State Farm Mutual Automobile Insurance Co.

National Labor Relations Board - Board Decisions

Aug 18, 1976

225 N.L.R.B. 966 (N.L.R.B. 1976)

966 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
State Farm Mutual Automobile Insurance Company
and State Farm Fire and Casualty Company, Em-
ployer-Petitioner and Teamsters Local No. 1,
American Communication Association affiliated
with the International Brotherhood of Teamsters,
Chauffeurs, Warehousemen and Helpers of Ameri-
ca and Highway Truckdrivers and Helpers Local
107, affiliated with International Brotherhood of
Teamsters , Chauffeurs , Warehousemen and Help-
ers of America . Case 29-RM-481
August 18, 1976
DECISION AND DIRECTION OF ELECTION
By MEMBERS FANNING, PENELLO, AND WALTHER
Upon a petition duly filed under Section 9(c) of
the National Labor Relations Act, as amended, a
hearing was held before Hearing Officer Richard
Roth of the National Labor Relations Board on No-
vember 13, 1975. Thereafter, the Regional Director
for Region 29, transferred the case to the Board for
Decision.
Pursuant to the provision 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, having duly considered the Hearing
Officer's rulings made at the hearing, finds that they
are free from prejudicial error. They are hereby af-
firmed. Upon the entire record in this case, the Board
finds:
1. State Farm Mutual Automobile Insurance
Company and State Farm Fire and Casualty Compa-
ny (hereinafter called the Employer) are Illinois cor-
porations maintaining their principal offices and
places of business in the city of Bloomington, Illinois,
and various other places of business in other States
of the United States, where they are and have been at
all times material herein engaged in the sale of auto-
mobile insurance and fire and casualty insurance and
related services. During the past calendar year, the
Employer in the course and conduct of its operations
derived gross revenues therefrom in excess of
$500,000 and purchased and caused to be transport-
ed and delivered to its New York place of business
office equipment and supplies and other goods and
materials valued in excess of $50,000, of which goods
and materials valued in excess of $50,000 were trans-
ported and delivered to its New York places of busi-
ness in interstate commerce directly from States in
the United States other than the State in which it is
located.
2. The parties have stipulated and we find that
Teamsters Local No. 1, American Communication
Association affiliated with the International Brother-
hood of Teamsters, Chauffeurs, Warehousemen and
Helpers of America and Highway Truckdrivers and
Helpers Local 107, affiliated with the International
Brotherhood of Teamsters, Chauffeurs, Warehouse-
men and Helpers of America, are labor organizations
within the meaning of Section 2(5) of the Act.
3. A question concerning representation exists
concerning the representation of certain employees
of the Employer within the meaning of Sections
9(c)(1) and 2(6) and (7) of the Act.
Teamsters Local No. 1, American Communication
Association affiliated with International Brother-
hood of Teamsters, Chauffeurs, Warehousemen and
Helpers of America, hereinafter referred to as Local
1, was certified on September 15, 1967, as bargaining
representative in a unit of all field (automobile)
claims specialists and field claims representatives em-
ployed by the Employer assigned to the Smithtown,
Syosset, and Jericho, Long Island, New York, offices
of the State Farm Mutual Automobile Insurance
Company.'
On October 1, 1972, after 5 years of bargaining,
the parties entered into their first collective-bargain-
ing agreement. A second agreement was effective
from April 1, 1974, to September 30, 1975. In early
September 1975, the Employer and Local 1, through
their respective bargaining committees, commenced
negotiations for a new agreement.
