Textron, Inc.

384 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Bell Aerospace, A Division of Textron, Inc. and Inter- national Union, United Automobile, Aerospace and Agricultural Implement Workers of America, Amal- gamated Local 1286. Case 3-CA-4695 July 23, 1975 SUPPLEMENTAL DECISION AND ORDER By CHAIRMAN MURPHY AND MEMBERS FANNING AND JENKINS This case originally arose upon a petition filed by Amalgamated Local No. 1286 of the United Auto- mobile, Aerospace and Agricultural Implement Workers of America (the Union) seeking an election in a unit of buyers in the procurement department of the Employer's Wheatfield, New York, plant. At the representation hearing, the Employer opposed the petition, contending that the buyers were managerial employees and, accordingly, were excluded from the coverage of the Act. On May 20, 1971, the Board issued its decision, holding that the Company's buyers constituted a unit appropriate for collective-bargaining purposes and directing an election in that unit.' The Board de- clined to rule specifically as to whether the buyers constituted managerial employees. Rather, relying on its then recent decision in North Arkansas Electric Cooperative, Inc.,2 the Board held that even though the buyers might be "managerial employees" as con- tended by the Company, they nevertheless were cov- ered by the Act and entitled to its protection. In that decision, the Board also rejected the Company's al- ternative contention that allowing the buyers repre- sentation rights would place them in a conflict of interest. After a Board-conducted election in which a ma- jority of the buyers voted for the Union, the Board on August 12, 1971, certified the Union. On that same day, however, the United States Court of Ap- peals for the Eighth Circuit denied enforcement of the Board's order in North Arkansas, holding that managerial employees were not covered by the Act and therefore not entitled to its protection.3 Immediately thereafter the Company filed a mo- tion requesting that the Board reconsider its earlier decision in light of the Eighth Circuit's decision. On May 1, 1972, the Board issued an order denying the Company's motion 4 In so doing, the Board again declined to specifically determine whether the 25 ' 190 NLRB 431. 2 185 NLRB 550 (1970). 7 446 F.2d 602. 196 NLRB 827 buyers were managerial employees. It stated, howev- er, that in its view, Congress intended to exclude from the Act only those managerial employees asso- ciated with the "formulation or implementation of labor relations policies." In each case, it held, the fundamental question was "whether the duties and responsibilities of any managerial employee or group of managerial employees do or do not include deter- minations which should be made free of any conflict of interest which would arise if the person involved was a participating member of a labor organization." Finding that the buyers involved herein had only limited and specific policy responsibility the Board stated it disagreed with the Eighth Circuit and reaf- firmed its prior finding. The Company held to its contention that buyers as managerial employees were not covered by the Act and refused to bargain with the Union. After this refusal to bargain, the Board, on the basis of an 8(a)(5) complaint, on May 30, 1972, issued an order compelling the Company to recognize and bargain with the Union.' The United States Court of Appeals for the Sec- ond Circuit, however, denied the Board's request for enforcement of that bargaining order .6 It concluded that Congress had intended to exclude all true "man- agerial employees" from the protection of the Act. It explained that this exclusion embraced not only an employee so closely related to or aligned with man- agement as to place the employee in a position of a conflict of interest between his employer on the one hand, and his fellow workers on the other, but also one who is "formulating, determining and effectuat- ing his employer's policies or his discretion indepen- dent of an employer's established policy in the per- formance of his duties." On the merits of the case, the court found that there was substantial evidence that the Company's buyers were not sufficiently high in the managerial hierarchy to constitute true managerial employees. It then added that, on proper proceedings, the Board would not be precluded from determining that buy- ers or some types of buyers were not true managerial employees and covered by the Act. Nevertheless its denial of enforcement was for two reasons . First, it was not certain that the Board's decision rested on a factual determination that the buyers were not true managerial employees rather than on the Board's new holding (with which the court disagreed) that all managerial employees were covered by the Act un- less their duties create a conflict of interest. Second- ly, it was of the view that if the Board were to find that some buyers were not managerial employees '197 NLRB 209 6 475 F.2d 485 (1973) BELL AEROSPACE (and covered by the Act), the case was appropriate for the rule-making process. On April 23, 1974, after