Payless Drug Stores

518 DECISIONS OF NATIONAL LABOR RELATIONS BOARD the statute was designed to prevent . As Judge Learned Hand said in a somewhat similar context, "[statutes] should be construed , not as theorems of Euclid, but with some imagination of the purposes which lie behind them" (Lehigh Valley Coal Co. v. Yensavage, 218 F. 2d 547, 553 (C.A. 2)). Upon the foregoing findings of fact, and upon the entire record in the case, I make the following: CONCLUSIONS OF LAW 1. Deaton is an employer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act. 2. Respondent is a labor organization within the meaning of Section 2(5) of the Act. 3. Respondent's picketing of Deaton since January 5, 1963, has not been vio- lative of Section 8(b)(7)(C) of the Act. RECOMMENDED ORDER Upon the basis of the foregoing findings of fact and conclusions of law, and pursuant to Section 10(c) of the - National Labor Relations Act, as amended, it is recommended that the complaint herein be dismissed in its entirety. Skaggs Drug Centers, Inc. d/b/a Payless Drug Stores [North- towner Restaurant] and Hotel & Restaurant Employees Local Union No. 400, AFL-CIO. Case No. 19-CA-2764. December 18, 1964 DECISION AND ORDER On August 14, 1964, Trial Examiner Ivar H. Peterson issued his Decision in the above-entitled proceeding, finding that Respondent had 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 Decision. Thereafter, Respondent filed exceptions to the Trial Examiner's Decision and a supporting brief, and the General Counsel filed an answering brief. Pursuant to the provisions of Section 3 (b) of the National Labor Relations Act, the Board has delegated its powers in connection with this case to a three-member panel [Chairman McCulloch and Mem- bers Fanning and Jenkins]. The Board has reviewed the rulings of the Trial Examiner made at the hearing and finds that no prejudicial error was committed. The rulings are hereby affirmed. The Board-has considered the Trial Examiner's Decision, the exceptions and briefs, and the entire record in the case, and hereby adopts the findings, conclusions, and recom- mendations of the Trial Examiner. ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the Board hereby adopts, as its Order, the Order recom- mended by the Trial Examiner and orders that Respondent, its offi- cers, agents , successors, and assigns, shall take the action set forth in the Trial Examiner's Recommended Order. 150 NLRB No. 11. PAYLESS DRUG STORES 519 TRIAL EXAMINER'S DECISION STATEMENT OF THE CASE Upon a charge filed on October 28, 1963, by Hotel & Restaurant Employees Local Union No. 400, AFL-CIO, herein called the Union, the General Counsel of the National Labor Relations Board, by the Regional Director for Region 19, issued a complaint on January 22, 1964, alleging that-Skaggs Drug Centers, Inc. d/b/a Payless Drug Stores (Northtowner Restaurant), herein called the Respondent, had engaged in and is engaging in certain unfair labor practices within the meaning of Section 8(a)(1) and (5) of the Act by refusing to bargain with the Union and by taking certain unilateral actions concerning a profit-sharing plan, a health and welfare plan, and wages. In its answer, the Respondent denied the commission of any unfair labor practices. Pursuant to notice, a hearing was held before Trial Examiner Ivar H. Peterson in Spokane, Washington, on February 25, 1964. The General Counsel, the Respondent, and the Union were represented at the hearing and were afforded full opportunity to be heard. Motions by the General Counsel to amend the complaint in certain particulars were granted without objection. Briefs submitted by the General Counsel, the Respondent, and the Union have been duly considered. Upon the entire record, and from my observation of the witnesses, I make the following: FINDINGS OF FACT 1. THE BUSINESS OF THE RESPONDENT The Respondent, with its principal office and place of business in Salt Lake City, Utah, operates various retail drug and sundry stores in 10 Western States, including a retail store and restaurant in the Northtown Shopping Center in Spokane, Wash- ington. Only the Spokane restaurant is here involved During the 12 months preceding the hearing, the Respondent, in the course and conduct of its business operations, sold and distributed products the gross value of which exceeded $1,000,000, and caused to be delivered and directly transported to its places of business, goods and materials valued in excess of $100,000 from various States across State lines in interstate commerce. The Respondent admits and I find that it is engaged in commerce within the meaning of Section 2(6) and (7) of the Act. II. THE LABOR ORGANIZATION INVOLVED Hotel & Restaurant Employees Local Union No. 400, AFL-CIO, is a labor organization within the meaning of Section 2(5) of the Act. III. THE UNFAIR LABOR PRACTICES A. Chronology of events The primary issue to be resolved is whether the