Hershey Foods Corp.

452 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Hershey Foods Corporation and Harold Gibson. H. B. Reese Candy Co., Inc. and Harold Gibson. Bakery and Confectionery Workers' International Union of America, Chocolate Workers Local No. 464 (Hershey Foods Corporation and H. B. Reese Candy Co., Inc.) and Harold Gibson. Cases 4-CA-6353, 4-CA-6354, and 4-CB-2097 January 16, 1974 DECISION AND ORDER BY MEMBERS JENKINS, KENNEDY, AND PENELLO On October 31, 1973, Administrative Law Judge Arthur Leff issued the attached Decision in this proceeding. Thereafter, Respondent Union filed exceptions and a supporting brief, and both the General Counsel and the Respondent Employers filed answering briefs. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the National Labor Relations Board has delegated its authority in this proceeding to a three-member panel. The Board has considered the record and the attached Decision in light of the exceptions and briefs and has decided to affirm the rulings, findings, and conclusions i of the Administrative Law Judge and to adopt his recommended Order. ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Relations Board adopts as its Order the recommend- ed Order of the Administrative Law Judge and hereby orders that Respondents Hershey Foods Corporation and H. B. Reese Candy Co., Inc., Hershey, Pennsylvania, their respective officers, agents, successors, and assigns and Respondent Bakery and Confectionery Workers International Union of America, Chocolate Workers Local No. 464, Hershey, Pennsylvania, its officers, agent and representatives, shall take the action set forth in said recommended Order. i Respondent Union's request for oral argument is hereby denied inasmuch as the record , exceptions, and briefs adequately outline the issues and the positions of the parties DECISION STATEMENT OF THE CASE ARTHUR LEFF, Administrative Law Judge: Upon charges by Harold Gibson filed on March 7, 1973, the General Counsel of the National Labor Relations Board, by the Regional Director of Region 4, on July 30, 1973, issued a consolidated complaint in these cases against the above- named Respondents, herein referred to respectively as "Hershey," "Reese," and "Local No. 462" (or "Union"), alleging that the Respondents had engaged in unfair labor practices proscribed by the National Labor Relations Act, the Respondent Companies within the meaning of Section 8(a)(I), (2), and (3), and the Respondent Union within the meaning of Section 8(b)(l)(A) and (2), in the respects to be stated below The Respondents filed answers denying the commission of unfair labor practices. A hearing was held on September 6, 1973, at Harrisburg, Pennsylvania. At the hearing, the parties entered into a stipulation wherein they agreed to waive the taking of testimony and to submit the issues of this proceeding for disposition on a record composed basically of (a) the pleadings in this proceeding, (b) the transcript, exhibits, and award in an arbitration proceeding conducted on December 7, 1972, by Arbitrator Clair V Duff, and (c) certain additional documents and agreed-upon facts referred to and/or specified in the stipulation. At the hearing, the parties also presented orally their respective contentions in this proceeding. Briefs were filed by the General Counsel, by the Respondent Companies, and by the Respondent Union on October 9, 1973. Upon the entire record in this case, I make the following: FINDINGS OF FACT 1. THE BUSINESS OF THE COMPANIES Hershey Foods Corporation (formerly known as Her- shey Chocolate Company),' is a Delaware corporation, engaged in manufacturing, processing, and selling choco- late and other food products. It maintains a facility at Hershey, Pennsylvania, for the production of chocolate. During the past year it produced at that facility products valued in excess of $50,000, which it shipped directly to customers outside of Pennsylvania. H. B. Reese Candy Co., Inc., a Delaware corporation, and a wholly owned subsidiary of Hershey, is also engaged in manufacturing and processing chocolate and other food products at Hershey, Pennsylvania. During the past year, Reese's sales of products, produced at Hershey, Pennsylva- nia, to customers located outside the State of Pennsylvania, were in excess of $50,000 in value. Hershey and Reese are employers engaged in commerce within the meaning of Section 2(6) and (7) of the Act. Ii. THE LABOR ORGANIZATION INVOLVED Bakery and Confectionery Workers' International Union of America, Chocolate Workers Local No. 464, is a labor organization within the meaning of Section 2(6) and (7) of the Act. i The corporate name was changed in 1968 208 NLRB No. 70 HERSHEY FOODS CORP. Ili. THE UNFAIR LABOR PRACTICES A. The Questions Presented Although framed in unfair labor practice terms, the basic question in this case is whether the Board should honor the award of Arbitrator Clair V. Duff, issued on February 14, 1973, in an arbitration proceeding initiated under the Union's contract with Hershey. The award directed Hershey to recognize the Umon as the representative of the production and maintenance employees at the plant of its subsidiary, Reese, and, subject to certain qualifications therein provided, to apply the Union's contract with Hershey, including the union-security provisions thereof, to the Reese employees. The award was predicated upon the arbitrator's determination that the Reese employees had become accreted to the Hershey collective-bargaining unit, and had thus become subject to the Union's contract with Hershey covering that unit. After issuance of the award, the Union and the Respondent Companies de- clared their intention to apply the Hershey contract to Reese employees as required by the arbitrator's award. The arbitrator's award has not, however, been further imple- mented to date because of the pendency of this proceeding. After the charges in this case were filed, both the Company and the Union Respondents notified the Reese employees, in effect, that the application to them of the Hershey contract would be withheld pending final disposition of this proceedmg. Specifically. the complaint alleges with respect to the Union that the Union violated Section 8(b)(1)(A) and (2) on and after February 13, 1973, by attempting to apply to the Reese employees, although the Union was not their majority-designated representative. its bargaining contract with Hershey, including the union-security provisions thereof. With respect to the Respondent Companies, the complaint alleges that Hershey and Reese violated Section 8(a)(1), (2), and (3) of the Act, by announcing to Reese employees, on or about February 