Overton Markets, Inc.

"OVERTON MARKETS" 615 CONCLUSIONS OF LAW 1. The , Respondent, Eastern Die Company, is engaged in commerce within the meaning of Section 2 (6) and (7) of the Act. 2. The Union is a labor organization within the meaning of the Act. 3. By discriminating in regard to the hire or tenure of employment of Paul Arel, Reginald Gagnon, Roland Cyr, Paul Fortier, and Robert Polley, thereby discourag- ing membership in the above Union, Respondent has engaged in and is engaging in unfair labor practices within the meaning of Section 8(a)(3) of the Act. 4. By engaging in the conduct set forth in the section III, C, above, the Respond- ent has engaged in and is engaging in unfair labor practices within the meaning' of Section 8 (a) (1) of the Act. 5. The aforesaid unfair labor practices are unfair labor practices within the meaning of Section 2 (6) and (7) of the Act. [Recommended Order omitted from publication.] Overton Markets, Inc.; J. W. Overton & Son, Inc.; Marvin B. Overton, Inc.; W. S. Overton, Inc.; Thomas L. Overton, Inc.; Lilton Davis ; Frank McLaurin ; all d/b/a "Overton Markets" and Local 305, Amalgamated Meat Cutters and Butcher Work- ers of North America, AFL-CIO, Petitioner and Retail Clerks International Association, AFL-CIO, Local 233, Petitioner. Cases Nos. 5-RC-3892P and 5-RC-3825. May 14, 1963 DECISION AND DIRECTION OF ELECTIONS Upon petitions duly filed I under Section 9(c) of the National Labor Relations Act, a hearing was held in the consolidated proceeding before Louis Aronin and Joseph R. Wirts, hearing officers.' The hear- ing officers' rulings made at the hearing are free from prejudicial er- ror and are hereby affirmed.3 1. Each of the petitioning Unions seeks to represent employees in a unit covering 10 retail grocery stores located in the vicinity of Nor- 3 The names of the parties appear as amended at the hearing. The Petitioner in Case No. 5-RC-3822 is referred to herein as Meat Cutters, and the Petitioner in Case No. 5-RC-3825 is referred to herein as Retail Clerks ' Hearing Officer Aronin presided over the hearing on July 9 and 10 and August 8, 1962, while Hearing Officer Wirts presided on August 15, 16, and 17, 1962. 8 Lilton Davis and Frank McLaurin , who purchased Stores from A. W. Overton after the petitions herein were filed , moved to dismiss the petitions as to them , and some of the corporations moved to dismiss the petitions entirely, on the ground that ( 1) Davis and McLaurin did not receive due notice of the proceeding , and (2 ) Hearing Officer Aronin denied their request for a continuance of the hearing. The hearing began at 10.30 a.m. on July 9, 1962, without the presence or knowledge of Davis and McLaurin . Both were present, however , during that afternoon and at all subsequent times. At the beginning of the hearing on the morning of July 10 , the hearing officer informed Davis and McLaurin what the issues were in these cases, and that they were parties to the proceeding with the right to participate fully and to retain counsel , and adjourned the hearing for 3 hours so they could obtain counsel . Counsel for Davis and McLaurin appeared when the hearing reconvened and represented them thereafter . On the afternoon of July 10, the hearing officer denied his request that the hearing be continued until he prepared his case, but on July 19, while the hearing was recessed as noted above, until August 8, he was provided with a transcript of the hearing for July 9 and 10 . Under these circumstances, we find that ample opportunity was provided for that preparation of his case, and that no preju- dice has been shown. The motions to dismiss are, therefore, hereby denied. 142 NLRB No. 71. 616 DECISIONS OF NATIONAL LABOR RELATIONS BOARD folk, Virginia. The ownership and operation of these stores is divided among, seven companies,, all-trading as "Overton Markets." The com- panies contend that they are not a single employer and that the peti- tions should be dismissed because the 10-store units are inappropriate. In addition, it is clear` that two of the stores do not, alone, meet the Board's standard for asserting jurisdiction over retail operations. There is no bargaining history. Of the seven companies, five are corporations and two, Davis and McLaurin, are individual proprietorships. Each of the five corpora- tions is owned by a different member of the same family-A. W. Over- ton, J. W. Overton, and T. L. Overton are brothers; Mrs. M. B. Over- ton is the widow of a deceased brother; 4 and W. S. Overton is the son of A. W., the eldest brother. The members of the -family have gone into the retail grocery business at different times beginning before 1937, originally as individual proprietorships and later forming sep- arate corporations. Each owns 100 percent of the stock, and is presi- dent and active manager of his own company. However, all the cor- porations employ the same accounting firm, and Robert Babb, an at- torney; is secretary of each corporation. In the corporation of