Saks & Co. v. N.L.R.B.
| Decision Date | 14 November 1980 |
| Docket Number | Nos. 90,I,601,AFL-CIO-CL,D,s. 90 |
| Citation | 634 F.2d 681 |
| Parties | 105 L.R.R.M. (BNA) 3274, 90 Lab.Cas. P 12,381 SAKS & COMPANY, Petitioner-Appellant-Cross Appellee, v. NATIONAL LABOR RELATIONS BOARD, Respondent-Appellee-Cross Appellant, Amalgamated Clothing and Textile Workers Union, Pittsburgh District Joint Board, Local 86,ntervenor. ockets 80-4029, 80-4057. |
| Court | U.S. Court of Appeals — Second Circuit |
John C. Grosz, New York City (Solinger & Gordon, New York City, Eugene H. Gordon, Eric H. Fisher, William J. Adelson, New York City, of counsel), for petitioner-appellant-cross appellee.
Allison W. Brown, Jr., N.L.R.B., Washington, D. C. (William A. Lubbers, Gen. Counsel, John E. Higgins, Jr., Deputy Gen. Counsel, Robert E. Allen, Acting Associate Gen. Counsel, Elliott Moore, Deputy Associate Gen. Counsel, N.L.R.B., Washington, D. C., of counsel), for respondent-appellee-cross appellant.
Leonard Schneider, Amalgamated Clothing and Textile Workers Union, AFL-CIO, Detroit, Mich. (Arthur M. Goldberg, Gen. Counsel, George Kirschenbaum, Amalgamated Clothing and Textile Workers Union, AFL-CIO, New York City), for intervenor.
Before FRIENDLY and MESKILL, Circuit Judges, and BONSAL, District Judge. *
Saks & Co. ("Saks") petitions for review of a Decision and Order of the National Labor Relations Board ("NLRB") issued against Saks on February 14, 1980 (247 NLRB No. 128). The NLRB cross-appeals for enforcement of its Order. The Amalgamated Clothing and Textile Workers Union ("Union") has intervened in support of the Order.
The NLRB found that Saks had violated Sections 8(a)(1) and (5) of the National Labor Relations Act, 29 U.S.C. §§ 158(a)(1) and 158(a)(5), by refusing to bargain with the union representing the alterations employees at the Saks store in Pittsburgh and in unilaterally setting the initial terms and conditions of employment of those employees. The NLRB's Order requires Saks to recognize and, if requested, bargain with the union and to make whole the employees for any losses suffered because of Saks' unlawful conduct.
Saks is a New York corporation which operates a nationwide chain of retail stores. For many years, Saks has operated a "Saks Fifth Avenue" store in Pittsburgh, Pennsylvania located on the sixth floor of the building which houses the department store of Gimbel Brothers, Inc. ("Gimbels"). All of the capital stock of Saks has been owned by Gimbels since 1924. The two companies file consolidated income tax returns. Saks nonetheless operates its stores independently of Gimbels and the two companies have separate officers and separate labor relations policies.
In 1973, Brown and Williamson, Inc. purchased all of the outstanding stock of Gimbels and, since 1975, the chairmen of both Saks and Gimbels have reported directly to the chief executive officer of Brown and Williamson.
Until August 10, 1977, Saks operated its Pittsburgh store in the Gimbels building pursuant to a written lease. Saks subcontracted its alterations work on women's garments to Gimbels, the work being performed by Gimbels employees, Gimbels paying social security taxes and premiums for unemployment insurance and workmen's compensation. Saks reimbursed Gimbels for the cost of labor, paid a fee for supervision by a Gimbels employee, and paid a portion of the fringe benefits of the Gimbels employees working on Saks garments.
Until about August 12, 1977, Gimbels maintained separate work areas for the alterations employees, one being used for alterations work on garments sold by Gimbels, and the other for alterations work on garments sold by Saks.
