The Kroger Co.

362 DECISIONS OF NATIONAL LABOR RELATIONS BOARD The Kroger Co. and Amalgamated Meat Cutters and Butcher Workmen of North America, AFL-CIO' and Retail Clerks International Association, AFL-CIO.2 Cases 13-CA-7164 and 13-CA-7271. May 5,1967 DECISION AND ORDER BY MEMBERS FANNING, JENKINS , AND ZAGORIA On November 28, 1966, Trial Examiner Thomas A. Ricci issued his Decision in this 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 Trial Examiner's Decision. Thereafter, exceptions to the Trial Examiner's Decision and supporting briefs were filed by Respondent, the General Counsel, the Meat Cutters, and the Retail Clerks. Answering briefs were filed by the Respondent, the General Counsel, and the Meat Cutters, and requests for oral argument were filed by Respondent and the Meat Cutters.3 Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the National Labor Relations Board has delegated its powers in connection with these cases to a three- member panel. 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 and the entire record in these cases, including the exceptions and briefs, and hereby adopts the findings,4 conclusions, and recommendations of the Trial Examiner, with the modifications herein set forth. We agree with the Trial Examiner that by maintaining and giving effect to the "exclusionary Paragraph 4"5 in its "Savings and Profit Sharing Plan" Respondent violated Section 8(a)(1), (3), and (5) of the Act. We find without merit Respondent's contention that the Board is foreclosed from finding an unfair labor practice in these cases because the Unions at the Respondent's adamant insistence ' Herein Meat Cutters 2 Herein Retail Clerks. J The requests for oral argument are hereby denied as, in our opinion, the positions of the parties are adequately presented by the exceptions, briefs, and the entire record in these cases 4 In the second paragraph, last sentence, of section III, D, 2, of his Decision, the Trial Examiner uses the date 1966 The record shows, and we find, that the date should rather be 1960 5 We refer throughout our Decision to paragraph 4, as did the Trial Examiner More precisely we mean only certain portions of paragraph 4, as specified in our Order and notice 6 Copies of letters to this effect are in evidence The letters are substantially similar in content. We do not find that it was 164 NLRB No. 54 executed contracts which include clauses or "supplements" adopting Respondent's illegal practice. We conclude, as did the Trial Examiner, that, as Respondent refused to bargain in good faith about its savings and profit-sharing plan, "acquiescence by the Unions in what is tantamount to an illegal demand by the employer, cannot serve retroactively to excuse the improper conduct." Moreover, the record shows that on several occasions, when the Unions returned the signed supplements to the contracts containing the disputed clause to the Respondent, the former reserved their legal rights in this matter by explicitly stating they regarded Respondent's insistence on excluding its represented employees from the savings and profit-sharing plan as "discriminatory and illegal." Indicating that they were not, in fact, acquiescing in this practice, the Unions took the position that "Rather than being coerced into a strike on this matter ... we reserve our right to proceed with such legal action in this connection, as we deem necessary."s THE REMEDY The Trial Examiner found that only those employees who were required to withdraw from Respondent's savings and profit-sharing plan "in consequence of contracts signed after that date [March 13, 1965] shall be restored to their original position." We find merit in the exceptions of the General Counsel, the Meat Cutters, and the Retail Clerks to this finding. Paragraph 4 of Respondent's savings and profit- sharing plan is clear and unequivocal-if a group of its employees, represented by a union, is granted the right of a separate pension plan, that group "ceases to be eligible" and is "considered to have withdrawn" from Respondent' s savings and profit- sharing plan.? Indeed, the supplements which the Unions signed were nothing more than an acknowledgment by the Unions that, "under the terms of the Kroger ... Program ... employees covered by this ... agreement ... shall be conclusively deemed to have withdrawn ...." It is our view that the withdrawal of each of the employees was at all times in consequence not of the contracts, but rather of the very terms of the ;discriminatory paragraph 4 in Respondent' s savings necessary for the Meat Cutters and the Retail Clerks to file such letters with regard to all 46-odd units involved throughout the country It is clear throughout the instant cases, and indeed Respondent agrees, that the parties were at all times bargaining about policies and conditions which would affect the employees of Respondent in all units represented by the Meat Cutters and the Retail Clerks throughout the country. Respondent made it clear to the Unions that it viewed paragraph 4 as operating automatically, several instances appear in the record where Respondent told its employees that "under the rules of [its) program, those employees covered by a `Union pension' plan automatically" become ineligible to continue in the Kroger program. THE KROGER CO. 363 and profit-sharing plan.8 As the Trial Examiner found, Respondent, by maintaining and continuing to maintain paragraph 4, has in the past and is now violating Section 8(a)(1) and (3) of the Act. We find, therefore, that all employees who were required, on or after March 13, 1965,9 to withdraw from the Kroger savings and profit-sharing plan in consequence of the exclusionary terms of paragraph 4 of that plan, are entitled to be restored to their original position as of the date of such withdrawal.' 0 Finding merit in the General Counsel's exception, we shall also order Respondent to amend existing employee booklets and/or publications so as to eliminate therefrom any language which indicates that employees covered under a pension plan resulting from collective bargaining through a union are disqualified from participation in Respondent's savings and profit-sharing plan. We find no merit in the remaining exceptions of the parties. We shall, in accord with the Trial Examiner's recommendation, leave the details of the remedy to the compliance stage of the proceeding." ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended , the National Labor Relations Board hereby orders that Respondent, The Kroger Co., Chicago, Illinois, its officers, agents, successors , and assigns, shall: 1. Cease and desist from: (a) Maintaining and enforcing those portions of paragraph 4 in its savings and profit -sharing plan which disqualify or exclude from participation employees covered by a pension plan resulting from collective bargaining through a labor organization; or so advising its employees in booklets or publications describing said plan. (b) Discouraging membership in and activities on behalf of Amalgamated Meat Cutters and Butcher Workmen of North America, AFL-CIO, Retail Clerks International Association , AFL-CIO, or any other labor organization , by maintaining and enforcing said portions of paragraph 4. (c) Refusing to bargain collectively in good faith with the foregoing identified labor organizations with respect to its savings and profit -sharing plan. (d) In any like or related manner interfering with, restraining, or coercing its employees in the exercise 8 We agree with the Trial Examiner that the contracts are not, on their face, illegal We therefore find no ment in the General Counsel's contention that certain portions of the contracts should be annulled. 0 We find no merit in the Meat Cutters' contention that the date should be fixed as March 10 rather than March 13. Respondent was first served with a copy of the earlier charge in the instant cases on September 13, 1965, as shown by the evidence herein, and as stipulated by the parties at the hearing . In the seventh paragraph, first sentence, of section III, F, of his Decision, the Trial Examiner erroneously refers to March 13 as "the day the first charge . was served." 10 As we find that employees were required by Respondent to withdraw from the plan by virtue of the Respondent 's unilateral of their right to self-organization , to form, join, or assist unions , to bargain collectively through representatives of their own choosing, to engage in concerted activities for the purposes of collective bargaining or other mutual aid or protection, or to refrain from such activities, except to the extent that such right may be affected by an agreement requiring union membership as a condition of employment, as authorized in Section 8(a)(3) of the National Labor Relations Act, as amended by the Labor-Management Reporting and Disclosure Act of 1959. 2. Take the following affirmative action, which we find will effectuate the policies of the Act: (a) Amend its savings and profit-sharing plan by deleting therefrom those portions of paragraph 4 which disqualify or exclude from participation employees covered by a pension plan resulting from collective bargaining through a labor organization. (b) Amend its existing employee booklets and/or publications so as to eliminate therefrom any language which indicates that employees covered under a pension plan resulting from collective bargaining through a labor organization are disqualified from participation in its savings and profit-sharing plan. (c) Upon request, bargain collectively with Amalgamated Meat Cutters and Butcher Workmen of North America, AFL-CIO, and with Retail Clerks International Association, AFL-CIO, in the units found appropriate in the Trial Examiner's Decision, with respect to the savings and profit-sharing plan. (d) Restore, in a manner to be determined hereinafter at the compliance stage of this proceeding, to the status in the Kroger savings and profit-sharing plan which they would have enjoyed had they not withdrawn from the plan, all those employees who were required, on or after March 13, 1965, to withdraw from the plan in consequence of the terms of paragraph 4 of that plan pertaining to coverage by collective- bargaining agreements, as explained above under the section of the Decision entitled "The Remedy." (e) Post at all its stores and business locations where rank-and-file employees work, wherever located, copies of the attached notice marked "Appendix." 12 Copies of said notice, to be furnished by the Regional Director for Region 13, after being duly signed by an authorized representative, shall be posted by Respondent immediately upon receipt rule rather than by operation of the contract, Local Lodge 1424, Machinists (Bryan Manufacturing) v. N L R.B., 362 U.S. 411, relied upon by the Trial Examiner, is inapposite with respect to any withdrawal required by Respondent within the 10(b) period However, employees who were required to withdraw from the plan prior to March 13, 1965 (the cutoff date of the 10(b) period), even though in consequence of Respondent's practice, are, of course, not entitled to restoration to the plan ii See Savoy Laundry, Inc, 148 NLRB 38, enfd 368 F.2d 1000 (C.A 2). ii In the event that this Order is enforced by a decree of a United States Court of Appeals , there shall be substituted for the words "a Decision and Order" the words "a Decree of the United States Court of Appeals Enforcing an Order " 364 DECISIONS OF NATIONAL LABOR RELATIONS BOARD thereof, and be maintained by it for 60 consecutive days thereafter, in, conspicuous places, including all places where notices to employees are customarily posted. Reasonable steps shall be taken by Respondent to insure that said notices are not altered, defaced, or covered by any other material. (f) Notify the Regional Director for Region 13, in writing, within 10 days from the date of this Order, what steps have been taken to comply herewith. APPENDIX NOTICE TO ALL EMPLOYEES Pursuant to a Decision and Order of the National Labor Relations Board, and in order to effectuate the policies of the National Labor Relations Act, as amended, we hereby notify you that: WE WILL NOT discourage membership in Amalgamated Meat Cutters and Butcher Workmen of North America, AFL-CIO, Retail Clerks International Association, AFL-CIO, or any other labor organization, by disqualifying or excluding our employees from participation in our savings and profit-sharing plan because of coverage under a pension plan resulting from collective bargaining through a union. WE WILL amend our savings and profit- sharing plan to eliminate therefrom those portions of paragraph 4 which disqualify or exclude from participation employees covered by a pension plan resulting from collective bargaining through a labor organization. WE WILL NOT refuse to bargain collectively in good faith with any collective-bargaining representative of our employees with respect to continued participation in our savings and profit-sharing plan by any of our employees. WE WILL, upon request, bargain collectively in good faith with Amalgamated Meat Cutters and Butcher Workmen of North America, AFL-CIO, and Retail Clerks International Association, AFL-CIO, with respect to our savings and profit-sharing plan. WE WILL restore, in a manner to be determined hereafter, to the status in our savings and profit-sharing plan which they would have enjoyed had they not withdrawn from