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Allis-Chalmers Mfg. Co. v. National Labor Relations Board.

June 6, 1947


Author: Kerner

Before KERNER and MINTON, Circuit Judges, and LINDLEY, District Judge.

KERNER, Circuit Judge.

This petition, in proceedings under § 10 of the National Labor Relations Act, 29 U.S.C.A. § 151 et seq., seeks the review of an order of the Board, predicated on findings of unfair labor practices committed in violation of § 8(1), (3), and (5) of the Act.The Board in its answer to the petition requests enforcement of its order.

The primary questions presented are (1) whether the inspectors were "employees" within the meaning of § 2(3) of the Act and could constitute a unit appropriate for the purpose of collective bargaining; (2) whether the inspectors were entitled to select as their bargaining representative any labor organization including one which represents the production and maintenance employees whose work they inspect; and (3) whether in any event the action taken with respect to the inspectors was a violation of § 8(3) and (5) of the Act.

Petitioner is a Delaware corporation having its principal office and place of business within this judicial circuit at Milwaukee, Wisconsin. It operates a plant at Pittsburgh, Pennsylvania, where it is engaged in the business of manufacturing and distributing electrical transformers and related products, and where the unfair practices occurred. On January 10, 1938, following a Board-directed election, under § 9 of the Act, the Board certified the United Electrical, Radio and Machine Workers of America, Local 613, C.I.O. (hereinafter referred to as union) as the collective bargaining representative for petitioner's production and maintenance employees. The Board's certification and the collective bargaining contract excluded the inspectors from the production and maintenance unit. Thereafter, for a period of seven years, petitioner and the union had an uninterrupted collective bargaining relationship evidenced by annual agreements containing provisions excluding the inspectors. On May 11, 1945, a hearing was held before a trial examiner designated by the Board, on a petition filed by the union requesting investigation and certification of it as the exclusive bargaining agent for the inspectors. The petition was opposed on the grounds that the inspectors were representatives of the management; that the functions of the inspectors conflict with the interests of the production employees, and for that reason the certification of the union would interfere with the proper performance of the inspection work; and that in any event, certification of the union as a collective bargaining agent for the inspectors would not effectuate the policies of the Act.

Petitioner's inspection department at the Pittsburgh plant consisted of a chief inspector, an assistant chief inspector, and 42 inspectors. These inspectors had no authority to hire or discharge employees or to recommend such action or other action affecting changes in the employment status of employees; they were charged with the duty of inspecting materials and workmanship for the purpose of insuring that petitioner's product met its specifications and those of its customers. They visually examined materials arriving at the plant and rejected those which did not conform to the specifications. They inspected the parts and products manufactured by petitioner at various stages of fabrication and when inspection disclosed an article which failed to conform to petitioner's standards, the inspectors rejected and "trouble tagged" the faulty article. If, however, the superintendent disagreed with the inspector concerning the rejection of an article, a committee composed of the superintendent challenging the rejection, the chief inspector, and a representative of the engineering department determined whether the inspector's rejection was justified. When the committee failed to agree, the representative of the engineering department made the final decision. They also checked the amount of work produced by the production employees for the purpose of insuring that the work was going through the department as it should and participated with the foremen, engineers, and superintendents in correcting design trouble when it arose. They also, on infrequent occasions, substituted for foremen who were absent from work; they were eligible for membership in the Foremen's Club, which was comprised of management representatives for the purpose of discussing management problems; they were sometimes used as a source of instruction by production employees as to the proper method of performing work and were consulted with reference to adjustments in rates of pay of production employees with whose work they were familiar, but all employees whose work was examined by the inspectors were under the direct supervision of production foremen.

On July 31, 1945, the Board issued its decision in which it concluded that the inspectors were not supervisory employees, that their interests were not allied with those of management, and that the inspectors, excluding the chief and assistant chief inspector, constituted an appropriate collective bargaining unit, and directed that an election be held to determine whether the inspectors desired to be represented by the union. At an election thereafter held, the inspectors designated the union as their bargaining agent, and the Board, in accordance with the provisions of § 9(a) and (c) of the Act, certified the union as their exclusive bargaining representative.

