Georgia Farm Bureau Mutual Insurance Cos.

National Labor Relations Board - Board Decisions

Apr 5, 2001

333 N.L.R.B. 850 (N.L.R.B. 2001)

DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 850
Georgia Farm Bureau Mutual Insurance Companies
and W. Scott Knight and Alan T. Lord. Cases
10–CA–31631–1 and 10–CA–31631–2
April 5, 2001
DECISION AND ORDER
BY CHAIRMAN TRUESDALE AND MEMBERS
LIEBMAN AND HURTGEN
On February 15, 2000, Administrative Law Judge Law-
rence W. Cullen issued the attached decision. The Re-
spondent filed exceptions and a supporting brief. The
General Counsel filed an answering 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 briefs and has decided to af-
firm the judge’s rulings, findings, and conclusions and to
adopt the recommended Order as modified and set forth in
full below.1
1. The judge found that the Respondent violated Sec-
tion 8(a)(1) of the Act by: (1) issuing warning letters to
employees W. Scott Knight, Alan T. Lord, Janet Frix, and
Thomas M. Ewing; (2) imposing onerous working condi-
tions on the employees; (3) reducing the employees’ earn-
ing potential; (4) causing the termination of employees
Frix and Knight; (5) placing employees Lord and Ewing
on a “work program;” and (6) discharging employees
Lord and Ewing. In reaching his decision, the judge de-
termined, inter alia, that the employees engaged in pro-
tected concerted activity when they reported to the Geor-
gia State Insurance Commissioner’s Office and the Re-
spondent’s claims department that their supervisor,
Agency Manager Donia Smith, knowingly mishandled
insurance claims. The judge also found that the Respon-
dent retaliated against the employees for reporting the
misconduct and that the reprisal was motivated by the
Respondent’s animus toward the employees’ protected
concerted activity.
In its exceptions, the Respondent argues, inter alia, that
the employees’ reporting of Smith’s misconduct was not
protected because it did not bear any relationship to the
employees’ working conditions. For the following rea-
sons, we agree with the judge that the employees were
engaged in protected concerted activity when they acted
of one accord in expressing their concern about Smith’s
fraudulent conduct.

1 We shall modify the judge’s recommended Order pursuant to Indian
Hills Care Center, 321 NLRB 144 (1996), and Excel Container, Inc.,
325 NLRB 17 (1997). We shall also add a provision ordering the Re-
spondent to rescind the unlawful work program on which it placed em-
ployees Alan T. Lord and Thomas M. Ewing, and the other unlawful
onerous working conditions imposed on Lord, Ewing, W. Scott Knight,
and Janet Frix.
Insurance Sales Agents Knight, Lord, Frix, and Ewing
were employed at the Respondent’s Newton County Farm
Bureau office. In March 1998,2 the four agents discov-
ered that Smith combined two unrelated claims as a single
claim so that a claimant could avoid paying two deducti-
bles. Knight and Frix also knew that Smith had combined
two unrelated claims for another client shortly before the
March incident. The agents were aware that insurance
fraud was a violation of the Company’s policy and State
law, and that failure to report it could subject them to ter-
mination or other losses to their wages, terms, and condi-
tions of employment.
Specifically, the agents’ employment contracts stated
that they could be immediately terminated, among other
reasons, for the commission of any act of dishonesty or
fraud. State Fraud Investigator Sherry Mowell also testi-
fied that any licensee under the Insurance Commissioner’s
office was required to report any suspected fraud to the
office per the Georgia statutory code section 33116. Fur-
ther, Mowell stated that, “if an employee became aware
that an agency filed unrelated claims as a single claim, it
would be reasonable for that employee to suspect that
fraud occurred.” Moreover, in its brief the Respondent
effectively concedes that Smith’s conduct was “unethical
and immoral.” Thus, the agents reasonably feared that a
failure to report the suspected fraud could impact ad-
versely on their working conditions.
In addition to contractual and regulatory requirements,
the employees also feared losing clientele. Lord testified,
without contradiction, that if he did not disclose the in-
formation, his customers could learn about the misconduct
and consider that he was a part of the fraud. Knight’s
unrebutted testimony also showed that he was concerned
that the Respondent, the Insurance Commission, or the
public would take action against him for condoning the
fraudulent conduct. For these reasons, the agents dis-
cussed Smith’s fraudulent conduct among themselves and
decided to report it.
As one court has stated, “Employees’ activities are pro-
tected by Section 7 if they might reasonably be expected
to affect terms or conditions of employment.” Brown &
Root, Inc. v. NLRB, 634 F.2d 816, 818 (5th Cir. 1981).
Here, the record clearly demonstrates that the agents acted
collectively to address a serious work concern that they
could reasonably expect to affect their positions and their
terms and conditions of employment. Thus, we find that
the agents’ conduct was completely within the umbrella of
employees’ rights that are protected by Section 7 of the
2 All dates are in 1998, unless stated otherwise.
333 NLRB No. 100
GEORGIA FARM BUREAU MUTUAL INSURANCE COS. 851
Act. Accordingly, we conclude that the Respondent vio-
lated Section 8(a)(1) of the Act when it retaliated against
the employees for engaging in protected concerted activity
for their mutual aid or protection.
2. We also affirm the judge’s finding that the Respon-
dent violated Section 8(a)(1) of the Act by placing Lord
and Ewing on “work programs” and by thereafter dis-
charging them. The Respondent contends in its excep-
tions that it lawfully placed Lord and Ewing on work pro-
grams for failing to cooperate with Joey Keys, the new
agency manager, and that it lawfully terminated them for
failing to comply with the work programs. For the rea-
sons set forth below, we find no merit in this contention.
On July 8, 1998, District Sales Manager Johnny
Hightower informed Lord, Ewing, Frix, and Knight that
Donia Smith resigned and that the other agency managers
were upset by the agents’ conduct in reporting Smith.
Hightower also told them that they were “black eyes” to
the Company and that they could expect very difficult
times in the future as a result of their actions. Further,
Hightower issued warnings to the agents for the alleged
“insubordination” of going outside the chain of command
and reporting Smith to the Respondent’s claim department
rather than the Respondent’s sales department.3 None of
the agents ever received discipline of any kind in the past.
In addition, in July, Director of Sales Tim Tucker told
Knight to tell the other sales agents that they all would be
fired if Tucker heard about any problems from the New-
ton County office.
As predicted by Hightower, Lord and Ewing encoun-
tered “difficult times” on February 3, 1999, when they
were placed on work programs. Work programs are usu-
ally reserved for employees with poor performance re-
cords. Neither employee, however, had a poor perform-
ance record as reflected in their January 1999 perform-
ance appraisals that showed satisfactory overall ratings.
In addition, as the judge found, the work programs estab-
lished production goals that were “onerous” and “virtually
impossible” to attain. Furthermore, although the work
programs were set for an indefinite duration, both Lord
and Ewing were discharged without explanation on Feb-
ruary 22, 1999, approximately 3 weeks after they were
placed on the work programs.
The judge found, and we agree, that the Respon-
dent’s animus against the employees’ protected concerted
activities was a motivating factor in the decision to place
Lord and Ewing on work programs and to terminate them.