In July 1973, the International Brotherhood of
Teamsters, Chauffeurs, Warehousemen and Helpers
of America (hereinafter referred to as the Interna-
tional) began to consider the merger of Local I into
another of its locals. Finally, in 1975, the Interna-
tional merged Local 1 into Highway Truckdrivers
and Helpers Local 107, affiliated with International
Brotherhood of Teamsters, Chauffeurs, Warehouse-
men and Helpers of America (hereinafter referred to
as Local 107).2
1 On July 2, 1970, the Regional Director dismissed a petition seeking
clarification of the unit to include fire field claims specialists and represen-
tatives Subsequently, however, both fire and automobile adjusters were
covered under the collective-bargaining agreements between the Employer
and Local I after the parties agreed to include them in the bargaining unit
if a majority of these employees designated the unit as their bargaining
agent The matter was submitted to an arbitrator who determined that a
majority of said employees did, in fact, designate Local I as their collective-
bargaining representative The most recent clarification, dated May 23,
1973, certifies Local I as the bargaining representative of the field claims
specialists, office claims specialists, field claims representatives, office
claims representatives, and estimators employed by the Employer assigned
to the Westbury and Levittown, Long Island , New York, offices
2 This merger was in accordance with sec I I of the constitution of the
International which provides that "the General Executive Board in its dis-
cretion shall have the power to merge local unions and other subordinate
bodies under such terms and conditions and subject to such qualifications
as the General Executive Board may determine " The General Execu-
tive Board may also, in its discretion, conduct a referendum vote among all
225 NLRB No. 135
STATE FARM MUTUAL AUTOMOBILE INSURANCE CO. 967
On July 16, 1975, William Bender, secretary-trea-
surer of Local 1, was informed of the merger.' On
September 9, 1975, Lewis J. Bottone, president of Lo-
cal 107, advised the membership of Local I that the
general executive board of the International had
merged Local I into Local 107, a Philadelphia, Penn-
sylvania, local. Under the leadership of William
Bender, the membership of Local 1 wrote a number
of letters to the International protesting the merger
and filed an action in U.S. District Court against the
International and Local 107 seeking to enjoin the
merger. In addition, a petition signed by 33 of the 37
unit employees of Local 1 was sent to the Interna-
tional on October 20, 1975, protesting the merger. A
letter which accompanied the petition protested the
unilateral action of the International which gave "no
consideration to the wishes of [the] members"; it also
protested any arrangement that did not provide that
Bender would represent the employees as collective-
bargaining representative.
Meanwhile, by letter dated September 8, 1975,
Bottone informed the Employer of the merger ex-
plaining that Local 107 would abide by all contractu-
al commitments, that all grievances would be han-
dled by Local 107, that the dues checkoff should be
forwarded to the secretary-treasurer of Local 107,
and that John E. Smalley had been assigned as busi-
ness agent to represent the members. On October 1,
1975, the Employer sent letters to both Local 1 and
Local 107 asking clarification of the September 8,
1975, letter from Local 107. Both Local 1 and Local
107 responded and each claimed to be the exclusive
bargaining agent. Consequently, on October 22,
1975, the Employer sent a letter to both Locals stat-
ing that in light of the competing claims of represen-
tation, "State Farm believes it has no option but to
respectively decline to bargain with either Local until
the question concerning representation is resolved."
Thereafter, the Employer filed the instant petition
with the Board.
Local 107 contends the merger should be recog-
nized because: the merger was in accordance with
the constitution of the International; the change was
instituted due to Local l's financial difficulties and
small membership; and the merger of the Locals ef-
fected structural changes only which do not alter the
representative character of the bargaining agent so as
to preclude a transfer of its bargaining rights to an-
other labor organization.
The Employer contends that the merger created a
totally different organization from that which was
certified to represent its employees; that the certified
Union and members thereof oppose a merger; that
the employees did not have the opportunity to vote
on the merger; and that, accordingly, a question con-
cerning representation exists. Upon the foregoing, we
find in agreement with the Employer that a question
concerning representation exists. In North Electric
Company, 165 NLRB 942 (1967), the Board indicated
that it would not grant an amendment to a certifica-
tion "where the possibility of a question concerning
representation remains open because the change of
affiliation took place under circumstances that do
not indicate that the change reflected a majority
view." In Missouri Beef Packers, Inc., et al., 175
NLRB 1100 (1969), the Board held that where "there
is no guaranty of continuity of representation and
the certified labor organization is a functioning, via-
ble entity, and opposes amendment, [the petition to
amend] cannot be granted without doing violence to
the purposes of the Act, which include the promotion
of stability in labor-management relations." The
above-mentioned two cases, unlike the instant case,
involved the amendment of certification. However,
as we stated in Newspapers, Inc, Publishers of the
Austin American, 210 NLRB 8 (1974), those cases in-
volving the amendment of certification "set forth the
factors deemed significant by the Board in cases in-
volving merger, substitution, or change of representa-
tive, and clearly indicate that the factor of primary
importance is whether the employees have had an
opportunity to pass on the change of representative."
