Allstate Insurance Co.

National Labor Relations Board - Board Decisions

Sep 29, 2000

332 N.L.R.B. 759 (N.L.R.B. 2000)

ALLSTATE INSURANCE CO. 759
Allstate Insurance Company and Carolyn Penzo.
Case 10–CA–29184
September 29, 2000
DECISION AND ORDER
BY MEMBERS FOX, LIEBMAN, AND HURTGEN
On March 25, 1997, Administrative Law Judge William
N. Cates issued the attached bench decision. The Respon-
dent filed exceptions and a supporting brief.
The National Labor Relations Board has delegated 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 brief and has decided to affirm
the judge’s rulings, findings, and conclusions to the extent
consistent with this decision, and to adopt the recom-
mended Order.
The judge found that Charging Party Carolyn Penzo was
an employee within the meaning of the Act, and that a
disciplinary warning issued to her by the Respondent in-
fringed on her Section 7 rights and violated Section
8(a)(1). The primary issue before us is whether Penzo was
in fact an employee within the meaning of the Act, rather
than a manager or a supervisor.1 If she were either of the
latter two, she would be excluded from the Act’s coverage.
The Respondent, as the party seeking to exclude an indi-
vidual from the protection of the Act, has the burden of
proof concerning both issues.2
1. Background and the judge’s decision
The Respondent sells insurance and related products and
services throughout the United States and in Canada. Dur-
ing the fall of 1995, the relevant time period in this case,
and for several years beforehand, Penzo worked for the
Respondent as a “Neighborhood Office Agent” (NOA),
selling the Respondent’s insurance policies from a store-
front office in Alpharetta, Georgia.
The record does not yield a precise definition of the
NOA job position. The Respondent describes the NOA
Program as allowing

agents, with Company guidance, to participate in the
selection of their own office site, and to select clerical
and solicitor assistance. At no cost to the NOA,
Allstate provides a sign with the NOA’s name and
phone number, furniture, basic supplies, business
forms and an office expense allowance for rent, main-
tenance, utilities, clerical and solicitor assistance, ad-
ditional furniture and equipment along with some
other necessary business expenses. . . . Here’s a pro-
gram that allows you to participate in running your
own show, and Allstate provides support and assis-
tance—a real winning combination.

1 The Respondent conceded, and the judge found, that she was not
an independent contractor. Thus, no independent-contractor issue is
before us.
2 See, e.g., Ferguson-Williams, Inc., 322 NLRB 695, 702 (1996)
(supervisory exclusion sought); University of Great Falls, 325 NLRB
83, 93 (1997) (managerial exclusion sought).
[R. Exh. 16(a), “What Is An NOA?” p. 1.] It is clear
that, under the Respondent’s program, a NOA does not
have and cannot gain any proprietary interest in the busi-
ness. Rather, the office’s “Book of Business”—essentially
the business file of clients and their insurance contracts—
is owned entirely by the Respondent.
The Respondent’s office expense allowance only covers
the cost of “some” business expenses. The NOA decides
what expenses to incur within the limited allowance and
pays any additional expenses out of her own pocket. A
NOA is free to invest her own funds in the storefront con-
cern in order to further support the cost of doing business
and to enhance business opportunities. A NOA’s earnings
are based on a minimal salary—Penzo’s was $8800 annu-
ally—and the commissions generated by the sale of the
Respondent’s insurance. Commissions naturally vary with
the success or failure of the business.
According to Penzo, she contributed $200,000 of her
own money to the business between 1989 and 1995, with
virtually nothing but debts to show for it. She was critical
of the terms and conditions of her employment. Her criti-
cisms became public knowledge after she and other of the
Respondent’s employees were interviewed and an article
reporting her views of the NOA program appeared in For-
tune magazine on October 2, 1995. Specifically in re-
sponse to her role in the article, the Respondent issued a
“job-in-jeopardy” disciplinary warning to her on October
19, 1995. The warning stated that her job was at risk be-
cause of her unauthorized contact with the news media.
This unfair labor practice proceeding followed. The
complaint alleged that Penzo was an employee of the Re-
spondent whose rights were protected by Section 7 of the
Act, that her participation in the magazine article was con-
certed activity protected by Section 7, and that the disci-
plinary warning violated Section 8(a)(1). At the hearing,
the Respondent asserted, inter alia, that Penzo was a su-
pervisor or a managerial employee, and thus excluded
from the Act’s coverage.
The judge found that Penzo was neither a supervisor nor
a managerial employee. On the supervisory issue, he
found that Penzo, as a NOA, did possess the kind of au-
thority set forth in Section 2(11), especially the power to
hire and fire the employees who may assist her in the of-
fice. However, he also opined that some exercise of this
authority within a reasonable period of time before the
commission of the alleged unfair labor practice was re-
quired to find an individual to be a statutory supervisor.
332 NLRB No. 66
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 760

He noted that Penzo had not exercised her authority from
1991 or 1992 up to the time of the disciplinary warning in
October 1995, because she had had no employees to su-
pervise during that time. Accordingly, he concluded that
she was not a statutory supervisor.
Concerning Penzo’s asserted managerial status, the
judge found that, through the policies and procedures
guiding its NOA program, the Respondent tightly con-
trolled all important aspects of her operation of the busi-
ness. In his view, therefore, the Respondent had denied
Penzo the kind of discretionary authority that marks a
managerial employee.
Having rejected the managerial and supervisory conten-
tions, the judge concluded that Penzo was a statutory em-
ployee entitled to the rights set out in Section 7. He found
that her role in criticizing the employment conditions of
NOAs in the Fortune article was protected concerted activ-
ity within the meaning of Section 7, because other indi-
viduals similarly situated in the Respondent’s employ also
participated in the article.3 Accordingly, he concluded that
the Respondent’s “job-in-jeopardy” warning, admittedly
issued in reaction to the article, violated Section 8(a)(1).
2. Discussion
Although we adopt the judge’s conclusion that the Re-
spondent violated the Act, we do so on the basis of a dif-
ferent analysis of the issues of supervisory or managerial
status. (As noted above, at fn. 1, no issue of independent
contractor status is before us.)
With respect to supervisory status, the rule is clearly es-
tablished in Board precedent that possession of authority
consistent with any of the indicia of Section 2(11), not the
exercise of that authority, is the evidentiary touchstone.
See, e.g., Pepsi-Cola Co., 327 NLRB 1062 (1999).4 The
absence of any exercise of the authority for a sustained and
lengthy period—3 to 4 years in this case, as the judge em-
phasized—raises a question whether the alleged supervisor
does in fact possess statutory supervisory authority. How-
ever, we find it unnecessary to pursue that line of inquiry

