Gannett Newspapers

SALINAS NEWSPAPERS 1007 Salinas Newspapers, Inc., a Division of Gannett Newspapers and San Jose Newspaper Guild Local 98, affiliated with the Newspaper Guild, AFL-CIO, CLC. Case 32-CA-6987 19 May 1986 DECISION AND ORDER By MEMBERS JOHANSEN, BABSON, AND STEPHENS On 11 February 1986 Administrative Law Judge George Christensen issued the attached decision. The General Counsel filed exceptions and a sup- porting brief. The Respondent filed a response. The National Labor Relations Board has delegat- ed its authority in this proceeding to a three- member panel. The Board has considered the decision and the record in light of the exceptions and briefs and has decided to affirm the judge' s rulings, findings,' and conclusions and to adopt the recommended Order. ORDER The recommended Order of the administrative law judge is adopted and the complaint is dis- missed. ' The General Counsel has excepted to some of the judge's credibility findings The Board's established policy is not to overrule an administra- tive law judge's credibility resolutions unless the clear preponderance of all the relevant evidence convinces us that they are incorrect Standard Dry Wall Products 91 NLRB 544 (1950), enfd 188 F 2d 362 (3d Cir 1951) We have carefully examined the record and find no basis for reversing the findings Sharon Chabon, Esq., for the General Counsel. John B. Jaske, of Arlington, Virginia, for the Respond- ent. DECISION STATEMENT OF THE CASE GEORGE CHRISTENSEN, Administrative Law Judge. On 28 and 29 May 1985 I conducted a hearing at Salinas, California, to try issues raised by a complaint issued on 28 February 1985 based on a charge filed by San Jose Newspaper Guild Local 98, an affiliate of the Newspaper Guild, AFL-CIO (the Union) on 4 January 1985. The complaint alleges Salinas Newspapers, Inc., a divi- sion of Gannett Newspapers (Respondent) violated Sec- tion 8(a)(1) and (3) of the National Labor Relations Act (the Act) by interrogating employee Mark Lopez about his and other employees' union activities; telling Lopez his and other employees' union activities and support were futile; threatening Lopez with reprisals if he did not watch and report the union activities of other em- ployees, discharging Lopez for engaging in union activi- ties, and publishing to other employees notice Lopez was discharged for engaging in union activities. The Respondent conceded it discharged Lopez for en- gaging in union activities, denied commission of the other acts just alleged, and contended none of its actions (including the discharge) were violative of the Act be- cause Lopez was a managerial employee. The issues are: (1) whether Lopez was a managerial employee; (2) if not, whether the Respondent committed the acts alleged as independent violations of Section 8(a)(1) of the Act; and (3) if Lopez was not a managerial employee, whether by such commission and the dis- charge, the Respondent violated the Act. The parties appeared by counsel at the hearing and were afforded full opportunity to adduce evidence, to examine and cross-examine witnesses, to argue and to file briefs. Counsel submitted briefs. Based on my review of the entire record, observation of the witnesses, perusal of the briefs and research, I enter the following FINDINGS OF FACT' 1. JURISDICTION AND LABOR ORGANIZATION The complaint alleges, the answer admits, and I find at all pertinent times the Respondent was an employer en- gaged in commerce in a business affecting commerce and the Union was a labor organization within the meaning of Section 2 of the Act. 11. THE ALLEGED UNFAIR LABOR PRACTICES A. The Managerial Employee Issue 1 Facts The Respondent publishes a daily newspaper called "The Californian" for distribution in Salinas and the sur- rounding areas Seventy-five percent of its revenues are derived from advertising. The Respondent hired Mark Lopez as a district sales (circulation) manager in April 1978. When the Respond- ent's credit manager left its employ in late 1979, Lopez applied for and was transferred to that position. He re- tained that position until his 27 December 1984 dis- charge. The job description for the credit manager position reads Job Title Credit Manager Report to: Controller Responsibilities: 1. Assume responsibility of accounts receivable classified and display accounts. 2 Process credit applications 3. Make collection calls on delinquent accounts both classified and display ' The following factual findings are based on a consideration of the record as a whole While every apparent or nonapparent conflict in the evidence has not been specifically resolved, any testimony in the record which is inconsistent with my factual findings is discredited on the basis of my observation of the witnesses' demeanor, evaluation of the reliabil- ity of their testimony, and the entire record 279 NLRB No. 142 1008 DECISIONS OF NATIONAL LABOR RELATIONS BOARD 4. Process accounts both classified and display for small claims court procedures. 