Morse Shoe, Inc.

MORSE SHOE, INC. Morse Shoe, Inc. and Retail Clerks Union Local 324, Retail Clerks International Association, AFL-CIO. Case 21-CA-13855 December 17, 1976 DECISION AND ORDER BY CHAIRMAN MURPHY AND MEMBERS JENKINS AND WALTHER Upon a charge filed on July 30, 1975, as amended on October 10, 1975, by Retail Clerks Union Local 324, Retail Clerks International Association, AFL- CIO, herein called the Union, and duly served on Morse Shoe, Inc., herein called the Respondent, the General Counsel of the National Labor Relations Board, by the Regional Director for Region 21, issued a complaint and- notice of hearing on October 22, 1975, against Respondent, alleging that Respondent had engaged in and was engaging in unfair labor practices affecting commerce within the meaning of Section 8(a)(5) and (1) and Section 2(6) and (7) of the National Labor Relations Act, as amended. Copies of the charges and complaint and notice of hearing before an Administrative Law Judge were duly served on the parties to this proceeding. The General Counsel alleged, :inter alia, that: (1) at all times material herein, the Union has been' the representative for the purposes of collective bargain- ing of a majority of the employees in an appropriate unit and is the exclusive representative `of all the employees in the unit for the purposes of collective bargaining with respect to rates of pay, wages, hours of employment, and other terms and conditions of employment; and that a collective-bargaining agree- ment between the Union and the Respondent cover- ing the terms: and conditions of employment of the unit employees was in ,;full force and effect from October 2, 1973, to September 30, 1975; and(2) Respondent, since on or about March 24, 1975, has violated Section 8(a)(5) and (1) of the Act, as amended, by withdrawing recognition from the Union and continuing thereafter to withhold recogni- tion, by refusing to recognize- the Union as the exclusive representative for purposes of collective bargaining of its employees in the appropriate unit, and by repudiating and failing to abide by the terms and conditions of employment as provided in the collective-bargaining agreement. On November 7, 1975, Respondent filed its answer to the complaint denying the commission of any unfair labor practice. The parties executed a stipulation on May 10 and 14, 1976, in which they agreed to certain facts, waived a hearing before an Administrative Law Judge and 39-1 the issuance of an Administrative Law Judge's Decision, and submitted the case to the National Labor Relations Board for findings of fact, conclu- sions of law, and an order. based upon a record consisting of the charges, the complaint and notice of hearing, the answer, and the stipulation of facts. On June 15, 1976, the Board approved the stipula- tion of the parties and ordered the proceeding transferred to the Board, granting permission and time for the filing of briefs. Thereafter, the General Counsel, the Charging Party, and Respondent filed 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. Upon the basis of the stipulation, the briefs, and the entire record in this proceeding, the Board makes the following findings: I. BUSINESS OF EMPLOYER Respondent is engaged in the manufacture and retail sale of shoes and operates 10 leased shoe departments in stores in Southern California, owned and operated by Vernando, -Inc., d/b/a Two Guys, herein called Two Guys. Since at least 1973, Respon- dent has operated a leased shoe department in the Two Guys store located at 9882 Adams Street, Huntington Beach, California. Respondent derives gross revenues in excess of $500,000 each year and annually - receives goods and products valued in excess of $50,000 directly from suppliers located outside the State of California. - The parties stipulated, and we find, that the Respondent is engaged in commerce within the meaning of Section 2(6) and (7) of the Act, and we find that it will effectuate, the purposes of the Act to assert jurisdiction herein.' II. THE UNFAIR LABOR PRACTICES A. Facts Two Guys and the Union entered into a collective- bargaining - agreement, effective from October 1, 1970, through December 31, 1974. In article I of the contract, Two Guys "recognizes Union as the sole collective bargaining agency . . . for all employees ... including leased departments, employed by Employer ...." at its Huntington Beach store. The agreement further states in article XI, section 7: If Employer has a shoe department -,operated by a licensee, concessionaire, or any party other than Employer, and if such department normally i Siemons Mailing Service, 122 NLRB 81 (1958). 