which A. W. is president, his son, W. S., is vice president, and his brother, J. W., is treasurer; also, A. W. is vice president of the corporation owned by his son W. S. The record shows that A. W. Overton presented "W. S. Overton, Inc.," as a college graduation gift to his son, W. S., and that the latter leaves its direction largely to the manager, Holli- day, who operated the store before the gift was made, while W. S. spends most of his time working at A. W.'s store as a salaried employee. W. S. makes up the payroll for his own store at his desk in A. W.'s store. A. W. Overton is endorser of a note for a loan by which his brother, J. W., borrowed funds from a bank to buy equipment for one of J. W.'s two stores. A. W., as president and sole stockholder of "Overton Enterprises, Inc.," owns the real estate and fixtures of the stores of his brothers, T. L. and J. W., for which they pay him rent. Each corporation owns one or two grocery stores, some of them small cash-and-credit stores, and others large strictly cash super- markets. All employ meatcutters, wrappers, helpers, checkers, and clerks. Three or four employees and one or two store managers em- ployed by Overtone corporations worked previously for a different Overton corportion. A butcher employed by T. L. Overton worked 4 In his will, M. B . Overton left the stock of his corporation in trust for his wife and three sons, and set up a committee consisting of his brothers , his wife, and the trustee to give advice on the reorganization of the company. The committee, which met only twice, approved a new board of directors composed of Mrs. M. B. Overton, president ; her sons ; the trustee ; and Robert Babb , an attorney. For several weeks while M. B was ill and after he died, A . W. Overton visited M B.'s stores two or three times a week to "assist" in their operations. Mrs. Overton now actively operates the stores herself. "OVERTON MARKETS" 617 at the M. B. Overton store for a few weeks 'after M. B.'s death, then, returned to work for T. L. Overton. All the corporations participate in the same group insurance and profit-sharing plans, one or both of which plans were explained to the Overtons and their employees at a dinner attended by all of them. The corporations originally had separate employee insurance plans but, a few years ago, adopted the same plan A. W. Overton had in effect. J. W. Overton testified that "complaints" regarding the plan are handled by a committee composed of W. S. and J. W. Overton and two Overton employees. The profit-sharing plan is administered by a local bank. Deposits in this plan must be withdrawn by an employee when his employment is terminated, unless he is then employed by another Overton corporation,, in which case he ap- parently may leave the deposit from his original employment in the fund. Overton Markets, Inc., owned by A. W. Overton, operates a ware- house and bakery in addition to its grocery store. All the corpora-' tions buy produce, groceries, and trading stamps from this ware- house, and baked goods from the bakery, - as well as from other suppliers. Ninety-five percent of the business of the warehouse is done with the Overton Markets. No cash passes from the Overton corporations to the warehouse but, at the end of each week, A. W. Overton forwards to each corporation warehouse supply bills in the approximate amount each owes, and the corporation pays the ware- house supplier directly, the warehouse deriving its profit from dis- counts for prompt payment. All other customers of the warehouse, including Davis and McLaurin,- pay cash. Invoices for goods pur- chased from the warehouse bear a suggested retail price, which each corporation may follow at its option. While the bakery is operated in substantially the same way as the warehouse, meat buying is handled by a salaried meat specialist named Welch who is employed by Overton Markets, Inc., and who visits the Overton stores and advises their meat department employees on cutting and displaying meat. He regularly takes meat orders from the stores, and places the orders with the packinghouses, which ship the meat directly to the stores. A. W. Overton, the first to operate a store, originally advertised his own weekly special sales in the local newspapers. As other mem- bers of the family went into business under the same name, he per- mitted them to benefit from his newspaper advertising without cost to them. A few years ago, however, he organized an advertising agency, which he wholly owns, which makes up weekly advertise- ments and sends advance copies to all Overton Markets so they can stock and price the items to be advertised. The agency charges the Overton Markets a percentage of the cost of the advertising based 618 DECISIONS OF NATIONAL LABOR RELATIONS BOARD on the weekly gross profits of each of them. All Overton Markets participate in the advertised specials, but they are not consulted as to the products or prices to be advertised. Davis and McLaurin, former managers of