N.L.R.B. v. Sav-on Drugs, Inc.

• Citation: 728 F.2d 1254
• Decision Date: 21 March 1984
• Docket Number: No. 81-7428,SAV-ON,81-7428
• Parties: 100 Lab.Cas. P 10,947 NATIONAL LABOR RELATIONS BOARD, Petitioner, v.DRUGS, INC., Respondent. CA
• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)

Page 1254

728 F.2d 1254

100 Lab.Cas. P 10,947

NATIONAL LABOR RELATIONS BOARD, Petitioner, v. SAV-ON DRUGS, INC., Respondent.

CA No. 81-7428.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted Jan. 11, 1984.

Decided March 21, 1984.

Peter Winkler, Elliott Moore, N.L.R.B., Washington, D.C., for petitioner.

Thomas S. Kerrigan, Timothy F. Ryan, McLaughlin & Irvin, Los Angeles, Cal., for respondent.

On Application for Enforcement of an Order of the National Labor Relations Board.

Before BROWNING, Chief Judge, CHOY, GOODWIN, HUG, SKOPIL, SCHROEDER, FLETCHER, FARRIS, FERGUSON, CANBY, and BOOCHEVER, Circuit Judges.

FARRIS, Circuit Judge:

The National Labor Relations Board petitions for enforcement of its order requiring Sav-On Drugs, Inc. to reinstate and pay back wages to 61 discharged employees. The panel refused to enforce the petition. NLRB v. Sav-On Drugs, Inc., 704 F.2d 1147 (9th Cir.1983). We reconsidered the petition en banc. We order enforcement.

FACTS

Sav-On operates a chain of retail drug stores in California, Texas and Nevada. In mid-1978, employees in approximately three-quarters of its California stores were covered by identical collective bargaining agreements with locals of the United Food and Commercial Workers International Union, AFL-CIO. These agreements had an expiration date of June 30, 1978, and covered all employees in the stores, including pharmacists and pharmacist managers.

Beginning May 1, 1978, the Guild for Professional Pharmacists, seeking to represent all pharmacists employed by Sav-On in its California stores, filed petitions with the National Labor Relations Board. The regional director dismissed the petitions on the ground that pharmacist managers were supervisors and that the Guild was not a labor organization within the meaning of the National Labor Relations Act. See 29 U.S.C. Sec. 152(5) and (11). The Guild filed a timely request for review of the decision.

On November 6, 1978, the Guild sent a letter to Sav-On, seeking wage increases for the pharmacists and threatening to strike if its demands were not met. On November 8, the Board granted the Guild's request for review of the regional director's decision. That same day, Sav-On and the Food and Commercial Workers Union agreed to extend their expired agreement as to Sav-On employees who were not pharmacist managers.

On January 5, 1979, Sav-On discharged two pharmacist managers because of their activities with the Guild. The Guild filed unfair labor practice charges. The pharmacist managers were not reinstated. Fifty-nine pharmacists and pharmacist managers struck to protest the discharges. Sav-On discharged all 59 and has refused to reinstate them.

On July 31, 1979, the Board issued its decision on review and reversed the regional director's decision. The Board found that the pharmacist managers were not supervisors and that the Guild was a labor organization within the meaning of the Act. The Board ordered an election. We enforced In the pending unfair labor practice case, the Board found that Sav-On violated sections 8(a)(1) and 8(a)(3) of the Act by discharging the two pharmacist managers because of their union activities and by discharging the 59 employees who struck to protest the discharges. The Board ordered Sav-On to reinstate and pay back wages to all of the discharged employees and to cease and desist from the unfair labor practices.

                that order.    NLRB v. Sav-On Drugs, Inc., 709 F.2d 536 (9th Cir.1983)
                

ANALYSIS

Sav-On recognizes that an employer violates sections 8(a)(1) and 8(a)(3) of the National Labor Relations Act when it discharges employees because of their union activities. See NLRB v. Fort Vancouver Plywood Co., 604 F.2d 596, 599-600 (9th Cir.1979), cert. denied, 445 U.S. 915, 100 S.Ct. 1275, 63 L.Ed.2d 599 (1980). Sav-On argues instead that in discharging the two pharmacist managers, it acted in reliance on the regional director's determination that pharmacist managers were supervisors. Sav-On contends that its actions were insulated from the Board order reversing the regional director's decision because the Guild failed to seek a stay and thus the regional director's decision was final. We reject the argument.

Section 102.67(b) of the Board's Rules and Regulations provides:

The decision of the regional director shall be final: Provided, however, That within 10 days after service thereof any party may file a request for review with the Board in Washington, D.C.

29 C.F.R. Sec. 102.67(b) (1983).

The regional director's decision was not a final decision on which the parties could rely. Where levels of review are provided, decisions may be reversed. A prevailing party at trial acts at its peril if it proceeds before the appeal is concluded. See W.R. Grace and Co. v. Local Union 759, --- U.S. ----, 103 S.Ct. 2177, 2184-86, 76 L.Ed.2d 298 (1983); Federal Trade Commission v. Weyerhaeuser Co., 648 F.2d 739, 741 (D.C.Cir.1981). The absence of a stay does not vary the rule.

