Retail Fruit & Veg. Clerks U. v. National Labor Rel. Bd.

• Decision Date: 08 November 1957
• Docket Number: No. 15298.,15298.
• Citation: 249 F.2d 591
• Parties: RETAIL FRUIT & VEGETABLE CLERKS UNION, LOCAL 1017, and Retail Grocery Clerks Union, Local 648, RETAIL CLERKS INTERNATIONAL ASSOCIATION, AFL-CIO, Petitioners, Respondents, v. NATIONAL LABOR RELATIONS BOARD, Respondent, Petitioner.
• Court: U.S. Court of Appeals — Ninth Circuit

249 F.2d 591 (1957)

RETAIL FRUIT & VEGETABLE CLERKS UNION, LOCAL 1017, and Retail Grocery Clerks Union, Local 648, RETAIL CLERKS INTERNATIONAL ASSOCIATION, AFL-CIO, Petitioners, Respondents, v. NATIONAL LABOR RELATIONS BOARD, Respondent, Petitioner.

No. 15298.

United States Court of Appeals Ninth Circuit.

November 8, 1957.

Carroll, Davis, & Burdick, San Francisco, Cal., for petitioner.

Jerome D. Fenton, Gen. Counsel, Stephen Leonard, Associate Gen. Counsel, Marcel Mallet-Prevost, Asst. Gen. Counsel, Duane Beeson, Norton J. Come, Attys., N.L.R.B., Washington, D. C., for respondent.

Before DENMAN, Senior Circuit Judge, and BONE and FEE, Circuit Judges.

BONE, Circuit Judge.

Petitioners bring the instant proceeding to this Court for review and seek an order setting aside an order of the National Labor Relations Board (herein "Board") issued against petitioners on August 24, 1956. Board in its answer requested enforcement of its order.

This case arose when negotiations between Retail Grocery Clerks Union, Local 648 (herein "Local 648"), and the Retail Grocers Association of San Francisco¹ (herein "Association") resulted in a failure of the parties to agree on a collective bargaining agreement. On or about February 3, 1955, Local 648 picketed two stores operated by members of Association, and Association members responded by a "lockout" on the theory that a "strike" against one is a strike against all members of Association.

Association bargained for the member firm of J. M. Long and Co., Inc. (herein "Long"). Long owned and operated a property called the Crystal Palace Market (herein "Market") in San Francisco. Long not only owned and managed the Market building as a whole, but directly operated several departments therein: a grocery, an appliance store, a sport shop, a housewares department, two liquor, tobacco and magazine departments, a grocery warehouse, a carpenter shop, general offices and a large parking area for customers of the Market. The remainder of the sixty-four departments operating in the Market at the time of the "strike-lockout" were owned and operated by other individuals under so-called "minimum and percentage" lease arrangements by which the lessee operators of these separate departments paid to Long each month a fixed sum plus a percentage of gross sales. These agreements ran from month to month and were subject to cancellation by either party on thirty days' notice.

In addition to the grocery department directly owned and operated by Long, there were in the Market approximately six grocery and delicatessen departments which employed members of, and bargained with, Local 648. Some, though not all, of these operators were represented by Association. Following the "strike and lockout", the grocery department operated by Long was closed. The Standard Groceteria, a lessee in the Market employing Local 648 members, was also closed. The other grocery and delicatessen members opened and closed intermittently. All other departments in the Market (including those operated directly by Long) were open for business and operated throughout the period of the so-called strike and lockout.

Pickets were placed at seven of the eleven entrances² to Market on February 15, 1955. The pickets indicated by placards, etc., that the dispute was between Local 648 and both Long and Standard Groceteria. Peaceful picketing continued until February 24. During this entire period, Long continued all of its operations in the Market, save and except its grocery. Also during this period other employees, members of other unions, crossed the picket lines to do their regular work in the Market, but some employees, including members of Retail Fruit and Vegetable Clerks Union, Local 1017 (herein "Local 1017") refused to cross the picket lines. At this time Local 1017 had contracts with about five fruit and vegetable departments in the Market building, which departments were represented for collective bargaining purposes by the Retail Fruit Dealers Association of San Francisco³ (herein "Fruit Dealers Association"). The collective bargaining agreement between Local 1017 and Fruit Dealers Association was in operation at this time and there was no dispute between the parties thereto.