the plan, all those employees who were required, on or after March 13, 1965, to withdraw from the plan in consequence of the terms of paragraph 4 of that plan pertaining to coverage by collective-bargaining agreements. WE WILL NOT in any like or related manner interfere with, restrain, or coerce our employees in the exercise of their right to self-organization, to form, join, or assist unions, to bargain collectively through representatives of their own choosing, to engage in concerted activities for the purposes of collective bargaining or other mutual aid or protection, or to refrain from such activities , except to the extent that such right may be affected by an agreement requiring union membership as a condition of employment, as authorized in Section 8(a)(3) of the National Labor Relations Act, as amended by the Labor-Management Reporting and Disclosure Act of 1959. THE KROGER CO. '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. If employees have any question concerning this notice or compliance with its provisions, they may communicate directly with the Board's Regional Office, 881 U.S. Courthouse and Federal Office Building, 219 S. Dearborn Street, Chicago, Illinois 60604, Telephone 828-7597. TRIAL EXAMINER'S DECISION STATEMENT OF THE CASE THOMAS A. Ricci, Trial Examiner: A hearing in the above-entitled proceeding was held before the duly designated Trial Examiner from May 9 through May 20, 1966, at Chicago, Illinois. A consolidated complaint, based upon separate charges filed by Amalgamated Meat Cutters and Butcher Workmen of North America, AFL-CIO, herein called the Meat Cutters, and by Retail Clerks International Association, AFL-CIO, herein called the Retail Clerks, was issued against The Kroger Co., herein called the Respondent or the Company. The essential issues presented are whether the Respondent violated Section 8(a)(1), (3), and (5) of the Act by maintaining and giving effect to a certain exclusionary provision in its savings and profit-sharing plan. Briefs were filed by all parties after the close of the hearing. Upon the entire record, and from my observation of the witnesses , I make the following:' FINDINGS OF FACT I. THE BUSINESS OF THE RESPONDENT The Kroger Co., an Ohio corporation, with its principal office in Cincinnati, Ohio, maintains and operates retail food stores in many States of the United States. In the course and conduct of its business operations during the past year the Respondent sold and distributed food products the gross value of which exceeded $1,000,000. During the same period the Respondent received goods at its Illinois and Indiana stores valued in excess of $100,000, all of which was transported to such stores in interstate commerce directly from States other than the States of Illinois and Indiana. I find that the Respondent is engaged ' Separate motions by counsel for the Meat Cutters and for the Respondent, unopposed by any of the parties, to correct the transcript are hereby granted. THE KROGER CO. 365 in commerce within the meaning of the Act and that it will effectuate the policies of the Act to exercise jurisdiction herein. II. THE LABOR ORGANIZATIONS INVOLVED Amalgamated Meat Cutters and Butcher Workmen of North America, AFL-CIO, and its constituent locals, and Retail Clerks International Association, AFL-CIO, and its constituent locals, are labor organizations within the meaning of Section 2(5) of the Act. III. THE UNFAIR LABOR PRACTICES A. The Question in General The essential and precise allegations of the complaint in this case are threefold, and charge the Respondent Company with having violated three separate proscriptions of the statute: Section 8(a)(1), (3), and (5). The critical and truly pertinent facts upon which these charges rest are uncontrovertible, and are proved by formal documents from the Respondent's own records. Since 1947 the Company has maintained a retirement plan applicable to all employees, necessary money contributions made only by the Company, the employees receiving pension benefits only upon retirement; thereafter the employees enjoy the benefits as long as they live. In 1951 the Respondent established a savings and profit-sharing plan, in which participation is optional to the employees. Those who wish to do so contribute so many dollars from their pay periodically, and at the end of each year the Company pays a percentage of its profits into the savings and profit-sharing plan trust fund. The money is invested by trustees, with the result that at any given. moment each participating employee is entitled to a divisible share depending upon the proportion of the total represented by his individual contribution, in each of two funds, one arising from employee savings, and the other funded from company profits. An employee may withdraw from this plan at will, and when he does so, receives a single cash payment for the value of his share. There is no provision for periodic payment after separation from the Company, or for leaving any part of the employee's share with the trust fund for withdrawal by installments thereafter. In 1956, by resolution of the Kroger Company board of directors, both the retirement and the savings and profit- sharing plans were modified by insertion of a new paragraph in each, automatically excluding from further eligibility from each plan all employees in a particular circumstance. To the savings and profit-sharing plan the following paragraph was added: Notwithstanding the foregoing provisions, any employee who is covered by a limited group pension plan as herein defined shall cease to be eligible hereunder and, if a member of this Plan, shall be considered to have withdrawn therefrom on the date when such coverage commenced. The term "limited group pension plan" means a plan for the payment of pensions or other retirement benefits which (a) is limited in its coverage to a particular group of employees, and (b) is established by or at the request of the covered employees or their authorized representatives. By formal resolution of the board of directors in 1962, a further clarifying provision was added, bearing directly upon the foregoing exclusion. Every employee who is a member of a group of employees or of a collective-bargaining unit which establishes or adopts a limited group pension plan for any employees of the Company (regardless of whether or not such employee participates therein) shall, for the purposes hereof, be deemed "covered" thereby. The term "coverage commenced" as used above shall mean the time when the Company, any group, collective-bargaining unit, or employee first becomes obligated to accrue or to make payments or contributions to such limited group pension plan. A comparable exclusionary provision was placed in the Company's retirement plan at the same time. Each of the basic allegations of wrongdoing appearing in the complaint is grounded upon the Respondent's maintenance and enforcement of this composite paragraph 4 of its savings and profit-sharing plan. It is argued that the very continued existence of such an exclusionary clause necessarily exerts an illegally coercive and restraining effect upon the employees in their freedom to join unions and to engage in unfettered collective bargaining with the employer with respect to a substantial aspect of their working conditions, and therefore constitutes a violation of Section 8(a)(1) of the Act. Enforcement of the clause precisely as written, an eventuality in each and every instance dictated beyond the possibility of deviation by the fiat of the Company's highest authority, automatically removed from the area of collective bargaining the question of union-represented employees continuing to enjoy the benefit of sharing in the employer's profits. Because the Respondent thereby precluded any discussion of the matter with the employees' bargaining agent, it has, according to the theory of complaint, literally refused to bargain with respect to a normally bargainable issue, in violation of Section 8(a)(5). An inseparable aspect of effective fulfillment of the board of directors' resolution was, very widely, the compulsory denial to employees of all further payments to the savings and profit-sharing fund on their behalf, all directly in consequence of the collective, bargaining activities they chose to carry on vis-a-vis the employer. The material discrimination is not disputed; the employees virtually doubled their money by placing it in the savings and profit-sharing plan instead of just putting it in the bank. Collective bargaining being, concededly, the end purpose of joining any union, it follows, if the General Counsel is correct, that such ipso facto reduction of the material compensation of these employees amounted to direct discrimination against them founded inevitably upon a purpose of discouraging them from joining, or remaining members of, unions, and therefore conduct proscribed by Section 8(a)(3) of the Act. Apart from statements relating to such things as the volume and the nature of the Company's business, or the status of the Charging Parties as labor organizations, the answer denies virtually every substantive allegation of the complaint. The real issues, however, are plain enough. And perhaps it is a single question: May an employer maintain such a limitation upon what is otherwise a companywide profit-sharing plan, and may it in fact enforce it whenever the specified situation materializes? A number of collateral assertions, outside the pleadings, are advanced, largely by the Respondent in defense, but also by the Charging Unions in coloration of the main 366 DECISIONS OF NATIONAL LABOR RELATIONS BOARD question, all of which tend only to obscure the issue of the case. They must therefore be considered and placed in clear and unmistakable perspective before the merits of the complaint can be understood and evaluated . Indeed the bulk of the extended testimony , and much of the voluminous documentary evidence , deals with what words the contending parties used , both in the past and during the hearing, to describe the retirement plan, or the savings and profit-sharing plan, or their respective feelings in prior years. This unending play on words is really an attempt to alter the format of the basic question and thereby deceptively predetermine the desired answer. union at the bargaining table, the employer is relieved altogether of the statutory duty to discuss it with the collective-bargaining agent. If this be the reason for such evidence in this case, and I can think of no other coherent basis for its introduction, I find the argument totally without merit as a defense. This is not to be taken as an implied finding that the record evidence supports the assertion of greater cost in the union-sponsored pension system than in the unilateral retirement and profit-sharing plans. In fact, were I to pass judgment upon the total evidence on this subject, I would conclude that the Respondent has not affirmatively proved its assertion as to the relative economic cost. B. Defense Based on Cost: an Irrelevancy For example, there is no contention that an employer is obligated to continue any particular term of employment, however beneficial to the employees, when in the give and take of good-faith collective bargaining about all working conditions, he honestly and openly discusses the diverse matters of proper interest to the employees. The cost of a pinpointed economic demand by the union is a pertinent factor in the appraisal of an employer's hard or amenable reaction. The sole question here, however, is whether the Respondent bargained at all with the Unions on the subject of continuing to give a share of the profits to these employees; whether the unequivocal and widely publicized determination of its board of directors years in advance of bargaining in fact tied the hands of its negotiators so that there could be no discussion across the table, no consideration whatever given the Unions' position. There is no evidence, nor is it claimed, that in summarily waiving aside every union demand to talk about the profit-sharing money the employees were receiving, company representatives justified their arbitrary position on the ground of its cost to the Company. Despite these facts and the clear nature of the issue presented, the Respondent offered much evidence intended to prove that the contributions it ultimately agreed to make to jointly administered union-employer pension plans, exceeded the cost of the Company's established retirement plan and savings and profit-sharing plan combined. But such evidence would only be relevant in response to a charge that the wrong lay in refusing to continue the profit-sharing arrangement exactly in accordance with past practice. There is no such allegation here. Moreover, if, as it also asserts in a collateral defense, the Company in fact did bargain in good faith on whether that particular benefit should or should not be continued, in whatever form or to whatever extent the parties might have agreed, its absolute cost to the Company, or even its relative cost in comparison to any one or all of the Union's economic demands, would still be immaterial to any issue that could be raised under this statute. An employer who bargains in good faith, as the statute commands, has no duty to convince the Board or the courts of the reasonableness of its position. In the light of the complaint and