State Farm Mutual Automobile Insurance Co.

966 DECISIONS OF NATIONAL LABOR RELATIONS BOARD State Farm Mutual Automobile Insurance Company and State Farm Fire and Casualty Company, Em- ployer-Petitioner and Teamsters Local No. 1, American Communication Association affiliated with the International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of Ameri- ca and Highway Truckdrivers and Helpers Local 107, affiliated with International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Help- ers of America. Case 29-RM-481 August 18, 1976 DECISION AND DIRECTION OF ELECTION By MEMBERS FANNING, PENELLO, AND WALTHER Upon a petition duly filed under Section 9(c) of the National Labor Relations Act, as amended, a hearing was held before Hearing Officer Richard Roth of the National Labor Relations Board on No- vember 13, 1975. Thereafter, the Regional Director for Region 29, transferred the case to the Board for Decision. Pursuant to the provision 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, having duly considered the Hearing Officer's rulings made at the hearing, finds that they are free from prejudicial error. They are hereby af- firmed. Upon the entire record in this case, the Board finds: 1. State Farm Mutual Automobile Insurance Company and State Farm Fire and Casualty Compa- ny (hereinafter called the Employer) are Illinois cor- porations maintaining their principal offices and places of business in the city of Bloomington, Illinois, and various other places of business in other States of the United States, where they are and have been at all times material herein engaged in the sale of auto- mobile insurance and fire and casualty insurance and related services. During the past calendar year, the Employer in the course and conduct of its operations derived gross revenues therefrom in excess of $500,000 and purchased and caused to be transport- ed and delivered to its New York place of business office equipment and supplies and other goods and materials valued in excess of $50,000, of which goods and materials valued in excess of $50,000 were trans- ported and delivered to its New York places of busi- ness in interstate commerce directly from States in the United States other than the State in which it is located. 2. The parties have stipulated and we find that Teamsters Local No. 1, American Communication Association affiliated with the International Brother- hood of Teamsters, Chauffeurs, Warehousemen and Helpers of America and Highway Truckdrivers and Helpers Local 107, affiliated with the International Brotherhood of Teamsters, Chauffeurs, Warehouse- men and Helpers of America, are labor organizations within the meaning of Section 2(5) of the Act. 3. A question concerning representation exists concerning the representation of certain employees of the Employer within the meaning of Sections 9(c)(1) and 2(6) and (7) of the Act. Teamsters Local No. 1, American Communication Association affiliated with International Brother- hood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, hereinafter referred to as Local 1, was certified on September 15, 1967, as bargaining representative in a unit of all field (automobile) claims specialists and field claims representatives em- ployed by the Employer assigned to the Smithtown, Syosset, and Jericho, Long Island, New York, offices of the State Farm Mutual Automobile Insurance Company.' On October 1, 1972, after 5 years of bargaining, the parties entered into their first collective-bargain- ing agreement. A second agreement was effective from April 1, 1974, to September 30, 1975. In early September 1975, the Employer and Local 1, through their respective bargaining committees, commenced negotiations for a new agreement. In July 1973, the International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America (hereinafter referred to as the Interna- tional) began to consider the merger of Local I into another of its locals. Finally, in 1975, the Interna- tional merged Local 1 into Highway Truckdrivers and Helpers Local 107, affiliated with International Brotherhood of Teamsters, Chauffeurs, Warehouse- men and Helpers of America (hereinafter referred to as Local 107).2 1 On July 2, 1970, the Regional Director dismissed a petition seeking clarification of the unit to include fire field claims specialists and represen- tatives Subsequently, however, both fire and automobile adjusters were covered under the collective-bargaining agreements between the Employer and Local I after the parties agreed to include them in the bargaining unit if a majority of these employees designated the unit as their bargaining agent The matter was submitted to an arbitrator who determined that a majority of said employees did, in fact, designate Local I as their collective- bargaining representative The most recent clarification, dated May 23, 1973, certifies Local I as the bargaining representative of the field claims