Metropolitan Life Insurance Co.

National Labor Relations Board - Board Decisions

Sep 4, 1942

43 N.L.R.B. 962 (N.L.R.B. 1942)

In the Matter of METROPOLITAN LIFE INSURANCE COMPANY and INTER-
NATIONAL UNION OF LIFE INSURANCE AGENTS, LOCALS 1, 2 , 3, 4, 5,
39, 41
Case No., R-4032.Decided September 4, 1942
Jurisdiction : life insurance industry.
Investigation and Certification of Representatives : existence of question:
refusal to accord petitioner recognition; election necessary.
Unit Appropriate for Collective Bargaining : state-wide unit within one terri-
'torial division of Company held appropriate notwithstanding-Company's con-
tention that the smallest appropriate unit should comprise one -territorial
division.
Definitions : insurance agents attached to, Company offices held to be employees
within the meaning of the Act.
Stephen M. Reynolds, for the Board.
Rieser and Mathys, by Mr. Robert M. Rieser, of Madison, Wis.,
and Covington, Burling, Rublee, Acheson, and Shorb, by Mr. Charles
A. Horsky, of Washington, D. C., for. the Company.
Gold and McCann; by Mr. R 'ay T. McCann, of Mil aukee, Wis.,
for the International.
Mr. Mozart G. Ratner, of counsel to the Board.
DECISION
AND
DIRECTION OF ELECTION
STATEMENT OF THE CASE
Upon petition duly filed by the' International Union of Life Insur-
ance Agents, herein called the International, alleging that a question
affecting commerce had arisen concerning the representation of em-
ployees of Metropolitan Life Insurance Company, New York City,
herein called the Company; the National Labor Relations Board
provided for an appropriate hearing upon due notice. On June 23.,
1942, 'before a hearing was held, the Company, the International,
and the Regional -Attorney for the Twelfth Region entered into a:
stipulation waiving hearing and providing that the facts stated in
the stipulation shall constitute all of the facts in this proceeding.
The Company and the International filed briefs which the Board has.
considered. On August 11, 1942, pursuant to notice served on all.
43 N. L. R. B., No. 168.
962
METROPOLITAN LIFE INSURANCE COMPANY 963
parties, the Company and the Union presented oral argument before
the Board.
Upon the entire record in the 'case, the Board makes the following :
FINDINGS OF FACT
1. THE BUSINESS OF THE COMPANY
Metropolitan Life Insurance Company is a New York corporation
having its home office in New York City. The Company is engaged
in insuring the lives and health of its policyholders. On December
31, 1941, the Company had approximately 40,000,000 policies in force
with a total face value of approximately $25,400,000,000. It had
approximately, 29,400,000 policyholders, residing in 48 States of the
United States, the District of Columbia, and Canada. On December
31111941, the Company's assets totaled over $5,000,000,000, consisting
of cash, Government 'bonds, stocks, mortgages on real estate, real
estate, and policy loans and notes. All securities purchased by the
Company are delivered to its home office in New York. The Company
owns its home office property located at 1 Madison Avenue, New York
City, and other properties used in the administration of its business
throughout the United States and Canada. The Company manages
its real estate through 200 real estate agents in 33 States of the
United States, in the District of Columbia, and in Canada. During
the 5-year period from 1937 to 1941, the Company annually invested
in bonds, stocks, and mortgages approximately $592,400,000. From
the foregoing, it is clear that in addition to insuring the lives of its
policyholders, the Company engages in a diversified -and widespread
investment business.
During 1941, the Company purchased approximately- $1,000,700
worth of furniture, fixtures, and mechanical equipment for use in
its business , of which approximately 34 percent in value was used in
a State or States other than that from which said equipment was
shipped to the Company. During 1941, the Company purchased
approximately $1,203,984 worth of paper and other stationery supplies
of which approximately' 25-percent in value was used in States other
than the State in which it was purchased. During 1941, the Coin-
pany spent approximately $2,568,266 for postage, telephone, telegraph,
and express services and approximately $3,046,178 for the traveling
expenses of its supervisors.
On December 31, 1941, the Company employed 18,607 agents
throughout the United States and Canada. We find that the Com-
pany is engaged in commerce within the meaning of the National
Labor Relations Act. - '
964 DECISIONS OF NATIONAL LABOR RELATIONS BOARD"
II. THE ORGANIZATION INVOLVED
International Union of Life Insurance Agents is an unaffiliated labor
organization admitting to membership insurance agents selling both
industrial and ordinary life insurance in the United States and Canada.