Respondent, as set forth in the complaint, unlawfully refused to_ bargain collectively with the Union, in violation of Section 8(a)(1) and (5) of the Act. As amended, the complaint alleges that the Respondent, without bargaining with the Union (1) on or about June 26, 1963, discontinued a union health and welfare plan and substituted its own plan; (2) about September 6, 1963, raised the wage rates of certain employees in the appro- priate unit; and (3) about January 1, 1964, placed certain employees in the appropriate unit under the Respondent's profit-sharing plan. The relevant facts are not in dispute. On October 26, 1962, the Union and Albertson's Food Centers (herein called Albertson) entered into a collective-bargaining agreement which was not due to expire until June 1, 1965.1 On June 26, 1963, the Respondent purchased and took over as a going concern the Northtowner Restaurant (as well as drugstore opera- 'This contract, covering Albertson's employees in the Northtowner Restaurant and in the lunch counters or snackbars at two other Albertson foodstores, contained a standard union-shop clause requiring membership in the Union by the employees on the 31st day after their employment or the effective date' of the agreement, whichever was later, and provided for a limited interim opening for the purpose of negotiating (1) changes in the cost of the present health and welfare benefits if the cost thereof should have changed, and (2) a wage increase for kitchen food handlers. Notice on behalf of the Union to negotiate changes in these two respects was served under date of April 2, 1963. 520 DECISIONS OF NATIONAL LABOR RELATIONS BOARD tions not here involved) owned by Albertson. No immediate changes were made in employees or management.2 The restaurant establishment continued to function under the Respondent in the same manner and with the same employees that it had under Albertson. The change in ownership came to the Union's attention on or about July 1, 1963. After several unsuccessful efforts, the Union contacted a representative of the Respondent on or about August 8, 1963. At that time Irene Smith and Ruth Hane, business representatives of the Union, left a copy of the contract between the Union and Albertson with Store Manager Luce, who undertook to arrange a meet- ing between the union representatives and the Respondent's district manager, Elwell. At the first meeting on August 12, 1963, between Union Representatives Smith and Hane and the Respondent's representatives, Luce and District Manager Elwell, the discussion centered upon the payment of certain health and welfare benefits for the restaurant employees. At the close of this meeting Elwell agreed to pay for such benefits incurred under the contract for the past month (July) and also retained the copy of the contract between the Union and Albertson in order to examine it more closely.3 The union representatives were asked to return 2 days later. At the second meeting on August 14, 1963, Elwell again agreed to pay the July health and welfare payments, but stated that the following month the employees would be covered exclusively by the Respondent's plan.4 As for what transpired during the remainder of this meeting, it is the testimony of both Smith and Hane, which I credit, that Elwell then stated that the employees were to have a share in the profits and that he was going to pay better than union wages. Smith testified that: ... Ruth Hane said sharing profits and bettering union wages is fine, but you can't put them on the store health and welfare and have a union contract and he [Elwell] said he wasn't going to have a union contract and Ruth said, "Does that mean you are refusing to sign the contract?" and he said, "Yes." Ruth said then, "You know this could be a labor dispute," and he said if we had any further questions to call Mike O'Brien [counsel for Respondent]. Elwell's version of the same meeting is not substantially different. He testified that after agreeing to make the July health and welfare payments, he told the union representatives that he did not think the Union had anything more to offer than the Respondent did, after which the union representatives made the statement, "It may be a labor dispute." Thereupon Elwell referred them to-a Mr. Lyons, manager of Associated Industries, which had previously represented Albertson. In response to his attorney's question, "Did the Union [representatives] in their conversation with you claim to represent a majority of the employees at the Northtowner Restaurant?" Elwell stated, "The majority was never mentioned." However, on cross-examination by the attorney for the Union, Elwell admitted not having made any inquiry as to the Union's representative status during the meeting. Claudia Mongelluzzo, secretary-treasurer of the Union, credibly testified that upon receiving a report of what took place at the August 12 and 14' meetings, she contacted O'Brien and "told him that we had the majority of the people union up there [at Northtowner Restaurant] and I was asking for a contract for that restaurant and he told me that he was under the impression that the people were no longer union up there, that most of them had either left the restaurant or had went suspended." 