Opposition Brief — Prudential Insurance Co. of America v. National Labor Relations Board

In the Supreme Court of the United States

OCTOBER TERM, 1975

No. 75-1376

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA,

PETITIONER

vw

NATIONAL LABOR RELATIONS BOARD, ET AL.

ON PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR

THE SIXTH CIRCUIT

BRIEF FOR THE NATIONAL LABOR RELATIONS

BOARD IN OPPOSITION

OPINIONS BELOW

The opinion of the court of appeals (Pet. App. Sa-I 1a)

is reported at 529 F.2d 66. The Board’s decision and order

(Pet. App. 13a-24a) is reported at 215 NLRB No. 30. The

decision and direction of election by the Regional Di-

rector in the related representation case is set forth at

Pet. App. 25a-32a.

JURISDICTION

The judgment of the court of appeals was entered on

February [2, 1976. The petition for a writ of certiorari

was filed on March 26, 1976. The jurisdiction of this Court

is invoked under 28 U.S.C. 1254(1).

(1)

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QUESTIONS PRESENTED

1. Whether the Board properly found that the union’s

unconditional offer to all unit employees to waive initia-

tion fees and dues until after a collective bargaining

agreement was negotiated and ratified did not warrant

setting aside the representation election.

2. Whether the Board abused its discretion in deter-

mining that employees in the company’s district office

constituted a separate bargaining unit.

STATUTES INVOLVED

Pertinent provisions of the National Labor Relations

Act, as amended, 61 Stat. 136, 73 Stat. 519, 29 U.S.C.

151, et seq., are set forth at Pet. App. la-3a.

STATEMENT

1. In 1973, the Insurance Workers International Union,

AFL-CIO (the Union) filed a representation petition with

the Board, seeking certification as bargaining representa-

tive for office clerical employees at the Grosse Pointe,

Michigan, district office of The Prudential Insurance

Company of America (the Company). The Company

opposed the petition, contending that the district office

was an inappropriate bargaining unit and that the bar-

gaining unit should include all employees in its North

Central Region, encompassing 48 district offices in seven

states (Pet. App. 26a). After an evidentiary hearing, the

Board’s Regional Director found that the Company's

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basic unit of operations was its district office,! and that

the Grosse Pointe district office was relatively autono-

mous.” Accordingly, the Regional Director concluded that

the bargaining unit sought by the Union was appropriate.

The Board denied the Company’s request for review of

the Director’s decision (A. 1).

'In particular, the Regional Director found that the Company

administers its nationwide insurance operations through nine re-

gional home offices. Its North Central Region comprises 48 district

offices in Michigan, North and South Dakota, Nebraska, lowa,

Minnesota, and Wisconsin; the North Central Regional Home Of-

fice is located in Minneapolis. (Pet. App. 26a; A. 67-69, 254.

“A.” references are to the printed appendix to the briefs in the

court of appeals, a copy of which we have lodged with the Clerk of

this Court.) The district offices sell and service insurance policies

within distinct geographic areas (Pet. App. 27a; A. 146, 151-152).

Each district office has responsibility for the “training, disciplining

[and] hiring * * *” of its clerical employees (Pet. App. 27a; A. 110).

The district office determines whether the employees should work

overtime, it schedules their lunch hours and vacations, and it adjusts

their individual working hours (Pet. App. 27a-28a; A. 74-75, 95, 104-

105, 133-134, 186, 204, 226-227). In addition, the district office is

responsible for evaluating the employees’ performances; it repri-

mands and disciplines them and recommends discharges when

necessary (Pet. App. 27a-28a; A. 78, 110-111, 198-199, 218-219).