III. THE QUESTION CONCERNING REPPESENTATION
On' October 24, 1941, the Union requested recognition as exclusive
representative of the Company's' agents in the State of Wisconsin.
The Company refused to grant this request on the grounds that (1)
the Act does not apply to the Company or to its agents because the
agents are not employees within the meaning of Section 2 (3) of the
Act; (2) that the unit alleged to be appropriate by the'petitioh is in
fact inappropriate for the purposes of collective bargaining; and (3)
that the Union does not represent a majority, of the agents attached
to the Company in an appropriate unit. The Company contends that
the agents are in -effect independent contractors and not employees
within the meaning of the Act because they are compensated by the
payment of commissions rather than salary and consequently there is
wide variation in earnings among agents, they are free to solicit and
sell insurance at such times as they deem fit, and they bear all expenses
connected with their agency except those assumed by the Company.
All "regular," "office account,"* and "detached" agents enter into
an "Agent's Agreement" with the Company pursuant to which the
agent agrees to canvass for and procure applications for insurance, to
deliver all policies issued by the Company on 'such applications, to
collect the premiums payable on delivery and other premiums which he
is authorized to receive and to'account for and pay over to the Com-
pany daily all monies paid to him as agent, to use the appropriate com-
pany forms to conserve the Company's business, to assist the holders
of policies of the Company in realizing the benefits provided by their
policies and to accept in full satisfaction for all services the commis-
sions and advances stated in the agreement.
Any regular or office account agent of the Company may solicit for
and sell any of the types of insurance issued by the Company at any
place where he is licensed to do so except that the Company encourages
agents to canvass for and write new industrial policies only on their
own debits, and 'except also that agents may not sell industrial insur-
ance at non-agency points where no facilities exist.to receive premiums.
The Company pays taxes on agents attached to its several offices
to the Bureau of Internal Revenue under the Insurance Contribution
Act and the Federal Unemployment Tax Act, Sub-chapter A and C
of Chapter 9, Internal Revenue Code, as well as to the Unemployment
METROPOLITAN LIFE INSURANCE COMPANY 965
Compensation Commission of each State. In some States the Com-
pany participates on behalf of its agents in Workmen's, Compensa-
tion programs. - In Wisconsin the Company has complied with the
provisions of the Wisconsin Workmen's Compensation Act by under-
writing its liabilities with the Travelers Insurance Company of
Hartford, Connecticut. The Company also carries a non-ownership
liability policy with the Travelers Insurance Company, the coverage
of which is restricted to the sole liability of the Company in the
event claim is made to-recover damages for personal injuries or prop-
erty damage allegedly resulting from the operation of an agent's
privately owned car in connection with Company business. The
Company maintains and makes contributions to Retirement Group
Insurance plans in which its agents voluntarily participate.
. Regular agents and office account agents usually report to the dis-
trict offices or office account offices at least 3 days each week, and in
addition they are required to report once a week for educational meet-
ings. On the days on which they report to the office they deposit
premiums, turn in applications for new policies, and receive their,
mail and other communications. Among the facilities which the Com-
pany furnishes' its agents at these offices are desks, mail boxes, sta-
tionery and forms, and advertising material, such as literature and
calendars. The hours at which the agents report at the office are fixed
by the district manager usually with reference to the time that the
office is open to the public. Managers may occasionally call agents
to the office at other times if they deem it necessary in the interest
of service to the policyholders or in connection with other phases
of the business. Agents are frequently accompanied on their debits
by an assistant manager or representative of the field training division
on training assignments in various phases of the business, and occa-
sionally by an assistant manager or a representative of the field audit-
ing division for the purpose of auditing an agent's account. Each
agent is entitled in each calendar year to a vacation, the duration
of which is determined by the home office and is uniform throughout
the United States for all agents having the same length of service.
We are of the opinion and find, in accordance with our previous
decisions, that the agents attached to the offices of the Company are
employees within the meaning of Section 2 (3) of the-Act.'
