N.L.R.B. v. Sav-on Drugs, Inc., SAV-ON

Decision Date01 September 1983
Docket NumberNo. 81-7428,SAV-ON,81-7428
Citation704 F.2d 1147
Parties113 L.R.R.M. (BNA) 2466, 97 Lab.Cas. P 10,097 NATIONAL LABOR RELATIONS BOARD, Petitioner, v.DRUGS, INC., Respondent.
CourtU.S. Court of Appeals — Ninth Circuit

Elliott Moore, Washington, D.C., Roger W. Goubeaux, Los Angeles, Cal., for petitioner.

Thomas S. Kerrigan, McLaughlin & Irvin, Los Angeles, Cal., for respondent.

On Application for enforcement of an Order of the National Labor Relations Board.

Before CHAMBERS, WALLACE and NORRIS, Circuit Judges.

CHAMBERS, Circuit Judge:

The National Labor Relations Board (the Board) petitions for enforcement of its order issued December 18, 1980, requiring Sav-On Drugs, Inc. (Sav-On) to reinstate and pay back wages to approximately sixty employees it terminated, on the ground the terminations violated section 8(a)(3) and (1) of the National Labor Relations Act (the Act).

Sav-On operated a chain of retail drug stores in California, Texas and Nevada. In mid-1979, Sav-On operated approximately 123 stores in California, some three-quarters of which were covered by identical collective bargaining agreements with various locals of the United Food and Commercial Workers International Union, AFL-CIO, formerly the Retail Clerks International Union (the Union). The contracts had an expiration date of June 30, 1978, and covered all of the employees in these stores, including the pharmacists and pharmacist managers.

Beginning May 1, 1978, petitions were filed with the Board by the Guild for Professional Pharmacists (the Guild) seeking to represent all pharmacists employed by Sav-On in its California stores. Eleven petitions were consolidated for a hearing after which, on September 26, 1978, the regional director issued a decision holding that the employees in the classification "pharmacist manager" were "supervisors" within the meaning of section 2(11) of the Act, and that the Guild was dominated by pharmacist managers and therefore was not a labor organization within the meaning of section 2(5) of the Act. 29 U.S.C. Sec. 152(5) and (11). The regional director simultaneously dismissed the Guild's petition for representation. The Guild sought no stay of that dismissal.

On October 6 the Guild filed a timely request for review of the regional director's decision and served Sav-On. On November 6 the Guild wrote Sav-On seeking wage increases for the pharmacists and threatened to strike if its demands were not met. Sav-On had, however, also received demands from the Union for the resumption of negotiations for a new agreement to replace the one that had expired on June 30, 1978. Sav-On responded to the Guild by referring to the regional director's decision and reporting that the Union was insisting on renewed negotiations.

On November 8, Sav-On and the Union entered into an agreement to extend the expired contract as to pharmacists who were not in a "supervisory" role. On the same day the Board granted the Guild's request for a review.

Between November and January increased pressure was exerted by the Guild and active in the Guild activities were pharmacist managers Kunysz and Fogel. On January 5, 1979, Sav-On discharged the two pharmacist managers because of their Guild activities. The Guild thereupon filed unfair labor practice charges against Sav-On, demanded that Kunysz and Fogel be reinstated, and threatened to strike if they were not. The two were not reinstated. Shortly thereafter, 59 pharmacists and pharmacist managers from both organized and unorganized stores engaged in a strike to protest the discharges. Sav-On responded by discharging the strikers. Since that time Sav-On has refused to reinstate the strikers or the two discharged managers, Kunysz and Fogel.

Six months after the discharges, and eight months after the regional director ruled in Sav-On's favor on the representation case, the Board issued its decision on review reversing the regional director and finding that the Guild was a labor organization within the meaning of the Act and that the pharmacist managers were not supervisors under section 2(11) of the Act. It ordered an election in a statewide unit of Sav-On's pharmacists and pharmacist managers.

In the unfair labor practice case, the Board found that Sav-On violated section 8(a)(3) and (1) of the Act by discharging pharmacist managers Kunysz and Fogel because of their union activities and by discharging the employees who struck to protest these discharges. The Board's order required Sav-On to cease and desist from the unfair labor practices found, and ordered it to offer immediate reinstatement to all the discharged employees and to pay back wages.

Section 8(a)(1) makes it unlawful for an employer "to interfere with, restrain, or coerce employees" in the exercise of their right to organize. 29 U.S.C. Sec. 158(a)(1). Under section 8(a)(3) of the Act, an employer may not discharge employees because of their union activities or sympathies. 29 U.S.C. Sec. 158(a)(3); NLRB v. Fort Vancouver Plywood Co., 604 F.2d 596, 600 (9th Cir.1979), cert. denied, 445 U.S. 915, 100 S.Ct. 1275, 63 L.Ed.2d 599 (1980). An administrative law judge found that the firing of Kunysz and Fogel was an undisputed prima facie violation of these two sections. Relying on Sav-On's stipulation that Kunysz and Fogel were discharged because of their activities on behalf of the Guild, and relying on the Board's decision on review that the Guild was a labor organization, he concluded that the actions of the employees were union activities. Sav-On does not dispute that a prima facie case of violation has been made out, but argues that it cannot fairly be held in violation of the Act because it was entitled to rely on the regional director's decision under section 3(b) of the Act.