of the Government's limited supporting contention, therefore, all of this evidence about cost is immaterial in this proceeding. Unless, of course, by implication the Respondent suggests a broader argument based upon the economics of the picture. This sort of evidence could be tied logically to the complaint as it stands by a contention that whenever an established monetary benefit of the employees costs more than the price of an economic demand presented by a C. The Respondent's Statutory Obligation to Bargain with the Charging Unions; Alleged Inappropriateness of the Bargaining Units The charges were filed by Amalgamated Meat Cutters and Butcher Workmen of North America, AFL-CIO, and Retail Clerks International Association, AFL-CIO. For a number of years the Company has negotiated with many locals of these International unions for employees in many regions of the country. In some areas the bargaining, and the resultant contracts, was based on multiemployer, areawide units; in some the contract covered only employees of this company in designated locations. There are also instances where negotiations and resultant contract applied only to a single store or warehouse. It does not appear that any of the bargaining units, or exclusive bargaining agency status of the various local unions, came into being as the result of Board proceedings; recognition and unit arrangements were by agreement of the parties. In keeping with the customary practice appropriate in cases involving alleged refusals to bargain, the General Counsel set out in his complaint 46 separate bargaining unit descriptions, and as to each the further statement of which particular local union is the exclusive bargaining agent; exact inclusion and exclusion of employee categories appears in detail. In a single word the answer denies the appropriateness of every one of these units, as well as the Government assertion that the many related and numbered local unions in fact are the majority representatives. The grounds upon which this denial was made were not explained until toward the end of the protracted hearing. Because the General Counsel deemed it necessary to prove the appropriateness of the bargaining units and the Union's majority status, there were received into evidence collective-bargaining agreements applicable to each of the many units. In every instance the unit description parallels exactly that set out in the complaint. The contracts are all currently in effect, either executed in recent years, or by their terms reaching into the time of the hearing, or negotiated and signed in the immediately preceding months. In some situations negotiations looking to contract renewal were in process as the hearing progressed. In partial defense the Respondent then offered to prove that all of these bargaining units, or almost all of them, are inappropriate for bargaining purposes, and that therefore the refusal-to-bargain allegations must be dismissed; the attack upon the appropriateness of the units in turn rests upon a contention that they include employees who in fact are supervisors within the meaning of the Act. The employees THE KROGER CO. in question are head meatcutters, head produce clerks, head grocery clerks, head checkers, head cashiers, head night stockers, and head dairy clerks. I sustained the General Counsel's objection to evidence relating to the alleged supervisory status of any of these employees.2 Not once, during the many years of amicable negotiations between the Company and either of these two International unions, did the Respondent attempt to exclude these employees from contract coverage. They have been included in all past agreements, and are, indeed, by expressly named classification, listed in all of the current contracts, with exact wage rates provided for all of them. One of the contracts among the exhibits was signed only 1 month before the hearing. The contention that such employees are not appropriately included in the contracts came as a surprise to the Unions at the hearing. The issue of this case is entirely unrelated to the correct unit placement of any employees of the Respondent. Inquiry now into the merits of the belated contentions concerning the alleged supervisors would extend the hearing unduly, and require the taking of oral testimony in a great number of widely dispersed locations throughout the country. The net result would be to confuse the record with respect to the real question to be decided. It is true that here, as in any case involving asserted refusal-to- bargain violations, it must first be found that the employer was obligated to bargain with the union in an appropriate unit at the time of the conduct said to have been illegal. That the Respondent in this case was so obligated, apart from any question of individual supervisor, in each and every unit set out in the complaint, was conceded on the record by counsel for the Kroger Company. Asked by the Trial Examiner whether, with exclusion of the disputed employees, the Unions' majority status would in any single situation be questioned, he replied in the negative. "Mr. Trial Examiner, we do not question, and will not question the majority status of the two charging unions in those locations where we deal with them and represent most of our employees. We will not question them. We have not said that we are not going to bargain with this union. We have bargained with both unions in good faith under the law; and we are going to fulfill our obligations under the law." With the Respondent thus candidly admitting that it always was and is now obligated to bargain with the different locals of these two International unions in the very units set out in the complaint, there really was no necessity for the General Counsel to prove, while introducing evidence to support the complaint, either the correctness of the unit descriptions or the identity of the specific recognized locals. As the record was finally made, all of these underlying matters are virtually admitted. Accordingly, no useful purpose would be served by restating in extended language in this report all the many unit descriptions underlying the established and continuing bargaining relationships between the Company and the many local unions. The complaint, as amended, exactly details them; against each such bargaining unit there is the name and the number identifying the local union long and presently recognized as the exclusive agent. I therefore hereby adopt, by reference incorporate herein, all the unit descriptions appearing in the amended complaint, and find that in each instance the unit so described is appropriate for purposes of collective 2 Bethlehem Steel Company (Shipbuilding Division), 133 NLRB 1347,1349. 367 bargaining, and that the named local union set out in the complaint relative to each such unit was at all pertinent times and now is the exclusive bargaining agent within the meaning of Section 9(a) of the Act. D. The Theory of Illegality; the Real Defense As in every unfair labor practice case before the Board, the issue is framed by the pleadings, and these are always worded essentially in conclusionary language. Here the complaint sets out paragraph 4 of the Kroger savings and profit-sharing plan, and then goes on to say that the Company implemented that clause, insisted adamantly and without discussion upon its full observance by every party concerned, and by such conduct violated the statute in the various respects mentioned; i.e., Section 8(a)(1), (3), and (5). Exactly by what reasoning adherence without quarter upon that decision of the Company's board of directors illegally coerced the employees, unlawfully discriminated against them in their conditions of employment, and predetermined a refusal to bargain, was not articulated by the General Counsel or by counsel for the Charging Parties at the hearing. Faced with an answer which did nothing more than deny, in the briefest language possible, practically every paragraph of the complaint, the prosecuting side of the proceeding could only prove that the clause existed, that employees were forced out of the plan pursuant to its paragraph 4, and that in bargaining negotiations which took place the Unions always met the uncompromising wall of the Board of directors' fiat whenever attempts were made to bargain about union- represented employees participating in the profit sharing, and then rest. The remainder of the case consists of argument, or a statement of why the net effect of the clause was illegal under the statute. Throughout the hearing the Respondent, in turn, avoided any direct statement of position; it stressed certain descriptive words used by union representatives during the bargaining sessions that were related by the witnesses , or in the course of their oral testimony. More than once its counsel refused to state whether or not certain underlying facts, upon which the Government rests, are or are not true. So far as could be learned during the hearing concerning its theory or theories of defense, there seemed to be a continuing play on words, as though the substantive issue of the case could be decided by the language any one of the many union or company representatives may have used in the course of the events spanning several years. In its very articulate and extensive brief, the Respondent argues a number of conclusions, some mixed with factual assertions , and many overlapping. I can only set out here what appears to be the essence of the arguments, both by the Government and by the Company. There are three sets of pertinent facts which can be said to underlie the basic complaint. (1) The details of employee participation in the savings and profit-sharing plan, as distinguished from their benefits under the Company's retirement plan. (2) The extent of the monetary advantages enjoyed in recent years by the employees by virtue of the savings and profit-sharing plan. (3) The language of the critical paragraph 4 of the savings and profit-sharing plan , coupled with the attitude of company representatives whenever union agents brought up the subject of that plan in bargaining negotiations . Number 1 bears upon the Respondent's contention that the savings and profit-sharing plan is only a retirement plan under a 368 DECISIONS OF NATIONAL LABOR RELATIONS BOARD different name. Number 2 serves to show that the enforcement of paragraph 4 always was, and still is, a very substantial discrimination in economic conditions of employment. Number 3 is half argument-that by its terms paragraph 4 precludes any possibility of collective bargaining-and half factual disproval of the Company's defense that it did bargain about savings and profit-sharing whenever asked to do so. plain desire or need for immediate cash. There is no provision for leaving any part of an individual's share with the plan for periodic payments after retirement or other separation from the Company. All this money-the employees' savings, the Company's payments out of its profits, and the investment earnings of both fund A and fund B-is held by trustees. It is a funded financial operation entirely separate from the Company's assets. 1. a. The retirement plan Every employee who works for Kroger is a potential beneficiary under its retirement plan, and the cost is borne entirely by the Company; he must be over 25 years of age and have worked at least 15 years. Retirement comes at age 65, with annual payments thereafter continued until death. An employee with 15 years of service may retire at age 60, at reduced payments. There are minor provisions not significant here. Twenty years of service guarantees minimum annual benefits of $1,200, 15 years assures at least $600 annual benefit. The only money the Company ever parts with consists of the payments in fact made to retirees. There is no separate fund and the plan is administered entirely by company officers. b. Savings and profit-sharing plan Participation in the savings and profit-sharing plan is voluntary; any employee may put away 5 percent of his salary, but no more than $15 weekly, by placing it in the savings fund (fund A). This money is invested by trustees and at the end of each year every employee is permanently entitled to his own money plus his divisible share-depending upon his proportionate contribution-in the total earnings of the savings fund. This is called A credit. Annually the Company gives to the trustees a percentage of its profits; this becomes fund B, and is also invested by the trustees, largely in Kroger and other corporate stocks. Again at the end of each year every employee who has money in fund A is credited with a proportionate share of the profits contributed plus whatever fund B earned during the year. This is the employee's B credit. In addition, at each year's end the total value of all the B credits that have been forfeited (see below) by employees who withdrew their savings during the year, is credited, in the usual alliquot manner, to employees still participating. Employees are free to move in or out of the plan at will. When they cash in they get back all they have contributed themselves plus all the B credits allotted to their individual shares during the years they were in. As to what B credits were allotted to them in the past, they receive only that portion "vested." Five percent of B credits "vest" each year; this means an employee who has been "in" for 20 years, gets it all, one who has participated 10 years receives 50 percent of his B credits in cash, and one who joined only 1 year before is paid 5 percent of his B credits. It is that portion of the B credits which during any given year, although allotted to employees, is not paid to them on their separation, that is called the "forfeited B credits," and goes to the remaining participants who stay in the plan. All payments out of the savings and profit-sharing plan are by lump sum, regardless of the occasion for withdrawal-death, permanent disability, retirement, or 2. a. Monetary value to employees of prof t-sharing as a condition of employment In recent years the contribution of the Company into the plan from its profits, and the credits assigned to employees in consequence of the decision of others to withdraw their money, have been very substantial . For the year 1965, the trustees reported as follows to the employees: For 1965 the Company contributed $4,156,894 to Fund B out of Company profits. This figure is equivalent to 67 cents for each $1 of your 1965 savings. In addition, members who withdrew from the Plan gave up $3,222,476 of Fund B credits and earnings. This amount is equal to an additional 52 cents for each $1 of your 1965 savings and has been transferred to those who remained in the plan. For each $1 you deposited in Fund A in 1965 you received a total of $1.19 of Fund B credits. In 1964, for each $1 of savings the employees were credited with 68 cents constituting Kroger's contributions from profits and 35 cents constituting forfeited B credits; as a further increment, the employees were credited with 10 percent of the preceding yearend balance constituted earnings on investment and capital appreciation in the combined funds. In 1961, the sums were respectively 44 cents, 46 cents, and 6 percent; in 1966, 74 cents, 39 cents, and 7.5 percent; in 1956, 39 cents, 19 cents, and 7.1 percent. 