N.L.R.B. v. Chicago Health & Tennis Clubs, Inc.

• Decision Date: 02 December 1977
• Docket Number: 77-1504,Nos. 77-1227,s. 77-1227
• Citation: 567 F.2d 331
• Parties: 96 L.R.R.M. (BNA) 3249, 82 Lab.Cas. P 10,289 NATIONAL LABOR RELATIONS BOARD, Petitioner, v. CHICAGO HEALTH & TENNIS CLUBS, INC., Respondent. NATIONAL LABOR RELATIONS BOARD, Petitioner, v. SAXON PAINT & HOME CARE CENTERS, INC., Respondent.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 331

567 F.2d 331

96 L.R.R.M. (BNA) 3249, 82 Lab.Cas. P 10,289

NATIONAL LABOR RELATIONS BOARD, Petitioner, v. CHICAGO HEALTH & TENNIS CLUBS, INC., Respondent.

NATIONAL LABOR RELATIONS BOARD, Petitioner, v. SAXON PAINT & HOME CARE CENTERS, INC., Respondent.

Nos. 77-1227, 77-1504.

United States Court of Appeals, Seventh Circuit.

Argued Oct. 26, 1977.

Decided Dec. 2, 1977.

Rehearing and Rehearing In Banc Denied in No. 77-1227 Jan. 6, 1978.

Elliott Moore, Deputy Associate Gen. Counsel, Jay E. Shanklin, Anne H. Andrews, Harvey M. Stone, Attys., N. L. R. B., Washington, D. C., for petitioner.

Michael L. Sklar, Anthony E. Dombrow, Chicago, Ill., for respondents.

Before SWYGERT and BAUER, Circuit Judges, and CAMPBELL, Senior District Judge. ¹

SWYGERT, Circuit Judge.

In the two cases before us, the National Labor Relations Board ("the Board") petitions for enforcement of its orders directing each of the respondents to cease and desist from refusing to bargain collectively with the union which had been certified as the exclusive bargaining representative. ² These two cases have been consolidated for this opinion because they present the identical legal issue: whether the Board abused its discretion in certifying a single retail store as an appropriate unit for collective bargaining where such store constitutes only one of a chain of stores owned and operated by the company in the Chicago metropolitan area. For the reasons set forth, we grant the petition in Chicago Health Clubs and deny enforcement in Saxon Paint.

I

(A) Parties

No. 77-1227. Chicago Health & Tennis Clubs is an Illinois corporation engaged in the sale of club memberships and providing services of exercise training and weight loss counseling for its members. It operates sixteen clubs in the Chicago metropolitan area (Chicago and suburbs). Its central office is located in Chicago's central business district and all clubs are within a 28-mile radius of this office.

No. 77-1504. Saxon Paint & Home Care Centers is an Illinois corporation engaged in the retail sale of paint, wallpaper, and home decorating supplies. It owns and operates twenty-one stores in the Chicago metropolitan area (Cook County). In addition, Saxon has seven other stores in Illinois, Indiana, and Wisconsin. Although these seven stores are operated by separate corporate entities, they are owned in part by the same stockholders and are operated through a single managerial hierarchy. All of the Chicago metropolitan area stores are within a 30-mile radius of each other.

(B) Procedural History

The procedural history of the two cases is similar and therefore a single description suffices. The proceeding began when the Retail Clerks Union, Retail Clerks International Association, AFL-CIO-CLC ³ filed a petition for representation seeking a unit limited to the employees of a single store in the company's chain. The company opposed the petition, contending that the only appropriate unit could consist of all its employees working in all its chain stores in the Chicago metropolitan area. Following a hearing, the Regional Director found that a single store constituted an appropriate bargaining unit. The Board denied the company's request for a review of the Director's decision. ⁴

An election was held in which a majority of the employees designated the Retail Clerks Union as their collective bargaining agent. The Director certified the union as the exclusive bargaining representative and shortly thereafter the union requested the company to bargain. The company refused on the ground that the unit found by the Board was inappropriate. The union then filed an unfair labor practice charge, alleging an unlawful refusal to bargain. Complaints issued and in its answer the company admitted its refusal to bargain, reasserting the inappropriateness of the designated unit.

The Board granted the General Counsel's motion for summary judgment, ⁵ finding that each company violated section 8(a)(1) and (a)(5) of the Act by refusing to recognize and bargain with the union. ⁶ On these two petitions for enforcement, each company reasserts its challenge to the unit determination. Since the companies defend solely on the grounds that the unit determinations were inappropriate, and since they concede that they refused to bargain, it is undisputed that the companies violated section 8(a)(1) and (a) (5) of the Act if the Board's unit determinations were correct. See NLRB v. Frisch's Big Boy Ill-Mar, Inc., 356 F.2d 895, 897 (7th Cir. 1966).

