Retail Clerks Union Local No. 1552 v. Lynn Drug Company

• Decision Date: 22 May 1969
• Docket Number: Civ. A. 7636.
• Citation: 299 F. Supp. 1036
• Parties: RETAIL CLERKS UNION LOCAL NO. 1552, etc., Plaintiff, v. LYNN DRUG COMPANY OF SPRING-FIELD SOUTHERN VILLAGE et al., Defendants.
• Court: U.S. District Court — Southern District of Ohio

299 F. Supp. 1036

RETAIL CLERKS UNION LOCAL NO. 1552, etc., Plaintiff, v. LYNN DRUG COMPANY OF SPRING-FIELD SOUTHERN VILLAGE et al., Defendants.

Civ. A. 7636.

United States District Court S. D. Ohio, E. D.

May 22, 1969.

Sigall & Sigall, Leonard S. Sigall, Columbus, Ohio, for plaintiff.

Vorys, Sater, Seymour & Pease, Charles D. Minor, Columbus, Ohio, for defendants.

MEMORANDUM OPINION AND ORDER

KINNEARY, District Judge.

The complaint filed herein under Section 301 of the Labor Management Relations Act, 29 U.S.C.A. § 185, seeks enforcement of a labor agreement against a successor employer under the principles announced in John Wiley & Sons, Inc. v. Livingston, 376 U.S. 543, 84 S.Ct. 909, 11 L.Ed.2d 898 (1964). The facts have been stipulated, and the matter is before the Court on a joint motion for summary judgment.

Facts

On November 12, 1963, the plaintiff, Retail Clerks Union, Local 1552, Retail Clerks International Association, AFL-CIO entered into a collective bargaining agreement with Gray Drug Stores, Inc. of Dayton, Gray Drug Stores, Inc. of Fairborn, Gray Drug Stores, Inc. of Springfield Southern Village, King Discount Distributors, Inc. of Dayton and King Discount Distributors, Inc. of Springfield. The agreement was to terminate on August 27, 1966.

On or about June 10, 1965, while this agreement was continuing in effect, Gray Drug Stores, Inc. of Springfield Southern Village sold the assets of its store located at Selma Road in Springfield, Ohio, to the defendant Lynn Drug Company of Springfield Southern Village (hereinafter Lynn Drug—Springfield). Following this purchase, Lynn Drug—Springfield introduced to the Selma Road Store the product lines, merchandising techniques and general operating procedures used by the Lynn Drug Company in its other drug stores in and around Columbus, Ohio. These product lines, merchandising techniques and operating procedures did not differ materially from those of Gray Drug Stores, Inc. of Springfield Southern Village.

At the time of the sale there were eight (8) employees in the bargaining unit. Lynn Drug—Springfield replaced the manager with a manager from one of the Lynn Drug Company's stores in Columbus, Ohio.

Lynn Drug—Springfield requested all employees to take a lie detector test as a condition of employment. All the employees who had previously worked for Gray Drug at the Selma Road Store took the test, passed the test and were retained by Lynn Drug—Springfield, except Betty O'Connell and Pat McClintock. These employees refused to take the test, and, thereafter, were told by Lynn Drug—Springfield that they would have to take the test or look for other employment. When they continued to refuse to take the test, Lynn Drug— Springfield separated them from its employ; Betty O'Connell on June 16, 1965, and Pat McClintock on June 24, 1965. The discharged employees were told that if, within a reasonable time, they agreed to take the test and passed, they would be re-employed.

On June 25, 1965, Kenneth Mitchell, Secretary-Treasurer of the Retail Clerks Union, sent a letter to Lynn Drug— Springfield stating that the two employees were not discharged for proper cause and requested reinstatement with no loss of seniority or wages. On August 6, 1965, the union's attorney wrote a letter to the president of Lynn Drug— Springfield requesting him to meet with the union to discuss the separations. This letter stated that if no agreement could be reached at such a meeting, the matter of the discharges should be submitted to arbitration in accordance with Article IV, Paragraph C of the bargaining agreement.

On August 9, 1965, Lynn Drug— Springfield replied, denying that Lynn Drug—Springfield or the Lynn Drug Company were parties to the bargaining agreement and bound by its terms. Although the letter stated that the president of Lynn Drug—Springfield would meet with Mr. Mitchell to discuss the situation, this willingness to discuss the situation should not be construed as recognition by Lynn Drug—Springfield of the Retail Clerks Union as the bargaining representative of its employees, nor as an acknowledgment that the company was bound by the bargaining agreement with Gray Drug. They met, and the company refused to recognize the union and refused to arbitrate the discharges.

On December 8, 1965, the Retail Clerks Union filed this action, asking the Court to enter its Order as follows:

1. Enforcing defendants' obligation under said contract to recognize plaintiff as the sole collective bargaining representative of defendants' employees at the aforementioned store.

