182 NLRB 81
Goodbody and Co.
GOODBODY AND CO.
81
Harold P. Goodbody , et al. d/b/a Goodbody and Co.
and Howard E. Buhse, et al. d/b/a Hornblower &
Weeks-Hemphill Noyes and Dempsey-Tegeler & Co.,
Inc. and Reynolds & Co. and
Society of Associated
Financial
Executives ,
Petitioner .
Cases 7-RC-9727,
7-RC-9734, 7-RC-9735, and 7-RC-9747
April 22, 1970
ORDER AFFIRMING REGIONAL DIRECTOR'S
DECISION AND DIRECTION OF ELECTION
On March 12, 1970, the Regional Director for Region
7 issued his Decision and Direction of Election in the
above-entitled consolidated proceeding, a copy of which
is attached hereto. Thereafter Goodbody and Co., Horn-
blower & Weeks-Hemphill Noyes, and Reynolds & Co.,
jointly, and Dempsey-Tegeler & Co., Inc., separately,
requested review of the Regional Director's Decision
and Direction of Election. By telegram dated April 7,
1970, the Board postponed the election scheduled for
April 9, 1970, pending consideration by the Board of
the Employers' requests for review.
ORDER
Having duly considered the Employers' requests for
review of the Regional Director's Decision and Direction
of Election, which reargue contentions rejected by the
Regional Director, the Board decided to, and hereby
does, affirm his Decision and Direction of Election which
is made a part hereof.
DECISION AND DIRECTION OF ELECTION
Upon petitions duly filed under Section 9(c) of the
National Labor Relations Act, as amended, a consolidat-
ed hearing was held before Hearing Officer Thomas
W. Doerr of the National Labor Relations Board. 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 the Regional Director.
Upon the entire record in this case, the Regional
Director finds:
Jurisdiction
1. Harold P. Goodbody, et al. d/b/a Goodbody and
Co.' (herein sometimes called Goodbody), Howard E.
Buhse ,
et
al.
d/b/a Hornblower & Weeks-Hemphill
Noyes (herein sometimes called Hornblower), and Rey-
nolds & Co. (herein sometimes called Reynolds) are
New York State partnerships. Dempsey-Tegeler & Co.,
Inc., herein sometimes called Dempsey-Tegeler, is a
Missouri corporation. These Employers are members
' Each of the employer-partnerships involved herein consists of a
substantial number of partners
To avoid unnecessary specification,
the name of each partner has not been specifically set forth herein
of the New York Stock Exchange, American Stock
Exchange, and various regional stock exchanges, and/
or commodity markets, and are engaged in the purchase
and sale of stocks, bonds, other securities, and/or com-
modities which are purchased, sold, distributed, and
transported in interstate commerce into and from the
State of Michigan, and into and from their many branches
located in other States of the United States.' Each
of their various branches is in direct telegraphic contact
with the various exchanges, which wire service is used
in placing purchase and sell orders of its firm's clients.
During the 1969 calendar year, the gross market value
of the securities and commodities each Employer sold
and
purchased in interstate commerce exceeded
$500,000,000. The Employers' representatives also esti-
mated that 80-85 percent of all purchase and sale orders
of securities -and/or commodities emanating from each
of the Employer's branches located within the State
of Michigan were executed on exchanges located outside
of the State of Michigan, and the market value of
said transactions was well in excess of $50,000 annually.
Although each Employer concedes that it is engaged
in interstate commerce and that there is constitutional
power to exercise jurisdiction herein, it does not admit
that it is engaged in commerce within the meaning
of the Act, or subject to the jurisdiction of the National
Labor Relations Board. It is the Employers' contentions
that the Securities Exchange Act of 1934, and subsequent
amendments thereto, providing for extensive regulation
of the securities industry, have the effect of precluding
the Board from exercising jurisdiction in cases involving
the securities industry. The Employers observe that
the Securities Exchange Commission and other organiza-
tions such as the New York Stock Exchange and the
National Association of Securities Dealers regulate the
qualifications, training, supervision, minimum commis-
sion standards, and other employment conditions of
the employees involved in this proceeding. The Employ-
ers further maintain that this regulation is in substantial
conflict with the concept of regulation under the NLRA
of the employees' rights and statutorily protected inter-
ests concerning matters falling within the subject matter
of the collective-bargaining process. Additionally, the
Employers contend that should the Board find that it
has statutory power to exercise jurisdiction herein, as
a matter of policy, it should exercise its discretion,
pursuant to Section 14(c) of the Act, to refrain therefrom.
Initially, the Regional Director observes that the pur-
poses and policies set forth in the Securities Exchange
Act of 1934 and the National Labor Relations Act (herein-
after sometimes called the NLRA or the Act) are different
and that the former is not incompatible with employees'
exercise of full freedom of association, self-organization,
and designation of representatives of their own choosing.