3 Because the agents were engaged in protected concerted activity
when they reported Smith to the Respondent’s claims department, the
judge found, and we agree, that the warnings issued to the employees
violated Sec. 8(a)(1).
Wright Line.4 Furthermore, particularly in light of the fact
that neither employee had a poor performance record, we
also find that the Respondent has failed to satisfy its
Wright Line burden of showing that it would have placed
Lord and Ewing on work programs in the absence of their
protected concerted activities. Given these findings, the
Respondent can defend against their termination allega-
tions only by showing that the discharges would have
occurred even in the absence of the unlawful work pro-
grams. This it failed to do. Instead, the Respondent ar-
gues that the employees were discharged “because of their
failure to comply with the enumerated work program.”
Under Wright Line, however, the respondent must estab-
lish that, even in the absence of the protected conduct, the
discharges would have occurred for a “legitimate business
reason.” 251 NLRB at 1088. Obviously, the employees’
failure to satisfy the requirements of the unlawful work
programs is not a “legitimate business reason.” In sum,
the Respondent cannot rely on its commission of one un-
fair labor practice (placing the employees on work pro-
grams) as a defense to the claim that it committed another
(discharging the employees). Accordingly, we adopt the
judge’s findings that the Respondent violated Section
8(a)(1) by placing Lord and Ewing on work programs and
by discharging them.
3. In his decision, the judge found that the Respon-
dent’s retaliatory conduct forced Frix and Knight to quit
their employment, and that accordingly Frix and Knight
were constructively discharged in violation of Section
8(a)(1) of the Act. Contrary to our dissenting colleague,
we agree with the judge’s decision.
Under the Act, two elements must be proven to estab-
lish a traditional constructive discharge. First, the burdens
imposed upon the employee must cause, and be intended
to cause, a change in the employee’s working conditions
so difficult or unpleasant as to force him to resign. Sec-
ond, it must be shown that those burdens were imposed
because of the employee’s protected activities. Crystal
Princeton Refining Co., 222 NLRB 1068, 1069 (1976).
“A significant reduction in income for an indefinite period
of time, causing an employee to quit and seek alternative
employment, when a motive for such treatment was pro-
tected activity will establish constructive discharge.”
Meadow Valley Contractors, 331 NLRB No. 96, slip op.
at 5 (2000); Consec Security, 325 NLRB 453 (1998),
enfd. 185 F.3d 862 (3d Cir. 1999). For the following rea-
sons, we find that the evidence establishes that Frix and
Knight were constructively discharged in violation of Sec-
tion 8(a)(1).
4 251 NLRB 1083 (1980), enfd. 662 F.2d 899 (1st Cir. 1981), cert.
denied 455 U.S. 989 (1982).
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 852
As stated above, the Respondent altered the agents’
working conditions once they reported Smith’s miscon-
duct. First, the Respondent demanded that the employees
sign their unlawful disciplinary warnings under the threat
of termination. Next, the Respondent imposed onerous
working conditions such as no longer permitting the four
agents to write minimum coverage on casualty and prop-
erty insurance policies. This caused the employees poten-
tial loss of income. The Respondent also no longer per-
mitted the employees to imprint their names on office
calendars that were used as a marketing tool to clients.
Further, Keys began closely monitoring the agents’ daily
work routine and limited the amount of time they spent
out of the office. These restrictions affected their visita-
tions to clients and impacted on their sales.
The Respondent’s retaliatory conduct was also rein-
forced by its derogatory remarks to the employees. In
addition to telling the employees that they were “black
eyes” to the Company, Hightower also told Knight that he
would immediately fire Knight if Knight attempted to
defend himself at a meeting with Director of Sales
Tucker. Similarly, Tucker told Knight that he was “noth-
ing but a zero in the eyes of Farm Bureau,” and that
Tucker would “personally come to Newton County and
fire [Knight’s] ass,” if anything got back to Tucker. As
previously stated, Knight relayed Tucker’s comment
about firing the agents to Frix and the other agents. In
addition, Keys warned the agents that they “had better
walk the line.”
On December 1, Frix resigned because of the above
conditions and her conclusion that she no longer had a
viable career with the Respondent. In December, after
Frix’s resignation, Keys told the agents that if they were
not happy with the Company, they could resign like Frix.
In January 1999, Knight resigned as a result of Tucker’s
threats, the adverse working conditions, and his conclu-
sion that he had no future with the Respondent.
Based on the totality of circumstances in this case, we
find that both prongs of the Crystal Princeton test have
been satisfied. First, we find that the Respondent’s ac-
tions caused, and were intended to cause, a change in the
agents’ working conditions so difficult or unpleasant as to
force them to resign. The changes in working conditions
were not only demeaning to the employees, but they also
had the potential to result in a “significant reduction in
income for an indefinite period of time.” Meadow Valley
Contractors, supra. Restricting the type of insurance cov-
erage available to the agents to sell, eliminating their mar-
keting tools, and limiting the amount of time that the
agents spent out of the office on sales calls were all sub-
stantial roadblocks in the ability of the agents to sell in-
surance. Even if, as contended by our dissenting col-
league, “there was no showing that these employees suf-
fered any reduction in pay or that they lost any tangible
benefits,” it is certainly reasonable to conclude that these
measures would mean lost sales, and over time would
result in a significant reduction in income for an indefinite
period for agents dependent on commissions from these
sales.5 Further, Keys’ statement that if the agents were
not happy with the Respondent, they should resign, as did
Frix, suggests that the Respondent instituted the adverse
working conditions with the intention of forcing the
agents to resign.
We also find that the second prong of the Crystal
Princeton test has been established. The record shows
that the burdens placed on the agents were clearly im-
posed because of the employees’ protected activities. As
a result of the employees’ protected concerted activity of
reporting Smith’s mishandling of insurance claims, the
employees were told by Hightower that they were “black
eyes” to the Company and were warned by Tucker that
they would be fired if Tucker heard about any problems
from the Newton County office. The employees were
also warned by Keys that they had better “walk the line.”
As the judge found, the changes instituted by Keys “were
designed to harass, intimidate and closely monitor the
agents whom the Respondent no longer trusted” because
they had engaged in the protected concerted activity. Be-
cause both prongs of the Crystal Princeton test have been
established, we conclude that the quits of Frix and Knight
constituted constructive discharges and that the Respon-
dent violated Section 8(a)(1) of the Act.6