Sav-On is not exempt from this general rule. It had more notice than a litigant ordinarily has. When Sav-On discharged the pharmacist managers, it knew that the Guild had requested review of the regional director's decision and that the Board had granted the request. Section 102.67(c) of the Board's Rules and Regulations provides that "[t]he Board will grant a request for review only where compelling reasons exist ...." 29 C.F.R. Sec. 102.67(c) (1983). ¹ Once the Board granted the request, there was a substantial possibility that the regional director's decision would be reversed. Under these circumstances, Sav-On could not reasonably rely on the regional director's decision.

Sav-On's reliance on Transportation Enterprises, Inc. v. NLRB, 630 F.2d 421 (5th Cir.1980), is misplaced. There, a regional director had dismissed a union's representation petition on the ground that the employer was not subject to the jurisdiction of the National Labor Relations Board. Four years later, the Board asserted jurisdiction and awarded back pay to employees not rehired after a strike. The Fifth Circuit declined to enforce the award because the union had not requested review of the regional director's earlier decision and thus it was a final determination on which the employer could reasonably rely. Sav-On however, acted with the knowledge that the regional director's decision would be reviewed and could be reversed. It could not reasonably rely on that decision.

Sav-On further argues that, under section 3(b) of the Act, its reliance was reasonable because the Guild failed to seek a stay. Section 3(b) provides that a request for review "shall not, unless specifically ordered by the Board, operate as a stay of any action taken by the regional director." 29 U.S.C. Sec. 153(b). The purpose of this provision is to limit delay caused by appeals. See 2 NLRB, LEGISLATIVE HISTORY OF THE LABOR-MANAGEMENT REPORTING AND DISCLOSURE ACT OF 1959, at 1750 (1959) (quoting remarks of Rep. Kearns, 105 Cong.Rec. 8873). When the regional director orders the parties to act, the parties must do so, regardless of the pendency of an appeal. However, section 3(b) was not intended to preclude the enforcement of a Board order reversing a regional director's decision when no stay has been granted.

Moreover, as the administrative law judge noted, the regional director's decision did not order any party to act. It merely dismissed the Guild's representation petition. Since the regional director's decision did not order any action to be taken, there was nothing to stay. The failure of the Guild to request a stay is therefore irrelevant.

Sav-On contends that it was compelled to bargain with the Union in the interim in order to avoid refusal to bargain charges under section 8(a)(5) of the Act. 29 U.S.C. Sec. 158(a)(5). This argument has no bearing on the question of Sav-On's discharge of the two pharmacist managers. Sav-On could properly refuse to bargain with the Union over the rights of the contested pharmacist managers, while it continued to bargain with respect to employees remaining in the unit. See Walla Walla Union-Bulletin v. NLRB, 631 F.2d 609, 615 (9th Cir.1980); Sakrete of Northern California, Inc. v. NLRB, 332 F.2d 902, 908 (9th Cir.1964), cert. denied, 379 U.S. 961, 85 S.Ct. 649, 13 L.Ed.2d 556 (1965). If sufficient evidence indicated that the Union no longer commanded majority support of the pharmacists, Sav-On might have refused to bargain over the pharmacists' rights as well. See Automated Business Systems v. NLRB, 497 F.2d 262, 270 (6th Cir.1974); Allied Industrial Workers v. NLRB, 476 F.2d 868, 881-82 (D.C.Cir.1973). In any event, Sav-On could have insulated itself from unfair labor practice charges by disavowing responsibility for the organizing activities of the pharmacist managers, and maintaining strict neutrality until the Board determined which union, if any, would represent them. See NLRB v. Signal Oil & Gas Co., 303 F.2d 785, 788 (5th Cir.1962); National Carbon Division, Union Carbide & Carbon Corp., 105 N.L.R.B. 441, 443 (1953), modifying 100 N.L.R.B. 689 (1952).

Sav-On also argues that it had a right to discharge the 59 protest strikers because the strike violated the no-strike clause in the collective bargaining agreement with the union. This argument is without merit. First, only about half of the strikers were covered by the collective bargaining agreement. The others either were employed at non-union stores or were pharmacist managers excluded from coverage under the agreement. Second, those strikers who were covered by the agreement did not breach the no-strike clause. A no-strike obligation is the quid pro quo for the employer's obligation to submit disputes to arbitration. Boys Market, Inc. v. Retail Clerks Union, Local 770, 398 U.S. 235, 248, 90 S.Ct. 1583, 1591, 26 L.Ed.2d 199 (1970). Absent explicit agreement to the contrary, the no-strike obligation is limited to disputes over arbitrable issues. Gateway Coal Co....