On August 27, 1945, petitioner, without consulting the union, advised the inspectors that since they had chosen to be represented by the union, the functions which had been entrusted to them were removed, that their jobs would be reclassified, and that each inspector would be advised of his new classification and rate of pay. As a result of the reclassification, the inspectors were divested of certain of their duties, their responsibilities curtailed and their wages reduced. Each inspector was told to report thereafter to the foreman of the department to which he was assigned and to follow that foreman's instructions. As part of the change, a group of foremen was established who would have supervision over the inspectors, but the inspector still examined petitioner's products to determine whether they met the specifications and reported his findings to the foreman who decided whether the article should have been rejected.

On September 11, 1945, a conference was held between representatives of petitioner and the union at which the union, as a matter of collective bargaining, requested reinstatement of the inspectors to their former status and rates of pay. Petitioner's representative replied that the inspectors' jobs had been changed, that they were being properly paid for the work they were doing, and that the inspectors were now subject to the contract covering the production and maintenance employees. There were no other negotiations between petitioner and the union concerning the inspectors.

On September 18, 1945, the Board issued a complaint against petitioner, based on charges filed by the union, alleging, inter alia, that in reclassifying the inspectors without prior consultation or bargaining with the union and refusing to reinstate them to their former status and rates of pay, petitioner had committed unfair labor practices. Petitioner answered, denied it had violated the Act, and alleged that prior to reclassification the inspectors were "acting in the interest of an employer" and consequently were not "employees" under the provisions of the Act, and that, therefore, the Board had no jurisdiction or right to make a certification of representation for such employees.

After a hearing on the complaint, the trial examiner found that petitioner had violated the provisions of the Act, and recommended issuance of an order by the Board directing petitioner to cease and desist therefrom. After adopting the findings and conclusions of the trial examiner, the Board found that the inspectors were "employees" within the meaning of § 2(3) of the Act, and entered an order that petitioner cease and desist from its unfair labor practices, restore the inspectors to the status which they occupied prior to August 27, 1945, make them whole for any loss they may have suffered by reason of the petitioner's discriminatory change in their status, and bargain collectively with the union.

In its brief petitioner's first contention is that prior to their reclassification the inspectors were management representatives, not entitled to the benefit and protection of the Act, and could not constitute a unit appropriate for the purpose of collective bargaining. It frankly, however, called attention to the case of Packard Motor Car Co. v. National Labor Relations Board, 67 S. Ct. 789 then pending in the Supreme Court, and stated that in the event the Supreme Court should rule that supervisory employees are entitled to the benefit of the Act, its contention may be deemed superfluous. Since the Supreme Court, in that case, on March 10, 1947, held that foremen (supervisory employees) are employees within the meaning of § 2(3) of the Act and that they constitute an appropriate collective bargaining unit, we pass to a consideration of petitioner's second contention - whether the inspectors may select as their bargaining representative a labor organization represents the production and maintenance employees.

Under § 9(b) of the Act, the Board has vast discretion in deciding the unit appropriate for the purposes of collective bargaining, and the Act "places upon the Board the responsibility of determining the appropriate group of employees for the bargaining unit." Pittsburgh Plate Glass Co. v. National Labor Relations Board, 313 U.S. 146, 152, 61 S. Ct. 908, 912, 85 L. Ed. 1251. This function of the Board is a positive one, and must be performed in such fashion as to insure to employees the full benefit of their rights to self-organization and to collective bargaining, and otherwise to effectuate the policies of this Act. And when the Board has so determined, provided the Board exercised that discretion reasonably, its determination is binding upon us. May Department Stores v. National Labor Relations Board, 326 U.S. 376, 66 S. Ct. 203, 90 L. Ed. 145.

Petitioner contends that the Board's refusal to dismiss the petition in the representation proceedings constituted an unreasonable exercise of administrative discretion. It insists that the Board failed to give due consideration to the possible harmful effects of the affiliation of the inspectors with a rank and file union. It argues that the production and maintenance employees are concerned with the quantity of production, while the function of the inspectors is to control and maintain the quality of petitioner's products and to protect the interests of the buying public. To affiliate the ...

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