The provisions of the Securities Exchange Act' indicate
that it was enacted for the broad purposes of regulating
R It is noted that Dempsey-Tegeler does not maintain a commodity
operation , nor is it a member of the various commodity markets
Hornblower has a limited commodity operation in New York only
J "Securities Exchange Act of 1934" (June 6, 1934, ch 404, 1,
48 Stat 881)
182 NLRB No. 16
82
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
the securities exchanges and the over-the-counter mar-
kets and preventing inequitable and unfair practices
in such markets. Specifically, it may be said to have
these objectives: (1) to set up machinery to regulate
these markets; (2) to limit the amount of speculative
credit; (3) to regulate unfair practices of dealers and
brokers in both the organized and unorganized securities
markets; and (4) to insure that the general public receives
adequate information about securities traded in such
markets and that so-called insiders, e.g., directors,
officers, and large stockholders, do not benefit from
any unfair use of such information. Succinctly stated,
a purpose and a policy of the National Labor Relations
Act is to protect the right of employees to exercise
or refrain from exercising full freedom of association,
self-organization, and designation of representatives of
their own choosing. The Securities Exchange Act stress-
es the protection of the general public through regulation
of the dealings of brokers and dealers and their relations
with the public, whereas the thrust of the NLRA is
the regulation of the labor relations between Employers
and employees and/or their designated representatives
to the end of encouraging collective bargaining as a
means of settling labor disputes.
The legislative history of the Act demonstrates that
Congress was well aware of the existence of the prior
enacted Securities Exchange Act; indeed the Securities
Exchange Act was discussed by way of comparing cer-
tain of its provisions with the then proposed provisions
of the NLRA,4 but nowhere in Congress' deliberations
was there any indication that the rights set forth in
the NLRA were not to be extended to employees
employed in the securities industry. The legislative histo-
ry of the NLRA also indicates that consideration was
given to the effect of existing or future Federal and
state regulations in the minimum wages and hours and
other areas and, even though it was recognized that
such types of regulations may ultimately affect the con-
tents of any collective-bargaining agreements reached,
such did not derogate from the provision for exclusive
collective-bargaining representation, and the collective-
bargaining process as a means of mitigating and eliminat-
ing obstructions to the free flow of commerce.'
In furtherance of the congressional resolve to provide
for a single body to administer the nation's labor policy
concerning the industries covered by the NLRA, Con-
gress provided in the NLRA that the Board's power
to prevent unfair labor practices affecting commerce,
shall be exclusive, and shall not be affected by any
other means of adjustment or prevention that has been
or may be established by law or otherwise." This exclu-
sive power has been held to obtain in representation
matters also.7 On many occasions it has been argued
that regulation and assertion of jurisdiction by other
Legislative History of the National Labor Relations Act (1935),
pp 1423, 1424
$ Legislative History, supra, pp. 1360-64, 1367-69
See Section 10(a) of the Act.
N.L.R.B. v Northern Trust Company, et al, 56 F Supp 335 (D.C.,
III , 1944), affd 148 F 2d 24 (C A 7,
1945), cert
denied 326 U.S.
731
Federal and state agencies precluded the Board from
asserting jurisdiction in unfair labor practice and repre-
sentation matters. However, consistently the Board and
the courts have affirmed the clear congressional mandate
that the Board's power in' the administration of the
Nation's labor policy, as reflected in the National Labor
Relations Act, shall be exclusive, notwithstanding regula-
tion or assertion of jurisdiction by other governmental
agencies, or other means of adjustment or prevention
of labor disputes affecting commerce."
Should any doubt linger whether the Regional Director
should conclude that the Board has the constitutional
and statutory power to exercise jurisdiction in cases
involving employees in the securities and commodities
industries, such is quickly dispelled by reference to
the body of case law in which the Board has asserted
jurisdiction over said industries."
With respect to the,jurisdictional issue, the Employers
also contend that, in any event, the Board should exercise
its discretion and degilne to assert jurisdiction herein.
Section 14(c) (1) of the,National Labor Relations Act,
as amended, permits
Board to decline to assert
jurisdiction over labor' disputes involving any class or
category of employers,, where in the opinion of the
Board, the effect of su;ch labor disputes on commerce
is not sufficiently substantial to warrant the exercises
of jurisdiction. 10
The Regional Director has carefully considered the
positions of the parties, and finds that it will best effectu-
ate the mandate of the Act, as well as national labor
policy, to assert jurisdiction over these Employers. The
Regional Director reaches this decision for the following
reasons:
