The General Store No. Two, Inc.

GENERAL STORE NO. TWO 415 The General Store No. Two, Inc. and United Food and Commercial Workers Union, Local No. 576. Case 17-CA-11529 14 December 1984 DECISION AND ORDER BY CHAIRMAN DOTSON AND MEMBERS ZIMMERMAN AND HUNTER On 14 December 1983 Administrative Law Judge Steven M. Charno issued the attached deci- sion. The Respondent filed exceptions and a sup- porting brief. The National Labor Relations Board has delegat- ed its authority in this proceeding to a three- member panel. The Board has considered the decision and the record in light of the exceptions and brief and has decided to affirm the judge's rulings, findings, and conclusions only to the extent consistent with this Decision and Order. The complaint in this case alleges that ihe Re- spondent, General Store' No. Two, Inc., threatened its employees in order to coerce their acceptance of wage and benefit concessions at midterm of the collective-bargaining agreement. The judge agreed, finding that certain statements made by the Re- spondent in the course of discussing with its em- ployees the need for concessions • amounted to threats in violation of Section- 8(a)(1) of the Act. The issue before us is whether, under the par- ticular circumstances of this case, the Respondent's statements did in fact constitute threats which im- paired employee rights under Section 7 of the Act. We answer in the negative and we will dismiss the complaint. The Respondent owns and operates three gro- cery stores in the Kansas City, Missouri area. It is a member of the Retail Grocers Association of Greater Kansas City (the Association), an employ- er's association consisting mostly of independent grocers. United Food and Commercial Workers Union, Local No. 576 (the Union) is the exclusive representative of the sales employees of the Re- spondent and of the emplOyees of a number of other grocery store operators in the area. The col- lective-bargaining agreement between the Respond- ent and the Union during the events of this case ran from 10 May 1981 through 10 September 1983. By a memorandum of agreement dated 24 Febru- ary 1983' the Union granted substantial wage and benefit concessions to Milgram Food Stores, a gro- cery chain in the Kansas City area. Milgram is in direct competition with the Respondent and other 1 All dates refer to 1983 unless otherwise indicated independent grocers who are members of the Ass- sociation. 2 On 8 March representatives of the Association met with the president of the Union to discuss the possibility of the Union's granting Milgram-type concessions to the independent grocers of the As- sociation. It is apparent from the record that the Union's president indicated that the union leader- ship had no objection to granting the same conces- sions to the independent grocers, but he also indi- cated that final approval would hinge on a vote by the bargaining unit members who would be affect- ed by the 'concessions. The president stated that, as a prerequisite to the vote, it would be necessary for each of the employers to meet with its employees in 'order to inform them of the particulars of the Milgram concessions and to "condition" them con cerning the similar concessions contemplated by the Union and the Association members. When the Association's representatives objected to this -direct approach, the Union's president stated that the Union would not file unfair labor practice charges as a result of the employers' directly approaching their employees to discuss the concessions. The Association members, including the Re- spondent, met 14 March to discuss the union lead- ership's position on the concessions proposal. The members were given printed information concern- ing the Milgram concessions and copies of a form letter to be sent to the Union requesting equivalent concessions. The form letter had been approved previously by the Union's president. The members also were instructed to meet with their employees prior to the vote on concessions in order to "condi- tion" them as suggested by the Union's president. On 16 March the Respondent's owners, Alan Gailey and Jim Marsh, met with five of their bar- gaining unit employees. Two of the employees worked at the Respondent's Kansas City store, two worked at the North Kansas City store, and one worked at the Raytown store. The five were con- sidered influential with the Respondent's other em- ployees. Each was either a produce manager or a head clerk.3 Alan Gailey began the meeting by describing the nature of the Milgram concessions. He then ex- plained the impact of the concessions on independ- ent grocers like the Respondent in-the Kansas City area. He emphasized that the Respondent needed similar concessions in order to continue operating 2 The recad indicates that the Milgram chain is also a member of the Association The record is not clear however on whether Milgram and the independent grocer/members were parties to a single collective-bar- gaining agreement with the Union 3 No Issue has been raised as to the possible supervisory capacity of any of these employees 273 NLRB No. 65 416 DECISIONS OF NATIONAL LABOR RELATIONS BOARD on a ,competitive basis and to maintain its fair market share of the local grocery business. He indi- cated that the independent grocers had approached