having granted the Board's petition for certiorari, the United States Su- preme Court stated that the Board's exclusion of managerial employers "defined as those who formu- late and effectuate policies by expressing and making operative the decisions of their employers" has been approved by courts without exception. It also noted with approval that the Board excludes from the Act as managerial those who formulate, determine, and effectuate an employer's policies and those who have discretion in the performance of their jobs, but not if that discretion must conform to an employer's estab- lished policy. It mentioned various early Board deci- sions wherein buyers, prior to the North Arkansas de- cision, had been denied bargaining rights on grounds they were managerial employees and representatives of management. It held that: ... the Board's early decisions, the purpose and legislative history of the Taft-Hartley Act of 1947, the Board's subsequent and consistent construction of the Act for more than two de- cades, and the decisions of the courts of appeals all point unmistakably to the conclusion that "managerial employees" are not covered by the Act. We agree with the Court of Appeals below that the Board "is not now free" to read a new and more restrictive meaning into the Act. 416 U.S. at 289. The Supreme Court expressed no opinion as to whether or not these buyers fell within the category of managerial employees but remanded the case to the Board for the application of the proper legal stan- dards in determining the buyers' status? Thereafter, the Board afforded the parties the op- portunity to file briefs and statements of positions with regard to the issue remanded. Both parties have done so.8 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. From the Supreme Court's discussion regarding managerial employees, it is clear to us that we must now apply the proper legal standard 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 7 The Supreme Court reversed the circuit court's holding on the rule- making question. 9 The Union's motion and the Employer's request to reopen the record are hereby denied as the parties' briefs and the present record are adequate for disposing of this case. 385 Court's opinion provides: The Board has had ample experience in defin- ing the term "managerial" in the manner which we think the Act contemplates. See, e.g., Eastern Camera & Photo Corp. [140 NLRB 569, 571 (1962)]. Of course, the specific job title of the employees involved is not in itself controlling. Rather, the question whether particular employ- ees are "managerial" must be answered in terms of the employees' actual job responsibilities, au- thority, and relationship to management. In Eastern Camera, the Board defined managerial employees as those who formulate, determine, and effectu- ate an Employer's policies... . Moreover, man- agerial status is not necessarily conferred upon employees because they possess some authority to determine, within established limits, prices and customer discounts. In fact, the determina- tion of an employee's "managerial" status de- pends upon the extent of his discretion, although even the authority to exercise considerable dis- cretion does not render an employee managerial where his decision must conform to the employer's established policy. [Citations omit- ted.] In a recent case,9 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 work- ers, 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 manage- ment. 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.10 The record herein reveals the following facts about Respondent's buyers: The essential function of the 9 General Dynamics Corporation, Convair Aerospace Division, San Diego Operations, 213 NLRB 851 (1974). 10 Inasmuch as the Board has already determined that a unit of buyers is appropriate and would on this record , present no conflict of interest, the only issue presented by the remand is whether, in light of the Supreme Court's decision, the buyers herein are covered by the Act. 386 DECISIONS OF NATIONAL LABOR RELATIONS BOARD procurement department is the purchase of items from outside sources (vendors). This purchasing ac- tivity is initiated by the receipt of a purchase requisi- tion which can come from any of the 30 departments at the plant. These requisitions cover a wide range of manufacturing requirements including case materi- als, subassemblies, parts, machines, and tools. After a requisition has been reviewed and authorized by procurement supervision, it is given to the appropri- ate buyer, each of whom is assigned an area of spe- cialization. The buyer turns the purchase requisition into a purchase order, i.e., an order to a vendor to supply the item requisitioned. The amount of effort required on the buyer's part varies according to the item being purchased. For example, a standard item may be procured simply by converting the requisition itself into a purchase order. For such items the buyer merely affixes his signature thereto since the depart- ment which originated the requisition has already designated the vendor, price, quantity, etc. Some