NLRB v. National Food Stores, Inc.

• Decision Date: 27 May 1964
• Docket Number: No. 14416.,14416.
• Citation: 332 F.2d 249
• Parties: NATIONAL LABOR RELATIONS BOARD, Petitioner, v. NATIONAL FOOD STORES, INC., Respondent.
• Court: U.S. Court of Appeals — Seventh Circuit

332 F.2d 249 (1964)

NATIONAL LABOR RELATIONS BOARD, Petitioner, v. NATIONAL FOOD STORES, INC., Respondent.

No. 14416.

United States Court of Appeals Seventh Circuit.

May 27, 1964.

Marcel Mallet-Prevost, Asst. Gen. Counsel, Elliott Moore, Atty., N. L. R. B., Arnold Ordman, Gen. Counsel, Dominick L. Manoli, Associate Gen. Counsel, Anthony J. Obadal, Atty., N. L. R. B., for petitioner.

O. S. Hoebreckx, Milwaukee, Wis., Sidney M. Libit, Chicago, Ill., for respondent.

Before HASTINGS, Chief Judge, and DUFFY and MAJOR, Circuit Judges.

MAJOR, Circuit Judge.

This case is here on petition of the National Labor Relations Board, pursuant to Sec. 10(e) of the National Labor Relations Act (29 U.S.C. § 151 et seq.) (called the Act), for enforcement of its order issued against National Food Stores, Inc. (respondent) April 29, 1963, and reported at 142 NLRB No. 38.

Respondent is a Michigan corporation engaged in the sale of groceries at retail stores in numerous states. There are thirteen divisions in respondent's organization, with home offices in Chicago, Illinois. The unfair labor practices found to have been committed herein involved the Milwaukee division which operates fifty-seven stores, twenty-seven located in Milwaukee County and thirty in other parts of Wisconsin and in Michigan.

On March 26, 1962, the Union (Office Employees International Union, Local No. 9, AFL-CIO) filed a representation petition with the Board seeking certification as the bargaining agent of respondent's five Milwaukee field auditors, whose function was to take inventory in stores operated by respondent. On April 26, 1962, respondent and the Union entered into a stipulation consenting to an election whereby the parties agreed, inter alia, that the inventory personnel constituted an appropriate collective bargaining unit. On May 11, 1962, the election was held, which resulted in an unanimous vote for the Union. On May 22, 1962, the Board certified the Union as the bargaining representative of the employees of the unit.

After hearing, a trial examiner, on February 14, 1963, issued his Intermediate Report, finding that respondent had engaged and was engaging in certain unfair labor practices, and recommending that it cease and desist therefrom and take certain designated affirmative action. On consideration of the examiner's Report and respondent's exceptions thereto, the Board adopted the trial examiner's findings, conclusions and recommended order.

The Board's conclusions which in the main form the basis for the contested issues here are: (1) that respondent violated Sec. 8(a) (1) of the Act by interrogating all the clerks concerning their reasons for joining the Union, by threatening some with discharge, transfer to distant locations, replacement with other employees and contracting away their work, and by promising some promotions and other benefits if they voted against the Union; (2) that respondent violated Sec. 8(a) (3) and (5) of the Act by discontinuing its inventory system and by subcontracting the inventory work to an independent contractor because the field auditors had selected the Union as their bargaining representative, and (3) that regardless of respondent's motives in deciding to subcontract the work, respondent violated Sec. 8(a) (5) by unilaterally taking this action without bargaining with the Union concerning its decision in this respect.

The Board's order requires respondent to cease the unfair labor practices found, to reinstate the field auditors to their former positions and to make them whole for any loss of pay they may have suffered as a result of the discrimination against them. Respondent is also required to bargain with the Union on request and to post the appropriate notices.