'Matter o f Supreme Liberty Life Insurance Company and American Federation of
Industrial and Ordinary Agents No. 20817, A F. of L, 32 N. L R B 94'; Matter of Sun
Life Insurance Company of America and Industrial and Ordinary Insurance Agents
Union No 21354, 15 N L. R. B 817; Matter of John Hancoci Mutual Life Insurance
Company and American Federation of Industrial and Ordinary Insurance Agents Union
No. 21571, 26 N L R B 1024; Matter of Life Insurance Company of Virginia and
The American Federation of Industrial and Ordinary Insurance Agents Union No 22264,
29 N L. R B. 246; Matter of Colonial Life Insurance Company of America and United
Office & Professional Workers of America, C. 1. 0., 42 N L. R. B. 1177.
966 DECISIONS -OF NATIONAL LABOR RELATIONS BOARD
A statement of the Regional Director indicates that the Interna-
tional represents a substantial number of employees in the unit herein-
after found appropriate.2
We find that a question affecting commerce has arisen concerning
the representation of employees of the Company, within the meaning
of Section 9 (c) and Section 2 (6) and (7) of the Act.
IV. TIIE APPROPRIATE UNIT
The International, requests a unit composed of all the insurance
agents employed by the Company within the State of Wisconsin. The
Company contends that the most appropriate unit consists of all insur-
ance agents in the employ of the Company and that the smallest
appropriate unit consists of- all the agents in any single territorial
division of the Company, in the instant case Territorial Division D.3
The parties agree that "independent" and "retired" agents, managers
and assistant managers, clerks, cashiers, secretaries, and other persons
not agents shall be excluded from the unit. The parties further agree
that "canvassing" agents, as well as "regular," "office account," and
"detached" agents shall be included in any unit found appropriate.
In the United States the Company has, for administrative purposes,
nine agency divisions; called territorial divisions, each representing
a group of contiguous States.4 The State of Wisconsin is located in
Territorial Division D, which includes the States of Wisconsin, Min-
nesota, Michigan, and Illinois. Each division is directly under a super-
intendent of agencies for that division, who is in turn responsible to
the second vice president in charge of agencies. Each superintendent
of agents is the effective supervisory executive of all the district 'offices
and office account offices in his division. Field training activities are
conducted by the field training division which is divided into territprial
divisions which correspond exactly with the agency territorial 'divi-
sions. Each territorial division contains 'a number of offices of two
main types known and referred to as district offices and office account'
offices, each under the direction of a manager and one or more assistant
managers. In no case, however, do authorized agency points served
by any district office or office account office include localities in more
than one territorial division of the Company.
All matters of general policy in the operation of the agency divi-
sions of the Company are determined by the directors and officers ofk
2 The International submitted 210 designation cards, of which 195 were found to bear
apparently genuine and original signatuies of persons whose names appear on the Com-
pany 's pay roll of November 20, 1942. The Regional Director found that there were
approximately 376 agcrits in the unit hereinafter found appropriate.
s Territorial Division D comprises the States of Wisconsin , Minnesota , Michigan, and
Illinois
' 4 This is true except for New York, which comprises Territorial Division A and part
of Teiritorial Division C.
METROPOLITAN LIFE INSURANCE COMPANY 967
the'Company at its home office. All applications for policies'of insur-
ance are, accepted, postponed, or rejected at the home office -aiid all
policies are issued at the home office. All fiscal affairs of the Company
are.under the direct supervision and control of the. home office. All
investigations are authorized and approved by the home office. All
agents are appointed by the Company at its home office, although
applications are made at a local office. Preliminary training of .the
agent is generally done under supervision of the home office. Rates
of earnings are determined by directors and officers at the home office
and are uniform throughout the United- States, for each of the various-
classes of agents. The forms on which, and the manner in which, the
agents make their reports of fiscal transactions to the Company are
prescribed and from time to time changed, by the home office. The
work of each agent is checkedafrom time to time by the home office,
which alone can adjust or compromise shortages, petty or otherwise,
in the accounts of,an agent. Managers have no authority'to arrange
sales drives or sales campaigns, nor have they authority to set, quotas
for an agent individually or for the office.
The. agent in one district office or office account office in. Territorial
Division D is in no different position from the agents in another dis-
trict office or office account office in that division. Those factors which
directly affect his work, such as collection, promotions, compensation,
• working conditions, rules and- regulations, supervision, and termina-
tion are uniform throughout Territorial Division D. Agents may be
and occasionally are transferred to a different office at their own
request, or with their consent at the request of the Company.