5 As stated above, “[T]he thrust of Board precedent on constructive
discharge with regard to loss of income is that if the reduction of wages
is significant and extends for an indefinite period, the reduction is so
onerous as to force an employee to leave.” Consec Security, supra, 325
NLRB at 454. Here, the potential loss of income resulting from the loss
of sales is significant and would extend for an indefinite period. Al-
though, as the dissent claims, there may have been no immediate “reduc-
tion in pay,” that is so only because the employees’ “pay” consisted of
commissions from sales. Unlike the employer in Consec, which directly
reduced the discriminatee’s income by lowering her wage rate, the Re-
spondent here sought to achieve its illegal objective indirectly by limit-
ing the employees’ ability to sell insurance and thus earn the commis-
sions that constituted their livelihood. Unlike our dissenting colleague,
we would not permit the Respondent to do indirectly that which the law
prohibits it from doing directly.
6 Our dissenting colleague contends that the employees’ acts of volun-
tary quitting were inconsistent with a discriminatee’s obligation to seek
to mitigate damages. We disagree. “The doctrine of mitigation of dam-
ages is a remedial issue and is not a factor in determining whether a
violation is established.” Consec Security, supra, 325 NLRB at 454
(footnote omitted). The responsibility to mitigate damages “is relevant
only to a determination of the remedy in the event that the constructive
discharge [violation] is found.” Moreover, “it is usually raised at the
compliance stage of a proceeding.” Id.
GEORGIA FARM BUREAU MUTUAL INSURANCE COS. 853
ORDER
The National Labor Relations Board orders that the Re-
spondent, Georgia Farm Bureau Mutual Insurance Com-
panies, Covington, Georgia, its officers, agents, succes-
sors, and assigns shall
1. Cease and desist from
(a) Placing any employee on a work program for engag-
ing in concerted activities protected by the Act.
(b) Reducing the earning potential of any employee for
engaging in concerted activities protected by the Act.
(c) Imposing more onerous work conditions on any em-
ployee for engaging in concerted activities protected by
the Act.
(d) Causing the termination of any employee for engag-
ing in concerted activities protected by the Act.
(e) Discharging, warning, or otherwise discriminating
against any employee for engaging in concerted activities
protected by the Act.
(f) In any like or related manner interfering with, re-
straining, or coercing employees in the exercise of the
rights guaranteed them by Section 7 of the Act.
2. Take the following affirmative actions necessary to
effectuate the policies of the Act.
(a) Within 14 days from the date of this Order, offer
Alan T. Lord, W. Scott Knight, Janet Frix, and Thomas
M. Ewing full reinstatement to their former jobs or, if
those jobs no longer exist, to substantially equivalent posi-
tions, without prejudice to their seniority or any other
rights or privileges previously enjoyed.
(b) Make Alan T. Lord, W. Scott Knight, Janet Frix,
and Thomas M. Ewing whole for any losses of earnings
and other benefits they suffered as a result of the dis-
crimination against them in the manner set forth in the
remedy section of the judge’s decision.
(c) Rescind the work programs that were imposed on
Alan T. Lord and Thomas M. Ewing and the other unlaw-
ful onerous conditions imposed on Lord, Knight, Frix, and
Ewing.
(d) Within 14 days from the date of this Order, remove
from its files any reference to the unlawful discharges,
warnings, and other unlawful actions, and within 3 days
thereafter notify Alan T. Lord, W. Scott Knight, Janet
Frix, and Thomas M. Ewing in writing that this has been
done and that the discharges and unlawful actions will not
be used against them in any way.
(e) Preserve and, within 14 days of a request, make
available to the Board or its agents for examination and
copying, all payroll records, social security payment re-
cords, timecards, personnel records and reports, and all
other records, including an electronic copy of the records
if stored in electronic form, necessary to analyze the
amount of backpay due under the terms of this Order.
(f) Within 14 days after service by the Region, post at
its facilities in Macon, Georgia and Covington, Georgia,
copies of the attached notice marked “Appendix.”7 Cop-
ies of the notice, on forms provided by the Regional Di-
rector for Region 10, after being signed by the Respon-
dent’s authorized representative, shall be posted by the
Respondent 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 Respondent to ensure that the notices are
not altered, defaced, or covered by any other material. In
the event that, during the pendency of these proceedings,
the Respondent has gone out of business or closed the
facility involved in these proceedings, the Respondent
shall duplicate and mail, at its own expense, a copy of the
notice to all current employees and former employees
employed by the Respondent at any time since July 8,
1998.
(g) Within 21 days after service by the Region, file with
the Regional Director a sworn certification of a responsi-
ble official on a form provided by the Region attesting to
the steps that the Respondent has taken to comply.

