S. S. Kresge Co.

442 DECISIONS OF NATIONAL LABOR RELATIONS BOARD S. S. Kresge Company, K-Mart Division, F & G Merchandising, Inc., Cunningham Drug Stores, Inc., Holly Stores, Inc., Miles Shoes, Dunham's Garden City, Inc., Schiller Co., Levitt Co. and Retail Store Employees Union Local 36, Retail Clerks International Association, AFL-CIO. Case 7-CA-5997 January 29, 1968 DECISION AND ORDER On July 25, 1967, Trial Examiner John F. Funke issued his Decision in the above-entitled proceed- ing, finding that the Respondents had engaged in and were engaging in certain unfair labor practices within the meaning of the National Labor Relations Act, as amended, and recommending that they cease and desist therefrom and take certain affirma- tive action, as set forth in the attached Trial Ex- aminer's Decision. Thereafter, the Respondents filed exceptions to the Decision and supporting briefs. I The National Labor Relations Board has reviewed the rulings of the Trial Examiner made at the hearing and finds that no prejudicial error was committed-2 His rulings are affirmed, except as discussed below. The Board has considered the Trial Examiner's Decision, the exceptions and sup- porting briefs, and the entire record in this case, and hereby adopts the findings, conclusions, and recom- mendations of the Trial Examiner as modified herein. As more fully set forth by the Trial Examiner, Respondent K-Mart operates a department store called the "Jackson K-Mart Plaza" in Jackson, Michigan, and has license agreements with the other Respondents who operate certain of the sales departments. The present controversy arises out of the representation case involving these parties,3 K- Mart Division of S. S. Kresge Company, 161 NLRB 1127, which issued on November 16,1966. In that case the Board found that K-Mart and its licensees were joint employers and that a storewide unit was appropriate. The Union won the sub- sequent election held on February 17, 1967, and on ' The Respondents have requested oral argument. This request is hereby denied because the record, the exceptions, and the briefs adequately present the issues and positions of the parties 2 For reasons set forth more fully below, we find erroneous and do not adopt the Trial Examiner's rulings that certain evidence of events sub- sequent to the certification of the Union should not be considered. How- ever, the rulings were not prejudicial to Respondents, in view of the basis on which we decide this case, and since we give consideration to that evidence for all purposes. For this reason also, we deny Respondents' mo- tion for reconsideration of our Decision on Review of Election (161 NLRB 1127). 3 Two changes occurred. Acme Quality Paint Company acquired Levitt Brothers Company on January 1, 1967, and commenced operations on March 1, 1967. Holly Stores, Inc., a subsidiary of S. S. Kresge Company, took over the operations of Joy Stores, Inc., on January 9, 1966. Since Holly is engaged in essentially the same operation at the same location or about March 6, 1967, requested bargaining.4 Respondents refused recognition, in part on the ground that the unit found by the Board had been rendered inappropriate by events subsequent to that decision. As a result, the Union filed charges, and a complaint was issued which alleged that Respondents unlawfully refused to bargain in viola- tion of Section 8(a)(1) and (5) of the Act. The Trial Examiner concluded, on the basis of the record, that there were no changes in the opera- tions of the licensees which would render inap- propriate the unit previously determined by the Board, and that Respondents unlawfully refused to bargain.5 The Respondents contend that the Trial Examiner wrongfully rejected certain other evidence which, they assert, would tend to establish the present inappropriateness of the previously determined unit. We find merit in the exceptions as to the evidentiary rulings but, having considered the documentary evidence upon which the Respond- ents rely, we conclude that the unit as originally defined is still appropriate. 1. At the hearing herein, the Respondents sought to adduce evidence to show that events which occurred subsequent to the Board's unit determination have rendered that unit inap- propriate. Thus, they introduced a letter sent by S. S. Kresge Company to its K-Mart regional, district, and store managers on February 7, 1967, which emphasized the alleged independence of licensees in basic labor and personnel matters. The Trial Ex- aminer initially admitted this evidence in the mistaken belief that it was sent before the Board's Decision finding the appropriate unit, but he later ruled that since it was actually distributed after that decision it could not now be considered. Respond- ents also offered into evidence a memorandum of understanding executed by K-Mart and