Prior to 1959, decisions on representation petitions were made by the Board itself. Congress then amended the Act to provide for the delegation of Board authority to regional directors in representation cases. Section 3(b) provides in part:

The Board is also authorized to delegate to its regional directors its powers under section 159 of this title to determine the unit appropriate for the purpose of collective bargaining, to investigate and provide for hearings, and determine whether a question of representation exists ... except that upon the filing of a request therefor with the Board by any interested person, the Board may review any action of a regional director delegated to him under this paragraph, but such a review shall not, unless specifically ordered by the Board, operate as a stay of any action taken by the regional director.

Decisions of the regional director are not merely advisory opinions or recommendations entitled to no meaningful weight. See Transportation Enterprises, Inc. v. NLRB, 630 F.2d 421, 425-27 (5th Cir.1980). The legislative history of section 3(b) confirms the breadth of the intended delegation: "[This new provision is] designed to expedite final disposition of cases by the Board, by turning over part of its caseload to its regional directors for final determination." 105 Cong.Rec. 19770 (1959) (emphasis added). The regulations of the Board state that the decision of the regional director shall be final, provided, however, that any party may seek review within ten days after service of the decision. 29 C.F.R. Sec. 102.67(b). Section 101.21(a) of the regulations explicitly states that a regional director's decision is final "subject to the review procedure set forth" in the regulations. Thus, it has been held that decisions rendered by regional directors which are not reviewed by the Board are entitled to the same weight and deference as Board decisions. Transportation Enterprises, Inc. v. NLRB, supra, 630 F.2d at 426; NLRB v. Gold Spot Dairy, Inc., 432 F.2d 125, 127 (10th Cir.1970).

It is clear from the Act and the regulations that once review has been granted by the Board under section 3(b), the regional director's findings are subject to modification or reversal. Indeed, given that review by the Board is discretionary and that the grounds for review listed in the regulations are quite limited (see Magnesium Casting Co. v. NLRB, 401 U.S. 137, 142, 91 S.Ct. 599, 601-602, 27 L.Ed.2d 735 (1971); Transportation Enterprises, Inc. v. NLRB, supra, 630 F.2d at 425-26) it can fairly be said that all of the parties are on notice that the decision of the regional director should not be fully relied upon until completion of the Board's review.

Sav-On argues that it was entitled to rely on the regional director's decision in the absence of a stay, saying that his decision remains final and action taken in reasonable reliance upon it should remain insulated from any later action of the Board on review. Section 3(b) of the Act does appear to be consistent with the rule of this Circuit that an appeal will not affect the validity of the judgment or order during the pendency of an appeal, absent a stay or supersedeas. Matter of Combined Metals Reduction Co., 557 F.2d 179, 190 (9th Cir.1977).

The Guild counters with an argument that there was nothing to stay. There are, of course, other situations where stays are more obviously useful, e.g. a stay of an order calling for an election. In this case the regional director did not order an election. He ruled against the Guild in its representation claims and he then went a further step; he dismissed its representation petition. Yet the Guild made no attempt to obtain a stay of that dismissal. We must inquire whether application for a stay would have served the purposes of the Act.

Stays are commonly used to maintain the status quo during an appeal and the status quo very obviously should have been maintained in this case. The purposes of the Act are best served when, in a situation such as this, all parties attempt to preserve the status quo. The Board has held that it was Sav-On's duty to refrain...

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2 cases
  • N.L.R.B. v. Sav-on Drugs, Inc.
    • United States
    • U.S. Court of Appeals — Ninth Circuit
    • 21 Marzo 1984
    ...Drugs, Inc. to reinstate and pay back wages to 61 discharged employees. The panel refused to enforce the petition. NLRB v. Sav-On Drugs, Inc., 704 F.2d 1147 (9th Cir.1983). We reconsidered the petition en banc. We order Sav-On operates a chain of retail drug stores in California, Texas and ......
  • NLRB v. Sav-On Drugs, Inc., 81-7428.
    • United States
    • U.S. Court of Appeals — Ninth Circuit
    • 1 Septiembre 1983
    ...and REINHARDT, Circuit Judges. Upon the vote of a majority of the regular active judges of this court, it is ordered that this case, 704 F.2d 1147, shall be reheard by an en banc panel of the court pursuant to Rule 25 of the Rules of the United States Court of Appeals for the Ninth Circuit.......

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