MEMBER HURTGEN, dissenting in part.
I agree with my colleagues in all respects except in re-
gard to their finding that the Respondent unlawfully and
constructively discharged employees Janet Frix and Scott
Knight.
To establish a constructive discharge under Board
precedent as set forth in Crystal Princeton Refining Co.,
222 NLRB 1068, 1069 (1976), the General Counsel must
establish that:

First, the burdens imposed upon the employee must
cause, and be intended to cause, a change in his working
conditions so difficult or unpleasant as to force him to
resign. Second, it must be shown that those burdens
were imposed because of the employee’s union activi-
ties.

I accept my colleagues’ conclusion that the Respondent
unlawfully made certain changes in the employment con-
ditions of employees Frix and Knight because of their
protected activity. However, I cannot agree that those
changes created conditions that were so intolerable as to
have forced the employees’ resignations. Rather, this was
a case in which the employees could have accepted the

7 If this Order is enforced by a judgment of the United States court of
appeals, the words in the notice reading “Posted by Order of the National
Labor Relations Board” shall read “Posted Pursuant to a Judgment of the
United States Court of Appeals Enforcing an Order of the National La-
bor Relations Board.”
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 854
changes and filed a charge with the Board, challenging the
Respondent’s actions.
In past cases, I have expressed my view that not every
retaliatory act by an employer against an employee should
be deemed to have forced the employee to quit.1 Rather,
it is only those employer acts which establish intolerable
working conditions that justify an employee’s quitting.
The “constructive discharge” doctrine does not, in my
view, justify an employee’s quitting merely because the
employer—albeit for unlawful reasons—has made it un-
comfortable for that employee. By the majority’s stan-
dard, almost any unlawful employer action against an
employee would justify that employee’s quitting. How-
ever, if an employee quits his employment because of
uncomfortable but not intolerable conditions, that em-
ployee has not in fact been forced to quit. Further, in such
circumstances, the employee’s act of quitting is a volun-
tary act which adds to the damages incurred because of
the unlawful conduct. It is therefore inconsistent with the
obligation to mitigate damages.2
Here, as described by my colleagues, the Respondent
unlawfully changed the working conditions of Frix and
Knight. The Respondent did not permit these employees
to put their names on calendars3 and it more closely moni-
tored their work activity. The Respondent also restricted
the insurance that these employees could write, thereby
causing a potential reduction in earnings. However, in
fact, there was no showing that these employees suffered
any reduction in pay or that they lost any tangible benefit.
In my view, all of the Respondent’s actions fall far short
of creating such intolerable conditions that the employees
could not realistically remain in the Respondent’s employ.
The employees could have continued to work and filed a
charge protesting the change in working conditions. The
remedy for the change would make them whole. I would
thus dismiss the complaint on the constructive discharge
allegations.
My colleagues assert that a “significant reduction in in-
come for an indefinite period of time” creates such a diffi-
cult or unpleasant condition as to force the employee to
resign. Even assuming arguendo the validity of that
proposition, it does not cover the situation involved
herein. There is no showing that there was any reduction
in income, let alone a “significant” reduction. At most, as
my colleagues concede, there was only a “potential” loss
of income. Without suffering any loss, and (necessarily)
without ascertaining whether any loss would be signifi-

1 See my dissenting opinions in L.S.F. Trucking, Inc., 330 NLRB
1054 (2000), and Consec Security, 325 NLRB 453 (1998).
2 See my dissent in Consec Security, supra.
3 Sales agents generally ordered calendars with their names imprinted
on them and used the calendars as a marketing tool.
cant, these employees simply quit. I would not reward
them with backpay.
APPENDIX
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 vio-
lated 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
concerted activities.