3 In agreeing with the judge that Penzo’s role in the magazine article
was “concerted” under Sec. 7, we note that her uncontradicted testi-
mony and the article itself establish that she participated at least in part
in order to alert other NOAs—there were thousands employed by the
Respondent at the time—of the pitfalls she perceived in the NOA pro-
gram. In this way, she was initiating or inducing group action, and her
conduct was accordingly concerted. See, e.g., Compuware Corp., 320
NLRB 101, 103 (1995), enfd. 134 F.3d 1285 (6th Cir. 1998).
4 Sec. 2(11) defines a “supervisor” as:
any individual having authority, in the interest of the employer, to
hire, transfer, suspend, lay off, recall, promote, discharge, assign,
reward, or discipline other employees, or responsibly to direct them,
or to adjust their grievances, or effectively to recommend such ac-
tion, if in connection with the foregoing the exercise of such author-
ity is not of a merely routine or clerical nature, but requires the use
of independent judgment.
in this case. Instead, we assume arguendo that Penzo pos-
sessed the kind of authority described in Section 2(11).
On the managerial question, we disagree with the judge
that the Respondent’s control of the NOA program so se-
verely limited Penzo’s conduct of the business that she had
no significant discretion in her decisionmaking. On our
review of the record, and as described below, we find that
Penzo’s day-to-day discretionary authority was consider-
able, albeit defined by the broad parameters of the Re-
spondent’s program.
With respect to both of these issues, the decisive ques-
tion is: given the characteristics of both supervisory and
managerial status inherent in her job, in whose interest did
Penzo act in running her office?
a. Supervisory status
In defining what constitutes a statutory supervisor, Sec-
tion 2(11) requires that such an individual have authority
“in the interest of the employer.” In Tiberti Fence Co.,
326 NLRB 1043 (1998), the Board considered the “inter-
est of the employer” requirement in concluding that a
group of foremen were not exercising the authority of
statutory supervisors when they recommended that their
helpers be given wage increases. The Board noted that the
wages paid to each helper were subtracted from the pay of
the foreman with whom the helper worked. Thus, imple-
mentation of a recommended wage increase meant that the
helper would receive a larger portion of the foreman’s pay.
In these circumstances, the Board found that the foremen’s
wage recommendations were not rooted in the interest of
their employer, but were made primarily in their own in-
terest to ensure a harmonious, continuing work relation-
ship with their helpers.
Similarly, in Distillery Workers v. NLRB, 298 F.2d 297,
302–305 (D.C. Cir. 1961), cert. denied 369 U.S. 843
(1962), enfg. 127 NLRB 850, 858–861 (1960), the court
found that 2(11)’s “interest of the employer” requirement
was not satisfied where driver-salesmen had the authority
to hire helpers if they so desired but only at a cost of re-
ducing their own pay. The Court reasoned:

In no meaningful sense was their exercise of authority
“in the interest of the employer.” On the contrary, we
see the record before us demonstrating that the driver-
salesmen were motivated by and were acting in their
own interest. Engaging the helpers had the effect of
reducing the manual burdens of the driver-salesmen,
expediting the service to their route customers, and
increasing their potential for higher commissions,
even to the point of their foregoing $15 each week
which otherwise they would have received.

ALLSTATE INSURANCE CO. 761
Id. at 304.5 See also Wells Dairies Cooperative, 109
NLRB 1450, 1451–1452 (1954) (finding driver-salesmen
not to be supervisors, notwithstanding their authority to
hire and fire personal helpers, where the amount of the
helper’s pay is deducted from the driver-salesman’s com-
mission, with the employer making up the difference if the
commission was insufficient to cover the cost).
The record shows that a NOA like Penzo has complete
discretion whether to work alone or to engage support staff
to assist her.6 The amount available to the NOA from the
office expense allowance supplied by the Respondent is
based on a formula keyed to office sales in the previous
year, and does not rise or fall depending on the number of
assistants hired in the current year. Accordingly, a NOA
can engage assistants, or agree to raise their wages, only at
the risk of exceeding her allowance and having to pay her
assistants’ wages out of her own pocket. If she chooses
not to engage personal assistants–the choice Penzo made
for more than 3 years—she is able to cover more of her
rent, equipment, and other expenses out of the limited of-
fice expense allowance that the Respondent provides her.
Consistent with the precedent discussed above, we find
that the supervisory authority that Penzo possesses over
any assistants she may hire would be exercised principally
in her own interest. The decision whether to have staff at
all is entirely within her discretion. Her choice would be
informed by her own determination whether adding assis-
tants would enhance the profitability of the office, and
accordingly her sales commissions. Her day-to-day su-
pervision of the assistants, as well as her decision to raise
or lower their pay, would be driven by this same motive.
Depending on the financial circumstances, she may find it
necessary or desirable to commit her own funds to pay for
her assistants. In these circumstances, we conclude that
Penzo would not be acting in the interest of the Respon-
dent with respect to assistants employed at her office, and
therefore she would not supervise them within the mean-
ing of Section 2(11).
In our judgment, the optional use of assistants at the
NOA’s own financial risk is the factor that distinguishes
this case from those that have rejected arguments that pu-
tative supervisors were not exercising 2(11) authority “in
the interest of the employer.” For example, in NLRB v.

5 The Court noted that the employer also contributed to the helper’s
wages but in a lesser amount, $12, than the driver-salesmen did. Id.
6 If a NOA elects to have assistants, she must comply with various
restrictions imposed by the Respondent. For example, both clerical
assistants and sales assistants (so-called “sales producers”) must be
placed on the payroll of an approved employment agency, which then
bills the expense of the support staff to the NOA. In addition, because
sales producers can bind the Respondent legally in contracts of insur-
ance, all such assistants must be approved by the Respondent as a con-
dition of their employment.
Health Care & Retirement Corp., 511 U.S. 571 (1994), the
Supreme Court rejected the Board’s holding that a nurse’s
supervisory authority is not exercised in the interest of the
employer “if it is incidental to the treatment of patients.”
Id. at 576–584. Critical to that outcome, in our opinion,
was the Court’s finding that “[p]atient care is the business
of a nursing home, and it follows that attending to the
needs of the nursing home patients, who are the em-
ployer’s customers, is in the interest of the employer.” Id.
at 577. That holding reflected the Court’s more general
conclusion that 2(11)’s “interest of the employer” re-
quirement is satisfied where the supervisory duties at issue
“are a necessary incident to the production of goods or the
provision of services.” Id. at 580. That is not the case
here. Whether a NOA serves customers with or without
personal assistants is up to her. No essential component of
the Respondent’s business is altered if a NOA decides to
work alone, and it simply does not follow that, in making a
decision to engage assistants at her own financial risk, a
NOA is exercising an authority that the Respondent dele-
gated for use solely in its interest.
Deaton Truck Lines, Inc. v. NLRB, 337 F.2d 697, 699
(5th Cir. 1964), cert. denied 381 U.S. 903 (1965), affg.
143 NLRB 1372, 1378 (1963), is similarly distinguishable
from this case. There the Court sustained the Board’s
finding that “multiple owner drivers” were supervisors and
rejected a union claim that these drivers exercised 2(11)
authority in their own interest, not that of Deaton. Impor-
tantly, Deaton’s common carrier business depended on
trucks leased from owner drivers for its own exclusive use.
Deaton’s payments under the lease agreements covered
both the fee for the truck rental and the wages of the
driver. Moreover, only drivers whom Deaton had tested
and trained and whom it retained on its approved list were
permitted to drive the leased vehicles and all drivers were
subject to Deaton’s direction and control in their day-to-
day employment. 143 NLRB at 1375–1376. In these dif-
ferent circumstances—where the drivers were, in effect,
paid for by Deaton and performed functions essential to its
business—the discretionary authority of the multiple
owner drivers to decide whether or not approved drivers
would be permitted to drive their own trucks and to trans-
fer them from one truck to another is reasonably viewed as
authority exercised in the interest of Deaton, and therefore
supervisory within the meaning of Section 2(11). 337
F.2d at 699; 143 NLRB at 1378.
In the present case, by contrast, where the use of office
or sale assistants was not a necessary incident of the Re-
spondent’s business but at the option and the financial risk
of the NOA, we are unable similarly to conclude that the
NOA’s have been assigned 2(11) authority to hire or fire
assistants “in the interest of the employer.” Accordingly,
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 762

we reject the Respondent’s contention that Penzo is a su-
pervisor and lacks a Section 7 right to engage in concerted
activity.
b. Managerial status
The Supreme Court has established an outline for identi-
fying individuals who have managerial responsibilities that
exclude them from the protection of the Act:

Managerial employees are defined as those who
“formulate and effectuate management policies by
expressing and making operative the decisions of their
employer.” . . . These employees are “much higher in
the managerial structure” than those explicitly men-
tioned by Congress, which “regarded [them] as so
clearly outside the Act that no specific exclusionary
provision was thought necessary.” . . . Managerial
employees must exercise discretion within, or even
independently of, established employer policy and
must be aligned with management. . . . Although the
Board has established no firm criteria for determining
when an employee is so aligned, normally an em-
ployee may be excluded as managerial only if he
represents management interests by taking or recom-
mending discretionary actions that effectively control
or implement employer policy.