5 Mongelluzzo insisted that the Union still had a majority and 3 As E L Elwell, store supervisor and district manager for the Respondent, testified, the Respondent purchased all the physical assets of the restaurant, but did not assume any of Albertson's liabilities or acquire Albertson's accounts receivable or other credits. Don Luce and Ben Brucker were retained as store and restaurant manager, respectively, and the employees of Albertson engaged in the operation here involved were carried over, I e., terminated by Albertson and then hired by the Respondent. The two snackbar opera- tions were not purchased by the Respondent. 3 Elwell's testimony is that at that time he did not recognize the union contract as such, but thought it was a pamphlet or brochure of some sort. While this may have been his initial impression, the so-called "pamphlet" had printed in bold letters on its front cover the words "Contract & Agreement," and he acknowledged that he had "reviewed the contents" of the document. ' By July payment is meant payment in July for coverage in August. During the month of August the employees were covered by two health and welfare plans-that of the Respondent and that of the Union. The Union's health and welfare plan coverage was discontinued effective September 1,1963 5 This conversation took place during the latter part of August or first of September and appears to be the first time that the Respondent purported to doubt the Union's majority status. PAYLESS DRUG STORES 521 threatened to put the Northtowner Restaurant on a "We do not patronize" list if the Respondent refused to sign a contract. O'Brien replied that the Respondent was refusing to sign a contract and suggested that the Union petition for an election. Under date of August 21, 1963, Elwell wrote to the Respondent 's accounting department in Salt Lake City, requesting that, in accordance with the agreement he had made with the representatives of the Union, the trust fund established under the contractual arrangement between the Union and Albertson 's be reimbursed in the sum of $83.20, representing health and welfare payments made by the trust fund for eight employees who in July had established eligibility for August coverage by working for the Respondent at least 80 hours in that month . In the same note Elwell stated that, "We don 't have a union contract, we are not bound by the Albertson agreement." The Respondent admitted that it made unilateral wage increases to several Northtowner Restaurant employees effective on or about September 6, 1963, to offset the cost to the employees of the Respondent's health and welfare plan. On or about January 1 , 1964, the Respondent did put its profit-sharing plan into effect for those employees of Northtowner Restaurant who had satisfied its mini- mum requirements of 5 years of consecutive service (including the time they had worked for Albertson prior to the change in ownership). B. The apps opriate unit and the Union 's majority status The complaint alleges that the appropriate unit consists of all employees of the Respondent's Northtowner Restaurant, excluding guards, professional employees, and supervisors as defined in the Act. Although the Respondent denied this allegation in its answer, it adduced no evidence to demonstrate the inappropriateness of this unit. Plainly, it is appropriate , as it consists of all the Respondent 's restaurant employees in the only such establishment operated by the Respondent in Spokane, Washington, with the customary exclusions . Upon the entire record, I find that all employees of the Respondent at its Northtowner Restaurant , excluding guards, professional employees, and supervisors as defined in the Act, constitute a unit appropriate for the purposes of collective bargaining, within the meaning of Section 9(b) of the Act. On August 12, 1963, when the Union made its first request for recognition, there were 14 employees in the appropriate unit, including Ben Brucker , Jr., and Oscar Riccius; the General Counsel contends that both of them should be excluded. I find no basis for excluding Brucker, Junior, on the ground that he is the son of the restaurant manager. The record shows that he worked as a dishwasher three evenings a week. There is no showing that he enjoys any special status by reason of his rela- tionship with his father, the restaurant manager. I include Brucker, Junior, in the unit. See Research Craft Mfg. Corporation, et al., 129 NLRB 723; Chester County Beer Distributors Association , 133 NLRB 771. Riccius worked as a cleanup man, dividing his time about equally