There is persuasive reason to believe that future labor
disputes-should they arise in this industry-will be
national in scope, radiating their impact far beyond
state boundaries. As stated above, the Employers main-
tain branches and conduct business throughout the
United States. The stj iIated commerce data establishes
that millions of dollars of interstate commerce are
involved in their normal business operations. The nature
of the industry is such that great reliance is placed
9 United Packinghouse Workers v N L R B , 416 F.2d 1126 (C.A.D.C
1969); Overnice Transportation Co =v. N.L.R.B
372 F 2d 765 (C A
4, 1967), enfg 157 NLRB 1185, Sylvania Electric Products. Inc v
N L R B , 358 F 2d 591 (C.4 ,l, 1966), enfg . 154 NLRB 1756, Butte
Medical Properties, d/b/a Medical Center Hospital,
168 NLRB 266;
Melville Confections, Inc.,
142 NLRB 1334; Indiana Desk Company,
58 NLRB 48, N L.R B v Northern Trust Company, supra.
9 Francis I DuPont and Co , 113 NLRB 57; Cyril de Cordova &
Bro , 91 NLRB 1121, Edward, C Fiedler, et al., 53 NLRB 902; New
York Stock Exchange,
43 NLRB 766; New York Stock Exchange,
58 NLRB 911, Stock Clearing Corporation, 41 NLRB 108; Lester M
Newburger, et al , 37 NLRB 683
10 Section 14(c)(1) reads in full:
The Board, in its discretion, may, by rule of decision or by published
rules adopted pursuant to the Administrative Procedure Act, decline
to assert jurisdiction over any labor dispute involving any class
or category of employers, where, in the opinion of the Board,
the effect of such labor dispute on commerce is not sufficiently
substantial to warrant the exercise of its jurisdiction: Provided,
That the Board shall not decline to assert jurisdiction over any
labor dispute over which it would assert jurisdiction under the
standards prevailing upon August 1, 1959
GOODBODY AND CO.
83
on interstate commerce and the instrumentalities of inter-
state commerce. Moreover, as noted above," in several
cases involving the securities and commodities indus-
tries, jurisdiction was asserted by the Board before
August 1, 1959, under jurisdictional standards for this
industry prevailing upon said date. Thus, it would appear
that the Regional Director is specifically prohibited by
the 'mandate in the proviso to Section 14(c)(1) of the
Act from declining to assert jurisdiction herein.
Accordingly, the Regional Director finds that the
Employers involved herein are engaged in an industry
affecting commerce, and that it will effectuate the policies
of the Act to assert jurisdiction herein.
. Diverging from the other Employers involved herein,
Demsey-Tegeler argues that its registered representatives
are independent contractors and not employees under
the
Act.
A registered representative may be briefly
described as a securities salesman registered to place
orders with certain stock and commodities exchanges.
A summary of the, arrangements concerning
wages,
hours, and other terms and conditions of employment
applicable to Dempsey-Tegeler's registered representa-
tives is as follows: The registered representatives are
located in Dempsey-Tegeler's office and use that con-
cern's basic equipment, support facilities, and secretarial
assistance in the performance of their jobs. Registered
representatives pay no rent or fees for these items
and other assistance. The equipment is maintained and
insured by the firm. The firm compensates the registered
representatives, usually by way of commissions, the
rates of which are set by the firm. The firm does not
consult with the registered representatives when it sets
commission rates. When registered, representatives are
paid, the firm makes no payroll deductions for items
such as income, social security, and unemployment com-
pensation taxes. Group hospitalization is available to
the registered representatives with the firm paying 50
percent of the cost. The registered representatives also
qualify for tax benefits under the Keogh Plan, as enjoyed
by employees of other, corporations with respect to
pension and reti rement funds. The registered representa-
tives work flexible schedules which are usually geared
to market hours. They are relatively free to use their
own judgment in allocating their time between office
attendance and out-of-oe customer contact although
inquiries are made by the branch manager should their
production drop as a result of delinquencies in office
attendance. Although the registered representatives need
not submit their account files to the firm, branch manag-
ers must approve each account before it is opened
and have full authority to demand that particular
accounts not be opened. Additionally, as required by
firm policy, registered representatives cannot take orders
from customers for stocks selling at less than $1 per
share. Each registered representative's production is
reviewed regularly and should said review disclose
improper handling of accounts or violation of outstanding
industry regulations, the registered representative may
be reprimanded, disciplined, or discharged by the firm.
11 Seefn 8,supra
Each registered representative is licensed by the' New
York Stock Exchange to work for Dempsey-Tegeler
and, while so licensed, they may not engage in security
sales for any other firm.
The Board has held that in determining the status
of persons alleged to be independent contractors, the
Act requires the application of the "right to control"
test.12 If the person for whom the services are performed
retains the right to control the manner and means by
which the result is to be accomplished, the relationship
is one of the employment; conversely, if control is
reserved only as to the result sought, the relationship
is that of independent contractor.