19 and 20, 1973, that Reese would apply to them the Union's contract with Hershey, including the union-security provisions thereof. The Union defends its conduct complained of primarily on the basis of the arbitrator's award, which it asserts should be honored by the Board as a valid and binding determination dispositive of the unfair labor practice issues herein presented. It contends additionally that, aside from the award, application to the facts in this case of the Board's accretion principles requires a conclusion that the Reese employees at the times material herein were part of the Hershey bargaining unit, and therefore lawfully subject to the requirements of the Union's contract with Hershey covering that unit. The Respondent Companies in their joint answer admit the factual allegations of the complaint as it relates to them, but affirmatively allege that the announcements to Reese employees Fttributed to them in the complaint "were made [by them] in good faith and pursuant to an arbitrator's award with no intent to infringe upon the rights 2 The Union also represents the employees of Hershey Estates which conducts various business enterpnses in and about the community of Hershey, Pennsylvania The represented employees of Hershey Estates are divided into a number of separate bargaming units, among them a unit of 453 of employees." The Company Respondents have made it clear, however, that their true position in this case coincides with that of the Charging Party and the General Counsel-"and if that means," their counsel stated at the hearing, "calling down the Labor Board upon us and in effect saying we've committed a violation of the Act, so be it.,, The Respondent Companies join the proponents of the complaint in contending that the arbitrator improperly invaded the Board's province in passing on the question of unit accretion. In any event, they contend further, the arbitrator's award must on the facts of this case be found to be so palpably at variance with the Board's established principles relating to unit accretions as to require its rejection as a valid defense to the alleged unfair labor practices. B. Sequence of Events The Union is now, and has been since 1939, the recognized exclusive bargaining agent of Hershey's em- ployees in a unit composed of all production and maintenance employees and teamsters at the Employer's Hershey, Pennsylvania, plant and branch milking stations.2 The current collective-bargaining agreement between the Union and Hershey for that unit contains a union-security provision requiring employees after 30 days employment to become, and thereafter to remain, members of the Union. Hershey now has approximately 3,300 bargaining unit employees. In July 1963, Hershey acquired the ownership of Reese by purchase of all its corporate stock, and since then has operated Reese as a subsidiary of Hershey. Reese is a candy manufacturer whose primary product, the Reese Peanut Butter Cup, is marketed nationally under that brand name. Prior to its acquisition by Hershey, Reese had been in business as an independent firm for some 40 years. In 1957, it had moved to Hershey, Pennsylvania, where it had constructed a candy manufacturing plant, about 100,000 square feet in size, later enlarged to 200,000 square feet, on an industrial site in Hershey, located about 1.4 miles from the Hershey plant. There, it had looked to Hershey as its sole supplier of the chocolate coating it required for the production of its peanut butter cups. Following its acquisition by Hershey, Reese, as a Hershey subsidiary, continued at its own plant and with its own work force to engage in the manufacture of the same products it had before. Its brand name on such products was retained for marketing purposes. Its operations, however, were integrated with those of Hershey's in certain respects-later to be considered herein in detail-princi- pally in areas related to the purchasing of raw materials and supplies, and to the shipment and marketing of its products, but not, in any major respect, to work processes at the production and maintenance employee level. Reese had about 350 production and maintenance employees when it was acquired by Hershey. That work about 97 employees employed at Hersheypark and Hersheypark Arena, a unit of about 109 employees at Hotel Hershey . one of about 118 employed at Hershey Motor Lodge, and a 376-employee uait in miscellaneous categories 454 DECISIONS OF NATIONAL LABOR RELATIONS BOARD force has since grown to about 970 employees. At the time of the arbitration hearing in December 1972, the Reese plant was being physically expanded to double its present size. It was anticipated that by the end of 1973 the plant would have a complement of approximately 1,300 prod- uction and maintenance employees. The expansion of the plant and work force was designed, in part, to make room for the production by Reese of a chocolate-covered wafer product called Kit Kat. Kit Kat had previously been distributed and marketed, but not produced, by Hershey under a license from its manufacturer, a British company. Hershey has now acquired a license from the British company to produce as well as to distribute that product. It has assigned the production license to Reese under a power of assignment. The Reese employees were not represented by any labor organization when Hershey took over control of that Company. During the Union's.contract negotiations with Hershey that were held in the latter part of 1963, and again in 1966, the Union made no claim that the Reese employees were part of the bargaining unit it represented. Instead, the Union, some time prior to 1966, initiated a campaign to organize the Reese employees into a separate bargaining unit. The campaign culminated in a union demand on Reese. made in early 1966, for recognition as the bargaining agent of Reese's production , maintenance, and shipping employees. Reese expressed doubt of the Union's majority and demanded an election. In the Board- conducted election, held on April 19, 1966, the Reese employees rejected the Union's bid for recognition by a vote of 464 to 246. After losing the 1966 election, the Union took another approach in its effort to gain recognition as bargaining agent for the Reese employees. It made the claim, for the first time, that the Reese employees were covered by its existing collective-bargaining agreement with Hershey. And when that claim was rejected and arbitration of the question was resisted by Hershey, the Union, on Novem- ber 4, 1966, filed suit in the United States district court to compel arbitration. The Union was ultimately unsuccessful in that shit, the court ruling that