NLRB v. Yeshiva University, 444 U.S. 672, 682–683
(1980) (citations omitted).
The judge found that the Respondent so restricted the
discretionary authority of NOAs that Penzo could not be
found to be managerial. For instance, he noted that a
NOA is required to use the Respondent’s documents and
pre-printed forms in selling the Respondent’s insurance
policies, and that any hiring of staff assistants must be
accomplished through temporary employment agencies
designated by the Respondent. We find, however, that the
record also establishes that, within the boundaries set by
the Respondent’s general policies and its NOA program,
Penzo, like other NOAs, has broad discretion in the mar-
keting of the Respondent’s insurance policies. She de-
cides whether to hire assistants, how many, how to utilize
them, how much their assistance will cost, and whether
they will be paid from the Respondent’s funds or her own.
She runs the office without any day-to-day oversight by
the Respondent. She decides where the office is to be
located, limited by the Respondent’s interest in avoiding a
location proximate to other offices selling its insurance.7
She decides whether, when, and what business expenses
should be incurred, for example, office equipment pur-

7 As discussed below, the Respondent required Penzo, as a NOA, to
sign the lease for her chosen office in her personal capacity, assuming
all risk of liability in this regard.
chases, contracts for accounting and legal services, and
advertising. She then decides how the necessary funds for
these expenses should be allocated, including whether to
draw from the Respondent’s allowance or her own funds.
Given the above and other relevant evidence in the re-
cord, we find that Penzo was invested with discretionary
authority. The dispositive question, however, is whether
her discretionary decision making is of a type that makes
her a managerial employee. We answer in the negative,
on reasoning similar to that in our supervisory analysis
above.
The purpose of exempting managerial employees is to
ensure “that employees who exercise discretionary author-
ity on behalf of the employer will not divide their loyalty
between employer and union.” NLRB v. Yeshiva Univer-
sity, supra, 444 U.S. at 687–688 (emphasis added). Here,
to the extent that Penzo exercises discretionary authority in
renting, furnishing, staffing, and otherwise running her
office she is not doing so “on behalf of the employer.”
Nor is she “formulat[ing] and effectuat[ing] management
policies by expressing and making operative the decisions
of [her] employer,” id. at 682, within the meaning of the
Board’s traditional definition of managerial employee.
Rather, she is acting in her own financial interest and at
her own financial risk.
The interests of the employer are, of course, reflected by
its establishment of the NOA program. The whole point
of the Respondent’s NOA program, as we understand it, is
“to increase business and profits, while providing its
agents with entrepreneurial opportunities and greater
flexibility and control over their own offices.”8 The opera-
tive management policies were formulated and effectuated
by the Respondent when it structured the NOA program.
The Respondent’s own managerial interests are expressed
and made operative by such measures as the Respondent’s
limiting the amount it will contribute towards the NOA’s
basic office expenses, its limiting the locations where
NOAs can open offices, its requiring that all sales assis-
tants must have its approval, and its requiring that any staff
be kept on the payroll of an approved employment agency
that bills the NOA for its services. However, within the
framework established by the NOA program and its poli-
cies, the NOAs, in their own interest, are free to determine
for themselves and at their own financial risk what course
will maximize their earnings.
Penzo, for example, originally determined that it would
be in her financial interest to engage assistants. Later, she
determined that she would reduce her expenses and in-
8 DeJesus v. Sears, Roebuck & Co., 87 F.3d 65, 68 (2d Cir. 1996),
cert. denied 519 U.S. 1007 (1996). See also Deus v. Allstate Insurance
Co., 15 F.3d 506, 511–512 (5th Cir.) (describing the NOA program),
cert. denied 513 U.S. 1014 (1994).
ALLSTATE INSURANCE CO. 763
crease her earnings by laying off her staff. In each case,
she made the decision in her own interest. In neither in-
stance was she “expressing and making operative the deci-
sions of [her] employer,” Yeshiva, supra, 444 U.S. at 682,
which is what our definition of managerial employee re-
quires.
Similarly, Penzo initially determined that it was in her
own interest not to share office space with another agent
but instead to establish her own office. She negotiated the
lease and is personally liable for the lease that she signed.
She has also determined, in her own interest and at her
own expense, to purchase office equipment and to contract
with lawyers, accountants, and business consultants. In
none of these instances was she performing functions
analogous to those of buyers or other persons traditionally
considered to be managerial employees. See NLRB v. Bell
Aerospace Co., 416 U.S. 267, 285–287 (1974). Those
persons were deemed managerial because, without prior
approval, they could make substantial purchases or other
commitments binding on the employer, and as such were
representative of management. Id. Here, by contrast,
Penzo’s activities were taken in her own name and finan-
cial risk.
Nor are Penzo’s activities analogous to those found
managerial in Yeshiva, supra, 444 U.S. at 686–690. There,
the Supreme Court found the problem of divided loyalty to
be presented because the faculty at issue was relied on to
formulate and apply the academic policies that were the
business of the university and as a result the professional
interests of the faculty and the managerial interests of the
university could not be separated. Id. at 687–689. Here,
by contrast, the NOA program clearly demarcates the dis-
tinct roles and interests of management and labor. As
noted, the Respondent retains complete ownership of the
results of the NOAs’ efforts, the so-called “Book of Busi-
ness” consisting of the client files and the insurance con-
tracts. It provides only a minimal salary and a limited
office expense allowance. In return, the NOAs are en-
couraged to invest their own funds and devise their own
business strategies in the hope that a steady stream of
commissions will reward their efforts. The choices that
the NOAs make reflect their own determination of where
their economic self-interest lies and they, not the Respon-
dent, bear the risk of the discretionary judgments they
make in their own interest. Penzo, for example, asserted
that she invested some $200,000 in her business over a 6-
year period with little more than debt to show for it.
In sum, we find that the Respondent’s NOA program is
an essentially commission-based employment scheme that
leaves to Penzo’s self-interested entrepreneurial decision-
making—and financial risk—certain basic choices con-
cerning how her office is to be run. Having chosen to
minimize its own involvement and to be guided by the
self-interested risk taking of Penzo—who bears the imme-
diate financial consequences of her misjudgments in these
matters—the Respondent cannot persuasively maintain
that Penzo is acting on its behalf and expressing or making
operative its decisions when she exercises her own discre-
tion in renting, furnishing, staffing, and otherwise running
her office. We therefore conclude that the Respondent has
failed to meet its burden of establishing that Penzo is a
managerial employee and, as such, outside the protection
of the Act.
3. Conclusion
We have found that Penzo was neither a statutory su-
pervisor nor a managerial employee at the time of the un-
fair labor practice alleged in the complaint. She was,
therefore, an employee within the meaning of Section 2(3)
of the Act at that time. Accordingly, as the judge other-
wise detailed in his decision, the Respondent’s issuance of
its “job-in-jeopardy” disciplinary warning to her on Octo-
ber 19, 1995, violated Section 8(a)(1).
ORDER
The National Labor Relations Board adopts the recom-
mended Order of the administrative law judge and orders
that the Respondent, Allstate Insurance Company, Alpha-
retta, Georgia, its officers, agents, successors, and assigns,
shall take the action set forth in the Order.