The evidence indicates that Dempsey-Tegeler signi-
ficantly controls the manner and means by which the
registered representatives perform their services. The
firm owns, maintains, and insures the basic equipment
used by registered representatives. The firm provides
support services and secretarial assistance to the regis-
tered representatives. Branch managers have full authori-
ty to approve or disapprove the opening of accounts,
and the type of stocks that may be handled. Registered
representatives are also subject to discipline by the
firm for improper or unethical account dealings. These
factors demonstrate that the registered representatives
are not independently free 'to do as they like. The
fact that compensation paid to the registered representa-
tives is unilaterally determined by the firm also points
to an employer-employee relationship. Therefore, the
Regional Director finds no merit to the Employer's con-
tention that its registered representatives are independent
contractors.13 Accordingly, Board jurisdiction is not pre-
cluded.
2. The labor organization involved claims to represent
certain employees of the Employers involved herein.
3. A question affecting commerce exists concerning
the representation of certain employees of the Employers
involved herein within the meaning of Section 9(c)(1)
and Section 2(6) and (7) of the Act.
Scope of Unit
4. The Employers contend that, in the event jurisdic-
tion is asserted, the geographical area encompassed by
the unit should be at least as broad as each Employer's
administrative "region" covering its Detroit office. Con-
trariwise, Petitioner argues that all registered representa-
tives employed at each of the Employers' Detroit, Michi-
gan, "branches" constitute an appropriate unit.14
Goodbody and Co.: Goodbody' s nationwide operation-
al structure is divided into four geographical divisions,
each division consisting of three regions. General policy
is set by the firm' s senior partner , managing partner,
executive committee, and policy committee. The firm's
compensation structure, including fringe benefits, appli-
12 Mound City Yellow Cab Company,
132 NLRB 484, Albert Lea
Cooperative Creamery Association , 119 NLRB 817; N L.R B v United
Insurance Co of America et al , 389 U S 1028
3 Cf Yellow Cab, Inc , 179 NLRB No 148
" The parties ' specific eligibility contentions will be discussed infra
84
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
cable to registered representatives is determined national-
ly. The firm's payroll is made up and issued at its
principal office in New York City, where personnel
records are kept, copies being retained at the branch
.level. Accounting and auditing is also administered by
the New York office.
The Michigan region consists of branches located
in Detroit,, Southfield, Birmingham; Flint, and Grand
Rapids, all located in Michigan
The Detroit branch
(main office) is located at 144 Penobscot Building in
downtown Detroit. The regional headquarters, where
the regional partner's office is located, is in the same
building. On a regional basis, a regional partner is ulti-
mately responsible for the operation of the branches
within that region, with the branch managers, being
accountable to the regional partner. The regional partner
receives daily and monthly reports concerning all branch
transactions which enable him to study the individual
transactions of each registered- representative, and to
determine,whether accounts are being handled in compli-
ance with the rules and regulations of existing regulatory
bodies. Problems that are perceived are brought to the
attention of the respective branch managers for further
attention. The regional'partner maintains daily telephonic
contact with the branches and visits them periodically.
Being in the best position to know or ascertain job
availability for registered representatives, the regional
partner passes upon all transfer requests. Both --the
regional partner and the branch managers jointly prepare
projected budgets. Although the branch managers have
independent authority to make purchases of less than
$500, purchases of greater value are made after consulta-
tion with the regional partner. Applicants for employment
leading to registered representative status are initially
tested, interviewed, and screened by the branch manag-
ers. If the branch manager concludes the applicant may
be qualified, the way is cleared for-further interview
at the regional or national level and testing, subsequent
to which the branch manager has a further opportunity
to decide whether or not to submit the applicant's name
to the firm's selection committee for, ultimate consider-
ation. Although subject to the approval of the regional
partner , the branch managers have authority to discharge
registered representatives. During training, the trainees
receive a salary. For an undetermined length of time
after being registered, the salary is gradually decreased
as earned commissions rise. The regional partner and
the branch managers together decide when such individ-
uals will be placed on a straight commission basis
The regional partner and the branch managers also con-
sult concerning bonuses to be given to deserving individ-
uals.
The branch managers ' duties encompass the day-
to-day evaluation and supervision of registered represent-
atives, training, hiring, and firing responsibilities, sales
and sales promotion, and compliance. New accounts
are opened only with the approval of the branch manager.
Accounts of registered representatives who have termi-
nated through death or otherwise are distributed to
the remaining registered representatives by the branch
managers.
The branch , managers have independent
authority to hire those,who are already registered repre-
sentatives and-they review daily production reports for
the same purposes as does the regional partner. Branch
managers also review incoming and outgoing correspond-
ence and distribute to the registered representatives
portions of issues being underwritten which have been
allocated by the regional partner to the branch. In prac-
tice, grievances are first processed through the branch
managers, and, if not resolved, are then brought before
the regional partner. Also, reprimands are usually meted
out
by the branch managers, although,
where
appropriate, the regional partner may directly reprimand
an employee.