6. The implicit defense: is the Kroger profit-sharing plan a retirement pension system? That the substance of the Respondent's retirement plan, as well of its savings and profit-sharing plan, are subjects that fall within the area of mandatory collective bargaining, is not disputed. As this report in its entirety will show, the Respondent makes essentially two defenses to the entire complaint. One is a direct denial of having refused to bargain about its savings and profit-sharing plan, coupled with what it called documentary and objective proof that it did in fact negotiate the Unions' demands with respect to that plan. The other may be called an implicit argument, and rests entirely upon an assertion that the two company plans-retirement and profit-sharing-are one and the same thing, that they "cannot be split." Clarity will be served by considering the latter defense now. This defense precedes via a logical structure of ideas built entirely upon the premise that the profit-sharing plan is a "retirement" system, or a "pension plan" under another name . From this one "fact," which the Respondent attempted to establish by many indirect forms of proof, it argues that necessarily, as a matter of pure logic, participation by any employee in a company-union THE KROGER CO. administered pension plan must exclude him from sharing in the current profits from time to time, and therefore it cannot be said that the Company did anything wrong in insisting that things be done coherently. Although not exactly articulated, what this really means, according to the Respondent's basic position, is that the Union recognized the fundamental logic that the profit-sharing plan is a retirement plan and that therefore there cannot be at any single moment, in a single employer-employee relationship, more than one pension system. No amount of argument can alter the facts of what this Company's profit-sharing plan is. An employee need not remain with the Company long, much less work for it into his middle years, or until the age of normal retirement, to be entitled to some, if not all of the cash payment distributed from company profits. Conversely, he can put aside part of his wages periodically as long as he wishes, well into old age, but if the Company nets less than $15 million per year in its operations, all he gets when he quits is his own money back, quite as though he had deposited it in a bank at interest. Every witness for the Company consistently and repeatedly referred to this plan as part of the Company's "retirement program." Words cannot change realities. Entirely apart and separate from its profit-sharing plan, the Company's long-established retirement plan, unlike profit sharing, applies to all employees without regard to their individual desires, contributions are made solely by the employer, payments are made only upon retirement at old age, and they continue without interruption throughout life, the man who survives 20 more years receiving four times the amount given another who lives only 5 years as a retiree. If the word "pension" has a generic meaning, this is it. Theoretically, a union desirous of winning the benefits of a jointly administered retirement arrangement for the particular single location or area employees it represents, could also request that they continue to enjoy the benefits of the employer's companywide, separate, and unilaterally administered retirement system. This would be a duplication of benefits for union-represented workmen, but the extent of a bargaining agent's economic demand cannot of itself determine the legality of its action, or of the employer's reaction thereto under the provisions of this statute. Unions do not make such demands, just as they do not ask that a newly proposed hourly wage rate be paid in addition to an established piecework system. But no such question arises in this case, for the unions involved never suggested Kroger continue for the same employees both its own retirement plan and one that might be administered by the Company and the Union jointly. It is at this point precisely-on this one fact of life-that the Respondent's implicit defense, or attempt to explain away the entire complaint, is built. Like the profit-sharing plan, the Company's retirement plan includes a specific clause, also by resolution of the board of directors, disqualifying employees who became subject to a jointly administered retirement system with any union. The complaint does not allege, and no union has charged, that maintenance of that exclusionary clause is coercive upon the employees within the meaning of the Act. The argument then continues that if the retirement plan's restrictive clause is not illegal (or at least not attacked in this proceeding) because it applies 3 That concomitant grants to employees of what are clearly two straight pension or retirement benefits would be unrealistic and illogical is conceded by the Meat Cutters International Union in its brief. ". . . since the very purpose of a union negotiated 369 to a pension and because there cannot exist two pension systems simultaneously, it follows by parity of reasoning that exclusion of paragraph 4 of the profit-sharing plan must be equally free from attack.3 For such reasoning to be at all correct, it is necessary that pension rights and profit shari ng be literally equated. There is no significant relationship, in terms of what is material to the issue of this case, between the two Kroger plans. Commitment to pay pensions under the retirement plan is a burden upon the Company's assets without regard to the success or failure of its business operations; profits are shared only when there are such earnings to be distributed. The first is an automatic benefit to all employees, the latter is a matter of choice. More important, the retirement plan brings a benefit only after employment has ceased, only in the event an employee lives into his 60's or later, and in an amount determined by a workmen's fortuitous longevity, a matter beyond the control of man or corporation. In contrast, profit sharing is money in the bank now, to be drawn by an employee at will, the amount in any given instance depended in major part upon the frugality and the saving habits of the individual, with the ultimate benefit terminating with finality at the moment of his separation from the Company. In sum, what share of profits, added to his own savings, an employee is entitled to recover in a single sum on quitting his employment, is only added to his old age support if he knew how and was in a position to husband his accumulated resources. But the essence of retirement pay, or pension, is assurance that come what may a man will die for causes other than want of food. It protects a man against his folly and against his weakness. This is what the Kroger retirement plan does; this is what a union pension plan does; this is not what the savings and profit- sharing plan assures a man. The "proof" that the profit-sharing plan is a retirement system consists entirely of repeated statements by company representatives to that effect. Typical of the supporting evidence is a form document that Respondent prepares for the convenience of employees contemplating retirement after the appropriate age. It lists the exact amount he would receive under the Kroger retirement plan, the sum to be paid him under applicable social security laws, and the value-if he is entitled to any at all-of his then divisible share in the savings and profit- sharing fund. Aside from being another example of the technique of labeling a man's savings as "pension," the last item no more can be called part of a man's "retirement benefit" than any other savings he may have been able to accumulate from other sources. No doubt a rich man lives better in old age than a poor one, but so does a squirrel who works harder and saves more chestnuts before the snow falls. And there is much in the record to prove that, apart from language characterization aimed at defeating the very thrust of this complaint while its threat built up over the years, the Company itself saw fit to sell this profit- sharing plan to its employees as a benefit in employment quite unrelated to their contingent old age needs after retirement. During 1965, while the Unions were inviting the company negotiators in various cities to talk of the profit-sharing plan and the possibility of continuing it in some form or other, the Respondent carried on a campaign pension plan is to replace the Retirement Income Plan, exclusion from the Retirement Income Plan upon establishment of a union- negotiated pension plan simply expresses a truism which would eventuate even if unarticulated." 370 DECISIONS OF NATIONAL LABOR RELATIONS BOARD directly intended to influence the employees towards continuing the company retirement "program" and to reject any union-proposed pension system. Among the central office material placed in the hands of store managers for this purpose was a document entitled "questions and answers-union pension." It included the following: Q. I am a journeyman meat cutter. Looking at the two plans (Kroger and the union plan) which one is best for me? A. This is difficult to do since we don't really know what plan the union is offering. However, we can compare known union plans and the Kroger Profit- Sharing and Retirement Income Program. Not considering the Profit-Sharing portion at this time, and looking only at retirement, any meat cutter with 30 years service would do better under Kroger's plan .... To these figures, we must add the Profit-Sharing payoff which can be used to purchase additional monthly income if desired. This is a large sum of money in cold hard cash to be spent any way you want. This stress upon a "payoff" of "cold, hard cash" that can be used "any way you want" has nothing to do with old age pension. The stated purpose of the savings and profit-sharing plan, as set out in its inception, only speaks of it as a supplement to retirement benefits, recognition of the fact it is comparable to any other savings or reserve asset an employee may enjoy in consequence of early economies .4 Repeatedly company literature for employee distribution highlighted the quick benefits, as distinguished from old age benefits, inherent in the savings and profit-sharing plan: As a young lady expecting to be married, I do not know how long I will be working. Is there any advantage to my joining the plan? Yes. Your savings will grow each week. A nice savings account can be very helpful in providing a nest egg with which to start your marriage. And if you should later decide to continue working longer, your earned share of the Profit Sharing Fund will add considerably to your savings. Do I receive any benefit from the Kroger Employee's Profit-Sharing and Retirement Income Program if I should leave Kroger before retirement age? Although the Kroger Employee's Profit-Sharing and Retirement Income Program was established to provide the maximum benefit payoff at retirement the program is also designed to provide modified benefits for individual employees who participate in the plan for even a short period of time. An example could be a young checker who has fulfilled the requirements for membership and who has been a member of the program for 3 years and who now becomes married and stops working. The employee would receive the following: Fund A.