Simplex Industries, Inc.

National Labor Relations Board - Board Decisions

Jun 27, 1979

243 N.L.R.B. 111 (N.L.R.B. 1979)

SIMPLEX INDUSTRIES, INC
Simplex Industries, Inc.' and International Union,
United Automobile, Aerospace and Agricultural Im-
plement Workers or America (UAW), Petitioner.
Case 7-RC- 14697
June 27, 1979
DECISION ON REVIEW AND DIRECTION
BY MEMBERS JENKINS, MURPHY, ANI) TRUESDAI..
On March 20, 1978, the Regional Director for Re-
gion 7 issued a Decision and Direction of Election in
the above-entitled proceeding in which he directed an
election in the Petitioner's requested unit of office
clerical employees, rejecting the Employer's conten-
tions that certain positions should be excluded on the
grounds that they are confidential or managerial.
Thereafter, in accordance with Section 102.67 of the
National Labor Relations Board Rules and Regula-
tions, Series 8, as amended, the Employer filed a
timely request for review of the Regional Director's
decision on the grounds, inter alia, that in resolving
various unit placement issues he made erroneous find-
ings as to substantial factual issues and departed from
officially reported precedent.
The National Labor Relations Board, by tele-
graphic order dated April 18, 1978, granted the re-
quest for review, only with respect to the status of
Ford, Marlow, and Cowper.2
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the Na-
tional Labor Relations Board has delegated its au-
thority in this proceeding to a three-member panel.
The Board has considered the entire record in this
proceeding with respect to the issues under review
and makes the following findings:
The Employer, a Michigan corporation, is primar-
ily engaged in the production and distribution of pa-
per products, through its Simplex Products Group. It
maintains manufacturing and processing facilities in
Adrian, Constantine, and Palmyra, Michigan, and
Jacksonville, Florida. The Adrian office facility,
which is physically separate from all production fa-
cilities, serves as the national headquarters of its pa-
per products operations. The employees at this loca-
tion are the subject of the instant proceeding. There is
no history of collective bargaining affecting any of
these employees.
The parties agreed that a unit of all office clerical
employees employed at the Employer's headquarters
office located at 3000 West Beecher Road, Adrian,
I The Employer's name appears as amended at he hearing
I We take administrative notice of the fact that an election Asas conducted
in this proceeding on April 18. 1978, and that the ballots have been im-
pounded pending our decision on review.
Michigan, is appropriate for the purposes of collec-
tive bargaining. We granted review of the Regional
Director's determinations with regard to the manage-
rial status of Francis Ford, credit manager: John
Marlow, buyer; and Norman C. Cowper, manager of
transportation.
The Supreme Court and the Board, in determining
managerial status, weigh the facts elicited to deter-
mine whether or not the persons at issue are involved
in the formulation, determination, and effectuation of
management policies by expressing and making op-
erative the decisions of their employer, and whether
they have discretion in the performance of their job
duties independent of their employer's established
policies.3 Having stated the "proper legal standard,"
was must now apply it to the instant proceeding in
order to determine whether or not the following posi-
tions enjoy managerial status.
Credit Manager
The Regional Director rejected the Employer's
contention that Credit Manager Francis Ford should
be excluded as a managerial employee. Ford is in
charge of establishing and reviewing lines of credit for
corporate customers. He utilizes guidelines accepted
in the credit industry, such as Dun & Bradstreet re-
ports, to initially determine credit ratings. Upon ex-
amining the Dun & Bradstreet report, Ford deter-
mines if there is a need to make further credit
inquiries. Ford evaluates the information available to
him and unilaterally decides whether or not to extend
credit and in what amount. He has no ceiling on the
amount of credit he can extend to a customer other
than his own determination of what the customer
should have.4 If a customer requests a higher limit
than he thinks the customer should have, Ford de-
cides whether or not to seek counsel from his supervi-
sor, Stephen Shade, controller of Simplex Industries.
Based upon his evaluation of a customer's situ-
ation. Ford also makes unilateral decisions to deny
credit authorization.5 When Ford's decision to deny
credit interferes with the efforts of the sales depart-
ment officials to effectuate sales, the decision may be
reviewed by his supervisor. In the only case of this
kind testified to, Ford's decision prevailed over the
sales department's objection. Ford's additional duties
include preparation of an internal monthly credit re-
port and efforts to collect overdue accounts, including
' N LR B . Be/Il Aerosrpa(e CoTrnRam. Dsv.n f Tevtron. In(. 416 U.S.