2. Enforcing defendants' obligation to comply with all of the terms and conditions of said contract in the same manner and to the same extent that defendants' predecessor would be required to comply with said contract.

3. Enforcing specifically defendants' obligation to take up the complaint concerning the discharges of employees Betty O'Connell and Pat McClintock, and, failing agreement, to submit said complaint to final and binding arbitration.

4. Enforcing specifically defendants' obligation under Article II and III of said contract by ordering defendant to make an accounting to plaintiff of the net earnings of all of its employees at said store since, on and after the date of its purchase of said store, and by ordering defendant to make plaintiff whole for all losses of dues and initiation fees caused by defendants' breach of contract.

5. For such other relief as may be just, equitable and proper.

The Selma Road Store has remained open throughout the time period in question, and as of the date of this stipulation five (5) out of the eight (8) original employees who were in the union's bargaining unit were still employed at that store.

Jurisdiction

Although the jurisdictional allegations in the complaint were denied by defendants in their answers, both defendants and plaintiff agree, now, that, (1) plaintiff is a labor organization which represents employees in retail industries and in other industries, which industries affect interstate commerce, (2) defendants are corporations having common ownership and control and a single labor relations policy, and are an employer whose activities affect interstate commerce, and, (3) this action arises from an alleged violation of a labor agreement.

It is determined, therefore, that this Court has jurisdiction of this action by virtue of Section 301 of the Labor Management Relations Act, 29 U.S.C.A. § 185 (a).¹

Union's Position

The union argues that the decision of the Supreme Court of the United States in John Wiley & Sons, Inc. v. Livingston, 376 U.S. 543, 84 S.Ct. 909 (1964) entitles the union to the injunctive relief requested. It is stated that the primary issue is whether or not the successor employer, Lynn Drug—Springfield, can show a "lack of substantial continuity of identity in the business enterprise" before and after the change of ownership so as to relieve itself of the obligations of the collective bargaining agreement. Wiley, supra, 376 U.S. at 551, 84 S.Ct. at 915. It is then argued that, in this case, Lynn Drug—Springfield cannot show such a lack of continuity, and, therefore, it is bound by the bargaining agreement to the same extent as was Gray Drug Stores, Inc. of Springfield Southern Village.

Employer's Position

Defendants also rely on Wiley, albeit a narrower interpretation. They argue that under Wiley a court has the authority to enforce an arbitration provision of a labor contract against a successor employer, but is without authority to enforce the bargaining agreement itself against such an employer. It is further specifically argued that a court is without authority to enforce the recognition and union security provisions of the bargaining agreement. Finally, although defendants concede that the Court has the power to require a successor employer to arbitrate grievances under its predecessor's agreement, they argue that the grievances must have been properly presented and preserved, and that that is not the situation in this action.

Successorship

The question of whether the relationship between the Retail Clerks Union and Lynn Drug—Springfield is that of labor organization and successor-employer within the meaning of Wiley permits easy resolution. An examination of the cases which have dealt with this issue discloses certain factors which are deemed relevant in determining whether the business operation continued substantially unchanged. First, did the successor and predecessor employers engage in the identical or very similar business? Wiley, supra, 376 U.S. at 551, 84 S.Ct. 909; Wackenhut Corp. v. International Union, United Plant Guard Workers of America, 332 F.2d 954, 958 (9th Cir. 1964); McGuire v. Humble Oil & Refining Co., 247 F.Supp. 113, 118 (S.D. N.Y.1965). Next, did the successor and predecessor employer utilize the same office and/or equipment? Wackenhut Corp., supra, 332 F.2d at 957; McGuire, supra. Did the business continue to operate in the transition period? Retail Store Emp. Union, Local No. 954 v. Lane's of Findlay, Inc., 260 F.Supp. 655, 656 (N.D.Ohio 1966). Finally, was there a substantial carryover of employees from the predecessor to the successor employer? Wiley, supra, 376 U.S. at 551, 84 S.Ct. 909; McGuire, supra, 247 F. Supp. at 118; Wackenhut, supra, 332 F. 2d at 958; Lane's supra, 260 F.Supp. at 656; Owens-Illinois, Inc. v. District 65, Retail, Wholesale and Dept. Store Union, AFL-CIO, 276 F.Supp. 740, 741 (S.D. N.Y.1967), aff'd 393 F.2d 932 (1968).

As stated previously, the Selma Road Store operated continuously throughout the transfer period, the product lines, merchandising techniques and operating procedures of Gray Drug and Lynn Drug—Springfield were similar and there was a substantial carryover of employees. The Court determines, therefore, that Lynn Drug—Springfield is a successor employer within the meaning of Wiley.

It makes no difference that the transaction between Gray Drug and Lynn...