A. W. Overton stores, each purchased one of A. W.'s stores on July 1, 1962, after the peti- tions herein were filed. The sales contracts provide that : (1) the purchasers must make a "specified payment every month for the merchandise on hand until the note therefor (which bears no interest) is paid, and must pay a monthly rental, for 5 years, for the premises; B (2) the purchasers receive the right to use the trade name "Overton's Markets" on condition that they operate the business "in the manner that other Overtons' Markets are operated, such as, the store is to be kept clean, the goods are to be of a quality equal to other stores trading under this name, there is to be no sale of alcoholic beverages, and that this operation shall comply with other standards as outlined" by A. W. Overton; (3) "the right to use the trade name of Overton's Markets shall be subject to withdrawal at the discretion of" A. W. Overton; (4) A. W. Overton is to furnish the purchasers with mer- chandise at the same prices as he does to his own stores, plus a weekly delivery charge, and to furnish "advertising on the basis of gross sales as prorated with the gross sales of all markets operating under this name"; 6 and (5) if the purchaser "breaches any conditions of this agreement and it is decided that it should be terminated, he will sur- render the premises . . . and all the merchandise therein at his cost." The contracts were drawn up by A. W.'s lawyer, and entered into by Davis and McLaurin without advice of counsel, and with little nego- tiation or investigation by them because, they testified, of their con- fidence in A. W. Davis and McLaurin participate in "Overton Markets" advertising on the same basis as the Overtons do. They buy a substantial amount of their groceries and produce from A. W.'s warehouse. Unlike the Overtons, they pay cash, but, like the Overtons, they may follow the suggested prices at their option. They buy some of their meat through Welch, who visited Davis' store twice in the period of about a month and a half between the date of purchase and the time of the hearing, and helped him set up an inventory system for the meat department. Davis and McLaurin have retained the employees who worked in the stores when they were owned by A. W., but their employee insurance plans differ from those of the other Overton stores and they have no profit-sharing plan. It is apparent from the facts set forth above, and we find, contrary to our dissenting colleagues, that these 7 companies operate their R A. W. Overton owns the leases on these properties as president and sole stockholder of "Overton Jr. Markets of South Norfolk, Inc." 9 A. W. Overton testified that Davis and MoLaurin must participate in the advertising if they use the Overton name. ""OVERTON MARKETS" 619 10 stores as a single, integrated enterprise. The stores are owned or controlled by members of the same family, and are represented to the public as a single retail grocery enterprise by their use of the same trade name, joint weekly newspaper advertising, and identical special sales. The interdependence of the corporations is clearly demonstrated by the fact that some of them have interlocking officers, by their identical and transferable employee profit-sharing and insurance plans, and by their common purchasing. Their financial and economic dependence on the leadership of A. W. Overton is not, we believe, characteristic of the arm's length relationship found among unintegrated companies, and can be explained only in terms of the existing close family ties. In addition, while Davis and McLaurin are not related to the Over- tons, their operations are, as before the transfer, integrated with those of the Overton corporations and substantially controlled by A. W. Overton. This is effectuated through the terms of the sales contracts giving them the use of the trade name; permitting them to take part in the joint advertising and identical sales and to participate in the common purchasing; requiring them to operate in the same manner as the other Overton Markets; and giving A. W. Overton full authority to determine the manner in which their stores are operated, based upon his power to withdraw permission to use the trade name or to terminate their contracts. Under all the circumstances, therefore, we find that the seven companies constitute a single employer for both jurisdictional and unit purposes? As the total gross revenues of these companies exceed $500,000 a year, and as Overton Markets, Inc., makes purchases directly from outside Virginia in an amount exceeding $50,000, we find that the Employer is engaged in commerce within the meaning of the Act, and that it will effectuate the policies of the Act to assert jurisdic- tion herein.8 2. The labor organizations involved claim to represent certain employees of the Employer. 