Lockheed Aircraft Corp.

LOCKHEED-CALIFORNIA COMPANY Lockheed-California Company, A Division of Lock- heed Aircraft Corporation andEngineers and Scien- tists Guild, Lockheed Section, Petitioner. Case 31-RC-2820 April 29, 1975 DECISION AND ORDER By MEMBERS FANNING, JENKINS, AND PENELLO Upon a petition duly filed under Section 9(c) of the National Labor Relations Act, as amended, a hearing was held before Hearing Officer Sidney Rosen. Pursu- ant to Section 102.67 of the National Labor Relations Board Rules and Regulations, Series 8, as amended, and by direction of the Regional Director for Region 31, this case was transferred to the National Labor Relations Board for decision. Thereafter, the Employer and the Petitioner filed briefs in support of their respec- tive positions. 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 reviewed the rulings of the Hearing Officer made at the hearing and finds that they are free from prejudicial error. They are hereby affirmed.' Upon the entire record in this case, the Board finds: 1. The parties stipulated, and we find, that the Em- ployer is engaged in commerce within the meaning of the Act, and it will effectuate the purposes of the Act to assert jurisdiction herein. 2. The labor organization involved claims to repre- sent certain employees of the Employer. 3. The original petition sought a separate unit of all "Buyers Code 1743," all "Senior Buyers Code 2813," and all "Sub-contract Administrators Code 1970,"2 excluding all supervisors, guards, office employees, and those represented by other bargaining units. At the hearing, Petitioner sought to amend the petition to provide that the Buyers be allowed to vote to become part of a unit of engineers presently represented by the Petitioner. The Employer objected to the proposed amendment, stating that, assuming the existence of a question concerning representation, it would agree only to the appropriateness of a separate unit of Buyers and not to the appropriateness of permitting the Buyers to vote to become part of the engineering unit. The Hear- 1 In its brief, Petitioner requests the Board to overrule the Hearing Of- ficer's decision granting the Employer's motion to bifurcate the hearing. Petitioner's request is hereby denied 2 The term ",Buyer" will hereinafter be collectively used to refer, without differentiation, to a member or members of a group comprised of buyers, senior buyers, and subcontract administrators The terms buyer, senior buyer, or subcontract administrator will be individually used where a delineation between these classifications is intended. 573 ing Officer granted the amendment. Thereafter, the Employer made a motion to bifurcate the hearing to restrict its scope solely to the issue of the status of the Buyers under the Act. The Petitioner objected to the motion on the ground that the hearing should deal with both the issue of the Buyers' status under the Act and the issue of the appropriateness of the unit sought, because both issues were "inextricably intertwined." The Hearing Officer denied the motion. Thereafter, the Petitioner and the Employer presented evidence with respect to the issue of the status of the Buyers under the Act and the Petitioner presented its evidence with re- spect to the issue of the appropriateness of the unit- sought. The Employer, before presenting its case on the appropriateness of the unit, renewed its motion to bifurcate the hearing so that the issue of the status of the Buyers could be immediately decided. The Hearing Officer, with the consent of the Regional Director, granted the motion to bifurcate and the hearing was indefinitely adjourned. The Employer therefore has not presented its evidence concerning the appropriateness of the unit. Due to the present posture of this case, the sole issue now before us is the status of the Buyers. The Employer asserts that the Buyers are managerial employees who do not come within the coverage of the Act. The Peti- tioner asserts that the Buyers are not managerial em- ployees and therefore that they fall within the purview of the Act. The Supreme Court has recently stated in its Tex- tron, Inc., decision3 that "`managerial employees' are not covered by the Act." In so holding, the Court further concluded that it was up to the Board to apply the "proper legal standard" in determining the ques- tion of the status of buyers. From the foregoing, it is clear that we must now employ this "proper legal standard" in order to determine whether the Buyers herein are "managerial employees" and thus excluded from the coverage of the Act. As to what constitutes the "proper legal standard," the Court's opinion provides:' The Board has had ample experience in defining the term "managerial" in the manner which we think the Act contemplates . See, e.g., Eastern Camera & Photo Corp., [140 NLRB 569, 571 (1963)]. Of course, the specific job title of the em- ployees involved is not in itself controlling. Rather, the question whether particular em- ployees are "managerial" must be answered in terms of the employees' actual job responsibilities, authority, and relationship to management. 