under the terms of the contract's arbitration provisions, as then written, the dispute was not an arbitrable one. On January 7, 1969, before its suit to compel arbitration was finally concluded,3 the Union filed with the Board an "R" petition, in Case 4-RC-8106, for another election in a bargaining unit composed of Reese's production and maintenance employees, truckdrivers, and receiving and shipping employees .4 About the same time a like petition for an election was filed by Teamsters Local 776 in Case 4-RC-8116. In the Board-conducted election held pur- suant to these petitions on February 20, 1969, the Reese employees again voted against union representation. The tally of ballots showed only 16 votes for the Union, 142 for the Teamsters Local, and 251 for neither labor organiza- tion. On May 27, 1971, the Board, on the petition of 3 The district court denied the Union's motion for judgment on the pleadings on April 13, 1967: a hearing was held on September 1969, and final judgment against the Union was entered on December 30, 1969. 4 The Union advised Hershey when it filed this "R" petition, that it was doing so without prejudice to the position it was taking in the court case Teamsters Local 776, in Case 4-RC-9120, conducted a third representation election among the Reese employees. The Union (Local 464) chose not to appear on the ballot in this election .5 Once again the Reese employees rejected union representation. The tally: 182 votes for, and 381 against representation by the Teamsters Local. In the meantime, the Union in negotiating a collective- bargaining contract with Hershey for the 2-year term beginning January 1, 1970, succeeded in obtaining a broadened grievance-arbitration provision that permitted arbitration of "any dispute [that] shall arise between the Employer and the Union." Fortified by this revised provision, the Union, in August 1971, filed with Hershey a grievance asserting, inter alia, that the operational interre- lationship which had evolved over the course of years between the Hershey and Reese plants had resulted in an accretion of the Reese plant to the Hershey bargaining unit, and that Hershey was now violating the union recognition and union-security provisions of its contract with the Union by failing to apply that contract to the Reese plant. When Hershey rejected this grievance, the Union demanded arbitration. An arbitration hearing was held on December 7, 1972, before Arbitrator Clair V. Duff. At the hearing, Hershey opposed the position of the Union, contending that the grievance was not arbitrable under the contract and that, in any event, the grievance was without validity on its merits. With respect to the merits of the grievance, Hershey insisted that the contract was never intended to cover the Reese operation; that no unit accretion had in fact taken place; and that the Reese employees were entitled under applicable law to be left free to select their bargaining agent. The issues presented to the arbitrator were fully litigated. Although, the Reese employ- ees were not independently represented at the arbitration proceeding, the position of the charging party in this proceeding appears to have been adequately and vigorous- ly presented by Hershey in contesting the Union's position. On February 14, 1973, Arbitrator Duff issued his opinion and award. The arbitrator in his opinion expressed his view of the case before him as one that involved a "problem of Contract interpretation" that was "superimposed and dependent upon the factual question as to whether an accretion had occurred." Accordingly, after rejecting Hershey's contention that the dispute before him was not arbitrable under the contract, the arbitrator, as his opinion reflects, treated the substantive issue before him as one essentially concerned with the question of unit accretion, requiring application of the "guidelines established by NLRB standards." Based upon his analysis of the record facts and on what he stated to be his application of the Board's accretion standards, he concluded in his opinion that an accretion had occurred; that "the employees at the Reese facility properly belong within the same bargaining unit as those at the Hershey Chocolate Plant"; and that it followed from this that the Union's collective-bargaining agreement covering production and maintenance employ- requesting arbitration 5 Prior to that election, the Union filed with the Board a UC petition, seeking clarification of its Hershey bargaining unit to have the Reese employees included in it. but at the hearing in that proceeding requested withdrawal of its petition. HERSHEY FOODS CORP. ees at the Hershey plant also embraced like employees at Hershey's "nearby Reese satehte." Accordingly, the arbitrator in his award sustained the Union's grievance demanding application of its Hershey contract to Reese employees, and directed Hershey to recognize the Union as the representative of all production and maintenance employees at the Reese plant. He qualified his award, however, in the following two respects: (1) Employees of Reese who were on its payroll during the period ending April 30, 1971, (the voting eligibility date of the last Board-conducted election at the Reese plant) were to be exempted from any contractual requirement for membership in the Union, not only during the term of the existing contract, but "so long as a contractual relation- ship" continued to exist between Hershey and the Union. This exemption was to be lost only if any such employee accepted a job at the Hershey plant or voluntarily joined the Union while remaining at Reese.6 (2) The Company was to maintain separate seniority lists for Reese and for Hershey employees with no cross-overjob bumping rights, nor were Hershey and Reese employees to be integrated for job posting and bidding purposes; the employees at one plant might bid for jobs posting in the other plant only if the posted vacancy could not be filled within the plant for which it was posted. On February 19 and 20, 1973, Reese vice president, George D. McClees, announced to the employees at the Reese plant that the Company would apply to them the Hershey contract, including the union-security provisions thereof, in accordance with the terms of the arbitrator's award.? On February 21, 1973, however, McClees in a posted notice to the Reese employees advised them that in the event they filed charges with the Board attacking the legality of the action the Company was taking pursuant to the award, the Hershey contract "will not be applied to this plant unless and until the NLRB states it should be." McClees assured the employees of management's desire to keep