Ernst & Ernst National Warehouse

590 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Ernst & Ernst National Warehouse and District Lodge 54 of the International Association of Machinists and Aerospace Workers, AFL-CIO, Petitioner. Case 8-RC-10461 March 7, 1977 DECISION AND DIRECTION OF ELECTION BY CHAIRMAN MURPHY AND MEMBERS FANNING AND JENKINS Upon a petition duly filed under Section 9(c) of the National Labor Relations Act, as amended, a hearing was held before Hearing Officer James M. Hehnen on November 3, 1976. Subsequent to the hearing, the Employer filed a brief with the National Labor Relations Board. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the National Labor Relations Board has delegated its authority in this proceeding to a three-member panel. The Board has reviewed the Hearing Officer's rulings made at the hearing and fmds that they are free from prejudicial error. They are hereby affirmed. Upon the entire record in this case, including the brief,l the Board finds: 1. District Lodge 54 of the International Associa- tion of Machinists and Aerospace Workers, AFL- CIO, Petitioner herein, has filed a representation petition seeking an election to determine the bargain- ing representative of certain employees of the Employer. The Employer requests that the petition be dismissed, arguing that the Board should not assert jurisdiction over operations of its type; i.e., independent certified public accounting firms. The Employer cites three grounds for this request: first, its operations do not sufficiently affect interstate commerce to legally warrant the exercise of jurisdic- tion; second, under Section 14(c)(1) of the Act the insignificant effect on commerce of a labor dispute involving employers of this type would justify the Board's discretionary decision to decline jurisdiction; and, third, due to practical considerations it would not effectuate the policies of the Act to assert jurisdiction. The evidence reveals the following: Ernst & Ernst, a general partnership, is an independent certified public accounting firm with over 100 offices in approximately 40 States, including a national office t The Employer's request for oral argument is hereby denied as the record and the Employer's brief adequately present the issues and positions of the parties 2 Sec 14(c)(1) of the Act provides. The Board, in its discretion, may, by rule of decision or by published rules adopted pursuant to the Administrative Procedure Act, 228 NLRB No. 68 and headquarters in Cleveland, Ohio. It is primarily engaged in the business of providing accounting and auditing services to its clients. Lesser operations include general tax services and management con- sulting. The Employer's national supply department, the department containing the employees involved herein, is located in Cleveland, Ohio, and is solely an internal operation of Ernst & Ernst. It provides local offices with printing and mailing services and general office supplies. This department additionally func- tions as a library and distribution center for internal Ernst & Ernst publications. The parties have stipulated that the Employer has received gross revenues in excess of $10 million during the last fiscal year, including $ 1 million in gross revenues from clients who meet the Board's direct inflow or direct outflow standard for jurisdic- tion. It has also been stipulated that the national supply division in the previous fiscal year has purchased $45,000 in goods from vendors located outside the State of Ohio, and $200,000 in goods from vendors located within the State of Ohio, who purchased directly those goods from sources outside the State of Ohio, and which goods were shipped from the manufacturer directly to the national supply department. Since the national supply department is an integral part of Ernst and Ernst, an accounting firm, the threshold question is whether the Board can or should assertjurisdiction over such employers. It is clear that under any monetary jurisdictional standard used by this Board we have sufficient authority to exercise jurisdiction over this Employer. A further issue involving jurisdiction and argued by the Employer is whether the Board should exercise its discretionary powers and refrain from asserting jurisdiction herein. The crucial consideration is to determine whether or not the existence of a labor dispute involving employers of this type would have a substantial effect on interstate commerce as provided in Section 14(c)(1) of the Act.2 While it is true that accounting firms do not provide the economy with a tangible product, it would be unreasonable to conclude, simpliciter, that labor disputes involving firms of this type would not affect commerce. Throughout its existence the Board has exercised jurisdiction over employers whose 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. ERNST & ERNST NATIONAL WAREHOUSE 591 primary activity is the rendering of services, not the production of goods.3 Furthermore, it is manifest that the services provided by accounting firms are directly and inextricably related to the efficient functioning of commercial activity in this country.4 Accountants are not expendable and superfluous appendages, but provide employers with essential financial informa- tion and analysis. Their determinations establish, for example, the solvency, profitability, and general economic health of business enterprises. Access to such information is indispensible prior to the rendering of most types of commercial decisions. The ability to substitute the services of one accounting firm for another is not material. N.L.R.B. v. Bradford Dyeing Association, 310 U.S. 318, 326 (1940). Under Section 14(c)(1) of the Act the Board is charged with considering the effect of a