MEMBER HURTGEN, dissenting.
Contrary to my colleagues, I find that Charging Party
Carolyn Penzo, a Neighborhood Office Agent (NOA) for
the Respondent, is a statutory supervisor.1 In my view,
Penzo has supervisory authority, and exercises that author-
ity in the interest of the Respondent.2
As my colleagues fully describe, Penzo operates a store-
front office and sells insurance for the Respondent. As
part of the Respondent’s NOA program, Penzo has the
authority, in her discretion, to hire and fire support staff,
including office support and sales producers.
The majority concludes that the NOA, in exercising this
authority, is not acting “in the interest of the Respondent.”
Accordingly, they conclude that Penzo is not a supervisor.
I disagree.
The Respondent has a clear interest in the functions of
the NOA. The thrust of the NOA program is to allow the

1 Having concluded that Penzo is a statutory supervisor, I need not
pass on the Respondent’s additional contention that Penzo is a manage-
rial employee.
2 As my colleagues correctly note, it is the possession of 2(11) su-
pervisory authority, not the exercise of it, that controls. Given this, I
find it virtually indisputable that Penzo has this authority. The Respon-
dent’s NOA program clearly authorizes the NOA to hire and fire sup-
port staff.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 764

NOA to use discretion to operate in a manner that benefits
both the NOA and the Respondent. (As the Respondent
puts it, it seeks a “winning combination.”) Certainly, the
ultimate goal is to increase compensation for the NOA and
to increase revenue for the Respondent.
The NOA’s authority to hire sales producers is a classic
example of the interest that the Respondent has in this
matter. A sales producer can sell insurance and can bind
the Respondent to insurance policies. Thus, a good pro-
ducer will sell more policies. A poor producer will sell
fewer policies. Worse, a poor producer may bind the Re-
spondent to unacceptably high insurance risks. Because of
this, the Respondent can veto the NOA’s hiring of any
sales producer.3
The Respondent’s interest in the NOA is also shown by
its practice of providing the NOA with an office expense
allowance (OEA). This OEA is used to pay a portion of
the office expenses, including the cost of staff. The
amount of the OEA is based on the amount of new and
renewal business generated by the NOA. That is, more
business leads to a greater reimbursement by the Respon-
dent. Thus, the Respondent is interested in, and supports,
the NOA’s effort to increase business through the hiring
and use of staff.
In finding that Penzo, as the NOA, does not act in the
interest of the Respondent, my colleagues rely on Distill-
ery Workers v. NLRB, 298 F.2d 297, 302–305 (D.C. Cir.
1961). There, the court held that driver-salesmen, who
could hire helpers, were not supervisors because they
could hire the helpers only at the cost of reducing their
own pay. Thus, if driver-salesmen chose to hire helpers,
they acted in their own interest.
That case is clearly distinguishable. In that case, the
helpers performed manual labor to help the driver. Con-
cededly, the use of a helper would permit the driver to earn
greater commissions and would permit the Company to
receive greater revenues. However, there was nothing to
suggest that the company was interested in the selection,
i.e., the hire of the helper. As noted, the helper performed
only manual labor. By contrast, the Respondent here is
vitally interested in the selection of the sales producers.
As discussed above, a good sales producer will generate
his/her own business and this will result in increased reve-
nues for the Company. A poor sales producer will not do
so, and can bind the Company to poor insurance risks.

3 The NOA may authorize a sales producer to engage in the follow-
ing activities: (1) sell insurance policies that are binding on Respon-
dent; (2) complete applications and service request forms to include the
binding of coverage; (3) be involved in direct solicitation activities; (4)
discuss and provide advice regarding coverage and limits; and (5) do
other office work as authorized by the NOA.
My colleagues also rely on Tiberti Fence Co., 326
NLRB 1043 (1998).4 There, a foreman’s recommendation
that a helper receive a wage increase would—if fol-
lowed—result in a decrease in the foreman’s pay. Thus,
the Board concluded that the foreman, in exercising his
authority, acted in his own interest and not that of the em-
ployer.
The case is inapposite to the instant one. In that case,
the Board found that the foreman was willing to pay the
helper in order to foster a better working relationship with
the helper. There was no suggestion that the company had
its own interest in the selection of the helper. By contrast,
there is such an interest here.
In sum, these precedents do not control here. The Re-
spondent’s NOA program seeks to increase the Respon-
dent’s revenue and to increase the NOA’s compensation.
The fact that the NOA is interested in the hiring of sales
producers does not mean that the Respondent is disinter-
ested in this matter. Both have an interest. Further, the
Respondent has a particular interest of its own in the hiring
of prudent sales producers.
In sum, the Respondent is in the insurance business and
seeks to increase its sales of insurance products. Its NOA
program is one of its means of meeting its goals. As the
sales producers hired by a NOA would sell insurance and
serve this Respondent interest, it follows that the NOA, in
hiring and directing sales producers, acts in the interest of
the Respondent. See NLRB v. Health Care & Retirement
Corp., 511 U.S. 571 (1994).
Finally, my colleagues make much of the fact that the
NOA can choose to have, or not have, staff support. In my
view, this misses the point. To be sure, the NOA will
make that choice based on what is in her financial interest.
However, it does not follow that the Respondent has no
interest in the matter. The Respondent encourages the
choice of having staff support, in that it agrees to pay for a
portion of it. And, as discussed, if the choice is to have
staff support, the Respondent can reap a financial advan-
tage or can incur a substantial insurance risk.
In these circumstances, I conclude that Penzo, as a NOA
with the authority to hire and fire support staff, is a super-
visor. The Respondent is vitally interested in the manner
in which this authority is exercised. Therefore, Penzo is a
statutory supervisor.

Lesley A. Troope, Esq., for the General Counsel.
R. Brent Ballow, Esq. (King & Ballow), for the Respondent.
Carolyn Penzo, Pro Se.

