which shall there- after be applicable to the further processing of this matter. MEMBER JFNKINS. concurring: I concur in the result reached by my colleagues, but because I think the rationale supporting the result should be buttressed with more specific facts and rea- sons, I consider it appropriate to set forth my views. The record shows that Credit Manager Francis Ford is in charge of establishing and reviewing lines of credit for the Employer's corporate customers. In performing his responsibilities. Ford uses guidelines accepted in the credit industry to determine credit ratings. Thus, he relies on the Dun & Bradstreet re- ports as an initial source material. When Ford de- cides additional or updated information is necessary, he obtains trade references and information from the prospective customer. Ford personally evaluates the information which he assembles and decides whether or not to extend credit. The Employer has imposed no ceiling on the amount of credit Ford can authorize for a customer and Ford testified that he has ap- proved credit of $100,000 without consulting anyone else in management.' The credit authorization docu- ment requires only Ford's signature. If a customer requests more credit than Ford ap- proves, Ford decides whether to bring the matter to the attention of the Employer's management. Simi- larly, Ford personally decides to deny credit authori- zations. When Ford's decision to deny credit is op- posed by the sales department officials, the decision may be reviewed by other management officials. In the single such instance reported in the record, Ford's decision prevailed over the sales department's objec- tion. In addition, Ford has the authority to revoke credit authorization for a customer without prior con- sultation. Furthermore, he has exercised this author- ity. Ford's duties also include preparation of an inter- nal monthly credit report which assists Ford in moni- toring and adjusting customer credit. Finally, he is involved in collecting overdue accounts including turning accounts over to a collection agency. From the foregoing and the record as a whole, it is clear that Ford is involved in the formulation, deter- O Compare dtir/iir FIri4 Fund, In,.. tup6ra. where the final credit ana- Ilsts' authorit to grant credit was limited to $600( i an? individual case. mination, and effectuation of management policies and that he has discretion in the performance of his duties independent of any Employer-established poli- cies. The Regional Director's reliance on the fact that Ford acts within the criteria of the credit industry and that some decisions are reviewed by higher manage- ment to find that Ford is not a managerial employee is misplaced. Thus, Ford gathers the data. He pre- sonally decides whether or not to extend credit. He decides the amount. And he decides when to revoke credit. His standard is industry-established criteria of proper credit practices. Indeed, it is Ford who estab- lishes the policies and guidelines for the Employer; there is no indication that Ford's discretion is circum- scribed by official policies and guidelines imposed by the Employer on Ford. Accordingly, I find Ford to be a managerial employee and shall exclude him from the unit. The record shows that Buyer John Marlow pur- chases all of the scrap paper used in the Employer's papermills, as well as all the raw materials used in the manufacture of Therma-ply, including aluminum foil, adhesives, and chip. Marlow also purchases other miscellaneous goods and services for the Employer. In deciding on particular purchases, Marlow is guided by "price, delivery, quality."'' Thus, the Em- ployer has not promulgated any procurement policies and Marlow's purchases are not circumscribed by policies and criteria established by others. Marlow personally issues and executes the purchase orders without approval or review by higher management officials. He initiates contact with suppliers and de- cides when to change suppliers. In changing suppli- ers. Marlow applies a 6-percent price differential standard. Significantly. Marlow established the 6-per- cent standard. Ile purchases nearly $6 million in goods and materials annually. Although approxi- mately one-sixth of this total is a blanket order under a requirement type contract, the remainder is individ- ual orders in varying dollar amounts. Finally, the rec- ord shows that Marlow also schedules production of chip by the Employer's two papermills. He deter- mines not only the grades of chip for production but also whether to make each particular type in the Em- ployer's papermills or buy it from outside suppliers.'2 I am persuaded that the record evidence establishes that Marlow had broad discretion in making purchas- ing decisions for the Employer. The existence of an approved list of vendors is not determinative here. u Quality standards re etahlished hs the Empl)roer's qualily control de- parlment i2 I he Regional I)irector relied in part on the tact that Marloh's discretion in scheduling production is circumscribed h3 sales stiatitlic provided b Ihe sales department I find the Regional D)irector's reliance Lon this lactir to he misplaced. hus. the imporlanl consideration here is that Marlow in his capacits as a buer determines whether to make the chip In the mplover's palpermills oIr huo it rotm outside suppliers. 114 SIMI.EX INI)USIRIES, IN(C where Marlow initiates contact with new suppliers. Nor does the fact that Marlow must eventually secure a requisition form from the factory management un- dermine Marlow's discretion inasmuch as the record shows that orders are generally placed before the req- uisition form is received and it is Marlow who selects the vendor and determines the price to be paid. Ac- cordingly, I find Marlow to be a managerial em- ployee and shall exclude him from the unit. The record shows that Manager of Transportation Norman Cowper is totally responsible for the overall distribution and transportation of the Employer's in- bound raw materials and the outbound finished prod- ucts. Thus, Cowper is responsible for determining and selecting the carrier-by motor freight or rail trans- portation-that will most economically transport the Employer's materials and goods. He quotes rates to the sales department. He approves freight bills before they are paid. In performing these duties, Cowper collects and maintains current the various approved and proposed freight rate tariffs. HIe also analyzes the tariffs to determine how they will affect the Employer and, when he decides it is necessary, he prepares and files protests of proposed freight rate changes with the Interstate Commerce Commission on the Employer's behalf. Cowper also assists selected carriers used by the Employer to enable them to obtain favorable rates of transportation for the Employer's products. In addition, Cowper is responsible for licensing ar- rangements for the Employer's fleet of trucks and for preparing and filing the Employer's highway use and fuel use tax returns. lie also negotiates truck leases for the Employer's fleet. I find that the above-described record eidence demonstrates, amply, that C'owper's duties and re- sponsibilities are comparable to those of the senior rate and tariff clerk who was found to be a manageri- al employee in ('C'& I Steel Corporation, sra. Thus, Cowper has broad discretion in making transporta- tion arrangements for the Employer's materials and products. Unlike the Regional Director. I am not per- suaded that Cowper's responsibility is diminished by the fact that truck leases are signed by the Employer's president or that many transportation decisions are based on tariffs and charges established by the Inter- state Commerce Commission. Accordingly. I find Cowper to be a managerial employee and shall ex- clude him from the unit. I I