Supreme Liberty Life Insurance Co.

National Labor Relations Board - Board DecisionsMay 27, 1941

32 N.L.R.B. 94 (N.L.R.B. 1941)

In the Matter of SUPREbrE LIBERTY LIFE INSURANCE COMPANY and AMERICAN FEDERATION OF INDUSTRIAL AND ORDINARY INSURANCE AGENTS, No. 20817, A. F. of L. Case No. R-2490-Decided May 27, 1941 Jurisdiction : life insurance industry. Investigation and Certification of Representatives : existence of question: re- fusal to accord union recognition ; election necessary. Unit Appropriate for Collective Bargaining : industrial agents, canvassers, and special agents of two of the Company's agencies with the exception of man- agers, assistant managers, office employees, and all other employees. Definitions : industrial insurance agents, special agents, and canvassers held to be employees and not independent contractors Mr. Earl B. Dickerson and Mr. Harry H. Pace, of Chicago, Ill., for the Company. Mr. Jack Bradon, of Chicago, Ill., for Local No. 20817. Mr. Frederic B. Parkes, 2nd, of counsel to the Board. DECISION AND DIRECTION OF ELECTION STATEMENT OF THE CASE On February 14, 1941, American Federation of Industrial and Ordi- nary Insurance Agents, No. 20817, A. F. of L., herein called Local No. 20817, filed with the Regional Director of the Thirteenth Region (Chicago, Illinois) a petition alleging that a question affecting com- merce had arisen concerning the representation of employees of Supreme Liberty Life Insurance Company, Chicago, Illinois, herein called the Company, and requesting an investigation and certifica- tion of representatives pursuant to Section 9 (c) of the National Labor Relations Act, 49 Stat. 449, herein called the Act. On April 11, 1941, the National Labor Relations Board, herein called the Board, acting pursuant to Section 9 (c) of the Act, and Article III, Section 3, of National Labor Relations Board Rules and Regulations-Series 2, as amended, ordered an investigation and authorized the Regional Director to conduct it and to provide for an appropriate hearing upon due notice. 32 N. L R. B, No 18, SUPREME LIBERTY LIFE I11NSURANCE OOMPANIY 95 On April 14 and 16, 1941, respectively, the Regional Director issued a notice of hearing, copies of which were duly served upon the Company and Local No. 20817. Pursuant to notice, a hearing was held on April 22, 1941, at Chicago, Illinois, before Charles F. McErlean, the Trial Examiner duly designated by the Chief Trial Examiner. The Company and Local No. 20817 were represented by counsel or official representatives and participated in the hearing. Full opportunity to be heard, to examine and cross-examine wit- nesses, and to introduce evidence bearing on the issues was afforded all parties. At the commencement and again at the close of the hearing, the Company moved to dismiss the petition on the ground that the Com- pany is not within the jurisdiction of the Board for the reasons that the Company is not engaged in commerce within the meaning of the Act, that the Company's agents herein involved are not engaged in interstate commerce, and that the relationship of employer and employee does not exist between the Company and its agents herein involved. The Trial Examiner reserved rulings on these motions for the Board. The motions to dismiss are hereby denied for reasons set forth below. At the close of the hearing, the Company also moved that if the Board should decide that the Company was within the Board's jurisdiction, the petition should be dismissed on the ground that Local No. 20817 had not shown that it represents a majority of the Company's agents. The Trial Examiner reserved ruling on the motion for the Board. The motion is hereby denied. During the course of the hearing the Trial Examiner made several rulings on other motions and on objections to the admission of evidence. The Board has reviewed the rulings of the Trial Exam- iner and finds that no prejudicial errors were committed. Upon the entire record in the case, the Board makes the following: FINDINGS OF FACT 1. THE BUSINESS OF THE COMPANY Supreme Liberty Life Insurance Company is an Illinois corpora- tion with its principal office, referred to by the Company as, and herein called, the home office, in Chicago, Illinois. It is engaged in insuring the lives of its policyholders and in investing its funds. The Company sells industrial, ordinary, and group life insurance policies. The Company operates 22 district offices in 8 States and the District of Columbia where it is authorized to transact business. The Company's business is managed and directed by its officers and Executive Committee located at the home office. Such officials at the home office determine the terms and conditions of the various 96 DECISIONS OF NATIONAL LABOR RELATIONS BOARD policies of insurance offered by the Company in accordance with the laws of the several States in which the policies are issued. ' They also control all investments made by the Company. All applications for insurance and claims, applications for loans, and other matters pertaining to insurance in force are acted upon at the home