each of its licensees in May 1967, which purportedly amended the existing license agreements regarding the con- trol of licensee personnel policies. The Trial Ex- aminer rejected this offer on the ground that since they were executed after the Board's unit deter- mination, they would constitute an impermissible attack on that decision. These rulings were based on the Trial Examiner's holding that the Board's and with essentially the same employees, we agree with the Trial Ex- aminer's conclusion that Holly was a successor employer to Joy, and was therefore bound by the Board's determination that Joy as a joint employer with K-Mart. We do not, however, adopt or pass upon his interpretation of Wiley v Livingston, 376 U S. 543, or the court decisions cited in his footnote 21 4 The Union made its request to Holly Stores, Inc., on April 6, 1967. 5 It was shown that Acme Quality Paint Company , after acquiring Levitt Brothers, made certain changes in vacations and holidays, in- stituted a life insurance plan, and began to make contributions toward a hospitalization plan, without consulting either K-Mart or the Union. The Trial Examiner found, and we agree, that these unilateral changes con- stituted an independent violation of Section 8(a)(5). Contrary to his state- ment, however, this finding is not contingent upon his holding in Zayre Corporation, 12-CA-3589. 169 NLRB No. 61 S. S. KRESGE COMPANY 443 findings as to the appropriateness of a unit could be affected only by events which occurred between the hearing in the representation case and the date on which the decision in that case was issued. It has been consistently held by the Board, with the concurrence of the courts, that at a subsequent hearing on the charge of an unlawful refusal to bar- gain, the Board need not allow relitigation of issues which were or could have been raised in the related representation proceeding, absent newly discovered or previously unavailable evidence.6 To do otherwise "would place a premium upon the withholding of evidence in representation proceedings, and encourage practices designed to cause protracted delay in such cases."7 Where, however, there is such new or previously unavaila- ble evidence, the Board admits it in the related un- fair labor practice cases, but the burden is on the Respondent to establish that the circumstances upon which that underlying decision was based no longer exist.8 Both the Kresge letter and the memoranda of un- derstanding herein involved came into existence only after the Board's unit determination, and should have been admitted into evidence and con- sidered in relation to the continued appropriateness of the unit. Accordingly, the - Trial Examiner's rulings in this regard were erroneous and are hereby reversed, and the letter and memorandum are hereby made a part of the record for all purposes. 2. As we have admitted the additional evidence proffered by the Respondents, our original unit finding must be considered in light thereof. Our ex- amination of this evidence leads us to the conclu- sion that the previously defined storewide unit is still appropriate. In the underlying representation case herein in- volved, the Board found, on the basis of the parties' license agreements and certain other evidence, that the parties intended to and did reserve to the licen- sor, K-Mart, the power substantially to affect the employment conditions of employees in licensed departments, and concluded that a joint employer relationship therefore existed. The excluded evidence does not establish any change which would undermine these findings. Kresge's letter to its K-Mart supervisors merely restates its previ- ously advanced interpretation of the original license agreements, Wand was a self-serving document ad- mittedly written in response to the adverse unit determination. However, in arriving at that decision as to unit, the Board interpreted these very agree- ments, considered other evidence of intent, and re-, jected the Respondent's interpretation of it. Ac- cordingly, such a subsequent pronouncement of contractual intent, although admissible, does not amount to a new matter which requires a different conclusion. - The memoranda executed by Respondents and its licensees also contain such pronouncements of the parties' interpretation of the license agreements. But their main importance lies in the contention as to their impact as amendments to the underlying agreements. Clause two states that: It is further mutually agreed by and between the parties hereto that none of the provisions of the License Agreement ... shall . . . be con- strued as granting to K-Mart DIVISION any measure of control over the labor policies or labor relations practices of the undersigned licensee or any power to affect the wages, hours, or other terms of employment of em- ployees