In a proceeding brought before the Nev York State Labor Relations
Board, the .Company took the position that the appropriate unit was
the entire State of New York which was all of Territorial Division A
and part of Territorial Division C. The State Board found that
Territorial Division A alone was an appropriate unit. In a proceeding
brought by the International before the Wisconsin Labor Relations
Board, the International at that time being organized only in the
metropolitan area of Milwaukee, Racine, and Kenosha, the Interna-
tional took the position that such area was an appropriate unit under
the State Act. The Company took the position that the' proper unit
was the entire country and the smallest appropriate unit was the State
of Wisconsin. The Wisconsin Labor Relations Board found that the
area; advocated by the International was the proper unit and directed
the Company to bargain with the Union.' The Company stresses that
6 This order was affirmed by the Circuit Court of Dane County. During the pendency
of the action in the Circuit Court of Dane County, the Wisconsin State Labor Relations
Act was repealed and the Wisconsin Employment Peace Act enacted. Upon appeal by
the Company from the decision of the circuit court of Dane County, the , Supreme Court
of Wisconsin reversed the decision of the Circuit Court.
968 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
in each of these cases it requested the largest possible unit within the
jurisdiction of the respective labor relations boards. '
The International has established locals in the State of Wisconsin
in Milwaukee, Kenosha, Racine, LaCrosse, Madison, Superior, Apple-
ton, and Ashland. It -has also established locals outside the State of
Wisconsin at Minneapolis and St. Paul, Minnesota, at Virginia, Min-
nesota, at Dayton and Springfield, Ohio, at Fort Wayne, and at
Anderson, Indiana. At the 1941 convention it was resolved that the
Organizing Committee of the International should concentrate to com-_
plete organization of industrial agents in Wisconsin and should then
extend organization to all unorganized agents`in the country.
The International has been recognized pursuant to the Wisconsin
Employment Peace Act as bargaining agent for the agents of the
Prudential Insurance Company in the State of Wisconsin and has
entered into a written contract with the Prudential in -which it is
recognized as the exclusive bargaining representative of the agents,of
the Prudential in Wisconsin. The International also entered into a
written contract with the John Hancock Life Insurance Company, in
which the International is recognized as the exclusive bargaining, agent'
for the agents of the John Hancock in the State of Wisconsin. The
Prudential has approximately 446 agents in Wisconsin and John
Hancock has approximately 48 agents in that State.'.
Insurance agents are licensed by their States. Requirements for a .
license vary greatly from one State to another. State Insurance De-
partments exercise varying degrees of supervision over the activities
of agents and of companies. The insurance agents of each State are t
this extent similarly situated. Furthermore, the feasibility of.a State-
wide unit is indicated by the fact that the agents of the John Hancock
Life Insurance Company and the agents of the Prudential Insurance
Company in the State of Wisconsin'are at present successfully engaged
in collective bargaining. Under the circumstances of this case, we are
of the opiniion and find that the:policies of the Act can be best effec-
tuated,by, making collective bargaining an immediate possibility for
the agents of the Company in Wiscoiisin.s We therefore find that all
of the insurance agents employed by the Company who are attached
to and work out of Wisconsin offices, including canvassing, regular
office account, and detached agents, but excluding independent and re-
tired agents,, managers, assistant managers, clerks, cashiers, secretaries,,
6 See Matter of Colonial Life Insurance Company of America and United Office & Pro-
fessional Workers of America, C. 1. 0, 42 N. L. R. B. 1177. Cf. Matter of Home Bene-
ficial Association of Richmond, Virginia and Industrial and Ordinary Insurance Agents'
Council, 17 N. L R B. 1027; Matter of John Hai`'cook Mutual Life Insurance Company
and American Federation of Industrial and Ordinary Insurance Agents ' Union, No. 21571,
26 N L. R. B 1024; Mattes of Life Insurance Company of Virgiiiia and American Fed-
eiation , of Industrial and Ordenaiy Insurance Agents' Union No. 222641, 29 N, L. R. B.
246. See also , Matter of Metropolitan Life Insurance Company, 1 N. Y. S L. R. B. 326,
- METROPOLITAN LIFE INSURANCE COMPANY 969
.and other persons not agents, constitute a unit appropriate for the pur-
poses of collective bargaining within the meaning of Section 9 (b) of
the Act. -
V. THE DETERMINATION OF REPRESENTATIVES
We shall direct that the question concerning representation which
has arisen be resolved by an election by secret ballot among the em-
ployees in the appropriate unit who were employed during the pay-
roll period immediately preceding the date of this Direction of Elec-
tion, subject to the limitations and additions set forth in the Direction.
