Legal Definitions - Managerial Employee

A Managerial Employee is an individual whose job responsibilities involve significant discretion in formulating and implementing company policy, or who has substantial authority to make independent decisions that affect the organization's business operations. Under the National Labor Relations Act (NLRA), these individuals are considered part of management, rather than "employees" in the traditional sense, and are therefore not protected by the Act's provisions that allow workers to form unions and engage in collective bargaining.

Here are some examples to illustrate this concept:

• Example 1: The Chief Marketing Officer (CMO) of a Global Apparel Brand

  The CMO is responsible for setting the company's overall marketing strategy, deciding which advertising campaigns to launch, approving brand partnerships, and allocating the multi-million dollar marketing budget. They don't just oversee a team; they make high-level decisions that directly impact the brand's public image and sales performance worldwide.

  How it illustrates the term: Because the CMO exercises significant independent judgment in formulating and implementing core business strategies and policies that affect the entire organization, they would be classified as a managerial employee. This means they are not eligible to join a union of the company's marketing specialists or graphic designers, as they are considered part of the employer's decision-making structure.

• Example 2: A Senior Software Architect at a Financial Technology Firm

  This architect is not a direct supervisor of other engineers, but their role involves designing the fundamental architecture for new software products, selecting core technologies, and making critical decisions about system scalability and security that will guide the work of dozens of development teams. Their choices shape the company's technological direction and product offerings.

  How it illustrates the term: The Senior Software Architect's authority to make independent, high-level technical decisions that define the company's products and operational infrastructure places them in a managerial role. They are not merely executing tasks but are instrumental in shaping the company's core business and technological policy, thus excluding them from NLRA protections.

• Example 3: The Director of Operations for a Chain of Restaurants

  This director is responsible for standardizing operational procedures across all restaurant locations, negotiating contracts with major food suppliers, and making strategic decisions about efficiency improvements, staffing models, and customer service policies that impact the entire chain's profitability and customer experience.

  How it illustrates the term: The Director of Operations' role in formulating and implementing company-wide policies and making significant independent decisions regarding business operations across multiple locations qualifies them as a managerial employee. Their work involves shaping the employer's business practices rather than simply carrying them out, distinguishing them from employees who are subject to those operational policies.