of said Licensee. Clause seven concludes: If any of the provisions of this document shall be deemed to be inconsistent with any of the language of the License Agreement ... or with any provisions of the applicable K-Mart Rules and Regulations, such License Agreement and the applicable K-Mart Rules and Regulations shall be deemed to be, and they are hereby, amended in such respects as may be necessary to eliminate such inconsistency. _ Clause six, however, states that: K-Mart DIVISION shall continue to exercise the power which it has exercised in-the past to prescribe K-Mart Rules and Regulations governing the personal conduct of all officers and employees of each Licensee which affect the overall merchandising image' of the JACKSON K-MART PLAZA. Even though clauses two and seven purport ex- plicitly to divest K-Mart of all or any power to con- trol or affect wages, hours, or other conditions of employment of the licensees' employees, clause six neutralizes their possible effect on the joint em- ployer relationship. For it reaffirms K-Mart's power "as exercised in the past,"- to control the "personal conduct" of all employees which "affect the overall image of the store" by means of rules and regulations. According to the license agree- ment, such rules and regulations govern, for exam- ple, "employment practices," and "personnel and store policies." Even if the new phrases "personal conduct" and "affect the overall image of the store" define this regulatory power, the extent of their limitation, if any, on such power is uncertain because of their ambiguity.- "Personal conduct" could easily include the licensees' employees' working hours, dress, rest periods, and the like, 6 See, e.g., Pittsburgh Plate Glass Company v N L.R.B., 313 U.S. 14, Follet Corporation, 164 NLRB 378; Frito-Lay Inc., 161 NLRB 950. 4 Neuhoff Bros. Packers, Inc , 154 NLRB 438,440 8 See, e.g., The Borden Company, 127 NLRB 304 (evidence of ad- ministrative changes made immediately after the representation case was found not sufficient to vitiate the Board's prior determination as to em- ployee status); National Diary Products Corp , 127 NLRB 313 (respond- ent-was held not to have unlawfully refused to bargain, because evidence of changes made subsequent to the representation case vitiated one of the findings made therein)- 444 DECISIONS OF NATIONAL LABOR RELATIONS BOARD which the Respondent has previously controlled. The other alleged limitation - "the overall image of the store" - is likewise susceptible of broad imple- mentation. Labor disputes affect the store's image, as do employee dress, the hours they work, the way they deal with customers, and other aspects of the. performance of their jobs. Clause six, in effect, retains what clauses two and seven purport to eschew, to the end that K-Mart still retains the power substantially to affect the employment condi- tions of employees in licensed departments which the Board previously found it had. Accordingly, we conclude that the Respondents remain the joint em- ployers of the employees involved herein, and that therefore a storewide unit continues to be ap- propriate for purposes of collective bargaining. Since there are no disputes as to fact or law re- garding the Respondents' denial of Petitioner's request for recognition and bargaining , we agree with the Trial Examiner that Respondents violated Section 8(a)(5) and (1) of the Act by refusing to bar- gain with the Union as the duly certified bargaining representative of employees in the appropriate unit. ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Relations Board hereby adopts as its Order the Recommended Order of the Trial Examiner, and orders that Respondents, K-Mart, Jackson, Michigan, and its licensees at the Jackson K-Mart Plaza: F & G Merchandising, Inc., Cunningham Drug Stores, Inc., Holly Stores, Inc., Miles Shoes, Dunham's Garden City, Inc., Schiller Co., and Levitt Co., their officers, agents, successors, and assigns, shall take the action set forth in the Trial Examiner's Recommended Order. TRIAL EXAMINER'S DECISION STATEMENT OF THE CASE JOHN F. FUNKE, Trial Examiner: Upon a charge filed March 30, 1967, and an amended charge filed April 14, 1967, by Retail Store Employees Union, Local 36, Retail Clerks International Association, herein the Union, against the above-named Employers , herein individually K-Mart, F & G, Cunningham, Holly, Miles, Dunham's, Shiller, and Levitt, and collectively the Respondents, the General Counsel issued a complaint alleging Respond- ents failed and refused to bargain with the Union in violation of Section 8(a)(5) and (1) of the Act. All of the defendants answered, denying the commis- sion of unfair labor practices and denying the appropriate- ness of the unit as found by the Board in K-Mart Division of S. S. Kresge Company, Case 2-RC-6714.' Holly further defended on the ground that it had not been I The Board's Decision was reported at 161 NLRB 1127. 