Eberhard Foods, Inc.

EBERHARD Eberhard Foods, Inc., 363 State Inc. and Wyoming Food City, Inc. and Retail Store Employees Union Local No. 20, Retail Clerks International Associa- tion , AFL-CIO. Case 7-CA-6202 September 27, 1968 DECISION AND ORDER BY MEMBERS BROWN, JENKINS, AND ZAGORIA On May 15, 1968, Trial Examiner Milton Janus issued his Decision in the above-entitled proceeding, finding that the Respondent had not engaged in certain alleged unfair labor practices and recommend- ing that the complaint herein be dismissed in its entirety, as set forth in the attached Trial Examiner's Decision. Thereafter, the Charging Party filed excep- tions to the Decision, together with a supporting brief, and the Respondent filed an answering brief. Pursuant to Section 3(b) of the National Labor Relations Act, as amended, the National Labor Relations Board has delegated its powers in connec- tion with this case 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, the exceptions and briefs, and the entire record in this case, and hereby adopts the findings, conclusions,' and recommendations of the Trial Examiner. 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 the complaint herein be, and it hereby is, dismissed in its entirety. 1 We find it unnecessary to our Decision to pass upon or adopt the Trial Examiner 's comment in his Decision , that if Eberhard were to buy out the two stores involved in this proceeding they would "again become part of the bargaining unit " Member Zagoria , in adopting the Trial Examiner's conclusion that the two stores involved herein were no longer part of the multistore unit of Eberhard stores , relies, in addition to the factors specified by the Trial Examiner , on the fact that there was no continuity of employee complement at these stores , inasmuch as all Eberhard employees at these stores were offered an opportunity to transfer to other Eberhard stores in the unit , and virtually all of them did so transfer. TRIAL EXAMINER'S DECISION STATEMENT OF THE CASE MILTON JANUS, Trial Examiner: The General Counsel is- sued his complaint in this proceeding on December 29, 1967, after a charge filed on August 3, 1967, by the Union named in FOODS 5 the caption. The complaint alleges that the three named Re- spondents (referred to hereafter as Eberhard, 363 States and Wyoming) constitute a single integrated business enterprise or, alternatively, that 363 State and Wyonung are the alter ego of Eberhard, and that they have refused to bargain with the Charging Union, in violation of Section 8(a)(5) and (1) of the Act. Respondents' answers deny the commission of any unfair labor practices. I conducted a hearing in this matter at Grand Rapids, Michigan on February 5 and 6, 1968. Briefs have been received from the General Counsel and the Respondents, and have been fully considered. Upon the entire record in the case, and from my observa- tion of the witnesses and their demeanor, I make the following: FINDINGS OF FACT I THE BUSINESS OF THE RESPONDENTS Each Respondent admits that it is a Michigan corporation, that during a representative period of a year or less it had gross revenues from the sale of foodstuffs and other merchandise in excess of $500,000 and that it received directly or indirectly from points outside the State of Michigan, foodstuffs and other merchandise valued in excess of $10,000. Each Respond- ent admits, and I find, that it is engaged in commerce within the meaning of the Act. II. THE LABOR ORGANIZATION INVOLVED Retail Store Employees Union Local No. 20, Retail Clerks International Association, AFL-CIO, referred to hereafter as Local 20 or the Union, is a labor organization within the meaning of Section 2(5) of the Act. III. THE ALLEGED UNFAIR LABOR PRACTICES General Background , Issue and Contentions A predecessor of Local 20 was certified in 1958 as exclusive bargaining representative for a unit of all grocery and produce department employees at all Eberhard stores located in Kent County, Michigan, which is the metropolitan area of Grand Rapids. Since 1960, Local 20 has entered into successive contracts with Eberhard, including one which had just been negotiated at the time of this hearing, in February 1968, and was about to be signed. Since the execution of the last preceding contract which ran from July 1, 1964 through June 30, 1967, Eberhard had closed one store and had sold, or otherwise disposed of five stores which had been previously included in the Kent County unit. Two of these stores, at 363 State Street, Grand Rapids, and at 830-28th Street, Wyoming, Michigan,were transferred respectively by Eberhard to the two corporations named as party Respondents here, namely 363 State Inc. and Wyoming Food City, Inc. Respondent Wyoming began operating its store on or about December 1, 1966, and 363 State assumed operation of its store about July 5, 1967. No question is raised by the General Counsel with respect to i As corrected and amended at the hearing. 