May Department Stores Company v. NLRB, 26790.

• Decision Date: 20 March 1972
• Docket Number: No. 26790.,26790.
• Citation: 454 F.2d 148
• Parties: The MAY DEPARTMENT STORES COMPANY, Plaintiff-Appellant, v. NATIONAL LABOR RELATIONS BOARD, Defendant-Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

454 F.2d 148 (1972)

The MAY DEPARTMENT STORES COMPANY, Plaintiff-Appellant, v. NATIONAL LABOR RELATIONS BOARD, Defendant-Appellee.

No. 26790.

United States Court of Appeals, Ninth Circuit.

January 20, 1972.

Rehearing Denied March 20, 1972.

David A. Maddux, Los Angeles, Cal. (argued), George R. Richter, Jr., of Sheppard, Mullin, Richter & Hampton, Los Angeles, Cal., for appellant.

William F. Wachter (argued), Daniel M. Katz, Peter G. Nash, Gen. Counsel, Dominick L. Manoli, Associate Gen. Counsel, Marcel Mallet-Prevost, Asst. Gen. Counsel, Washington, D. C.; Ralph E. Kennedy, Reg. Director, NLRB; Brundage, Neyhart, Miller, Ross & Reich, Los Angeles, Cal., for appellee.

Harry L. Browne, Howard F. Sachs, Spencer, Fane, Britt & Browne, American Retail Federation, Kansas City, Mo., amicus curiae.

Before WRIGHT and TRASK, Circuit Judges, and BYRNE, District Judge.^*

EUGENE A. WRIGHT, Circuit Judge:

This case is before us on petition to review and cross-application for enforcement of an order of the National Labor Relations Board. This court has jurisdiction under Section 10(e) and (f) of the National Labor Relations Act, 29 U.S.C. § 151, et seq.

The board ordered an election among the employees at a service facility owned by the May Company in Los Angeles. At issue is the appropriateness of the bargaining unit certified by the board. The board's order appears at 186 NLRB No. 17 (1970).

Because the board gave controlling weight in determining the bargaining unit to the extent of unionization, in violation of Section 9(c) (5) of the Act; and because the board failed to distinguish its decision in this case from its many inconsistent decisions in cases involving substantially identical fact situations, we grant the petition to set aside the order and deny the cross-application for enforcement.

May Department Stores (Mays) operates a chain of department stores in Southern California—one major store in downtown Los Angeles, seventeen branch stores in that part of the state, and a service facility three miles from the downtown store.

The service facility is the subject of these proceedings. It consists of five buildings making up one complex serving the retail stores. Goods are received, warehoused, and distributed. There are also processing activities in a variety of workrooms handling furniture, drapery, upholstery, carpeting, clothing alterations, etc. The workrooms are on several floors of the buildings comprising the facility, adjacent to merchandise storage and warehousing areas.

The board has certified a unit of "warehouse employees," essentially those personnel who check merchandise in and out and move it around the facility. Excluded are the workroom employees.

The history of attempts to unionize the service facility employees is brief. In May of 1967, Teamsters Local 986 filed a petition pursuant to Section 9(c) of the Act, seeking a board election among employees at the facility. The union did not contest Mays' position that the unit should include all workroom employees. The regional director ruled that the unit appropriate for collective bargaining was that contended for by Mays and sought by the union, even though the alterations workroom employees to be included were then located outside the facility. The alterations workroom was transferred to the facility in September of 1967.

The representation proceeding initiated by Teamsters Local 986 ultimately culminated in an election. The union failed to receive a majority of the valid ballots cast and the results of the election were certified.

In November 1969, Teamsters Local 196 filed a second amended petition for election, seeking a bargaining unit to include warehouse employees but excluding the workroom employees. After a hearing, and over the protest of the company, the regional director certified the smaller unit now requested by the union.

An election was ordered in January 1970, for the unit as sought by the union and it received a majority of the valid ballots cast. The result of the election showed no overwhelming union sentiment even within the fragment unit, the union winning by the narrow margin of 72 to 65.

In order to secure judicial review, Mays refused to bargain with the union and the latter filed refusal to bargain charges. A complaint issued; Mays answered with an admission that it had refused to bargain, but pleaded affirmatively the inappropriateness of the bargaining unit. Upon motion of the General Counsel, summary judgment was granted and Mays held in violation for refusal to bargain with the union.