the union leadership with a request- for Milgram- type concessions and that the Union had been re- ceptive to the request. After some discussion Gailey informed the five employees that all of the bargaining unit employees would be voting on the concessions within a few days. Should the unit em- ployees vote to reject the proposal, Gailey stated that (1) the Respondent would roll back wages uni- laterally; (2) the Respondent's North Kansas City store would have to be either sold or closed; and (3) the Milgram concessions would be the Re- spondent's only contract offer at negotiations fol- lowing expiration of the current contract in Sep- tember. On the following day, 17 March, one of the five employees who had been present at the above meeting discussed the meeting and the proposed concessions -with the store manager of .the. Re- spondent's North Kansas City store. During this discussion the manager reiterated the Respondent's position that it would have to close the North Kansas City store if the employees did not accept the concessions. No vote on, the concessions was taken among bargaining .unit members following these incidents and there is no indication that the Respondent im- plemented any of the alternatives of which Gailey spoke at the 16 March meeting. The judge found Alan Galley's. three statements of alternatives made on- 16 March and the related statement of the Respondent's store manager on 17 March to be violative of Section 8(a)(1). He con- cluded. that they were threats which interfered with the employees' right to bargain collectively as to the terms and conditions of their employment. For the reasons given below we do not agree. It is clear that at the 8 March meeting the union leadership gave at least tacit approval to the Asso- ciation's proposal for concessions _equivalent to those which the Union had granted to the Milgram chain. The Union's president later approved the form letter to be used by the Association members to formally request Milgram-type concession. Fur- ther, the Union's president not only , agreed to allow the employers to approach their employees directly to "Condition" them to the concessions, 'he suggested this course of conduct in the first in- stance. The Union drew no limits on the nature or extent of the -"conditioning" approach to be taken by the Employers. The Union also promised not to file charges as a result of the Employers' direct,- in- dividual approach. We interpret the Union's posi- tion in these circumstances as one of broad en- dorsement, broad enough to include the reasonably foreseeable consequences of the employers' desire to persuade their employees to accept the conces- sions. The judge's reliance on Admiral Merchants Motor Freight, 265 NLRB -134 (1982), to support the 8(a)(1) findings is misplaced. In that case the em- ployer bypassed the exclusive representative to bar- gain directly with employees concerning benefits concessions. The Board found independent 8(a)(1) violations in threats made by the employer,' , in addi- tion tä the 8(a)(5) and (1) violations with regard to the employer's bypassing the union to bargain with employees. The critical factor which is absent in the Admiral Merchants situation but present here is the consent of the union to the employer's' conduct. In Admiral Merchants the 8(a)(1) threats, While in- dependent violations; grew out of the 8(a)(5) con- text: the employer's ignoring the union to negotiate directly with employees. 4 In the present case the Respondent did not bypass the Union; it acted with the approval and consent of the employees' exclu- sive representative and at its suggestion. Given the particular circumstances of the case we find that the statements of the Respondent which the judge found violative were part of a course of conduct which the Union had encour- aged and broadly approved. The statements made by Alan Gailey on 16 March were part of a com- munication with the employees which was support- ed by the Union. The statement made by the Re- spondent's store manager on 17. March was a con- tinuation of that communication. Under these par- ticular circumstances we conclude that the Re- spondent's statements did not reasonably tend to interfere with, restrain, or coerce the employees in the exercise of their rights under the Act. There- fore we do not adopt the judge's conclusions of law and we will dismiss the complaint in its entire- ty.5 4 -Admiral Merchants Motor Freight, above at fn 5 5 We also note that Alan Galley's 16 March statements were preceded by an explanation of the nature of the Milgram concessions, their eco- nomic impact on independent grocers in the area, and the Respondent's need to maintain a competitive position in its market Under the circum- stances, where there is no indication whatsoever that the Respondent had bypassed the Union and where the Respondent has prefaced its state- ments with relevant, objective, economic considerations, we find that the 16 March statements were a legitimate expression of the Respondent's reasonable economic alternatives, protected by .Sec 8(c) The 17 March statement, as a continuation of the Respondent's communication with its employees, carried the same 8(c) protection' With respect to our colleague's dissenting opinion, we disagree with his rhetorical