173 NLRB No. 2 6 DECISIONS OF NATIONAL LABOR RELATIONS BOARD the sale of the other three stores and their consequent removal from the bargaining unit. After the disposition of these six stores, Eberhard still operated seven retail grocery stores in the Grand Rapids area, as well as a number of other stores outside Kent County. The only issue in this case is whether Respondent Eberhard has violated Section 8(a)(5) and (1) by refusing to bargain with the Union for the appropriate store employees employed by the other two Respondents. It is the contention of the General Counsel that the three Respondents together constitute one employer, and that Respondents 363 State and Wyoming are the alter egos of Respondent Eberhard, because the transfer of the stores did not divest Eberhard of the controls and indicia of ownership which serve to establish, under Board precedents, that separate business entities are in fact integrated operations of a single employer. The General Counsel does not contend that 363 State or Wyoming is individually obligated to bargain with the Union as a successor of Eberhard. Respondents contend that the two stores involved here were sold in bona fide, economically motivated transactions, without intent to avoid contractual or statutory bargaining obligations, and that the admitted indirect and partial common ownership of Eberhard and the other Respondents did not transform the separate corporations and separately conducted businesses into a single, integrated enterprise. Eberhard Foods, 363 State and Wyoming have individual memberships in Spartan Stores, which each acquired through its purchase of the necessary qualifying stock. 363 State is also a member of an organization of eight or nine stores, each individually owned and operated and members of Spartan Stores, which advertises jointly under the trade name of Shop-Rite. The sales plans and advertising layouts for the Shop-Rite group are prepared for it by an employee of Spartan Stores. A different employee of Spartan Stores' advertising department performs a similar service for Wyoming. Eberhard has its own advertising department and prepares all its own sales plans and advertising material for use in newspapers, radio and television. Eberhard also does all its own accounting, and for a fee, performs accounting for Wyoming. 363 State, which is a much smaller operation than either of the other two Respondents uses one of its own employees to do bookkeeping work, and relies on Spartan Stores for preparation of tax returns and accounting analyses of its operations. For these services, it pays Spartan a monthly fee. Payroll and payments to suppliers are handled by 363 State through its own checking account which is under the immediate control of Frank Clark, the "purchaser" of that store. The issuance of checks for Wyoming's payroll and payments to suppliers are handled through Smith, who is comptroller of Eberhard and treasurer of Wyoming. Walter Meier, the "purchaser" of Wyoming, does not sign checks. Operations of L V. Eberhard, the Respondents, and Spartan Stores, Inc L. V. Eberhard, who has been in the retail grocery business for 50 years, controls a number of enterprises in or related to the retail sale of food products around Grand Rapids. These are Eberhard Foods, which operates food supermarkets, Eberhard Realty, which owns the buildings and ground on which some of these stores are located, Food Equipment, which owns and leases store fixtures and equipment, and Christiansen Ice Cream Co., a distributor of ice cream and a source of funds for investment in enterprises other than the above, in which L V. Eberhard has an interest 2 Spartan Stores, Inc., is a wholesaler of food products, owned cooperatively by its more than 400 members who operate retail food outlets in Western Michigan. It offers them, in addition to centralized buying and distribution from its own warehouse, the benefits of preparing advertisements, printing, advice on merchandising, and various forms of accounting services. All members of Spartan Stores must purchase shares of stock to evidence their participation in the cooperative, and agree to buy their grocery merchandise from it. It can also supply them with meats and bakery products, although apparently they may utilize other sources of supply. Advertis- ing, accounting, and other store services are available to any individual member on a fee basis. 2 Besides his controlling interest in those stores operated directly by Eberhard Foods, L. V. Eberhard , or members of his family , also have a substantial interest in other supermarket chains outside of Kent County. To the extent that acquisition or divestiture of retail outlets of these chains may be relevant in establishing how and why L. V. Eberhard bought and sold stores in Kent County , the facts relating thereto will be set out later. 