4 I dissented in Tiberti and I adhere to that dissent. However, even
accepting the majority decision on the facts of that case, I would not
find that decision controlling here.
ALLSTATE INSURANCE CO. 765
BENCH DECISION
STATEMENT OF THE CASE
WILLIAM N. CATES, Administrative Law Judge. This is a
wrongful warning case. At the close of a 2-day trial in Atlanta,
Georgia, on March 3, 1997, I rendered a Bench Decision in favor
of the General Counsel thereby finding a violation of 29 U.S.C. §
158(a)(1). This certification of that Bench Decision, along with
the Order, which appears below, triggers the time period for fil-
ing an appeal (“exceptions”) to the National Labor Relations
Board (Board). I rendered the Bench Decision pursuant to Sec-
tion 102.35(a)(10) of the Board’s Rules and Regulations.
For the reasons stated by me on the record at the close of the
trial, and by virtue of the prima facie case established by the
General Counsel, a case not credibly rebutted by Allstate Insur-
ance Company (the Respondent or Company), I found the Re-
spondent violated Section 8(a)(1) of the National Labor Relations
Act, as amended (Act) when on or about October 19, 1995, the
Respondent issued a “job-in jeopardy” warning to Carolyn Penzo
(Penzo) because she engaged in concerted activities protected by
the Act. More specifically, I concluded that when Penzo, a
Neighborhood Office Agent (NOA) for the Company, and others
discussed their working conditions with a reporter for Fortune
Magazine1 they were engaging in concerted activities protected
by the Act. Meyers Industries, 268 NLRB 493 (1984); Meyers
Industries, 281 NLRB 882 (1986); Cincinnati Suburban Press,
289 NLRB 966 (1988), and Kinder-Care Learning Centers, 299
NLRB 1171 (1990). It is undisputed that the October 1995 “job-
in jeopardy” warning given Penzo was, in substantial part, a re-
sult of the interview she gave the Fortune Magazine reporter.
Thus, in concluding that Penzo’s interview with Fortune Maga-
zine was concerted activity protected by Section 7 of the Act, the
“job-in jeopardy” warning given her for doing so constitutes
discrimination in violation of the Act. Arriving at my decision, I
concluded Penzo was an employee within the meaning of Section
2(3) of the Act. Heck’s, Inc., 277 NLRB 916, 918–919 (1985). I
rejected the Respondent s contention that the mere existence of
unexercised supervisory power, without more, qualified Penzo as
a supervisor within the meaning of the Act. Automobile Club of
Missouri, 209 NLRB 614 (1974). In that regard, I concluded the
Company’s reliance on a comment by Judge Richard A. Scully in
Ironton Publications, 321 NLRB 1048, 1053 (1996), was mis-
placed. The Respondent’s reference was to Judge Scully’s
statement “sporadic and infrequent possession of supervisory
authority is to be distinguished from its constant possession but
infrequent exercise. The latter indicates supervisory status while
the former does not.” Kern Council Services, 259 NLRB 817,
818 (1981). I concluded that even under Ironton Publications,
supra, some exercise of supervisory authority is necessary to
qualify an individual as a statutory supervisor. In the instant
case, Penzo had not exercised any supervisory authority in ap-
proximately 5 years. I likewise rejected the Company’s conten-
tion Penzo was a managerial employee who formulated and ef-
fectuated management policies, thus excluding her from the pro-

1 The interview by Richard Behar resulted in an article “Stalked by
Allstate” published in Fortune Magazine on December 2, 1995. Quota-
tions are attributed to Penzo in the article.
tection afforded by the Act. I concluded that NOAs, such as
Penzo, have little if any discretion in the performance of their
jobs independent of the Respondent’s established guidelines,
directives, and policies. Cf. S. S. Joachim & Anne Residence,
314 NLRB 1191 fn. 6 (1994). At the trial, the Company aban-
doned any contention Penzo was an independent contractor.
I order the Respondent, within 14 days from the date of this
Order, to remove from its records the “job-in jeopardy” warning
and any reference thereto it issued Penzo on October 19, 1995,
and within 3 days thereafter notify her in writing this has been
done and the October 19, 1995 “job-in jeopardy” warning will
not be used against her in any way.
I certify the accuracy of the portion of the transcript (p. 343–
361) containing my decision, and I attach a copy of that portion
of the transcript, as corrected, as “Appendix A.”
CONCLUSION OF LAW
Based on the record, I find the Respondent is an employer en-
gaged in commerce within the meaning of Section 2(2), (6), and
(7) of the Act; that it violated the Act in the particulars and for
the reasons stated at trial and summarized above; and, that its
violations have affected and, unless permanently enjoined, will
continue to affect commerce within the meaning of Section 2(6)
and (7) of the Act.
REMEDY
Having found the Respondent has engaged in certain unfair la-
bor practices, I find it must be ordered to cease and desist and to
take certain affirmative action designed to effectuate the policies
of the Act.
Having found the Respondent unlawfully issued its employee,
Carolyn Penzo, a “job-in jeopardy” warning on or about October
19, 1995, I recommend the Respondent, within 14 days from the
date of this Order, be ordered to remove from its files any refer-
ence to Penzo’s October 19, 1995 “job-in jeopardy” warning and
within 3 days thereafter notify Penzo in writing that this has been
done and that the unlawful “job-in jeopardy” warning will not be
used against her in any way. I also recommend the Respondent
be ordered, within 14 days after service by the Region, to post an
appropriate notice to its employees, copies of which are attached
hereto as “Appendix B” for a period of 60 consecutive days in
order that employees may be apprised of their rights under the
Act and the Company’s obligation to remedy its unfair labor
practices.
On these findings of fact and conclusions of law and on the en-
tire record, I issue the following recommended2
ORDER
The Respondent, Allstate Insurance Company, Alpharetta,
Georgia, its officers, agents, successors, and assigns, shall
1. Cease and desist from
(a) Issuing employees “job-in jeopardy” warnings because
they engage in protected concerted activities.
2 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.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 766

(b) In any like or related manner interfering with, restraining,
or coercing employees in the exercise of the rights guaranteed
them by Section 7 of the Act.
2. Take the following affirmative action necessary to effectu-
ate the policies of the Act.
(a) Within 14 days from the date of this Order, remove from its
files any reference to the unlawful “job-in jeopardy” warning it
issued Carolyn Penzo on or about October 19, 1995, and within 3
days thereafter notify Penzo in writing this has been done and
that the unlawful “job-in jeopardy” warning will not be used
against her in any way.
(b) Within 14 days after service by the Regional Director of
Region 10 of the National Labor Relations Board, post at its
Atlanta area facilities copies of the attached notice marked “Ap-
pendix B.”3 Copies of the notice, on forms provided by the Re-
gional Director for Region 10 after being signed by the Com-
pany’s authorized representative shall be posted by the Company
and maintained for 60 consecutive days in conspicuous places,
including all places where notices to employees are customarily
posted. Reasonable steps shall be taken by the Company to en-
sure that the notices are not altered, defaced, or covered by any
other material. In the event that during the pendency of these
proceedings the Company has gone out of business or closed the
facility involved in these proceedings, the Company shall dupli-
cate and mail, at its own expense, a copy of the notice to all cur-
rent Neighborhood Office Agents in the Atlanta area employed
by the Company on or at any time since October 19, 1995.
(c) Within 21 days after service by the Region, filed with the
Regional Director for Region 10 of the National Labor Relations
Board a sworn certification of a responsible official on a form
provided by the Region attesting to the steps that the Company
has taken to comply.

APPENDIX A
BENCH DECISION
343
JUDGE CATES: I find that the charge in this case was filed on
March 19, 1996, and thereafter, properly served upon the com-
pany. And these first few findings are made based upon the
pleadings, that is the complaint and the answer.
I find also that at all times material herein, the company has
been and continues to be an Illinois corporation engaged in the
sale of insurance and related products or services throughout the
United States and Canada and that the Respondent maintains
offices and places of business in the State of Georgia, including
Alpharetta, Georgia, which appears to be the location involved
herein.
I find that during the past 12 month period, with the operative
date being February 4, 1997, that the company, in conducting its
business operations derived revenues in excess of $1 million
from the interstate sale of insurance, of which more than $50,000