5. Process check problems. a. NSF checks. b. Closed account. c. Refer to maker. 6. Assign delinquent accounts to local collection agencies. 7. Review bankruptcy petitions. a. File applications of executory contract. b. File proof of claim. 8. Perform such other duties as may be assigned. The Respondent had the following credit and collec- tion policies: Credit Policy 1. Granting Credit to an Advertiser A. No credit will be granted to an advertiser that does not have an existing account with The Califor- nian until a fully prepared credit application is re- ceived, processed and approved by the Credit Man- ager. All advertising run prior to approval of the advertiser's credit application will be cash with copy Any transient ad with a cost of $752 or more must be paid in advance or the advertiser must pre- pare a mini-application and wait until the applica- tion is checked and approved. s s s D. The Credit Manager will verify the advertis- er's credit references either by telephone, or in writ- ing, or both. Particularly desired are references of other newspapers within the state of California. E. The Credit Manager will process the advertis- er's credit application as rapidly as possible. Upon approval of the credit application, the Credit Man- ager will notify the advertising rep that credit ad- vertising may begin. The Advertising Director will be notified in writing when credit is denied. J. Payment will be requested for all over-the- counter transient ads, display or classified. K. Each advertising account in display and classi- fied commercial advertising will be assigned a credit limit based on both average monthly usage and contract value. .. . Collection Policy It is the responsibility of the credit department to collect monies due for advertising. General Collection Schedule: Certain accounts may be handled differently, but the following is a general outline of The Californian collection efforts: 30 days - 1. New customers are sent a letter and go on credit control. 2 This amount was adjusted periodically It was $85 at the time Lopez was discharged and $86 50 at the time of the hearing 2. Established customers receive a polite re- minder letter and a phone call. 3. New customers receive a phone call to es- tablish repayment dates and resume advertising. Established customers will receive a weekly call until the past due becomes current. 4. One time only advertisers receive a letter and a reminder phone call. 60 days - 1. Established customers will receive notification and go on credit control. 2. Established customers will receive stronger collection call and arrangements will be made for repayment before any advertising continues. 90 days - 1. All customers will receive a rigor- ous schedule of phone calls requesting pay- ment. . . . Negotiating payments and accepting partial and time payments: Under unique circumstances adver- tisers may be allowed special payment privileges. Sincerity and regular payment performance by the account will influence the decision to allow adver- tising to continue with cash in advance plus pay- ments on the old balance. Such arrangements will be monitored closely by the Credit Manager. The Advertising Director will be notified of any default by an account and all ad- vertising privileges will be suspended. During the 5 years Lopez was the Respondent's credit manager, each month he processed 20-25 applications for credit to run display ads and each day he processed 10- 12 requests for credit to run classified ads. The display advertising applications ranged from appli- cations to run $100 of display advertising per month on credit to applications to run $3000 of display advertising per month on credit, with an average request for a $1500 monthly credit. Thus each month Lopez processed appli- cations for display advertising credit valued at $30,000- $37,500 ($360,000-$450,000 per year). The requests for credit to run classified ads ranged from requests to run $86.50 in classified advertising on credit3 to $600. Using an average figure of $300, this meant each day Lopez processed requests for credit to run classified advertising valued between $3000-$3600 ($60,000-$72,000 per month and $720,000-$864,000 per year). As his job description states, each application for dis- play credit was sent to Lopez for review, he secured any additional information necessary to complete the applica- tion from the applicant, obtained a credit report from the local credit bureau, verified by telephone