between the restaurant and the associated drugstore. Since the record indicates that Riccius is a regular part-time employee, I find that he properly belongs in the unit . Thus I find that on August 12, 1963, there were 14 employees in the appropriate bargaining unit. On August 14, when the second request for recognition was made, the number was the same.6 Membership records of the Union , introduced in evidence, show that on August 12 the following eight employees were members in good standing : Allenfort, Crosby, Dewitt, Hintz, Kurowski , Peck, Pfahl, and Presky. In addition, Neprud had signed an application for membership on June 6, 1963 , and had paid $5 toward her initiation fee. Her application had not been rejected, although she had not been initiated nor had she paid anything further on her membership . The membership application con- tains the following language: "I agree, as a member of or, hereby applying for mem- bership in , do respectively designate and authorize said organization ... to represent me ... to negotiate and conclude agreements as to hours of labor, wages and other employment conditions ...... I conclude that Neprud must be counted as having authorized the Union to represent her, by applying for membership, which application had not, as of August 12 or 14, been rejected . Accordingly, I find that on August 12 and 14, 1963 , the Union had been duly designated as their collective -bargaining repre- sentative by 9 of the 14 employees in the appropriate bargaining unit, and that the U In the Union ' s brief, Evelyn Fraser and Lorraine K Schmitz are included in a list of employees for the week ending August 15, 1963 However, the Respondent ' s payroll records show that Fraser was terminated on July 18, and that Schmitz was hired on August 15 . I find that the following were in the unit on August 12 and 14: Doris Allen- fort, Joyce Bossio , Ben Brucker, Jr., Mabel Crosby, Ella Dewitt , Sandra Elliot, Jacqueline Hintz , Joan K. Johnson , Theressa Kurowskl , Jacqueline Neprud, Lena Peck, Colleen Pfahl, Echo Presky, and Oscar Riccius. 522 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Union was, therefore, the exclusive representative of the employees in the appropriate unit for the purposes of collective bargaining within the meaning of Section 9(a) of the Act. C. Conclusions as to the refusal to bargain In its brief, the Respondent argues that the employees here involved "were new employees of a new employer, not covered under a labor contract , and were entitled to an election in just the same manner as if Skaggs had started from `scratch' by building a new building and hiring new employees off the street ." Manifestly, adop- tion of this argument would have the effect of reversing well-established precedent, and I reject it. The Board has consistently held that where a purchaser continues its predecessor's business from the same location, handling the same products, and employing the predecessor's employees, the purchaser is a successor employer with a duty to recognize and bargain in good faith with the incumbent union . Downtown Bakery Corp. Successor to Smayda's Home Bakery, Inc., 139 NLRB 1352; Witham Buick, Inc., 139 NLRB 1209; Quality Coal Corporation , et al., 139 NLRB 492; F. G. McFarland and S. R. Hullinger, d/b/a McFarland & Hullinger, 131 NLRB 745; Cruse. Motors, Inc., 105 NLRB 242; Southerland's Tennessee Company, Inc., et at., 102 NLRB 1178 . It is undisputed that the Respondent took over the Northtowner Restaurant as a going concern with the same supervision and the same employees, and continued the same operations in the same manner. In short, the evidence demonstrates that there was "continuity of the employing enterprise ." See Cruse Motors, Inc., 105 NLRB 242, 249. Upon these facts I conclude that Respondent is a. successor employer within the meaning of Board decisions and is thereby obligated to recognize and bargain with the Union. In view of the fact that the Respondent is a successor employer in the sense that the "employing industry" remained the same, and that the Union did represent a majority of the employees on the crucial dates, it would seem plain that the Respondent, by rejecting the Union's proposals for a contract on the ground that the Union could not achieve anything for the employees that they were not already getting from the Respondent, and by unilaterally changing the employees' health and welfare plan, increasing wages, and establishing a profit-sharing plan, refusing to bargain collectively with the Union, violated Section 8(a)(5) and ( 1) of the Act. However, the Respondent contends that it had a good -faith doubt as to the Union 's majority status. I find no merit in this contention. The record is clear that on August 12 and 14, the Union sought recognition as the exclusive representative of the employees, and that on those occasions District Manager Elwell did not raise any question as