specialists, office claims specialists, field claims representatives, office claims representatives, and estimators employed by the Employer assigned to the Westbury and Levittown, Long Island , New York, offices 2 This merger was in accordance with sec I I of the constitution of the International which provides that "the General Executive Board in its dis- cretion shall have the power to merge local unions and other subordinate bodies under such terms and conditions and subject to such qualifications as the General Executive Board may determine " The General Execu- tive Board may also, in its discretion, conduct a referendum vote among all 225 NLRB No. 135 STATE FARM MUTUAL AUTOMOBILE INSURANCE CO. 967 On July 16, 1975, William Bender, secretary-trea- surer of Local 1, was informed of the merger.' On September 9, 1975, Lewis J. Bottone, president of Lo- cal 107, advised the membership of Local I that the general executive board of the International had merged Local I into Local 107, a Philadelphia, Penn- sylvania, local. Under the leadership of William Bender, the membership of Local 1 wrote a number of letters to the International protesting the merger and filed an action in U.S. District Court against the International and Local 107 seeking to enjoin the merger. In addition, a petition signed by 33 of the 37 unit employees of Local 1 was sent to the Interna- tional on October 20, 1975, protesting the merger. A letter which accompanied the petition protested the unilateral action of the International which gave "no consideration to the wishes of [the] members"; it also protested any arrangement that did not provide that Bender would represent the employees as collective- bargaining representative. Meanwhile, by letter dated September 8, 1975, Bottone informed the Employer of the merger ex- plaining that Local 107 would abide by all contractu- al commitments, that all grievances would be han- dled by Local 107, that the dues checkoff should be forwarded to the secretary-treasurer of Local 107, and that John E. Smalley had been assigned as busi- ness agent to represent the members. On October 1, 1975, the Employer sent letters to both Local 1 and Local 107 asking clarification of the September 8, 1975, letter from Local 107. Both Local 1 and Local 107 responded and each claimed to be the exclusive bargaining agent. Consequently, on October 22, 1975, the Employer sent a letter to both Locals stat- ing that in light of the competing claims of represen- tation, "State Farm believes it has no option but to respectively decline to bargain with either Local until the question concerning representation is resolved." Thereafter, the Employer filed the instant petition with the Board. Local 107 contends the merger should be recog- nized because: the merger was in accordance with the constitution of the International; the change was instituted due to Local l's financial difficulties and small membership; and the merger of the Locals ef- fected structural changes only which do not alter the representative character of the bargaining agent so as to preclude a transfer of its bargaining rights to an- other labor organization. The Employer contends that the merger created a totally different organization from that which was certified to represent its employees; that the certified Union and members thereof oppose a merger; that the employees did not have the opportunity to vote on the merger; and that, accordingly, a question con- cerning representation exists. Upon the foregoing, we find in agreement with the Employer that a question concerning representation exists. In North Electric Company, 165 NLRB 942 (1967), the Board indicated that it would not grant an amendment to a certifica- tion "where the possibility of a question concerning representation remains open because the change of affiliation took place under circumstances that do not indicate that the change reflected a majority view." In Missouri Beef Packers, Inc., et al., 175 NLRB 1100 (1969), the Board held that where "there is no guaranty of continuity of representation and the certified labor organization is a functioning, via- ble entity, and opposes amendment, [the petition to amend] cannot be granted without doing violence to the purposes of the Act, which include the promotion of stability in labor-management relations." The above-mentioned two cases, unlike the instant case, involved the amendment of certification. However, as we stated in Newspapers, Inc, Publishers of the Austin American, 210 NLRB 8 (1974), those cases in- volving the amendment of certification "set forth the factors deemed significant by the Board in cases in- volving merger, substitution, or change of representa- tive, and clearly indicate that the factor of primary importance is whether the employees have had an opportunity to pass on the change of representative." Although we are aware that the industrial stability sought by the