State Farm Mutual Automobile Insurance Co.

National Labor Relations Board - Board Decisions

May 16, 1966

158 N.L.R.B. 925 (N.L.R.B. 1966)

STATE FARM MUTUAL AUTOMOBILE INSURANCE CO 925
State Farm Mutual Automobile Insurance Company and Insur-
ance Workers International Union, AFL-CIO, Petitioner. Case
No 2-RC-14145 May 16,1966
DECISION AND DIRECTION OF ELECTIONS
Upon a petition duly filed under Section 9(c) of the National
Labor Relations Act, as amended, a hearing was held before Hearing
Officer Nathaniel H Janes The Hearing Officer's rulings made at
the hearing are free from prejudicial error and are hereby affirmed
The Employer filed a brief in support of its position
Upon the entire record in this case, the National Labor Relations
Board finds
1 The Employer is engaged in commerce within the meaning of
the Act
2 The labor organization involved claims to represent certain em-
ployees of the Employer
3 A question affecting commerce exists concerning the representa-
tion of employees of the Employer within the meaning of Sections
9(c) (1) and 2(6) and (7) of the Act
4 The Petitioner requests an election in a single bargaining unit
consisting of all field claims specialists and field claim representatives
assigned to the Employer's Bronx,' Jackson Heights, Brooklyn, and
Queens offices (herein referred to as the Metropolitan group) and
also those assigned to the Smithtown and Nassau County offices
(herein referred to as the Nassau-Suffolk group)
In the Employer's northeastern region, aside from the offices
petitioned for, the Employer has 9 other claims offices in New York
State (herein referred to as the Upstate group) and some 14 other
claim offices in New Jersey and the New England States In moving
to dismiss the petition, the Employer appears to contend that the
appropriate unit should encompass the entire northeastern region,
but that in any event no less than all of the offices in New York State
comprise the minimally appropriate unit
In our opinion, the unit requested by the Petitioner is not an
appropriate one within the meaning of Section 9(b) of the Act, and
we shall instead direct elections in the units described hei ein below
The national headquarters of the Employer, and the companies
with which it is affiliated, are located in Bloomington, Illinois Basic
business, operating, and personnel policies are determined at this
home office The next highest stratum of administrative authority is
I The office which services both the southern tip of Westchester County and the Bronx
is located in Bronxville which is in Westchester County The record refers to this office
as the "Bronx" office
158 NLRB No 84
926 DFCI'SIONS OF NATIONAL LABOR RELATIONS BOARD
vested in the 21 regional headquarters located throughout the United
States and Canada. We are presently concerned' with the northeast-
ern region, which, as noted, has jurisdiction over New York, New
Jersey, and the New England States.
The northeastern region is directed by a regional vice president
and his two deputies. The vice president reports directly to the
president of the State Farm group in Bloomington. Headquarters of
the northeastern region are located in Wayne, New Jersey, in offices
which house some 500 employees. All of the operations of the State
Farm companies conducted in the Northeastern United States are
directed and controlled from the Wayne offices, in addition to the
;staff functions, such as accounting, administrative services, and data
processing, which are performed there.
Under the office of the regional vice president, the business of the
northeastern region is carried on by five divisions-two automobile
operating divisions, one fire and casualty operating division, one life
,operating division, and one division in charge of the sale of life,
automobile, and fire insurance. Each of the four operating divisions
is under the . direction of a division manager; the sales division is
supervised by eight agency directors.
The heavy volume of automobile insurance business and claims
service in the region has necessitated the establishment of the two
automobile operating divisions referred to. Alike in structure and
function, one services claims in New York State and the other serv-
ices claims in New Jersey and New England. Each division has a
service section, located in Wayne, which performs various clerical
functions, pertaining mostly to issuance of policies and premium
billing. Each also has an underwriting section, located in Wayne,
which underwrites new risks and reunderwrites existing business.
Finally, each of the two automobile divisions has a claims. section,
with which we are presently concerned, that is responsible for pro-
cessing, investigating, negotiating, and paying claims. The two
claims sections employ a total of about 170 field claim representatives,
located throughout the region. The unit sought by the petitioning
union covers some, but not all, of the claims representatives employed
by the claims section of the New York automobile operating division.
As we have noted, each automobile operating division is in the
charge of a division manager, who supervises the claims, service, and
underwriting functions of the division, subject to the control of the
regional vice president.