We need not relate in detail the evidence relied upon by the Board in support of its conclusion that respondent violated Sec. 8(a) (1) of the Act, inasmuch as its sufficiency is not seriously challenged. Respondent upon learning of the intention of the field auditors to organize went beyond any permissible limit in demonstrating its opposition. The employees were told in effect that as members of a union they could not participate in respondent's profit-sharing program and that their increase for sick benefits would not be allowed, that respondent would not tolerate a union in the inventory unit, that it did not intend to have the crew organized and would fight it in every way, and that such a union would be a failure. They also were told that if they persisted in the union movement respondent had numerous alternatives which it could employ, including transferring inventory personnel to distant points from Milwaukee, changing working hours, laying off field auditors, taking inventory with store and supervisory personnel or subcontracting the inventory work to an outside firm.

Pending the representation proceedings before the Board and prior to the election (May 11, 1962), each of the five employees was interviewed by management and promised a better job if he voted against the union. True, the testimony of the five employees was contradicted in some respects by witnesses for the respondent. It is hardly necessary to cite cases in support of the rule that the issue of credibility is a matter for resolution by the Board. See Revere Copper and Brass, Inc. v. N. L. R. B., 7 Cir., 324 F.2d 132, 135, and Revere Camera Corp. v. N. L. R. B., 7 Cir., 304 F.2d 162, 164 (both decisions by this Court), and cases therein cited.

The Board's finding that respondent violated Sec. 8(a) (3) and (5) of the Act by subcontracting its inventory work to an independent contractor because the field auditors had selected the Union as their bargaining agent presents a more difficult problem. Closely allied with this issue is that arising from the Board's finding that respondent violated Sec. 8(a) (3) and (5) by contracting out its inventory work without bargaining with the Union. Respondent argues (1) that its decision to subcontract its inventory work was for economic reasons only and not because of the Union organization, and (2) that in any event it attempted in good faith to bargain with the Union concerning its subcontracting of the work.

After certification of the Union as the bargaining agent, meetings were held between representatives of the Union and respondent, purportedly for the purpose of bargaining. The first meeting, July 17, 1962, was a few weeks after respondent had received from Union officials a proposed contract. At the second meeting, August 17, 1962, the company announced that it would subcontract the inventory work and place such employees elsewhere with the company or recommend them to the subcontractor. In the meantime, respondent had obtained from Retail Grocery Inventory Service (RGI) a proposal for performing its inventory work, which was accepted by respondent September 4, 1962. As we shall later show in some detail, the Union refused to accept respondent's offer of other jobs to its members and, on September 16, the inventory work was taken over by RGI.

The evidence relied upon by the respective parties upon the issue as to whether respondent's decision to subcontract its inventory work was discriminatory or solely the result of respondent's economic situation presents a close question even when approached from the standpoint of our prerogative as a reviewing court. We think it is sufficient to state, without detailing such evidence, that we have carefully considered it and have reached the conclusion that there is sufficient basis for the Board's finding that respondent's action was discriminatory.

In evaluating respondent's motive in making the change, it is difficult to escape the inference arising from its strenuous opposition to the unionization of its inventory clerks as evidenced by its statements and activities prior to the election at which the employees voted for the Union as their bargaining representative. Respondent's attempt to counteract this unfavorable inference is not without merit. It points out that it and its affiliates had contracts with some twenty-five labor unions and that its reason for opposition to the unionization of its inventory clerks was the nature of their work, different from any other category of employees. This difference resulted from the fact that inventory clerks could perform their services in a more efficient manner by working after hours and week-ends when there were no customers in the stores. Thus, the hours of their employment had long been a matter of controversy. Respondent argues that it feared greater difficulty in this respect if it was required to deal with the Union. That this fear was not without basis is shown by the contract which the Union proposed at the first meeting with respondent subsequent to the Union's certification. On the other hand, it is a circumstance from which a reasonable inference can be drawn against respondent that its decision to subcontract its inventory work was made only when faced with the obligation to bargain with the Union. Moreover, respondent would be in violation if the selection of the Union by the clerks was a contributing factor in its decision to subcontract the work. Town & Country Mfg. Co., Inc. v. N. L. R. B., 5 Cir., 316 F.2d 846, 847; N. L. R. B. v. Great Eastern Color Lithographic Corp., 2 Cir., ...