3 N.LR.B. v. Bell Aerospace Company, Division of Textron, Inc., 416 U.S 267 (1974) 4 Id at 290, In. 19 217 NLRB No. 93 574 DECISIONS OF NATIONAL LABOR RELATIONS BOARD In Eastern Camera,, the Board defined managerial employees as those who formulate, determine, and effectu- ate an Employer's policies. .. . Moreover, managerial status is not necessarily conferred upon employees because they possess some au- thority to determine, within established limits, prices and customer discounts. In fact, the deter- mination of an employee's "managerial" status de- pends upon the extent of his discretion, although even the authority to exercise considerable discre- tion does not render an employee managerial where his decision must conform to the employer's established policy. [Citation omitted.] ' In a recent case,' the Board has reaffirmed the- rule of Eastern Camera stating: The Board long has defined managerial em-, ployees as those who formulate and effectuate management policies by expressing and making operative the decisions of their employer, and those who have discretion in the performance of their jobs .independent of their employer's estab- lished policy [citation omitted]. . . . managerial status is not conferred upon rank-and-file workers, or upon those who perform routinely, but rather it is reserved for those in-executive-type positions, those who are closely aligned with management as true representatives of management. The foregoing quotations set forth what we believe to be the "proper legal standard" for deciding the ques- tion of managerial status. Therefore, all that remains herein is to analyze the instant facts and apply them to the standard set forth above. - The approximately 225 Buyers are located in three branches which are predominantly found at the Em- ployer's facilities in Burbank, California. Of these, 202 are located in the material branch which is headed by a director of material. The material branch is divided into divisions which are headed by division directors. The divisions are further divided into departments headed by procurement managers. The Buyers are located in the various departments and they are di- rectly responsible to their procurement manager. The material branch is responsible for procuring the various materials requested by the numerous author- ized user organizations within the Employer. To this end, it is a Buyer's responsibility to initiate all the necessary steps of a procurement once it has been as- signed to him.' The decision to purchase material is 5 General Dynamics Corporation, Con vair Aerospace Division, San Diego Operations, 213- NLRB No 124 (1974). 6 The general policies of the Employer concerning procurement activities are set out in a document entitled "Procurement Policies " Some of these implemented by authorized user organizations through a request to purchase (RTP), which must bear the or- ganization's authorization stamp.' Buyers do not have the authority to affix such stamps or otherwise initiate purchases.' Once a Buyer receives a properly stamped RTP, he must draft bid invitations and establish the list of suppliers to whom the bid invitations will be sent. The Buyer's discretion in formulating the bid list de- pends on the individual procurement. For instance, on standard parts a Buyer has little or no discretion since authorized suppliers are designated for standard parts. However, regardless of the way in which a bid list is prepared, it must be approved before the Buyer can send out the invitations to bid. The level of authoriza- tion depends on the estimated cost of the procurement. Once the bid list is approved, the Buyer must obtain any required approvals on the invitations to bid before sending them out. After the Buyer receives the various bids from the suppliers who have responded, he begins the bid evaluation process. During the process numer- ous organizations evaluate different sections of each bid. These separate evaluations are combined for the ultimate selection of the supplier. On the basis of this data the Buyer selects the supplier to be used. However, his selection is subject to review. Prior to the award of the contract the Buyer must negotiate any unsettled terms and conditions. This gen- erally includes price, at least on items other than stand- ard parts. To negotiate a final price, the Buyer must have an approved negotiation range. The necessity for this approval depends on the size of the maximum limitation of the negotiation range. Once the preceding stages are completed, the Buyer must complete the RTP and have it authorized before he can execute a purchase order.' After the RTP is properly completed and authorized, the Buyer may policies are translated into specific guidelines known as authorizing direc- tives or procurement instructions Those that apply to the Buyers are set out in a document known as the "Buyers's Handbook, RTP, POR and PORR Processing." This book by and large sets out all the procedures which a Buyer must follow in the various stages of a procurement Included are the various authorization requirements which, depending on the value of the procurement, pertain to the different stages of a procurement 7 As discussed infra, a Buyer must complete the-RIP, pursuant to estab- lished instructions, and obtain the necessary authorizations on it, depending on the dollar value of the procurement, before he can actually commit the Employer's credit to purchase any material 8 Some Buyers do not actually engage in the procuring of material. In general, their jobs entail nonbuying functions such as follow -up work. 9 The instructions for the completion of the RTP are contained in the "Buyers Handbook." Empl Exh 7 reveals the dollar limits within which the different members of the proposed unit can normally authorize RTP's with- out additional approval A buyer can individually authorize an RTP up to $500 while a senior buyer can individually authorize an RTP up to $2,500 and a subcontract administrator can individually authorize an RTP up to $5,000 A buyer and a senior buyer