N.L.R.B. v. Emsing's Supermarket, Inc.

• Decision Date: 17 April 1989
• Docket Number: No. 87-2635,87-2635
• Citation: 872 F.2d 1279
• Parties: 131 L.R.R.M. (BNA) 2296, 111 Lab.Cas. P 11,107 NATIONAL LABOR RELATIONS BOARD, Petitioner, v. EMSING'S SUPERMARKET, INC. and Rocky's Supermarket, Inc., Respondents.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1279

872 F.2d 1279

131 L.R.R.M. (BNA) 2296, 111 Lab.Cas. P 11,107

NATIONAL LABOR RELATIONS BOARD, Petitioner, v. EMSING'S SUPERMARKET, INC. and Rocky's Supermarket, Inc., Respondents.

No. 87-2635.

United States Court of Appeals Seventh Circuit.

Argued Sept. 14, 1988.

Decided April 17, 1989.

Margaret G. Bezou, N.L.R.B., Washington, D.C., for petitioner.

J. Charles Sheerin, Law Offices of J. Charles Sheerin, Michigan City, Ind., for respondents.

Before CUDAHY, RIPPLE and KANNE, Circuit Judges.

RIPPLE, Circuit Judge.

The National Labor Relations Board (the NLRB or Board) seeks the enforcement of its order directing Emsing's Supermarket, Inc. (ESI) and Rocky's Supermarket, Inc. (RSI) to cease and desist unfair labor practices and to take certain affirmative steps designed to remedy the actions of ESI at the time of the closing of its store in August 1984. ¹ For the reasons that follow in this opinion, we enforce the order of the NLRB in its entirety.

I BACKGROUND

A. History of Store Ownership

During the time in question, ESI and RSI were owned by Alan Emsing and his wife Terri Emsing. Emsing's Supermarket had been established in 1967 by Mr. Emsing's parents. It was located in Griffith, Indiana. In 1980, Mr. and Mrs. Emsing purchased ESI from Mr. Emsing's parents. With the exception of some treasury shares retained by Mr. Emsing's father to secure the purchase note, Mr. and Mrs. Emsing became the sole shareholders of ESI. The couple controlled the company as shareholders and officers. ² In December 1982, Mr. and Mrs. Emsing formed RSI and became its sole shareholders. ³ On January 7, 1983, Rocky's opened in Hammond, Indiana, eleven miles north of Emsing's Griffith, Indiana location.

B. Collective Bargaining History

About fifteen employees worked at Emsing's before it closed in mid-August of 1984. Eight or nine of these employees were clerks who were in a bargaining unit represented by the United Food and Commercial Workers Union, Local 1460, AFL-CIO, CLC (Union). ⁴ The Union had represented the workers since 1970 and the most recent collective bargaining agreement (agreement or CBA) covered the period of November 1, 1980 through October 31, 1983. When the store closed, the CBA had expired but was being negotiated.

The events that led to the Union's charge of unfair labor practices began in the fall of 1983. In October or November 1983, Mr. Emsing and Arthur Primm, a Union representative, met at Emsing's to negotiate a replacement contract for the CBA that was due to expire on October 31, 1983. ⁵ At this meeting Mr. Primm described the requested Union modifications and Mr. Emsing responded that his financial situation was deteriorating and that he would need substantial concessions to survive. Emsing's Supermarket, Inc., A.L.J. Dec. Case 13-CA-24609 at 5 (Sept. 12, 1985) [hereinafter ALJ Dec.]. At the same meeting, Mr. Primm asked if Mr. Emsing would agree to continue the CBA until a new one was ratified. Mr. Emsing said, "We will see." Id. at 6.

A second meeting was held on December 16, 1983. Mr. Emsing presented the Union with his final proposal which called for reduced benefits and a ten percent wage reduction. Mr. Emsing began to explain his financial situation and placed his financial records on the table for inspection. However, Mr. Primm was unable to review the records and Mr. Emsing agreed that a Union auditor could inspect the books at any time. No auditors ever came to inspect the books.

During this second meeting, Mr. Emsing told the Union that his proposal could not be changed and asserted that there was no money in ESI to accommodate the Union proposals. He stated that, unless his proposals were accepted, ESI could not afford to keep Emsing's open. ALJ Dec. at 6. Mr. Primm responded that perhaps the employees would accept a wage freeze but also advised Mr. Emsing that he would recommend that the Union members reject such a proposal. Before the third bargaining session, the Union employees voted and, on Mr. Primm's recommendation, rejected ESI's proposal.

Little was accomplished at the third meeting which was held in January 1984. Mr. Primm told Mr. Emsing that the proposal had been rejected. Mr. Emsing repeated that his records were available for inspection and that his proposal was his only offer, because the store was losing money. Mr. Primm said he would still recommend rejection of the proposal.

