NLRB v. Kostel Corporation

• Decision Date: 13 April 1971
• Docket Number: No. 18111.,18111.
• Citation: 440 F.2d 347
• Parties: NATIONAL LABOR RELATIONS BOARD, Petitioner, v. The KOSTEL CORPORATION, d/b/a Big Ben Shoe Store, Respondent.
• Court: U.S. Court of Appeals — Seventh Circuit

440 F.2d 347 (1971)

NATIONAL LABOR RELATIONS BOARD, Petitioner, v. The KOSTEL CORPORATION, d/b/a Big Ben Shoe Store, Respondent.

No. 18111.

United States Court of Appeals, Seventh Circuit.

February 25, 1971.

Rehearing Denied April 13, 1971.

Arnold Ordman, Gen. Counsel, Dominick L. Manoli, Associate Gen. Counsel, Marcel Mallet Prevost, Asst. Gen. Counsel, Warren M. Davison, Atty., N.L.R.B., Washington, D. C., for petitioner.

S. Richard Pincus, Herbert M. Berman, Lederer, Fox & Grove, Chicago, Ill., for respondent.

Before KILEY and KERNER, Circuit Judges, and REYNOLDS, District Judge.¹

KILEY, Circuit Judge.

The Labor Board seeks enforcement of its cease and desist orders based on findings that respondent Kostel Corporation (Company) violated Sections 8(a) (1), 8(a)(3) and 8(a)(5) of the National Labor Relations Act, 29 U.S.C. § 158; and of its order that it bargain with the Union.² We enforce the orders.

The Company's self-service shoe store in Kankakee, Illinois was opened in April, 1967. A few months later the Union began an organizational drive among the store's employees which then numbered between three and seven. During this drive the Company's District Manager Moshinsky committed unfair labor practices in interrogating employees about their Union activity and in threatening to discharge, and constructively discharging, employees for this activity. On August 3, 1967 the Union, after receiving Union authorization cards from a majority of the employees, demanded recognition as bargaining agent. The demand was not met and the proceeding before us followed.

The only issues presented are with respect to the findings and conclusions that respondent had violated Section 8 (a) (5)³ by refusing to bargain with the Union on or after August 3, 1967; and with respect to the bargaining order.

I. THE § 8(a) (5) VIOLATION

The Company does not dispute that there is substantial evidence to support the Board's conclusion that the Company violated § 8(a) (5) of the Act by refusing to bargain in good faith. Rather, it challenges that finding solely on the grounds that the Kankakee store employees did not constitute an appropriate bargaining unit and that the Union did not have a majority when it made its demand for recognition.

The Examiner found that the unit was not appropriate. The Board decided that the unit was appropriate.

The Board has a broad discretion in its determination of an appropriate unit and may choose any unit it reasonably deems appropriate. State Farm Mutual Auto Ins. Co. v. NLRB, 411 F.2d 356, 358 (7th Cir. 1969). The unit must be chosen in relation to the facts of each case, and the Board is required to make each determination in order to assure the employees "the fullest freedom in exercising the rights guaranteed by the Act." Section 9(b), 29 U.S.C. § 159(b). But various factors, with no one determinative, may enter into making this determination: the company organization, the number of employees in the unit and their geographic distribution, the responsibilities of unit supervisors, and the extent to which the unit is already organized. State Farm Mutual Auto Ins. Co. v. NLRB, supra, at 358. And where the facts underlying a Board determination are uncontroverted, the determination will not be overturned unless it is "arbitrary or unreasonable." May Dept. Stores Co. v. NLRB, 326 U.S. 376, 66 S.Ct. 203, 90 L.Ed. 145 (1945); NLRB v. Krieger-Ragsdale & Co., 379 F.2d 517, 520 (7th Cir. 1967).

We think the Board sufficiently related its determination of appropriateness to the relevant facts. The 50 mile geographical separation of the Kankakee store from the three downstate Illinois stores, in the light of the stock-boy employees of the Company, could be reasonably seen as isolating the Kankakee employees from easy communication with employees in the other cities, even if there might reasonably be said to be a substantial community of interest between employees in these several cities outside of the Chicago metropolitan area. The 59 mile distance between Chicago and Kankakee might offer easier communication but would probably offer less community interest between employees in the 13 Chicago stores and the stock-boys in Kankakee, since employment conditions and wage scales might be entirely different for the two cities. The distance between Kankakee and Hammond, about equal to that between Kankakee and Chicago, might offer less easy communication while offering greater community of interest between the Kankakee stock-boys and those in Hammond.