227 NLRB No. 53 392 DECISIONS OF NATIONAL LABOR RELATIONS BOARD employs not more than 4 employees covered by this Agreement, such employees shall not be covered by this Agreement, but under Union's so- called retail shoe industry agreement, including, but not limited to, the hourly wage rates and Employer contributions to the various benefit funds; but as to-all other' conditions of employ- ment that are common to employees generally at the store, this Agreement supersedes any inconsis- tent provisions of said shoe agreement. According to the contract, the Employer was under an obligation to "exert its best efforts" to insure that any licensee operating the shoe department would execute. and abide by the terms of the applicable union-industry agreement. Karl's Shoe Stores, Ltd., herein called Karl's, had formerly-operated a shoe department in the Hunting- ton Beach store pursuant to a lease agreement. with Two Guys. In accordance with the contract between Two Guys and the Union set forth above, Karl's executed an agreement with the Union, effective October 1, 1972, `through September 30, 1975, incor- porating all the provisions of the, retail shoe agree- ment.2 However, on or about October 2, 1973, Respondent 'commenced operating the shoe depart- ment at the aforesaid store, also pursuant to a lease agreement with Two Guys. The stipulated record shows that Respondent, a ' completely distinct and separate business entity from Karl's,' did not assume the lease agreement of its predecessor but entered into its own lease directly with Two Guys: Moreover, none of the employees of Karl's became employees of Respondent, which hired its own work force upon taking over the shoe department.3 To comply with the' terms of the Two Guys' agreement, Respondent immediately entered into a letter of understanding with the Union, which incor- porated all the relevant provisions contained in the agreement between Karl's and the Union. There was no election of representatives by the employees of Respondent's leased shoe department, nor was the Union required to prove its majority status through authorization cards. Thus, as the parties stipulated, the Union became the representative of Respondent's leased shoe department employees solely by reason of the provisions in the collective-bargaining agreement 2 According to the parties' stipulation of facts, the retail shoe agreement was effective from October 1, 1972, through November 30, 1975. However, the exhibits contained in the record clearly show that both the retail shoe agreement and the contract executed by Karl's and the Union, which incorporated all the provisions of the retail shoe agreement, were effective from October 1, 1972, through September 30, 1975 Art h, sec 'A, par. I of the collective-bargaining agreement between Karl's and the Union reads as follows 1. The Employer agrees to recognize and hereby does recognize the Union as the sole and exclusive collective bargaining agent for the unit consisting of all employees, excluding one overall store manager and all between Two Guys and the Union. Thereafter, on April 29, 1974, the Union requested that Two Guys implement the provisions of the contract by directing Respondent to sign an assent agreement. After being forwarded this information by Two Guys, Respon- dent executed the assent agreement on May 28, 1974, in which it reaffirmed the contract with the Union and specifically acknowledged an obligation to con- tribute to various trust funds of the Union. An employee of Two Guys filed a petition on October 22, 1974, to decertify the Union as the bargaining representative for Two Guys' employees. Subsequently, the parties entered into a Stipulation for Certification Upon-Consent Election Agreement, providing for an election in a unit of all-Two Guys employees, excepting certain categories not relevant herein, at the instant store and another in Garden Grove; California. After an election was held on March 14 and 24, 1975, the Regional Director for Region 21 issued a Certification of Results of Election, wherein he specified that a majority of the valid ballots had not been cast for any participating labor organization. However, Respondent was nei- ther apprised of the pendency of the decertification proceedings nor made a party to such proceedings. Accordingly, the Respondent's employees at the Huntington Beach ' store did ' not participate in the election in any manner. The record herein also reveals that Respondent made fringe benefit payments until March 24, 1975, on behalf of employees in the leased shoe depart- ment, to certain health and welfare benefit trust funds of the Union. But since that date 'and continuing to the present, Respondent has withheld these ' fringe benefit payments, Furthermore, Store Manager Char- lene McCormick told agents of the, Union, on or about April 15, 1975, that Respondent no longer had a contract with the Union. On July 21, 1975, Respondent filed a petition for a representation election among the shoe department employees at the Two Guys store here involved. In support of said petition, Respondent submitted objective evidence to, the Regional Director, which allegedly demonstrated that the Union did not represent a majority of its employees.4 Thereafter, the manager trainees in each store in the Employer's present establishments within the Union's present geographical jurisdiction with respect' to rates of pay, wages, hours, and other conditions of employment. 3 According to the record, Respondent has normally employed a complement of two employees since commencing operations at the Hunting- ton Beach store' Therefore, as set forth in art. Xl; sec . 7 of the contract between Two -Guys and the Union, Respondent and its employees came under the auspices of the retail shoe agreement. 