3 The Wyoming store's loss between July 1 and November 19, 1966, Transfer of the Wyorrung and State Street Stores Because of their unprofitability, L. V. Eberhard decided to get rid of certain stores in Kent County.3 In May 1966, the Plainfield store was closed. In November 1966, the 28th Street store in Wyoming was transferred to Walter Meier, or more accurately, to a corporation in which an Eberhard subsidiary had the majority stock interest and Meier had a minority interest 4 In the first half of 1967, two stores were sold to Market Development Co., a subsidiary of Spartan Stores, the State Street store was transferred to a new corporation in which Frank Clark had a minority stock interest, and, in August 1967, the Madison Avenue store was sold to Madison Square Food Town. It is known from the record that the Eberhard employees at the Wyoming and State Street stores were transferred to other Eberhard stores in accordance with the provisions of the contract. As for the other three Eberhard stores transferred during this period, no contention is made that they are still in the Eberhard bargaining unit or that Eberhard has any bargaining obligation with respect to them. The Wyoming Store-The building occupied by the Wyoming store was leased by Eberhard Realty from the owner, who is not identified but is not connected with the Eberhard interests. Shortly after L. V Eberhard let it be known in the grocery trade in Kent County that he wanted to get rid of the Wyoming store, he began negotiating with Meier, who had 25 years experience in the grocery business and who was then was over $31 ,000. State Street lost almost $4 ,000 in the year ending July 1, 1967. 4 To avoid any undue coloration of the issue , I will use the neutral term "transfer " to describe the acquisition of the stores by the two new corporations, thus not committing myself as yet to whether it might be more accurately described as a bona-fide sale (as contended for by the Respondents) or as an insubstantial shift of assets between Eberhard controlled entities (as contended for by the General Counsel). EBERHARD FOODS 7 employed as a divisional manager for another food chain in the area Meier had never worked for any Eberhard enterprise. Meier's employer was then engaged in selling its own stores in Grand Rapids to still another chain, and Meier was slated to be transferred to Detroit. He preferred to stay in Grand Rapids and to put his experience to work in a business of his own The deal which Eberhard and Meier negotiated for the Wyoming store was as follows A corporation was organized to take over the assets and operation. Christiansen Ice Cream, an Eberhard subsidiary, put up 55 percent of the investment, Meier obligated himself by cash and notes for 35 percent, and three men whom Meier was going to hire as department managers put up the money for the remaining 10 percent None of these were then employed at the store The owner of the building spent $40,000 remodeling the premises which was then leased to Eberhard Realty. Food Equipment, an Eberhard subsidiary, spent $50,000 for new fixtures for the store All the Eberhard private brand merchandise was removed, an inventory of the remaining merchandise was made, and was valued at its retail price less 15 percent The sale price for the merchandise was slightly more than $32,000. Eberhard Realty subleased the store to Wyoming for a 12-year term at a monthly rental of $1716.80, adjustable upward in accordance with changes in the Consumer Price Index, and with an option on Wyoming's part to extend the lease for an additional 10 years. Wyoming also leased the fixtures from Food Equipment for a 5-year term at a rental of 1 percent of net sales It was also given the option of installing its own fixtures and equipment at any time, and of removing them on expiration of the store lease. The lease for the property contains detailed provisions as to the allocation between the parties of taxes, special assessments, water and sewage rates. Christiansen put up $11,000 of the total capitalization of $20,000. By the date of the hearing, Meier had paid up his share, amounting to $7,000 Christiansen and Meier each have first refusal on the purchase of the other's stock at its book value plus 10 percent. Christiansen also lent money to Wyoming in addition to the stock investment The loan is being currently repaid. Wyoming operated at a loss for the first 9 months of operations but is now showing a profit. Meier agreed dunng the negotiations for the transfer to limit his remuneration to $300 per week plus a percentage of the profits When Eberhard ceased operations at the Wyoming Store in November 1966 it transferred the three supervisors and eight employees who were there to its other stores. Meter hired all his own employees with the help of a Spartan Store official. He neither sought, `nor was offered, any assistance by the personnel department of Eberhard. Meier decided what to pay his employees, what