WE WILL NOT place any employee on a work program
for engaging in concerted activities protected by the Act.
WE WILL NOT reduce the earning potential for any
employee for engaging in concerted activities protected by
the Act.
WE WILL NOT impose onerous work conditions on
any employee for engaging in concerted activities pro-
tected by the Act.
WE WILL NOT cause the termination of any employee
for engaging in concerted activities protected by the Act.
WE WILL NOT discharge, warn, or otherwise discrimi-
nate against any employee for engaging in concerted ac-
tivities protected by the Act.
WE WILL NOT in any like or related manner interfere
with, restrain, or coerce you in the exercise of the rights
guaranteed you by Section 7 of the Act.
WE WILL, within 14 days from the date of the Board’s
Order, offer Alan T. Lord, W. Scott Knight, Janet Frix,
and Thomas M. Ewing full reinstatement to their former
jobs or, if those jobs no longer exist, to substantially
equivalent positions, without prejudice to their seniority
or any other rights or privileges previously enjoyed.
WE WILL make Alan T. Lord, W. Scott Knight, Janet
Frix, and Thomas M. Ewing whole, with interest, for any
loss of earnings and other benefits they suffered as a result
of our discrimination against them.
WE WILL rescind the work programs imposed on Alan
T. Lord and Thomas M. Ewing and the other unlawful
onerous working conditions imposed on Lord, Ewing,
Frix, and Knight.
WE WILL, within 14 days from the date of the Board’s
Order, remove from our files any reference to the unlaw-
GEORGIA FARM BUREAU MUTUAL INSURANCE COS. 855
ful discharges, warnings and other unlawful actions, and
WE WILL, within 3 days thereafter, notify Alan T. Lord,
W. Scott Knight, Janet Frix, and Thomas M. Ewing in
writing that this has been done and that the discharges will
not be used against them in any way.

GEORGIA FARM BUREAU MUTUAL
INSURANCE COMPANIES

Lisa Henderson, Esq., for the General Counsel.
Duke Groover Jr., Esq. and Denmark Groover, Esq. (Groover &
Childs), for the Respondent.
DECISION
STATEMENT OF THE CASE
LAWRENCE W. CULLEN, Administrative Law Judge. This
case was heard before me on October 28 and 29, 1999, in Cov-
ington, Georgia, pursuant to a consolidated complaint issued by
the Regional Director for Region 10 of the National Labor Rela-
tions Board (the Board) on July 30, 1999. The complaint is
based on charges filed against Georgia Farm Bureau Insurance
Companies (the Respondent or the Company) by W. Scott
Knight, an individual, in Case 10–CA–31631–1 and Alan T.
Lord, an individual in Case 10–CA–31631–2. The consolidated
complaint alleges that Respondent violated Section 8(a)(1) of the
National Labor Relations Act (the Act) through its supervisors
and agents by disciplining its employees; warning its employees;
denying its employees promotions; requiring its employees to
submit to interrogation, threatening its employees; reducing the
earnings potential of its employees; imposing more onerous
working conditions on its employees; causing the termination of
its employees; placing its employees on work programs; and
discharging employees because they engaged in protected con-
certed activity. The complaint as amended at the hearing is
joined by the answer of Respondent as amended at the hearing
wherein Respondent denies the commission of any violations of
the Act. Respondent also raises certain affirmative defenses in
its answer and at the hearing.
On the entire record in this case including the credited testi-
mony of the witnesses who testified herein, the exhibits received
in evidence and the positions of the parties at the hearing and
upon review of their briefs filed after the close of the hearing, I
make the following
FINDINGS OF FACT
I. JURISDICTION
A. The Business of Respondent
The complaint alleges, Respondent admits, and I find that at
all times material, Respondent has been a Georgia corporation
with offices and places of business in Macon and Covington,
Georgia, and has been engaged in the sale and servicing of prop-
erty and casualty insurance, that during the past year, a represen-
tative period of its operations, in conducting its operations it had
a gross volume of business in excess of $500,000, that it has a
relationship with the American Farm Bureau Insurance Com-
pany located in Park Ridge, Illinois, under which arrangement it
from time-to-time seeds portions of its losses in excess of speci-
fied figures which arrangement is called a reinsurance treaty,
and the moneys paid by Respondent under the arrangement to
the American Farm Bureau exceed $50,000 a year. Based on the
foregoing, I conclude that Respondent is an employer engaged in
commerce within the meaning of Section 2(2), (6), and (7) of the
Act.
Facts
Respondent is a mutual insurance company and employed
four sales agents at its Newton County Farm Bureau’s office
who reported to the Agency Manager Donia Smith. The four
sales agents were W. Scott Knight, Alan T. Lord, Janet Frix, and
Thomas M. Ewing, who were employees of Respondent who
sold insurance from Respondent’s Newton County office in
Covington, Georgia. Additionally, the Newton County Farm
Bureau employed a secretary, Karin Byous, who did work for
the agents. On March 1998, Ben Marks, a Newton County Farm
Bureau officer presented two separate insurance claims for him-
self to secretary Byous and told her to process them as one claim
in order for him to only be required to pay one deductible
amount rather than two for the two separate claims. Byous de-
clined to do so contending that this was fraudulent. Ben Marks
then directed her to give the claims to Supervisor Donia Smith
for processing as a single claim. Byous gave Smith the claim
but stated that she (Byous) would not sign it. The conversation
was overheard by Agents Ewing, Frix, and Knight. Later that
day, Ewing was told by Smith that she had “taken care of things”
by combining Marks’ claims.
Later that month, Smith told Frix that she could not believe
that Byous had spoken to Marks in that manner. Frix then told
Smith, “Well that’s fraud.” Smith did not reply to this comment
by Frix. Shortly prior to this incident Smith had told Knight and
Frix that she was going to combine two unrelated claims of an
elderly lady, Bessie Galloway, in order to avoid Galloway being
required to pay two deductibles. The General Counsel elicited
unrebutted testimony that Smith’s actions were in violation of
company policy and State law. This alarmed the four sales
agents who discussed the matter among themselves and deter-
mined that Knight and Lord would take action to report this
perceived fraud on the part of Smith. Initially, Lord contacted
the State Insurance Commissioner’s office and was advised to
handle it through Respondent’s internal processes. Lord and
Knight then contacted Respondent’s claims adjuster, Otis
Criswell, who said he would call the matter to the attention of
District Claims Manager Mike Weaver. However, in early May,
Lord, and Knight learned that Marks’ claim had been paid. They
again contacted Criswell who assured them he had brought the
matter to Weaver’s attention.
In May 1998, Lord asked training agent, Ewing, how to pro-
ceed with the employees’ concern about the perceived fraud.1