I. Extent of Unionization.

In determining the appropriateness of the bargaining unit, the board has broad discretion. Section 9(b) of the Act provides:

"The Board shall decide in each case whether, in order to assure to employees the fullest freedom in exercising the rights guaranteed by this subchapter, the unit appropriate for the purposes of collective bargaining shall be the employer unit, craft unit, plant unit or subdivision thereof."

This section has been interpreted to give the board wide latitude within its area of expertise. Packard Motor Car Co. v. N.L.R.B., 330 U.S. 485, 67 S.Ct. 789, 91 L.Ed. 1040 (1947); N.L.R.B. v. E-Z Davies Chevrolet, 395 F.2d 191 (9th Cir. 1968); N.L.R.B. v. Merner Lumber & Hardware Co., 345 F.2d 770 (9th Cir. 1965), cert. denied, 382 U.S. 942, 86 S. Ct. 397, 15 L.Ed.2d 352 (1965).

However, the board is limited by Section 9(c) (5) of the Act which provides:

"In determining whether a unit is appropriate for the purposes specified in subsection (b) of this section the extent to which the employees have organized shall not be controlling."

We noted in Westward-Ho Hotel Co. v. N.L.R.B., 437 F.2d 1110, 1112-1113 (9th Cir. 1971):

"It is clear that Congress in passing this amendment intended to overrule Board decisions approving a unit that could only be supported on the basis of the extent of organization."

The legislative history of Section 9(c) (5) includes the following pertinent remarks:

"The section strikes at a practice of the Board by which it has set up as units appropriate for bargaining whatever group or groups the petitioning union has organized at the time. . . . While the Board may take into consideration the extent to which employees have organized, this evidence would have little weight, and, as the section provides, is not to be controlling. . . ." 1 Legislative History of the Labor Management Relations Act, 1947, page 328; House Report No. 245, 80th Congress, 1st Session, page 37.

We agree that the compelling inference from the record before us is that the board allowed the extent of unionization to control its decision. Although we do not contest the board's counsel's general proposition that more than one unit may be appropriate at any facility See State Farm Mutual Automobile Insurance Co. v. N.L.R.B., 411 F.2d 356 (7th Cir. 1969), cert. denied 396 U.S. 832, 90 S.Ct. 87, 24 L.Ed.2d 83 (1969), we are not convinced that merely because the board, at the urging of the union, has made two conflicting determinations this shows conclusively that there are two appropriate units in one facility.

There was no significant change between 1967 and 1970 at the Mays service facility. In view of the fact that the union sought a facility-wide unit, lost the election, and then sought a fragmented unit, we feel that it is incumbent upon the board at the very least to confront the inconsistency between its two rulings and give adequate reasons why it finds two different appropriate units within the same facility. Counsel's after-the-fact attempts to explain the record are inadequate.

II. Inconsistency With Other Board Decisions.

Of equal significance is the fact that the board's decision in the instant case was wholly inconsistent with its prior, and subsequent, decisions in cases involving retail department store service buildings under comparable facts. In May Department Stores Company d/b/a Famous Barr Company, 176 NLRB No. 14 (1969), the board held appropriate a bargaining unit which included all employees employed at the petitioner's St. Louis facility, including approximately 225 employees who performed traditional warehouse functions and approximately 90 who were employed in the furniture, carpet, appliance, and radio and television workrooms and in the fur storage vault.

In R. H. Macy Co., Inc., 180 NLRB No. 59 (1969), the board included employees working in the furniture, television and lawnmower repair workrooms in a unit of warehouse employees at the employer's service building in Atlanta. The board there said:

"It is clear that the service building is essentially a place where goods are received, stored, processed, and then shipped to the retail stores or directly to customers, and that the employees located there are engaged in such activities or closely related work. Though some of the work of the workshop employees is concerned with repairing goods after they have reached the customer, others of the workshop employees, like the warehouse employees, process goods before they are delivered. For example, employees in the furniture shop may repair damaged furniture before sale or shipment, and the rug workshop performs cutting and installation. Also, as indicated, the Service Building Manager is the top supervisor for all service building workers, including those whom the Employer would exclude from the unit. The service building involves basically a single, separate operation, much like a single plant which is, under the Act, an inherently appropriate unit. In these circumstances, the fact that workshop employees are more skilled than warehousing employees no more suggests the inappropriateness of the building wide unit than does the fact that a plant may have employees of varying skills suggest the inappropriateness of a plantwide unit." (footnote omitted) 180 NLRB at p. 3 of slip opinion.

And in H. P. Wasson & Co., 153 NLRB No. 1499 (1969), the board included a rug...