Golden State Agency, Inc.

National Labor Relations Board - Board Decisions

Mar 20, 1952

98 N.L.R.B. 778 (N.L.R.B. 1952)

778 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
WE WILL notify KAISER ALUMINUM & C HEMICAL CORPORATION in writing
that we have no objection to the reinstatement of the above -named employees,
without prejudice to their seniority or other rights and, privileges , and will
furnish copies thereof to each of the said employees.
UNITED CARPENTERS AND JOINERS OF
AMERICA, LOCAL No. 720, AFL,
Labor Organization.
By ---------------------------------------
(Representative ) ( Title)
Dated--------------------
This notice must remain posted for 60 consecutive days from the date hereof,
and must not be altered , defaced, or covered by any other material.
GOLDEN STATE AGENCY, INC., STATE FARM MUTUAL AIITomoBILE
INSURANCE COMPANY, STATE FARM _ FIRE AND CASUAIIr1Y COMPANY
AND STATE FARM LIFE INSURANCE COMPANY and INSURANCE AND
ALLIED WORKERS ORGANIZING COMMITTEE , CIO, PETITIONER. Case
No. 20-RC-1622. March 20,1952
Decision and Order
Upon a petition duly filed under Section 9 (c) of the National Labor
Relations Act, a hearing was held before Nathan R. Berke, hearing
officer . The hearing officer's rulings made at the hearing are free from
prejudicial error and are hereby affirmed.
Pursuant to the provisions of Section 3 (b) of the Act, the Board
has delegated its powers in connection with this case to a three-member
panel [Members Houston, Murdock, and Styles].
Upon the entire record in this case, the Board finds : ^
1. The Companies are engaged in commerce within the meaning of
the Act.
2. The labor organization involved claims to represent certain em-
ployees of the Companies.
3. No question affecting commerce exists concerning the representa-
tion-of employees of the Companies within the meaning of Section 9
(c) (1) and, Section 2 (6) and (7) of the Act, for the following
reasons:
The Petitioner seeks a unit of all life, fire, casualty, and automobile
insurance agents appointed by and acting for the Companies in the
State of California. The Companies contend that the agents sought
are independent contractors rather than employees. - '
1 As the record and brief adequately present the issues and positions of the parties, the
Employer 's request for oral argument is hereby denied.
98 NLRB No. 119.
GOLDEN STATE AGENCY, INC. 779
The Companies write various kinds of insurance in the United
States and Canada. The Companies' district managers recruit the
local agents sought by the Petitioners, and recommend their appoint-
ment to the State agents, who sign the contracts of appointment sub-
ject to approval by the Companies. Approximately 408 local agents,
some of whom do not represent all 3 Companies, write and service
the Companies' insurance policies.
Agents' contracts of appointment are subject to such changes as
the Companies may promulgate and may be terminated at any time
by the Companies or the agents. Agents do not receive a minimum
salary or guarantee but are compensated on a commission, service
fee, and bonus basis.2 Commissions are based upon the amount of
insurance written; fees for,handling policyholders' losses are based
upon a percentage of premiums collected; and bonuses are paid on the
amount of qualifying insurance in force over a period of time. The
Companies advance funds to new agents if necessary until business
develops and commissions earned offset the funds advanced. Under
State law the Life Insurance Company pays the State license fee for
its agents while the agents themselves pay the licensing fees for
automobile, fire, and casualty insurance.3
The automobile and life insurance contracts of appointment spec=
ify that the duties of agents are to solicit and secure applications for
insurance on a "quality basis" in accordance with company rules;
to deliver policies; to secure membership fees, initial premiums, and
applications for reinstatement' of insurance; to use their "best effort"
to keep in force existing policies; to service the policyholders; to
make reports as required; and to investigate and handle claims "under
the direction of the Company." Agents agree to represent no other
insurance carrier in the same line without permission of the Com-
panies. In 1951, permission was granted agents in 52 instances to
represent competing insurance carriers. In these circumstances,
agents exercise independent judgment whether to write policies with
the Companies or their competitors.
Agents maintain and equip their offices as they desire, seek busi-
ness anywhere in the State, set their own working time and vacations,
and are not obligated to devote full time to the Companies' business.
Some agents pursue other occupations and their business cards so
indicate. A number of agents hire office employees and insurance
solicitors in the conduct of their agency. The Companies exercise
no control over these employees who are directed and compensated by
the agents. All office expenses except for a part of advertising costs
2 In addition to service fees, automobile insurance agents receive a percentage of the
policyholders ' membership fee.
8 The agents involved herein do not write industrial or debit type of life insurance.
780 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
in local newspapers are borne by the agents.' The Companies fur-
nish throwaway cards at reduced cost as well as policy forms, rate
manuals, proofs of loss, report forms, and return envelopes.
Agents fix their own business quotas after discussion with the dis-
trict manager but are not required to fulfill their quotas. Such
records are kept as are required by the State insurance department
but no inspection of agents' records is made by the Companies. Agents
are required to file monthly reports with the Companies' State office
showing the number of claims handled and the hours worked on
the claims as a prerequisite to receiving service fees. Attendance
at monthly meetings and training sessions held in the district man-
ager's office is optional though new agents generally attend and receive
a manual on how to write policy applications and service policy-
holders. Detailed instructions are not furnished agents on matters
connected with servicing policyholders. In difficult cases, agents
may call upon the assistance of the district manager but are not re-
quired to do so.
The Companies withhold income tax, make social security contri-
butions, and provide a retirement plan for the agents. The agents
make all income tax deductions and social security contributions for
their own employees. The Companies do not carry workmen's com-
pensation insurance for the agents nor do the Companies require that
the agents secure liability insurance on their automobiles or their
offices.
The Companies assert that the agents are independent contractors
because they are subject to control only as to the results and not as to
the details of performing their functions. We agree. It is clear that
the right of the Companies to exercise control over the methods and
manner by which insurance policies are written and serviced is not
reserved by such general references in the agents' contracts of appoint-
ment as "under the direction of the Company." Indeed the method of
operation demonstrates that the agents involved herein enjoy wide
latitude in implementing the contracts of appointment. It is signifi-
cant in this connection that agents choose their working time, main-
tain their own offices, hire, discharge, and direct employees in further-
ance of agency operations, and represent competing insurance carriers.
In addition, agents make only limited monthly reports, are not
required to attend company meetings, set their own insurance quotas
which are not mandatory, and function with little or no supervision.
Though the manner of compensating agents is essentially on a com-
mission basis, the entrepreneurial nature of the relationship in ques-
' The contracts of appointment provide that the compensation paid an agent shall be
regarded "as his personal remuneration and as reimbursement for his necessary business
expenses in carrying out the provisions of this appointment."
CINCH MANUFACTURING CORPORATION 781
tion is also evidenced by the fact that ultimate financial return is
dependent-upon the extent to which deductions for operating costs
result in profit or loss.
In view of the foregoing and upon the entire record, we conclude
that the Companies' insurance agents are independent contractors and
not employees within the meaning of the Act.5 Accordingly, we shall
dismiss the petition herein.
Order
Upon the basis of the entire record in this case, the National Labor
Relations Board hereby orders that the petition filed in the instant
matter be, and it hereby is, dismissed.
E Southwestern Associated Telephone Company, 76 NLRB 1105; Roy C. Martin Lumber
Company, Inc., 83 NLRB 691; J. Howard Smith, Inc., 95 NLRB 21. Cf. N. L. R. B. v.
Phoenix Mutual Life Insurance Company, 167 F. 2d 983 (C. A. 7), where insurance agents
were found to be employees because of the close control over their manner of operation
exercised by the employer. See, also, Life d Casualty Insurance Co. of Tennessee, 5^
NLRB 1196; Metropolitan Life Insurance Co., 43 NLRB 962.
CINCH MANUFACTURING CORPORATION 1 and INTERNATIONAL UNION OF
ELECTRICAL, RADIO AND MACHINE WORKERS, CIO, PETITIONER. Case
No. 35-BC-6110. March 20, 1952
Decision and Direction of Election
Upon a petition duly filed under Section 9 (c) of the National Labor
Relations Act, a hearing was held before Alan A. Bruckner, hearing
officer. The hearing officer's rulings made at the hearing are free from
prejudicial error and are hereby affirmed.
Pursuant to the provisions of Section 3 (b) of the Act, the Board has
delegated its powers in connection with this case to a three-member
panel [Members Houston, Murdock, and Styles].
Upon the entire record in this case, the Board finds :
1. The Employer is engaged in commerce within the meaning of the
Act.
2. The labor organization involved claims to represent certain
employees of the Employer.2
3. A question affecting commerce exists concerning the representa-
tion of employees of the Employer within the meaning of Section 9 (c)
(1) and Section 2 (6) and (7) of the Act.
I The name of the Employer appears as amended at the hearing.
2 At the hearing the Employer contended that one or more supervisors as defined in the
Act sponsored and actively assisted in the Petitioner 's membership campaign and that the
petition should therefore be dismissed . In view of our findings herein as to the status
of employees classified as "supervisors " at the Employer 's plant , we find no merit in this
contention.
98 NLRB No. 118.