Magic Pan, Inc.

MAGIC PAN, INC. Magic Pan, Inc. and Amalgamated Clothing and Tex- tile Workers of America, AFL-CIO, Petitioner. Case 5-RC-10029 December 30, 1977 DECISION ON REVIEW AND DIRECTION OF ELECTION BY CHAIRMAN FANNING AND MEMBERS JENKINS AND MURPHY On July 20, 1977, the Acting Regional Director for Region 5 issued a Decision and Order in the above- entitled proceeding in which he found that Petition- er's requested unit limited to employees in the Em- ployer's Washington, D.C., store was inappropriate. The Regional Director dismissed the petition based upon his finding that the presumptive appropri- ateness of a single-store unit had been rebutted in this case.' Thereafter, in accordance with Section 102.67 of the National Labor Relations Board Rules and Regulations, Series 8, as amended, Petitioner filed a timely request for review of the Regional Director's decision on the grounds, inter alia, that he made find- ings of fact which were clearly erroneous and depart- ed from officially reported precedent. The Employer filed an opposition. By telegraphic order dated September 9, 1977, the National Labor Relations Board granted Petitioner's request for review. Thereafter, the Employer filed a brief in support of the Regional Director's Decision and Order,2 and Petitioner filed a brief in support of its appeal.3 Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the Na- tional Labor Relations Board has delegated its au- thority in this proceeding to a three-member panel. The Board has reviewed the entire record in this proceeding, including the Acting Regional Director's decision, the Employer's opposition to the request for review, and the briefs of the parties on review, and makes the following findings: Petitioner contends that the Acting Regional Di- rector failed to accord appropriate weight to the ef- fective authority and inherent responsibilities of the restaurant's manager and assistant manager, and placed undue weight on the factors of centralized administrative control, uniform fringe benefits, and the interdependence of the area's operations. Peti- tioner also contends that the Acting Regional Direc- tor improperly evaluated the evidence pertaining to such factors as employee interchange and the eco- x Petitioner did not seek any alternative unit. 2 The Employer filed a request for oral argument which is hereby denied, as the record and bnefs adequately present the issues and the positions of the parties. 234 NLRB No. 5 nomic viability of the Washington restaurant to en- gage in meaningful collective bargaining. We find merit in Petitioner's contentions. Petitioner seeks to represent a unit of employees at the Employer's restaurant located in Washington, D.C. The Employer contends that the appropriate unit consists of its employees at the following five restaurants within what is known as the Washington area: Washington, D.C.; Bethesda, Maryland; Ty- son's Corner, Virginia; Columbia, Maryland; and Richmond, Virginia. Alternatively, the Employer takes the position that its four establishments in the Washington area, exclusive of the Richmond, Virgin- ia, restaurant, constitute an appropriate unit. As a third alternative, the Employer contends that a unit of its employees employed at the Tyson's Corner, Bethesda, and Washington, D.C., restaurants is an appropriate unit. The Employer is a San Francisco based corpora- tion which runs a nationwide chain of restaurants. These restaurants are substantially similar in opera- tion and menu. The nationwide chain is broken down into administrative areas such as the Washing- ton area under the supervision of an area manager. From its California headquarters, the Employer at- tempts to maintain a uniform operation and has es- tablished detailed guidelines for the operation of all its restaurants. These guidelines contain standardized procedures covering every aspect of the business, in- cluding the preparation and display of its food prod- ucts, restaurant operations, and labor relations poli- cies. In the event the Employer's guidelines do not cover a particular geographical location, it is the area manager's job to establish the appropriate area guidelines. The Washington area manager maintains his office in Tyson's Corner, Virginia, near the location where the Employer opened its first Washington area res- taurant in 1975. In 1976 the Employer opened restau- rants in Bethesda, Maryland, and in Washington, D.C., about 5 miles apart and about 10 miles from Tyson's Corner. In 1977 the Employer opened anoth- er restaurant in the Washington area, in Columbia, Maryland, about 25 miles from the Tyson's Corner location. A restaurant located in Richmond, Virgin- ia, approximately 100 miles away from the Washing- ton restaurant is also under the supervision of the area manager. The area manager regularly visits each of the restaurants in the area and receives a daily status report from each restaurant. The Employer's policy is to locate restaurants gen- erally within a 100-mile radius of each other. From 3 The Hotel & Restaurant Employees and Bartenders International Union was permitted to file an amieus brief in behalf of Petitioner, which was fully considered. 1 DECISIONS OF NATIONAL LABOR RELATIONS BOARD experience the Employer has found that customers are generally attracted from this radius, and in this way it is able to build upon an existing base of cus- tomers while increasing the demographic area ser- viced by the restaurant. The restaurants in the Wash- ington area were consciously located at a distance from the Tyson's Corner location so that they could make a combined appeal to potential customers by portraying a common decor, menu, means of prepa- ration, approach to customer service, and atmo- sphere, and at the same time not compete with each other. Thus, each restaurant in terms of patronage is economically independent and services its own mar- ket area. The area manager has the authority and the re- sponsibility to assure that each of the Employer's restaurants maintains uniformity and consistency by interpreting existing company policies and establish- ing local policies for any problem not specifically covered by companywide guidelines. The area manager exercises almost total control over the choice of suppliers and purveyors utilized by the Washington and other restaurants in the area and negotiates the supply contracts. The purchasing of the majority of items used by the restaurants is also done