labor dispute involving not just a single employer, but an entire class or category of employers. See also Polish National Alliance of the United States of North America v. N.L.R.B., 322 U.S. 643, 648 (1944). For the above reasons, we conclude that the disruption of services provided by account- ing firms would have a substantial impact on commerce.5 Finally, the Employer contends that there exist practical considerations of sufficient gravity to warrant a discretionary denial of jurisdiction. The Employer asserts that the existence of a detailed professional code for accountants and the applicabil- ity of Securities and Exchange regulations provide extensive control over the conduct of accounting firms and their employers. The Employer raises the specter that, if Board jurisdiction were to be exercised, the Employer would be forced to make public information which would violate the provi- sions of the professional code, and in other ways be forced to act in conflict with governmental and professional regulations. We find this argument to be without merit. First, this Board has already held that pervasive regulation of an enterprise through Federal securities laws and regulations does not preclude the exercise of jurisdiction by this Board. Harold P. Goodbody, et al., d/b/a Goodbody and Co., 182 NLRB 81 (1970). Second, it has been settled long ago that accountants are employees subject to the jurisdiction 3 Dun & Bradstreet, Inc., 80 NLRB 56 (1948) (financial reportin service); The New York Board of Fire Underwriters, 193 NLRB 551 (19711 (fire inspection services); American Automobile Association, Wisconsin Division, 183 NLRB 48 ( 1970) (insurance company); and Amalgamated Bank of New York, 92 NLRB 545 (1950) (bank). The Board has also exercised jurisdiction over employers providing services wholly unrelated to the facilitation of commercial activity in goods. Cornell University, 183 NLRB 329 (1970) (universities); The American League of Professional Baseball Clubs, 180 NLRB 190 (1969), enfd. 429 F.2d 1803 (C.A. 2, 1970) (baseball clubs), and Sec. 103.2, Board's Rules and Regulations, Series 8, as amended (symphony orchestras). 4 Respondent relies on Bodle, Fogel, Julber, Reinhardt & Rothschild 206 NLRB 512 (1973), to support its claim that it should not be subject to the Board's jurisdiction. We do not find this case to be controlling. of the Act,6 as are employees who audit the finances of other employers and individuals.? Therefore, the existence of a professional code for accounting employees has not in the past acted as a bar to the assertion of the Board's jurisdiction, and the Em- ployer has failed to provide us with sufficient reason to overturn this policy. In view of the foregoing, we conclude that the Employer 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 Petitioner is a labor organization within the meaning of the Act which claims to represent certain employees of the Employer. 3. A question affecting commerce exists concern- ing the representation of the employees of the Employer within the meaning of Sections 9(c)(1) and 2(6) and (7) of the Act. 4. The Petitioner seeks a unit of all employees in the Employer's national supply department. The Employer contends that all employees in this department are "confidential" employees and conse- quently the unit petitioned for is inappropriate. From the record, it appears that the employees in the petitioned-for unit are employed in the publication, storage, or distribution of such items as a national client roster, financial reports to clients, a salary administration manual, and an internal administra- tive manual. To conclude from these duties that these employees are confidential employees is to give an unduly broad reading to the term "confidential." The mere handling of or access to confidential business or labor relations information is insufficient to render an employee "confidential"; as the Board has defined this term. Instead, we look not to the confidentiality of information within the employee's reach, but to the confidentiality of the relationship between the employee and persons who exercise "managerial" functions in the field of labor rela- tions.8 There is no evidence that any of the employees in the proposed unit stand in a confiden- tial relationship to such persons. On the basis of the foregoing, the parties' stipulation, and the entire record, we find that the following employees of the Employer constitute a unit appropriate for the purposes of collective bargaining within the meaning of Section 9(b) of the Act: 5 In reaching this conclusion, we note that this is not the first time the Board has asserted jurisdiction over employers whose primary service is the processing of financial information. Dun & Bradstreet, Inc., 80 NLRB 56 (1948); Dun & Bradstreet, Incorporated 194 NLRB 9 (1971). 6 Southern Alkali Corporation, 84 NLRB 120 (1949). Accord: Aeronca, Inc., 221 NLRB 326 (1975). 7 Hudson Motor Car Company, 55 NLRB 509 (1944); Fairfax Family Fund Inc., a wholly owned subsidiary of Spiegel, Inc., 195 NLRB 306 (1972). 8 This definition of confidential employees, first formulated in Ford Motor Company (Chicago Branch), 66 NLRB 1317 (1946), has been reaffirmed recently in Flintkote Company, 217 NLRB 497 (1975). See also Aeronca, supra 592 DECISIONS OF NATIONAL LABOR RELATIONS BOARD All full-time and regular part-time employees of al employees, guards and supervisors as defined National Supply Department, Ernst & Ernst, in the Act. including pressmen, shipping clerks, mail clerks, duplication operators, bindery operators , publica- [Direction of Election and Excelsior footnote tions workers, and maintenance employees, but omitted from publication.] excluding all office clerical employees , profession-