475 F.2d 485 (2nd Cir. 1973), 351, Bell Aerospace Co. Div. of Textron Inc. v. N.L.R.B.

Docket Nº:351, 352, 72-1703-72-1860.
Citation:475 F.2d 485
Case Date:February 28, 1973
Court:United States Courts of Appeals, Court of Appeals for the Second Circuit

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475 F.2d 485 (2nd Cir. 1973)




Nos. 351, 352, 72-1703-72-1860.

United States Court of Appeals, Second Circuit.

February 28, 1973

Argued Jan. 17, 1973.

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Richard E. Moot, Buffalo, N. Y. (Ohlin, Damon, Morey, Sawyer & Moot, Buffalo, N. Y., of counsel), for petitioner.

Jonathan G. Axelrod, Atty., N. L. R. B. (Peter G. Nash, General Counsel, Patrick Hardin, Associate General Counsel, Marcel Mallet-Prevost, Asst. General Counsel, and Leonard M. Wagman, Atty., N. L. R. B., of counsel), for respondent.

Before FRIENDLY, Chief Judge, and OAKES and TIMBERS, Circuit Judges.

FRIENDLY, Chief Judge:


A petition by the Bell Aerospace Company Division of Textron Inc. (Bell) to review and a cross-petition by the National Labor Relations Board to enforce a bargaining order, 187 N.L.R.B. No. 30 (1972), put in question the Board's earlier order in a representation case, 190 N.L.R.B. No. 66 (1971), adhered to on a denial of reconsideration, 196 N.L.R.B. No. 127 (1972). The representation order found that 25 buyers in Bell's Department 121 constituted an appropriate unit and directed an election, which was won by the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America, Amalgamated Local 1286 (the Union). Bell refused to recognize the Union on the ground that the buyers were managerial employees and, as such, were not employees protected by §§ 7 and 8(a) of the National Labor Relations Act.

There is not much dispute about the facts: The buyers have full discretion, without limit in dollar amount, in selecting prospective vendors, preparing invitations to bid, evaluating bids, negotiating prices and terms, and preparing purchase orders. They execute all purchase orders up to $50,000, although they must obtain the approval of a superior for any commitment exceeding $5,000. 1 Many purchases are "off the shelf" items, which are made in quantity for the general public and can be purchased from a number of distributors or sources; many are not. In some instances other Bell employees (many of them organized) or a subcontractor will have tentatively selected a vendor, and the buyer must get approval before seeking a different one. For the Minute Man project, which represents about 70% of Bell's sales, major decisions are made by a team consisting of supervisory type personnel 2 from the engineering, quality assurance, manufacturing and finance departments; the buyer is team chairman and signs the purchase forms but a supervisor from pricing and

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negotiations participates in working out the terms. Once agreement is reached, the buyer is responsible for seeing that contracts are complied with and adjusting disputes. Where the amount is less than $5,000, the buyer has authority to cancel a contract and place the order with an alternate vendor.

The case first came before the Board by transfer from the Regional Director in October, 1970. On May 20, 1971, a unanimous Board issued a direction of election, 190 N.L.R.B. No. 66, relying heavily on its recent decision in North Arkansas Electric Cooperative, Inc., 185 N.L.R.B. No. 83 (1970). North Arkansas concerned the discharge of one Lenox, an "electrification advisor," who had been discharged for failing to remain neutral during a union organizational campaign. On the Board's application for enforcement of an earlier order requiring reinstatement, 168 N.L.R.B. 921 (1967), the Eighth Circuit held that the Board's determination that Lenox was not a "managerial employee" was in error but remanded for determination whether his discharge was nevertheless in violation of the National Labor Relations Act, NLRB v. North Arkansas Electric Cooperative, Inc., 412 F.2d 324 (8 Cir. 1969). 3 The Board, on remand, held that the Act's protections extended to most managerial employees in general and to Lenox in particular, North Arkansas Electric Cooperative, Inc., supra, 185 N.L.R.B. No. 83. 4 This disposed, as far as the Board was concerned, of what had been Bell's prime contention in the instant case, namely, that the buyers did not constitute an appropriate unit for collective bargaining within § 9(b) since they were managerial employees; 5 the Board proceeded to reject the alternative contention "that buyers, whether considered managerial or not, are to be denied representation because there would exist a potential conflict of interest between the buyers as union members and the Employer"-notably by preferring unionized vendors and influencing "make or buy" decisions in favor of "make," thus creating additional work for sister unions in the plant. 6

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On the very day on which the Board certified the Union, the Eighth Circuit denied enforcement of the Board's second order in NLRB v. North Arkansas Electric, 446 F.2d 602 (8 Cir. 1971). On the basis of a review of the legislative history of the Taft-Hartley Act, 446 F.2d at 605-608, and of court decisions with respect to application of the Act to "managerial employees," the court held that Congress did not intend the word "employee" to embrace them. 7 No application was made for certiorari.