inferences and evaluation of the circumstances of this case As our analysis indicates, the facts here do not suimort the conclusion that the Respondent's conduct contravened the Sec 7 rights of its em- ployees GENERAL STORE NO TWO 417 ORDER The complaint is dismised. MEMBER ZIMMERMAN, dissenting. - I do not agree with my, colleagues that under the circumstances here the Respondent was privileged to threaten its employees- with plant closure, job loss, unilateral wage cuts, and immutable bargain- ing demands. On the contrary, I would find that— despite the Union's request that the Respondent "condition" employees for wage concessions—the Respondent's statements unlawfully interfered with the employees' Section '7 right to engage collec- tive bargaining. At a meeting with five key employees the Re- spondent's co-owner declared, that if the employees failed to vote for midterm wage concessions the Respondent would (1) close or sell one 'of its three stores, (2) unilaterally reduce wages and fringe ben- efits, and (3) make the proposed concessions its only offer at the expiration of the collective-bar- gaining contract. The next day a store manager re- iterated to an employee the threat to sell a store if concessions were not forthcoming. My colleagues have reversed the judge's findings that these statements were violative of Section 8(a)(1) on the grounds that the Union suggested and consented to the Respondent's approaching the employees for "conditioning," and that the Re- spondent's statements were protected by Section 8(c) of the Act. With respect to the first ground, the majority reasons that the Respondent's conduct was a "rea- sonably foreseeable consequence" of the Union's tentative endorsement of the wage concessions. In asking the Respondent to "condition" employees to accept concessions, the Union's statement cannot reasonably be interpreted as encouraging the Re- spondent to threaten employees with job loss or unilateral cuts if they did not agree to the conces- sions. That the Respondent may have so interpret- ed the Union's statement as permission or acquies- cence does not make the threats permissible. At issue is the right of employees to be free -of restraint or coercion with respect to their Sectioni 7 rights; interference with that right cannot be excused simply because the Union may have encouraged the Respondent's conduct. In addition I find no basis for my colleague's' conclusion that the threats expressed by the Re- spondent are the type of legitimate expression of views or economic predictions protected by Sec- tion 8(c). Accordingly, I would affirm the judge and I dissent from my colleagues' dismissal of the complaint. DECISION STEVEN M eHARNO, Adnimistrativ' e Law Judge. In regp'orise - to a charge 'filed March 16, 1983, a complaint issued on April 22, '1983, alleging that The General Store No. Two, Inc. (Respondent)' had violated Section 8(a)(1) of the National Labor Relations Act by threaten- ing its employees, with closure Of a facility, unilateral wage reductions,. and a refusal to bargain in good faith with the United FoOd and Commercial Workers Union; Local No 576 (Union) Respondent's answer denied the commission of any unfair labor practice. A hearing was held before me in Kansas City, Kansas, on July 5, 1983. 2 Briefs were filed by the General Coun- sel, the Charging Party, and the Respondent under due date of August 9, 1983. FINDINGS OF FACT I. JURISDICTION Respondent is a Missouri corporation engaged in the retail,sale of groceries, produce, meat, and related prod- ucts at its facilities in Kansas City, Raytown, and North Kansas City, Missouri. Respondent's gross volume of business at these facilities exceeds $500,000 annually. In the course and conduct of its business operations within Missouri, Respondent annually purchases goods and services valued in excess of $50,000 from sources outside the State. It is admitted, and I find, that Respondent is.an employer_ engaged IR commerce within the meaning of the Act. The Union is admitted to be, and I find is, a labor or- ganization within; the meaning of the Act. II. THE ALLEGED UNFAIR LABOR PRACTICES ' A. Background At all times relevant the Union has been the exclusive collective-bargaining representative of Respondent's sales employees. Respondent and the Union have been parties to a series of collective-bargaining agreements, the most recent of which- was in effect from May 10, 1981, through September 10, 1983 3 The Union also represents the employees of other. grocers doing business in the Kansas City area and, by a February 24 contract supple- ment, it granted significant wage and benefit concessions to the Milgram grocery chain. Milgram's stores and those of Respondent are direct competitors. Respondent is a member of the Retail Grocers Asso- ciation of Greater Kansas City (Association). One of the Association's functions as a trade organization is to rep- resent its members, including Respondent, in labor nego- tiations. On March 8 the Association's executive director and its attorney met with Carl Nothnagel, the Union's presi- dent, to discuss the availability of the Milgram conces- Respondent was incorrectly identified in the complaint as "General Store Nos 1 & 2, d/b/a Justnte Nos 1, 2 and 3" On Joint motion of the parties at the heanng, the