centrally by the area manager. All advertising for the Washington and other restaurants in the area is handled areawide on a group basis, and the pay- ment for the advertising is prorated on the basis of the sales from each location. Each restaurant has the same items on the menu and sells these items at prices established by the area manager, not necessar- ily uniformly for each restaurant. Each of the Employer's five restaurants in the area, including the Washington, D.C., restaurant, has a manager, assistant manager, and relief manager. While subject to the national and area guidelines, the individual restaurant managers run their establish- ments on a day-to-day basis and within prescribed limits have authority to act for the Employer. Em- ployee fringe benefits are uniform throughout the restaurant chain and the same job classifications and similar training programs are utilized in every restau- rant. Wages, however, are not necessarily identical for the same job, but vary within a wage range of 5 percent, depending upon location and the labor mar- ket. The manager at the Washington, D.C., restaurant has the authority to hire employees, set wages within the prescribed wage ranges, fix daily schedules, ap- prove vacations, grant limited leaves of absences, grant funeral leave, and give employees cash ad- vances on their salaries. These actions are subject to overview by the area manager and in some cases action is taken only after consultation and advice from the area manager. Because of the nature of the restaurant industry which has mealtime peaks and employs a large num- ber of part-time employees, the manager of each in- dividual restaurant must of necessity have the au- thority to act decisively and independently in the area of direct supervision of employees. A successful restaurant requires constant, immediate, and contin- uous direct supervision over employees to maintain the Employer's standards of service, food prepara- tion, and cleanliness. This is so because the majority of the time the restaurant manager, assistant manag- er, or relief manager is the only representative of the Employer with whom the employees have contact. The Washington restaurant manager has full au- thority to exercise all forms of discipline, up to and including discharge. The manager also has the re- sponsibility for completing evaluations of employees' work performance and making changes in work sta- tus. All action in regard to disciplinary actions are subject to review by the area manager, and employ- ees may appeal the manager's disciplinary actions directly to the area manager. When circumstances permit, the restaurant manager will consult the area manager before discharging an employee or chang- ing an employee's status. The record shows that there has been a consider- able amount of exchange of prepared foods, raw items, and operating supplies among the Washing- ton, D.C., Tyson's Corner, and Bethesda restaurants because of faulty equipment or depleted supplies. There is also occasional interchange of employees among the restaurants. The record discloses that ap- proximately eight permanent and temporary trans- fers between the Washington restaurant and other of the Employer's area restaurants have taken place within the past year. However, it also appears from the record that such employee interchange does not exceed 10 percent of the Washington complement of approximately 80 to 90 employees, and that the Washington restaurant has a permanent and stable work force. In view of the foregoing, we find, contrary to the Acting Regional Director, that the presumptive ap- propriateness of a single-store unit has not been re- butted. While it is clear that the Employer has cen- tralized national and area administrative control over all its restaurants in such matters as decor, menus, food preparation, advertising, purchasing, storage, and maintenance of food and equipment, we find that such centralized administration does not pre- 2 MAGIC PAN. INC. clude meaningful collective bargaining at the Wash- ington, D.C., restaurant.4 Here, in our opinion, the Washington restaurant manager has effective control over the matters which most directly affect the res- taurant's employees. The employees perform their work under the manager's direct supervision, and look to him for guidance. He has the authority to effectively hire, discharge, discipline, adjust wages within a prescribed range, and act in other ways which control their status and working relationships. Moreover, we find that the Washington restaurant has a stable and permanent labor force which is not weakened by occasional permanent or temporary transfers. In addition, it is clear that the Washington restaurant is a separate economic entity, serving its own market area, geographically separated from the Employer's other restaurants. For the above reasons, together with the absence of any bargaining history, and the fact that no labor organization seeks to represent the employees in a broader unit, we find that a unit limited to the em- ployees of the Employer's Washington, D.C., restau- rant is an appropriate unit for collective bargaining.5 4 See. e.g.. Razco. Inc., d 1 a Hit 'n Run Fod Stores, 227 NLRB 1186 (1977); Gimbels Midwest, Inc., 226 NLRB 891 (1976), and cases cited there- in. Accordingly, we find that a question affecting com- merce exists concerning the representation of certain employees of the Employer within the meaning of Sections 9(c) (1) and 2(6) and (7) of the Act; the Employer is engaged in commerce within the mean- ing of the Act and it will effectuate the purposes of the Act to assert jurisdiction herein; the labor organi- zation involved claims to represent certain employees of the Employer; and the following employees of the Employer constitute a unit appropriate for collective bargaining within the meaning of Section 9(b) of the Act: All full-time and regular part-time employees employed at the Employer's Washington, D.C., restaurant, excluding office clerical employees, professional employees, technical employees, guards, and supervisors as defined in the Act. Accordingly, the petition herein shall be, and it hereby is, reinstated, and we shall direct an election in the unit described above. [Direction of Election and Excelsior footnote omit- ted from publication.] 5 See Buehler' Food Markets, Incorporated, 232 NLRB 780 (1977); Lip- mnan', a Division of Dayton-Hudson Corporation, 227 NLRB 1436 (1977). 3