II

The primary responsibility for determining the appropriateness of a unit for collective bargaining rests with the Board. It is given broad discretion in determining bargaining units "to assure to employees the fullest freedom in exercising the rights guaranteed by (the Act)." 29 U.S.C. § 159(b). The Board is not required to select the most appropriate bargaining unit in a given factual situation; it need choose only an appropriate unit within the range of appropriate units. Wil-Kil Pest Control Co. v. NLRB,440 F.2d 371, 375 (7th Cir. 1971). It follows that Board unit determinations are rarely to be disturbed. South Prairie Construction Co. v. Local No. 627, International Union, 425 U.S. 800, 805, 96 S.Ct. 842, 48 L.Ed.2d 382 (1976); Packard Motor Co. v. NLRB, 330 U.S. 485, 491, 67 S.Ct. 789, 91 L.Ed.2d 1040 (1947).

Although Board determinations are subject to limited review, they are not immune from judicial scrutiny. We must bear in mind that section 10(e) of the Act clothes the courts of appeals with authority to enter decrees " enforcing, modifying, and enforcing as so modified, or setting aside in whole or in part the order of the Board." 29 U.S.C. § 160(e). Indeed, the Supreme Court has held that we are not " 'to stand aside and rubber-stamp' Board determinations that run contrary to the language or tenor of the Act." NLRB v. Weingarten, Inc., 420 U.S. 251, 256, 95 S.Ct. 959, 968, 43 L.Ed.2d 171 (1975); NLRB v. Brown, 380 U.S. 278, 291, 85 S.Ct. 980, 13 L.Ed.2d 839 (1965). Accordingly, we have the responsibility of determining whether the Board's unit determinations were unreasonable, NLRB v. Krieger-Ragsdale & Co.,379 F.2d 517, 521 (7th Cir. 1967), cert. denied, 389 U.S. 1041, 88 S.Ct. 780, 19 L.Ed.2d 831 (1968), arbitrarily or capriciously made, State Farm Mutual Automobile Insurance Co. v. NLRB, 411 F.2d 356, 358 (7th Cir.) (en banc), cert. denied, 396 U.S. 832, 90 S.Ct. 87, 24 L.Ed.2d 83 (1969), or unsupported by substantial evidence, NLRB v. Pinkerton's Inc., 416 F.2d 627, 630 (7th Cir. 1969).

In making unit determinations, the Board must effect the policy of the Act to assure employees the fullest freedom in exercising their rights, yet at the same time "respect the interest of an integrated multi-unit employer in maintaining enterprise-wide labor relations." NLRB v. Solis Theatre Corp., 403 F.2d 381, 382 (2d Cir. 1968). See Szabo Food Services, Inc. v. NLRB, 550 F.2d 705, 709 (2d Cir. 1976); NLRB v. Pinkerton's Inc., 428 F.2d 479, 485 (6th Cir. 1970). In reaching its decision, the Board considers several criteria, no single factor alone being determinative. State Farm Mutual, 411 F.2d at 358. These factors include:

(a) geographic proximity of the stores in relation to each other, NLRB v. Kostel Corp., 440 F.2d 347 (7th Cir. 1971); Wil-Kil Pest Control Co. v. NLRB, 440 F.2d 371 (7th Cir. 1971);

(b) history of collective bargaining or unionization, Kostel Corp., supra; State Farm Mutual, supra;

(c) extent of employee interchange between various stores, Walgreen Co. v. NLRB, 564 F.2d 751 (7th Cir. 1977); NLRB v. Pinkerton's Inc., 416 F.2d 627 (7th Cir. 1969);

(d) functional integration of operations, State Farm Mutual, supra; NLRB v. Frisch's Big Boy Ill-Mar, Inc., 356 F.2d 895 (7th Cir. 1966); and

(e) centralization of management, particularly in regard to central control of personnel and labor relations. Walgreen Co., supra; Wil-Kil Pest Control, supra; Frisch's Big Boy, supra.

As the geographic proximity of the stores in the two cases before us is almost identical, our decision whether to grant the petitions for enforcement must rest on an analysis of the other factors.

One further item deserves note before proceeding to a discussion of the individual cases. Although the Board has vascillated in deciding the proper scope of a bargaining unit in the retail chain industry, ⁷ it has apparently now adopted the administrative policy that a single store is "presumptively an appropriate unit for bargaining." Haag Drug Corp., 169 N.L.R.B. 877-78 (1968). ⁸ That presumption, however, is not conclusive and "may be overcome where factors are present in a particular case which would counter the appropriateness of a single store unit. . . . " Id. at 878.

We turn now to the two cases before us.

(A) Saxon Paint, No. 77-1504

Although the Board recognized that the Chicago area Saxon stores exhibited "a high degree of centralized administration," it nevertheless found a single store unit appropriate. In large part, the Board based its unit determination on the role of the local store manager, adopting the Regional Director's finding that "substantial responsibility is invested in the Employer's store managers." We believe that the Board exaggerated the control exercised by the store manager over labor and administrative matters and hold that the Board's finding that the store manager possesses autonomy and authority is not supported by substantial evidence.

The evidence in the record clearly establishes that Saxon is a highly integrated operation. Each Saxon store is similar in all respects to each of the other Saxon stores in Cook County. All of the stores are open on the same days and at the same times. They sell the same merchandise at the same price and the physical layout of each store is similar. Special sales and promotions are held at the same time in each store with the same sale prices being charged. Advertising covers the entire metropolitan area and is...