3 If this Order is enforced by a judgment of a United States court of
appeals, the words in the notice reading “Posted by Order of the Na-
tional Labor Relations Board” shall read “Posted Pursuant to a Judg-
ment of the United States Court of Appeals Enforcing an Order of the
National Labor Relations Board.”
in insurance premiums were remitted to its home office in Illinois
from its offices in the State of Georgia.
Based on that information, as alleged in the complaint and
admitted in the answer, I find that the company has been and is
an employer engaged in commerce within the meaning of Section
2(6)(7) of the National Labor Relations Act, hereinafter Act.
There is no dispute that the company issued a job in jeopardy
warning to its employee, Carolyn Penzo, on or about
344
October 19, 1995, which job in jeopardy is in evidence as Gen-
eral Counsel Exhibit 65. The question then becomes why did the
company issue the job in jeopardy warning to its employee, and
did it do so, in whole or in part, because Penzo engaged in con-
certed activities that are protected by the Act?
If I find that she did engage in concerted activities that are pro-
tected by the Act, I then look to the motivation of the company in
doing so. And, in that regard, the Board has provided an analyti-
cal mode for resolving cases that turn upon an employer’s moti-
vation. And as each of you full well know, that is outlined in
Wright Line, W-r-i-g-h-t, another word, L-i-n-e, reported at 251
NLRB 1083, (1980).
And in a case called Manno. M-a-n-n-o Electric, Inc., reported
at 321. NLRB Number 43, a May 22, 1996 case, particularly at
footnote 12 and page three, the Board seemed to be re-stating the
Wright Line burden. But then, in a very recent case, the Board
seemed to be moving away from its restatement in Manno Elec-
tric. In the most recent pronouncement on the subject matter, the
Board, in The 3, the number three, with a capital E, The 3 E
Company, Inc. 322, number 192, at footnote one, a decision is-
sued on February 12, 1997, the Board appeared to be moving
away from whatever it may have said in the Manno Electric and
going back to pure Wright Linen analysis.
Under the Wright Line analysis, the General Counsel must
make a prima facie showing sufficient to support the inference
that
345
protected conduct was a motivating factor in the employer’s deci-
sion. Once accomplished, the burden shifts to the employer to
demonstrate that the same action would have taken place, not-
withstanding the protected conduct. It is also well settled that
when a Respondent’s stated motives for its action are found to be
false, the circumstances may warrant an inference that the true
motive is the one that the Respondent desires to conceal.
Before I can get, however, to the Wright Line burden, I think I
need to address some preliminary issues. Did the conduct that
Penzo engaged in for which the company issued its October 1995
job in jeopardy constitute concerted activities that are protected
by the Act? I’m persuaded that they were activities that were
protected by the Act.
The company, in its job in jeopardy warning, makes reference
to the fact that Penzo went to the press or, in this case, Fortune
Magazine, and expressed her views on the company, which
views are attributed directly to her in the article.
And I find that they were not only concerted activities, but ac-
tivities protected by the Act for the following reasons: Ms. Penzo
testified that she spoke to other NOAs, which, for the purposes of
ALLSTATE INSURANCE CO. 767
this decision, mean neighborhood office agents; that she spoke
with others of those about the commissions that the NOAs were
paid, particularly on their book of business, and other related
expenses; that she discussed those with other NOAs--for exam-
ple, at meetings. I believe she placed them in
346
Las Vegas, Nevada and other places—that she mailed out some
inquires and received responses thereto, so that when she was
speaking on the matter of commissions, expenses and the overall
working conditions of NOAs, she was expressing not only the
concerns of herself, but of other similarly situated NOAs.
The General Counsel cited, and I am persuaded supports her
proposition, that speaking with a reporter or a newspaper or a
major publication, in this case the Fortune Magazine, constitutes
conduct of a concerted nature hat’s protected under the Act in
keeping with the Board’s decision in Meyers, M-e-y-e- r-s, Indus-
tries, Inc., 268 NLRB 943 (1984), as well as Meyers Industries,
Inc., reported at 281 NLRB 882 (1986).
Also, there is the guidance along this point in a case called
Kinder, K-i-n-d-e-r, dash, Care, C-a-r-e, Learning Centers, 299
NLRB 1171 (1990), where the Board concluded that an employer
may not prohibit employees from discussing terms and condi-
tions of employment with colleagues, nor with an. Emplcoyer’s
customers, advertisers, parent company, news reporters and the
public in general. And incidentally, in that decision the Board
also concluded that an employee need not exhaust internal reme-
dies before discussing terms and conditions of employment with
others.
Prohibiting employees from the discussion of their working
conditions violates Section 8(a)(1) of the Act and issuing a warn-
ing thereto violates the Ac., but we don’t arrive at that
347
point just yet. So, in summary on this particular point, I find that
the activities that Penzo engaged in for which she was given the
job in jeopardy warning in October of 1995 were concerted ac-
tivities that are protected by the Act.
But before a conclusion can be made as to whether or not such
would violate Section 8(a)(1) of the Act, we must address the
issue of whether or not the Charging Party herein is an employee
or whether she’s a supervisor, a management representative or an
independent contractor. The term employee and supervisor are
mutually exclusive. She cannot be both. If she is anything other
than an employee, the protection of the Act is not afforded to her.
So I feel it incumbent that I address at least three items
whether she is a supervisor within the meaning of the Act,
whether she is a managerial employee within case law that has
been developed and/or whether she is an independent contractor.
I believe I heard Company counsel say in his closing argument
that he would concede that she was not an independent contrac-
tor, as that term of art is utilized in labor relations. Let me speak
very briefly to the independent contractor issue, notwithstanding
Company counsel’s statement that the company does not contend
that she’s an independent contractor, because some of the factors
that will determine whether she is a managerial employee or not
may perhaps overlap with some of those as to whether or not
she’s an independent contractor.
348
When you look to independent contractor issues, you look to
see whether the company has retained the right to control the
manner and the means by which its agents accomplish the results
sought. So, to that extent, if there is an overlap in addressing
whether or not she is a managerial employee, let me simply make
the following observations with respect to independent contrac-
tor.
I am persuaded, in agreement with Company counsel’s state-
ment, that she is not an independent contractor, as that term is
used with reference to the National Labor Relations Ace. It is of
no great moment to me or to the outcome of this case that she
may contend in a brief to the United States Supreme Court that
she’s an independent contractor, or, for purposes under the Inter-
nal Revenue Service, that she is an independent contractor. Ob-
viously you can have internally inconsisten pleadings, depending
on what the forum you are before.
This company, in my opinion, gives the agent no unfettered
ability to accomplish the tasks for which she set out or held out to
be, that is the selling of insurance and maintaining the book of
business, that would make her an independent contractor within
the understanding of the National Labor Relations Act.
Is Ms. Penzo a supervisor within the meaning of the Act? I do
not mean to be speaking down to learned counsel, but let me,
before addressing the issue of whether Penzo was, at material
times herein, a supervisor within the meaning of the Act, it’s
349
helpful to review Section 2(11) of the Act and examine certain
Board principles related thereto. Bear with me, please.
Section 2(11) of the Act reads: “The term supervisor means
any individual having authority in the interest of the employer to
hire, transfer, suspend, lay off, recall, promote, discharge, assign,
reward or discipline other employees or responsibly to direct
them, or to adjust their grievances or to effectively recommend
such action.”
If in connection with the foregoing, the exercise of such au-
thority is not of a merely routine or clerical nature, but requires
the use of independent judgment, the statutory indicia just out-
lined in Section 2(11) of the Act are in the disjunctive and only
one need exist to confer supervisory status on an individual. See,
for example, Miller Electric Company, 301 NLRB Number 41, a
1991 decision, and Opelika Foundry, 281 NLRB 897, at 899, a
1986 case
However, in order for supervisory status to exist, the exercise
of one or more of the above outlined powers must be accom-
plished with independent judgment on behalf of management in
other than a routine or clerical manner. See, for example, Hydro
Conduit Corporation, 254 NLRB 433 (1981). The statute insists
that a supervisor, one have authority; two, to use independent
judgment; three, in performing such supervisory functions; four,
in the interest of management.
These latter requirements that I have just outlined in our
350
the conjunctive. The burden of proving supervisory status rests
on the party alleging that such status exists. On that point, see,
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 768