the credit ref- erences set out in the application, reviewed the informa- tion, decided whether or not to approve it, and stamped it either "approved" or "disapproved." When he had several processed applications, he placed them in a folder on the controller's desk. The controller made a cursory examination of the contents of the folder and returned 3 The sellers of classified ads were authorized to approve running clas- sified ads on credit valued at $86 50 or less at the time of the hearing Lower figures prevailed in prior years The running of a classified ad on credit valued in excess of the specified figure required Lopez' approval SALINAS NEWSPAPERS 1009 the folder to Lopez, with any comments he felt were warranted.4 During Fischer's tenure, his review of the contents of each folder took 2-3 minutes and he never changed or overruled any of Lopez' decisions whether credit should or should not be extended.5 Lopez utilized what were called "mini-applications" when an applicant for credit to run display advertising made his request for credit a short time before the adver- tising he ordered was scheduled to run; in those cases, Lopez or the salesperson would have the applicant supply a lesser amount of information than the regular form required, Lopez would make a quick (telephone) check of the credit history provided (particularly wheth- er the applicant timely paid for advertising in other newspapers and what the credit bureau reported) and im- mediately either disapproved or approved credit for a run of the ad, using his personal credit card. 6 Although Lopez testified he was not authorized to nor ever ex- tended the Respondent's credit for an advertising order exceeding the ceiling in effect for classified advertising salespersons and that he was not authorized to and never extended the Respondent's credit for display advertising in the rush situation just described (when time did not permit processing a complete credit application) without the controller's review and approval, all other witnesses (Fischer, other executives, and advertising salespersons) plus documentary evidence established Lopez processed all and only credit applications or requests for credit ad- vertising valued in excess of the ceiling and regularly au- thorized or denied credit without consulting with Fischer or anyone else.7 I therefore find at least during the last 2 years of his employment Lopez, without prior authoriza- tion by anyone else, regularly processed and either ap- proved or disapproved applications to run display adver- tising on credit in amounts exceeding $85 and ranging between that figure and $3000. As his job description states, following the disapproval of any application to run display advertising on credit, Lopez notified the advertising director, the salesperson who was handling the applicant's account, and the appli- cant of the credit denial and that payment in advance of each run would be required. Concerning approved appli- cations, Lopez prepared a plastic credit card containing the applicant's identity and the dollar value of display advertising he would be permitted to run each month on credit, delivered the card to the salesperson who handled the applicant's account, and notified the applicant his ap- plication had been approved. Turning next to customer requests to run classified ad- vertising valued in excess of the ceiling on credit and re- 4 Lopez worked under three controllers, the,last one he worked under was John A Fischer (for Lopez' last 2 years on the job) This finding is based on Fischer's testimony 5 Fischer stated he relied on Lopez' expertise and felt no need to make a full review or any changes 6 Lopez, the advertising director, and the managers of the display ad- vertising department and the classified advertising department possessed plastic credit cards in their names for imprinting advertising orders to run on a credit basis All other credit cards contained the name and credit limit of each advertiser to whom credit was extended It was the Re- spondent's policy to permit advertising to run on credit only if the order therefore carved the imprint of one of the plastic credit cards 9 This finding is based on the mutually corroboratory testimony of all the witnesses other than Lopez and supporting documentation quests by out-of-town advertisers to run classified adver- tising on credit, the classified salesperson who received the order prepared a printout or "insertion" showing the proposed ad, attached to the insertion the identity of the customer and the value of the ad, and brought it to Lopez. Lopez ran a quick check of the customer (to see if he had run and timely paid for any previous ads, what his credit history was, etc.), wrote