-100% of all deposits plus interest and growth in market value of securities in Fund A. Fund B-15% of all earnings credited to her account. (Earnings in Fund B consist of interest on bonds, dividends on stocks, rent on stores owned by the fund, and increase in market value of the stocks and bonds within Fund B.) The fact that in 1 year over $3 million in B credit funds are forfeited by employees who choose to withdraw their savings, greatly weakens the contention that this is no more than retirement financing. Moreover, at the hearing, Parker, the vice president of labor relations, while persisting in referring to the two plans as "one program," conceded "obviously, it can be split." And finally at one stage during the hearing, company spokesman took a position completely at variance with, and utterly destructive of, this implicit defense bottomed upon logical reasoning. Parker said that his assistants, the first linemen who do the bargaining in the field, are authorized to negotiate changes in the savings and profit- sharing plan, that the exclusionary paragraph 4 was not an impediment to negotiating some form of continued profit- sharing even by employees who might be covered by a point pension plan with the Union. At this point the entire argument that one is a pension counterpart of the other and that the two cannot coexist fell apart. Whatever may be said of the propriety in arbitrarily denying employees double coverage in retirement benefits under two pension plans-one operated exclusively by the employer and the other jointly with his union-has no relevance to the facts here considered. 3. Did the Company bargain? The savings and profit-sharing plan was originally established pursuant to definitive resolution of the Company's board of directors, and every modification thereafter was made only by express resolution of that authority. The 1956 innovation excluding persons covered by other pension systems, and its further clarification in 1962 were also of such character. It was also by express board of directors' resolution that employees of other stores, or chains of stores, later purchased by Kroger, were brought within the coverage of the profit-sharing plan. There is no indication that there has ever been a deviation from any provision of the plan, as precisely decided by the board of directors, by any subordinate official of the Company. When paragraph 4 was first added, and its terms brought to the attention of the employees, the Meat Cutters Union learned of the fact and protested, in writing, to the Company its view that the very existence of such an exclusionary clause was illegal under this statute, that it improperly interfered with the employees' freedom to engage in untrammeled collective bargaining through a union of their choice. The Respondent never replied to that Union's protestation. It was not until the early 1960's, however, that either of the two Charging Unions embarked upon a program of jointly administered pension plans with this employer. ' The resolution of the board of directors establishing the plan contains the following statement of purposes The plan is designed to provide an additional incentive for improved operating and merchandising by enabling employees to share with stockholders in the profits of the Company; to attract better caliber people to seek employment with the Company; to encourage individual thrift and continuity of employment, to aid the Company's employees in providing old age security by supplementing the noncontributory Kroger Retirement Program with a participating savings plan. THE KROGER CO. 371 From that day forward it was the Respondent's unqualified and unyielding position that the continued profit-sharing of employees covered by a union-sponsored pension system was a matter not only impossible thereafter but not even to be discussed in bargaining negotiations. The tone of the attitude that was to follow consistently thereafter was set at the very first conference where a union pension plan was proposed. When, at the opening bargaining session for a multiemployer unit in the Kansas City area in the year 1963, the Meat Cutters included the subject of pensions among its introductory demands, the Company's immediate reaction was to withdraw from the multiemployer negotiations entirely. There followed, in the several years later, a series of contracts negotiated with each of the Charging Unions; in some there was agreement to establish jointly administered pensions, in others the idea was abandoned. The signed contracts total about 38 for the Meat Cutters and 16 for the Retail Clerks. At first, when the Union insisted on its own pension arrangement, the Company asked that the employees be polled specifically on which pension they wished, the Company's or the Union's, this apart from any vote for ratification of the total contract. Later, the Company was satisfied if the union negotiators made the decision as part and parcel of the total bargaining. In every instance where a union-negotiated pension was included in the contract, the Company refused to sign the agreement unless and until the Union accepted either a clause in the contract proper or, as a special addendum, language fully embodying the exclusionary provision of paragraph 4. The pattern was so fixed that in later stages, while the Unions were considering bringing the matter to the Board for determination, and even after the charges had been filed, the Unions accepted the clause without discussion at all in order to expedite regularity and stability in other economic matters. The Respondent even refused to provide in the contracts that the question be reserved for Board determination. The heart of this case, as already stated, is the fact that by formal, extensively publicized decision of the Respondent's board of directors, all employees who choose to bargain successfully about pensions with the Company are automatically debarred from further enjoyment of part of the Company's profits. All contentions urged by the Government and by counsel for the Charging Unions in support of the complaint allegations stem from this one reality. In turn the focal point of the real defense-which starts by recognizing that as a matter of law a share of the profits in return for work performed is a bargainable condition of employment is the plain assertion that the Company did bargain about it and always does so. The objective evidence said to support the defense is the fact that the contracts, normally reflecting the agreement of the parties in collective bargaining, literally set out the Union's consent to have paragraph 4 of the savings and profit-sharing plan be implemented. In its proposed findings of fact, here reduced to capsule form, the Respondent suggests that the record in its entirety amounts to no more than the following: There came a time when the union agents included in their list of demands preliminary to negotiating contract renewals, a jointly administered straight retirement system. The company representatives, usually a labor representative from the Cincinnati main office together with a divisional vice president, responded with saying that the proposal would be considered, but that the Company would wish to discontinue the benefits of the profit-sharing plan if the employees were to receive such a joint pension plan advantage. The Union argued against this counterproposal, claiming that there was no logical relationship between pension and profit-sharing. The company negotiators maintained the position, explained their reasons, talked to persuade the opposite members to their view. In the end-in every instance-the Union yielded, either by signing the supplemental to the contract, or by agreeing to the inserted clause, and thereby completed the bargaining negotiations. After distilling the record and reducing it to this simple statement, the Respondent then goes on to characterize the events as no more than the usual bartering of one economic demand against another, with its position respecting further participation in profit-sharing and the union's request for a joint pension as only two of the many interlaced and interdependent terms and conditions of employement which together, in the give and take of normal collective bargaining, are resolved one way or the other in the total package which finally is codified in the contract. The record in its entirety does not support this proposed "findings of fact"; indeed it required a contrary conclusion. Had the company negotiators in truth considered, before rejecting, the merits of the union argument against automatic exclusion of employees from profit-sharing, had they discussed this knotty conflict between their insistence upon adherence to paragraph 4 and the Union's objection to it-in short, had they bargained about the matter as the statute requires concerning so substantive a condition of employment, the merits of the complaint would appear in a different light. It is true that in the end, after all other issues had been successively and amicably negotiated for the early contracts, and because the Company then adamantly refused to sign unless the Unions agreed to incorporate paragraph 4 into the contracts, the union negotiators yielded to the inevitable. It does not follow from the fact of such unqualified surrender to the Company's insistence, however, that capitulation was preceded by what can be called good-faith bargaining on the subject. To so hold requires a form of inverse reasoning, starting from the fact of contract language and rationalizing backward that necessarily, or by implication, there must have been the usual precontract bargaining. The evidence, both oral and documentary, shows otherwise. And this is equally true of the last several contracts signed, where the Meat Cutters wasted no time arguing all over again against the fixed position of the Company, but instead went right ahead with all other negotiated terms by adding the requisite exclusionary language offhand. By this time it was clear there was no way of provoking real bargaining about profit- sharing short of bringing the entire question to the Board in this proceeding. Much more persuasive is the reasoning and conclusion that must flow from the starting point of things as they were before negotiations began, and as they still face the union negotiators today so long as paragraph 4 stands as automatic debarment from profit-sharing of all employees covered by a union pension system. It hardly needs saying, or citation of supporting legal authority, that the board of directors of so large a corporation by their formal resolutions dictate rules of operations which subordinates are not free to ignore. There is nothing, by either direct or inferential language, in paragraph 4 or in any other resolution of the directors, even remotely suggesting that the lower officers of the Company may in their discretion 298-688 0-69-25 372 DECISIONS OF NATIONAL LABOR RELATIONS BOARD vary one iota the orders of the top officials. When the negotiators from the office of John Parker, vice president in charge of labor relations, went to the various cities to meet with union agents and hammer out the terms of new contracts, on this one point-the binding effect of paragraph 4 of the savings and profit-sharing plan-their lips were sealed and their hands were tied. As a witness, Vice President Parker attempted to create the impression that the company negotiators were free to bargain on the question of whether employees who might be covered by a joint company-union pension plan could nevertheless continue to participate in the profit-sharing plan. His testimony on this critical point was evasive, argumentative, and totally unpersuasive. After repeated equivocation, he said his negotiators "could have" given both a company-union pension plan and profit sharing, or "could have" departed from the structure of paragraph 4; "This could have happened." Asked what the consequences would have been had they ignored paragraph 4 of the plan, he answered ". . . what the legal implications are, I am sure I don't know, I am not a lawyer." He "imagined" his assistants were aware of paragraph 4: "these men know the economics involved, they know the consequences." Did the resolutions of the board of directors dictate company policy? "A: I don't know whether they do or not." What is the Company's position that if the Union were successful in negotiating a pensin plan employees "would automatically be dropped" from profit sharing? "A: I'd say that that is not the Company's position." Here in one breath Parker swept away 10 years of his board of directors' authority. Twelve local union officers-five of the Meat Cutters and seven from the Retail Clerks - testified of their experi- ence with company agents in their attempts to bargain about-the profit-sharing plan. Northnagel of Meat Cutters Local 476, in 1963 met with a large multiemployer group in Kansas City; he stated at the outset that he would propose a pension plan, with Kroger's employees continuing, in some fashion, in the profit-sharing plan. The Respondent's sole reaction was to withdraw forthwith from the negotia- tions. The Company was kept informed of bargaining as it proceeded, and when Local 476 again advised Snead, personnel manager, they viewed retirement and profit sharing as separate negotiable items, the Company's sole answer was: "You understand the Company's position." While this was going on, the Company advised each of the employees involved by