1 Ewing worked in the Georgia Farm Bureau system for 41 years. He
worked as a volunteer for many years at the county and state levels and
was president of the Newton County Farm Bureau for 9 years. He
served on the Georgia Farm Bureau Board and as vice president of
Georgia Farm Bureau Federation. In 1988, Ewing was elected president
of the Georgia Farm Bureau Federation and its affiliated companies
(including Georgia Farm Bureau Mutual Insurance Companies). He
served in this capacity for 6 years. (T. 146.)
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 856
Ewing recommended that Lord speak to Roy Cox, director of
claims and telephoned Cox who was retiring since Ewing had
been invited to his retirement party. After a lengthy discussion
with Cox concerning his retirement plans, Ewing broached the
matter with Cox and asked if he would be willing to speak to
Lord about it. Cox agreed, and Lord telephoned Cox and in-
formed him of the handling of the claims. Cox looked into the
matter briefly and concluded the handling of the claims was
irregular. On May 28, Cox sent a memo to Director of Internal
Audits Rod Oleson requesting that the agents and secretary By-
ous be contacted at their homes, as per their request to investi-
gate the perceived fraudulent handling of the Marks and Gallo-
way claims by Manager Donia Smith.
Subsequently, on June 23, Oleson and District Sales Manager
Johnny Hightower arrived at the Covington office to investigate
the matter and met individually with each of the four agents.
They asked Lord why he contended that Smith’s actions were
fraudulent and why he had reported this to Claims Director Cox
rather than up the sales division chain of command.
Frix testified that shortly after this Donia Smith told Frix she
was upset with the agents’ actions in reporting her. She also told
Frix it would help her if she called Oleson and changed her ac-
count of the matter concerning Smith. Frix refused to do so.
Smith also met with Knight and Lord and expressed her dismay
and anger at them for reporting her. On July 1, Smith told Ew-
ing she was in danger of losing her job and later that day she told
Frix that she, Knight, and Byous were to blame for her loss of
the agency manager position.
Subsequently on July 8, Hightower met with the four agents
and informed them Smith had been demoted and had resigned as
agency manager. He went on to tell them that agency managers
and agents across the State were upset because they had reported
Smith. He told them they were “black eyes” to the Company,
that their actions were not honorable, and they could expect very
difficult times in the future as a result and that their actions
would make it very hard for them.
Hightower told the four agents that they had been insubordi-
nate by going outside the chain of command in reporting Smith
to the claims department rather than the sales department. He
also issued each of the agents warning letters for their “insubor-
dination” and forced each of the agents to sign them under threat
of termination. None of them had ever received discipline of
any kind in the past. Knight had been employed by Respondent
since July 1988. Lord had been employed by Respondent since
January 1994. Frix had been employed by Respondent since
January 1992. Although Ewing had only been employed as a
training agent since October 1996, he had served the Respondent
and its affiliate state organization for over 41 years as set out
above. The agents also testified that they had never been in-
formed of a chain of command prior to this and that they consid-
ered the claims department the logical place to take the com-
plaint rather than their immediate Supervisor Smith who was the
subject of the complaint. It should be noted that the claims de-
partment and the sales department are both a part of the same
Company, the Respondent in this case.
Subsequently on July 23, the four agents were each required
to appear before the Newton County Farm Bureau board to an-
swer inquiries regarding Smith. Hightower told the agents to be
careful at the meeting as to what they said and how they said it.
He attended the meetings also. County Board President Brad
Marks had sent memos to the agents and Hightower had also
reiterated the message from Marks. There is no doubt that the
agents were required to attend as the Board had the authority to
disapprove an agent’s continuation as an agent in the County.
Brad Marks is the brother of Ben Marks whose claim was the
subject of the inquiry that had led to Smith’s removal as the
agency manager. Brad Marks was secretary/treasurer of the
Newton County Farm Bureau and a board member and attended
the meeting. Each of the four agents described their meeting
with the Board as hostile with board members peppering them
with questions concerning their professional relationship with
Smith, and why they had gone to Claims Director Cox. At one
point a board member asked Knight if Ben Marks was involved
in the claim handled by Smith. When Knight answered, “[Y]es,”
Hightower immediately told him his job was in jeopardy for
revealing confidential information. The record in this case
leaves no doubt that the board was aware that the claims submit-
ted by Ben Marks were known by the board members to be in-
volved in this matter.
Knight testified he went on a “needful vacation” the week af-
ter the board meeting. When he returned, Hightower told him he
needed to meet with Director of Sales Tim Tucker at the home
office in Macon, Georgia. Hightower cursed at Knight and told
him he had “royally screwed up” by revealing confidential in-
formation in the Board meeting. He also told Knight that if he
tried to defend himself in the meeting with Tucker, he would be