Concerning the interrelationships of registered repre-
sentatives among branches, it appears that there is rela-
tively little interbranch contact except for joint meetings,
which occur infrequently,
concerning
new security
issues. Although there have been permanent transfers
-in the past from branch to branch when requested,
there is no temporary interchange of registered represent-
atives.
Hornblower & Weeks-Hemphill Noyes: Hornblower
is organized nationally into six regions covering various
geographical areas of the country; Pacific, Midwest,
Mid-Atlantic, New England, Eastern, and Southwest.
An' executive committee sets the firms' policies. The
same compensation (including fringe benefits) structure
is applicable to all registered representatives. The firm's
accounting and payroll operations for all regions and
branches are performed at its office in New York City.
The firm's Midwest region with headquarters in Chica-
go, Illinois, is composed of branches located in Chicago,
Illinois; Denver, Colorado; Detroit, Michigan; Indianapo-
lis, Indiana; Memphis, Tennessee; Minneapolis, Minne-
sota; Peoria, Illinois; and Rockford, Illinois. The Detroit
branch is located at. Room 244 of the previously men-
tioned • Penobscot Building. The chief operating officer
-in' a region is the regional managing partner, and he
is assisted by a regional sales partner, regional operations
partner, regional corporate finance partner, and a regional
partner (undesignated). Support functions for the branch
offices are performed by the region in such areas as
hiring and training, mutual funds, syndicate stock, con-
vertible bonds, other bonds, over-the-counter trading,
compliance, sales promotion, and research. Additionally,
daily production and compliance checks are made by
regional personnel.
When branch office expenditures
exceed a certain, dollar value, regional approval is
,required. Accounts payable are forwarded by the branch-
es through the region to the New York offices for
payment. Hornblower's hiring practices are comparable
to those of Goodbody. The regional partner and branch
managers jointly participate in branch budgeting and
trainee salary determination. The regional partner main-
tains daily telephone communication with the branches,
and visits the branches on the order of once a year.
The branch managers' general operational duties are
comparable to those of Goodbody's branch managers.
,As part of the hiring process, the branch
managers
have complete authority to decide whether to process
applications for employment. Branch managers have
GOODBODY AND CO.
authority
to
reprimand registered representatives,
although, on occasion, a regional representative may
directly reprimand a registered representative in compli-
ance situations. The branch managers also distribute
to remaining registered representatives accounts of repre-
sentatives whose employment has terminated.
Although there have been a few permanent transfers
within the region in the past, it appears that there
is no interchange or interaction of registered representa-
tives in the branches. Furthermore, registered represent-
atives are prohibited from soliciting customers in areas
near other branches without prior approval.
Reynolds & Co.: The firm's managerial direction is
headed by an executive committee whose promulgated
policies are put into operation by a regional partner
in each of the firm's ten regions. In this firm, the
branch support function is primarily supplied by its
New York offices. Duplicate copies of branch personnel
records are kept there also. Again, as appears common
in the industry, the same compensation structure (includ-
ing fringe benefits) is applicable to registered representa-
tives throughout the country.
The firm's region 2, which includes the Detroit branch,
also consists of branches in Minneapolis, Minnesota;
Milwaukee, Wisconsin; Denver, Colorado; and Chicago,
Illinois. Although, as with the prior-mentioned firms,
the region does not handle routine day-to-day operations
of its branches, it does maintain daily telephone contact
with its branches, and fulfills a support function similar
to that of the regions of other Employers involved
herein.
The- branch managers perform the same duties as
in Hornblower's operation described above In the
recruitment area, the branch managers screen applicants
for employment and, only if in their opinion an individual
may be qualified, is the application processed further.
The branch managers make the initial attempts to resolve
employee grievances, the regional partner being the next
step in the grievance channel.
Although registered representatives
may be trans-
ferred on request, there is no temporary interchange
among branches.
Demsey-Tegeler& Co., Inc.: This corporation is guided
by a board of directors, and it operates through four
sales divisions, two corporate finance divisions, two
research divisions, and two accounting divisions. The
firm's payroll is compiled at and issued from its home
office in St. Louis, Missouri. Compensation structure
(including limited fringe benefits) is standardized and
the opportunity to earn bonuses during national sales
promotion contests is available to all registered represent-
atives in the country.
`
The firm's Great Lakes 'division, managed by one
executive vice president, maintains headquarters in Chi-
cago, Illinois, and consists of branches in Milwaukee,
Wisconsin; Beloit and Rockford, Illinois; Indianapolis,
Indiana; Detroit, Southfield, and Mt. Pleasant, Michigan;
and in the Chicago, Illinois, area. The firm's sales and
other divisions perform supporting functions for the
branches. These functions are comparable to those of
similar units in the other firms involved herein, and
85
the executive vice president's job and branch contact
• is comparable to that of a regional partner in the other
firms.