the plant nonunion. The charges in this proceeding were filed on March 7, 1973. On the following day, McClees posted a further notice to employees assuring them that as a charge had now been filed, no employee of the Company would lose his job for failure to pay union dues pending the Board's final disposition of the matter. Meanwhile, the Union had also informed the Reese employees of the arbitration award and had indicated that it would expect compliance by them, as well as by 6 The arbitrator in his opinion explained that exemption as follows: The NLRB, and the Federal Courts as well, have zealously protected the rights of employees to freely select their bargaining agents Though we find that by December, 1972, the bargaining unit had experienced a process of expansion or accretion, we are nevertheless cognizant that at a time when perhaps no such accretion had yet occurred, some original employees voted to reject any Union representation Solicitude for that freedom of choice will be demonstrated by an award precluding the application of [the contract's union security provisions to Reese employees who were] eligible to vote during the last representational election, held on May 27, 1971. Although this Union did not participate in that election, we have concluded that Federal Law and equitable principles alike will be scrupulously observed by permitting this special group of employees to retain the choice of declining membership in the Union if that is their pleasure T The complaint attributes to Hershey as well as to Reese responsibility for McClees' announcement The Respondent Companies have admitted 455 management, with the provisions of the award. The Union persisted in that position until July 24, 1973, when, following the General Counsel's reversal on appeal of the Regional Director's refusal to issue a complaint on the charges, the Union also advised the Reese employees, in effect, that it would withhold any further action to apply the Hershey contract to the Reese plant pending Board decision. And this is where the matter now rests. C. Additional Facts Bearing on the Issue of Accretion S At the top management level, Reese's operations are completely controlled by Hershey. Hershey's president is also the president of Reese and all members of Reese's board of directors are also on the Hershey board. In Hershey's overall corporate structure, Reese, although a separate corporate entity with its own books of account, is considered for administrative purpose to be part of Hershey's Chocolate and Confectionery Division .9 That division includes, in addition to the Hershey Chocolate and Reese plants in Hershey, two other candy plants, one in California and the other in Canada.io The Reese plant limits its production to Reese brand name products, acquiring from Hershey all the chocolate ingredients which it needs for its products, just as it did before it became a Hershey subsidiary. With one excep- tion, Hershey manufactures no Reese-brand products at its Hershey chocolate plant.ii The exception is the Reese peanut butter egg. That specific product has never been produced by Reese. Hershey placed it on the market, along with a coconut egg under its own brand name, sometime after it acquired Reese. Both of these products are produced with the same equipment in Hershey's confec- tionery department. Hershey obtains from Reese the peanut butter compound required for the "egg," coats it with its own chocolate, places it in Reese's wrapper, and markets it under Reese's brand name. This product, designed for the Easter season, is produced during 6 months of the year. In certain respects, Reese's operations are now function- ally integrated with those of Hershey. Thus, it appears that all Reese products are now sold, advertised, and marketed, along with Hershey products, by Hershey personnel. The products manufactured at the Reese plant are not normally shipped directly to customers, but are transported by truck to the Hershey Chocolate plant where they are stored and this allegation of the complaint. s the factual findings in this subsection are based on the record made before the arbitrator, as supplemented in small part by the additional facts stipulated in this proceeding Though not presented in the same form and with the same emphasis as in the arbitrator's opinion, the basic evidentiary facts found herein, as distinguished from the conclusions drawn therefrom, are not inconsistent with those stated by the arbitrator. " Hershey also has various other corporate subsidiaries, including several diversified food producers, which it has placed under the administrative direction of another division iu The California plant is a branch plant of Hershey The Canada plant is operated by another corporate subsidiary of Hershey The production and maintenance employees at the California and at the Canada plants are organized into separate bargaining units, represented in each case by a labor organization other than Local 464 ii The Reese peanut butter cup is, however, produced by Hershey at its California branch plant. 456 DECISIONS OF NATIONAL LABOR RELATIONS BOARD later shipped from there to customers. Reese products at times are sold in variety packages that also include Hershey products: in such instances the packaging into the variety containers is done at the Hershey plant. Hershey also does most of the purchasing for Reese. Reese limits its direct purchases to peanuts, some of which it also buys for Hershey. All other raw materials used by Reese for the production of its products are handled through the Hershey purchasing department. In addition, Hershey provides Reese with various other services, some of which it also furnishes its other corporate subsidiaries. Included are data processing services; laboratory services for research and the development of new production tech- niques; quality control services; engineering services for the design and installation of machinery; and the like. Hershey computer equipment is used to prepare the paychecks of Reese employees: these, however, are drawn in Reese's name. The cost of all materials, equipment, and supplies purchased by Hershey for Reese, as well as the value of all selling, shipping, and administrative services which Hershey furnishes Reese, are charged to Reese, Reese maintains separate books of account, which are maintained along with Hershey's overall books of account at Hershey's general offices. Such operational integration as has taken place has not, however, led to any intermingling of job functions at the production and maintenance employee level, nor has it otherwise destroyed the identity of the Reese employees at