can jointly authorize an RTP up to $10,000 and a senior- buyer and a subcontract administrator can jointly authorize an RTP up to $50,000. According to authorizing directive A-I (Empl Exh 21), any member of the proposed unit may individually author- ize a purchase up to $5,000 without prior approval if "Urgency dictates " He must, however, thereafter get the approvals normally required. LOCKHEED-CALIFORNIA COMPANY execute a purchase order committing the credit of the Employer. After the purchase is completed, it remains the Buyer's responsibility to coordinate the Employer's re- lationship with its suppliers and customers. This entails the resolution of problems which arise in relation to items the Buyer has procured . For instance, it is the Buyer's responsibility to handle requests by suppliers to modify existing contracts . However, prior to authoriz- ing any such modification, a Buyer must obtain the approval of higher authority. Buyers do not participate in make or buy decisions for the Employer. These deci- sions are made by a committee which includes no Buy- ers. The following are characteristics of the Buyers in general. There are no formal educational requirements for Buyers. All of the Employer's salaried employees have, in general, the same group insurance, retirement plan, savings plan, vacation program , holidays, and sick leave: Buyers, , unlike personnel in classifications above them, are not eligible to receive stock options. Lockheed's labor relations branch is responsible for the labor relations policy concerning all of Lockheed's em- ployees. The executive dining room may be utilized by a Buyer only after he has obtained permission from someone who is authorized to regularly use the facility. None of the members of the proposed unit have regular permission to use the dining room. Witness Hollander, a subcontract administrator , testified that while park- ing spots weren't assigned anymore it was the custom that "management," procurement managers, and above, parked in the left lot and everybody else, includ- ing the Buyers, parked in the right lot. It is clear to us, on these facts, that the Buyers do not "formulate and effectuate management policies by ex- pressing and making operative the decisions of their employer." Further, we do not believe that the Buyers "have discretion in the performance of their jobs in- dependent of their employer's established policy." In so concluding, we are not, unmindful of all the various 10 As previously noted, fn 9, supra, a senior buyer and a subcontract administrator can combine to commit the Employer's credit up to $50,000 without additional authorization- The true impact of this ability to commit the Employer's credit, while seemingly of the greatest significance at first blush, can only be appreciated by considering the nature of the Employer's business, the aerospace industry Thus, while the ability to commit such amounts of an employer's credit may be highly significant in the context of a small retail enterprise, it is of far less significance in the context of the aerospace industry. As the record in the instant case reveals , in 1973 the Employer's capital was committed in excess of $770 million. 575 activities and functions of the Buyers, particularly their credit committing function . L° However, as the facts reveal, the activities of the Buyers are circumscribed to varying degrees by the Employer's established policy or by the review power placed in higher authority. For example, Buyers may comment on the directives that govern their actions," but higher authority must give its approval before any comment is made part of a directive; a Buyer's selection of a source is also subject to review, and disputes along the buying cycle are all ultimately ruled on by authority higher than the Buy- ers. Thus, we are led to conclude that the Buyers herein do not exercise sufficient independent discretion in their jobs to truly align them with management.12 Accordingly, as the evidence before us fails to dem- onstrate either that the Buyers herein are managerial or that their participation in a labor organization would create a conflict of interest, we find that these Buyers are entitled to the protection of the Act . We therefore find that a question affecting commerce exists concern- ing the representation of certain employees of the Em- ployer within the meaning of Sections 9(c)(1) and 2(6) and (7) of the Act. While we have Found the Buyers to be employees entitled to the protection of the Act, the present record before us discloses that the only issue fully litigated at the hearing related to the question of the status of the Buyers, and the parties are not in agreement regarding other issues. Thus, as a means of illustration and not limitation, the parties would appear not to agree as to the unit which will be appropriate. Accordingly, we deem it necessary to remand the case to the Regional Director for such further action as the Regional Direc- tor deems appropriate regarding the above-mentioned and any remaining issues preparatory to his directing an election. ORDER It is hereby ordered that Case 31-RC-2820 be, and it hereby is, remanded to the Regional Director for Region 31, for such further action as he deems appro- priate including the issuance of a Decision and Direc- tion of Election. 11 See fn 6, supra, for a discussion of those directives 12 We further find, as a result of these limitations on the Buyers' discre- tion, that the Buyers' participation in a labor organization would not create a conflict of interest with their job responsibilities.