letter that exclusion from profit sharing would be "automatic" in the event of a "union pension plan," that the two "could not be split." Failing to obtain strike authorization from its International, and with the Company adamantly insisting the exclusionary clause of the profit-sharing plan must be incorporated in any contract, Local 476 finally conceded. The special contract provision, substantially as it appears in all the later contracts, reads as follows: It is understood and agreed that under the terms of the Kroger Employees' Profit Sharing and Retirement Income Program (hereinafter sometimes called the Program) all employees covered by this collective bargaining agreement, shall, as of midnight, June 30, 1965 be ineligible to participate in or receive any benefits under the Program, and if any such employee is then a member of the Kroger Employees' Savings As a witness for the Respondent Bedell denied any agent of either union ever asked him to bargain with respect to paragraph 4 of the savings and profit-sharing plan. He also denied having said to a representative of the Retail Clerks that "It was and Profit Sharing Portion of the program, such employee under the terms of the Program shall be conclusively deemed to have withdrawn as of midnight, June 30, 1965. Shortly thereafter Northnagel dealt with Howard Harris, also from Vice President Parker's office, for other areas-Leavenworth and Florence in Kansas and Sadalia in Missouri. As the negotiations proceeded, according to Northnagel's testimony, ". . . he [a conciliator] asked the company if they would negotiate separate on the two programs. The company said no." Kelly, Meat Cutters International vice president, told a like story of late 1964 bargaining on behalf of many locals for multistore units in the general Chicago area; again Kroger had for many years bargained jointly with other retail companies. Here Van Ausdall, representing Kroger, told Kelly he must have a letter from the Union agreeing in advance there would be no talk of pension if he was to continue to participate in the multiemployer negotiations. When Kelly said he would talk pensions, Van Ausdall, according to Kelly ". . . said `We are not going to be influenced by any other offers.' That as far as they were concerned, if their people made a decision on pensions, that they would have to do so separately and alone. And that they would have to be voted by the union separately and alone. They pointed up that if they voted to come into the union plan, they would automatically stop participating in the pension and the profit-sharing plan of the Company." Kroger's answer to the Union's demand here was "This was company policy." The employees in this area were polled twice, first choosing the Company's arrangement and then agreeing to a union pension. Here the contracts were signed in July 1965, with the exclusionary clause demanded by the Company. Again the Company kept the employees advised by letter: "Should you vote to enter the Union program, the complete company program-retirement income and profit sharing-will be terminated. Such termination would be effective at the time Kroger began contributions to the union pension fund." In the St. Louis area early in 1965, Bedell, from Parker's office, took a like position; he told Hook, of Meat Cutters Local 88, that Kroger would not bargain with the industry, despite a 20-year history of multiemployer negotiations; Hook was to finish off negotiations with the industry and to see him later about Kroger. By May 25, 1965, a union pension was negotiated with other stores, but when he was asked to sign the multiemployer agreement, Bedell said " .. you know the company's policy. The employees will have to drop profit sharing .... You can have one, but you cannot have both." Bedell also said, according to Hook, "The Company felt very stongly that the Kroger employees should be given the opportunity to express themselves, whether they wanted to be covered by the union Industry Pension Plan or maintain the Kroger retirement and profit sharing income program." Hook told Bedell "we want to negotiate with you on the profit sharing plan of the Company," and Bedell answered, "The answer is no."5 The Kroger employees in this area voted in favor of the union pension plan, but the Company held firm to its refusal to sign a contract unless paragraph 4 was expressly incorporated by supplement to the agreement. All this led company policy " that no employee could continue to enjoy profit sharing together with a union pension system In the light of the total record, I do not credit such denials by Bedell. THE KROGER CO. to a conference among the lawyers in July, because a strike threat developed over the issue. The Respondent, throug i its lawyer, Vaughn, was adamant: "No supplement, no contract." The Union suggested the contract be executed and the question of adamant insistence that the Company's two plans were but a single pension system be submitted to the Labor Board as a matter of litigation. Again the answer was "No," with the Company stating it would take a strike if necessary on the issue. The local chose to yield instead of striking; it signed the contract amendment agreeing to the exclusionary term of paragraph 4. Bedell also acted for the Respondent in the Ohio area late in 1965. Pollack, president of Meat Cutters Local 427, asked would the Company consider having a union representative sit with the trustees of the saving and profit-sharing fund. Bedell answered: "No, that would be impossible ... the Company's position was well known ... if they would consider and agree to a jointly-administered pension plan, the union would have to agree to include in as part of it the dropping of the profit-sharing plan." Pollack called paragraph 4 "devisive," saying it pitted the Company against the Union, and asked would Kroger consider altering the profit-sharing plan for these employees. Bedell's response was: "I can't handle this any other way except as we have presented it to you ...." Pollack testified to similar experiences in the Pittsburgh area in September 1965, where Saunders, representing the Company, rested with saying "Mr. Sabel [union negotiator] ... was well aware of the Company's position. That, if the union wanted to negotiate a jointly administered pension plan, that it was the Company's position that the people through the union would have to agree to drop the profit-sharing plan." In Cleveland the Meat Cutters signed a contract with a pension clause, but also with the exclusionary supplement; in Pittsburgh it gave up on its pension demand , and paragraph 4 was not added to the agreement. Meat Cutters International Representative Hall negotiated contracts for a number of locals during 1965 in the Indiana, Kentucky, Tennessee, and Georgia regions. Many contracts were signed here in 1965 and 1966, and in some sections negotiations were still in progress at the time of the hearing. At South Bend, Hall asked Company Spokesman Van Ausdall "... if he wanted to talk about profit-sharing, would he put the profit-sharing situation on the table and bargain or negotiate on the subject of profit sharing. Mr. Van Ausdall said he could not ...... Ausdall added that Hall "knew the policy of the company, and that it was not the policy of the Company-not to bargain or negotiate on the profit sharing." In Atlanta, in June 1965, Company Negotiator Saunders told Hall "You can have one, but you can't have both ... you know the policy." In Nashville, Tennessee, Bedell gave Hall the same position. And so it went. At Louisville no union pension was agreed upon. In all the locations where the parties established a union pension, the usual exclusionary supplement was placed in the contract . Bargaining is still continuing in this fashion in Memphis and South Bend. Holding firm to the basic contention that the two plans could in no event be "split,"- the Respondent's representatives pursued the same technique in their dealings with the various locals of the Retail Clerks Union throughout the country. At the hearing spokesmen for these unions gave much detailed testimony of contract negotiations from 1962 to the present, but the tenor of their stories is the same, and no useful purpose would be served 373 by comprehensive repetition here. Fundamentally, the Company's position was one and the same throughout. Where the Retail Clerks wished to negotiate a union- company administered system, the answer was that the Company was willing to discuss the proposal and come to agreement if possible, but that in no circumstances would its retirement plan and savings and profit-sharing plan be considered as separate or divisible conditions of employment. In every instance the Company's insistence was that a union pension system automatically meant surrender of profit sharing, and that it would in no event discuss any possibility of continuing profit sharing or altering it in any way in the light of a newly established union retirement system. Always the refrain which met the local union's request to discuss the matter was that this was "company policy," something beyond the authority of the Company's negotiating teams. Thus Howard Harris, of the Company, told Renschen, of Retail Clerks Local 655 in St. Louis in late 1962, that "the Kroger Pension and Profit Sharing were tied together ... that that was the company policy and he couldn't do anything about it ... that his hands were tied by the company's position on company policy in reference to pension and profit sharing." At one point here the Union proposed that, instead of union pensions, the two company plans be set out in the contract so there could be no reduction of the benefits during the life of the agreements. Harris' reply was that "it was impossible, they could not put anything like that into the plan, that they were not negotiating for it at that time and they absolutely would not put it into the contract." Again in 1964 the Company refused a like request to incorporate its two plans into a signed agreement. Negotiating with Leeby, of Retail Clerks Local 954 in 1963, Harris again insisted profit sharing must be surrendered, that his two plans were not separable, that it was the "corporate officer's position" of 1956 "that they would not separate those two." In 1965 Local 880 President McDonald complained to Bedell in Cleveland that the Company had increased its contribution to the profit-sharing fund without discussing the change in benefits with the Union. Bedell's answer was: "You know, if you are fortunate to receive a pension plan, that the employees will lose the profit sharing?" Again in August 1965, in Pennsylvania, McDonald asked Bedell to incorporate the two company plans in the contract they were negotiating . The answer was . I knew the company policy, and we would not get it." When, in 1964, Local 782 negotiated a union pension, Bedell told the union agents: "Well, the people have made their choice that they want a jointly administered pension program and, therefore, the Company will take away the profit- sharing program. And he went on to say this is a matter of company policy and it was a decision made by the Board of Directors." These excerpts from the record testimony, plus many others too detailed and cumulative to warrant restating here, stand uncontradicted as statements made by company representatives in the course of bargaining during the past several years. The consistent pattern, the logical coherence between such statements, and the compelling force of the board of directors' resolution always effectively publicized and enforced, make the testimony fully credible. It cannot be said that in response to repeated invitations for discussion of so substantial a condition of employment as this profit-sharing plan an employer bargaining in good faith may limit his responses 374 DECISIONS OF NATIONAL LABOR RELATIONS BOARD to robot repetition of such phrases as "it is company policy," or "the two items cannot be split," or "the matter has been set at rest by our Board of Directors years ago." I find, on the record in its entirety, that the Respondent in fact refused to discuss with any of the union representatives, and therefore literally refused to bargain about, either the possibility of viewing its retirement plan and savings and profit-sharing plan as separate negotiable conditions of employment, or the possibility of altering its profit-sharing plan for union represented employees, or substituting some other benefit in its place. It is no comfort to the defense that in the end, in each and every case where a pension clause was negotiated, the many local unions acceded to the Respondent's unalterable insistence that the questionable paragraph 4 be inserted in the contract. Where there is no good-faith bargaining, as the statute commands, humble acquiescence by the union in what is tantamount to an illegal demand by the employer, cannot serve retroactively to excuse the improper conduct. What the Company was really saying to the union officers, after all other issues had been resolved but before it would sign , and what it is still saying today, is: "Agree with us, in writing, that profit- sharing and pension are one and the same condition of employment, that there is no legal duty upon us to discuss the profit-sharing plan with you separately, and that by force of our Board of Directors' unilateral decision