complaint was amended to reflect Respondent's correct name 2 Transcnpt errors have been noted and corrected 3 All dates are in 1983, unless otherwise indicated 418 DECISIONS OF NATIONAL LABOR RELATIONS BOARD sions to grocers who were Members of the Association. Nothnagel stated that, before the Union could grant con- cessions to the Association's members, it would be neces- sary for the grocers to meet with and "condition" their employees concerning the concessions. The A'ssociation's attorney, citing the 'National Labor Relations" Act, ob- jected to the grocers talking directly to their employees. Nothnagel stated that, no charges would be filed and that it would be necessary for the grocers to meet with their employees and discuss the concessions with them. Noth- nagel also noted that an employee vote would have to be held on the question of whether to grant concess-ions. On March 14, a meeting was held of the Association's membership. Representatives of the members, including Respondent's owners Jim Marsh and Alan Galley,. were told what had transpired at the March 8 meeting with Nothnagel, and each of the representatives was given a copy of the Milgram- contract supplement, a letter from Milgram's president to its employees, and a handwritten chart showing the impact of the Milgram concessions on the members' employees. Also distributed a draft letter to the Union requesting concessions similar to those granted Milgram in order to allow the Associa- tion's - to remain competitive. Gailey 'subse- quenty executed and mailed a copy of this letter to Nothnagel. B. The March 16 Meeting On March 16, Alan Gailey called a 9 a,m, meeting at his office in the Raytown store. Present were Galley, Marsh, and five employees: the' Kansas City store's produce manager Ronald Lybarger and Clerk Richard Sanchez, the North Kansas City 'store's produce manager William Stewart and Head Clerk Ruben Chavez and the Raytown store's produce manager Ralph Weant. Galley explained the Milgrarti concessions, as well as their impact on the grocery industry in the Kansas City area, and stated that Respondent needed comparable concessions to remain competitive and to maintain its market share. The Milgram contract supplement, the letter from Milgram's president, and the chart prepared by the Association were passed around. Gailey stated that the Union would soon hold a meeting to vote on whether to grant similar concessions to Respondent and other Independent grocers. Gailey further stated that, even if the concessions were not approved by that vote, there would be . a wage rollback in the relatively , near future. He went on to explain that the moneys not paid to employees because of the rollback would be held in a escrow account pending the outcome of anticipated lid- gation.4 Gailey also told the assembled employees that, when the collective-bargaining agreement between Respondent and the Union expired in September, Respondent's only contract offer to the Union would be the Milgram con- cessions. 5 During the meeting, Stewart stated that he 4 The foregoing findings are based primanly on Galley's admissions which were corroborated by the employees present at the meeting • 5 Galley's candid admission that he told his ertuiloyees "this is the con- tract that we'll offer and that's all" was confirmed by Respondent's wit- ness Weant who testified that Galley stated that the Milgram concessions "would be the only contract that was offered" in September would not take a pay cut of the magnitude indicated, to which no response was. made. Galley stated at some point that it was a "hell of a cut" and that he was not sure whether he would vote for it himself. In response to Chavez' question of whether Respondent's employees would have to take the same pay cut if they voted the Union . out, Galley answered that the issue was not union or nonunion, but parity of wage costs among competing grocers. Galley also stated that he would pay his em- ployees $20 an hour if his competitors had the same wage costs. Finally, Galley told his employees that Respondent's North Kansas City store was losing money because of in- adequate volume and that wage cOncessions might make that store profitable over the near term. 6 Galley further stated that the North Kansas City store would have to be sold or closed without the wage concessions.7 Respondent did not implement the pay cuts discussed at this meeting, and Respondent's North Kansas City store had not been closed or sold at the time of the hear- ing.. C The March 17 Incident On March 17, a conversation took place at the front of Respondent's North Kansas City store between Stewart and Michael Gailey, the manager of that store. At the time of the conversation, Stewart and Galley had main- tained both a working and a social relationship for ap- proximately 10 years. No one else was present during the conversation. Stewart and Galley discussed the March 16 meeting and the Milgram concessions This was not the first occasion on which they had discussed the conces- sions. Gatley told Stewart that Respondent would have to sell the North Kansas City store unless the wage con- cessions were accepted. 