their fringe benefits were to be, and set all their terms and conditions of employment. At the time of the hearing, Wyoming employed about 60 full- and part-time employees 5 Three of the four directors of Wyoming represent the Eberhard interests. Meier is the fourth director. The four officers are Meier, Maloney, one of the minority stockholders, L. V Eberhard, and Smith, comptroller of Eberhard. The 363 State Street Store-About the time that L. V. Eberhard sold two of the Grand Rapids stores to another area chain, he was also looking for a purchaser of the State Street Store Frank Clark, who was then employed by Drackett, a manufacturer of kitchen products, was interested, and negoti- ated a deal with Eberhard. Clark is a fairly young man who had begun working for Eberhard Foods while still in high school, and had risen to an assistant manager's position before leaving to go with Drackett The terms of their agreement were as follows A new corporation was formed, capitalized at $5,000. Amos A Stagg, the son-in-law of L. V Eberhard, vice president and director of Eberhard Foods, and the manager of operations for all the Grand Rapids stores, invested $2,750. Clark put up the remaining $2,250, most of which he borrowed from a relative The corporation gave Eberhard Foods a note for $22,000, payable at the rate of $1,000 per month plus interest. By the date of the hearing, $5,000 had been paid on the note The store building is owned by Eberhard Realty, and is leased to 363 State for a 5-year term at a rental of $750 per month, with an option to renew for an additional 5-year term at the same rental The store equipment is owned by Food Equipment and is leased to the corporation at a rental of one percent of net sales The lessee has the option of purchasing the equipment at the end of the first year for $20,000 The agreement between L. V. Eberhard and Clark also provided for a mutual option between Stagg and Clark as to the purchase of each other's stock holdings at 110 percent of book value, with the limitation that Stagg could exercise his option only in the event of Clark's death, gross misconduct or negligence, while Clark could exercise his option to buy Stagg out only after the company had paid off its outstanding debts to Eberhard. Their agreement also provided for a sliding scale of remuneration to Clark, based on the store's weekly volume, plus a bonus based on its net annual profit The transfer of the 363 State store occurred over the July 4th weekend in 1967, and the store reopened the next day with the Eberhard private brand merchandise removed. The Eberhard employees who wished to transfer to other Eberhard stores were permitted to do so, and Clark began his operations with three employees, one of whom had been working at the store for Eberhard and whom Clark wished to hire In the next few weeks Clark personally hired additional employees, one of whom came to him from another Eberhard store The 363 State Store now has 12 or 13 employees Clark does his own luring without assistance or supervision from Eberhard, and at wage rates which he himself has set. Organization and Management of Eberhard Foods After September 1967, Eberhard Foods operated seven stores in Kent County and four in other areas. Through one or more subsidiaries, it also operated a number of stores under various trade names. No issues in this case are relevant to the operation of the subsidiaries' stores except insofar as one of these corporations, Eberhard-Byerley, illustrates a pattern of acquisitions and divestitures of individual stores by the Eberhard interests L. V. Eberhard is the operating head of Eberhard Foods. Reporting to him are his son-in-law, A. A Stagg, who is 5 The substantial difference between the figure of 8 nonsupervisory employees who were at the store in November 1966, and the 60 employees who were there in February 1968 is unexplained . It may be that the 8 employees did not include part-time workers, while the figure of 60 does, and that the latter also includes supervisors. 8 DECISIONS OF NATIONAL LABOR RELATIONS BOARD directly in charge of the Kent County stores, and his son, R. W. Eberhard, in charge of the other stores Reporting to Stagg and L V. Eberhard are various operating and staff officials, constituting a level between them and the individual store managers and their department heads These officials operate out of the chain's central office, and are responsible at the product level, for meats, groceries and produce, and at the staff level for security, sales planning, advertising, personnel and "front-end operations " Stagg and the divisional managers visit the Grand Rapids stores frequently, and actively exercise day-to-day supervision over the store managers. All the Eberhard stores in the Grand Rapids area have uniform price schedules, advertise under and display Eberhard emblems and slogans, and are presented to the public through all media of