that level as a self-contained homogeneous group, separate and distinct from the Hershey bargaining unit employees. The work of the Reese employees, now no less than during the preacquisition period, continues to be confined to the production of specific candy products that are different, though of a comparable class, from those produced at the Hershey plant. The work of the Reese employees is still performed in a plant that is physically separated from Hershey's plant by a distance of over a mile. Each plant has its own separate seniority lists for tenure and promotional purpose, and also its separate job posting and bidding systems. Each plant has its own work rules which, although not substantially dissimilar in content, are separately published. The production and maintenance employees at each plant have entirely separate supervision up through the plant manager level. Each plant does its own hiring through its own separate personnel office.12 Among production employees, there has never been any interchange between those employed at the Hershey plant and those employed at the Reese plant. It does appear that some of Reese's "tradesmen" (i.e., machinists, electricians, mechanics) were trained, apparently after being hired by Reese, at the Hershey plant, the cost of such training having been charged to Reese. But there is nothing in this record to indicate that these "tradesmen," or any other maintenance employees of Reese, have ever been assigned to work tasks at the Hershey plant. The record does show that employees of Hershey's sanitation department have 12 Although Reese uses Hershey physicians for the medical examinations of newly hired employees, the physicians perform their examinations at the medical office in Reese's plant, and Reese is charged in the corporate books for the use of such physicians' services. 13 Reese has no employees of its own who perform their work. Hershey employees who do this work spend less than a month a year at the Reese been sent to Reese to sand floors and to fumigate that plant;13 that there have been occasions when bins or related equipment have been built at Hershey and sent to Reese for use there, and that there may also have been some infrequent occasions when Hershey carpenters were assigned to the Reese plant for brief periods to build tables or to repair floors. However, except for the floor sanding and fumigation work by sanitation department employees, which appears to be done on a regular basis, the use of Hershey employees for Reese maintenance work appears to be an uncommon practice. The record does not reveal the extent to which the specific job tasks performed by Reese employees parallel those performed by Hershey's, or call for the exercise of the same skills. It is reasonable to assume, however, that they are basically similar, as the arbitrator found. It is also reasonable to assume, since the same Hershey management representative developed the job evaluations for both the Hershey and the Reese employees, that where job classifications at the two plants are similar, so too are the pay rates. With respect to wages and benefits, management has pursued a policy of conformity at the two plants. The same retirement and group insurance plans, with the same level of benefits, are applicable at both plants.14 Vacation arrangements at both plants are also virtually identical. As a matter of practice, whenever Hershey bargaining unit employees have obtained any wage or fringe benefit increases as a result of bargaining by the Union, manage- ment has simultaneously-unless prevented or delayed by wage control restrictions-granted the same increases to Reese production and maintenance employees. The Reese employees have thus been de facto beneficiaries of the Union's bargaining for the unit in which the Union now seeks to accrete them. The free ride they have thus been able to obtain may well account for the reluctance of at least some of them to join the Union; understandably this has been a cause of union resentment. D. Analysis and Concluding Findings The ultimate unfair labor practice issue to be decided is whether the Respondents violated the Act by extending the Hershey union collective-bargaining agreement, including the union-security provisions thereof, to cover Reese employees. The law is clear that unless unit accretion is established, an employer and a union may not, without the majority consent of the employees to he added thereto, expand an established bargaining unit to take in a new or added facility. See, e.g., Combustion Engineering, Inc., 195 NLRB 909; Melbet Jewelry, 180 NLRB 107. As the Reese employees had not separately designated the Union as their majority representative , the disposition of the unfair labor practice allegations of this complaint must turn on whether or not a finding is warranted that these employees prior to the contract extension had become merged plant 1/ It is noted, however. that the master policies applicable to the group insurance plan, as well as the trust fund for the retirement plan, are not confined in their coverage to Hershey 's bargaining unit employees and Reese's production and maintenance employees, but extend as well to all employees of Hershey and its various subsidiaries HERSHEY FOODS CORP. through accretion in the Hershey collective-bargaining unit. A preliminary question is raised by the Union's conten- tion that the Board should apply its policy favoring arbitration, as expressed in Collyer15 and Spielberg,16 and like cases, and honor the arbitration opinion and award of Arbitrator Duff as a final and binding determination of that issue. The short answer to that contention is that to do so would be contrary to controlling Board precedent. The Board has already declared itself in a number of cases on that subject, holding that where union accretion is in issue, it will not eschew its statutory obligation to decide that issue itself. The Board's most recent ruling on that precise point is to be found in Combustion Engineering, supra, a case decided after Collyer. In that case, the alleged unfair labor practices were virtually identical to those alleged against the Respondent Companies in the case at hand. There, too, the respondent contended that the Board should give effect to Collyer and Spielberg by honoring the decision of an arbitrator who in his award had ruled that the employees of an employer's newly opened plant were covered by the same collective-bargaining agreement that governed the operations of its older plant. The arbitrator in that case, like the arbitrator in the instant case, had grounded his determination of contract coverage largely on his finding