3. Questions affecting commerce exist concerning the representation of employees of the Employer within the meaning of Section 9(c) (1) and Section 2 (6) and (7) of the Act. 4. The appropriate units (a) Scope of the units: Retail Clerks requests a unit of all full-time and part-time employees in the grocery, produce, and dairy products departments of the Employer's 10 retail grocery stores, excluding meat department employees, warehouse and bakery employees, office clerical employees, professional employees, guards, store managers, and all other supervisors as defined in the Act. Meat Cutters requests a unit 4 See N L R.B v. Stowe Spinning Company, et al, 336 U.S. 226, 227; Regal Knitwear Company v N.L R B., 324 U. S. 9, 14-16; Trade Winds Motor Hotel & Restaurant, 140 NLRB 567. Accord, T. P. Taylor & Company, Inc, et al., 118 NLRB 376, 377. Carolina Supplies and Cement Co., 122 NLRB 88. 620 DECISIONS OF NATIONAL LABOR RELATIONS BOARD of all meat department employees of the 10 stores, excluding all other employees. There is no disagreement among the parties with regard to the appropriateness of separate units of grocery and of meat department employees. In conformance with Board practice in such circum- stances, we find separate units of these categories appropriate herein.9 Furthermore, as we have found that the 7 companies constitute a single employer and as the 10-store units requested cover all the retail store operations of the Employer, we find, contrary to the Employer, that units covering all 10 stores are appropriate. Retail Clerks requests that the employees at the warehouse and bakery owned by Overton Markets, Inc., be excluded from the unit it seeks. Overton Markets, Inc., objects to these exclusions. As set forth above, in the description of the Employer's operations, the warehouse, which is known as "South Norfolk Cash and Carry," and the bakery are both owned by Overton Markets, Inc., which also owns 1 of the 10 stores involved herein. Ninety-five percent of the warehouse business is done with 10 "Overton Markets." All of its sales are considered sales by the Overton Markets, Inc., store, which is located five blocks from the warehouse. The warehouse employs a grocery manager assisted by five employees, a produce buyer assisted by one employee, and the meat buyer, Welch, who has an office in the store. Two of the warehouse employees also serve as truckdrivers, delivering supplies to the stores of Davis and McLaurin and, ap- parently, to the Overton Markets, Inc., store. The grocery and produce managers hire and discharge, and maintain the working schedules of their employees, but their payroll accounting records are kept in the office of the store. The bakery, located one-half block from the store, bakes pastry specialty items, which it sells at retail over the counter and to all 10 "Overton Markets." There is a bakery manager, who hires and discharges bakery employees, and a night manager who directs their work. All Overton Markets, Inc., employees, including those -of the grocery store, warehouse, and bakery, have the same holiday and vacation benefits. Under all the circumstances, particularly the fact that the warehouse and bakery are operated as an adjunct of the Overton Markets, Inc., store, the similarity of employee benefits, the deliveries made by warehouse employees to stores in the units, the retail selling done by the bakery employees, and the fact that no union is seeking to represent the warehouse or bakery employees separately, we find that the warehouse and the bakery employees should be included in the unit of grocery employees.10 Food Fair Stores, No., 138 NLRB 1. 10 Accord, T. P. Taylor & Company, Inc., et al., supra, at 379. "OVERTON MARKETS" 621 (b) Composition of the units: There remains for consideration the unit placement of certain individuals. The parties agree, and we find, that all general managers of the grocery stores should be excluded as supervisors. Retail Clerks would include assistant store managers, grocery managers, and produce man-, agers, and takes no position as to meat department managers, while Meat Cutters 'contends that assistant store managers should be ex- cluded as supervisors, takes no position as to grocery and produce managers, and would include meat department managers in its unit. Other than agreeing that general managers are supervisors, the Em- ployer takes no position on the matter of supervisory status. The record shows that McLaurin personally directs all operations of the East Chester Street store and has delegated no supervisory authority to the assistant store managers or to the meat department manager of that store. The record also shows that the produce man- ager of the East Indian River Road store has no employees in his department. We therefore find that they are not supervisors and we shall include them. All the other assistant store managers, produce managers, grocery managers (including the assistant grocery manager at the Poindexter Street store), and meat department man- agers possess authority to hire, discharge, discipline, or effectively to recommend such action, on either a full-time basis or