to the Union's status as exclusive representative . His rejection of the Union's request to bargain was based solely on the ground-as he testified-that after having "reviewed this contract . . . there was nothing" in the contract "that we as a company do not offer our employees" and that he did not "think the Union has anything to offer that we don't...." A week after the last meeting with the representatives of the Union, 'Elwell on August 21 wrote the Respondent's accounting office in Salt Lake City, stating that he had had "a visit with Inland Employer Assoc. Mr. Mike O'Brien," that the Respondent did not "have a union contract, we are not bound by the Albertson agreement," and that the Respondent "will not be affiliated with the union...." It was not until the latter part of August or early in September that the Respondent, in Attorney O'Brien's telephone conversation with Mongelluzzo , first questioned the Union's majority status and suggested that an election be held. This belated sugges- tion of a doubt as to majority , I find, coming as it did after District Manager Elwell had unequivocally refused to deal with the Union as the representative of the employees, was not advanced in good faith . Upon all the evidence , I find that the Respondent, by refusing on and after August 14, 1963, to recognize and bargain with the Union, and by unilaterally changing the employees' health and welfare plan, increasing wages without discussion with the Union , and establishing an employee profit-sharing plan , thereby refused to bargain collectively with the Union in violation of Section 8(a) (5) and ( 1) of the Act. IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The activities of the Respondent set forth in section III, above , occurring in connec- tion with the operations of the Respondent set forth in section I, above, have a close, intimate, and substantial relation to trade, traffic, and commerce among the several States, and tend to lead to labor disputes burdening and obstructing commerce and the free flow of commerce. PAYLESS DRUG STORES 523 V. THE REMEDY Having found that the Respondent has engaged in unfair labor practices, I will recommend that it cease and desist therefrom and take certain affirmative action to effectuate the policies of the Act. It has been found that the Respondent has refused to bargain collectively with the Union as the exclusive representative of the employees in the appropriate unit. I shall therefore recommend that the Respondent, upon request, bargain collectively with the Union as such representative, and, in the event that an understanding is reached, embody such understanding in a signed agreement. It will also be recommended that the Respondent cease and desist from refusing to bargain collectively with the Union, and that it cease and desist from interfering with, restraining, and coercing its employees in the exercise of organizational rights guaran- teed in Section 7 of the Act, by refusing to bargain collectively and by unilaterally granting wage increases or by any like or related action. Upon the basis of the above findings of fact, and upon the entire record in the case, I make the following: CONCLUSIONS OF LAW 1. The Respondent 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 Section 2(5) of the Act. 3. All employees of Respondent's Northtowner Restaurant, excluding guards, pro- fessional employees, and supervisors as defined in the Act, constitute a unit appropriate for the purposes of collective bargaining within the meaning of Section 9(b) of the Act. 4. Hotel & Restaurant Employees Local Union No. 400, AFL-CIO,•was on Au- gust 12, and at all times since has been, the exclusive representative of all employees in the aforesaid appropriate unit for the purposes of collective bargaining within the meaning of Section 9(a) of the Act. 5. By refusing on August 12 and 14, 1963, and thereafter, to bargain collectively with the above-named Union, and by making unilateral changes in the health and welfare plan, employee wages, and instituting a profit-sharing plan, the Respondent has engaged in and is engaging in unfair labor practices within the meaning of Section 8(a)(5) and (1) of the Act. 6. The aforesaid labor practices are unfair labor practices affecting commerce within the meaning of Section 2(6) and (7) of the Act. RECOMMENDED ORDER Upon the basis of the foregoing findings of fact and conclusions of law, and upon the entire record in the case, it is recommended that the Respondent, Skaggs Drug Centers, Inc. d/b/a Payless Drug Stores (Northtowner Restaurant), Spokane, Wash- ington, its officers, agents, successors, and assigns, shall: 1. Cease and desist from: (a) Refusing to bargain collectively with Hotel & Restaurant Employees Local Union No. 400, AFL-CIO, as the exclusive bargaining representative of its employees in the following appropriate unit: All employees of the Respondent at its Northtowner Restaurant, Spokane, Washington, excluding guards, professional employees, and supervisors as defined in the Act. (b) Interfering with, restraining, or coercing its employees in the exercise of the right to bargain collectively through said Union, or any other labor organization of their own choosing, by refusing to bargain collectively, or by unilaterally changing wage rates, altering health and welfare coverage, inaugurating a profit-sharing plan, or by any like or related conduct. 