The branch managers perform substantially the same
duties as their counterparts in other firms. Although
it is not entirely clear whether or not the branch managers
can hire and fire independently of the division, it is
apparent that their judgment is heavily relied on. The
record indicates that contacts between registered repre-
sentatives in different branches are minimal, being limited
to occasional Michigan interbranch sales meetings where
attendance is voluntary, and conferences in specialty
areas with divisional delegates being selected by the
executive vice president.
There is no history of collective bargaining involving
any of the Employers herein.
The above factors indicate that the Employers' opera-
tions are all characterized by a substantial degree of
centralization and uniformity. However, the Board has
stated that a single facility or installation is presumptively
an appropriate unit, and it is well established that the
aforementioned factors are insufficient in themselves
to rebut this presumption.' In deciding whether the
presumption in favor of a single unit has been rebutted,
the Board gives considerable weight to whether the
employees perform their day-to-day work under local
supervisors who are significantly involved in hiring, dis-
charge; and routine problems which give rise to their
grievances. Other relevant factors include degree of
interchange of employees, geographic proximity of facili-
-ties, degree of supervision exercised by higher level
management personnel, and functional relation to other
employer facilities.Ie
In this connection, the evidence indicates that each
Employer's branch supervision is intimately involved
in the hiring and firing process, ranging from initiation
of the aforesaid process to independent authority in
such areas. Branch supervision is also the avenue of
first resort in grievance matters. Branch supervision
is directly responsible for matters affecting local employ-
ees, such as training, evaluation, and normal day-to-
day supervision, sales promotion, distribution of unas-
signed accounts, account approval, compliance, and dis-
cipline.
Within the Employers' applicable regional or division
networks, the branches nearest the Detroit offices range
anywhere from 15 to in excess of 1,000 miles in distance.
Interchange of employees in negligible or nonexistent.
This is understandable because of the distances involved
and the nature of the registered representative-client
relationship which is usually locally oriented.
The record also indicates that there is little immediate
direction of branch personnel by the regional or divisional
offices, except, where there may be serious breaches
of the regulatory schemes of the Securities Exchange
Commission, National Association of Securities Dealers,
or Exchanges.
" Haag Drug Company, Incorporated, 169 NLRB 884
Allied Stores of Ohio, Inc ,
175 NLRB No 162, Fireman's Fund
Insurance Company, 173 NLRB No 146
86
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Finally, although branch support functions are sup-
plied on an area or national basis, there is a paucity
of evidence tending to establish interbranch dependence,
rather, each branch's operations and viability appear
to be independent of that of the others
Upon consideration of the entire record and particular
ly the salient factors described above, the Regional
Director concludes that a unit confined to the registered
representatives employed at each of the Employers'
Detroit offices is appropriate for the purposes of collec-
tive bargaining
Unit Placement
Having found branch units to be appropriate, certain
unit placement and individual eligibility claims raised
by the parties have been mooted The unresolved unit
placement issues relate to certain employees or categor-
ies of employees employed at the Employer's Detroit
branches Petitioner contends, contrary to the Employ-
ers, that the following named individuals," all of whom
are registered representatives, should be excluded from
the unit
Goodbody and Co 1K
Gordon Hutchinson
John Hartl
John L Meyers
Charles R Hicks
Mr Barnes"'
Mr Gryzenia
Fred McCrindle
Robert Kissel
Bernina Rish
Frank Griffo
Reynolds & Co
William J Macleod, Jr
John Gerrity
Jerry Agron
Bryson Scarff
Hornblower& Weeks-Hemphill Noyes211
Charles VanFleet
John McCloskey
Mr Keane
Mr Miller
Dempsey-Tegeler & Co Inc 21
C Edwin Mercier
Thomas Yager
Thomas Fanning
Goodbody and Co
The work tasks of Barnes, Gryze-
nia, Hicks, and Meyers vary slightly from those of
" The transcript does not disclose the given names of all individuals
in issue
" The parties stipulated to the exclusion of Adrian DeBruyn an
employee in the regional corporate finance department
" No relationship to Branch Manager Harry Barnes
The parties stipulated to the exclusion of James McAleer branch
manager and Ronald Rashid assistant branch manager
" The parties stipulated to the exclusion of Minton Clute branch
manager and T H Mercier assistant sales manager
the other registered representatives In addition to their
regular selling tasks, these individuals conduct weekly
intrabranch sales meetings which are attended by the
registered representatives
Among the matters discussed
at these meetings are sales promotion, sales technique
and new research material Topics for discussion are
selected, in most cases, by Mr Paletta, the assistant
branch manager Each meeting lasts for about 15 min-
utes
The named individuals make brief oral presenta-
tions of the topic for the day and the balance of the
meeting consists of open discussion among those present
On occasion Hard and Hutchinson have filled in for
