United Insurance Co.

National Labor Relations Board - Board Decisions

May 11, 1954

108 N.L.R.B. 843 (N.L.R.B. 1954)

UNITED INSURANCE COMPANY 843
that Respondent was displaying an inordinate interest in the concerted activities of its em-
ployees and was taking definite steps to satisfythat interest, including an attempt to enlist the
aid of an employee for that purpose. In the light of the unconvincing excuse offered by Green
for admitted interrogations of other prospective employees, the inference is justified that
Respondent's more than casual interest in employee concerted activities was not caused by a
natural business or economic interest but by ulterior motives. The Board has long recognized,
with the approval of the courts, that employees' self-organization and other concerted activ-
ities constitute an area of activity guaranteed by the Act as the exclusive business and concern
of the employees, and has condemned as an unlawful interference with this right of privacy
indirect attempts of employers through espionage or surveillance to secure information about
such activities of their employees. Is In the light of these principles, I cannot view these in-
terrogations , plus conduct giving the impression of surveillance and involving an attempt to
bribe an employee to assist in such surveillance, when indulged in by the second and third
ranking supervisory officials in a plant of only 28 employees, as mere casual or perfunctory
remarks or conduct lacking in any aspects of intimidation or coercion. I feel that it may rea-
sonably be anticipated, in line with past Board experience, that this type of conduct, if per-
nutted to continue, will probably be followed by efforts of the employer to hinder or defeat
employee activity looking to self-organization. I therefore conclude that the decisions cited by
Respondent are not apposite or controlling here, and I shall recommend that Respondent be
ordered to cease and desist from the specific unfair labor practices found above, and from
interfering in any other manner with the rights of employees guaranteed by Section 7 of the
Act. U I shall also recommend that Respondent take certain affirmative action designed to
effectuate the policies of the Act.
Upon the foregoing findings of fact, and on the entire record in the case, I make the following:
CONCLUSIONS OF LAW
1. The above Union is a labor organization within the meaning of Section 2 (5) of the Act.
2. By interfering with, restraining, and coercing its employees to the extent found above in
the exercise of rights guaranteed by Section 7 of the Act, Respondent has engaged in and is
engaging in unfair labor practices within the meaning of Section 8 (a) (1) of the Act.
3. The aforesaid unfair labor practices are unfair labor practices affecting commerce
within the meaning of Section 2 (6) and (7) of the Act.
4. Respondent has not violated the Act by interrogation of employees as set forth in para-
graphs 5b and 5c of the complaint, nor has it committed any violation of the Act as set forth in
paragraph 5e of the complaint.
[Recommendations omitted from publication.]
iiStandard-Coosa-Thatcher Company, 85 NLRB 1358, 1360, 1361, and cases cited in footnotes
13 and 14.
14 Mike Persia Chevrolet Co., Inc., 107 NLRB 377.
UNITED INSURANCE COMPANY and INSURANCE WORKERS
OF AMERICA, CIO, LOCAL NO. 5, Petitioner
UNITED INSURANCE COMPANY and INSURANCE AGENTS
INTERNATIONAL UNION, AFL, Petitioner . Cases Nos. 4-
RC-2052 and 4-RC-2110. May 11, 1954
DECISION, ORDER, AND DIRECTION OF ELECTION
Upon separate petitions duly filed under Section 9 (c) of the
National Labor Relations Act, a hearing in Case No. 4-RC-2052
and a consolidated hearing in Cases Nos.4-RC-2052and 4-RC-
108 NLRB No. 115.
844 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
2110 were held before William Draper Lewis, Jr ., hearing offi-
cer. The hearing officer's rulings made at the hearings are
free from prejudicial error and are hereby affirmed.'
Upon the entire record in this case , the Board finds:
1. The Employer is engaged in commerce within the meaning
of the Act.
2. The labor organizations involved claim to represent
certain employees of the Employer.
3. Insurance Workers of America, CIO , Local No . 5,1 herein
called the C.I.O., and Insurance Agents International Union,
AFL, herein called the A.F.L., seek to represent separate
units of industrial debit agents employed by the Employer in
the State of Pennsylvania . The Employer contends that its
debit agents are independent contractors and therefore not
employees within the meaning of the Act.
