Hughes & Hatcher, Inc. v. NLRB

Decision Date17 April 1968
Docket Number17517.,No. 17412,17412
PartiesHUGHES & HATCHER, INC. and its Wholly Owned Subsidiary, Oppenheim's, Inc., Petitioners, v. NATIONAL LABOR RELATIONS BOARD, Respondent. CENTRAL STATES JOINT BOARD, RETAIL & DEPARTMENT STORE EMPLOYERS, etc., Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.
CourtU.S. Court of Appeals — Sixth Circuit

COPYRIGHT MATERIAL OMITTED

William M. Saxton, Detroit, Mich., Robert J. Battista, Butzel, Eaman, Long, Gust & Kennedy, Detroit, Mich., Lee B. Brody, Smith, Hirsch & Brody, Detroit, Mich., on brief, for petitioner Hughes & Hatcher.

Jacob Sheinkman, New York City, Sheldon Klimist, Detroit, Mich., Bernard J. Firestone, Detroit, Mich., on brief, for petitioner Central States Joint Board etc.

Theodore Sachs, Detroit, Mich., Rothe, Martson Mazey, Sachs & O'Connell, Detroit, Mich., on brief, for intervenor Retail Clerks Unions.

Julius Rosenbaum, N.L.R.B., Washington, D. C., Arnold Ordman, General Counsel, Dominick L. Manoli, Associate General Counsel, Marcel Mallet-Prevost, Asst. General Counsel, Elliott Moore, Julius Rosenbaum, Attorneys, N.L.R.B., Washington, D. C., on brief, for respondent.

Before WEICK, Chief Judge, and O'SULLIVAN and CELEBREZZE, Circuit Judges.

WEICK, Chief Judge.

These proceedings involve a bitter controversy between two rival labor unions,1 each vying to organize the employees of the employer2 in order to become their bargaining representative.

The employer owns and operates a chain of fourteen retail clothing stores in metropolitan Detroit, and through its subsidiary, Oppenheim's, operates two stores in Jackson, Michigan. It employs in all of the stores about eleven hundred employees, three hundred of whom were already represented by a union other than the two here involved.

Organizational activity was initiated by Amalgamated in April, 1964, but the company did not become aware of it until the following July. The company resisted organization of its employees and embarked on a "Don't Join the Union" campaign and distributed leaflets. Its managers were instructed to watch for union organizers and not to permit solicitation in the stores as it would violate the company's long-standing "no solicitation" rule. Organizational efforts were originally directed at the two downtown Detroit stores, but by September, 1964, they had spread throughout the chain. In November, 1964, the campaign was slowed because of the union's other organizational commitments and the presence among the company's personnel of numerous seasonal employees. However, in January, 1965, the union assigned top priority to the organization of H&H and designated six full time organizers for the job.

In the ensuing months Amalgamated received a more favorable response from general office workers than from other company personnel, and on March 18th the union notified the company, by telegram, that it represented a majority of "office clerical employees employed in your general offices located at 2301 Woodward Detroit Michigan." This group was composed of approximately one hundred employees who performed general clerical work for the entire chain. The company rejected the union's request for recognition, and on April 9th the union filed a petition for certification as the bargaining representative for the unit and then called a strike. Approximately forty office workers responded. The strikers, joined by nonemployees, spasmodically picketed all of H&H's stores until May 8th.

On April 13th H&H filed an unfair labor practice charge against Amalgamated, claiming that the union was in violation of Section 8(b) (7) (C) of the National Labor Relations Act as amended (29 U.S.C. § 151 et seq). The Regional Director dismissed the charge but ordered an expedited election. On April 19th the union filed a petition for certification as the bargaining representative for a unit of approximately eighteen employees, which was said to consist of "all non-selling employees employed in the Employer's retail store located at 2301 Woodward Avenue Detroit Michigan." The expedited election was blocked by the filing of an unfair labor practice charge by Amalgamated. The charge was disposed of by a settlement agreement, but the agreement was later set aside and serves as the basis for the present alleged 8(a) (1) violations of unlawful interrogation and a promise of benefits.

