Textron, Inc.

National Labor Relations Board - Board Decisions

Jul 23, 1975

219 N.L.R.B. 384 (N.L.R.B. 1975)

384 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Bell Aerospace, A Division of Textron , Inc. and Inter-
national Union, United Automobile, Aerospace and
Agricultural Implement Workers of America, Amal-
gamated Local 1286. Case 3-CA-4695
July 23, 1975
SUPPLEMENTAL DECISION AND ORDER
By CHAIRMAN MURPHY AND MEMBERS FANNING
AND JENKINS
This case originally arose upon a petition filed by
Amalgamated Local No. 1286 of the United Auto-
mobile, Aerospace and Agricultural Implement
Workers of America (the Union) seeking an election
in a unit of buyers in the procurement department of
the Employer's Wheatfield, New York, plant. At the
representation hearing, the Employer opposed the
petition, contending that the buyers were managerial
employees and, accordingly, were excluded from the
coverage of the Act.
On May 20, 1971, the Board issued its decision,
holding that the Company's buyers constituted a unit
appropriate for collective-bargaining purposes and
directing an election in that unit.' The Board de-
clined to rule specifically as to whether the buyers
constituted managerial employees. Rather, relying on
its then recent decision in North Arkansas Electric
Cooperative, Inc.,2 the Board held that even though
the buyers might be "managerial employees" as con-
tended by the Company, they nevertheless were cov-
ered by the Act and entitled to its protection. In that
decision, the Board also rejected the Company's al-
ternative contention that allowing the buyers repre-
sentation rights would place them in a conflict of
interest.
After a Board-conducted election in which a ma-
jority of the buyers voted for the Union, the Board
on August 12, 1971, certified the Union. On that
same day, however, the United States Court of Ap-
peals for the Eighth Circuit denied enforcement of
the Board's order in North Arkansas, holding that
managerial employees were not covered by the Act
and therefore not entitled to its protection.3
Immediately thereafter the Company filed a mo-
tion requesting that the Board reconsider its earlier
decision in light of the Eighth Circuit's decision. On
May 1, 1972, the Board issued an order denying the
Company's motion 4 In so doing, the Board again
declined to specifically determine whether the 25
' 190 NLRB 431.
2 185 NLRB 550 (1970).
7 446 F.2d 602.
196 NLRB 827
buyers were managerial employees. It stated, howev-
er, that in its view, Congress intended to exclude
from the Act only those managerial employees asso-
ciated with the "formulation or implementation of
labor relations policies." In each case, it held, the
fundamental question was "whether the duties and
responsibilities of any managerial employee or group
of managerial employees do or do not include deter-
minations which should be made free of any conflict
of interest which would arise if the person involved
was a participating member of a labor organization."
Finding that the buyers involved herein had only
limited and specific policy responsibility the Board
stated it disagreed with the Eighth Circuit and reaf-
firmed its prior finding.
The Company held to its contention that buyers as
managerial employees were not covered by the Act
and refused to bargain with the Union. After this
refusal to bargain, the Board, on the basis of an
8(a)(5) complaint, on May 30, 1972, issued an order
compelling the Company to recognize and bargain
with the Union.'
The United States Court of Appeals for the Sec-
ond Circuit, however, denied the Board's request for
enforcement of that bargaining order .6 It concluded
that Congress had intended to exclude all true "man-
agerial employees" from the protection of the Act. It
explained that this exclusion embraced not only an
employee so closely related to or aligned with man-
agement as to place the employee in a position of a
conflict of interest between his employer on the one
hand, and his fellow workers on the other, but also
one who is "formulating, determining and effectuat-
ing his employer's policies or his discretion indepen-
dent of an employer's established policy in the per-
formance of his duties."
On the merits of the case, the court found that
there was substantial evidence that the Company's
buyers were not sufficiently high in the managerial
hierarchy to constitute true managerial employees. It
then added that, on proper proceedings, the Board
would not be precluded from determining that buy-
ers or some types of buyers were not true managerial
employees and covered by the Act. Nevertheless its
denial of enforcement was for two reasons . First, it
was not certain that the Board's decision rested on a
factual determination that the buyers were not true
managerial employees rather than on the Board's
new holding (with which the court disagreed) that all
managerial employees were covered by the Act un-
less their duties create a conflict of interest. Second-
ly, it was of the view that if the Board were to find
that some buyers were not managerial employees
'197 NLRB 209
6 475 F.2d 485 (1973)
BELL AEROSPACE
(and covered by the Act), the case was appropriate
for the rule-making process.
