Kroger Company v. NLRB

• Decision Date: 10 October 1968
• Docket Number: No. 17895-18011.,17895-18011.
• Citation: 401 F.2d 682
• Parties: The KROGER COMPANY, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent, and Amalgamated Meat Cutters and Butcher Workmen of North America, AFL-CIO, Intervenor, and Retail Clerks International Association, AFL-CIO, Intervenor. AMALGAMATED MEAT CUTTERS AND BUTCHER WORKMEN OF NORTH AMERICA, AFL-CIO, Petitioner, and Retail Clerks International Association, AFL-CIO, Intervenor, v. NATIONAL LABOR RELATIONS BOARD, Respondent, and The Kroger Company, Intervenor.
• Court: U.S. Court of Appeals — Sixth Circuit

401 F.2d 682 (1968)

The KROGER COMPANY, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent, and Amalgamated Meat Cutters and Butcher Workmen of North America, AFL-CIO, Intervenor, and Retail Clerks International Association, AFL-CIO, Intervenor.

AMALGAMATED MEAT CUTTERS AND BUTCHER WORKMEN OF NORTH AMERICA, AFL-CIO, Petitioner, and Retail Clerks International Association, AFL-CIO, Intervenor, v. NATIONAL LABOR RELATIONS BOARD, Respondent, and The Kroger Company, Intervenor.

Nos. 17895-18011.

United States Court of Appeals Sixth Circuit.

October 10, 1968.

Nicholas Unkovic, Pittsburgh, Pa., (Leonard L. Scheinholtz, Scott F. Zimmerman, Reed, Smith, Shaw & McClay, Pittsburgh, Pa., J. Mack Swigert, Taft, Stettinius & Hollister, Cincinnati, Ohio, Norman Diamond, Arnold & Porter, Washington, D. C., William Keller, Clark, West, Keller, Clark & Ginsberg, Dallas, Tex., on the brief), George A. Leonard, Cincinnati, Ohio, of counsel, for Kroger Company.

Bernard Dunau, Washington, D. C. (Lester Asher, Chicago, Ill., for Retail Clerks International Association, AFL-CIO, S. G. Lipman, Donald Grody, Washington, D. C., on the brief), for Amalgamated Meat Cutters and Butcher Workmen of North America, AFL-CIO.

Peter Ames Eveleth, National Labor Relations Board, Washington, D. C. (Arnold Ordman, Gen. Counsel, Dominick L. Manoli, Associate Gen. Counsel, Marcel Mallet-Prevost, Asst. Gen. Counsel, Nancy M. Sherman, Atty. N. L. R. B., Washington, D. C., on the brief), for National Labor Relations Board.

Before O'SULLIVAN and PHILLIPS, Circuit Judges, and CECIL, Senior Circuit Judge.

CECIL, Senior Circuit Judge.

Cause No. 17895 is before the Court upon petition of The Kroger Company (herein called Kroger or the Company) for review of an order of the National Labor Relations Board issued on May 5, 1967. Amalgamated Meat Cutters and Butcher Workmen of North America, AFL-CIO (herein called Meat Cutters), one of the charging parties, intervened in cause No. 17895, and in cause No. 18011 petitioned for review of portions of the same order. The Board cross-petitioned for enforcement of its order in full. Retail Clerks International Association, AFL-CIO (herein called Retail Clerks), also a charging party, intervened in both causes. The Kroger Company intervened in No. 18011. The Board's decision and order are reported at 164 NLRB No. 54. The cases on review have been consolidated for briefing, oral argument and filing of a joint appendix. This Court has jurisdiction because Kroger is an Ohio corporation with its principal office in Cincinnati. Section 160(f), Title 29, U.S.C.

Separate charges were filed by Meat Cutters on September 10, 1965, and by Retail Clerks on December 10, 1965, charging Kroger with violating Sections 8(a) (1), (3) and (5) of the National Labor Relations Act (herein called the Act). The cases were consolidated for hearing before the Trial Examiner. The Trial Examiner sustained the charges which were affirmed by the Board.

Kroger operates a large retail grocery chain with stores in many parts of the United States. We deal here with a company which has no animus toward unions. It has a long history of negotiating contracts with the two unions involved herein and over ninety-five percent of its employees are members of unions. The matter in issue concerns the company's pension and profit-sharing programs, which, because of the amount of money involved, is of great interest to all of the parties.

In 1947 Kroger established the Employees' Retirement Income Plan. This plan provides lifetime retirement to all employees retiring at age 65 with 15 years of service. Retirement income is based upon an employee's length of service and average annual earnings with a minimum level of benefits guaranteed. There are other details of the plan, such as early retirement for reasons of health etc., not necessary to state here. An essential characteristic of this plan is that it is non-contributory, the cost being borne entirely by the company. It is not funded and the payments are carried as a part of current expenses. The employee has no vested interest beyond his income for life whether he lives only a few weeks or for many years. A death benefit of $500 is paid to a designated beneficiary of a retired employee.