that there was a unit accretion. The Administra- tive Law Judge rejected the Collyer-Spielberg contention, and, contrary to the arbitrator and on the basis of his own consideration and evaluation of the evidence, held that in fact there had been no accretion . The Board affirmed his holding. Addressing itself to the contention that the Board should respect the arbitrator's award, the Board stated: With respect to the award of the arbitrator, the question of whether the existing contract was intended, or can be construed, to cover those employees of [the newly acquired plant] who were hired after its effective date is a question for the arbitrator, but his conclusion on that issue does not govern or guide the Board in its disposition of the issue presented here . For, though the arbitrator answered the question in the affirmative, it is nevertheless the obligation of the Board to determine whether the employees at [the newly acquired plant] constituted an accretion to the existing unit. On the facts before us, we agree with the Trial Examiner that such a finding is not warranted here. To the same general effect, although in representation case contexts, are the holdings of the Board in Pullman Industries, Inc., 159 NLRB 580; Beacon Photo Service, Inc., 163 NLRB 706; Textron, 173 NLRB 129; and Woolwich, Inc., 185 NLRB 783. In Beacon, where the Board in a contract-bar context declined to await a then pending arbitration on the issue of accretion, holding that the determination of that issue was not one within the competence of an arbitrator , the Board stated: There are two issues presented in this case: (1) whether the multi-employer collective-bargaining contract re- 457 lied upon by the Union was intended to cover the subsequently established-plant , and (2) whether, assuming the first question is answered in the affirma- tive, the contracting parties could so extend the contract to the [subsequently established plant] without the consent of the latter's employees . The first question can be answered by the arbitrator, but the second question is only for the Board. Similar statements appear in Textron and Woolwich. Raley's Inc. d/b/a Raley's Supermarkets, 143 NLRB 256, upon which Respondent largely relies, may not properly be viewed as precedent to the contrary. The precise issue in that case was whether a retail stores multiemployer contract, asserted as a contract bar, was intended to include janitors and bottle workers who were not in the Employer's employ at the time the contract was made. As a careful reading of that decision discloses , the Board treated the issue before it as involving only a question of contract interpretation . The only reference in the decision to accretion appears in the Board's closing comment that it could perceive nothing in the arbitrator's decision relating to contract coverage that was opposed to statutory policy, since in similar circumstances the Board had itself held like employees to be an accretion to the contract unit and therefore covered by the contract . In cases decided after Raley's, the Board expressly limited the scope of that decision to situations where the sole and dispositive issue before the Board is one of contract interpretation. See Hotel Employers Association of San Francisco, 159 NLRB 143, 147-148; Holbrook Knitwear, Inc., 169 NLRB 768, 771. It is further noted that Raley's preceded the line of cases cited above in which the Board has declined to defer to arbitral awards where accretion is in issue. The later cases must thus be deemed to supersede Raley's even if regarded as inconsistent therewith. As prevailing Board law does not warrant deferral to the arbitrator's award on this issue, the Respondent Union's claim of accretion must be examined on its merits. For the reasons that will appear below, I find that claim to be without merit. To support its accretion claim, the Union relies, as did the arbitrator, essentially upon the following considera- tions: (1) the geographical proximity of the Hershey and Reese plants and the similarity in the products they produce; (2) the similarity in the type of work performed and employee skills required ; (3) the uniformity in wages paid and benefits accorded employees at both plants, as well as the practice of putting into effect simultaneously for Reese employees increased wages and benefits negotiated by the Union for Hershey employees; (4) the common top- level managerial control over the operations of both plants, and the centralized administration that exists with respect to such functions as purchasing, advertising, sales, pro- duction planning, research, engineering services, bookeep- ing, and accounting; (5) the functional integration of plant operations to the degree evidenced by Reese's use of Hershey chocolate, Hershey's storage and shipment of Reese's products, Hershey's production of the Reese 15 Collyerlnnulated Wire, 192 NLRB 837. 16 Spielberg Manufacturing Co, 112 NLRB 1080. 458 DECISIONS OF NATIONAL LABOR RELATIONS BOARD peanut butter egg with the use of peanut butter produced by Reese, and Hershey's packaging of Reese butter cups when they are included in variety packages: and (6) Hershey's action in placing the Kit Kat production operation in the Reese facility.i7 The foregoing considerations appear to be material mainly to the question of whether a combined unit of Hershey and Reese employees would be appropriate for the purposes of collective bargaining: The question of the appropriateness of the enlarged unit that will result from an accretion is, of course, always involved where accretion is in issue. But an affirmative answer given to that question cannot dispose entirely of the issue. Also involved is whether a finding of accretion would result in an undue and reasonably avoidable impairment of employees' freedom of choice. Relevant to this is the separate unit appropriateness of the employee group that would be added to the established unit without a voice in the matter if accretion is sanctioned. It is to a consideration of this aspect of the case that I now turn. There can of course be no doubt whatever that the Reese production and maintenance employees, though unorgan- ized, formed an appropriate bargaining unit prior to Hershey's acquisition of Reese. After the acquisition, Hershey continued to maintain Reese as a separate corporate entity, with its plant organized as an autono- mous operation, having its own personnel office, separately published work rules, etc. And, as found above, Reese's production and maintenance employees retained their previous identity as a self-contained homogeneous group of employees, separate and distinct from the