In the claims section of each automobile operating division, the
next line of supervisory authority below the division manager are
the divisional superintendents. The number of these superintendents
in each division is subject to change according to the volume of busi-
ness and geographic distribution of field claims offices in the division;
STATE FARM MUTUAL AUTOMOBILE INSURANCE CO. 927
.in the claims section of the automobile division responsible for New
York State, there are three such divisional superintendents, but in
the claims section of the New Jersey-New England division, there
are only two. In 1956, there was only a single divisional super-
intendent in the New York automobile division . Presently, in the
New York State division, one of the divisional superintendents
supervises those lower echelon supervisors and claim representatives
who are attached to the Nassau and Smithtown offices; the second,
those employees who work out of the Queens, Jackson Heights,
Brooklyn, and. Bronx offices; and the third, those employees assigned
-to the nine other offices scattered throughout the rest of New York
State. All divisional superintendents are based in Wayne, New
Jersey, and visit the offices subject to their supervision about once
every 2 weeks. In the New York State division, the divisional super-
intendent for the Nassau-Suffolk group supervises 6 supervisors and
29 claim- representatives; the one for the Metropolitan group, 8
supervisors and 32 representatives; and the, one for the Upstate
group, 8 supervisors and 42 representatives.
The record establishes that each divisional superintendent super-
vises the instruction of new claims personnel, reviews claims files,
and has the authority to settle claims for amounts greater than those
which claim superintendents or claim representatives are allowed to
negotiate. The divisional superintendent also makes recommenda-
tions about most proposed personnel actions pertaining to' the em-
ployees within his group. , •
The next link in the descending supervisory chain is represented
,by the claims superintendents. As has been noted, the Upstate and
Metropolitan divisional superintendents have eight claims super-
intendents working" under each of them; the Nassau-Suffolk di-
visional superintendents has six. Of these 22 claims superintendents,
13 are based in Wayne, New Jersey. Each has supervisory au-
thority over a specified number of claims representatives ranging
from two to seven and averaging about five. The 13 nonresident
claims superintendents make weekly visits of about 2 days' duration
to the offices where their supervisees are located. The other 9
superintendents are based in the claim offices. As a result of this
distribution, there are no supervisors stationed in 10 of the field
offices in the region, and in 2 of the other field offices the resident
claims superintendents have supervisory authority over only some of
the claims representatives in the office, while other employees in the
same office are supervised by nonresident supervisors.
National personnel policies are determined at the home office in
Bloomington : sick leave, group medical, life, and other insurance
programs, vacations, credit unions, travel allowances , promotion
928 :DECISIONS OF NATIONAL LABOR RELATIONS, BOARD
procedures , and. similar conditions and benefits ' of - employment.
These policies are'-effectively construed and implemented by the
several regional , offices. Against the background of policies and
practices established by the -home office, decisions as to the applica-
bility of these policies. and procedures to claims representatives are
made by the- regional supervisory authorities. Ultimately, most of
the final .decision-making authority, in each region is vested in the
office of the regional vice president . For instance, the region makes
annual reviews,of the performance of each employee, for the purpose
of determining whether he should be granted a salary increase
(within a range predetermined by the home office). The claims super-
intendent will fill out a form to initiate such reviews, giving his
comments and recommendations . The divisional superintendent will
then make his recommendation in the portion of the form designed
for his entry. Finally , the division manager will add his recommen-
dation, and the form will then be submitted to the office of the
regional vice president, where this official or his deputy will approve
or disapprove the increase.
Evidence was admitted of 64 transfers of claim representatives
from one field office to another within the northeastern region for the
period from January 1, 1963, to November 1, 1965. Most of the
transfers were apparently permanent , and the majority occurred
within the State of New Jersey. Only five of the transfers occurred
within the Metropolitan group of offices, five in the Upstate group,
and four in the Long Island group. There were 11 transfers between
the Metropolitan and Long Island groups, 2 of which were tempo-
rary. No transfers were effected between upstate and downstate New
York offices.
The Petitioner , as stated above, seeks a single unit encompassing
all of the Employer's six claims offices in lower New York State.
Of the claim representatives in the New York operating division, 61
work in these offices. As we have found, the Employer has adminis-
tratively partitioned the claims section of its New York operating
division into three distinct groups, supervised by three divisional
superintendents ; the offices covered by the instant petition constitute
all of the offices under the jurisdiction of two of these divisional
superintendents. Of the offices in the third group, which is under
the aegis of the remaining divisional superintendent, the next closest
office to Bronxville, the northernmost office in the unit sought
by the petition, is the one located in Newburgh, more than 40 miles
from Bronxville. Proceeding northerly, the next office after New-
burgh is found in Albany, and the rest of the claims offices in
New Yark State-Penfield, Syracuse, Ithaca, Utica, Binghamton,
Jamestown, and Buffalo-are strung throughout the northern and
western parts of the State.