The Employees' Savings and Profit Sharing Plan, the real subject of this controversy, was established by the company in 1951. Participation in this plan, for those employees who met eligibility requirements, was entirely voluntary. They could join and withdraw at will. An eligible employee could deposit with the company as much as 5 percent of his salary up to a maximum of $15 per week. These moneys were deposited in a savings fund known as Fund A and invested by Kroger-appointed trustees. Kroger annually contributes a percentage of its profits to a separate fund, known as Fund B which is invested in Kroger stock and other securities. At the end of each year, through accounting procedure, not necessary to detail here, the participating employee is credited with a proportionate share of the deposits and earnings of each fund. Upon withdrawal from the plan an employee receives all of his A Fund credit and a proportionate part of his B Fund credit equal to 5% for each year of participation. All withdrawals by an employee are in a lump sum and in the total amount of his interest in the funds. Membership in the plan is terminated upon retirement or other separation from employment. The benefits of this plan to an employee are substantial. In 1965, the company contributed over $4,000,000 of its profits to this plan. In this same year, for every dollar deposited in the savings fund, the employee was credited with $1.19 of Fund B credits.

In 1956, by resolution of the Kroger Board of Directors, both the retirement and the savings and profit-sharing plans were modified by the insertion of a new paragraph in each. To the Savings and Profit-Sharing Plan a paragraph identified as paragraph 4 was added as follows:

"Notwithstanding the foregoing provisions, any employee who is covered by a limited group pension plan as herein defined shall cease to be eligible hereunder and, if a member of this Plan, shall be considered to have withdrawn therefrom on the date when such coverage commenced. The term `limited group pension plan\' means a plan for the payment of pensions or other retirement benefits which (a) is limited in its coverage to a particular group of employees, and (b) is established by or at the request of the covered employees or their authorized representatives."

Again, in 1962, by resolution of the Board of Directors, a further clarifying provision was added:

"Every employee who is a member of a group of employees or of a collective bargaining unit which establishes or adopts a limited group pension plan for any employees of the Company (regardless of whether or not such employee participates therein) shall, for the purposes hereof, be deemed `covered\' thereby.

"The term `coverage commenced\' as used above shall mean the time when the Company, any group, collective bargaining unit, or employee first becomes obligated to accrue or to make payments or contributions to such limited group pension plan."

At the same time a comparable exclusionary provision was placed in the Retirement Plan. Membership in a union which has negotiated its own pension plan with Kroger excludes all such employees from participation in Kroger's Pension and Profit-Sharing Plans.

We consider first the grounds for review in cause No. 17895. Each of the basic allegations of unfair labor practices appearing in the consolidated complaint is grounded upon Kroger's claimed maintenance and enforcement of paragraph 4 of the Savings and Profit-Sharing Plan. The Board ordered the company under the heading of affirmative action to

"(a) Amend its Savings and Profit Sharing Plan by deleting therefrom those portions of Paragraph 4 which disqualify or exclude from participation employees covered by a pension plan resulting from collective bargaining through a labor organization.

"(b) Amend its existing employee booklets and/or publications so as to eliminate therefrom any language which indicates that employees covered under a pension plan resulting from collective bargaining through a labor organization are disqualified from participation in its Savings and Profit Sharing Plan."

The question arises whether paragraph 4 is a violation of Section 8(a) (3) of the Act.

Section 8(a) (3) provides:

"It shall be an unfair labor practice for an employer — by discrimination in regard to hire or tenure of employment or any term or condition of employment to encourage or discourage membership in any labor organization: * * *"

Kroger contends that the essential elements of an 8(a) (3) violation — discrimination, discouragement of union membership, and unlawful intent or motive — are lacking in this case. National Labor Relations Board v. Brown, 380 U.S. 278, 286, 85 S.Ct. 980, 13 L.Ed.2d 839.

The company seeks to justify its position by the following statement in its brief:

"Kroger has never — through bargaining or by reason of amended Section 4 — required any member of the charging unions to withdraw from profit sharing without bargaining with the unions and granting the unions an agreeable substitute. The bargaining history shows that Kroger\'s primary goal was to obtain continued participation of all employees in the Kroger Program — both pensions and profit sharing. Even while retreating from this bargaining position and agreeing to contribute to a negotiated pension plan, Kroger has always extended to the charging unions the option of continued participation in the Kroger Program, including profit sharing. In every instance where employees withdraw from the Kroger Program, it was because they, or their union representatives, preferred a union-negotiated pension plan over continued participation in the Kroger Program."

This statement is based upon...