Ernst & Ernst National Warehouse

National Labor Relations Board - Board Decisions

Mar 7, 1977

228 N.L.R.B. 590 (N.L.R.B. 1977)

590 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Ernst & Ernst National Warehouse and District Lodge
54 of the International Association of Machinists
and Aerospace Workers, AFL-CIO, Petitioner.
Case 8-RC-10461
March 7, 1977
DECISION AND DIRECTION OF
ELECTION
BY CHAIRMAN MURPHY AND MEMBERS
FANNING AND JENKINS
Upon a petition duly filed under Section 9(c) of the
National Labor Relations Act, as amended, a
hearing was held before Hearing Officer James M.
Hehnen on November 3, 1976. Subsequent to the
hearing, the Employer filed a brief with the National
Labor Relations Board.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the
National Labor Relations Board has delegated its
authority in this proceeding to a three-member panel.
The Board has reviewed the Hearing Officer's
rulings made at the hearing and fmds that they are
free from prejudicial error. They are hereby affirmed.
Upon the entire record in this case, including the
brief,l the Board finds:
1. District Lodge 54 of the International Associa-
tion of Machinists and Aerospace Workers, AFL-
CIO, Petitioner herein, has filed a representation
petition seeking an election to determine the bargain-
ing representative of certain employees of the
Employer. The Employer requests that the petition
be dismissed, arguing that the Board should not
assert jurisdiction over operations of its type; i.e.,
independent certified public accounting firms. The
Employer cites three grounds for this request: first,
its operations do not sufficiently affect interstate
commerce to legally warrant the exercise of jurisdic-
tion; second, under Section 14(c)(1) of the Act the
insignificant effect on commerce of a labor dispute
involving employers of this type would justify the
Board's discretionary decision to decline jurisdiction;
and, third, due to practical considerations it would
not effectuate the policies of the Act to assert
jurisdiction.
The evidence reveals the following: Ernst & Ernst,
a general partnership, is an independent certified
public accounting firm with over 100 offices in
approximately 40 States, including a national office
t The Employer's request for oral argument is hereby denied as the
record and the Employer's brief adequately present the issues and positions
of the parties
2 Sec 14(c)(1) of the Act provides.
The Board , in its discretion , may, by rule of decision or by
published rules adopted pursuant to the Administrative Procedure Act,
228 NLRB No. 68
and headquarters in Cleveland, Ohio. It is primarily
engaged in the business of providing accounting and
auditing services to its clients . Lesser operations
include general tax services and management con-
sulting. The Employer's national supply department,
the department containing the employees involved
herein, is located in Cleveland, Ohio, and is solely an
internal operation of Ernst & Ernst. It provides local
offices with printing and mailing services and general
office supplies. This department additionally func-
tions as a library and distribution center for internal
Ernst & Ernst publications.
The parties have stipulated that the Employer has
received gross revenues in excess of $10 million
during the last fiscal year, including $ 1 million in
gross revenues from clients who meet the Board's
direct inflow or direct outflow standard for jurisdic-
tion. It has also been stipulated that the national
supply division in the previous fiscal year has
purchased $45,000 in goods from vendors located
outside the State of Ohio, and $200,000 in goods
from vendors located within the State of Ohio, who
purchased directly those goods from sources outside
the State of Ohio, and which goods were shipped
from the manufacturer directly to the national supply
department.
Since the national supply department is an integral
part of Ernst and Ernst, an accounting firm, the
threshold question is whether the Board can or
should assert jurisdiction over such employers.
It is clear that under any monetary jurisdictional
standard used by this Board we have sufficient
authority to exercise jurisdiction over this Employer.
A further issue involving jurisdiction and argued by
the Employer is whether the Board should exercise
its discretionary powers and refrain from asserting
jurisdiction herein. The crucial consideration is to
determine whether or not the existence of a labor
dispute involving employers of this type would have
a substantial effect on interstate commerce as
provided in Section 14(c)(1) of the Act.2
While it is true that accounting firms do not
provide the economy with a tangible product, it
would be unreasonable to conclude, simpliciter, that
labor disputes involving firms of this type would not
affect commerce. Throughout its existence the Board
has exercised jurisdiction over employers whose
decline to assert jurisdiction over any labor dispute involving any class
or category of employers, where, in the opinion of the Board , the effect
of such labor dispute on commerce is not sufficiently substantial to
warrant the exercise of its jurisdiction : Provided, That the Board shall
not decline to assert jurisdiction over any labor dispute over which it
would assert jurisdiction under the standards prevailing upon August 1,
1959.
ERNST & ERNST NATIONAL WAREHOUSE 591
primary activity is the rendering of services, not the
production of goods.3
Furthermore, it is manifest that the services
provided by accounting firms are directly and
inextricably related to the efficient functioning of
commercial activity in this country.4 Accountants are
not expendable and superfluous appendages, but
provide employers with essential financial informa-
tion and analysis. Their determinations establish, for
example, the solvency, profitability, and general
economic health of business enterprises. Access to
such information is indispensible prior to the
rendering of most types of commercial decisions. The
ability to substitute the services of one accounting