a substantial and regular basis as substitutes for the regular supervisors, and we shall therefore exclude them from the respective units. The record is not clear as to the supervisory status of the assistant manager and the produce manager of the Afton Parkway store. We shall there- fore make no determination as to them, but shall permit them to vote subject to challenge. The parties took no position as to the supervisory status of the general manager and produce manager of the warehouse and the man- ager^ of the bakery. As the record shows that all these have authority to hire and discharge employees, we shall exclude them as supervisors. Although the record shows that the night manager of the bakery di- rects the work of employees, it fails to show whether he responsibly directs them or exercises any other supervisory authority within the meaning of the Act. We shall therefore permit him to vote subject to challenge. Welch, the meat specialist, purchases meat for all the Overton stores, advises them as to inventory systems and meat pricing, and instructs them on how to cut meat in order to make the most profit. He has a desk in the Overton Markets, Inc., office, but spends part of his time visiting the meat departments in the various Overton stores and calling on meat suppliers. Welch, who is salaried, whereas most of the employees are hourly paid, sets his own working hours and works without supervision. Meat Cutters request his exclusion from 622 DECISIONS OF NATIONAL LABOR RELATIONS BOARD the unit it seeks and none of the parties request his inclusion. We find that Welch's interests are allied with those of management and shall therefore exclude him from the unit. Accordingly, we find that the following employees of the Employer in its stores, warehouse, and bakery in Norfolk, Virginia, and vicinity, constitute separate appropriate units for the purposes of collective bargaining within the meaning of Section 9(b) of the Act: (a) All full-time and regular part-time employees in the grocery, produce, and dairy products departments of the Employer's 10 retail grocery stores, and all employees of the warehouse and bakery, exclud- ing meat department employees, office clerical employees, professional employees, guards, general managers, and all other supervisors as de- fined in the Act. (b) All meat department employees, including the meat department manager at the East Chester Street store, but excluding the meat de- partment managers at all other stores, all other supervisors as defined in the Act, and all other employees. [Text of Direction of Election omitted from publication.] MEMBERS RODGERS and LEEDOM, dissenting : We would dismiss the petitions because, in our opinion, the record supports neither the assertion of jurisdiction nor the appropriateness of the units sought. On the issue of jurisdiction, it is clear that the individual proprietor- ships, two of the seven companies here involved, do not meet the Board's jurisdictional standards, and that the Board would not assert jurisdiction over them unless there is a basis for combining their revenues with the revenues of the five corporations involved herein. Similarly, as to the appropriate unit, the Board would find separate units of each corporation or proprietorship appropriate herein, unless some basis exists for combining them with the other entities. That basis, according to our colleagues, exists because these entities con- stitute a single employer for purposes of the Act. Yet, our colleagues have not shown the necessary degree of common ownership and control, including control of labor relations, which the Board has, in the past, deemed essential before separate entities may be found to be a single employer. Indeed, the record shows that each of the companies is separately owned, and that its stores are separately managed. There is no common control of labor relations or of management policies. The wages, hours, and working conditions of the employees of the various stores are not uniform, and there is no employee interchange. More- over, these companies have never bargained together, joined an as- sociation for bargaining purposes, or in any other way evidenced any intent to bargain as a combined entity. "OVERTON MARKETS" 623 The single-employer finding, according to our colleagues, stems from the facts that the stores are owned or controlled by members of the same family, albeit separately, that they are represented to the public as a single retail grocery enterprise by their use of the same trade name, joint weekly newspaper advertising, and identical special sales, and that they have identical and transferable employee profit- sharing and insurance plans and common purchasing. Realistically speaking, except for the family ties present here, the above character- istics are typical of many trade associations in which small independent businessmen in the grocery or other types of retail business join to- gether, not for labor relations purposes, but for their