2 K-Mart is a division of the S . S. Kresge which operates retail stores throughout the various States under the name of K--Mart. served with notice of hearing in the representation case and had not appeared. Respondent Cunningham did not ,appear at the hearing in the instant case. This proceeding, with all parties except Cunningham represented, was heard before me at Detroit , Michigan, on June 6 ,1967. At the conclusion of the hearing the parties were given leave to file briefs. A brief was received from the General Counsel , from Respondent K- Mart and from Respondents F & G, Holly, Miles, Dun- ham's, and Schiller. Upon the entire record in this case and from my obser- vation of the witnesses while testifying, I make the fol- lowing: FINDINGS AND CONCLUSIONS I. THE BUSINESS OF THE RESPONDENTS K-Mart is engaged' in the sale of hard and soft good merchandise in various States of the United States.2 During the year ending December 31,1966, K-Mart sold at retail at its Jackson store, the store involved in this proceeding, merchandise valued in excess of $500,000. During the year 1966 K-Mart purchased and received at its Jackson, Michigan, store merchandise valued in ex- cess of $500,000 shipped from places of business outside the State of Michigan. Respondent K-Mart is engaged in commerce within the meaning of the Act. Respondent F & G operates an auto supply and service department under a license agreement with K-Mart at its Jackson, Michigan, store. Respondent Cunningham operates a drug business under a license agreement with K-Mart at its Jackson, Michigan, store. Respondent Miles operates a footwear department under a. license agreement with K-Mart at its Jackson, Michigan, store. Respondent Dunham's operates a sporting goods de- partment under license with K-Mart at its Jackson, Michigan, store. Respondent Schiller. operates a millinery department under license with ' K-Malt at its Jackson, Michigan, store. Respondent Levitt operated a home improvement merchandise department under license agreement with K- Mart at its Jackson, Michigan, store.3 Respondent Holly operates a ladies', girl's and infant's apparel department under a license agreement with K- Mart at its Jackson, Michigan, store. The Respondents admit and I find that they are en- gaged in commerce within the meaning of the Act. II. THE LABOR ORGANIZATION INVOLVED The Union is a labor organization within the meaning of the Act. III. THE UNFAIR LABOR PRACTICES A. The Evidence 1. Background Upon petitions filed pursuant to Section 9(c) of the Act by Truckdrivers Local 164, etc., in F & G Merchandis- 3 On January 1, 1967, Levitt was acquired by Acme Quality Paint Company, a subsidiary of Sherwin Williams. The names of these appear as they appear in the record. S. S. KRESGE COMPANY ing, Inc., Case 7-RC-6707, by the same labor organiza- tion in K-Mart Division of S. S. Kresge in Case 7-RC-6708, and by Retail Clerks Union, Local 36, etc., in Case 7-RC-6714, a consolidated hearing was held by the Regional Director for Region 7 on March 24,1966. An issue in the consolidated hearing was the unit ap- propriate for bargaining. The Truckdrivers Local 164 asked for separate units of employees of F & G and of K- Mart excluding from the K-Mart unit all employees of licensed departments. Retail Clerks Union, Local 36, in Case 7-RC-6714, asked for a unit of all employees of K- Mart including all employees of the licensed departments but excluding the employees of Wrigley's Supermarkets.4 Employer K-Mart was in agreement with the unit position of the Truckdrivers Local 164. The Regional Director in his Decision, ,Order, and Direction of Election agreed with the Truckdrivers and ordered separate elections among the employees of F & G and K-Mart, excluding from the K-Mart unit the employees of licensed depart- ments. Upon review the Board, in K-Mart Division of S. S. Kresge Company, supra, November 16, 1966, reversed the Regional Director and ordered an election in the fol- lowing unit: All full-time and regular part-time selling and non- selling employees of K-Mart Division of S. S. Kresge Company, at its store at 3001 E. Michigan Avenue, Jackson, Michigan, including employees of licensed departments other than Wrigley's Supermarkets, but excluding 'managers, assistant managers, manager trainees, department heads, guards, and all other su- pervisors as defined in the Act. Following an election held February 17, 1967, which the Union won 113 to 31,5 the Regional Director issued a certification of representative to the Union on February 27, 1967.6 On March 6, 1967,' Manual Schoffstall, secretary- treasurer of the Union, wrote K-Mart and its licensees requesting a meeting to initiate bargaining