Hershey bargaining unit employees. The Reese employees, now as before, perform their work in a separate plant, have entirely separate supervision through the plant manage- ment level, and have a separate seniority system. There has never been any transfer or interchange of production employees between the Hershey and Reese plants. Nor, with the relatively insignificant exceptions that have previously been noted, has there been any involving maintenance employees. It thus clearly appears that the Reese production and maintenance employees constituted an appropriate bar- gaining unit at the times material herein, even though a combined unit of Hershey and Reese employees might also have been appropriate. Indeed, the Union acknowledged as much in the two representation petitions it filed with the Board seeking representation of the Reese employees on a separate unit basis. It was not until after the Union lost the first of the two elections in which it participated that the Union made the claim for the first time that the Reese employees came within the scope of its Hershey contract.i8 'r The Union in its brief stresses the last item as the "most revealing" factor indicating accretion Why this is so evades me It is clear from the record that Kit Kai was never produced at the Hershey plant The placement of its production in the Reese plant will not involve the transfer of any Hershey employees to the Reese plant nor reduce the work performed at Hershey 1N Although the Union now asserts that the accretion resulted from a gradual "evolution" which "had not been culminated by the date of the last election." held in 1969, there is nothing in the record to show any further "evolution" after that date, except for the assignment to Reese of the Kit Kat operation , discussed above. 19 Respondents' reliance upon an arbitrators award does not , of course. No such claim had, however, been made by the Union during the negotiations for the two contracts covering the Hershey bargaining unit that were negotiated between the date of acquisition and the date of the first election. It is well settled that the doctnne of accretion will not be applied where the employee group sought to be added to an established bargaining unit is so composed that it may separately constitute an appropriate bargaining unit. N.L.R.B. v. Masters-Lake Success, Inc., 287 F.2d 35 (C.A. 2, 1961); Smith Management Corp., 197 NLRB 1156; Melbet Jewelry Co., supra, at 109. Nor will it be applied by the Board in situations where the employee group, though in existence at the time, was excluded from previously negotiated collective-bargaining contracts covering the bargaining unit to which its accretion is claimed. Gould- National Batteries, Inc., 157 NLRB 679, 681. As a prerequisite to the addition of any such employee group to an established unit, the law requires the majority consent of those to be added, expressed either in a self-determina- tion election or by some other lawfully acceptable method. Ibid. As no such majority consent was given by the Reese employees, there was no lawful justification for extending the Hershey contract to the Reese plant under the guise of accretion. The attempt to impose on the 1,000 Reese employees a union they did not select is in this case particularly offensive to statutory policies because the Reese employees by overwhelming margins had twice rejected representation by the Union, and in a third election had again indicated a desire to remain unrepre- sented by rebuffing another labor organization's bid for recognition. It follows, and I find, as alleged in the complaint, that the Union, by attempting to apply its collective-bargaining contract with Hershey, including the union-security provi- sions thereof to Reese plant employees, violated Section 8(b)(1)(A) and (2) of the Act, and that the Respondent Companies, by announcing to employees of Reese that Reese would apply the Hershey contract to them, violated Section 8(a)(1), (2), and (3) of the Act. See Combustion Engineering, supra; Melbet Jewelry Co., supra; N.L.R.B. v. Martins Lake Success, Inc., supra. 19 CONCLUSIONS OF LAW 1. By attempting to apply its collective-bargaining contract with Hershey, including the union-security provi- sions thereof, to employees of Reese, the Respondent Union violated Section 8(b)(1)(A) and (2) of the Act. 2. By announcing to employees of Reese that Reese would apply the Union's collective-bargaining agreement with Hershey, including the union-security provisions provide a defense for their unlawful conduct. Combwrron Engineering, supra Nor are Respondents' unfair labor practices excused by their announcements to Reese employees after the charges were filed that the contract would not be applied pending disposition of this proceeding See Combustion Engineering, supra, pp. 910,913 Though I have decided this case on a different basis, it may be appropriate to note here that had I considered the Spielberg doctrine otherwise applicable to this case. I would have rejected the arbitrator's award as a defense for failing to meet one of the Spielberg'r tests, i.e , that an award. if it is to be honored by the Board, must "not [bel clearly repugnant to the purposes and policies of the Act " HERSHEY FOODS CORP. thereof, to employees of Reese. the Respondent Companies violated Section 8(a)(1), (2), and (3) of the Act. 3. The aforesaid unfair labor practices are unfair labor practices affecting commerce within the meaning of Section 2(6) and (7) of the Act. THE REMEDY Having found that the Respondents have engaged in certain unfair labor practices, I shall recommend that they be ordered to cease and desist therefrom, and from like and related unfair labor practices. and that they take certain affirmative action found necessary to effectuate the policies of the Act. Upon the foregoing findings of fact, conclusions of law, and the entire record, and pursuant to Section 10(c) of the Act, I hereby issue the following recommended: ORDER 20 A. Respondents Hershey Foods Corporation and H. B. Reese Candy Co., Inc., their respective officers, agents, successors, and assigns, shall: 1. Cease and desist from: (a) Requiring as a condition of employment that employees at the Hershey, Pennsylvania, plant of Respon- dent Reese become or remain members of Respondent Union pursuant to the collective-bargaining agreement between Respondent Union and Respondent Hershey, or otherwise extending or applying any of the provisions of said contract, or any modification, extension or renewal thereof, to such Reese employees, unless and until the Union has been certified by the Board as the representative of such employees in a