in 1956 every employee who chooses to be covered by a union- negotiated pension program must automatically surrender the profit-sharing part of his compensation." That anyone of the unions could have struck in order to compel proper bargaining is beside the point.6 E. Conclusions However the case be viewed, the finger of fault points always to the board of directors' resolution placed in the profit-sharing plan in 1956 and standing there firmly as an absolute impediment to any collective bargaining on the subject. Its inflexible application to employees who chose to engage in unfettered collective bargaining effectively deprived them of a substantial benefit in employment they would otherwise have continued to enjoy. The consequent restraint upon the employees' statutory freedom to carry on their protected union activity is clear. I find, as alleged in the complaint, that by maintaining and giving effect to the exclusionary paragraph 4 in its savings and profit- sharing plan the Respondent has in the past committed, and is now committing, unfair labor practices in violation of Section 8(a)(1), (3), and (5) of the Act. It matters not whether the disputed clause be approached from one end of this spectrum or from the other. The General Counsel calls it illegal on its face; the Respondent relies heavily on the contention that there is no direct evidence of union animus or of an intent either to 6 "A claim of `waiver' with respect to charges or refusal to bargain on an issue as to which bargaining is mandatory, or to include in a contract a point on which agreement has in fact been reached, requires some rather nice discriminations A party faced with a stiff position by its opposite number on such an issue may decide against pressing it, preferring not to jeopardize other advantages it may obtain It is somewhat misleading to speak of such conduct as a waiver of a refusal to bargain, rather, when the course of the negotiation is considered as a whole, no such refusal was ever consummated But when the issue has been pressed throughout, the party unable to force the other to bargain or to include an agreed provision in the written contract does not "restrain and coerce" or to discourage "union membership." There are some things that employers and unions do which run afoul of the proscriptions of this statute and are therefore "unlawful even absent a discriminatory motive" (Textile Workers Union v. Darlington Manufacturing Co., 380 U.S. 263, 269), and "whatever the employers' motive" (N.L.R.B. v. Burnup and Sims, Inc., 379 U.S. 21, 22). Although the word "union" nowhere appears in the exclusionary paragraph 4, there is no question but that its purpose is to exclude from profit sharing those employees, and only those employees, who wish to enjoy a pension benefit negotiated by a labor organization. In the very nature of a limitation of this sort there inheres a restraining effect upon the desire and the freedom to bargain collectively. And if the practice of collective bargaining in turn is the very reason for joining or forming unions at all, discouragement of the tendency to become a union member must flow necessarily from the flat provision of the disputed paragraph. This is a case where "the intent is founded upon the inherently discriminatory or destructive nature of the conduct itself. The employer in such cases must be held to intend the very consequences which foreseeably and inescapably flow from his actions ." N.L.R.B. v. Erie Resistor Corp., 373 U.S. 221. As the court stated in Great Lakes Carbon Corp. v. N.L.R.B., 360 F.2d 19 (C.A. 4): "The significant factor in assessing the validity of such a plan is its effect on the employees." In his brief counsel for the Meat Cutters paraphrases the exclusionary clause; his rewording is correct. "The only pension plan that Kroger will allow to exist in conjunction with participation in its Savings and Profit-Sharing Plan is its own unilaterally adopted Retirement Income Plan. Joint negotiation of a pension plan in substitution for unilateral determination of a pension plan means ipso facto debarment from the Savings and Profit-Sharing Plan." And it then becomes "the union's exercise of its statutory prerogative as the representative to negotiate a pension plan which causes the employees to lose participation in the Savings and Profit-Sharing Plan." To offset this finding that paragraph 4 necessarily and directly tends to discourage union membership, the Respondent points to the fact that its employees' membership in the two Charging Unions has mounted in recent years and stands at over 95 percent today. It distinguishes the related precedents on the ground that disqualification here does not, in so many words, flow from union membership as such,7 or establishment of a majority representative," or mere execution of any collective- bargaining agreement.9 But it is not the quantum of restraining effect upon the employees' desire or freedom to join a union that determines the legality or propriety of repressive conduct under this statute. It is enough that the behavior complained of, or the rules of conduct unilaterally imposed and enforced by the employer, tend in that direction. The Act does not require that "this `waive' a completed refusal to bargain simply by signing up for the best it can get It would seriously contravene the basic objective of industrial peace to place such a party in the predicament where it could make a valid charge of an unfair labor practice only if it forewent a contract altogether " Henry!. Siegel Co , Inc. v N L R B , 340 F 2d 309 (C A 2) See also McQuay-Norris Manufacturing Company v N L R B , 116 F 2d 748 (C.A 7) ' Jim O'Donnell, Inc , 123 NLRB 1639 8 Melville Confections, Inc., 142 NLRB 1334, enfd. 327 F 2d 689 (C A 7) " Toffenettt Restaurant Co , 136 NLRB 1156, enfd 311 F 2d 219 (C A 2). THE KROGER CO. 375 change in employees' `quantum of desire' to join a union have immediate manifestations" (Radio Officers' Union (A.H. Bull Steamship Co.) v. N.L.R.B., 347 U.S. 17, 51). I hold it true that when employees are told, as the Kroger employees were frequently reminded by central office literature, that they will lose profitable participation in the savings and profit-sharing plan because of coverage by a pension plan negotiated by a union, their desire to join or remain with that union is diminished. In support of its insistence that the exclusionary clause was motivated by other than antiunion purposes the Respondent asserted at the hearing that it was timed with an acquisition program-the purchase of other retail stores or chains of stores-and to avoid double coverage by employees so associated with the Respondent. In the face of the assertion, Vice President Parker, while speaking of the acquisition program, admitted, as a witness, "I don't know as there is any connection between the two." His adverse admission is consistent with the further fact that, whenever the Respondent did add existing stores to its group, in every instance it was necessary for the board of directors to take positive action via its own resolutions before any employees of newly acquired stores were brought under the coverage of the savings and profit-sharing plan. It is thus clear that the acquisition program had nothing to do with paragraph 4; double coverage was avoided by inaction. Moreover, the clause is expressly limited in application to Kroger's own employees and makes no reference to acquisition or employees of other stores. More significant, when paragraph 4 was first established it excluded all employees "covered by a limited group pension plan," then defined only as "established by or at the request of the covered employees or their authorized representatives." Six years later the board of directors added more precise language to specify the exclusion with greater clarity. It will be recalled that by this time the Charging Unions had started to make bargaining demands respecting both the Company's retirement plan and its savings and profit-sharing plan. Now the clause was amplified to make clear that "covered" by a limited group pension, meant eligibility, even absence participation, in a "collective bargaining unit" so covered. This revealing phrase appears twice in the rather brief 1962 addendum to paragraph 4. Thus not only is there no support for the requested finding that the exclusion was motivated by pure business reasons, but the final language of the paragraph affirmatively shows its real intended reach to be aimed at "union" pension plans. And finally, there is no indication of the exclusion ever having applicability to any other kind of external pension plan coverage. Paragraph 4 of the Respondent's profit-sharing plan illegally infringes upon the employees' statutory rights because it interferes with, restrains, and coerces the employees in their exercise of the right guaranteed in Section 7 of the Act. The statutory right upon which the Respondent places a monetary price is the privilege of negotiating the matter of pensions collectively through a union. If the employees are not satisfied to leave this substantial aspect of their working conditions to the exclusive and unilateral determination of the Respondent, their Section 7 rights are pro tanto denied them. Ineligibility in profit sharing is thus based upon a facet of union representation. In the language of the statute, Kroger levies a toll upon the employees' exercise of the right "to bargain collectively through a representative of their own choosing," or to engage in concerted activities for "mutual aid and protection." In Jim O'Donnell, supra, the employer's pension trust plan was limited to "nonunion" employees, and the Board held it to violate Section 8(a)(1) by its very existence and Section 8(a)(3) in its effective application. That case differs from this only in a matter of degree; qualitatively the vice is the same. Just as union membership cannot be a predicate for ineligibility, neither can union representation. Restriction of profit sharing to employees "not represented by a union designated as the bargaining agent" was held to violate Section 8(a)(1) in Melville Confections, supra. Here the debarment was not as broad as in Jim O'Donnell; a man could be a union member and still enjoy profit sharing, and only lost it if his union were established as the bargaining agent. Now the distinction between the two cases is of lesser degree, but again the character of the infringement upon Section 7 rights precisely parallels the case at bar. And in Toffenetti, supra, the profits could be shared by a union member, or even when represented by a union under contract, and it was only if the employer became obligated to contribute, by agreement, to a union welfare, disability, or pension plan, that the employee was automatically debarred. The case-where the Board found violations of Section 8(a)(1), (3), and (5)-differs from the present situation more in words than in substance. Exactly as in Toffenetti, Kroger's employees are debarred from profits only if the Company is contractually obligated to contribute to a union pension for them. The price for the privilege of exercising the full gamut of rights guaranteed by Section 7 was exacted from employees in the past, and is being exacted today. As set out above, it is a substantial toll being paid. The employees who refrained from full collective bargaining-the fulfillment of union membership-have continued to share in the company profits; those who chose to do otherwise have been, and are even now being, deprived of the "hard cash," as the Respondent describes it. This is a discrimination in "conditions of employment," as defined in the statute. The supplemental attachments to the many contracts were signed by union agents in object defeat before the unyielding "take it or leave it" attitude of the company spokesmen. The reaction reflected no more than realistic acceptance of the finality already predetermined by the Company within its own council years earlier. It is only in a superficial sense that the Union can be said to have "agreed" to universal application of paragraph 4. The dispute between the negotiators on that question was not resolved between them in 1962, or 1963, or later, at any of the bargaining locations, when the many contracts now in evidence were signed. Instead, if it can be said to have been resolved at all, it was settled once and for all-with all possibility of discussion completely foreclosed-by the board of directors, unilaterally and certainly without consultation with any union. The "refusal to bargain" is clear. There is a final truism in this situation that is also advanced, albeit obliquely, as a defense, again superficially persuasive but not really in point. For the Respondent to alter the terms of its companywide savings and profit-sharing plan in its application to the employees of only one store, or even a small grouping of stores, would, in a practical sense, be virtually impossible. In any one of the many separate unit bargaining relationships reviewed, the Union involved spoke for the employees intimately involved, and only for those. But establishment of a limited and exclusive savings and profit-sharing plan would be 376 DECISIONS OF NATIONAL LABOR RELATIONS BOARD only one method for concluding good-faith bargaining on the subject, and the mere fact such a solution would be quite unworkable and impractical is not sufficient reason for precluding,,g any consideration of all other possible adjustments. The fact is the parties never reached the question of how the Unions' demands to discuss the benefits enjoyed by the employees could be dealt with in view of changes made in retirement systems. It is the fact that all talk was excluded from the negotiations that governs here, not the perhaps illogical idea of separate and maybe multiform profit-sharing systems. F. The Statute of Limitations: The Remedy Because this business of excluding certain employees from a share of the profits is an old story, that section of the statute which was intended to put old sins at rest without revival day, comes into play. Section 10(b) of the Act lowers a curtain, as it were, upon the acts that were played more than 6 months before the filing of any charges of wrongdoing. 