regulations." On March 14 K-Mart replied rejecting the requests and stating: It is the opinion of counsel that the several compa- nies cannot lawfully be classified as joint employers of the employees described in order and direction of election issued by the NLRB in case # 7-RC-6714 and in the certification issued February 27, 1967, that the said group of employees do not constitute an appropriate bargaining unit, and that for these and other reasons (including substantial changes in the factual situation, subsequent to the date of the NLRB hearing held March 24, 1965) the certifica- tion is invalid. On April 6 Theordore Sachs, attorney for the Union, wrote Holly Stores requesting a meeting.10 (Holly had not been an adressee of the March 6 letter.) No reply to this letter was received from Holly. On May 10 the General Counsel issued and served his complaint upon the Respondents, all of whom answered. 4 Such a unit would necessarily include the employees of F & G 5 See "Tally of Ballots." G. C. Exh. 3. The Truckdrivers received no votes. 6 G. C. Exh 2. Unless otherwise noted all dates hereinafter refer to 1967. B G. C Exh. 6. o G. C. Exh. 7 445 2. The testimony Arthur B. Fairbanks, director of public and employee relations for Kresge (K-Mart), testified that during May 1967, and following the certification in Case 7-RC-6714, K-Mart and the licensees agreed to a memorandum of un- derstanding with respect to control of personnel policies as between K-Mart and the licensees.I I These memoran- da were offered in evidence and rejected by the Trial Ex- aminer on the ground that since they were executed after the Board's Decision in Case 7-RC-6714 they could not, without attacking the Board's Decision as to the ap- propriate unit, be received. 12 Fairbanks also testified that a letter (dated February 7, 1967) was sent to all store managers of K-Mart explaining personnel problems which might arise between K-Mart and its licensees and stating: At the same time the Store Manager must re- member that our licensees have an independent responsibility in the fundamental matters relating to their own employees, such as the right to hire, fire, and discipline their own employees, to set pay and fringe benefits for their own employees, and to deter- mine when merit increases should be given. We must scrupulously respect this independence. We do not tell a licensee what people to hire or to fire, nor do we tell them what wages to pay, or insurance to provide, or how many paid holidays he should have, or what sort of overtime pay principles he should observe. These decisions belong to the licensee alone. We should even be careful that we don't unwittingly cause morale problems for our licensee; for example, publicizing wage scales and fringe benefits, if these are not also enjoyed by licensee employees, can make the latter quite unhappy and make problems for the licensee. The Trial Examiner accepted this document under the mistaken impression that it was distributed before the Board's Decision and Certification of the Results of the Election. While it was distributed before certification it was distributed after the Board's Decision finding ap- propriate the bargaining unit therein set forth. It will not, therefore, be considered in any finding made herein. Fair- banks also testified that in August 1965, and following the hearing in the representation hearing, K-Mart unilaterally put into effect a _paid sickness and accident insurance policy affecting only K-Mart employees. Changes were also made in K-Mart's pension plans, although these were not disclosed. They were made in January 1966. Ed Baker, personnel manager of Acme Quality Paints, which acquired Levitt in January 1967, testified that after the acquisition (operation of Levitt commenced on March 1) it changed the vacation plan at Levitt, instituted a life insurance plan, contributed to a hospitalization plan, and changed the number of paid holidays. These changes were made without consultation with K-Mart and were made to conform the working conditions of Levitt em- ployees to those of Acme Paint. Acme district managers 10 G. C. Exh. 8. " Resp. Exhs. 1-6, rejected. 