fired immediately. In the meeting with Hightower, Tucker and
Assistant Director of Sales Jack Shippey, Tucker told Knight he
was “nothing but a zero in the eyes of Farm Bureau.” Tucker
also chided Knight that he ought to know now why he had not
received the agency manager position he had applied for.
Tucker also told Knight that if anything got back to him, he
would “personally come to Newton County and fire (Knight’s)
ass.” He further told Knight to tell the other agents, he had bet-
ter not hear anything out of Newton County. As directed,
Knight repeated the threat to Ewing, Frix, and Lord.
In early August, the Respondent appointed Joey Keys to re-
place Smith as agency manager. Keys had been selected for this
position over Frix and Knight who had also applied although his
production was substantially less than either agent. When
Hightower introduced Keys to the four agents, he warned them
that they had better listen to him and walk the line. Keys
quickly demonstrated that he would continue Respondent’s
campaign against the agents for their disclosure to the claims
department of the claim handling by Smith. Although Ewing
who had served in the Respondent’s hierarchy for many years,
offered to introduce Keys to local bank presidents and officials,
this offer was declined by Keys. Keys, who did not testify, initi-
ated a number of changes which in combination went beyond
those to be expected of a new manager in a neutral change of
leadership. Rather, I find that these changes were designed to
harass, intimidate, and closely monitor the agents whom Re-
spondent no longer trusted because of their reporting of the han-
dling of the Marks and Galloway claims to the claims depart-
ment. Thus, working conditions deteriorated under Keys’ man-
agement. Friday casual days were discontinued. The agents
GEORGIA FARM BUREAU MUTUAL INSURANCE COS. 857
were no longer permitted to order office calendars with their
names imprinted on them which was the loss of a significant
marketing tool to them. The agents testified that Keys notified
them that they could no longer write minimum coverage auto
insurance policies and imposed a $300,000 liability minimum on
homeowner’s insurance policies, both of which restrictions had
the potential of causing a loss of business to the agents. In addi-
tion, Keys ordered that all mail be routed through him rather
than directly to the agents as in the past. He also required close
monitoring of the whereabouts of the agents and initiated work
reviews. It is clear that these changes were designed to frustrate
and belittle the agents and restrict their abilities to perform their
jobs as they had in the past all without prior discipline and
whose sales production figures were above average.
Frix resigned on December 1, as a result of these conditions
and her conclusion that she no longer had a viable career with
Respondent. In response to this resignation, Keys told the
agents that if they were not happy with Respondent, they should
do as Frix did and resign. In January 1999, Knight resigned as a
result of the threats by Tucker, the adverse working conditions
and his conclusion that he had no future with Respondent.
On January 22, 1999, Lord and Ewing were given their per-
formance appraisals by Keys who rated both as satisfactory
overall and included some positive comments about their per-
formance. On February 3, 1999, there was an unprecedented
meeting held among Respondent’s top management officials
held in the Newton County office including the Agency Manager
Keys, its District Sales Manager Hightower, its Director of Sales
Tim Tucker, Assistant Director of Sales Jack Shippey, and the
president of the Georgia Farm Bureau, as well as the district 3
manager of the Georgia Farm Bureau Federation, Rickey Lane.
On the following Monday, Ewing and Lord were placed on work
programs normally reserved for employees with poor perform-
ance records. In fact, Ewing had successfully completed his
training agent program in the fall of 1998 and both Lord’s and
Ewing’s production records were demonstrative of successful
performance. The overall Newton County office production
figures were also well above the averages of other agency office
production figures.
The work program set onerous and virtually impossible pro-
duction goals to be met by Lord and Ewing. It also barred the
acceptance of telephone calls from exagents and barred their
discussion of the work program with anyone other than Keys
and Hightower without requesting permission to go up the
“chain of command.” It also provided that under no circum-
stances were they to discuss the work program with anyone out-
side of Farm Bureau management. Ewing objected to the pro-
gram, told Hightower he was cutting his head off a little at a
time and stated he did not wish to sign it. Hightower told him he
had no choice but to sign it to continue his employment. Lord
also signed his work program. The work program was to be of
indefinite duration but on February 22, 1999, both Lord and
Ewing were terminated without explanation with High-tower
merely telling them he had been ordered to terminate them. At
the hearing, Hightower testified that Tucker had made the deci-
sion to terminate the two agents’ contracts. Tucker testified only
in generalities as to the reasons for their terminations and de-
ferred to Hightower and Keys as to the specifics. As noted
above Keys was not called by Respondent to testify giving rise
to the inference that his testimony would not have been favor-
able to Respondent’s position in this case. Hightower also of-
fered no specific substantive reasons for Respondent’s treatment
of the agents.
Analysis
I find that Respondent has violated Section 8(a)(1) of the Act
as alleged in the complaint by:

