National Labor Relations Board v. Action Automotive, Inc
| Decision Date | 19 February 1985 |
| Docket Number | No. 83-1416,83-1416 |
| Parties | NATIONAL LABOR RELATIONS BOARD, Petitioner v. ACTION AUTOMOTIVE, INC |
| Court | U.S. Supreme Court |
Respondent, a retail automobile parts and gasoline dealer, is a closely held corporation owned equally by three brothers, who serve as officers and are actively involved in running the business. In 1981, a union filed with the National Labor Relations Board a petition requesting that a representation election be held among respondent's employees. Thereafter, an election was held and the union received a plurality of the votes, but enough ballots were challenged on each side to place the outcome in doubt. Among the ballots challenged by the union were those of one owner's wife, who works as a clerk at the same location as her husband and occasionally takes coffee breaks in his office, and of the owners' mother, who is a cashier at one of respondent's stores and lives with one of the owners. Concluding that the wife's interests were different from those of other clerical employees and that the mother's interests were more closely aligned with management than with the employees, but without making a finding that the wife and mother enjoyed special job-related benefits, the Board's hearing officer recommended that the union's challenge to the ballots be sustained. The Board adopted this recommendation and, after all qualified votes were counted, certified the union as the exclusive bargaining representative. When respondent refused to bargain, the union filed charges with the Board, which held that respondent had violated §§ 8(a)(1) and (5) of the National Labor Relations Act (Act), and ordered respondent to bargain. The Court of Appeals denied enforcement of the Board's order, holding that the Board had no authority under § 9(b) of the Act to exclude employees from a bargaining unit based solely on their close family relationship with those who own and operate the business, that an employee's family ties may be a factor justifying exclusion only when the employee receives job-related benefits that flow from the relationship, and that in this case there was insufficient evidence that the wife and mother enjoyed such benefits.
Held: The Board did not exceed its authority in excluding from collective-bargaining units close relatives of management, without making a finding that the relatives enjoy special job-related privileges. Pp. 494-499.
(a) The Board's policy of considering a variety of factors in deciding whether an employee's familial ties are sufficient to align his interests with management so as to warrant his exclusion from a bargaining unit, is a reasonable application of the Board's standard whereby, in defining bargaining units, its focus is on whether the employees share a "community of interest." The Board's decision to exclude some family members is entitled to deference and is not inconsistent with the Act's fundamental structure or policies. Nor does the Board's policy of excluding close relatives of management without a showing of special job-related benefits run afoul of the Act's mandate that the Board remain "wholly neutral" as between the contending parties in a representation election. Pp. 494-498.
(b) On the facts of this case, the Board could reasonably conclude that the wife's and mother's interests were more likely to be aligned with the family's business interests than with the employees' interests. Pp. 498-499.
717 F.2d 1033 (CA6 1983), reversed.
Norton J. Come, Washington, D.C., for petitioner.
Stewart J. Katz, Detroit, Mich., for respondent.
We granted certiorari to decide whether the National Labor Relations Board may exclude from a collective-bargaining unit employees who are relatives of the owners of a closely held corporation that employs them, without a finding that the employees receive special job-related benefits.
Respondent Action Automotive, Inc., is a retail automobile parts and gasoline dealer with stores in a number of Michigan cities. Action Automotive is a closely held corporation owned equally by three brothers, Richard, Robert, and James Sabo. The Sabo brothers are actively involved in the daily operations of the business. They serve as the corporation's officers, make all policy decisions, and retain ultimate authority for the supervision of every department.
In March 1981, the Retail Store Employees Union, Local 40 (the Union), filed with the Board a petition requesting that a representation election be held among Action Automotive's employees. Action Automotive and the Union agreed to elections in two bargaining units—one consisting of employees at the company's nine retail stores, and the other comprising clerical employees at the company's headquarters. The elections were held on May 29, 1981, and the Union received a plurality of votes in each unit; 1 enough ballots were challenged by each side, however, to place the outcome of the elections in doubt. We are concerned only with the Union's challenge to the ballots of Diane and Mildred Sabo.
Diane Sabo is the wife of Action Automotive's president and one-third owner, Richard Sabo. She works as a general ledger clerk at the company's headquarters in Flint, Michigan. She resides with her husband and both work at the same office. Unlike other clerical workers, she works parttime and receives a salary. She also is allowed to take breaks when she pleases, and she often spends her break in her husband's office.