4 This evidence consisted of a signed affidavit by McCormick. According to this document, one of the two employees in the shoe department had said that he no longer wanted to be represented by the Union MORSE SHOE, INC. Regional Director dismissed the representation peti- tion after issuing the complaint in this proceeding. B. The Contentions of the Parties The General Counsel and the Union assert that Respondent's challenges to the appropriateness of the unit and the legality of its initial recognition` of the Union are, at this . point in time, untimely under Section 10(b) of the Act. In any event, they contend that a separate unit of Respondent's-shoe department employees is an appropriate unit, citing Esgro Valley, Inc., 169 NLRB 76 (1968), and Bargain Town, U.S.A. of Puerto Rico, Inc., 162 NLRB 1145 (1967). They -further argue that the Respondent cannot defend the 8(a)(5) allegation on the grounds that its obligation to bargain with the Union ceased upon the expiration of the -master agreement between Two Guys and the Union or the decertification -of the unit set forth therein. According to the contractual language, the General Counsel and the .Union contend, the unit covering employees of Respondent is defined in the retail shoe agreement, not in the master agreement referred to above, and, therefore, Respondent's employees constitute a separate unit from that described in the agreement with Two Guys. -For these reasons, the. General Counsel and the Union maintain that Respondent violated and is violating Section 8(a)(5) and (1) of the Act by withdrawing recognition of the Union and by repudi- ating the terms and conditions of employment as provided in the collective-bargaining agreement. Respondent contends that the only basis for the Union's representation of its employees was the master agreement executed by Two Guys, which covered the entire store. Thus, Respondent asserts that inasmuch as any and all of its obligations under the'retail shoe agreement emanated solely from Two Guys' obligations, it could not have refused to bargain with the Union in violation of the Act after the Union was decertified by the overall unit. Furthermore, -according to Respondent, the indus- try agreement between the lessee and the Union merely supplemented the contract between two Guys and the Union, which had expressly provided that the unit include "all employees" in the store, "including leased departments." In this connection, Respondent notes that under article XI, section 7, as set forth above, the master agreement superseded any inconsistent provisions -of the shoe agreement. Since the shoe department was not a separate, appropriate unit under the master agreement, Respondent there- fore argues that the application of the aforesaid provision resulted in the termination of its assent agreement with the Union on the expiration date of 393 Two Guys' contract; i.e., before recognition was withdrawn. - Assuming arguendo that the Two Guys' agreement did not designate an overall, ,storewideunit, Respon- dent further contends the stipulated 'facts clearly establish that such is the only appropriate unit under Thriftown, Inc., d/b/a Value Village, et al., 161 NLRB 603 (1966), and Jewel Tea Co. -Inc. and Its Operating Divisions, 162 NLRB 508 (1966). Finally, Respondent asserts that it should not be required to bargain with the Union because there- is "ho -presumption of continuing majority status where the Union initially obtained its representative status without ever dem- onstrating majority support'. In view of the foregoing, Respondent submits that the Board should dismiss the complaint in its entirety and reinstate its representation petition filed on July 21, 1975. C. Discussion and Conclusion - We do not agree with Respondent's argument? that the election which decertified the Union as the bargaining-, representative of Two Guys employees also terminated Respondent's obligation to bargain with the, Union. According to the stipulated record, the unit that participated in that election included only "All employees of the Employer [Two. Guys ] employed at its retail operations located at .. . Huntington, Beach, California, and . . . Garden Grove, California .... "'T`he decertification petition made no mention with respect to the eligibility of leased department employees, nor did they vote in the election. Therefore, inasmuch as Respondent's em- ployees were not listed on the voter eligibility list and did not vote in the election held on March 14, 1975, we find that the election referred to above did not decertify the Union as the collective-bargaining representative for employees in the shoe department operated by Respondent, Nor do we agree with Respondent's further asser- tion that its contract with the Union terminated on the expiration date 'of the master ' contract between Two Guys and the Union because its shoe employees were part of a storewide unit. The record shows that the 'separate contract originally executed by Karl's and the Union, and later assumed in the assent agreement by Respondent, incorporated ' all the relevant provisions of the retail shoe agreement. As set forth in footnote 2 above, the recognition clause in Respondent's agreement defined the bargaining- unit as encompassing all nonsupervisory employees em- ployed by Respondent in its shoe department. Accordingly, we conclude that Respondent recog- nized the Union as the bargaining. representative of Respondent's employees in a separate, distinct unit 394 DECISIONS OF NATIONAL LABOR RELATIONS BOARD apart from the overall' unit of Two Guys' employees defined by the master agreement. Hence, inasmuch as its contract with the Union by its terms did not expire until the following September, the Respondent could not have lawfully withdrawn recognition of the Union on March 24, 1975.. With respect _ to the other contentions made by Respondent, the Board,. has held, in light of the Supreme Court's , decision in Bryan