for example, California Beverage Company, 283 NLRB 328
(1987).
An individual’s status as a supervisor is not determined by the
individuals title or job classification, but rather, is determined by
the individuals functions and authority. See, for example,
Mack’s, M-a-c-k-’-s, Supermarkets, Inc., 283 NLRB 1082, a
1988 case. Isolated or sporadic exercise of Section 2(11) author-
ity is insufficient to predicate a supervisory finding on, and like-
wise, employees who are merely conduits for relating manage-
ment information to other employees are not true supervisors.
Now, we have a little different situation in the present case that
is not sometimes present in other cases, in that there is no ques-
tion but what Mrs. Penzo and similarly situated NOAs have the
authority to hire and fire support staff as they deem appropriate.
The Company urges, by way of its pre-trial brief and in closing
argument a case called Ironton Publications, speller I-r-o-n-t-o-n
Publications, Inc., reported at 321 NLRB Number 148, a 1996
case, and specifically, Company counsel, on behalf of the Com-
pany, invites my attention to the point that sporadic and infre-
quent possession of supervisory authority is to be distinguished
from its constant possession, but infrequent exercise.
351
And in that case, the trial judge, Judge Scully, concluded tha—
well, let me read the sentence, before me. I’m reading from Iron-
ton Publications, at slip opinion, page 13 I believe it is, in which
Judge Scully states, “Sporadic and infrequent possession of su-
pervisory authority is to be distinguished from its constant pos-
session, but infrequent exercise. The latter indicates supervisory
status, while the former does not.”
And, in support of that proposition, Judge Scully cites Kern,
Kern, Council Services, 259 NLRB 817, at 818, a 1981 case.
Now, the Board, in adopting Judge Scully’s decision, to the
extent they did so, did not make any comment contrary to the
contention that Judge Scully announced, which perhaps was not
absolutely essential to the disposition of the issue before him. But
the problem that I have with that particular statement of Sub
silentio law by Judge Scully and adopted, at least, by the Board,
is it’s infrequent exercise.” Envisioned in that is that it. there be
some exercise of the supervisory authority.
In the present case, there has been no exercise of supervisory
authority by Ms. Penzo since at least the early ‘90s. Perhaps ‘91,
‘92. Somewhere in that neighborhood.
So that brings us to a case that the General Counsel invites us
to review, of which Company counsel I think made reference to
in his closing argument, which is called Hecht’s, Inc., H-e-c-h-t-
’-s, Inc., a case reported at 277 NLRB 916 (1985), in which
Judge McLeod was speaking to the status of
352
whether an individual in the toy department of Hecht’s stores was
a supervisor after management removed the two employees from
that department that the supervisor had been supervising.
And Judge McLeod concluded that since the individual in
question had no employees to supervise during February and
March of 1993—and I think he means 1994 in that case because
everything else in the decision would point to 1994, but that’s not
critical at all. Because she had no one to supervise during that
two month period of time, he concluded she was not a supervisor
within the meaning of the Act, notwithstanding the fact that she
had been two months earlier.
I am persuaded that current Board law, by which I am bound,
has not moved away entirety from requiring some exercise of the
supervisory authority. Stated differently, the mere possession of
supervisory authority unexercised, does not make an individual a
supervisor within the meaning of the Act.
In support of that, I invite your attention to such cases that the
General Counsel cites, such as Detroit College of Business, in
which the Board addresses, at some length, whether an individual
exercising supervisory authority 50 percent of the time was suffi-
cient to make him a supervisor. The Board indicated it was not
interested in fast and hard lines with respect to whether you su-
pervise 50 percent of the time or 25 percent of the time; however,
it still said a factor that would be need necessarily looked at as
relevant, would be how much time is
353
spent in supervising individuals.
Now, I recognize that the case such as Detroit College of
Business, and another case that I shall make reference to here in
just a moment, do not arise in the same context that the case be-
fore me does. They’re speaking in terms of an individual have
someone to supervise and whether they supervise them as part of
their function or whether it was just ancillary to their function.
The question before me, which I want to draw a bright line in
the sand is, and the Company’s position is very simple; that the
mere possession, which no one disputes in the instance case, of
supervisory authority, unexercised over an extended period of
time, nonetheless warrants a finding that the individual is a su-
pervisor within the meaning of the Act.
It is my conclusion that the Board has not gone that far yet. I
agree with Company counsel to the extent; that the case Ironton
Publications, Inc. tends to indicate that the Board may to it. well
be moving in that direction. And if this case was before the
Board, the Board might well be willing to make this the vehicle
that they would state the mere possession of supervisory author-
ity standing alone is sufficient to make one a supervisor.
I can’t go that far because I don’t think Board law permits me
to go that far. I’m compelled to follow Board law. The National
Labor Relations Act is federal legislation administered by a na-
tional agency intended to solve a National problem on a
354
National scale. See, NLRB v. Natural Gas Utility District, 402
US 600, at 603–604 (1971).
Given that statutory objective, it has long been the Board’s
judgment that a uniform and orderly administration of the Na-
tional Act necessitates that its Administrative Law Judges apply
only established Board and Supreme Court precedents, as op-
posed to precedents of the Circuit Courts of Appeals, which are
adverse to the Board and not the law of the case. See, Insurance
Agents International Union, 119 NLRB 768, at 773 (1957), (I
recognize that case was reversed on other grounds by the U.S.
Supreme Court, at 361 US 477 (1960).)
I say all of that only to say this, that I don’t’ think the Board
has gone as far as you’re asking me to go on the supervisory
ALLSTATE INSURANCE CO. 769
issue, Company counsel, and I’m saying that Ironton tends to
indicate the Board is moving in that direction. There are Circuit
Court cases that tend to indicate the circuits are perhaps maybe
already there on that issue. But I’m bound by Board law, which
indicates to me that there must be some exercise of the supervi-
sory authority over an extended period, or you can’t be supervi-
sory.
Now, in the case of Automobile Club of Missouri, 239 NLRB
614, a 1974 case, it appears that what you’re asking me to find-
has been on the mind of the Board for a long time, inasmuch as
the automobile case is a 1974 case, and in Member Kennedy’s,
concurring, in part, and dissenting, in part, portion of the
355
decision, he would conclude, just as you are arguing, Company
counsel, that the exclusion of supervisors from the Section 2(3)
definition of employee rests upon whether an individual qualifies
as a Section 2(11) supervisor and not upon whom he supervises.
The mere existence of the power determines whether an indi-
vidual is an employee or a supervisor; however, unfortunately
that was in the dissent of that decision.
So, all I’m saying on the supervisory point is that the mere
possession is not enough, that she has to have exercised it within
a reasonable period of time, and that her failure to exercise it,
although by her own choice, since 1992, does not make her a
supervisor within the meaning of the Act.
Now, another issue sort of ancillary to that issue I want to
make clear that I am not addressing, and that is the status of the
individuals a NOA would be supervising if they were supervising
anyone, because it says they’re not employees of Allstate that
they are employees of the temporary service. I’m not addressing
that issue. I don’t need to reach that issue for my conclusion
herein as to whether she would be a supervisor, in this case, Ms.
Penzo, if she had temporary employees that were not employees
of Allstate, but rather, were employees of a temporary service.
I have my beliefs on that, but it’s not necessary to address such
in this particular case.
356
Now, before we can determine whether or not she’s protected by
the Act, we have to address one further matter. I have deter-
mined that she’s not an independent contractor, and I have con-
cluded that she is not a supervisor within the meaning of the Act.
But finally, we come to the issue of whether or not she is a
managerial employee. And here again, some of the conclusions
that I will draw would apply also to whether or not she was a
supervisor—as to whether or not she’s a managerial employee.
First, we need to take a look, I guess, at what constitutes a
managerial employee, and I don’t think there’s any dispute in
that; the Board has long held that managerial employees formu-
late and effectuate management policies by expressing and mak-
ing operative the decisions of their employer) and who have the
discretion in the performance of their jobs, independent of the
employer’s established policies.
In my opinion, the Charging Party herein, Ms. Penzo, does not
qualify as a managerial employee, for a number of reasons.
First, every aspect of this business vis-a-vis the NOAs, that is the
neighborhood office agents, is tightly controlled by the company,
Allstate Insurance. For example, starting perhaps with the most
basic item, the N OA may not change the pre-printed forms and
documents that are utilized to sell whatever type insurance it is.
She’s not free, or the NOA is or not free, to draft, from the be-
ginning, a contract of insurance without following
357
guidelines that are clearly set down by the Company. The Com-
pany makes it clear, for example, in their employment agreement
for the agent, that the company will own all business produced;
that NOA’s will not represent or solicit business for any other
company; that NOA’s will follow Company guidelines; that
NOA’s will open their business only where we approve; that you
will only utilize certain signs to advertise your business; that you
will only utilize certain advertisements in the telephone; you will
only select letters, although perhaps it’s a vast number of NOA’s
letters or correspondence may select from, to send as forms of
advertisement or solicitation of business, but you must do so
from those that have been pre-approved by the company
Much was made of the employees that could be hired by the
NOA, but here again, the company tightly controlled who could
be hired. As Ms. Wright testified, a witness that I find did so
very candidly and truthfully and articulated the statement and
position of the company in a fine manner, pointed out that you
could not hire, an NOA could not hire an individual, regardless of
how well qualified they were, unless that individual was willing
to go through the temporary service designated by Allstate.
Then, in conjunction with whether she’s an employee or a
managerial representative, the Company’s own documents speak
to that and speak very clearly. For example, in the Neighborhood
Office Agent Manual, it says, “As a neighborhood office agent,
358
you will be a full-time employee of Allstate and enjoy all com-
pany benefits and privileges, in addition to the features exclusive
to the neighborhood office agents.”
Again, Ms. Wright, when she was testifying, was speaking to-
certain classifications, such as NSOs, LSOs, and one othercate-
gory, which she said were truly independent contractors. And the
brief description she gave about those would indicate that per-
haps they are, in fact, true independent contractors, but I need not
address that. The point being that Ms. Wright said the NOAs
were employees.
She also indicated that they were paid by W2s as opposed
to1099s or 1098s—I never get those numbers quite correct—
which goes more to the status of an independent contractor where
you simply report on—I think it’s form 1099, but doesn’t matter
for the purposes that I’m speaking to, whereas the NOAs are paid
via W2, which also speaks to individuals being employees.
Much was made of the lease arrangements that the NOA goes
through and signs the lease arrangement on his or her own. Here
again, the companies own documents speak to the approval of the
company. It even speaks to the—having to obtain the company’s
approval if you wanted to sublease any part of their office after
they had leased it.
Again, much was made of the fact that the NOAs could hire
solicitors, for example, to help generate more business. But
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 770