firm for another is not material. N.L.R.B. v. Bradford
Dyeing Association, 310 U.S. 318, 326 (1940). Under
Section 14(c)(1) of the Act the Board is charged with
considering the effect of a labor dispute involving not
just a single employer, but an entire class or category
of employers. See also Polish National Alliance of the
United States of North America v. N.L.R.B., 322 U.S.
643, 648 (1944). For the above reasons, we conclude
that the disruption of services provided by account-
ing firms would have a substantial impact on
commerce.5
Finally, the Employer contends that there exist
practical considerations of sufficient gravity to
warrant a discretionary denial of jurisdiction. The
Employer asserts that the existence of a detailed
professional code for accountants and the applicabil-
ity of Securities and Exchange regulations provide
extensive control over the conduct of accounting
firms and their employers. The Employer raises the
specter that, if Board jurisdiction were to be
exercised, the Employer would be forced to make
public information which would violate the provi-
sions of the professional code, and in other ways be
forced to act in conflict with governmental and
professional regulations. We find this argument to be
without merit. First, this Board has already held that
pervasive regulation of an enterprise through Federal
securities laws and regulations does not preclude the
exercise of jurisdiction by this Board. Harold P.
Goodbody, et al., d/b/a Goodbody and Co., 182 NLRB
81 (1970). Second, it has been settled long ago that
accountants are employees subject to the jurisdiction
3 Dun & Bradstreet, Inc., 80 NLRB 56 (1948) (financial reportin
service); The New York Board of Fire Underwriters, 193 NLRB 551 (19711
(fire inspection services); American Automobile Association, Wisconsin
Division, 183 NLRB 48 ( 1970) (insurance company); and Amalgamated
Bank of New York, 92 NLRB 545 (1950) (bank). The Board has also
exercised jurisdiction over employers providing services wholly unrelated to
the facilitation of commercial activity in goods. Cornell University, 183
NLRB 329 (1970) (universities); The American League of Professional
Baseball Clubs, 180 NLRB 190 ( 1969), enfd . 429 F.2d 1803 (C.A. 2, 1970)
(baseball clubs), and Sec . 103.2, Board's Rules and Regulations, Series 8, as
amended (symphony orchestras).
4 Respondent relies on Bodle, Fogel, Julber, Reinhardt & Rothschild 206
NLRB 512 (1973), to support its claim that it should not be subject to the
Board 's jurisdiction . We do not find this case to be controlling.
of the Act,6 as are employees who audit the finances
of other employers and individuals.? Therefore, the
existence of a professional code for accounting
employees has not in the past acted as a bar to the
assertion of the Board's jurisdiction, and the Em-
ployer has failed to provide us with sufficient reason
to overturn this policy. In view of the foregoing, we
conclude that the Employer is engaged in commerce
within the meaning of the Act, and it will effectuate
the purposes of the Act to assert jurisdiction herein.
2. The Petitioner is a labor organization within
the meaning of the Act which claims to represent
certain employees of the Employer.
3. A question affecting commerce exists concern-
ing the representation of the employees of the
Employer within the meaning of Sections 9(c)(1) and
2(6) and (7) of the Act.
4. The Petitioner seeks a unit of all employees in
the Employer's national supply department. The
Employer contends that all employees in this
department are "confidential" employees and conse-
quently the unit petitioned for is inappropriate. From
the record, it appears that the employees in the
petitioned-for unit are employed in the publication,
storage, or distribution of such items as a national
client roster, financial reports to clients, a salary
administration manual , and an internal administra-
tive manual. To conclude from these duties that these
employees are confidential employees is to give an
unduly broad reading to the term "confidential." The
mere handling of or access to confidential business
or labor relations information is insufficient to
render an employee "confidential"; as the Board has
defined this term. Instead, we look not to the
confidentiality of information within the employee's
reach, but to the confidentiality of the relationship
between the employee and persons who exercise
"managerial" functions in the field of labor rela-
tions.8 There is no evidence that any of the
employees in the proposed unit stand in a confiden-
tial relationship to such persons. On the basis of the
foregoing, the parties' stipulation, and the entire
record, we find that the following employees of the
Employer constitute a unit appropriate for the
purposes of collective bargaining within the meaning
of Section 9(b) of the Act:
5 In reaching this conclusion , we note that this is not the first time the
Board has asserted jurisdiction over employers whose primary service is the
processing of financial information . Dun & Bradstreet, Inc., 80 NLRB 56
( 1948); Dun & Bradstreet, Incorporated 194 NLRB 9 (1971).
6 Southern Alkali Corporation, 84 NLRB 120 (1949). Accord: Aeronca,
Inc., 221 NLRB 326 (1975).
7 Hudson Motor Car Company, 55 NLRB 509 (1944); Fairfax Family
Fund Inc., a wholly owned subsidiary of Spiegel, Inc., 195 NLRB 306 (1972).
8 This definition of confidential employees , first formulated in Ford
Motor Company (Chicago Branch), 66 NLRB 1317 (1946), has been
reaffirmed recently in Flintkote Company, 217 NLRB 497 ( 1975). See also
Aeronca, supra
592 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
All full-time and regular part-time employees of al employees, guards and supervisors as defined
National Supply Department , Ernst & Ernst, in the Act.
including pressmen , shipping clerks, mail clerks,
duplication operators , bindery operators , publica- [Direction of Election and Excelsior footnote
tions workers , and maintenance employees, but omitted from publication.]
excluding all office clerical employees , profession-