On February 9, 1984, Mr. Primm met with members of the Union, and, although only three Union members were present, they voted two against one to reject Mr. Emsing's proposal. Mr. Primm reported the results to Mr. Emsing and asked for another meeting to make some proposals. Mr. Emsing reasserted that he had already given ESI's only proposal. Mr. Primm stated that he would need approval to strike; Mr. Emsing responded by telling him to do what he had to do but that ESI would do what was necessary to operate. ALJ Dec. at 7. On March 22, 1984, the request to strike was approved by the International Union. Before striking, Mr. Primm telephoned Mr. Emsing to see if they could work out any other proposal as the Union preferred not to strike. Mr. Emsing stated that he had expressed his position and reiterated that each would have to do whatever he felt was necessary.

During this time, Emsing's initiated a number of cost-cutting measures. ⁶ Also during this time, some of the employees heard rumors that the store was going to close and started an effort to bring the subject of contract ratification and strike up for a revote. This effort resulted in a Union meeting on May 23, 1984 at which the employees, this time against Mr. Primm's recommendation, voted not to strike and to accept ESI's contract offer. Mr. Primm testified that he called Mr. Emsing with the news. The ALJ, however, did not find Mr. Primm's testimony on this point to be credible and found that the call was not made. Mr. Primm testified that he instructed his secretary to type up the contract, but, from the time that the contract was ratified until the store closed, no contract was ever sent to Mr. Emsing.

Mr. Primm conceded that, as early as May 23, 1984, the period around the ratification vote, he began to hear rumors from the employees, vendors, and others that Emsing's was going to close. A number of Union employees contacted Mr. Primm to ask if the rumors were true. He told these members that, if an employer plans to close a store, "[he] will let us know. We try to set back and wait for [the employer to notify the Union]." Tr. at 504. As August approached, the rumors became more intense. Finally, an Emsing's employee contacted Mr. Primm and said that she had heard from a reliable source that the store was going to close. On August 8, 1984, Mr. Primm sent a letter to Mr. Emsing asking whether the store would be closing on August 11 as the rumors indicated. The letter stated, "If the rumor is true, I would request a meeting with you to discuss store closing." R. Vol. IV at General Counsel Ex. 5.

Mr. Emsing testified that the decision to close the store was made on August 1, 1984, and that, in individual conferences, each of the employees was told that the store would close around August 11 or 12. ALJ Dec. at 9. Mr. Primm and Mr. Emsing spoke on the telephone on August 8 or 9, and, at that time, Mr. Emsing told Mr. Primm that the store would close. Mr. Primm asked if a meeting could be set up to talk about the effects of the closing on the employees. Mr. Emsing replied that they could meet at any time and asked if Mr. Primm wanted to meet right away. Mr. Primm indicated that he was tied up and that he would get back to Mr. Emsing with a date.

During the next week, Mr. Primm began calling Mr. Emsing. These calls were made not only to set up an appointment but also because Mr. Primm had been informed that ESI had failed to remit the dues checkoff after July 5, 1984, had unilaterally discontinued making health and welfare payments under the CBA after June 1984, had unilaterally discontinued making pension payments after June 1984, and had ceased paying for accrued vacation time after the store closed. These were the unilateral changes that the General Counsel alleged violated sections 8(a)(1) and (5) of the National Labor Relations Act. 29 U.S.C. Secs. 158(a)(1) & (5).

From August 11 through August 27, Mr. Primm telephoned Emsing's three to five times, but obtained an answer only once. On that occasion, Mr. Primm spoke with Mr. Emsing's brother, Joseph "Butch" Emsing. Butch Emsing stated that his brother was working at both Emsing's and Rocky's stores and that Mr. Primm might be able to contact him at Rocky's. Mr. Primm did not ask for the number at Rocky's but instead asked that Mr. Emsing return the call. Mr. Emsing testified that he was never given the message. Mr. Primm conceded that, after he spoke with Butch Emsing, he made no attempt to find the number for Rocky's. On August 27, 1984, Mr. Primm sent Mr. Emsing another letter addressed to Emsing's. The letter was sent by certified mail and, although the parties stipulated that Mrs. Emsing signed for the letter, Mr. Emsing claimed that he had no recollection of having seen the letter. Finally, by letter dated September 26, Mr. Primm referred the matter to the Union's attorneys for arbitration to recover the amount owed for the Union's August dues, health and welfare contributions, for liquidated damages for July and August, and for unspecified sums of vacation money due to three employees. On November 5, 1984, the Union filed the original charge with the Board.

II DECISION OF THE NLRB

The Board found, in agreement with the administrative law judge (ALJ), that ESI had violated section 8(a)(5) and (1) of the Act, by unilaterally discontinuing payments to the benefit funds, by unilaterally discontinuing payments to employees for accrued vacation benefits, and by precluding meaningful bargaining over the closure of the store through its failure to give the Union...