416 U.S. 267, 294, 94 S. Ct. 1757, 1771, 40 L. Ed. 2d 134 (1974)
In July 1970, Amalgamated Local No. 1286 of the United Automobile, Aerospace and Agricultural Implement Workers of America petitioned the National Labor Relations Board for a representation election to determine whether the union would be certified as the bargaining representative of the 25 buyers in the purchasing and procurement department at Bell Aerospace Company's plant in Wheatfield, New York.1 The company opposed the petition on the ground that the buyers were managerial employees and thus were not covered by the Act.2 The plant is engaged in research and development in the design and fabrication of aerospace products.3
The purchasing and procurement department receives requisition orders from other departments at the plant and is responsible for purchasing all of the company's needs from outside suppliers.4 Some items are standardized and may be purchased off the shelf from various distributors and suppliers.5 Other items must be made to the company's specifications, and the requisition orders may be accompanied by detailed blueprints and other technical plans.6 Absent specific instructions to the contrary, buyers have full discretion, without any dollar limit, to select prospective vendors, draft invitations to bid, evaluate submitted bids, negotiate price and terms, and prepare purchase orders.7 Buyers execute all purchase orders up to $50,000.8 They may place or cancel orders of less than $5,000 on their own signature.9 On commitments in excess of $5,000, buyers must obtain the approval of a superior, with higher levels of approval required as the purchase cost increases.10 For the Minute Man missile project, which represents 70% of the company's sales, purchase decisions are made by a team of personnel from the engineering, quality assurance, finance, and manufacturing departments, with the buyer serving as team chairman.11
After the representation hearing, the Regional Director transferred the case to the Board.12 On May 20, 1971, the Board issued its decision holding that the company's buyers constituted an appropriate unit for purposes of collective bargaining and directing an election.13 Relying on its recent decision in North Arkansas Electric Cooperative, Inc., the Board stated that even though the company's buyers might be managerial employees, they were nevertheless covered by the Act and entitled to its protections.14 The Board rejected the company's contention that representation should be denied because the buyers' authority to commit the company's credit, select vendors, and negotiate purchase prices would create a potential conflict of interest.15 On June 16, 1971, a representation election was conducted in which 15 of the buyers voted for the union and nine against.16 On August 12, the Board certified the union as the exclusive bargaining representative for the company's buyers.17
The company stood by its contention that the buyers were not covered by the Act and refused to bargain with the union.18 An unfair labor practice complaint resulted in a Board finding that the company had violated sections 8(a)(5) and (1) of the Act and an order compelling the company to bargain with the union.19 The company petitioned the United States Court of Appeals for the Second Circuit for review of the order and the Board cross-petitioned for enforcement.20 The Court of Appeals denied enforcement and remanded the case to the Board for a rulemaking proceeding.21 The Supreme Court granted the Board's petition for certiorari.22
Whether the National Labor Relations Board properly determined that all managerial employees, except those whose participation in a labor organization would create a conflict of interest with their job responsibilities, are covered by the National Labor Relations Act?23
Managerial employees are excluded from the protections of the National Labor Relations Act, as Congress intended to exclude all employees properly classified as managerial from coverage under the Act.24
No. The Board's determination that managerial employees are covered unless their participation would create a conflict of interest is erroneous.25 The established facts demonstrate that the buyers possess substantial discretion to select vendors, negotiate prices and terms, and execute purchase orders up to $50,000 without prior approval.26 This places them in a position to formulate and effectuate management policies.27 Longstanding Board precedent such as Ford Motor Co. supports this classification.28
The legislative history of the Taft-Hartley Act confirms that Congress viewed such managerial employees as outside the Act's protections.29 The Board's new conflict-of-interest standard departs from that understanding without support in the statute or prior decisions.30
The Board did not properly determine that the buyers were covered by the Act.31
Related opinions on this issue
Justice White dissented from the holding in Part II of the opinion.32 He argued that section 2(3) of the Act defines the term employee to mean any employee except those expressly excluded by the statute.33 White reviewed the Board's pre-1947 decisions and concluded that the Board had never completely excluded managerial employees from the Act's protections.34
He noted that the legislative history of the Taft-Hartley amendments addressed supervisors specifically but did not support a broad exclusion of all managerial employees.35 White maintained that the Board's conflict-of-interest approach was narrower and adhered more closely to the rationale of the supervisory exclusion and congressional intent.36
Whether the Board must proceed by rulemaking rather than by adjudication in determining whether the company's buyers are managerial employees?37
The Board may announce new principles in an adjudicative proceeding, and the choice between rulemaking and adjudication lies primarily in the informed discretion of the Board.38
No. The Court of Appeals erred in requiring the Board to use rulemaking procedures.39 The established facts show that buyer duties vary widely depending on the company or industry.40 This makes case-by-case adjudication especially appropriate for developing standards.41 The Board has discretion to proceed by individual order rather than general rule under precedents such as SEC v. Chenery Corp. and NLRB v. Wyman-Gordon Co.42 Nothing in the record indicates that adjudication would amount to an abuse of discretion here.43
The Board is not required to proceed by rulemaking rather than adjudication.44