12 This Examiner held in Zayre Corp., Case 12-CA-3589, now pending before the Board, that an employer could not, by unilaterally changing its methods of operation and affecting working conditions, disturb the Board's certification of an appropriate unit. 446 DECISIONS OF NATIONAL LABOR RELATIONS BOARD . follow the Acme hiring and discipline policies without re- gard to K-Mart policy. William Chandler, district manager for 47 stores operated by Holly Stores, Inc.,13 stated that on January 9, 1966, Holly took over the operations of Countess Joy Dress Corporation, which had been a party to the representation proceedings in Case 7-RC-6714 under the names Joy Stores, Inc. Countess Joy sold women's clothing, sports wear, children's and infant's wear. Holly did not continue the infant's department but did operate a lingerie department which had been under K-Mart. Chandler testified that Holly sold a generally higher grade of merchandise and offered more styles than Countess Joy. Holly employed all 10 employees who had been em- ployed by Joy and added 6 more. Within 3 months Holly had discharged four of the Joy employees and supplanted the Joy manager with its own manager. Joy wages were increased to bring them to the Holly scale and additional benefits were granted the Holly employees such as hospitalization and life insurance. While Holly was a separate corporation it operated, according to Chandler, as the ready-to-wear department of K-Mart as far as the public was concerned. B. Conclusions As the Trial Examiner stated at the hearing , he would not relitigate any of the issues raised and determined in the representation proceeding. Nor would he consider any changes in operations or working conditions made by unilateral action on the part of any Respondent after the Board's certification in 7-RC-6714. 14 Thorough and ex- haustive briefs were received on behalf of Respondent K- Mart and Respondents F & G, Holly, Miles , Dunham's, and Schiller. The thrust of 'these briefs is mainly directed to the Board's Decision and determination of the unit issue and to action subsequent to certification which would affect the unit issue. The Trial Examiner feels now, as he did at the hearing, that these arguments are beyond his reach. As to the further argument that procedural de- fects in the representation case voided any decision therein the Board's Decision , footnote 1, states that notice of hearing was duly served on F & G, Cun- ningham, Joy Stores , Inc., Miles , Dunham's, Schiller, and Levitt. I find this, too, binding upon me in the instant case. I do not, however, in making this finding rely on the Supreme Court's Decision in N.L.R.B. v. Mattison Machine Works, 15 which I consider inapposite. The issues which remain to be determined by the Ex- aminer in this case are, like the annals of the poor, short and simple. I find only two: (1) Was there a sufficient change in operations between the representation hearing and the Board's Deci- sion in 7-RC-6714 to justify finding that the Board's unit as found therein is now inappropriate and (2) Was Holly a "successor employer" to Joy so that it would be bound by the Board's Decision that Joy was a joint employer with K-Mart? As to (1) the crucial period is that between March 24, 1965 (when the hearing was held), and November 16, 1966 (when the decision was issued). This excludes from consideration K-Mart's memoranda of understanding ex- ecuted with its licensees in May 1967, and its letter to its store managers dated February 7, 1967. This is not to say that had these documents been available to the Board prior to its decision a different determination might not have been made. But this case is not before me on any motion to reopen or to reconsider, motions which, of course, would have been properly addressed to the Board. I find that, on the basis of the testimony and the exhibits herein, there was no such significant change in the operations of K-Mart and its licensees between March 24, 1965, and November 16, 1966, as to justify a deter- mination by me that the Board's unit finding in K-Mart was inappropriate. The testimony of Fairbanks related to documents which were prepared and executed after the Board's certification had issued and the testimony of Baker established that Acme Paints had acquired Levitt after the Board certification. It is true that Acme made unilateral changes in the working conditions of Levitt em- ployees to conform those conditions to the district condi- tions of the other Acme stores and that this was done without consulting K-Mart and without consultation with or notice to the Union. In so doing I find that it com- mitted a separate breach of Section 8(a)(5) for the reasons stated in Zayre, supra.16 I therefore find that the appropriate unit herein con- sisted of: All full-time and regular part-time selling and non-selling employees of K-Mart Division of S. S. Kresge Company, at its store at 3001 E. Michigan Ave., Jackson, Michigan, including employees of licensed departments other than Wrigley's Supermarkets, but excluding managers, assistant manager, manager trainees , depart- ment heads, guards and all other supervisors as defined by the Act.17 The other issue reserved to me is whether Holly was a successor employer to Joy and required to honor the cer- tification issued in K-Mart, supra. I find it is. It continued essentially the same operation with the same employee unit at the same location.18 It is true that it discontinued the infant's wear department and took over lingerie from K-Mart, that 6 girls were added to the Joy complement of 10 employees and that space allocation was changed. (Later four Joy employees and the Joy store manager were released.) I do not find these changes, made after takeover, sufficiently substantial to disturb the prior unit '' The Holly stores were wholly owned by Kresge. Some 160 to 170 K- Mart department stores had Holly stores operating on their premises. 