The Employer is an Illinois corporation engaged in the
insurance business. It is licensed to do business in 38 States
and the District of Columbia . It has its home office in Chicago,
Illinois , and district offices in various cities throughout the
United States . In Pennsylvania, the only State involved in
this proceeding , there are 2 district offices in Philadelphia;'
2 in Pittsburgh , and 1 each in Harrisburg , Braddock , Hanover,
Somerset , and Greensburg . These offices , as well as the
district offices in Delaware , Maryland , Virginia , and West
Virginia , are under the general supervision of the manager
of the eastern division , who has his office in Baltimore,
Maryland.4 The manager of each district office has a number
of salaried supervisors or superintendents to assist him. The
debit agents whom the Petitioners seek to represent are
attached to and work out of the district offices . There are
approximately 40 such agents in the Philadelphia offices and
100 in the other district offices in Pennsylvania . In addition,
there are 6 agents attached to the district office in Wilmington,
Delaware , and 5 attached to the district office in Hagerstown,
Maryland, who work only in Pennsylvania . Approximately 5
agents are assigned to each supervisor.
The debit agents sell insurance and collect premiums
thereon . In Pennsylvania , in order to sell insurance an agent
must take an examination and be licensed by the State. The
'After the hearing, the Employer filed with the Board a motion to dismiss the petitions
on the ground that its industrial agents are not employees but independent contractors.
For the reasons set forth below, the motion is hereby denied.
2Incorrectly designated in the formal papers as Local 5, Insurance and Allied Workers
Organizing Committee, CIO.
3These two offices are referred to as the Philadelphia division . The manager , called a
division manager, personally supervises one of the offices and has under him an assistant
district manager who supervises the other . So far as the record shows , these offices function
in the same way as the other district offices , and bear the same relationship to the Em-
ployer's organizational scheme.
4 The Employer has no State offices. However, reports from the district offices are
compiled on a State basis in the Baltimore office.
UNITED INSURANCE COMPANY 845
agent pays for his own license , but the Employer must certify
that it has appointed him to sell for it . If his agency is
terminated , the Employer notifies the insurance department;
the license is canceled ; and the agent cannot continue to sell
insurance unless he is licensed to do so for another company.
The agent is also required tofurnishabond , for which he pays.
Agents are recruited by the district managers or super-
visors as vacancies occur . They are paid a commission on
collections and a bonus on sales . They have no signed contracts
with the Employer , but perform their services under an agree-
ment or commission schedule drawn up by the Employer, a
copy of which is posted in each district office . This agreement,
which is revised once a year, sets forth the commission and
bonus rates , which are uniform throughout the Employer's
operations . After a new schedule is promulgated , an agent
may choose , at the beginning of any quarter , to go under it
or to remain under the old agreement . If he chooses to change,
he cannot later change back . The agents have no minimum
guarantee or drawing account.
When an agent is appointed , he is given a debit or list of
policy holders from whom he is to collect weekly premiums,
and the district manager or supervisor explains the compensa-
tion arrangement to him. The original debit is confined to a
definite area, but the agent is free to sell insurance anywhere
in the State . A supervisor usually accompanies a new agent
on his rounds to acquaint him with his debit and show him how
to sell insurance and make collections . Thereafter , the agent
is free to follow these methods or to adopt his own. If he
wishes further advice or help, his supervisor will give it to
him; and the record shows that supervisors devote approxi-
mately 75 percent of their time to rendering such assistance.
The district managers occasionally hold meetings for the
agents, but the agents are not required to attend.
The agents set their own hours of work , are not required to
make any fixed number of calls , and have no quotas to meet.
The 1953 commission schedule provides , however, that the
payment of any bonus is based on the condition of the agent's
account.