office. All policies of insurance and all checks covering disbursements on policies and general expenditures are executed at the home office. On December 31, 1940, the Company had 214,151 insurance pol- icies in force, having a face value of $57,161,414. In terms of num- ber of insurance policies in force, the Company ranks 137th among all insurance companies in the United States. The amount of in- surance in force as of December 31, 1940, by States was as follows : District of Columbia ---------------------------- $2,124 , 421.00 Illinois------------------------------------------ 14,337 , 131.00 Kentucky________________________________________ 1,300,223.00' Maryland ---------------------------------------- 2, 356, 712.00 Michigan ---------------------------------------- 9,593,531.00 Missouri ------------------ ------------------------ 3, 853,425.00 Ohio -------------------------------------------- 15,573 , 151.00 Tennessee---------------------------------------- 4,485,844.00 West Virginia----------------------------------- 2,449 , 851.00' All others--------------------------------------- 1,087 , 125.00 Total-------------------------------------- $57,161,414 00 The Company's assets as of December 31, 1940, were as follows : Cash in office and banks----------------------------- $87,352.14 United States Government bonds-- ------------------- 175, 723.82 Bonds of United States political subdivisions ---------- 22, 527. 21 Railroad and railroad equipment bonds--------------- 249, 405. 52 Public Utility bonds--------------------------------- 43, 014.54 Industrial bonds------------------------------------- 62,996.51 Stocks ----- ----------------------------------------- 273,147.32 Mortgages ( loans ) ----------------------------------- 552,002.34 Real estate- ----------------------------------------- 666,108.19 Premium notes -------------------------------------- 22,900.87 The Company's cash was deposited in 26 banks located in 8 States and the District of Columbia. The Company owns bonds- of United States political subdivisions, issued by such subdivisions in 3 States. The Company also owns public utility bonds and industrial bonds purchased from companies located in several States, as well as rail- road bonds purchased from railroads operating in many States, The Company holds some common stock. The larger part of the Com- pany's stockholdings, however, consist of preferred stocks of rail- roads, public utilities, and industrial and miscellaneous companies. All securities purchased by the Company are delivered to it at its home office and are kept in Chicago, Illinois. k, :S(UPRRME LIBERTY LIFE INSURANCE, COMPANY 97 Loans are made on notes secured by mortgages on apartment build- ings and residences. The Company has loans outstanding secured by real estate located in 10 States and the District of Columbia. Real estate is held in 8 States and the District of Columbia. From the foregoing it is clear that in addition to insuring the lives of its many policyholders, the Company engages in a diversified and widespread investment business. In 1940, ' the Company purchased furniture, fixtures, equipment, and supplies valued at $2,712.21. In the same year the Company spent $8,238.85 for postage, telephone, telegraph, and express services. During 1940, the Company spent $15,603.48 for agency supervision and for traveling expenses of supervisors. The Company employs approximately 500 persons. II. THE ORGANIZATION INVOLVED American Federation of Industrial and Ordinary Insurance Agents, No. 20817, is a labor organization affiliated with the American Fed- eration of Labor, admitting to membership employees of the Company. III. THE QUESTION CONCERNING REPRESENTATION On September 4 and December 16, 1940, Local No. 20817 requested the ' Company to recognize it as the sole bargaining agent for the Company's industrial insurance agents, canvassers, and special agents employed in the city of Chicago. The Company, doubting that Lo- cal No. 20817 represented a majority of those employees, refused to grant such recognition. A statement of the Trial Examiner, intro- duced in evidence at the hearing, shows that Local No. 20817 repre- sents a substantial number of employees in the unit found below to be appropriate., We find that a question has arisen concerning the representation of employees of the Company. 1V. THE EFFECT OF THE QUESTION CONCERNING REPRESENTATION UPON COMMERCE We find that the question concerning representation which has arisen, occurring in connection with the operation of the Company described in Section I above, has a close, intimate, and substantial relation to trade, traffic, and commerce among the several States and 1 The Federation filed 50 application dds. dated be,l eeen July 1940 and February 1941, with the Trial Examiner who found that 49 bore genuine signatures of which 24 were the names of emplovees oil the Company s pa} roll of Match 22, 1941. There are approximately 64 employees within the unit found below to be appropriate. 