Grievances and complaints are ordinarily settled at the district level

(Pet. App. 28a; A. 93-94, 148, 223-224). While wages, fringe bene-

fits, vacations, and work standards are based upon guidelines which

are formulated by the corporate home office and adjusted by the

regional home offices, the district office can recommend that em-

ployees be placed on a higher pay scale (Pet. App. 28a-29a; A. 76-77,

88-90, 131, 149), and it initially decides upon promotions and wage

increases (Pet. App. 28a, n. 4; A. 86-88, 96, 104-105, 163, 183).

"In particular, the record shows that the Grosse Pointe office

is located 10 miles from any other district office (A. 229). Moreover,

there is no significant interchange of employees between Grosse

Pointe and other district offices: out of 300 clerical employees in

North Central Region's district offices, only about 20 transfer

annually and few transfer temporarily (Pet. App. 29a: A. 107,

156-157, 255-257). The Grosse Pointe office's geographical bound-

aries have remained stable. In 1972, for the first time in 5 years,

a boundary adjustment resulted in the gain of one clerical employee

(Pet. App. 29a, n. 5; A. 120, 159-161).

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2. The Union unanimously won the ensuing represen-

tation election and was certified. The Company there-

after refused to bargain with the Union (Pet. App. 13a-

14a). In the subsequent unfair labor practice proceeding,

the Company contended that the bargaining unit was

inappropriate, and that “newly discovered evidence”

showed that the Union interfered with the conduct of the

election by offering to waive its dues and fees until a

collective bargaining agreement was negotiated and

ratified (Pet. App. 15a, 17a). The Board rejected these

contentions, noting that the Union’s offer to all employees

to waive dues and fees did not contravene National

Labor Relations Board vy. Savair Manufacturing Co., 414

U.S. 270 (Pet. App. 16a-17a).3 Finding that the Com-

pany’s refusal to bargain therefore violated Section 8(a)

(5) and (1) of the Act, the Board entered a bargaining

order (Pet. App. 2la-22a).

3. The Company sought review in the court of ap-

peals, contending that the Board’s order should be set

aside because the bargaining unit was inappropriate and

because the Union’s offer to waive dues and fees im-

permissibly interfered with the election. The court of

appeals enforced the Board’s order, concluding, inter alia,

that “the Board’s view that the district office has the de-

gree of autonomy necessary for being an appropriate

bargaining unit is supported by this record taken as a

whole” (Pet. App. 8a) and that the Union’s offer to all

employees to waive dues and initiation fees until a col-

lective bargaining agreement had been signed did not

contravene Savair, supra (Pet. App. 9a-10a).

‘In Savair, supra, this Court held that a union's offer to waive

initiation fees on/y of employees who sign authorization cards prior

to an election impermissibly interferes with the employees’ right to

refrain from union activities and their statutory right to a free and

fair election (id. at 277).

TRAN TE SE hI RS OT aR OTE

BLEED TH

ARGUMENT

1. Contrary to the Company's contention, the de-

cision below does not conflict with National Labor Rela-

tions Board v. Savair Manufacturing Co., supra. There,

this Court noted that the union’s legitimate interest in

waiving initiation fees could be preserved without

election interference if the waiver were made available

to all employees who join “the union before an election

[and] also to those who join after the election.” 414 U.S.

at 272-274, n. 4. Here, it is undisputed that the Union’s

offer to waive dues and fees until a collective bargaining

agreement had been negotiated and ratified was made to

all employees.

Unlike a pre-election offer limited to employees who

support the union, an unconditional waiver to all em-

ployees does not “allow the union to buy endorsements

and paint a false portrait of employee support during its

election campaign” (414 U.S. at 277). Employees who

vote against the union benefit from the initial waiver of

fees and dues equally with those who vote for the union.