On April 23, 1974, after having granted the
Board's petition for certiorari, the United States Su-
preme Court stated that the Board's exclusion of
managerial employers "defined as those who formu-
late and effectuate policies by expressing and making
operative the decisions of their employers" has been
approved by courts without exception. It also noted
with approval that the Board excludes from the Act
as managerial those who formulate, determine, and
effectuate an employer's policies and those who have
discretion in the performance of their jobs, but not if
that discretion must conform to an employer's estab-
lished policy. It mentioned various early Board deci-
sions wherein buyers, prior to the North Arkansas de-
cision, had been denied bargaining rights on grounds
they were managerial employees and representatives
of management. It held that:
... the Board's early decisions, the purpose and
legislative history of the Taft-Hartley Act of
1947, the Board's subsequent and consistent
construction of the Act for more than two de-
cades, and the decisions of the courts of appeals
all point unmistakably to the conclusion that
"managerial employees" are not covered by the
Act. We agree with the Court of Appeals below
that the Board "is not now free" to read a new
and more restrictive meaning into the Act. 416
U.S. at 289.
The Supreme Court expressed no opinion as to
whether or not these buyers fell within the category
of managerial employees but remanded the case to
the Board for the application of the proper legal stan-
dards in determining the buyers' status?
Thereafter, the Board afforded the parties the op-
portunity to file briefs and statements of positions
with regard to the issue remanded. Both parties have
done so.8
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.
From the Supreme Court's discussion regarding
managerial employees, it is clear to us that we must
now apply the proper legal standard to determine
whether the buyers herein are managerial employees
and thus excluded from the coverage of the Act. As
to what constitutes the proper legal standard, the
7 The Supreme Court reversed the circuit court's holding on the rule-
making question.
9 The Union 's motion and the Employer 's request to reopen the record
are hereby denied as the parties' briefs and the present record are adequate
for disposing of this case.
385
Court's opinion provides:
The Board has had ample experience in defin-
ing the term "managerial" in the manner which
we think the Act contemplates. See, e.g., Eastern
Camera & Photo Corp. [140 NLRB 569, 571
(1962)]. Of course, the specific job title of the
employees involved is not in itself controlling.
Rather, the question whether particular employ-
ees are "managerial" must be answered in terms
of the employees' actual job responsibilities, au-
thority, and relationship to management.
In Eastern Camera, the Board defined managerial
employees
as those who formulate, determine, and effectu-
ate an Employer's policies... . Moreover, man-
agerial status is not necessarily conferred upon
employees because they possess some authority
to determine, within established limits , prices
and customer discounts. In fact, the determina-
tion of an employee's "managerial" status de-
pends upon the extent of his discretion, although
even the authority to exercise considerable dis-
cretion does not render an employee managerial
where his decision must conform to the
employer's established policy. [Citations omit-
ted.]
In a recent case,9 the Board has reaffirmed the rule
of Eastern Camera, stating:
The Board long has defined managerial em-
ployees as those who formulate and effectuate
management policies by expressing and making
operative the decisions of their employer, and
those who have discretion in the performance of
their jobs independent of their employer 's estab-
lished policy [citation omitted] . . . . managerial
status is not conferred upon rank-and-file work-
ers, or upon those who perform routinely, but
rather it is reserved for those in executive-type
positions, those who are closely aligned with
management as true representatives of manage-
ment.
The foregoing quotations set forth what we believe to
be the "proper legal standard" for deciding the ques-
tion of managerial status. Therefore, all that remains
herein is to analyze the instant facts and apply them
to the standard set forth above.10
The record herein reveals the following facts about
Respondent's buyers: The essential function of the
9 General Dynamics Corporation, Convair Aerospace Division, San Diego
Operations, 213 NLRB 851 (1974).
10 Inasmuch as the Board has already determined that a unit of buyers is
appropriate and would on this record , present no conflict of interest, the
only issue presented by the remand is whether, in light of the Supreme
Court's decision , the buyers herein are covered by the Act.
386 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
procurement department is the purchase of items
from outside sources (vendors). This purchasing ac-
tivity is initiated by the receipt of a purchase requisi-
tion which can come from any of the 30 departments
at the plant. These requisitions cover a wide range of
manufacturing requirements including case materi-
als, subassemblies, parts, machines, and tools. After
a requisition has been reviewed and authorized by
procurement supervision, it is given to the appropri-
ate buyer, each of whom is assigned an area of spe-
cialization.