Mildred Sabo is the mother of the three Sabo brothers who own and manage Action Automotive. She is employed as a full-time cashier at the company's store in Barton, Michigan. Mildred Sabo lives with James Sabo, secretary-treasurer of the corporation, and she regularly sees or telephones her other sons and their families. She earns 25 cents per hour more than any other cashier, but she is also one of the company's most experienced cashiers.
In light of these facts, the Board's hearing officer concluded that Diane Sabo's interests are different from those of other clerical employees in the company's headquarters and that Mildred Sabo's "interests are more closely aligned with management than with the employees of Action Automotive." App. to Pet. for Cert. 36a. He reached this conclusion without finding that Diane and Mildred Sabo enjoy special job-related benefits. Believing that such a finding was not a prerequisite to excluding the two women from the bargaining units, the hearing officer recommended that the Union's challenge to their ballots be sustained.
The Board adopted the hearing officer's recommendations 2 and, after all qualified votes were counted, certified the Union as the exclusive bargaining representative for the two units. When Action Automotive refused to bargain, the Union filed charges with the Board. The Board, relying on its earlier certification decision, found that Action Automotive had violated §§ 8(a)(1) and (5) of the National Labor Relations Act (Act), 61 Stat. 140, 141, 29 U.S.C. §§ 158(a)(1) and (5), and ordered the company to bargain with the Union. 262 N.L.R.B. 423 (1982).
The United States Court of Appeals for the Sixth Circuit denied enforcement of the Board's order. 717 F.2d 1033 (1983). The panel, apparently feeling bound by the Circuit's prior decisions, see, e.g., NLRB v. Hubbard Co., 702 F.2d 634 (1983), held that the Board had no authority under § 9(b) of the Act to exclude employees from a bargaining unit based solely on their close family relationship with those who own and operate the business. The court held that an employee's family ties may be a factor justifying exclusion from a bargaining unit only "when the employee receive[s] job-related benefits or other favorable working conditions which flow from the relationship." 717 F.2d, at 1035. Under this standard, the court concluded that there was insufficient evidence that Diane and Mildred Sabo enjoy special job-related benefits, and that the Board erred in excluding them from the units.
The Sixth Circuit's holding conflicts with the decisions of other Circuits 3 and restricts the Board's statutory authority to define bargaining units. We granted certiorari, 466 U.S. 970, 104 S.Ct. 2341, 80 L.Ed.2d 816 (1984), and we reverse.
Section 9(b) of the Act vests in the Board authority to determine "the unit appropriate for the purposes of collective bargaining." 61 Stat. 143, 29 U.S.C. § 159(b). The Board's discretion in this area is broad, reflecting Congress' recognition "of the need for flexibility in shaping the [bargaining] unit to the particular case." NLRB v. Hearst Publications, Inc., 322 U.S. 111, 134, 64 S.Ct 851, 862, 88 L.Ed. 1170 (1944). The Board does not exercise this authority aimlessly; in defining bargaining units, its focus is on whether the employees share a "community of interest." See South Prairie Construction Co. v. Operating Engineers, 425 U.S. 800, 805, 96 S.Ct 1842, 1844, 48 L.Ed.2d 382 (1976) (per curiam); 15 NLRB Ann.Rep. 39 (1950). A cohesive unit one relatively free of conflicts of interest—serves the Act's purpose of effective collective bargaining, Pittsburgh Plate Glass Co. v. NLRB, 313 U.S. 146, 165, 61 S.Ct. 908, 918, 85 L.Ed. 1251 (1941), and prevents a minority interest group from being submerged in an overly large unit, Chemical Workers v. Pittsburgh Plate Glass Co., 404 U.S. 157, 172-173, 92 S.Ct. 383, 393-394, 30 L.Ed.2d 341 (1971).
The Board has long hesitated to include the relatives of management in bargaining units because "their interests are sufficiently distinguished from those of the other employees." Louis Weinberg Associates, Inc., 13 N.L.R.B. 66, 69 (1939). From the earliest days of the Wagner Act, ch. 372, 49 Stat. 449 et seq., until 1953, the Board automatically excluded close relatives of a manager or owner of a closely held company. See, ...
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