Fruit Dealers Association filed unfair labor charges with the National Labor Relations Board on February 16, 1955 and a complaint was issued. Petitioners answered, denying the charges and moved to dismiss the complaint. Hearings were held whereupon the Trial Examiner issued his intermediate report and recommended order, finding petitioners to have violated § 8(b) (4) (A) of the National Labor Relations Act, as amended, 29 U.S.C.A. § 158(b) (4) (A). Petitioners filed written exceptions to the Trial Examiner's report. The Board, one member concurring especially and two members dissenting, issued a decision and order affirming the Trial Examiner. See Retail Fruit & Vegetable Clerks' Union, Local 1017, and Retail Grocery Clerks' Union, Local 648, Retail Clerks International Association, AFLCIO Crystal Palace Market and Retail Fruit Dealers' Association of San Francisco, Inc., 116 N.L.R.B. 856 (1956). The intermediate report and recommended order of the Trial Examiner begins at 116 N.L.R.B. 876. The Trial Examiner's report also included a helpful diagram of the Market, with entrances marked and the stands operated by Long being marked.

Section 8(b) (4) (A) of the Act is not an example of the clearest type of statutory draftsmanship. It has given the Board and courts considerable difficulty. The division of the Board into a 2-1-2 decision in this case is indicative of the many uncertainties involved. The statute reads:

"(b) It shall be an unfair labor practice for a labor organization or its agents —

* * * * *

"(4) to engage in, or to induce or encourage the employees of any employer to engage in, a strike or a concerted refusal in the course of their employment * * * to perform any services, where an object thereof is: (A) forcing or requiring * * * any employer or other person * * * to cease doing business with any other person; * * *."

As we understand this statute there are two necessary requirements to find a violation of it. These are: (1) Independent neutral employers (see National Labor Relations Board v. Business Machine and Office Appliance Mechanics Conference Board, Local 459, 2 Cir., 1955, 228 F.2d 553, 557, for a situation where the secondary employers were found to be "allied" with the primary employer), and (2) the union must have as an object of its picketing (or other activity) the inducement or encouragement of the neutral employees to engage in a concerted refusal to work for their neutral employer, so that the neutral employer will cease doing business with the primary employer, which indicates that the neutral employer must be doing some sort of business with the primary employer.

The first question for consideration is whether or not the lessees operating retail stands in the Market were independent neutral (or secondary) employers and thus within the protection of § 8(b) (4) (A). It is petitioners' contention that the lessees were under direct and strong control of Long.⁴ The Board believes that the factors from which petitioners infer control by Long over the lessees were the arrangements designed to protect Long's interest as lessor, and emphasizes that each of the lessees provided its own working capital, managed its own business in all respects not limited in the lease agreement, and each controlled its own employment relations. The Board found the lessees were neutral employers⁵ entitled to the protection of § 8(b) (4) (A).

The question here presented is somewhat like the question decided in National Labor Relations Board v. Hearst Publications, Inc., 1944, 322 U.S. 111, 130-132, 64 S.Ct. 851, 88 L.Ed. 1170, where the Court ruled that determination by the Board that, in the circumstances of the case, a person is an employee under the National Labor Relations Act, may not be set aside on review if it has warrant in the record and a reasonable basis in law. We believe the finding by the Board that the lessees of Long were independent and neutral employers is supported by substantial evidence and has a reasonable basis in law. Though Long had some control over certain aspects of the lessees' business operations, this does not necessarily preclude the lessees from being independent neutral employers. See National Labor Relations Board v. Denver Building & Construction Trades Council, 1951, 341 U.S. 675, 689-690, 71 S.Ct. 943, 95 L.Ed. 1284.

The second assertion of error by petitioners is that even if the lessees be considered independent neutral employers, there can be no violation of § 8(b) (4) (A) since is was not an object of union conduct to prevent the lessees from doing business with Long. It is petitioners' argument that a normal landlord-tenant relationship (which Board says is involved here) is not what Congress intended to include in the term "doing business." Petitioners further assert that the only way the lessees could "cease doing business" with Long would have been to terminate their lease and move out, and that there is no evidence that such a result was "an object" of the picketing.

Board asserts that lease termination is not the only manner in which the parties could "cease doing business," but claims that the handling of the advertising for all lessees in the Market and the agreement in the leases whereby Long received a percentage of the tenants' receipts over a fixed minimum would both be disrupted if the lessees' operations were closed down as a result of the picket line. Board says that such partial disruptions in the relations between the lessees and Long are included in the phrase "cease doing business" as used in § 8(b) (4) (A).

Board also argues that the finding of a violation in this case does not rest alone on the claimed disruption of lessees' business with Long, but is also found in...