communication as a single, unified chain-store operation. None of these divisional managers visit, oversee or advise Meier or Clark on any operations at their respective stores. Meier and Clark hire and discharge the employees at their store, set their wage rates, fix their own price schedules, advertise solely on their own behalf, and actively seek to present an image of themselves to the public which is unrelated to and independent of that presented by Eberhard Foods. I have already mentioned that in 1967, Eberhard Foods disposed of three other Kent County stores besides Wyoming and 363 State The three stores were apparently sold outright or without substantial financial investment on Eberhard's part. In the preceding past 6 or 8 years, L. V. Eberhard, through his Eberhard-Byerley subsidiary also transferred a number of stores to other parties while retaining some financial interest in the form of capital investment or loans Stores in Holly and Montrose, Michigan, were transferred to newly established corporations in which Eberhard-Byerley had a 55-percent stock interest, and the operator of the store purchased 45 percent of the stock In both cases, the operator and minority stockholder has since bought out Eberhard-Byerley's interest Other Eberhard-Byerley stores were transferred on the same basis, and in some of these cases, the arrangement remains unchanged, that is, the operator is still the minority stock- holder Yet other stores have been sold outright or closed because of unprofitability At least one store, that at Owosso, was sold by Eberhard-Byerley without making any capital investment in the succesor but accepting as part of the purchase price, notes on the equipment and inventory. The Alleged Refusal to Bargain Sometime in October 1966, Rehkopf, the president of the Union, heard that the Wyoming store was going to be sold to. Meier. When he called Mrs. DeVries, personnel director of Eberhard, about it, she confirmed the story and told him that the employees would be transferred out of the store in accordance with the seniority provisions of the agreement By letter dated November 1, 1966, Eberhard advised the Union that it was planning to close the Wyoming store for economic reasons about November 12, that it would provide employ- ment for employees covered by the contract, and offered to discuss with it the plans for the shutdown of the store and the 6 B & B Industries, Inc et al, 162 NLRB No 79 7 California Footwear Company, 114 NLRB 765, enfd as mod 246 F 2d 886 (C A 9), Herman Brothers Pet Supply, Inc, 138 NLRB 1087 , enfd 325 F 2d 68 (C A 6), Garwin Corporation, 153 NLRB 664, enfd as mod . 347 F 2d 295 (C.A.D C ) 8 Royal Oak Tool & Machine Company, 132 NLRB 1361, enfd 320 transfer of the employees . The Union did nothing further at the time The following June , when Rehkopf and DeVries met to negotiate a new agreement to become effective July 1, 1967, Rehkopf asked her why the checks issued by Wyoming were being made out by Eberhard She said that she did not know, but that the Wyoming store had been sold During the negotiations , DeVries told the Union that the 363 State store was to be sold about July 1. Thereafter , during the course of the negotiations the Union claimed to be bargaining on behalf of these two stores, while Eberhard insisted that they had been sold and were excluded from the bargaining unit. Concluding Findings Although many of the cases relied on by the General Counsel to establish a connection between Respondent Eberhard and the other two Respondents pose the question of liability on the part of a successor, or the survival of a bargaining obligation for a "runaway shop," the General Counsel recognizes that these cases are not directly apposite Thus, -the General Counsel does not argue that Wyoming or 363 State is individually required to bargain with the Union on behalf of its employees as successors of Eberhard, nor is it suggested that Eberhard transferred two of its many stores to the other Respondents only to evade bargaining with the Union for them However, the successor and "runaway shop" cases relied on by the General Counsel, do involve as here, the survival of a bargaining obligation after a sale or other transfer of assets from a predecessor to a successor organization. The elements to be considered are similar, although their relative importance may vary, in cases where the question presented is whether formally separate business entities constitute a single employer for jurisdictional or unit purposes,6 or whether a successor is a disguised extension or continuance of the predecessor, ' or whether an existing employer is obligated to continue bargaining for operations which it has transferred to newly formed allegedly independent entities.8 They have recently been restated in a jurisdiction case, 9 but are also applicable in a case such as this where the issue is whether an existing organization remains