either "approved" or "disapproved" on the printout with his initials, and re- turned the insertion, along with his plastic credit card, to the salesperson to imprint his card on the order. He usu- ally processed the request while the salesperson stood alongside his desk.8 As his job description indicates, Lopez also was re- sponsible for monitoring delinquent accounts and seeking to collect the amounts owed . He sent a letter series to each delinquent demanding payment in successively stronger terms (after 30-60-90 days of delinquency or nonpayment) and made telephone calls pressing for pay- ment. He secured monthly printouts showing all delinquent accounts and attended monthly meetings with the top management team , where he distributed copies of the printout to each person attending the meeting, gave a reports on the status of each account, and made appro- priate recommendations. 10 About 90 percent of his rec- ommendations were adopted.I I Following the cancellation of a delinquent 's credit, Lopez notified the salesperson handling the delinquent's account of the cancellation, and secured and destroyed the delinquent's plastic credit card.12 As noted earlier, occasionally Lopez suspended credit and picked up credit cards between meetings of the management team. In several instances, Lopez yielded to representations by a salesperson he or she could secure payments on a delinquent account and left the credit card in the sales- person's possession for use in extending further credit, without checking with or securing the concurrence of anyone else, even though the management team had or- dered a credit cutoff and collection action.13 Lopez personally filed claims against delinquents in small claims court, appeared and presented evidence sup- porting the claims, sought asset disclosure after judgment was entered, and levied against the assets disclosed to a Lopez conceded the testimony of Classified Advertising Manager Pam Dozier and Preprint Coordinator July Lazarus to that effect was ac- curate and correct 9 Lopez sometimes reported he suspended credit on certain delinquent accounts since the last meeting 10 Cancellation of further credit, write-off of the account (an account- ing entry), referral to a collection agency, filing suit in small claims court, etc ,, The publisher explained although Lopez' recommendation of credit cancellation, write-off, and collection appeared warranted, information within the personal knowledge of one of the members of the management team or special circumstances (such as the identity of the delinquent or his standing in the community) sometimes prompted delaying the recom- mended action while a member of the team sought payment , that testimo- ny is credited iz The credit cards were kept by the salespersons at their desks and utilized by them to imprint the advertising orders placed by their custom- ers 13 Lopez conceded the accuracy of a salesperson's testimony he so acted on occasion 1010 DECISIONS OF NATIONAL LABOR RELATIONS BOARD satisfy the judgments.14 The Respondent established a checking account in Lopez' name for his use in paying filing charges, service fees, and related expenses. Lopez received a commission (over and above his regular wages) on the moneys he succeeded in collecting. Lopez and other employees, some admittedly in super- visory capacities, were designated "associates," hourly paid, received time and one half for work in excess of 40 hours per week, received the same meal and break peri- ods, complied with a uniform dress code, mingled at common leisure facilities, and were on a local payroll. 15 2. Analysis and conclusions In 1974 the Supreme Court affirmed "The Board's ex- clusion of managerial employees, defined as those who `formulate, determine and effectuate an employer's poli- cies' [American Federation of Labor, 120 NLRB 973 at 978 (1958)], and 'those who have discretion in the per- formance of their jobs, but not if the discretion must conform to an employer's established policy' [Eastern Camera, 140 NLRB 569 at 571 (1963)]."16 The court went on to state "The question whether particular em- ployees are 'managerial' must be answered in terms of the employee's actual job responsibilities, authority and relationship to management." 