The agents are required to report to their district offices
once a week to settle their accounts .5 They compute their
own commissions , deduct this amount from their collections,
and remit the balance to the Employer . Usually they also remit
to the Employer money to cover their withholding and social-
security taxes . The Employer contends , however, thatthese tax
payments are entirely voluntary on the part of the agents. If the
agent makes a social-security payment , the Employer pays its
share . The Employer also has voluntary pension and group
insurance plans for the agents , to which the agents make pay-
5 The agents are apparently supposed to report on Thursdays, and usually do so. The
Employer does not object, however, if they are a day or two early or late.
846 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
ments in the same way. Forms for the agents ' accounts are
supplied by the Employer , but the agents are not required to use
them. The accounts are audited , and corrections in them are
made, by the Employer . The Employer also has the right to
inspect the agents' debit books at any time.
When an agent is on vacation ,6 his supervisor will service
his debit for him if the agent so desires , and the agent is given
credit for the collections made. The agent may , however, make
other arrangements for taking care of the debit . When an agent
is sick , the supervisor makes the collections , and the agent is
paid on the basis of his average earnings for the preceding
13 weeks.
There is no rule prohibiting the agents from selling insurance
for other companies , and a few of them have done so. It is
clear, however , that they ordinarily devote full time to the
Employer's business.
Agents pay their own expenses for postage , telephone calls,
entertaining , and whatever advertising they may do .7 They may
hire assistants to help with collections, but apparently seldom
do so . The Employer pays all expenses of the district offices
which the agents use, and furnishes them with a rate book,
forms of various kinds , and some promotional material.
The Employer does not transfer agents from one office to
another, except at their own request . It has the right to
terminate their services at any time, but does not do so except
for serious cause. Complaints from policy holders are investi-
gated by the supervisors , who may recommend termination of
the agency. Final action , however , is taken only by the Em-
ployer's home office.
The Employer ' s contention is thatthese circumstances, taken
as a whole , indicate an independent contractor rather than an
employer-employee relationship. We do not agree.
As the Board has previously held,s the determination of
whether an individual is an independent contractor or an
employee under the Act requires the application of the common
law "right of control " test . Under this test, an employer-
employee relationship exists where the person for whom the
services are performed reserves the right to control not
only the end to be achieved , but also the manner and means to
be used in reaching such end . The resolution of this question
depends on the facts of each case , and no one factor is deter-
minative.
6 Agents arrange their own vacations , notifying their supervisors when they will be away.
It is apparently understood, however, that the length of the vacation depends on the length
of the agent 's service with the Employer.
7Such advertising appears to be confined to the distribution of cards and such articles as
pencils or ash trays imprinted with the agent 's name.
8Golden State Agency, Inc., et aL, 101 NLRB 1775, 1780, and cases therein cited . See also
N. L. R. B. v. Phoenix Mutual Life Insurance Company, 167 F. 2d 983 (C. A. 7), cert. denied
335 U. S. 845.
UNITED INSURANCE COMPANY 847
In this case it appears that the Employer' s debit agents are
permitted considerable latitude with respect to the manner and
means of performing their services . Thus, they arrange their
own working hours, decide what calls they will make, adopt their
own methods of approach , are free to solicitbusiness anywhere
in the State , and may hire assistants to make collections for
them. The Employer, however, suggests the methods to be
used by having a supervisor show new agents how to make
collections and sales , insures the regular servicing of the debits
by conditioning the payment of any bonus on the condition of
the agent ' s account , and keeps a check on the activities of the
agents by requiring weekly reports and by investigating com-
plaints. It also has the right to inspect the agents ' debit books
at any time. We believe that these circumstances show that the
Employer has reserved to itself the rightto control the manner
and means by which the agents perform their services as well
as the end to be achieved ; that it does not exercise the right
to the fullest extent possible is immaterial to a determination
of the nature of the relationship.9
The employer- employee relationship is further indicated by
the right of the Employer unilaterally to determine the agents'
compensation and to terminate the relationship without sub-
jecting itself to liability. Moreover , the Employer furnishes
the original debits, employs supervisors to train and assist
the agents , provides for the servicing of their debits when
they are sick or on vacation , pays them when they are sick,
provides pension and hospitalization plans for their benefit,
and handles withholding and social -security tax payments for
them. All these practices are normally associated with an
employer-employee relationship . Finally, it is clear that the
agents generally devote full time to their duties for the Em-
ployer, and that their activities constitute an integral part of
the Employer' s business.