Although we are aware that the industrial stability
sought by the Act would unnecessarily be disrupted
if every union organizational adjustment were to re-
sult in displacement of the Employer-bargaining rep-
resentative relationship and that Congress necessari-
ly vested in unions a large measure of discretion in
the management of their internal affairs,' we consid-
er it of primary importance that the employees in-
volved be assured of the continuity of their present
organization and representation.' Based on the facts
herein, we are not convinced that the employees in-
volved enjoy such an assurance. To the contrary, not
only were the employees in the affected unit not pro-
vided an opportunity to express their approval of the
merger, but an overwhelming majority of them
signed a petition protesting the merger. Moreover,
merger into Local 107 would provide a significant
change for the employees in the certified unit since
Local 1 consists of approximately 120 members
whereas Local 107 has approximately 8,000 mem-
bers.
Accordingly, based on the above evidence indicat-
of the members of the Local, but such referendum is advisory only
3 On July 3, 1975, Bender had written a letter to the International oppos-
ing the merger
4 See Canton Sign Co, 174 NLRB 906 (1969)
5 See The Hamilton Tool Company, 190 NLRB 571 (1971), Gulf Oil Corpo-
ration , 135 NLRB 184 (1962)
968 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
ing the opposition of the certified unit to the merger,
and the lack of opportunity for the members of Local
1 to formally express their approval or disapproval of
the merger by means of a referendum, we find that a
question concerning representation exists.
4. The Employer contends that the appropriate
unit is:
All field claims specialists, office claims special-
ists, field claims representatives, office claims
representatives, claims service specialists and es-
timators, employed by State Farm Mutual Auto-
mobile Insurance Company and State Farm
Fire and Casualty Company assigned to Mel-
ville, Massepequa, Lake Ronkonkoma and
Westbury, Long Island, New York, offices ex-
cluding superintendents, all other managerial
and supervisory personnel, guards, as defined in
the National Labor Relations Act, claim counsel
and other professional employees, and all other
employees of the Company assigned to said of-
fices.
The Employer argues that the unit of employees enti-
tled to vote in an election to resolve the question
concerning representation is properly described in
the Employer's petition. The Employer indicates that
this petition differs from the most recent clarification
in three ways: (1) The names of the towns in which
the claims offices are located are different since the
addresses have changed; (2) fire company adjusters
are also included because the arbitrator in 1970 in-
cluded them following a secret card check; both fire
and automobile adjusters have been included under
both labor contracts; fire company adjusters occa-
sionally do the work of automobile company adjust-
ers or work together with them and at times they
share the same offices; authority to hire and fire au-
tomobile and fire company adjusters rest in the same
members of supervision; (3) the claims service spe-
cialists would also be included in the unit, consistent
with the 1973 unit clarification decision which in-
cluded the inside adjusters of the automobile compa-
ny.' This position was created pursuant to a change
in procedures occurring after the last Board certifica-
tion. Subsequently, the parties agreed to include this
employee in the unit.
For reasons cited by the Employer, as set forth
above, in support of its proposed unit and since no
party has expressed any opposition to such a pro-
posed unit,7 we shall direct an election in the follow-
ing unit, which we find, is appropriate for the purpos-
es of collective-bargaining within the meaning of
Section 9(b) of the Act:
All field claims specialists, office claims special-
ists, field claims representatives, office claims
representatives, claims service specialists, and
estimators, employed by State Farm Mutual Au-
tomobile Insurance Company and State Farm
Fire and Casualty Company assigned to Mel-
ville, Massepequa, Lake Ronkonkoma, and
Westbury, Long Island, New York, offices, ex-
cluding superintendents, all other managerial
and supervisory personnel, guards, as defined in
the National Labor Relations Act, claim counsel
and other professional employees, and all other
employees of the Company assigned to said of-
fices.
[Direction of Election and Excelsior footnote omit-
ted from publication.]
6 The claims service specialist is an inside adjuster who works for the fire
company and performs work similar in scope and nature to that performed
by the office claims representative in the automobile company
At the hearing, Local I indicated it did not oppose the unit proposed by
the Employer Local 107 took no position and has not subsequently taken a
position as to the proposed unit