98 DECISIONS OF NATIONAL LABOR RELATIONS BOARD tends to lead to labor disputes burdening and obstructing commerce and the free flow of commerce. V. THE APPROPRIATE UNIT Local No. 20817 contends that all industrial insurance agents, can- vassers, and special agents in the Company's Chicago offices at 35th Street Industrial Agency and West Side Agency, with the exception of managers, assistant managers, office employees, and all other em- ployees, constitute a unit appropriate for the purposes of collective bargaining. Although the Company took no definite position at the hearing in regard to the appropriate unit, it apparently claims that all its insurance agents, ordinary as well as industrial, man- agers, and assistant managers of its three Chicago agencies consti- tute an appropriate unit. The Company contends, however, that industrial insurance agents, canvassers, and special agents are inde- pendent contractors and are therefore not employees within the meaning of the Act. Industrial insurance agents of the Company sell industrial and to some extent ordinary life insurance. Each agent is assigned to a definite territory where he collects the weekly or monthly premiums on industrial policies at the homes or offices of the policy holders. Those premiums are generally referred to as debits and the collec- tion of such premiums as debit collections. The agents are paid strictly on a commission basis, consisting of a specified percentage of the debit collections and of the premiums on insurance sold. Canvassers, whom the Company refers to as special agents, are engaged primarily in selling industrial policies. They do not col- lect debits until they have sold sufficient policies to create a debit account of their own. In addition to commissions, each canvasser receives a salary of $6.00 per week for traveling expenses. From that amount, it appears that $1.00 for "new business" and a fifty- cent bonding fee are deducted. Those employees whom Local No. 20817 calls special agents and the Company calls superintendents each have five to seven agents work- ing under him. The special agents assist the less experienced men in the preparation of accounts and train them in the art of insurance selling. They receive a salary of $15 to $20 per week in addition to commissions on policies sold and debits collected. All agents, spe- cial agents, and canvassers are paid by vouchers. None has a writ- ten contract of employment with the Company. All agents, special agents, and canvassers report at 8 o'clock each morning at the branch office from which they work, signing an at- tendance book to show the time of their arrival. They turn in col- lections made the previous day and route cards showing the policy- SUP'RE'ME LIBERTY LIFE IN'$URANCE COMPANY 99 holders called upon and the standing of the policies. After a discussion of problems arising in their work, the meeting closes. The agents, special agents, and canvassers leave the office at 9 or 10 o'clock and do not return until the next morning. The amount of time an agent spends on his work is in theory entirely discretionary. However, each agent is allotted by the Company a certain percentage of collections on his debit account which he must maintain and a certain amount of new policies which he must sell each week if possible. From the foregoing, it appears that the work of the agents, spe- cial agents, and canvassers is a functional part of the business of the Company and that they are subject, in large measure, to the control and right of control of the Company as to manner and mode of its execution. We find that the relationship between the Com- pany and its industrial insurance agents, canvassers, and special agents is that of employer-employee and that industrial insurance agents, special agents, and canvassers are employees within the meaning of Section 2 (3) of the Act.2 The Company maintains the following three branch agencies, in Chicago: (1) 35th Street Industrial Agency, (2) West Side Agency, and (3) 35th Street Ordinary Agency. As indicated above, Local 20817 would include in the unit, only the employees at the first two agencies. The agents working out of the first two agencies are en- gaged primarily in the sale of industrial insurance policies and in the collection of premiums upon such policies. On occasion they sell ordinary life insurance. The agents at the 35th Street Ordinary Agency, on the other hand, sell almost exclusively ordinary life in- surance. Less than 1 per cent of the Company's total industrial insurance is sold by ordinary agents. Local No. 20817 has confined its organizational activities to the industrial agents, special agents, and canvassers in the two agencies, and it has made no attempt to organize the ordinary agents at the 35th Street Ordinary Agency. Under the circumstances, we are of the opinion that a unit which coincides with the extent of Local No. 20817's organization is appropriate.' ' See Matter of Washington Branch , Sun Life Insurance Company of America and Indus- trial and Ordinary Insurance Agents Union No 21354, Industrial and Ordinary Insurance Agents Council , 15 N. L R. B. 817 ; Matter of John Hancock Mutual Life Insurance Com- pany and American Federation of Industrial and Ordinary Insurance Agents Union No. 21.271, East St. Louis and Vicinata, Illinois , 26 N L R B 1024; Mattel of Life Insur- ance Company of Virginia and The Amei scan Federation of Industrial and Ordinary Insurance Agents Union No 2226/,, 29 N: L R. B 246 ' See Matter of John Hancock Mutual Life Insurance Company and American Federation of Industrial and Ordinary Insurance Agents Union No. 21571, East St. Louis and Vicinity, Illinois, 26 N L R B 1024; Matter of Home Beneficial Association of Richmond, Vu, and Industrial and Ordinary Insurance Agents' Council , 17 N. L R B 1027. 