the above-named individuals, but Hutchinson has not
done so since 1968 The firm also conducts investment
forums for the public which are basically a form of
sales promotion, and in which interested registered repre-
sentatives participate
Barnes acts as the coordinator
of the investment forum activities These jobs consume
but very limited portions of these individuals' time,
approximately 95 percent of their workdays are employed
in their regular jobs of selling securities In addition
to their earned commissions, these individuals are paid
bonuses for handling these tasks In other respects they
are similarly situated to their fellow employees, and
work side by side with them All but Gryzenia are
engaged in the sale of various types of securities, 40
percent of Gryzenia's sales are in "options "
McCrindle, Kissel, Rish, and Griffo are assigned to
the regional staff in office suites located on the fourth
floor of the Penobscot Building in Detroit Offices occu
pied by branch registered representatives are also located
nearby on the fourth floor Sales by these four persons
are limited to specialty areas, McCrindle and Kissel
in institutional sales, Rish in mutual funds, and Griffo
in over-the counter stocks Being specialists, these indi-
viduals provide support services to registered representa-
tives throughout the region The regional partner directly
supervises these individuals They are salaried and also
receive bonuses based on sales Although these individ-
uals do not interchange with Detroit branch personnel,
the two groups come into regular contact with one
another, especially when branch-registered representa-
tives handling sales in these specialty areas seek informa-
tion, such as prospectuses, annual reports, etc , and
advice from the regional staff The regional staff regis-
tered representatives work the same flexible work sched-
ules, enjoy the same fringe benefits, and make use
of the same coffeeroom as the branch-registered repre
sentatives
Hornblower &
Weeks-Hemphill
Noyes
VanFleet,
McCloskey, Keane, and Miller22 work in the same office
area with the other branch-registered representatives
and are on the branch staff, but their sales are specialized,
VanFleet is in over-the-counter stocks, McCloskey in
municipal and corporate bonds, Miller in institutional
sales, and Keane in corporate finance Although these
men are the branch specialists, any registered representa-
tives may sell in the respective specialty areas
When
22 The Employer and Petitioner stipulated
and upon the record
I find that these employees are not supervisors
GOODBODY AND CO.
,he is present, all over-the-counter orders must be placed
through VanFleet, who is, salaried. Other registered rep-
resentatives fill in for him when he is absent. McCloskey,
Keane, and Miller are paid on a commission basis.
As a form of remuneration, for being an exceedingly
high producer, Keane is provided with a private office
in which to work. In no other ways are these individuals'
functions or treatment different from that of the other
registered representatives:
Reynolds & Co.: Gerrity, Agron, and Scarff possess
a greater depth of knowledge in certain areas; Gerrity
in municipal bonds; Agron in over-the-counter stocks;
and Scarff in mutual funds. Although not formal classi-
fications, Agron is called a syndicate coordinator and
Scarff, a mutual fund coordinator. In addition to sales
in their specialty areas, they also sell the full range
of other securities. Their means of being compensated
vary somewhat from straight commissions.
MacLeod, who is the former branch manager, is
called a senior branch manager. Although he has retained
the private office which he occupied when he was branch
manager, he now sells the same product mix and per-
forms the same duties as the other registered representa-
tives.
Dempsey-Tegeler & Co., Inc.: As compared to the
other registered representatives of this Employer, Pag-
er's distinguishing feature is that he transmits the orders
of all registered representatives to the various exchanges
for execution, thus relieving them of this duty. Yager
is called an order clerk. In addition to commissions
earned from his own' sales, Yager is paid a salary for
doing the order clerk job.
Fanning presents monthly financial planning seminars
for the firm comparable to the investment forums con-
ducted by Goodbody, and receives a nominal salary,
in addition to earned commissions, for doing so.
Mercier has a private office and has the honorary
title of vice president. The record indicates that this
title is not reflective of any authority or responsibility
greater than that of the other registered representatives.
Rather, Mercier performs the same duties, receives the
same compensation (including fringe, benefits) as the
other registered representatives, and is also directly
supervised by the branch manager.,
All of the individuals heretofore described in this
section have no authority to hire, fire, promote, assign,
or direct their fellow employees. Also, all of the individ-
uals, except as noted above, perform the same work
and are paid in the same manner as the other branch-
registered representatives. They are subject to 'the same
supervision and discipline and have the same grievance
avenues open to them. They also have common or
adjoining work areas.
Except for the noted stipulation that certain individuals
are not supervisors within the meaning . of the Act,
Petitioner claims that the individuals -heretofore dis-
cussed in this section are either supervisors, managerial
employees, or have no community of interest with the
other registered representatives in their respective
branches.