267 (1974): General Dynamics Corporatiln, ec.. 213 NI.RB 851 1974): Bell
Aerospace. 4 Division of Texlron. Inc. 219 NLRB 384 1975)
' Ford testified that he has approved credit limits up t Sl100.000 without
consulting anyone else in management
' Ford also has the authority to revoke credit aulthorlzltion for a customer.
without prior consultation. and the record shows hat he has exercised this
aulthoriy
243 NLRB No. 13
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I)lt('ISIONS OF NAFIONAl I.ABOR R:lI.AI(IONS BOARD
turning said accounts over to a collection agency. His
monthly report assists Ford in monitoring and adjust-
ing the extent of customer credit.
When considering the managerial status of credit
managers and other employees who are in a position
to extend the credit of their employers, we place prin-
cipal reliance on the independence with which said
employees exercise their discretion.6 The mere posses-
sion of authority to extend the employer's credit is
not controlling.
The Regional Director concluded that close deci-
sions, including decisions to deny credit and decisions
with which salesmen or customers take issue, are re-
ferred to higher management. Further, he found that
Ford acts only within the prescribed criteria of the
credit industry in making decisions regarding extend-
ing credit. Under these circumstances, the Regional
Director found that Ford does not exercise discretion
independent of guidelines in the performance of his
duties and thus included him in the appropriate unit.
We disagree.
Ford exercises broad discretion in the course of
performing his job as credit manager. The Regional
Director neglected to mention that Ford himself de-
cides what is a close decision and if he should consult
with management regarding same. In addition, as
stated above, the record discloses only one case of the
latter instance, and Ford's decision prevailed over the
sales department's objection.
Ford gathers credit data and unilaterally decides
whether or not to extend credit, determines the
amount to be extended, and also determines when
credit is to be revoked. His sole limitation, as would
be expected, is industry-established criteria of proper
credit practices.7 This limitation does not preclude
him from being a managerial employee, for his discre-
tion is not narrowly circumscribed by his Employer's
set policies and guideline. Therein lies the critical dis-
tinction. Accordingly, we find that Ford is a manage-
rial employee and exclude him from the appropriate
unit.
Buyer
The Employer contends that the Regional Director
erred in not finding Buyer John Marlow to be a man-
agerial employee. Marlow is responsible for purchas-
ing all of the scrap paper used in the Employer's
papermills. Scrap paper is the raw material used in
See Fairfax Family Fund, Inc., a wholly owned subsidiar, of Spiegel, Inc.,
195 NLRB 306, 307 (1972), and Lockheed-California Company, A Division of
Lockheed Aircraft Corporation, 217 NLRB 573 (1975).
1 Ford's job description states that he is to "establish credit limits for all
new customers based on accepted criteria." According to the uncontradicted
testimony. "accepted criteria" refers to criteria normally accepted on an
industrywide basis for establishing credit limits.
manufacturing various grades of heavy paperboard
known as "chip."6 He is also responsible for purchas-
ing all of the raw materials used in manufacturing
Thermo-ply (an insulated sheathing material used in
the construction industry), including aluminum foil,
adhesives, and chip, which is also purchased from
outside suppliers. Further, Marlow is responsible for
purchasing other miscellaneous goods and services.
Because of his responsibility for chip purchases,
Marlow is responsible for scheduling production of
this material by the Fnmplover's two papermills. lie
determines whether to make each particular type of
grade of chip in the Employer's papermills or to bug
it on the outside, and schedules the different grades of
chip for production in the papermills.
The annual dollar volume of purchases for which
Marlow is responsible is approximiatels $5.75 million.
About $1 million reflects purchases on a blanket or-
der under a requirement-type contract and the re-
mainder reflects individual orders which mav be in
any dollar amount.
On the purchases for which he is responsible. Mar-
low issues and executes the purchase orders without
any approval or review of his actions. The Employer
has not promulgated an procurement policies to
guide Marlow: thus he bases his purchasing decision
on "price, delivery, quality." Marlow exercises com-
plete discretion with respect to price and delivery, but
his discretion is limited with respect to quality by the
standards established by the quality control depart-
ment.