Predictably Bell moved for reconsideration, which the Board denied in another opinion, 196 N.L.R.B. No. 127 (1972). Disagreeing with the breadth of the Eighth Circuit's opinion, the Board restated the position it had taken in North Arkansas. See fn.4 supra. It held that managerial employees were excluded from coverage only if they make "determinations which should be made free of any conflict of interest which could arise if the person involved was a participating member of a labor organization." This category included not only "those concerned with management policies in the labor relations area," but also those having "responsibility with respect to policies which are inextricably intertwined and of necessity affect or infringe upon the labor relations area." It gave as an example "a corporate representative, charged with the duty of determining where an employer's plants should be located or what capital expenditures a corporation ought to make" if he had "broad managerial discretion." The same might be true of "those bearing primary responsibility for determination of financial policies, or even those charged with the direction of basic policies in the field of research and development." The Board emphasized that the question whether "the probabilities of such conflict are sufficiently minimal" was to be determined on the facts of each case.


The issue here tendered must be considered in light of the confusing pattern of Board decisions before and after enactment of the Taft-Hartley Act in 1947, 61 Stat. 136 et seq., and the less than pellucid legislative history of the provision of that statute that is here relevant.

The concept of the "managerial employee" seems to have first arisen in National Labor Relations Act cases in which either employers or unions argued for the exclusion from proposed larger bargaining units of certain employees with a close relationship to management. In Julian P. Friez & Sons, 47 N.L.R.B. 43, 47 (1943), the Board ruled that employees, who were charged with expediting the completion of orders and assuring adherence to production time schedules, were "closely related to the management," and therefore should be excluded from a unit of production and maintenance employees. Expediters, who contacted vendors, placed orders, kept records of the progress of deliveries and had authority to reassign orders, were excluded from a unit of office, clerical, technical and professional employees in Spicer Manufacturing Corp., 55 N.L.R.B. 1491, 1498 (1944), because "the authority possessed by these employees to exercise their discretion in making commitments on behalf of the Company stamps them as managerial." See also Rex Manufacturing Co., Inc., 7 N.L.R.B. 95, 99 (1938); Westinghouse Air Brake Co., 64 N.L.R.B. 547, 553 (1945); Electric Controller & Manufacturing Co., 69 N.L.R.B. 1242, 1245-1246 (1946). In a number of cases this principle was applied to buyers. See, e. g., Hudson Motor Car Co., 55 N.L.R.B. 509, 512 (1944); Vulcan Corp., 58 N.L.R.B.

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733, 736 (1944) ; Barrett Division Allied Chem. & Dye Corp., 65 N.L.R.B. 903, 905 (1946). Shortly before enactment of the Taft-Hartley amendments, the Board summed up its position as regards "managerial employees" in Ford Motor Co., 66 N.L.R.B. 1317, 1322 (1946) (footnote omitted):

We have customarily excluded from bargaining units of rank and file workers executive employees who are in a position to formulate, determine, and effectuate management policies. These employees we have considered and still deem to be "managerial," in that they express and make operative the decisions of management.

While the Board's policy was clearly not to permit managerial employees to join units of rank and file personnel, the Board nonetheless viewed at least minor managerial employees as within the Act's definition of "employee." In an early decision, the NLRB, holding that a dispatcher was an "employee" and therefore protected by the Act against his employer's unfair labor practices, said:

[The employee's] position as dispatcher . . . was of a minor supervisory character. Although antiunion conduct of managerial or supervisory employees has been repeatedly held to be proof that the employer has engaged in unfair labor practices, it does not follow that managerial or supervisory employees are not employees within the meaning of Section 2(3) of the Act. The statutory definition is of wide comprehension.

Atlantic Greyhound Corp., 7 N.L.R.B. 1189, 1196 (1938) (footnote omitted). And in Dravo Corp., 54 N.L.R.B. 1174 (1944), a case in which the...

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