10 As is often the case, the prosecution side here too has no difficulty seeing right through the curtain, and in effect, if not in words, would right the wrongs committed as of old. To the defender, understandably, the curtain is of iron, and casts a prospective shadow shielding also the derelictions going on downstage. In reality, the curtain is opaque. Some light penetrates out of the events of the past, and makes current events more understandable. The light is not so distinct, however-and this is because Congress threw dust into the eyes of the judge-that it can be said with assurance anyone committed unfair labor practices upstage. Thus the Kroger Company argues that even if the exclusionary paragraph 4 is improper for any reason, its establishment, by the directors, was a deed of 1956, completed by 1962, all behind the curtain, and therefore may not be the basis for an unfair labor practice finding today. From this the Company then would have it that the protection of Section 10(b) extends prospectively and permits whatever coercive effects, legal or illegal, continued existence and implementation of the debarring provision may have now, and forever hereafter. The position is not well taken. No more persuasively could it be said an established employer policy against hiring union members-formally documented, publicized, and recorded-could warrant such a refusal to hire today merely because the practice is an old one. The exclusionary provision of the profit-sharing plan illegally coerces employees now, is effectively being used to discriminate against them in their employment because of the exercise of protected activities, and precludes good- faith collective bargaining. These are unfair labor practices being committed now; the remedy must fit the offense." The Respondent must be ordered to delete paragraph 4 from its savings and profit-sharing plan, to bargain in good faith with the majority representatives of any of its employees on the subject of profit sharing, regardless of whatever other proper subjects of collective bargaining the Unions may propose, and to make whole all those employees who, starting at a time 6 months before the filing of a charge by the Meat Cutters, have suffered a financial deprivation in consequence of effective In pertinent part Section 10(b) of the Act reads as follows no complaint shall issue based upon any unfair labor practice occurring more than six months prior to the filing of the charge with the Board and the service of a copy thereof upon the person against whom such charge is made implementation of the debarring paragraph 4. The character and scope of the improper conduct imputed to the Respondent in the charge filed by the Meat Cutters International Union on September 10, 1965, and served upon the Respondent 3 days later, was such that there never was, nor could there be, any question in the minds of any of the parties or their representatives but that the purpose was to correct a companywide practice. Indeed, the unfair labor practices found are such that the order below, both the negative injunction to cease giving effect to paragraph 4 and the affirmative dictate to bargain in good faith, extends to the benefit of all Kroger employees and any statutory majority representative, whether or not a party to this proceeding, and whether or not now in existence. In turn , the General Counsel and counsel for both Charging Unions want money remedies now for unfair labor practices they say were committed behind the curtain of Section 10(b), or before March 13, 1965. As reported above, many contracts providing for jointly administered pensions were executed in the early period; in each of these, quite as the Respondent insisted in the current negotiated agreements, the Unions had to agree to the exclusion from the profit-sharing before the Company would have anything to do with the agreements reached. X is an employee covered by such a contract signed before March 13; as required by the debarring paragraph 4 of the savings and profit-sharing plan, but also pursuant to the contract clause reluctantly accepted by the Unions, he ceased participating in profits and was paid off. Recognizing the imperative that there can be no finding of an unfair labor practice committed at that time by the maintenance of paragraph 4, by the refusal to bargain about profit sharing, or by the coerced acceptance of the inevitable by the Unions, the General Counsel waives any suggestion that X be compensated for profits lost before that date. X must nevertheless be made whole, according to the General Counsel, for the profits that would have been credited to his account in the profit fund B after March 13. This means, of course, retroactive' compensation to all those employees who were forced out of the savings and profit-sharing plan in consequence of activities occurring before the curtain fell dividing the stage in two. The difficulty with this contention of the Government is that before a remedy may be fashioned for X, it must first be said an unfair labor practice has been committed as to him. Every employee of the Kroger Company who left the savings and profit-sharing plan following establishment of a jointly administered pension system, did so in keeping with the literal wording of the applicable contract. As you look at the contract, there is no indication of illegality or coercion on its face. Had the Company bargained in good faith on the question of profit sharing, had the Union negotiated the matter-one subject against another-and in consequence of regular bargaining agreed to surrender profit sharing for its employees in return for a revised pension agreement, or any other of its demands, there would be nothing improper in the withdrawal of those employees pursuant to the written agreements . It is only by looking to the fact there was no real bargaining about profits when those early contracts were executed, and the 11 The Respondent's purported equation of its unilaterally adopted exclusionary rule with the prima facie proper union- security clause found in the collective-bargaining agreement considered by the Supreme Court in Bryan Manufacturing Co infra, is patently false See Melville Confections, supra THE KROGER CO. fact that there then existed the automatic and unilateral exclusionary paragraph 4 in the Company 's plan, that the agreements can be characterized as anything other than perfectly valid accords. This situation parallels the one presented in Local Lodge No. 1424, International Association of Machinists, AFL-CIO v. N.L.R.B. (Bryan Manufacturing Co), 362 U.S. 411. There a contract making union membership a condition of employment was executed before the start of the 10(b) period with a minority union . Conceding that a complaint predicated on the execution of the agreement was barred by the statute of limitations , the Board nevertheless found that it continued enforcement after the 10(b) period was unlawful and ordered reimbursement to the employees of all initiation fees and dues paid to the union as required by the contract . In disagreeing, the Court applied the rule that "where conduct occurring within the limitations period can be charged to be an unfair labor practice only through reliance on an earlier unfair labor practice ... the use of the earlier unfair labor practice is not merely `evidentiary' . " but "Rather ... serves to cloak with illegality that which was otherwise lawful . And where a complaint based upon that earlier event is time-barred , to permit the event itself to be so used in effect results in reviving a legally defunct unfair labor practice." 12 The analogy is perhaps best illustrated if it be assumed that instead of providing for withdrawal from profit sharing, the old contracts required outright discharge of X under circumstances that , but for Section 10(b), could be found illegal. The hurt to the employee so released under that contract would also be continuing ; he might be without a job today. X is still at work but minus a share of the profit . In each case the act of discrimination occurred in the past, and while still effective today, cannot be said to flow from mere continuation of the contract. The employees in Bryan Manufacturing must continue to pay union dues now; X stays out of the savings and profit- sharing plan. Unless , of course, good-faith bargaining in contract renewals hereafter brings about a different accord. The cutoff date is March 13 , the day the first charge in this proceeding was served upon the Respondent. Only those employees who were required to withdraw from the savings and profit-sharing plan in consequence of contracts signed after that date shall be restored to their original position. The curtain has fallen on all others previously excluded . Because of fiscal practices and requirements , the contracts have specified the precise date for withdrawal of employees from the plan, usually at a time after the signing of the contracts . What. governs here is the date when the contract was signed , even though the particular employees affected may for some months thereafter have continued to participate. As to those employees whose debarment came about by application of paragraph 4 unlawfully forced upon the Unions in contracts signed after March 13, a reasonable p i' The Supreme Court also said in Bryan Manufacturing at 423 In any real sense the complaints in this case are "based upon" the unlawful execution of the agreement, for its enforcement , though continuing, is a continuing violation solely by reason of circumstances existing only at the date of execution To justify reliance on those circumstances on the ground that the maintenance in effect of the agreement is a 377 restoration of their original status must be made. A final requirement for an affirmative remedy is that each such employee must be permitted to rejoin the plan, either immediately or, if the mechanics of bookkeeping prevent, at such times as the established plan rules for entry and withdrawal otherwise provide. Equitable restoration of employees adversely affected by the unfair labor practices found, to the status as participants in the savings and profit-sharing plan which they would otherwise have enjoyed, presents very complex problems with multiple ramifications. In the circumstances, and absent expert advice on the problem, the sundry details of this aspect of the remedy are best left to amicable adjustment by the parties at the compliance stage of the proceeding. IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The activities of the Respondent set forth in section III, above, occurring in connection with the Respondent's operations described in section I, above, have a close, intimate, and substantial relationship 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. Upon the basis of the foregoing findings of fact, and upon the record in its entirety, I make the following: CONCLUSIONS OF LAW 1. The Respondent is an employer within the meaning of Section 2(2) of the Act. 2. The International Unions and all of their locals are labor organizations within the meaning of Section 2(5) of the Act. 3. By maintaining and continuing to maintain a savings and profit-sharing plan which by its terms automatically excludes from participation employees covered by a pension plan resulting from collective bargaining through a labor organization , Respondent has interfered with, restrained , and coerced its employees in their exercise of the rights guaranteed in Section 7 of the Act, and is thereby violating Section 8(a)(1) thereof, has discouraged and is discouraging membership and activities on behalf of Amalgamated Meat Cutters and Butcher Workmen of North America , AFL-CIO, Retail Clerks International Association , AFL-CIO, and other labor organizations, and is thereby violating Section 8 (a)(3) of the Act, and has refused and is refusing to bargain with the foregoing named Unions, and is thereby violating Section 8(a)(5) of the Act. 4. The aforesaid unfair labor practices are unfair labor practices within the meaning of Section 2(6) and (7) of the Act herein. [Recommended Order omitted from publication.] continuing violation is to support a lifting of the limitations bar by a characterization which becomes apt only when that bar has already been lifted Put another way, if the § 10(b) proviso is to be given effect, the enforcement, as distinguished from the execution, of such an agreement as this constitutes a suable unfair labor practice only for 6 months following the making of the agreement.