4486`)2-42-\ of 32--8 100 DECISIONS OF NATIONAL LABOR RELATIONS BOARD The managers and assistant managers whom, Local No. 20817 would exclude, are supervisory officials, represent the Company in the man- agement of the branch offices, and supervise the work of the agents. The office employees are not eligible to membership in, Local No. 20817, being within the jurisdiction of another union affiliated with the American Federation of Labor. Local No. 20817 has not at- tempted to organize these employees. We shall exclude them from the unit.4 We find that all industrial insurance agents, canvassers, and spe- cial agents in the Company's Chicago offices at 35th Street Industrial Agency and West Side Agency with the exception of managers. assistant managers, office employees, and all other employees, con- stitute a unit appropriate for the purposes of collective bargaining and that said unit will insure to employees of the Company the full benefit of their right to self-organization and to collective bargain- ing and otherwise effectuate the policies of the Act. VI. THE DETERMINATION OF REPRESENTATIVES We find that the question which has arisen concerning representation can best be resolved by, and we shall accordingly direct, an election by secret ballot. At the hearing Local No. 20817 requested that the pay roll of April 19, 1941, be used as a basis for determining eligibility to vote, and the Company asked that the pay roll immediately preceding the Direction of Election be used. We find no reason to depart from our usual practice. Accordingly, we shall direct that the employees of the Company eligible to vote in the election shall be those in the appropriate unit who were employed during the pay-roll period imme- diately preceding the date of the Direction of Election herein, subject to such limitations and additions as are set forth in the Direction. Upon the basis of the above findings of fact and upon the entire record in the case, the Board makes the following : CONCLUSIONS OF LAw 1. A question affecting commerce has arisen concerning the repre- sentation of employees of Supreme Liberty Life Insurance Company, Chicago, Illinois, within the meaning of Section 9 (c) and Section 2 (6) and (7) of the National Labor Relations Act. 2. All industrial insurance agents, canvassers, and special agents in the Company's Chicago offices at 35th Street Industrial Agency and West Side Agency with the exception of managers, assistant managers, office employees, and all other employees; constitute a unit appropriate SPe P8 se cited in footnote 2, supra SUPREME LIBERTY LIFE INSURANCE COMPANY 101 for the purposes of collective bargaining, within the meaning of Sec- tion 9 (b) of the National Labor Relations Act. DIRECTION OF ELECTION By virtue of and pursuant to the power vested in the National Labor Relations Board by Section 9 (c) of the National Labor Relations Act, 49 Stat. 449, and pursuant to Article III, Section 8, of National Labor Relations Board Rules and Regulations-Series 2, as amended. IT IS HEREBY DIRECTED that, as part of the investigation authorized by the Board to ascertain representatives for the purpose of collective bargaining with Supreme Liberty Life Insurance Company, Chicago, Illinois, an election by secret ballot shall be conducted as early as pos- sible, but not later than thirty (30) days from the date of this Direc- tion, under the direction and supervision of the Regional Director for the Thirteenth Region, acting in this matter as agent for the National Labor Relations Board, and subject to Article III, Section 9, of said Rules and Regulations, among the industrial insurance agents, can- vassers, and special agents in the offices at 35th Street Industrial Agency and West Side Agency of the Company, who were employed during the pay-roll period immediately preceding the date of this Direction, including employees who did not work during such pay-roll periods because they were ill or on vacation or in the active military service or training of the United States, or temporarily laid off, but excluding managers, assistant managers, office employees, and all other employees, and employees who have since quit or been discharged for cause, to determine whether or not they desire to be represented by American Federation of Industrial and Ordinary Insurance Agents, No. 20817, affiliated with the American Federation of Labor, for the purposes of collective bargaining.