8 There is no evidence that Gailey talked to any other employee on this subject Discussion The General Counsel contends that Alan Galley's statements on March 16 constitute' three separate viola- tions of the Act: a threat to shut down an operation unless wage concessions were granted, a threat to unilat- erally modify terms and conditions of employment, and a threat to refuse to bargain in good faith. Respondent argues that Galley's statements were not threats when viewed in the context of everything which was said during the meeting and that his statements were part of an isolated incident and therefore de mmimis It was established that Galley stated that Respondent would sell or close one its stores unless wage concessions were granted, that it would make unilateral wage cuts, and that it would bargain from a fixed position on expi- 6 Galley so testified The General Counsel's witnesses Stewart, Lybarger, and Chavez, as well as Respondent's witness Weant, so testified 8 Stewart so testified Galley conceded that he stated, in the conversa- tional context of Respondent's competitors paying lower wages, that Re- spondent would have to sell the store before it lost too much money To the extent that their -versions of the conversation may be thought to be Inconsistent, I credit Stewart who displayed the better memory of what occurred GENERALY STORE NO TWO 419 ration, .of the then current collective-bargaining agree- ment. By making these statements, Galley threatened to inflict economic harm on his employees by engaging in, conduct which was indisputably violative of the Act.? All three of these threats may reasonably' be said to interfere with the free exercise of employee rights guar- anteed by Section 7 of the Act, ,specifically of the right of Respondent's employees to bargain collectively con- cerning the terms and conditions - of their employment. See Admiral Merchants Motor Freight, 265 NLRB 134 (1982). Given, this finding, neither - Gailey's intent in making the statements nor the ultimate_coercive effect of those statements is material Fairleigh Dickinson- Universi- ty, 264 NLRB 725 (1982); National Apartment ,Leasing Co., 263.NIAB 15 (1982) . Because I found that Gailey's threats tended to inter- fere with the free exercise of employee rights, it is neces- sary to address Respondent's argument that those threats were merely an isolated incident which does not 'rise to the level of a violation of the Act. Galley, acting pursu- ant to a union ,request to "condition" Respondent's work force to accept_ wage concessions, called together five , admittedly "key" employees and threatened them. Those threats envisioned a serious economic impact on all of Respondent's employees and were made by an individual whO had the pOwer to carry them out. There is no evi- dence that Respondent ever attempted to retract or repu- diate the threats.. In this context, the presumption _ that such threats will be repeated to and discussed with other employees is clearly applicable. See Coach & Equipment Saks Corp., 228 NLRB 440 (1977); General Stencils, 195 NLRB 1109, 1110 (1972). For the foregoing reasons, I find that all of Gailey's threats on March 16 were viola- tive of Section 8(a)(1) of the Act. 9 Galley's statements therefore fall within one of the definitions of the term "threat" quoted by Respondent on brief "an indication of some- thing impending and usu [sic] undesirable or unpleasant as ex- pression of an Intention to inflict loss or harm on another by Illegal means The General Counsel contends that the conversation on March 17 at Respondent's North Kansas City store discloses a , further violation of the Act. Respondent argues that the conversation was merely one "between individuals who had a working relationship for many years" and that it was an isolated incident. The existence of a long-standing social and working relationship be- tween Stewart and Michael Galley does not nullify the coercive effect of Galley's statement. Indeed, a statement of serious economic consequences may have an even greater impact on an employee when it comes from a friend who is part of management. See Coach & Equip- ment _Sales Corp., supra; _Wichita Eagle 41 Beacon Publish- ing Co., 199 NLRB, 360, 370 (1972) Contrary to Re- spondent's second argument, I do not believe that Mi- chael Galley's statement can be assessed standing alone. Rather, it must be 'considered in connection with and as corroborative of Alan Galley's similar threat on March 16. 'Accordingly, I find that Michael Galley's statement that the North Kansas City store would be have to be sold unless wage concessions were granted was a threat violative of Section .8(a)(1) of the Act. , CONCLUSIONS OF LAW 1 The -Respondent is an employer engaged in coin- merce within the meaning of Section 2(2), (6), and (7) of the Act. 2. The ,Union is a labor organization within the mean- ing of Section 2(5) of the Act. 3. By threatening that (a) it would sell or close one of its stores unless its employees granted wage concessions, (b) it would unilaterally reduce employee wages, and (c) it would refuse to bargain in good faith by adopting a fixed and unalterable bargaining position, Respondent has engaged in unfair labor practices in violation of Section 8(a)(1) of the Act. , 4. The aforesaid unfair labor practices effect commerce within the meaning of Section 2(6) and (7) of the Act. [Recommended Order' omitted from publication.]