1. reducing the earning potential of its employees;
2. imposing more onerous working conditions on its
employees;
3. causing the terminations of its employees Janet Frix
and W. Scott Knight;
4. placing its employees Alan Lord and T. M. “Mort”
Ewing on a “work program”; and
5. discharging its employees Alan Lord and T. M.
“Mort” Ewing.

This case involves the engagement in protected concerted ac-
tivity by the four agents, Respondent’s animus toward these
employees’ engagement in the protected concerted activity, and
its relentless retaliation against these employees for their en-
gagement in the protected concerted activity.
There is ample evidence that the employees were engaged in
protected concerted activity. On their discovery of the apparent
mishandling of the Marks’ and Galloway’s claims the employees
were placed in a vulnerable and tenuous position as a result of
the potential threat to their positions and terms and conditions of
employment if they were determined to have acquiesced in this
activity by failing to report it. There is no question that insur-
ance fraud is a felony under State law. Certainly its participation
therein violates state licensing requirements for insurance agents
and the conditions set out in the individual contracts that the
agents signed with the Respondent in order to serve as agents.
Thus it is clear that at a minimum the agents’ tenure with Re-
spondent was in jeopardy once they learned of the mishandling
of the claims by Smith. If they failed to report it, they could
have been subject to termination. As it turned out, they were
also in jeopardy of losing their jobs if they reported it in a man-
ner deemed unacceptable by Respondent’s management. There
is no question that the agents discussed the problem at length
among themselves and determined to take action to report it to
the claims department which they considered to be the logical
place to report a mishandled claim. Respondent retaliated
against them by the issuance of a written warning which is not
alleged as a violation because of 10(b) considerations regarding
the filing of charges within 6 months of a violation of the Act.
The warning was issued for having failed to follow the “chain of
command” up through the sales department which included the
Supervisor Smith who was involved in the mishandling of the
claim. The Respondent failed to produce explicit testimony or
evidence that the agents had ever been advised to follow the
sales department, “chain of command” in reporting mishandled
claims. I credit the agents’ testimony that they had not been so
advised. Furthermore, there is no evidence of any impropriety
on the part of the agents in reporting the matter to the claims
department which is a part of Respondent just as is the sales
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 858
department. The sales department’s objection to the reporting of
the mishandled claim to the claims department is a puzzle.
Whether it was a concern of the potential embarrassment to the
sales department, an attitude that this was a minor matter which
could have been readily handled by the sales department or a
concern for the persons involved is a matter of speculation.
In any event it is clear that the agents engaged in protected
concerted activity in reporting the mishandled claim to the
claims department. Transpac Fiber Optics, 305 NLRB 974
(1991); Daniel Construction Co., 277 NLRB 795 fn. 4 (1985);
Systems With Reliability, Inc., 322 NLRB 757, 760 (1996); and
Arrow Electric Co., 323 NLRB 968, 970 (1997).
There is overwhelming evidence in this case that Respondent
retaliated against the agents and that the retaliation was moti-
vated by Respondent’s animus toward them for their engage-
ment in the protected concerted activity of reporting the mishan-
dled claims to the claims department. This is true of the deroga-
tory remarks made to them by Respondent’s management, the
warnings issued to them, the onerous working conditions im-
posed on them, the restrictive working conditions giving rise to a
potential loss of income, the constructive discharge of Frix and
Knight, the impositions of the work program on Lord and Ewing
and the discharge of Lord and Ewing. Thus, the General Coun-
sel has made a prima facie case of all of the violations of Section
8(a)(1) as alleged in the complaint.
With respect to the constructive discharge of Frix and Knight,
I find that the onerous conditions imposed on them did cause and
were intended to cause a change in their working conditions so
as to force their resignation and that they were subjected to these
onerous conditions because of their engagement in protected
concerted activity. Crystal Princeton Refining Co., 222 NLRB
1068, 1069 (1976).
With respect to the imposition of the work program on Ewing
and Lord and their ultimate discharge by Respondent it is clear
that this was the final step in Respondent’s campaign to rid itself
of all four agents who had engaged in the protected concerted
activity.
I find Respondent has failed to rebut the prima facie cases of
violations established by the General Counsel. Wright Line, 251
NLRB 1083 (1980); Kysor Industrial Corp., 309 NLRB 237
(1992).
B. The Late Filed 10(b) Defense
In its posthearing brief, Respondent asserts for the first time in
this proceeding that the addition of Janet Frix’s constructive
discharge filed in the amended charge of July 12, 1999, is un-
timely. I find however that this allegation is not time barred
under Section 10(b) of the Act. The Respondent did not raise
this defense in its answer to the complaint or at the hearing but
did so only in its posthearing brief in this case. Since Section
10(b) is an affirmative defense and was not timely raised it is
accordingly untimely in this case. Prestige Ford, 320 NLRB
1172 fn. 2 (1996); Public Service Co., 312 NLRB 459, 461
(1993).
CONCLUSIONS OF LAW
1. The Respondent is an employer within the meaning of Sec-
tion 2(2) and (5) of the Act.
2. The Respondent violated Section 8(a)(1) of the Act as set
out in the foregoing decision.
3. The above unfair labor practices in connection with the
business of Respondent have the effect of burdening commence
within the meaning of Section 2(6) and (7) of the Act.
THE REMEDY
Having found that Respondent violated the Act, it shall be or-
dered to cease and desist there from and to take certain affirma-
tive actions including the rescinding of the unlawful onerous
conditions imposed on the agents, the constructive discharge of
Frix and Knight, the imposition of the work program on Ewing
and Lord and the discharge of Ewing and Lord. It shall also be
ordered to purge its records of all references to the unlawful
actions taken against Frix, Knight, Ewing, and Lord and to offer
them reinstatement to their former positions or to substantially
equivalent positions if their former positions no longer exist
without prejudice to their seniority or other rights or privileges
previously enjoyed or to which they would have been entitled in
the absence of the discrimination against them from the date of
their discharges. I also recommend that Respondent make the
employees whole for any loss of earnings and benefits they sus-
tained as a result of the discrimination against them. These
amounts shall be computed in the manner prescribed in F. W.
Woolworth Co., 90 NLRB 289 (1950), with interest as computed
in the manner prescribed in New Horizons for the Retarded, 283
NLRB 1173 (1987). Interest shall be computed at the “short
term Federal rate” for the underpayment of taxes as set out in the
1986 amendment to 26 U.S.C. § 6621.
[Recommended Order omitted from publication.]