The buyer turns the purchase requisition into a
purchase order, i.e., an order to a vendor to supply
the item requisitioned. The amount of effort required
on the buyer's part varies according to the item being
purchased. For example, a standard item may be
procured simply by converting the requisition itself
into a purchase order. For such items the buyer
merely affixes his signature thereto since the depart-
ment which originated the requisition has already
designated the vendor, price, quantity, etc. Some
items are purchased through a data phone contact,
requiring merely a phone call. There was testimony
that many items are so-called "repetitive" or "off the
shelf" items which are generally needed to run a
manufacturing plant. They include light bulbs, fuel
oil, rags, paint, data-processing rental, office sup-
plies, furniture, books, and standard hardware items.
Where there are alternative sources, the buyer ex-
ercises some discretion in determining a price or
source. In many instances, however, especially in-
volving requests from manufacturing and production
departments calling for raw materials, tooling, or ma-
chines, the vendor and manufacturing specifications
are frequently designated. Also, in some instances
there are no alternative sources for certain items.
Where a vendor has been designated, if a buyer
wishes to change the vendor designation, he must
clear it with the department which issued the requisi-
tion.
In some instances, however, there are purchase or-
ders involving subcontracting (make or buy) deci-
sions and those involving the purchase of sophisticat-
ed electronic components. These orders require
significant amounts of team liaison with a number of
other departments such as finance, engineering, legal,
production control, program and configuration man-
agement, quality control, etc. In such instances buy-
ers may travel out of town for negotiations with ven-
dors. Once an order is made, the buyers monitor the
performance of the vendors to insure timely deliver-
ies.
In all instances, purchase orders up to $50,000 are
executed by the buyers themselves. Although the
buyers in negotiating contracts and ordering items
can commit the Company 's credit , the record reveals
that they cannot commit the company credit in
amounts in excess of $5,000 without the concurrence
of higher authority . Procurement Director Seitz testi-
fied that when a buyer recommends a purchase order
in excess of that amount , "of course as it [the cost]
goes up the level of review more people get to look at
it. More people get to question it. They question the
buyer's discretion , his judgment , how did you arrive
at the conclusions that this is a good package he is
offering for your approval."
The record contains numerous comprehensive
manuals and instructions which show the restrictions
on the buyers ' discretion in making purchases. It also
reveals a supervisory ratio of one supervisor to three
buyers which enables management to review and
check the orders prepared by the buyers . Ed Nolan, a
buyer, testified that buyers get bombarded with all
kinds of instructions and that the "job is pretty well
spelled out for us."
The record reveals the following additional factors
bearing on the buyers ' status . Their salaries range
from $195 to $271 per week and are comparable to
the salaries paid other organized white collar em-
ployees at the plant . They receive the same fringe
benefits as other organized employees except they
are not paid for overtime unless it is authorized by
the procurement department . They use the same caf-
eteria and parking lot as do other acknowledged em-
ployees . Buyers must receive permission from pro-
curement management to leave early or have an
extended lunch . They do not hire or fire the secre-
taries in their offices and cannot give the secretaries
permission to leave early . They do not authorize
overtime.
In view of the Supreme Court's decision setting
forth the proper legal standards to be applied, it is
clear to us on the basis of the facts set forth that
these buyers do not "formulate and effectuate man-
agement policies by expressing and making operative
the decisions of their employer." As we said in our
earlier decision in this proceeding , 190 NLRB 431:
While it is true that the buyers are in a position
to commit the Employer 's credit , the record re-
veals that the discretion and latitude for inde-
pendent action must take place within the con-
fines of the general directions which the
Employer has established.
Thus we conclude that the buyers herein do not
exercise sufficient independent discretion in their
jobs to truly align them with management and that
they are employees within the meaning of the Act.
Therefore, inasmuch as we have found that these
buyers' participation in a labor organization would
BELL AEROSPACE 387
create no conflict of interest, and since a majority of ORDER
the employees in the unit heretofore found appropri-
ate has voted for the Union, the bargaining order Based on the foregoing, and upon the entire record
previously issued to remedy the Respondent's refusal in this case, the National Labor Relations Board
to bargain is appropriate and we shall affirm it." hereby affirms its order issued in this proceeding on
May 30, 1972.
"Chairman Murphy would also rely on the fact that , after the Board the buyers' alleged managerial status . Accordingly, she finds that the Re-
decision in the representation proceeding , the Respondent dropped its chal- spondent is estopped from otherwise challenging the appropriateness of the
lenge to the appropriateness of a unit of buyers on any ground other than unit herein.