bargaining unit covered by such contract. (b) In any like or related manner, interfering with, restraining, or coercing its employees in the exercise of their rights under Section 7 of the Act. 2. Take the following affirmative action, which is deemed necessary to effectuate the policies of the Act: (a) Post at the Hershey, Pennsylvania, plant of H. B. Reese Candy Co., inc., copies of the attached notice marked "Appendix A."2221 Copies of said notice, on forms to be provided by the Regional Director of Region 4, shall, after being duly signed by its representative, be posted by it immediately upon receipt thereof, and maintained by it for a period of at least 60 consecutive days thereafter, in conspicuous places, including all places where notices to employees are usually posted. Reasonable steps shall be taken by them to insure that such notices are not altered, defaced, or coverer by any other material. (b) Notify the Regional Director for Region 4, in writing, within 20 days from date of the receipt of this Order, what steps they have taken to comply herewith. B. Respondent Bakery and Confectionery Workers International Union of America, Chocolate Workers Local No. 464, its officers, representatives, agents, and assigns, shall: 1. Cease and desist from: (a) Extending or applying, or causing or attempting to cause the Respondent Companies, or either of them, to extend or apply, to the employees at the Hershey, 459 Pennsylvania. plant of Respondent Reese, any of the provisions, including the union-security provisions, of the collective-bargaining contract between the Union and Respondent Hershey, or any renewal, modification, or extension thereof, unless and until Respondent Union has been certified by the Board as the representative of such employees in a bargaining unit covered by said contract. (b) In any like or related manner, restraining or coercing Reese employees in the exercise of their rights under Section 7 of the Act. 2. Take the following affirmative action, which is deemed necessary to effectuate the policies of the Act: (a) Post in conspicuous places at its business office, meeting halls, and places where notices to its members are customarily posted, copies of the attached notice marked "Appendix B."22 Copies of said notice to be furnished by the Regional Director for Region 4, shall, after being duly signed by an authorized representative of the Respondent Union, be posted immediately upon receipt thereof, and be maintained by it for a period of 60 days thereafter. Reasonable steps shall be taken by Respondent Union to insure that said notices are not altered, defaced, or covered by any material. (b) Furnish to the Regional Director signed copies of the aforesaid notice for posting by Respondent Companies at the Reese plant where notices to employees are customarily posted. Copies of the said notice to be furnished by the Regional Director, shall, after being signed by Respondent Union as indicated, be forthwith returned to the Regional Director for posting by him. (c) Notify the Regional Director, in writing, within 10 days from the date of this Decision, what steps Respondent Union has taken to comply herewith. 20 In the event no exceptions are filed as provided by Sec 102.46 of the Rules and Regulations of the National Labor Relations Board, the findings. conclusions, and recommended Order herein shall, as provided in Sec. 102 48 of the Rules and Regulations . be adopted by the Board and become its findings, conclusions, and order, and all objections thereto shall be deemed waived for all purposes. 21 In the event that the Board's Order is enforced by a Judgment of a United States Court of Appeals. the words in the notice reading "Posted by Order of the National Labor Relations Board" shall he changed to read "Posted Pursuant to a Judgment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board." 22 See fn. 21. supra APPENDIX A NOTICE To EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government WE WILL NOT require as a condition of employment that any of the employees of H. B. Reese Candy Co., Inc., become or remain members of Bakery and Confectionery Workers International Union of Ameri- ca, Chocolate Workers, Local No. 464, pursuant to the collective-bargaining contract between that Union and Hershey Foods Corporation. WE WILL NOT otherwise extend or apply any of the provisions of the aforesaid contract, or any extension, modification, or renewal thereof, to the Reese employ- 460 DECISIONS OF NATIONAL LABOR RELATIONS BOARD ees, unless and until the Union has been certified by the Board as the representative of such employees in a bargaining unit covered by said contract. WE WILL NOT in any like or related manner interfere with the rights of our employees guaranteed by Section 7 of the Act. H. B. REESE CANDY COMPANY (Employer) Dated By (Representative) (Title) HERSHEY FOODS CORPORATION (Employer) Dated By (Representative) (Title) This is an official notice and must not be defaced by anyone. 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. Any questions concern- ing this notice or compliance with its provisions may be directed to the Board's Office, Suite 4400 William J. Green, Jr., Federal Building, 600 Arch Street, Philadelphia, Pennsylvania 19106, Telephone 215-597-7601. APPENDIX B NOTICE To EMPLOYEES AND MEMBERS POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government WE WILL NOT extend or apply, or cause or attempt to cause H . B. Reese Candy Co., Inc . or Hershey Foods Corporation to extend or apply, to Reese employees any of the provisions, including the union secunty provisions, of our collective-bargaining contract with Hershey Foods Corp., or any renewal , modification or extension of that contract , unless and until we have been certified by the Board as the bargaining represent- ative of the Reese employees in a bargaining unit covered by said contract. WE WILL NOT in any like or related manner restrain or coerce employees of H. B . Reese Candy Co. in their right to self-organization , to form, join, or to refrain from forming or joining unions, and to bargain collectively through representatives of their own choos- ing. Dated By BAKERY AND CONFECTIONERY WORKERS INTERNATIONAL UNION OF AMERICA, CHOCOLATE WORKERS LOCAL No. 464 (Labor Organization) (Representative) (Title) This is an official notice and must not be defaced by anyone. 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 . Any questions concern- ing this notice or compliance with its provisions may be directed to the Board's Office, Suite 4400 William J. Green, Jr. Federal Building, 600 Arch Street, Philadelphia, Pennsylvania 19106, Telephone 215-597-7601.