STATE FARM MUTUAL AUTOMOBILE INSURANCE CO 929
In Quaker City Life Insurance Company, 134 NLRB 960, we de-
cided to abandon the rule earlier adopted in Metropolitan Life Insur-
ance Company, 56 NLRB 1635, that bargaining units of insurance
agents would be deemed appropriate only if State or company wide
in scope Looking primarily to the autonomous character of the
single district office petitioned for in Quaker City, and the overall
immediate supervision exercised by the district office manager, we
concluded that a unit consisting of the employees in the district office
was an appropriate bargaining unit Since that case, we have found
appropriate other single office units which exhibited a similar degree
of autonomy, and have also authorized groupings of single offices
where considerations of geography or the employer's administrative
structure lent coherence to such multiple office units See Metro-
politan Life Insurance Company (Woonsocket, RI ), 156 NLRB
1408, and cases cited therein
The evidence of record in the case before us presents it significantly
different picture of field operating procedure from that developed in
the insurance agents cases cited above It seems clear that the
smallest component of the Employer's business structure which may
be said to be relatively autonomous in its operation is not the field
claims office, but rather the divisional unit of employees supervised
by a divisional superintendent By virtue of the managerial au-
thority reposed in the three divisional superintendents, who represent
a supervisory focal point for their respective groups of 39, 32, and
29 claims representatives, these functionaries appear to exercise
powers most closely analogous to those possessed by the district office
managers in the earlier cases A finding, therefore, that bargaining
units could properly be demarcated by the supervisory jurisdiction
of each divisional superintendent would be wholly in keeping with
the principles applied in the insurance agents cases
A unit comprising all three divisions, as contended for by the
Employer, also would be appropriate for bargaining, in view of the
facts that such a unit would include all claims representatives re-
sponsible to the division manager, the chief supervisor in the New
York Automobile Operating Division, and, as well, would encompass
all claims representatives in a clearly delimited geographic area, the
State of New York In addition, a unit comprising the entire north-
eastern region, also as contended for by the Employer, would be
appropriate But these considerations do not negate each other, nor
do they refute the appropriateness of still other units of the Em-
ployer's employees "There is nothing in the statute which requires
that the unit for bargaining be the only appropriate unit, or ultimate
unit, or the most appropriate unit, the Act requires only that the
221-751-67-vol 158-60
930 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
unit be `appropriate.' " Morand Brothers Beverage Co. et at., 91
NLRB 409, 418.
In requesting a single unit in which only two of the three divisions
would be represented, however, the Petitioner asks for neither fish
nor fowl. The Board will itself establish a single unit of separate
appropriate units only where the amalgamated unit is coherent and
sensible for collective bargaining from the standpoint of geographic
considerations or the employer's administrative or operational
structure. But if two or more appropriate units are to merge (and,
to some extent, sacrifice) their separate identities in a larger single
unit, the resultant unit should encompass all similarly situated units
in order to present some geographic or administrative coherence.
The unit requested by the Petitioner in this proceeding fails to
meet these standards. Consideration of the geographic and adminis-
trative factors makes it clear that the Petitioner has asked for either
too much or too little by seeking to combine into a single unit only
two of the three divisions. The Employer's organizational structure
rationally compels the conclusion that if the Petitioner wishes an
election in such a combined unit, applying the principles enunciated
above, it must as well include the third division comprising the
upstate New York employees. On the other hand, since, on the basis
of the petition, it appears that the Petitioner is primarily interested
in representing the six downstate offices, it would be entitled to, and
we shall hereinafter direct, elections in two separate appropriate
divisional units : one comprising the four Metropolitan offices, and
the other, the two Nassau-Suffolk offices. The elections will be held
subject to a sufficient showing of interest by the Petitioner in each
unit. If the Petitioner indicates a desire for a statewide election, we
would direct an election in that unit, again subject to a proper
showing of interest.
Accordingly, we find that the following employees of the Employer
constitute units appropriate for the purposes,of collective bargaining
within the meaning of Section 9(b) of the Act:
1. All field claim specialists and field claim representatives em-
ployed by the Employer assigned to the Bronxville, Jackson Heights,
Queens, and Brooklyn offices, excluding superintendents and all other
managerial and supervisory personnel, clerical employees, and guards
as defined in the Act.
2. All field claims specialists and field claims representatives em-
ployed by the Employer assigned to the Smithtown (Suffolk
County) and Nassau County offices, excluding superintendents and
all other managerial and supervisory personnel, clerical employees,
and guards as defined in the Act.
[Text of Direction of Elections omitted from publication.]