It should also be noted that the Kankakee store manager had a reasonable degree of autonomy in her "on the spot" supervisory control of the self-service stores, especially in view of the small number⁴ and unskilled character of the employees involved and the significant fact that the district supervisor visited the Kankakee store only once or twice a week. And the minimal interchange of employees, found by the Board, which contributes to the isolation of a group of stock-boy employees from the other groups, reinforces our conclusion that the Board did not err in deciding that the Kankakee store was an appropriate bargaining unit.

We see no merit in the claim that in making this determination the Board failed to accord any weight to the principle of stare decisis. The doctrine of stare decisis does not require that the Board's policies and standards be unchangeable since it must meet changing conditions by corresponding changes in policies and standards. There is no per se injustice in this. The question is in each case whether the policy, standard or decision is erroneous. NLRB v. Western Wirebound Box Co., 356 F.2d 88, 91 (9th Cir. 1966).

Respondent's reliance upon NLRB v. Purity Food Stores, Inc., 376 F.2d 497 (1st Cir. 1967), and NLRB v. Frisch's Big Boy Ill-Mar Inc., 356 F.2d 895 (7th Cir. 1966), is of no avail. The facts in those cases distinguish them.⁵ And our observation in State Farm, 411 F.2d at 358, that the Board need not choose the best unit disposes of the Company's argument that the appropriate unit should be the employees in the Kankakee and the 13 Chicago metropolitan area stores.

We hold that the Board did not err in concluding that the Kankakee store was an appropriate bargaining unit. Since there is no credibility issue on this point, and the disagreement between the Examiner and Board is upon a conclusion as to which the Examiner's findings are not entitled to special weight, the Board's final determination was within its prerogative. NLRB v. Stafford Trucking Co., 371 F.2d 244, 249 (7th Cir. 1966).

Since the Trial Examiner found the Kankakee employee unit inappropriate, there was no need for him to go on to the question of the alleged 8(a)(5) violation. The Board, however, in disagreeing with the Examiner, reviewed the relevant evidence on the issue and concluded that "by refusing on and after August 3, 1967" to bargain with the Union as exclusive representative of the Kankakee unit, respondent violated 8(a) (5) and (1) of the Act. The evidence: On August 1, 1967 the Union wrote the Company demanding recognition on a card majority. The Company received the letter August 3 and the next day District Manager Moshinsky asked the Union "to hold off matters" because Mr. Kostel, the Company's president, was out of town but would contact the Union upon his return "on or about" August 26. Neither Moshinsky nor Kostel communicated with the Union after Moshinsky's message.

At the time of the Union demand on August 1, 1967, the store had five employees: Carter, Guimond, Dirker, Senesac and Entwhistle. Of these employees, only two, Guimond and Dirker, had signed Union authorization cards. A third authorization card, that of Entwhistle, was signed on August 23, 1967.

The Board's original decision was filed August 14, 1968. It found that on August 3 the appropriate bargaining unit consisted of Dirker, Guimond and Entwhistle. It excluded employee Senesac from the bargaining unit because she was a temporary part-time employee, and Carter because he was a Social Security annuitant. The Board found that the Union had been validly designated as of August 3, 1967, as bargaining representative by two of the three employees in the unit.

The Supreme Court filed its opinion in NLRB v. Gissel Packing Co., 395 U.S. 575, 89 S.Ct. 1918, 23 L.Ed.2d 547, on June 16, 1969. Thereafter, upon notice to the parties involved and after the submission of memoranda, the Board modified its decision with respect to the Union's majority on August 3, 1967. Because of a new Board policy, Carter was now included in the unit and the Board found the Union without a majority on August 3. However, it found that the Union's demand for recognition was a "continuing" one and that on August 23⁶ the Union had a majority, and respondent's failure to respond to the demand after that date viewed in the light of the prior violations of 8(a) (1) and (3), was a violation of 8(a) (5) and (1).

We think the record as a whole supports the Board's conclusion of a continuing demand after August 3, where the Union's demand was deferred on August 3 because of the Company's promise of a response on or about August 23, and the promise was broken. See Local No. 152 v. NLRB, 120 U.S. App.D.C. 25, 343 F.2d 307, 310 (1965). We hold the Board's conclusion has substantial support in the record as a whole.

We conclude therefore that the Board did not err in concluding that the Company violated 8(a) (5) and (1) of the Act by its refusal to bargain with the Company. We now turn to the issue whether a bargaining order was appropriate in this case.

II. THE BARGAINING ORDER

The Board, in its supplemental decision, issued after Gissel, found that Kostel's unlawful labor practices "tended to undermine the Union's majority and that there is insufficient indication that an election would be a more reliable test of the employees' desires than a card count"; and "issuance of a bargaining order will...