obligated to continue bargaining with a union for operations which it has "spun-off" to formally separate business organizations Whether the formally separate business organizations constitute a "single employer" turns on the extent of their interrelationship of operations, their centralized control of labor relations, their common management, their common ownership or financial control, and their representation to the public as a single integrated enterprise. I consider it of little significance in determining whether the three Respondents constitute a single employer that Wyoming and 363 State continue to operate as food markets on the same premises where Eberhard Foods operated. Eberhard could expect to obtain a better recovery on its investment in merchandise and store fixtures if the stores could be sold as food markets rather than for some other type of business. Much more significant is the fact that though the premises F.2d 77 (C A 6), Hemisphere Progressive Corp, 154 NLRB 711, and Manley Transfer Company, Inc 164 NLRB No 21, enfd. 390 F 2d 777 (C A 8) 9 International Union of Operating Engineers, Local 428, AFL- CIO, 169 NLRB No. 30. EBERHARD FOODS 9 continue to be used as food markets they show no outward connection with the Eberhard chain either by the use of Eberhard private brands, signs or emblems, or by common advertising. To the public they appear as separate entities and competitors. Although they purchase from a common supplier, Spartan Stores, and are members of that cooperative whole- saler, that establishes neither an interrelationship of operations nor common management, since Spartan is clearly separate from, and independent of, each of them. There is no persuasive evidence that Eberhard officials manage the day-to-day operations of Wyoming or 363 State in any fashion, nor do either of these Respondents have any connection with each other, besides their possible common involvement with Eberhard. When Wyoming and 363 State were Eberhard stores, their managers were salaried employees of Eberhard subject to the supervision of L. V. Eberhard, A. A. Stagg and the Eberhard divisional managers. The hiring of employees was subject to Eberhard control, prices of com- modities were set by Eberhard, and the stores did not advertise separately. They were, in the eyes of the public, their employees, vendors, and creditors, units of a single, coordi- nated business operation. Now, on the other hand, no supervisory official of Eberhard ever visits Wyoming, and Stagg's infrequent visits to 363 State and his examination of its sales and financial reports can be explained by his interest in his financial investment. The evidence also shows that Meier and Clark decide how many employees to hire and in what categories The Eberhard personnel office does not interview applicants for them, does not make or keep schedules of hours of work, and exercises no function over their selection, discipline or termination. The present employees at Wyoming or 363 State were never told that they were working for Eberhard, and they and Eberhard employees are never interchanged. The major thrust of the General Counsel's argument that the three Respondents constitute a single employer is directed at the financial arrangements between the Eberhard interests and the other two corporations. Eberhard's financial involve- ment is at different levels. As to both stores, Eberhard corporations are lessors or sublessors of the realty, lessor of the store equipment, creditors and investors. At each of these levels, there is a possibility of Eberhard's exercising control over Meier's or Clark's independent interests. That every aspect of Eberhard's financial involvement is clearly and carefully spelled out, and that Meier's and Clark's rights and interests are described and safeguarded impresses me that their negotiations with L V. Eberhard were at arms-length even though it is fairly obvious that Eberhard held most of the financial cards. Meier and Clark did not have much money, but they were willing to invest their experience and motivation to turn unprofitable stores into profitable ones, something which Eberhard had not been unable to accomplish. There are not, in this case, devices of the sort by which a former owner seems to transfer to a financially irresponsible newcomer an interest in a going business with no intention of ever permitting a real transfer of assets to take place. The emphasis here is quite to the contrary. The terms of the realty and equipment leases are for fixed periods, the rental is set at fixed sums which cannot be increased except, in the case of Wyoming, after an increase in the Consumers Price Index, the allocation of future increased costs, such as taxes, is deter- mined in advance, and the options for extension or for purchase are left with the new corporations. There is no way by which Eberhard may force Meier or Clark out by arbitrary cancellations of