And, unlike a pre-election offer by an employer, who is

in a position to alter terms and conditions of employment

in anticipation of an election and thereby directly inter-

fere with his employees’ free choice, the union’s offer

necessarily is contingent on events it does not control;

if it loses the election or fails to negotiate and ratify a

collective bargaining agreement, it will have no power to

impose monetary obligations on any unit employee.‘

‘Accordingly, every court of appeals that has ruled on the question

has held that a union’s unconditional offer to waive fees and dues,

not predicated on pre-election support, does not impermissibly

interfere with an election and therefore is not prohibited by

Savair, supra. See, e.g., National Labor Relations Board vy. Wabash

Transformer Corp., 509 F.2d 647, 649-650 (C.A. 8), certiorari denied,

423 U.S. 827; Altman Camera Co., Inc. v. National Labor Relations

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2. The Company also contends that the Board abused

its discretion in limiting the bargaining unit to employees

in the Company’s district office. Section 9(b) of the Act

authorizes the Board to decide “in each case whether,

in order to assure to employees the fullest freedom in

exercising the rights guaranteed by [the] Act, the unit

appropriate for the purposes of collective bargaining shall

be the employer unit, craft unit, plant unit, or subdivision

thereof.” Under settled principles, a single district

office in the insurance industry is presumptively an

appropriate bargaining unit.° This presumption was not

Board, 511 F.2d 319, 322 (C.A. 7); National Labor Relations

Board v. S & S§ Product Engineering Services, Inc., 513 F.2d

1311, 1312-1313 (C.A. 6); National Labor Relations Board v.

Benner Glass Co., 514 F.2d 641, 642 (C.A. 5), certiorari denied,

No. 75-654, January 12, 1976; National Labor Relations Board vy.

Stone & Thomas, 502 F.2d 957, 958 (C.A. 4): National Labor

Relations Board vy. Dunkirk Motor Inn, 524 F.2d 663, 665 (C.A. 2):

Thrift Drug v. National Labor Relations Board, 52\ F.2d 243 (C.A.

5), certiorari denied. No. 75-1063, April 5, 1976.

‘In view of this broad authority, the finding that a particular

unit is appropriate will not be set aside unless the Board has acted

arbitrarily (Packard Motor Car Co. v. National Labor Relations

Board, 330 U.S. 485, 491-492), or has failed clearly to articulate

the basis for its determination (National Labor Relations Board v.

Metropolitan Life Insurance Co., 380 U.S. 438, 442-443).

"See, e.g., Michigan Hospital Service Corp. vy. National Labor

Relations Board, 472 F.2d 293 (C.A. 6); Continental Insurance Co. v.

National Labor Relations Board, 409 F.2d 727 (C.A. 2). certiorari

denied, 396 U.S. 902: National Labor Relations Board v. American

Life & Accident Insurance Co., 394 F.2d 616 (C.A. 6), certiorari

denied, 393 U.S. 913: National Labor Relations Board \. Western &

Southern Life Insurance Company, 391 F.2d 119 (C.A. 3), certiorari

denied, 393 U.S. 978; Metropolitan Life Insurance Co., 156 NLRB

1408: Quaker City Life Insurance Co., 134 NLRB 960, 138 NLRB

61. entorced, 319 F.2d 690 (C.A. 4). The application of this

presumption to units of clerical employees in district offices is

also settled. See Empire Mutual Insurance Co., 195 NLRB 284,

Equitable Life Assurance Society, 192 NURB 544: Fireman's Fund

Insurance Co., 173 NLRB 982.

RIrFoeoenm Tween

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rebutted in the instant case since the Board found that

the Grosse Pointe district office “maintains the substantial

degree of autonomy necessary for collective bargaining

to effectively function” (Pet. App. 30a). As shown above

(pp. 2-3), the-record adequately supports this finding.

CONCLUSION

The petition for a writ of certiorari should be denied.

Respectfully submitted.

RoBerT H. Bork,

Solicitor General.

JOHN S. IRVING,

General Counsel,

JOHN E. HIGGINS, JR.,

Deputy General Counsel,

NorTON J. COME,

Deputy Associate General Counsel,

LINDA SHER,

ALAN BANOV,

Attorneys,

National Labor Relations Board.

May 1976.

DOJ-1976-05

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