87
As described above, none of these individuals possess-
es the indicia of supervisory, authority except two
employees, Macleod and Mercier, who have titles with-
out authority, and upon which there is no basis for
finding supervisory status. Accordingly, the Regional
Director concludes that none of the individuals hereto-
fore described in this section are supervisors within
the meaning of the Act.
Generally, the Board finds an employee to be manage-
rial when his interests are so allied with management
as to negate his community of interest with other employ-
ees.23 In essence, the Board has held that managerial
employees are those who formulate, determine, and
effectuate an employer's policies.24 There is no evidence
to indicate that any of the employees in issue meet
any of these criteria. Therefore, I am unable to conclude
that they are managerial employees.
Contrary to Petitioner's contention, the individuals
discussed do appear to have a community of interest
with the other registered representatives in their branch-
es. Within their respective offices, they work in close
contact with one another in the same or adjoining areas,
performing the same selling function, notwithstanding
the specialty work of some, or the added duties of
others. They receive the same fringe benefits, and work
under the same or similar conditions and hours of
employment. With the limited exception in the Goodbody
situation, each is subject to the same local supervision
Having duly considered all relevant factors, the Regional
Director finds that the individuals heretofore described
herein have a community of interest and are properly
included within the Detroit office unit of their respective
Employers. Accordingly, I find them to be in the unit
and eligible to vote in the respective elections directed
herein.25
Petitioner also argues that trainees for the positions
of registered representatives should be excluded. The
Employers take the opposite position. Hornblower has
one trainee presently "working" for its Detroit branch.
The record does not clearly reveal whether the other
Employers involved herein have trainees presently
assigned to their respective Detroit branches.
After an applicant for employment, seeking to become
a registered representative, is hired, he must undergo
an intensive training program of approximately 6 months'
duration culminating with exchange examinations. If
the examinations are successfully passed, which is usual-
ly the case, he is registered. It is only then that he
may begin operating as a registered representative. The
first 3 months of training take place at the branch
level under the supervision of the branch manager.
During this period, the trainee takes a correspondence
course interspersed
with periodic examinations and
engages in what is called presolicitation activity. This
PJ Howard Johnson Co , 174 NLRB No 182 ,
"American Federation of Labor and Congress of Industrial Organiza-
tions, 120 NLRB 969
" Petitioner challenged the unit placement of Mr Vantil employed
by Hornblower solely on the basis that he is not a registered representa-
tive Based upon the-record, I find that Vantil is a registered representa-
tive and is , therefore, an eligible voter
88
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
activity consists of preparing prospective customer lists
and solicitation letters which cannot be used until after
his registration
Most of his time is spent studying
in the branch The remaining months of his training
program are spent in New York New York, where
he must study further, taking the New York Stock
Exchange course in preparation for the examinations,
the passing of which is a condition precedent to becoming
a registered representative
At no time during the entire
program does or can a trainee solicit his own customers
or handle his own accounts
With substantial portions
of the training period spent away from the branch,
and with little, if any, of what can be termed unit
work being performed during the training period, I find,
in the special circumstances herein, that trainees do
not have a sufficient community of interest with the
registered representatives
The Regional Director con-
cludes that they are excluded from the unit and ineligible
to vote in the respective elections directed herein
Having considered all issues raised, and based on
the foregoing and the evidence on the record as a
whole, I find that the following employees of each
of the respective Employers involved herein constitute
a unit appropriate for the purpose of collective bargaining
within the meaning of Section 9(b) of the Act
All registered representatives employed by the
Employer at its offices located in Detroit, Michigan,
but excluding trainees, Branch Managers, Assistant
Branch Managers, guards and supervisors as defined
in the Act, and all other employees 21
[Direction of Election27 omitted from publication ]
21 The respective units consist of approximately the following numbers
of employees Goodbody-55 Hornblower-28 Reynolds-23 and Demp
sey Tegeler-18
27 In order to assure that all eligible voters may have the opportunity
to be informed of the issues in the exercise of their statutory right
to vote all parties to the election should have access to a list of
voters and their addresses which may be used to communicate with
them Excelsior Underwear Inc
156 NLRB 1236 N L R B v
Wyman
Gordon Company 394 U S 759 Accordingly it is hereby directed
that an election eligibility list containing the names and addresses
of all the eligible voters
must be filed by each Employer with the
Regional Director within 7 days of the date of this Decision and Direction
of Election
The Regional Director shall make the list available to
the Petitioner In order to be timely filed such a list must be received
in the Regional Office 500 Book Building 1249 Washington Boulevard
Detroit
Michigan 48226 on or before March 19 1970 No extension
of time to file this list may be granted except in extraordinary circum
stances
nor shall the filing of a request for review operate to stay
the filing of such list Failure to comply with this requirement shall
be grounds for setting aside the election whenever proper objections
are filed