14 This case was originally docketed under the case name "F & G Merchandising, Inc.," Case 7-RC-6707 but after consolidation of cases the Board's Decision was issued under the case name "K-Mart Division of S. S. Kresge Company" Case 7-RC-6714. 15 365 U.S. 123. 18 Should the Board reverse the finding of the Examiner in Zayre then the holding herein would no longer be binding upon Acme. 17 This decision is based on the Board's finding in K-Mart, supra, which I find res judicata as to this issue. No consideration has been given to any of many decisions respecting retail store units nor to the alleged change in Board policy with respect to such units. 18 In his address before the State Bar of Texas, July 7, 1967, Board Member Fanning entitled "The Purchaser and the Labor Contract" listed seven questions relevant to the problem; these were stated as: (1) whether there has been a substantial continuity of the same busi- ness operations; (2) whether the new employer uses the same plant; (3) whether he has the same or substantially the same work force; (4) whether the same jobs exist under the same working conditions; (5) whether he employs the same supervisors; (6) whether he uses the same machinery, equipment, and methods of production; and (7) whether he manufactures the same product or offers the same ser- vices. I find the tests set forth above sufficient for this particular operation. 'S. S. KRESGE COMPANY finding.19 This is particularly true since Holly was a sub- sidiary of Kresge and Holly's employees would normally have been included in the K-Mart unit regardless of the finding as to licensees.20 I think that Board and court cases, including Wiley v. Livingston , 376 U.S. 543, rather clearly establish that a successor employer is bound to acknowledge the bargain- ing obligations of its predecessor where it continues sub- stantially the same operation with the same employee unit at the same location.21 I think this applies equally whether the obligation has been established by contract or by prior Board certification .22 This obligation should not be subject to defeat by unilateral changes in either operations or working conditions . It is true that the opera- tions of retail and discount stores are subject to constant change as to licensees, personnel and-working conditions. There must, however , be a time at which the obligations of the parties , as to labor-management relations, can be fixed. The alternative is to hold that no obligation can ever be imposed upon the employer group and that no bargaining rights of the employees can ever be established. Recognizing the peculiar and special nature of retail-discount store operations vis-a-vis their licensees and employees , I can see no reason to exclude their em- ployees from the protection of the Statute. IV. THE REMEDY Having found that Respondents engaged in and are en- gaging in an unfair labor practice , it shall be recom- mended that Respondents cease and desist therefrom and take certain affirmative action necessary to effectuate the policies of the Act. It shall be further recommended that Respondents, upon request, bargain in good faith with the Union as the exclusive bargaining agent of their employees in the unit found appropriate by the Board in K-Mart Division of S. S. Kresge Company, 161 NLRB 1127. Upon the foregoing findings and conclusions and upon the entire record in this case, I make the following: CONCLUSIONS OF LAW 1. By refusing to bargain collectively with Retail Store Employees Union, Local 36, as the exclusive bargaining representative of the employees in the unit found ap- propriate herein the Respondents violated Section 8(5) and (1) of the Act. 2. The appropriate unit for the purposes of collective bargaining is: All full-time and regular part-time selling and non-selling employees of the K-Mart Division of S. S. Kresge Co., at its store at 3001 E.-Michigan Ave., Jackson , Michigan, including all employees of licensed departments other than Wrigley's Supermarkets , but ex- cluding managers , assistant managers , manager trainees, department heads, guards , and all other supervisors as defined by the Act. 3. The aforesaid unfair labor practice set forth in para- graph I of this section is an unfair labor practice within the meaning of Section 2(6) and (7) of the Act. RECOMMENDED ORDER It is hereby, recommended that the Respondents S. S. Kresge Company, K-Mart Division , F & G Merchandis- ing, Cunningham Drug Stores , Inc., Holly Stores, Inc, Miles Shoes, Dunham's Garden City, Inc., Schiller Co., 447 and Levitt Co., their officers , agents, successors , and as- signs, shall: -1. Cease and desist from : Refusing to bargain collec- tively with Retail Store - Employees_ Union Local 36, Retail Clerks International Association , AFL-CIO, as the exclusive bargaining agent of their employees in the unit found appropriate herein. 