On May 3rd a representation hearing began. At the hearing the company subscribed to the position that the proper bargaining units should be either all employees in all the company's stores or all non-selling employees in all the company's stores. The next day the hearing was continued at the request of Amalgamated, and was never reconvened.

At the suggestion of the company, a meeting was arranged between Bernard E. and Max J. Pincus, president and executive vice-president of H&H, their attorney, Lester Smith, and David Chaney, president of Amalgamated. A sounding out of the positions of each side indicated that the company was greatly concerned about the strike, the picketing, and the injurious effect on its business. On the other hand, Chaney expressed his belief that a majority of the company employees wanted representation by Amalgamated, and that except for the vigorous antiunion campaign waged by H&H, a majority of the employees would have indicated their feelings by signing authorization cards. At another meeting held the next day between the same parties and the attorney for Amalgamated, Chaney boasted that if H&H would clearly state to its employees that in the future it would assume a neutral attitude in regard to organization, Amalgamated could obtain a majority within forty-eight hours. After some negotiation, the parties agreed that H&H would issue a letter informing its employees of its newly-adopted position of neutrality; and that following such letter the employees would be given opportunity to decide whether they wanted the union. Chaney entered into a "gentlemen's agreement" with Bernard and Max Pincus and their attorney that if a majority of the employees failed to select the union within seventy-two hours, the union would abandon its efforts to organize H&H.

A "neutrality" letter3 was drafted, and it was agreed that authorization cards would be distributed to employees. There was some disagreement as to how distribution should be carried out. The union wanted its organizers to make the distribution, but H&H objected because it would violate the company's no-solicitation rule. Finally it was agreed that neutral employees would be selected by the store managers to hand out the cards.

On the evening of May 4th a meeting of all store managers was held, and the position of the company was explained. The managers were instructed that the neutrality letter should be read the assembled employees, and a copy of it distributed to each employee. Then authorization cards should be distributed. The managers were not told about the seventy-two hour gentlemen's agreement. The only persons who knew about the gentlemen's agreement were Bernard and Max Pincus, Attorney Smith, and David Chaney.

The next morning, meetings in conformity with the above format were held in all Detroit stores, on company property and on company time. On May 6th a card check revealed that a majority of employees had selected Amalgamated, on the basis of which the company immediately recognized the union. However, Amalgamated refused to remove picket lines until a contract was negotiated. Bargaining sessions were held on May 6th, 7th and 8th, with the result that on May 8th a union security agreement, running for five years, was executed, and the picketing was discontinued.

The foregoing negotiations had not included the Jackson employees. When the union was questioned about what it would want for these employees, it responded that the same terms as had been negotiated would be sufficient. The parties then decided that the same procedure as had been utilized in the Detroit stores, would be employed in the Jackson stores.

Accordingly, on May 10th the company's "letter of neutrality" was read to Jackson employees, and authorization cards were distributed. A subsequent card check revealed that a majority of employees had selected Amalgamated, and the parties thereafter entered into a one-page statement, by the terms of which the Jackson employees were covered by the contract already executed.

Retail Clerks had commenced organizational activity shortly before H&H had capitulated to Amalgamated. Retail Clerks filed charges of unfair labor practices against the company, alleging that it gave assistance to Amalgamated in the latter's organization of the employees. The charges were consolidated with those filed by Amalgamated, and a complaint was issued by the General Counsel against the company.

The case was heard by the trial examiner, who found that H&H violated Section 8(a) (1) of the Act by interrogating and coercing employees in connection with protected activities, and that it violated Sections 8(a) (1), (2) and (3) of the Act by assisting and contributing financial and other support to Amalgamated, by recognizing and bargaining with Amalgamated, and by entering into a union security agreement at a time when it did not represent an uncoerced majority of the employees. The Board adopted the findings, conclusions and recommended order of the trial examiner, ordered the company to cease and desist from giving effect to the collective bargaining agreements unlawfully entered into with the union, and ordered the company to reimburse the employees for dues and fees exacted under the agreements. The Board added a proviso, however, which expressly reserved to the employees any wage, hour, or other substantial feature of their relationship with their employer which was established pursuant to the agreements, including any rights which they may have thereunder.

Petitions to review the Board's order were filed in this court by H&H and...

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