May Dept. Stores Co., Venture Stores Div. v. N.L.R.B.

• Decision Date: 11 April 1990
• Docket Number: 89-1065,Nos. 88-3302,AFL-CI,CL,I,s. 88-3302
• Citation: 897 F.2d 221
• Parties: 133 L.R.R.M. (BNA) 2745, 114 Lab.Cas. P 12,016 MAY DEPARTMENT STORES COMPANY, VENTURE STORES DIVISION, Petitioner, Cross-Respondent, v. NATIONAL LABOR RELATIONS BOARD, Respondent, Cross-Petitioner. United Food and Commercial Workers Union, Local 881, Chartered by United Food and Commercial Workers International Union,ntervenor.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 221

897 F.2d 221

133 L.R.R.M. (BNA) 2745, 114 Lab.Cas. P 12,016

MAY DEPARTMENT STORES COMPANY, VENTURE STORES DIVISION Petitioner, Cross-Respondent, v. NATIONAL LABOR RELATIONS BOARD, Respondent, Cross-Petitioner United Food and Commercial Workers Union, Local 881 Chartered by United Food and Commercial Workers International Union, AFL-CIO, CLC, Intervenor.

Nos. 88-3302, 89-1065.

United States Court of Appeals Seventh Circuit.

Argued Oct. 24, 1989.

Decided Feb. 28, 1990.

Reconsideration En Banc Denied April 11, 1990.

Jairus M. Gilden, Neal D. Rosenfeld, Rosenfeld & Karmel, Chicago, Ill., John W. Noble, Jr. (argued), Alex V. Barbour, Pope, Ballard, Shepard & Fowle, Chicago, Ill., for petitioner.

Aileen A. Armstrong, Laurence Zakson, Howard E. Perlstein, N.L.R.B., Appellate Court, Enforcement Litigation, Washington, D.C., Donald J. Crawford, N.L.R.B., Chicago, Ill., Edward P. Wendel, Washington, D.C., for respondent.

Jairus M. Gilden, Rosenfeld & Karmel, Chicago, Ill., for intervenor.

BAUER, Chief Judge, and WOOD and COFFEY, Circuit Judges.

BAUER, Chief Judge.

Like an old friend--or a bad cold--this case just seems to keep coming back. After a laborious history that has included two previous trips to this court, this 1981 unfair labor practices claim against May Department Stores Company, Venture Stores Division ("Venture") has reached us again. In the instant matter, Venture petitions for review of an order of the National Labor Relations Board ("NLRB" or "Board"), reported at 289 NLRB No. 88 (June 30, 1988) ("Board Decision "), in which the Board found that Venture violated Sections 8(a)(5) and (1) of the Labor-Management Relations Act ("Act"), 29 U.S.C. Secs. 158(a)(5) and (1), by refusing to recognize and bargain with the United Retail Workers Union, Local 881 ("Local 881"). The NLRB has responded with a cross-application for enforcement of this order, and Local 881 has intervened. In what we hope is our final visit from this case, we deny Venture's petition and grant the Board's cross-petition for enforcement, for the reasons discussed below.

I.

The facts of this dispute, to which the parties stipulated long ago, have been set forth in detail in the NLRB decision at issue. Board Decision at 3-10. For our purposes here, a brief summary of the relevant highlights will suffice.

The dispute centers on the merger/affiliation ¹ of two unions: the United Retail Workers Union ("URW"), and the United Food and Commercial Workers International Union ("UFCW"). Prior to the merger, the URW was an independent union with four locals and about 20,500 members, including 1,214 members employed by Venture. The UFCW was and is an international union affiliated with the AFL-CIO.

In the summer of 1981, the officers of the URW unanimously endorsed a "resolution of merger" between their union and the UFCW. A mail ballot referendum was then called for in which the rank and file members of the URW would be asked to approve the proposed merger. Before the balloting, all URW members received, among other things, a copy of the merger agreement and UFCW's constitution. URW and UFCW officers conducted, after duly notifying all URW members, a number of special information meetings regarding the merger. The URW set up a telephone "hot line" to answer members' questions about the merger. In addition, URW and UFCW officers sent explanatory information to all employers with employees represented by the URW ("covered employers"), including Venture.

On July 31, a direct mail service hired by URW mailed secret ballots, return envelopes and instructions to all individuals eligible to vote on the merger. ² All ballots were to be returned to LaSalle Bank, which had been appointed to receive and tally the ballots, by the close of business on August 20. On August 21, LaSalle Bank opened and tabulated the ballots. It reported that 6,823, or approximately 74 percent, of the ballots validly cast ³ were cast in favor of the merger, with 2,344, or about 26 percent, against. It was also determined that, of the 1,214 Venture employees who were sent ballots, 389 sent them in. However, because all the ballots were commingled for counting purposes, it was and is impossible to determine how these 389 employees--or, indeed, how the employees of any single bargaining unit--voted.