Marlow has authority to initiate contacts with new
suppliers and to change suppliers unilaterally, pro-
vided quality control standards are met. He has es-
tablished a 6-percent differential as his guide in deter-
mining the need to change vendors.
Marlow is nominally supervised by Lee Keller, di-
rector of purchasing, who reports to David Flotow.
vice president of operations. Flotow testified that
Marlow and Keller share the actual purchasing duties
and individually have primary responsibility for spe-
cific product lines: however, Keller administratively
runs the department.
The Regional Director concluded that Marlow is
restricted to an approved list of vendors, must seek
higher management approval to go beyond the list,
and must eventually secure requisition forms from the
factory management when making other than regu-
larly scheduled purchases. Further, he found that
Marlow's discretion in scheduling production is lim-
ited by the sales statistics provided by the sales de-
partment. He therefore concluded that Marlow
C hip is the sole product manufactured in the Employer's papermills and
constitutes a major component of the lEmployer's fabricated products.
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SlIMPI X INI), SI RItS. IN(
lacked that discretion required of a manIagcerial eCil-
ployee and included him in the unit.
As is obvious from the facts stated aho e the Re-
gional Director's conclusions are not supported by
the record. Marlow performs his job as huer without
the assistance of any Emnplo\ er-imposed procurement
policies. Thus, he bases purchasing decisions on price.
delivery, and quality, and is restricted onlN with re-
spect to quality control standards set by the qualit\
control department. In addition to the absence of pro-
curement policies, there is no Emploer-approved list
of vendors. Marlow is authorized to initiate contacts
with new suppliers and to change suppliers unilater-
ally. Further, the sales statistics, found to be limita-
tions on Marlow's discretion by the Regional Direc-
tor, are in fact sales forecasts which Marlow utilizes
in determining how much material will be required
and when it will be required. hen. with respect to
chip. Marlow decides whether to make it in the Eim-
ployer's papermills or to buy it on the outside. (learly
Marlow's discretion is broad in handling managerial
matters and is obviously not restricted by fixed poli-
cies established by the Employer. Thus, we find that
Marlow is a managerial employee and is excluded
from the appropriate unit.
Manager of Transportation
The Employer disputes the Regional Director's
finding that Transportation Manager Norman Cow-
per is not a managerial employee. Cowper is totally
responsible for the overall distribution and transpor-
tation of all the Employer's inbound raw materials
and outbound finished products. Inbound materials
and outbound products are received and shipped by
both motor freight and rail transportation. and Cow-
per is responsible for making the most economical
arrangements possible for the Employer's transporta-
tion and for approving all freight bills before they are
paid.
To perform this task Cowper maintains an exten-
sive library of looseleaf services which list approved
and proposed freight rate tariffs and are updated on a
daily basis. He analyzes this data in order to identify
any proposed charges which may adversely affect the
Employer. He also decides whether or not to protest a
proposed freight rate charge, and, upon deciding to
file a protest, he prepares it and files it with the Inter-
state Commerce Commission, and appears before the
Commission on behalf of the Employer.
Cowper further continually analyzes freight rates
and routing information in order to discover more
economical transportation arrangements. When he
determines that it is advantageous to do so. Cowper
assists selected carriers in obtaining approval of fa-
vorable rates of transportation of the Employer's
products. In these cases, (Cowper also prepares plead-
ings and other docuiments for fli l g wit I the Interstate
(Commerce Commission and appears before the (om-
mission on the mploer's behal If.
!:urther C(owper is responsible for all ofI the licens-
ing arrangemients for the Employer's fleet of trucks
and for preparing and filing all the mplo>er's high-
way use tax returns and fuel use tax returns. lie is
also responsible for nregotiting truck leases for the
I-mplo er' s fleet, which he presents to the president of
the corporation or his signature and review.
Cowper quotes rates to the sales emplo ees and he
reports to the ma;nager of sales administration. No
one else in managelment has transportation expertise
thus (owper had broad discretion to make decisions
on all matters within his area of responsibility.