2. Take the following affirmative action necessary to effectuate the policies of the Act: (a) Upon request, bargain collectively with Hotel & Restaurant Employees Local Union No. 400, AFL-CIO, as the exclusive representative of employees within the appropriate unit described above, and, if an understanding is reached, embody such understanding in a signed agreement. (b) Post at its premises in Spokane, Washington, copies of the attached notice marked "Appendix." 7 Copies of said notice, to be furnished by the Regional Director 7 In the event that this Recommended Order be adopted by the Board, the words "a Decision and Order" shall be substituted for the words "the Recommended Order of a Trial Examiner" in the notice. In the further event that the Board's Order be enforced by a decree of a United States Court of Appeals, the words "a Decree of the United States Court of Appeals, Enforcing an Order" shall be substituted for the words "a Decision and Order." 524 DECISIONS OF NATIONAL LABOR RELATIONS BOARD for Region 19, shall, after being duly signed by a representative of the Respondent, be posted by the Respondent immediately upon receipt thereof, and be maintained for a period of 60 consecutive days thereafter, in conspicuous places, including all places where notices to employees are customarily posted. Reasonable steps shall be taken by the Respondent to insure that said notices are not altered, defaced, or covered. by any other material. (c) Notify the Regional Director for Region 19, in writing, within 20 days from the date of receipt of this Decision and Recommended Order, what steps the Respondent has taken to comply herewith.8 8In the event that this Recommended Order be adopted by the Board, this provision shall be modified to read: "Notify the Regional Director for Region 19, in writing, within 10 days from the date of this Order, what steps it has taken to comply herewith." APPENDIX NOTICE TO ALL EMPLOYEES Pursuant to the Recommended Order of a Trial Examiner of the National Labor Relations Board, and in order to effectuate the policies of the National Labor Rela- tions Act, as amended, we hereby notify our employees that: WE WILL bargain collectively, upon request, with Hotel & Restaurant Employees Local Union No. 400, AFL-CIO, as the exclusive representative of all employees of Northtowner Restaurant, excluding guards, professional employees, and supervisors as defined in the Act. If an understanding is reached, we will embody such understanding in a signed agreement. WE WILL NOT, by refusing to bargain collectively, by unilaterally changing bargainable terms or conditions of employment, or by any like or related action, interfere with, restrain, or coerce our employees in the exercise of their rights to self-organization, to form labor organizations, or to join or assist Hotel & Restaurant Employees Local Union No. 400, AFL-CIO, or any other labor organization, to bargain collectively through representatives of their own choos- ing, and to engage in concerted activities for the purposes of collective bargaining or other mutual aid or protection, or to refrain from any and all such activities, except to the extent that such rights may be affected by an agreement requiring membership in a labor organization as a condition of employment, as authorized in Section 8 (a) (3) of the National Labor Relations Act. All our employees are free to become, remain, or refrain from becoming members of the above-named union or any other labor organization, except insofar as member- ship may be lawfully required pursuant to Section 8(a)(3) of the Act. SKAGGS DRUG CENTERS, INC., Employer. Dated------------------- By------------------------------------------- (Representative) (Title) This notice must remain posted for 60 consecutive days from the date of posting, and must not be altered, defaced, or covered by any other material. Employees may communicate directly with the Board's Regional Office, 327 Logan Building, 500 Union Street, Seattle, Washington, Telephone No. Mutual 2-3300, Extension 553, if they have any question concerning this notice or compliance with its provisions. Tennessee Plastics, Inc. and Local Union 934, International Brotherhood of Electrical Workers. Case No. 10-CA-5395. December 18, 1964 DECISION AND ORDER On April 8, 1964, Trial Examiner Wellington A. Gillis issued his Decision in the above-entitled proceeding, finding that the Respond- 150 NLRB No. 6.