In view of the foregoing , and upon the record as a whole, we
find, contrary to the Employer ' s contention , that its debit agents
are employees within the meaning of Section 2 (3) of the Act. 10
Accordingly, we find that a question affecting commerce
exists concerning the representation of employees of the Em-
ployer, within the meaning of Section 9 ( c) (1) and Section 2
(6) and (7) of the Act.
4. The C.I.O. seeks a unit confined to the Employer's
debit agents in Philadelphia, Pennsylvania . The A.F.L. seeks
9 As the courts have held , the determining element is the right of control and not the
exercise thereof. N. L R. B . v. Phoenix Mutual Life Insurance Company , supra.
'OSee Capital- Life & Health Ins. Co. v . Bowers , Collector of Internal Revenue, 186 F.
2d 943 (C. A 4), in which the court held that debit agents are employees within the Federal
Insurance Contributions Act and the Federal Unemployment Tax Act.
For other cases in which the Board has found industrial debit agents to be employees,
see Life and Casualty Insurance Company, 53 NLRB 1196, 1200; Supreme Liberty Life
Insurance Company , 32 NLRB 94, 99; The Life Insurance Company of Virginia , 29 NLRB
246, 252; John Hancock Mutual Life Insurance Company , 26 NLRB 1024, 1033.
848 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
a separate unit of the debit agents attached to the Employer's
district offices in Pittsburgh, Braddock, Hanover, Harrisburg,
Somerset , and Greensburg, Pennsylvania--i.e., all district
offices in Pennsylvania except the Philadelphia offices. The
Employer contends that only a statewide unit of all debit agents
doing business in Pennsylvania is appropriate.
The Board has held that under ordinary circumstances a
unit less than statewide in scope is inappropriate for insurance
agents.ii As all debit agents of the Employer who work in
Pennsylvania have similar duties and conditions of employ-
ment, we find no reason to make an exception in this case.
Furthermore, the requests of the Petitioners appear to be
based solely on the extent of organization , and under Section
9 (c) (5) of the Act this factor cannot be given controlling
effect. We find, therefore, that neither the single-city unit
requested by the C.I.O. nor the multidistrict, but less than
statewide, unit requested by the A. F. L. is appropriate. At
the hearing, however, the A. F. L. indicated that it wished to
appear on the ballot if the Board found a statewide unit
appropriate, and its showing of interest is sufficient to
warrant our holding an election in such a unit. We find that
a statewide unit is appropriate. n
The Employer would include, and the A.F.L. would exclude,
the debit agents who work in Pennsylvania, but are attached
to the Employer's district offices in Wilmington, Delaware,
and Hagerstown, Maryland. As these agents are licensed
by the State of Pennsylvania and apparently work only in that
State, we shall include them in the unit. is
We find that all debit agents employed by the Employer in
the State of Pennsylvania, excluding ordinary agents, special
agents, supervisors or superintendents, managers, and office
employees, constitute a unit appropriate for the purposes of
collective bargaining within the meaning of Section 9 (b) of
the Act.
As the unit requested by the C.I.O. is inappropriate, and
as the C.I.O. indicated at the hearing that it did not wish to
appear on the ballot if the Board found a statewide unit
appropriate, we shall dismiss the petition in Case No. 4-RC-
2052.
[The Board dismissed the petition in Case No. 4-RC-2052.]
[Text of Direction of Election omitted from publication.]
ii Metropolitan Life Insurance Company, 56 NLRB 1635, 1640, and 56 NLRB 1644, 1646;
Peoples Life Insurance Company, 72 NLRB 1406, 1408; Monumental Life Insurance Company,
90 NLRB 941, 942.
12 The Board has previously found statewide units of insurance agents to be appropriate
even though, as in this case, they do not correspond to any administrative unit of the em-
ployer. Peoples Life Insurance Company, supra, at 1409.
iSHome Beneficial Life Insurance Co., 98 NLRB 1053, 1054.