Manufacturing Co., 5 `that an, employer :may not defend against a refusal-to-bargain allegation on the basis that the original recognition, occurring more than 6 months before'chaiges had been filed in the proceeding raising the issue, was unlawful 6 Any such defense is barred by Section 10(b) of the Act, which, as the Court explained in Bryan, was specifically intended by Congress to stabilize bargaining relationships. For similar reasons we must reject Respondent's argu- ment that the previously agreed-upon unit was inappropriate. The record herein shows that Respon- dent signed the assent agreement almost 10 -months before it withdrew recognition from the Union and over a year prior to the time the Union filed the instant charge. Hence, it cannot now attack the Union's- majority status -among its employees or the appropriateness of the unit. - 'Respondent concludes by asserting that the Re- gional Director erred- in-dismissing its representation petition because of the complaint issued herein. Based on the strict requirements set forth in United States Gypsum Company, 7 an `Employer may refuse to bargain on the terms of a new contract if it can "demonstrate by objective considerations that it has some reasonable grounds for believing that, the union has lost its majority status . . . ."g In this instance, however, Respondent not only withdrew recognition before the end of the contract period, but also filed the petition prior to the appropriate date. Moreover, Respondent's showing of objective considerations is tainted by its withdrawal of recognition during the contract term,..thereby unlawfully undermining the strength of the Union.9 - Accordingly, we find that Respondent has refused to abide by the terms of its bargaining agreement, and has refused to bargain collectively with the Union as the exclusive representative of the employ- ees in the appropriate unit, and that, by such refusal, Respondent has engaged in and is engaging in unfair labor practices within the meaning of Section 8(a)(5) and (1) of the Act. _ :I - - 5 Local Lodge No. 1424, International Association of Machinists, AFL-CIO [Bryan' Manufacturing Co ] v. N L R. B, 362 U:S 411 (1960). 6 North Bros Ford Inc, 220 NLRB 1021 (1975), and cases cited therein. 7 157 NLRB 652 (1966). 8 Id at 656. III. THE REMEDY Having found that Respondent has engaged in and is engaging in unfair labor practices within the meaning of Section 8(a)(5) and (1) of the Act, we shall order that it -cease' and desist therefrom and take certain affirmative action designed to effectuate the policies of the Act. - - - The stipulated record shows that Respondent on or about March 24, 1975, and at all times thereafter, has withdrawn recognition from the Union and continues to withhold recognition, and thus has refused to recognize the Union:as the exclusive representative for purposes of collective bargaining of its employees in the appropriate unit; and has repudiated and failed to abide by the terms and conditions of the collective- bargaining agreement in that, inter alia, it has refused to make payments to the Union's welfare and pension funds. We shall therefore order that Respondent recognize and bargain with the Union as the exclusive bargaining representative of the employees in the appropriate unit, and make contributions to the Union's welfare and pension trust funds as required by the collective-bargaining agreement. The appropriate remedy for Respondent's unilater- al action in discontinuing contributions to the welfare and pension plan, just like the appropriate remedy for any other unlawful unilateral action, is, where feasi- ble, to reinstate the status quo ante and retain it until Respondent fulfills its bargaining obligation by either consummating a new agreement covering the subject or bargaining for a reasonable period of time to an impasse. For these reasons, we shall order Respon- dent to make whole the employees in the unit by remitting all pension and welfare contributions, as provided in the retail shoe agreement, which have not been paid prior to September 30, 1975, the expiration date of the assent agreement' it executed with the Union, and which would have been paid absent Respondent's unlawful unilateral discontinuance of such payments found herein, and by providing them with any other benefits they may have lost because of Respondent's repudiation of said agreement.10 The Board, upon the basis of the foregoing facts and the entire record, makes the following: CONCLUSIONS OF LAW 1. ' Respondent, Morse Shoe, Inc., is an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act. 9 See Retired Persons Pharmacy, t/a NRTA-AARP Pharmacy, 210 NLRB 443, fn. 2 (1974). 