The Regional Director found that ('owper acts
within previously established Employer policies with
respect to most of his duties. Based on the foregoing
and the record as a whole. we disagree. As stated
above. Cowper bears total responsibility for the over-
all distribution and transportation of all the Employ-
er's inbound raw materials and outbound finished
products. Cowper is responsible for accomplishing
this task in the most cost-efficient manner possible
and he is authorized to make the necessary decisions
to achieve this end. Cowper clearly formulates. deter-
mines, and effectuates the t-Employer's policies with
respect to transportation.' We find that he is a man-
agerial emploee arind exclude him frorm the appropri-
ate unit.
In summary we find that Ford, Marlow and Cow-
per are mainagerial employees and thus are not in-
cluded in the appropriate unit.
Consistent with the fregoing, we find that the fol-
lowing employees of the Employer at its corporate
headquarters located at 3(X) W. Beecher Road,
Adrian. Michigan. constitute a unit appropriate for
purposes of collective bargaining within the meaning
of Section 9(h) of the Act:
All full-time and regular part-time office employ-
ees employed by the Employer at its corporate
headquarters located at 3000 W. Beecher Road.
Adrian. Michigan. including customer service
representatives: ut excluding the credit man-
ager, the buger. the transportation manager and
all other managerial employees, commissioned
salesmen, confidential employees, guards and su-
pervisors as defined in the Act.
DIR ECTI ON
It is hereby directed that the Regional Director for
Region 7 shall, pursuant to the Board's Rules and
' See ( I S/ Itte (,rpo,rraltt. 196 Nl RB 470) (1972)
I I
I)E('ISIONS OF NATIONA LABOR RELATIONS BOARI)
Regulations, Series 8, as amended, within 10 days
from the date of this Decision on Review and Direc-
tion, open and count the valid ballots cast in an elec-
tion held on April 18, 1978, and prepare and cause to
be served on the parties a tally of ballots in accord-
ance with Section 102.69 of the Board's Rules and
Regulations. Series 8. as amended, which shall there-
after be applicable to the further processing of this
matter.
MEMBER JFNKINS. concurring:
I concur in the result reached by my colleagues, but
because I think the rationale supporting the result
should be buttressed with more specific facts and rea-
sons, I consider it appropriate to set forth my views.
The record shows that Credit Manager Francis
Ford is in charge of establishing and reviewing lines
of credit for the Employer's corporate customers. In
performing his responsibilities. Ford uses guidelines
accepted in the credit industry to determine credit
ratings. Thus, he relies on the Dun & Bradstreet re-
ports as an initial source material. When Ford de-
cides additional or updated information is necessary,
he obtains trade references and information from the
prospective customer. Ford personally evaluates the
information which he assembles and decides whether
or not to extend credit. The Employer has imposed
no ceiling on the amount of credit Ford can authorize
for a customer and Ford testified that he has ap-
proved credit of $100,000 without consulting anyone
else in management.' The credit authorization docu-
ment requires only Ford's signature.
If a customer requests more credit than Ford ap-
proves, Ford decides whether to bring the matter to
the attention of the Employer's management. Simi-
larly, Ford personally decides to deny credit authori-
zations. When Ford's decision to deny credit is op-
posed by the sales department officials, the decision
may be reviewed by other management officials. In
the single such instance reported in the record, Ford's
decision prevailed over the sales department's objec-
tion. In addition, Ford has the authority to revoke
credit authorization for a customer without prior con-
sultation. Furthermore, he has exercised this author-
ity.
Ford's duties also include preparation of an inter-
nal monthly credit report which assists Ford in moni-
toring and adjusting customer credit. Finally, he is
involved in collecting overdue accounts including
turning accounts over to a collection agency.
From the foregoing and the record as a whole, it is
clear that Ford is involved in the formulation, deter-
O Compare dtir/iir FIri4 Fund, In,.. tup6ra. where the final credit ana-
Ilsts' authorit to grant credit was limited to $600( i an? individual case.
mination, and effectuation of management policies
and that he has discretion in the performance of his
duties independent of any Employer-established poli-
cies. The Regional Director's reliance on the fact that
Ford acts within the criteria of the credit industry and
that some decisions are reviewed by higher manage-
ment to find that Ford is not a managerial employee
is misplaced. Thus, Ford gathers the data. He pre-
sonally decides whether or not to extend credit. He
decides the amount. And he decides when to revoke
credit. His standard is industry-established criteria of
proper credit practices. Indeed, it is Ford who estab-
lishes the policies and guidelines for the Employer;
there is no indication that Ford's discretion is circum-
scribed by official policies and guidelines imposed by
the Employer on Ford. Accordingly, I find Ford to be
a managerial employee and shall exclude him from
the unit.