416 U.S. 267 at 290. In a later decision closely resembling this one, 17 after stating the evidence disclosed Simplex's credit manager (Ford) established and reviewed lines of credit for his employer's customers; utilized guidelines accepted in the credit industry such as Dun and Bradstreet reports in his initial determination; made whatever inquiries he thought warranted; evaluated the information he received; decid- ed whether to extend credit and in what amount; had no ceiling other than his determination of the amount he thought should be granted; consulted Simplex's control- ler if the customer requested more than he thought war- ranted; denied and revoked credit, had the controller review his decision to deny or revoke credit if the revo- cation or denial interfered with a sale and the salesperson objected; prepared monthly credit and delinquency re- ports, and handled collection efforts, the Board stated: The Supreme Court and the Board, in determin- ing managerial status, weigh the facts elicited to de- termine whether or not the persons at issue are in- volved in the formulation, determination and effec- tuation of management policies by expressing and making operative the decisions of the employer, and whether they have discretion in the performance of their job duties independent of their employer's es- tablished policies. [243 NLRB at 111.] 14 Lopez referred delinquencies exceeding the limits for small claims actions ($1500) to collection agencies and monitored their collection ef- forts is The "management team" was salaried and paid from corporate headquarters out of state 16 NLRB v Bell Aerospace Co, 416 U S 267, 288 (1974) 1' Simplex Industries, 243 NLRB 111 (1979) Also see ACF Industries, 145 NLRB 403 (1963), Eastern Camera, 140 NLRB 569 (1963), and Diana Shop Spokane, 118 NLRB 743 (1957) When considering the managerial status of credit managers and other employees who are in a posi- tion to extend the credit of their employers, we place principal reliance on the independence with which said employees exercise their discretion. [243 NLRB at 112.] Applying that standard to the facts, the Board stated: Ford gathers data and unilaterally decides wheth- er or not to extend credit, determines the amount to be extended, and also determines when credit is to be revoked. His sole limitation, as would be expect- ed, is industry-established criteria of proper credit practices. This limitation does not preclude him from being a managerial employee, for his discre- tion is not narrowly circumscribed by his Employ- er's set policies and guideline. Therein lies the criti- cal distinction. Accordingly, we find that Ford is a managerial employee . . . [243 NLRB at 112 ] In this case Lopez possessed and exercised discretion- ary powers to extend or deny credit to his Employer's customers in substantial amounts, he was solely reponsi- ble for administering his Employer's collection efforts (for which effort he received extra commission income and the authority to disburse checks on his signature alone), and he effectively recommended and accom- plished credit cutoffs and account write-offs. I find, on the basis of the foregoing, that all pertinent times Lopez was a managerial employee within the meaning of the Act. CONCLUSIONS OF LAW 1. At all pertinent times the Respondent was an em- ployer engaged in commerce in a business affecting com- merce and the Union was a labor organization within the meaning of the Act. 2. At all pertinent times Mark Lopez was a managerial employee of the Respondent within the meaning of the Act. 3. The Respondent did not violate Section 8(a)(1) and (3) of the Act by discharging Lopez for engaging in union activities. 4. Even assuming valid evidence established the Re- spondent interrogated Lopez about his and other em- ployees' union activities, told Lopez his and other em- ployees' union activities and support were futile, threat- ened Lopez with reprisals if he did not watch and report the union activities of other employees, and published to other employees a notice stating Lopez was discharged for engaging in union activities, the Respondent never- theless would not have violated the Act. I" 18 No evidence established any employee other than Lopez was aware of the alleged interrogation , expression of futility, threat and instruction to watch and to report, so because Lopez was a managerial employee un- protected by the Act, such actions would not be violative of the Act With respect to the notice, I conclude because the notice truthfully ad- vised employees Lopez was discharged because he violated a policy pro- hibiting managerial employees from engaging in union activities, its publi- cation would not violate Sec 8(a)(l) of the Act SALINAS NEWSPAPERS On these findings of fact and conclusions of law and on the entire record , I issue the following recommend- ed19 ORDER The complaint is dismissed in its entirety. 1011 19 If no exceptions are filed as provided by Sec 102 46 of the Board's Rules and Regulations , the findings, conclusions, and recommended Order shall, as provided in Sec 102 48 of the Rules be adopted by the Board and all objections to them shall be deemed waived for all pur- poses