items are purchased through a data phone contact, requiring merely a phone call. There was testimony that many items are so-called "repetitive" or "off the shelf" items which are generally needed to run a manufacturing plant. They include light bulbs, fuel oil, rags, paint, data-processing rental, office sup- plies, furniture, books, and standard hardware items. Where there are alternative sources, the buyer ex- ercises some discretion in determining a price or source. In many instances, however, especially in- volving requests from manufacturing and production departments calling for raw materials, tooling, or ma- chines, the vendor and manufacturing specifications are frequently designated. Also, in some instances there are no alternative sources for certain items. Where a vendor has been designated, if a buyer wishes to change the vendor designation, he must clear it with the department which issued the requisi- tion. In some instances, however, there are purchase or- ders involving subcontracting (make or buy) deci- sions and those involving the purchase of sophisticat- ed electronic components. These orders require significant amounts of team liaison with a number of other departments such as finance, engineering, legal, production control, program and configuration man- agement, quality control, etc. In such instances buy- ers may travel out of town for negotiations with ven- dors. Once an order is made, the buyers monitor the performance of the vendors to insure timely deliver- ies. In all instances, purchase orders up to $50,000 are executed by the buyers themselves. Although the buyers in negotiating contracts and ordering items can commit the Company's credit, the record reveals that they cannot commit the company credit in amounts in excess of $5,000 without the concurrence of higher authority. Procurement Director Seitz testi- fied that when a buyer recommends a purchase order in excess of that amount , "of course as it [the cost] goes up the level of review more people get to look at it. More people get to question it. They question the buyer's discretion, his judgment, how did you arrive at the conclusions that this is a good package he is offering for your approval." The record contains numerous comprehensive manuals and instructions which show the restrictions on the buyers' discretion in making purchases. It also reveals a supervisory ratio of one supervisor to three buyers which enables management to review and check the orders prepared by the buyers . Ed Nolan, a buyer, testified that buyers get bombarded with all kinds of instructions and that the "job is pretty well spelled out for us." The record reveals the following additional factors bearing on the buyers' status. Their salaries range from $195 to $271 per week and are comparable to the salaries paid other organized white collar em- ployees at the plant. They receive the same fringe benefits as other organized employees except they are not paid for overtime unless it is authorized by the procurement department . They use the same caf- eteria and parking lot as do other acknowledged em- ployees. Buyers must receive permission from pro- curement management to leave early or have an extended lunch . They do not hire or fire the secre- taries in their offices and cannot give the secretaries permission to leave early . They do not authorize overtime. In view of the Supreme Court's decision setting forth the proper legal standards to be applied, it is clear to us on the basis of the facts set forth that these buyers do not "formulate and effectuate man- agement policies by expressing and making operative the decisions of their employer." As we said in our earlier decision in this proceeding, 190 NLRB 431: While it is true that the buyers are in a position to commit the Employer's credit, the record re- veals that the discretion and latitude for inde- pendent action must take place within the con- fines of the general directions which the Employer has established. Thus we conclude that the buyers herein do not exercise sufficient independent discretion in their jobs to truly align them with management and that they are employees within the meaning of the Act. Therefore, inasmuch as we have found that these buyers' participation in a labor organization would BELL AEROSPACE 387 create no conflict of interest, and since a majority of ORDER the employees in the unit heretofore found appropri- ate has voted for the Union, the bargaining order Based on the foregoing, and upon the entire record previously issued to remedy the Respondent's refusal in this case, the National Labor Relations Board to bargain is appropriate and we shall affirm it." hereby affirms its order issued in this proceeding on May 30, 1972. "Chairman Murphy would also rely on the fact that , after the Board the buyers' alleged managerial status . Accordingly, she finds that the Re- decision in the representation proceeding, the Respondent dropped its chal- spondent is estopped from otherwise challenging the appropriateness of the lenge to the appropriateness of a unit of buyers on any ground other than unit herein.