359
again, the neighborhood office manual speaks to that by saying
like clerical support, all solicitors must be hired through an ap-
proved service firm. And in addition, there’s certain other re-
quirements.
Much was made about advertisement, but here again, for ex-
ample, in the Neighborhood Offlce Agent Manual, all ads must
be placed through the “Woodward Direct, our national service
firm, and must be approved by your regional vice president.”
With respect to support that the NOAs are employees, as op-
posed to managerial representatives, is further buttressed by the
benefit package program outlined in the Neighborhood Office
Agent Manual.
There was evidence presented from both sides about the con-
trol over the NOAs in the form of requiring them to attend certain
meetings, whether the individual would feel it beneficial or not,
that is the NOA. And, for example, in a letter from the agency
manager to the Charging Party, your attendance is required at
these meetings. Another reminder, this time to all agents, NOA
types, that you must observe our office hours. You must have a
pre-approved answer on your answering machine.
So the control that the company places on its NOAs clearly
places them in the employee status, rather than where they would
have, as the law requires in order to be a managerial employee or
a managerial representative. There’s no indication in this
360
record that they formulate and effectuate management policies or
that they have the discretion in the performance of their jobs,
independent of their employer’s established policies. In fact,
they can’t do very much at all without the—at least prior ap-
proval of management.
Now, we come further. I have concluded that the individual in
question engaged in concerted activities protected by the Act, and
I have concluded that she is not an independent contractor, a
supervisor or a managerial employee. I will go one step further
before I conclude this and say that I conclude that the job in jeop-
ardy warning that was given to her in October, on its face, indi-
cates that it was given to her, in part, for her going to the media
with her concerns about working conditions. Specifically, to the
Fortune Magazine article, and the company has failed to show
that it would have issued her r he job in jeopardy absent her hav-
ing engaged in these activities protected by the Act.
One final comment. I have reviewed the article in Fortune
Magazine, and I have concluded that there is nothing in the arti-
cle that is attributed to Penzo, which would be of such a deroga-
tory nature to the company that, notwithstanding the fact she was
an employee who engaged in concerted, protected activity, that
what she said took her out from under the protection and the
framework of the National Labor Relations Act.
361
So, in summary, I find that the job in jeopardy warning issued
to Carolyn Penzo, on or about October 19, 1995, violated Section
8(a)(1) of the Act, and I shall direct that the company expunge
such from her records and post an appropriate notice, which I
will attach to my certification of the decision.
The appeals period for filing any exceptions to my decision
runs from, as I understand it, the certification of the decision, and
I will certify the decision as reasonably soon after I receive the
transcript as I can do so. And the court reporting service, particu-
larly this Court Reporter, has always been faithful to get the tran-
script to us within approximately 10 days of the close of the hear-
ing.
And, with that, let me say that it has been a pleasure to hear the
case.
And, Madam Court Reporter, I thank you for being here and
taking the proceeding down.
And, with that, the trial is closed.
(Whereupon, at 5:15 p.m., the hearing was concluded.)
APPENDIX B
NOTICE TO EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government

The National Labor Relations Board has found that we violated
the National Labor Relations Act and has ordered us to post and
abide by this notice.

Section 7 of the Act gives employees these rights.
To organize
To form, join, or assist any union
To bargain collectively through representatives of their
own choice
To act together for other mutual aid or protection
To choose not to engage in any of these protected con-
certed activities.

WE WILL NOT issue “job-in jeopardy” warnings to our em-
ployees because they have engaged in protected concerted activi-
ties.
WE WILL NOT in any like or related manner interfere with,
restrain, or coerce our employees in the exercise of the rights
guaranteed them by Section 7 of the Act.
WE WILL, within 14 days from the date of this Order, remove
from our files any reference to the unlawful “job-in jeopardy”
warning we issued Carolyn Penzo on or about October 19, 1995,
and, WE WILL within 3 days thereafter, notify Carolyn Penzo in
writing this has been done and that the “job-in jeopardy” warning
will not be used against her in any way.

ALLSTATE INSURANCE COMPAN