2. Take the following affirmative action necessary to effectuate the policies of the Act: (a) Upon request, bargain collectively with the above- named Union as the exclusive bargaining representative of their employees in the unit found appropriate herein with respect to wages, rates of pay, hours, and other terms and conditions of employment and, if agreement is reached, embody such understanding in a written agree- ment. (b) Post at its store at Jackson , Michigan, copies of the attached notice marked "Appendix." 23 Copies of said notice, to be furnished by the Regional Director for Re- gion 7, after being duly signed by an authorized represent- ative, shall be posted by the Respondents immediately upon receipt thereof, and be maintained by it for 60 con- secutive days thereafter, in conspicuous places, including all places where notices to employees are customarily posted. Reasonable steps shall be taken by the Respond- ent to insure that said notices are not altered , defaced, or covered by any other material. (c) Notify the Regional Director for Region 7, in writ- ing, within 20 days from the receipt of this Decision, what steps have been taken to comply herewith.24 19 Cf. N L.R.B v. John Stepp's Friendly Ford, 388 F 2d 833 (C.A 9), reversing 141 NLRB 1065. 20 The Holly employees voted in the election held among employees of K-Mart and its licensees. 21 Wiley v. Livingston, 376 U S. 543 , Wackenhut V International Union, Plant Guard Workers , 332 F 2d 954(C A. 9); United Steelwork- ers v. Reliance Universal, Inc., 335 F 2d 891 (C.A 3), Piano and Musi- cal Instrument Workers v. Kimball Company, 379 U.S. 357 ; Humble Oil & Refining Company , 153 NLRB 1361, Chemrock Corporation, 151 NLRB 1074, Maintenance, Incorporated, 148 NLRB 1299, Overnite Transportation Co v N L.R B., 372 F.2d 765 (C.A. 4). 22 Stonewall Cotton Mills , 80 NLRB 325. 23 In the event that this Recommended Order is adopted by the Board, the words "a Decision and Order" shall be substituted for the words "the Recommended Order of a Trial Examiner" in the notice. In the further event that the Board's Order is enforced by a decree of a United States Court of Appeals, the words "a Decree of the United States Court of Ap- peals Enforcing an Order" shall be substituted for the words "a Decision and Order." 24 In the event that this Recommended Order is adopted by the Board, this provision shall be modified to read. "Notify the Regional Director for Region 7, in writing, within 10 days from the date of this Order , what steps Respondents have taken to comply herewith " APPENDIX NOTICE TO ALL EMPLOYEES Pursuant to the Recommended Order of a Trial Ex- aminer of the National Labor Relations Board and in order to effectuate the policies of the National Labor Relations Act, as amended, we hereby notify our em- ployees that: WE WILL, upon request , bargain collectively with Retail Store Employees Union Local 36, Retail Clerks International Association , AFL-CIO, as the exclusive bargaining agent of our employees in the 448 DECISIONS OF NATIONAL LABOR RELATIONS BOARD following unit with respect to wages, rates of pay, hours, and other terms and conditions of employ- ment and , if agreement is reached , sign a written con- tract covering such agreement . The employees in the appropriate unit are: All full-time and part-time selling and non- selling employees of K-Mart Division of S. S. Kresge Company , at its store at 3001 E. Michigan Ave., Jackson , Michigan , including employees of licensed departments other than Wrigley's Supermarkets , but excluding managers , assistant managers , manager trainees, department heads, guards , and all other super- visors as defined in the Act. S. S. KRESGE COMPANY, K- MART DIVISION (Employer) Dated By Dated By Dated By (Representative) Dated By Dated By Dated By (Title) Dated By F & G MERCHANDISING, INC. (Employer) (Representative ) (Title) CUNNINGHAM DRUG STORES, INC. (Employer) (Representative) (Title) Dated By HOLLY STORES, INC. (Employer) (Representative) (Title) MILES SHOES (Employer) (Representative) (Title) DUNHAM 'S GARDEN CITY, INC. (Employer) (Representative) (Title) SCHILLER CO. (Employer) (Representative) (Title) LEVITT CO. (Employer) (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, 500 Book Building, 1249 Washington, Boulevard, Detroit, Michigan 48226, Telephone 226-3200.