10 Harold W Hinson, d/b/a Hen House Market No 3, 175 NLRB 596 (1969) MORSE SHOE, INC. - 2. Retail Clerks Union Local -324, Retail Clerks International Association, AFL-CIO, is a labor organization within the meaning of Section 2(5) of the Act. 3. The following employees of Respondent consti- tute an appropriate unit for the purposes of collective bargaining within the meaning of -Section 9(b) of the Act: All employees employed - by Respondent at its Huntington Beach, California, location, excluding one overall store manager, all manager trainees, and supervisors, as defined in the Act. 4_ By refusing on or about March 24, 1975, and at all times thereafter, to bargain collectively with the above-named labor organization as the exclusive representative of all the employees in the appropriate unit; by making a unilateral modification of the collective-bargaining agreement between the Union and by refusing to make payments to the Union's welfare and pension trust funds prior to September 30, 1975; and by withdrawing recognition from the Union and by repudiating the contract, the Respon- dent has engaged in and is engaging in unfair labor practices within the meaning of Section 8(a)(5) of the Act. 5. By the aforesaid conduct, Respondent has interfered with, restrained, and coerced, and is interfering with, restraining, and coercing, employees in the exercise of the rights guaranteed them in Section 7 of the Act, and thereby has engaged in and is engaging in unfair labor practices within the meaning of Section 8(a)(1) of the Act. 6. The aforesaid unfair labor practices are unfair labor practices affecting commerce within the mean- ing of Section 2(6) and (7) of the Act. ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Relations Board hereby orders that the Respondent, Morse Shoe, Inc., Huntington Beach, California, its officers, agents, successors, and assigns, shall: 1. Cease and desist from: (a) Refusing to bargain collectively with Retail Clerks Union Local 324, Retail Clerks International Association, AFL-CIO, as the exclusive representa- tive of all the employees in the appropriate unit by withdrawing recognition from the Union; by repudi- ating the agreement; by making unilateral modifica- tions of the collective-bargaining agreement between the Union and the Respondent; and by refusing to make payments to the Union's welfare and pension funds prior to the expiration of the' contract on September 30, 1975. 395 (b) In any-like or related-manner interfering with, restraining,` or coercing employees in the exercise of the rights guaranteed them in, Section 7 of the Act. 2. - Take the following-affirmative action which the Board finds will effectuate the policies of the Act: (a) Upon request, bargain for a reasonable- period of time with the above-named labor organization as the exclusive bargaining representative of all employ- ees _in, the aforesaid appropriate unit, with respect to any modification of the prior or -future collective- bargaining agreement between the- Union and the Respondent. (b) Make whole the employees ' in- the- appropriate unit by remitting all pension' and welfare contribu- tions, as provided in the retail shoe agreement, which have not been paid prior to September 30, 1975, the expiration date of the assent agreement between Respondent and the Union, and which would have been paid absent Respondent's unlawful conduct found herein. Further, make whole the employees for whatever benefits were lost to them by Respondent's unlawful repudiation of the contract. (c) Post at its principal place of business in Huntington Beach, California, copies of the attached notice marked "Appendix."" Copies of said notice, on forms provided by the Regional Director for Region 21, after being duly signed by Respondent's representative, shall be posted by Respondent imme- diately upon receipt thereof, and be maintained by it for 60 consecutive days thereafter, in conspicuous places, including all places where notices to employ- ees are customarily posted. Reasonable steps shall be taken by Respondent to insure that said notices are not altered, defaced, or covered by any other materi- al. (d) Notify the Regional Director for Region 21, in writing, within 20 days from the date of this Order, what steps the Respondent has taken to comply herewith. ii In the event that this 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 read "Posted Pursuant to a Judgment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board." APPENDIX NOTICE To EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government WE WILL NOT refuse to bargain collectively with Retail Clerks Union Local 324, Retail Clerks International Association, AFL-CIO, as the ex- clusive representative of all the employees in the bargaining unit described below, by withdrawing 396 DECISIONS OF NATIONAL recognition from the Union; by repudiating the agreement; .by making unilateral modifications of the collective-bargaming agreement executed with said Union; or by refusing to make payments to the Union's welfare and pension funds prior to the expiration of the contract on -September 30, 1975. WE WILL NOT in any like, or related manner interfere with, restrain, or coerce our employees in the 'exercise of the rights guaranteed them in Section 7 of the Act. WE WILL bargain with the above-named Union as the, exclusive bargaining representative of all employees in the bargaining unit-described below, with respect to any modification of the prior or future collective-bargaining agreement between us and the Union. The bargaining unit-is: LABOR RELATIONS BOARD All employees employed by Respondent at its Huntington Beach, California, location, excluding one overall store manager, all manager trainees, and supervisors as defined- in the Act. WE- WILL, make whole the employees in the appropriate unit by remitting all pension and welfare contributions, as provided in the retail shoe agreement, which have not been paid prior to September 30, 1975, the expiration date of our assent agreement with the Union, and which would have been paid absent our unlawful con- duct found herein; and WE WILL make whole said employees for whatever benefits were lost to them by our unlawful repudiation of the contract. MORSE SHOE, INC.