The record shows that Buyer John Marlow pur-
chases all of the scrap paper used in the Employer's
papermills, as well as all the raw materials used in the
manufacture of Therma-ply, including aluminum foil,
adhesives, and chip. Marlow also purchases other
miscellaneous goods and services for the Employer.
In deciding on particular purchases, Marlow is
guided by "price, delivery, quality."'' Thus, the Em-
ployer has not promulgated any procurement policies
and Marlow's purchases are not circumscribed by
policies and criteria established by others. Marlow
personally issues and executes the purchase orders
without approval or review by higher management
officials. He initiates contact with suppliers and de-
cides when to change suppliers. In changing suppli-
ers. Marlow applies a 6-percent price differential
standard. Significantly. Marlow established the 6-per-
cent standard. Ile purchases nearly $6 million in
goods and materials annually. Although approxi-
mately one-sixth of this total is a blanket order under
a requirement type contract, the remainder is individ-
ual orders in varying dollar amounts. Finally, the rec-
ord shows that Marlow also schedules production of
chip by the Employer's two papermills. He deter-
mines not only the grades of chip for production but
also whether to make each particular type in the Em-
ployer's papermills or buy it from outside suppliers.'2
I am persuaded that the record evidence establishes
that Marlow had broad discretion in making purchas-
ing decisions for the Employer. The existence of an
approved list of vendors is not determinative here.
u Quality standards re etahlished hs the Empl)roer's qualily control de-
parlment
i2 I he Regional I)irector relied in part on the tact that Marloh's discretion
in scheduling production is circumscribed h3 sales stiatitlic provided b Ihe
sales department I find the Regional D)irector's reliance Lon this lactir to he
misplaced. hus. the imporlanl consideration here is that Marlow in his
capacits as a buer determines whether to make the chip In the mplover's
palpermills oIr huo it rotm outside suppliers.
114
SIMI.EX INI)USIRIES, IN(C
where Marlow initiates contact with new suppliers.
Nor does the fact that Marlow must eventually secure
a requisition form from the factory management un-
dermine Marlow's discretion inasmuch as the record
shows that orders are generally placed before the req-
uisition form is received and it is Marlow who selects
the vendor and determines the price to be paid. Ac-
cordingly, I find Marlow to be a managerial em-
ployee and shall exclude him from the unit.
The record shows that Manager of Transportation
Norman Cowper is totally responsible for the overall
distribution and transportation of the Employer's in-
bound raw materials and the outbound finished prod-
ucts. Thus, Cowper is responsible for determining and
selecting the carrier-by motor freight or rail trans-
portation-that will most economically transport the
Employer's materials and goods. He quotes rates to
the sales department. He approves freight bills before
they are paid. In performing these duties, Cowper
collects and maintains current the various approved
and proposed freight rate tariffs. HIe also analyzes the
tariffs to determine how they will affect the Employer
and, when he decides it is necessary, he prepares and
files protests of proposed freight rate changes with the
Interstate Commerce Commission on the Employer's
behalf. Cowper also assists selected carriers used by
the Employer to enable them to obtain favorable
rates of transportation for the Employer's products.
In addition, Cowper is responsible for licensing ar-
rangements for the Employer's fleet of trucks and for
preparing and filing the Employer's highway use and
fuel use tax returns. lie also negotiates truck leases
for the Employer's fleet.
I find that the above-described record eidence
demonstrates, amply, that C'owper's duties and re-
sponsibilities are comparable to those of the senior
rate and tariff clerk who was found to be a manageri-
al employee in ('C'& I Steel Corporation, sra. Thus,
Cowper has broad discretion in making transporta-
tion arrangements for the Employer's materials and
products. Unlike the Regional Director. I am not per-
suaded that Cowper's responsibility is diminished by
the fact that truck leases are signed by the Employer's
president or that many transportation decisions are
based on tariffs and charges established by the Inter-
state Commerce Commission. Accordingly. I find
Cowper to be a managerial employee and shall ex-
clude him from the unit.
I I