On August 12, 1977, the two areas occupied a large room, divided in half by a partition, on the thirteenth floor of the Gimbels store. Gimbels employed 18 employees in the Saks area and 10 in the Gimbels area. The Saks area performed alterations only on women's garments, while the Gimbels area performed alterations on both men's and women's garments. While Gimbels' manager of alterations supervised both work areas, Alfred Gianta, Saks' manager of alterations, was responsible for the quality of work performed in the Saks area.
The Union has been recognized by Gimbels since 1937 as the exclusive bargaining representative of its alterations employees. The most recent collective bargaining agreement (February 16, 1976 to February 15, 1979) recognized the Union as the exclusive bargaining representative of its alterations employees in the Pittsburgh metropolitan area. The agreement, which contains union security and check-off provisions, was negotiated between the Union and the Labor Standards Association, a multi-employer association of which Gimbels is a member.
On June 15, 1976, Saks signed a lease for a retail store facility, located one block from the Gimbels store, in downtown Pittsburgh, and at the same time notified Gimbels that it would be closing its operations within the Gimbels store. By letter of July 7, 1977, Saks notified Gimbels that it would be establishing its own alterations workroom in its new Pittsburgh store and therefore Following interviews, Saks hired 16 of the 18 Gimbels employees who had worked in the Saks area. Saks closed its store at the Gimbels location on August 10, 1977, and on August 15, the 16 former Gimbels employees began working at Saks' new Pittsburgh store under the supervision of Mr. Gianta.
would no longer require the services of Gimbels' alterations workroom. On July 15, Richard Mascaro, the director of labor relations at Gimbels, inquired of John Bullis, the senior vice-president of Saks, whether Saks would consider interviewing for employment at its new Pittsburgh store those alterations employees who would be displaced as a result of Saks' relocation decision. Bullis replied that Saks would be happy to arrange such interviews and noted that both the Saks personnel director and the Saks manager of alterations would be interviewing applicants in late July. Mascaro informed the Union's business representative of Gimbels' intention to close the Saks alteration work area. Mascaro then informed the employees in the Saks area of the closing and informed them that they could apply for jobs at Saks' new Pittsburgh store.
At its new store, Saks added men's and children's garments to its line of women's garments, so that the scope of its alterations department was expanded.
The weekly wage of the former Gimbels employees hired by Saks remained unchanged at first. Changes were made in both working conditions and fringe benefits, however, which included a shortening of the work week, the substitution of a different pension plan, and an alteration in the paid vacation policy.
On or about July 29, 1977, Henry Dropkin, International Vice-president of the Union and manager of the Union's Pittsburgh Joint Board, was informed by Mr. Bullis that Saks would not recognize the collective bargaining agreement as applying to the alterations employees in its new store and did not recognize the Union as their bargaining representative.
By letter of June 1, 1978, Bullis informed Dropkin that Saks would bargain with the Union only when it had been certified by the NLRB as the collective bargaining representative for the alterations employees at Saks.
On February 14, 1980, the NLRB issued its Decision and Order finding Saks' actions to be violative of the National Labor Relations Act. The NLRB determined that Saks was a successor employer to Gimbels with respect to the alterations employees at Saks' Pittsburgh store, whom, the NLRB found, constituted an appropriate bargaining unit. The NLRB therefore concluded that Saks violated Sections 8(a)(1) and (5) of the Act by refusing to bargain with the Union as the representative of these employees. The NLRB also found, over one dissent, that Saks had violated Sections 8(a)(1) and (5) by unilaterally setting the initial terms and conditions of employment of the alterations employees after it refused to bargain with the Union.
The NLRB found that Saks was a successor employer to Gimbels and that therefore, by refusing to bargain with the Union, Saks had violated Sections 8(a)(1) and (5) of the National Labor Relations Act. Saks contends that it was not a successor employer to Gimbels and consequently was not required to bargain with the Union.
"The key factor in determining whether an employer succeeds to an obligation to bargain with the incumbent union is the substantial continuity in the identity of the workforce." Nazareth Regional High School v. N.L.R.B., 549 F.2d 873, 879 (2d Cir. 1977). See also N.L.R.B. v. Burns International Security Services, Inc., 406 U.S. 272, 280-81, 92 Ct. 1571, 1578-79, 32 L.Ed.2d 61 (1972); