## Facts

- Bell Aerospace employed “buyers” responsible for purchasing materials used in its manufacturing operations.
- A union sought certification as the buyers’ exclusive bargaining representative in a separate bargaining unit.
- In a representation proceeding, the NLRB found the buyers to be an appropriate bargaining unit and directed an election.
- The NLRB indicated that even if the buyers were “managerial employees,” they would remain covered by the NLRA absent a showing that unionization would create a labor-relations conflict of interest.
- The buyers voted for union representation, and the NLRB certified the union.
- Bell refused to bargain with the certified union.
- The NLRB found Bell committed an unfair labor practice and ordered it to bargain.
- The Second Circuit denied enforcement, finding ambiguity in the NLRB’s rationale and concluding that any change in the treatment of managerial employees required rulemaking rather than adjudication.
- The Supreme Court granted review to address both (1) whether managerial employees are covered by the NLRA and (2) whether the NLRB had to proceed by rulemaking.

## Issues

1. Whether employees properly classified as “managerial” are excluded from NLRA protections, or instead are covered unless their unionization would create a conflict of interest in labor relations.
2. Whether the NLRB must use rulemaking, rather than adjudication, to determine and apply standards for identifying managerial employees (including buyers).

## Decision

- The Supreme Court held that Congress intended to exclude from NLRA protections all employees properly classified as “managerial,” not merely those whose unionization would create a labor-relations conflict of interest.
- The Court rejected the NLRB’s conflict-of-interest approach as the governing standard for managerial status under the Act.
- The Court held the NLRB is not required to proceed by rulemaking rather than adjudication when determining whether buyers (or types of buyers) are managerial employees.
- The Court reversed in part and remanded for further proceedings consistent with its interpretation of the managerial-employee exclusion.

## Legal Principles

- Employees properly classified as “managerial” are excluded from the NLRA’s protections, even though the statute’s explicit exclusion focuses on “supervisors.”
- The scope of the managerial-employee exclusion is determined by congressional intent as reflected in statutory history and longstanding administrative and judicial constructions, not by a case-specific conflict-of-interest requirement.
- An agency generally may choose between rulemaking and adjudication when developing policy, including announcing new principles through adjudication.
- Case-by-case adjudication is permissible where job categories vary widely and a generalized rule would provide limited value, and where reliance interests do not make adjudicative change unfair.

## Conclusion

The Supreme Court concluded that managerial employees fall outside the NLRA’s protection and that the NLRB may determine managerial status through adjudication, remanding for the Board to apply the correct managerial-employee standard to Bell’s buyers.


NLRB v. Bell Aerospace Co., 416 U.S. 267 (1974)