Act would unnecessarily be disrupted if every union organizational adjustment were to re- sult in displacement of the Employer-bargaining rep- resentative relationship and that Congress necessari- ly vested in unions a large measure of discretion in the management of their internal affairs,' we consid- er it of primary importance that the employees in- volved be assured of the continuity of their present organization and representation.' Based on the facts herein, we are not convinced that the employees in- volved enjoy such an assurance. To the contrary, not only were the employees in the affected unit not pro- vided an opportunity to express their approval of the merger, but an overwhelming majority of them signed a petition protesting the merger. Moreover, merger into Local 107 would provide a significant change for the employees in the certified unit since Local 1 consists of approximately 120 members whereas Local 107 has approximately 8,000 mem- bers. Accordingly, based on the above evidence indicat- of the members of the Local, but such referendum is advisory only 3 On July 3, 1975, Bender had written a letter to the International oppos- ing the merger 4 See Canton Sign Co, 174 NLRB 906 (1969) 5 See The Hamilton Tool Company, 190 NLRB 571 (1971), Gulf Oil Corpo- ration, 135 NLRB 184 (1962) 968 DECISIONS OF NATIONAL LABOR RELATIONS BOARD ing the opposition of the certified unit to the merger, and the lack of opportunity for the members of Local 1 to formally express their approval or disapproval of the merger by means of a referendum, we find that a question concerning representation exists. 4. The Employer contends that the appropriate unit is: All field claims specialists, office claims special- ists, field claims representatives, office claims representatives, claims service specialists and es- timators, employed by State Farm Mutual Auto- mobile Insurance Company and State Farm Fire and Casualty Company assigned to Mel- ville, Massepequa, Lake Ronkonkoma and Westbury, Long Island, New York, offices ex- cluding superintendents, all other managerial and supervisory personnel, guards, as defined in the National Labor Relations Act, claim counsel and other professional employees, and all other employees of the Company assigned to said of- fices. The Employer argues that the unit of employees enti- tled to vote in an election to resolve the question concerning representation is properly described in the Employer's petition. The Employer indicates that this petition differs from the most recent clarification in three ways: (1) The names of the towns in which the claims offices are located are different since the addresses have changed; (2) fire company adjusters are also included because the arbitrator in 1970 in- cluded them following a secret card check; both fire and automobile adjusters have been included under both labor contracts; fire company adjusters occa- sionally do the work of automobile company adjust- ers or work together with them and at times they share the same offices; authority to hire and fire au- tomobile and fire company adjusters rest in the same members of supervision; (3) the claims service spe- cialists would also be included in the unit, consistent with the 1973 unit clarification decision which in- cluded the inside adjusters of the automobile compa- ny.' This position was created pursuant to a change in procedures occurring after the last Board certifica- tion. Subsequently, the parties agreed to include this employee in the unit. For reasons cited by the Employer, as set forth above, in support of its proposed unit and since no party has expressed any opposition to such a pro- posed unit,7 we shall direct an election in the follow- ing unit, which we find, is appropriate for the purpos- es of collective-bargaining within the meaning of Section 9(b) of the Act: All field claims specialists, office claims special- ists, field claims representatives, office claims representatives, claims service specialists, and estimators, employed by State Farm Mutual Au- tomobile Insurance Company and State Farm Fire and Casualty Company assigned to Mel- ville, Massepequa, Lake Ronkonkoma, and Westbury, Long Island, New York, offices, ex- cluding superintendents, all other managerial and supervisory personnel, guards, as defined in the National Labor Relations Act, claim counsel and other professional employees, and all other employees of the Company assigned to said of- fices. [Direction of Election and Excelsior footnote omit- ted from publication.] 6 The claims service specialist is an inside adjuster who works for the fire company and performs work similar in scope and nature to that performed by the office claims representative in the automobile company At the hearing, Local I indicated it did not oppose the unit proposed by the Employer Local 107 took no position and has not subsequently taken a position as to the proposed unit