mutual advantage to counteract competition of industrial giants, to increase the demand for their products or merchandise, and to expand their profits. As to the family ties, it is true that most of these operators are members of the same family and that they have sought to gain the maximum advantage therefrom. But these operators have merely found a ready substitute for the trade association in their family ties. They have been fortunate, in this connection, in that one of them, A. W. Overton, is willing to share with the others the fruits of his success. Thus, he has lent them money to buy store fixtures ; he has allowed them to purchase produce and groceries at wholesale prices from his warehouse and baked goods from his bakery, giving them thereby the price advantages of his large-scale purchasing; and he has extended the advantages of his advertising agency to them. In sum, A. W. Overton has been a benevolent older brother, helping the others get the maximum amount of business and profits out of their respective store operations. He has at no time injected himself into the management of the respective stores, or into matters relating to wages, hours, and working conditions of the employees of each corporation, or proprietorship, all of which have always been handled separately by each owner and operator. A. W. Overton's benevolence is in our view no substitute for the missing common labor policy, nor does it compensate for the lack of an established or agreed-upon multiemployer unit. In the recent Checker Cab case," we rejected the majority's unwar- ranted use of the Checker Cab Association as an amalgam for joining the independent owner-operators into a pseudo-integrated relation- ship for purposes of asserting jurisdiction and determining the unit. Similarly here, we reject their use of the family ties of these inde- pendent owner-operators, and the incidents thereof, as an amalgam for spelling out a single-employer relationship. By this decision, our colleagues make blood ties synonymous with labor relations ties. There is no warrant for this in our Act or in its legislative history. n Checker Cab Company and Its Members, 141'NLRB 583. 624 DECISIONS OF NATIONAL LABOR RELATIONS BOARD We would find, therefore, that the circumstances that most of these store owners and operators are members of the same family and operate in their family name, and have availed themselves of oppor- tunities to reduce their costs and improve their competitive position in such areas as advertising, purchasing, and insurance, do not con- stitute them a single employer, nor justify forcing them to bargain together, without their agreement or consent, and without any bar- gaining history on such a basis. Accordingly, as these owners and operators are no more than separate and independent small business- men, who, because of family ties are enjoying mutual advantages un- related to labor relations, we would find that they may not be joined together for collective-bargaining purposes, and we would, therefore, dismiss the petitions. American Art Clay Company, Inc. and Henderson Gregory; Fount Gregory ; Armond Gregory; Joe Songer ; Lonnie Starnes; Carl Forsyth. Case No. 25-CA-1646. May 15, 1963 DECISION AND ORDER On February 26, 1963, Trial Examiner Louis Libbin issued his Intermediate Report in the above-entitled proceeding, finding that Respondent has engaged in and was engaging in certain unfair labor practices and recommending that it cease and desist therefrom and take certain affirmative action, as set forth in the attached Intermediate Report. Thereafter the Respondent filed exceptions to the Intermedi- ate Report and a supporting brief. The General Counsel filed excep- tions solely to the Trial Examiner's ruling at the hearing dismissing the allegation in the complaint which alleged a violation of Section 8 (a) (3), and a supporting brief. 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 [Chairman McCulloch and Members Rodgers and Leedom]. The Board has reviewed the rulings made by the Trial Examiner at the hearing and finds that no prejudicial error was committed.' The rulings are hereby affirmed. The Board has considered the Inter- mediate Report, the exceptions and briefs, and the entire record in the case, and hereby adopts the findings, conclusions, and recommenda- tions s of the Trial Examiner. 1 We find it unnecessary to decide whether Respondent's conduct was also violative of Section 8(a) (3) of the Act inasmuch as the remedy necessary to effectuate the policies of the Act would be identical in either case. Latex Industries, Incorporated, 132 NLRB 1, 2 For the reasons stated in the dissenting opinion in Isis Plumbing & Heating Co., 138 NLRB 716, Members Rodgers and Leedom are convinced that the award of interest in this case exceeds the Board's remedial authority. While adhering to such view, for the pur- poses of this decision they are acceding to the majority Board policy of granting interest on moneys due. 142 NLRB No. 75.