Under the terms of the merger agreement as approved in the referendum, the whole of the URW became Local 881, "an autonomous local union chartered by the UFCW," with the URW's former four locals redesignated as "administrative districts" of Local 881. Local 881 retained all URW property and assets, including the URW treasury. The agreement provided that Local 881 would be governed by both the UFCW constitution and its own set of by-laws, with any conflicts being resolved in favor of the by-laws, at least for the first three years. Local 881 would be directed by three officers, a general executive board composed of these officers and twenty-two vice-presidents, and an executive council composed of the three officers and eight of the twenty-two vice-presidents. The merger agreement provided that, for the first three-year term, these positions would be filled entirely by former officers of the URW. Specifically, the former National Executive Director of the URW would become the President of Local 881; URW's National Vice President/Treasurer would become Local 881's Secretary/Treasurer; URW's Director of Education would become Local 881's Recorder; all the members of URW's board of governors would become the vice-presidents on Local 881's general executive board; and the supervisors from URW's professional staff would become the eight vice-presidents who also sit on Local 881's executive council. ⁴

Under the merger agreement, the collective bargaining agreements already in place between the URW and the covered employers would remain unchanged, and the officers of Local 881 (who were identical to the former officers of the URW) would continue to administer these agreements. Under Local 881's by-laws, future collective bargaining agreements would continue to be negotiated on the local level, and contracts would continue to be ratified by a majority of the affected local membership, with UFCW reserving the right to request that initial bargaining proposals and the resulting agreements be submitted to the UFCW president before their submission to the general membership. Local 881 would have the exclusive authority to interpret and enforce the collective bargaining agreement, to submit grievances to arbitration, and to withdraw or settle grievances. Further, just as the URW had required a two-thirds vote of the affected membership present at a special meeting to authorize a strike, Local 881 would require the same, with one added wrinkle: any strike would have to then be approved by the UFCW. Local 881 also retained the authority to set its own dues. However, the procedure would be changed in that, whereas URW dues were set by the stewards, Local 881's dues would be set by majority vote of its members and would be subject to the minimums set forth in the UFCW constitution and the approval of the UFCW. Unlike the URW, the UFCW charges its locals a per capita monthly tax, but the merger agreement exempted Local 881 from such charges for three years.

After the merger referendum results were certified and reported, all covered employers recognized Local 881 as the valid successor to the URW and honored existing collective bargaining agreements--all covered employers, that is, except Venture. Venture asserted that it need not recognize or bargain with Local 881 because non-URW-member employees of the covered employers were not permitted to vote in the merger referendum, citing the "Amoco rule." See Amoco Production Co., 262 N.L.R.B. 1240 (1982), aff'd sub nom. Local Union No. 4-14, Oil, Chemical & Atomic Workers International v. NLRB, 721 F.2d 150 (5th Cir.1983). ⁵ Under this rule, the Board would not require an employer to bargain with a post-merger or post-affiliation union unless it determined, as a threshold matter, that all employees in the bargaining unit, not merely union members, were permitted to vote on the change.

Back in 1984, the NLRB agreed with Venture, and ruled that, pursuant to the Amoco rule, Venture did not violate the Act by refusing to recognize Local 881 because non-URW-members were not permitted to vote in the merger referendum. May Department Stores Co., 268 N.L.R.B. 979 (1984). Local 881 petitioned this court for review and, in our first crack at this case, we affirmed. United Retail Workers Union, Local 881 v. NLRB, 774 F.2d 752 (7th Cir.1985). After examining the split that then existed in the federal courts of appeals and the conflicting policies involved, we held that the Board's decision to adopt and apply the Amoco rule was rational and consistent with the Act. Id. at 758-64. Local 881 pressed on, however, and petitioned the Supreme Court for a writ of certiorari.

While Local 881's petition was pending, the Supreme Court issued its opinion in NLRB v. Financial Institution Employees of America, Local 1182 (Seattle-First National Bank), 475 U.S. 192, 106 S.Ct. 1007, 89 L.Ed.2d 151 (1986) ("Sea-First "), an appeal from a decision of the Ninth Circuit. In Sea-First, the Court held that "the Board exceeded its authority under the Act in requiring that nonunion employees be allowed to vote for affiliation before it would order the employer to bargain with the affiliated union." Id. at 209, 106 S.Ct. at 1016 (footnote omitted). The Court explained that the Amoco rule "violated the policy Congress incorporated into the Act against outside interference in union decisionmaking." Id. at 204, 106 S.Ct. at 1014 (citations omitted). In light of Sea-First, the Court granted Local 881's petition for a writ of certiorari, vacated our judgment, and remanded the case to us for further consideration. United Retail Workers Union, Local 881 v. NLRB, 475...