DIRECTION OF ELECTION
By virtue of and pursuant to the power vested in the National Labor
Relations Board by Section 9 (c) of the National Labor Relations Act,
49-Stat. 449, and pursuant to Article III, Section 8, of National Labor
Relations Board Rules and Regulations-Series 2, as amended, it is
hereby
DIRECTED that, as part of the investigation to ascertain representa-
tives for the purposes of collective bargaining with Metropolitan Life
Tnsurance Company, New York City , an election by secret ,ballot shall
,be conducted as early as possible, but not later than thirty (30) days
from the date of this Direction , under the direction and supervision of
the Regional Director for the Twelfth Region, acting in this matter as
agent for the National Labor Relations Board, and subject to Article
III, Section 9, of said Rules and Regulations , among the employees
of the Company in the unit found to be appropriate in Section IV,
above, who were employed during the pay-roll period immediately
preceding the date of this Direction, including any such employees who
did not work during said period because they were ill or on vacation
or in the act ve military service or training of the United States, or
temporarily laid off, but excluding those who have since quit or been,
discharged for cause, to' determine whether or not they desire to be
represented l.y the International Union of Life Insurance Agents for
the purposes of collective bargaining. .
MR. GGERARD D. REILI.Y dissenting :
I dissent from the conclusion of the majority that the State of
Wisconsin constitutes a unit appropriate for the purposes of collective
bargaining in this case . In my opinion, a unit may not properly be
termed appropriate within the meaning of the Act in the absence of
evidence either that the employees involved constitute a distinct func-
tional group, or that the proposed unit has a reasonable relation to
the organization and operation of the employer 's business , or that the
I
970 - DECISIONS OF NATIONAL LABOR RELATIONS BOARD
proposed unit coincides with the present state of self-organization of
the'employees. None of these indicia of propriety are present here.
Respondent's organization is highly integrated and its smallest ad-
ministrative divisions extend over several States. Territorial Division
D', for example, which is here involved, comprises the States of Wis-
consin, Minnesota, Michigan, and Illinois. The respondent has no
supervisors whose activities are limited to Wisconsin. Employees of
the Company throughout Territorial Division- D have identical work-
ing conditions and are precisely similarly situated with respect to
all questions affecting their employment which may be the subject
of collective bargaining. The contracts in force between the, Com-
pany and its agents `are uniform throughout the United States and
are'not affected by the variations in State insurance laws. The peti-
tioner has organized locals in the surrounding States in Territorial
Division D at the same time that it has organized in the' State of
Wisconsin:' Since neither the respondent nor the Union has limited
its operations or organization with respect to State lines and since the
interests of the employees do not vary from one State to another,
arbitrary segregation of a fraction of the employees of the Company
may not be justified by reference to the fact that the fraction hap-
pens to be coincidental with State lines." Furthermore, the employees
in Wisconsin do not constitute a small cohesive group, operating out of
one office or subject to one manager. The large' area of the State of
Wisconsin, and difficulties of transportation and communication easily
serve to distinguish this case from those cited by the majority in
which a city-wide unit was held appropriate.5 I am of the opinion
that the unit thus created is not conducive to effective collective bar-
gaining and will therefore not serve to effectuate the policies of the
Act.
7 In Matter of Colonial Lite Insurance Company of America and United Office d Pro-
fessional Workers, of America,, C I. 0 , 42 N L. R B. 1177, relied on by the majority,
It appeared that the Union had confined its organizational activities to the State of
New Jersey
8 In Matter of Gulf States Utilities Company and International Brotherhood of Elec-
trical Workers, A F of L, 31 N. L R B. 740, the Board rejected the petitioning Union's
contention that employees of the Company in one State alone constituted an appropriate
unit, on the ground that the entire system was functionally coherent and closely integrated.
The Board has adopted the same view in numerous other cases as well Matter of Wis-
consin Power and Light Company and United Electrical, Radio and Machine Workers of
America, Local 1134, 6 N L. It. B 320 ; Matter of Tennessee Electric Power Company,
and International Brotherhood of Electrical Workers, 7 N L R B 24; Matter of Southern
California Gas Company and Pacific Gas Workers Union, 30 N. L. R. B. 263.
9 See cases cited in footnote 6 of the majority opinion.
..1