the leases. The same is true as to Eberhard's status as a creditor of Wyoming and 363 State. Lenders, whether they are govern- ment agencies, financial institutions, or vendors who have not yet been fully paid, insist on security and protection for their loans, and one common type of safeguard is a restriction on what the borrower may draw out in personal remuneration. Limitations on salary, the right to inspect financial statements, or even insistence on the power of approving expenditures do not, of themselves, prove that the borrower is only an alter ego of the lender The question to be answered is really whether an underfinanced investor, such as Meier or Clark, can reasonably expect to pay off the loans and thereby exclude the lender from exercising further control over his operations. I am satisfied that both Meier and Clark are in that position, and that as a matter of fact, the current repayment of their loans proves that their indebtedness to the Eberhard interests was not devised as a means of keeping them permanently depend- ent on Eberhard There is finally the question whether the stock holdings of the Eberhard interests in Wyoming and 363 State, amounting in each case to 55 percent of the total capitalization is sufficient, either alone or in combination with its involvements as lessor and creditor, to justify a finding that the three Respondents are a single employer. A majority stockholder has the potential for full control of a corporation, through the election of a majority of the board of directors, and their selection of the officers and operating officials. Although the possibility of a takeover of the positions held by Meier and Clark exists, it strikes me as a remote and doubtful eventuality. In two cases when Eberhard-Byerley took a majority stock interest in a newly formed corporation organized to buy a store from it, the minority stockholders who actually operated the stores have since bought it out, and in two other cases, the original arrangement remains unchanged. If past experience is a guide, Meier and Clark are more likely to buy out Eberhard than the reverse. And, of course, if Eberhard does buy them out, the stores would again become part of the bargaining unit. If common ownership or financial control were the sole criteria in determining whether separate business entities are in effect a single employer, then the Eberhard financial interests through leases, loans and stock ownership would arguably sustain a finding that Meier's and Clark's interests were not substantial enough for separate employer status. But the Board considers this as only one of the factors to be considered in deciding whether businesses which are financially related are in fact substantially independent of each other. I have taken these other factors into account-the interrelationship of operations, centralized control of labor relations, common management, and representation to the public as a single integrated enterprise, and I find that the elements of common ownership of the three Respondents, or the financial control potentially exercisable by the Eberhard interests over the affairs of Wyoming or 363 State are not sufficient to overcome the virtual absence of the other equally important indicia of single employer status. As neither Wyoming nor 363 State is the alter ego of Eberhard Foods, and is not affiliated with it otherwise for bargaining purposes, it follows that the latter Respondent did not violate Section 8(a)(5) by insisting that it had no further obligation to recognize the Union as the representative of the employees at those locations after the new corporations began 10 DECISIONS OF NATIONAL LABOR RELATIONS BOARD operations I shall recommend that the complaint be dismissed 10 in its entirety.' CONCLUSIONS OF LAW I Eberhard Foods, Inc., 363 State Inc., and Wyoming Food City, Inc., are employers engaged in commerce and in activities affecting commerce within the meaning of Section 2(6) and (7) of the Act. 2 Retail Store Employees Union Local No. 20, Retail Clerks International Association, AFL-CIO, is a labor orgam- zation within the meaning of Section 2(5) of the Act. 3. Eberhard Foods, Inc. has not violated Section 8(a)(5) and (1) of the Act by refusing to recognize the Union as the bargaining representative for the employees of 363 State Inc., or Wyoming Food City, Inc. 4. The Respondents have not engaged in any unfair labor practices alleged in the complaint. RECOMMENDED ORDER It is hereby recommended that the complaint be dismissed in its entirety. I0It is therefore not necessary to consider the validity of the contention made by Wyoming and Eberhard that Section 10(b) of the Act barred the issuance of a complaint against them , since the charge was filed more than 6 months after the Union became aware that Eberhard had sold the 28th Street store to Wyoming, and had transferred all the employees at that location to its other stores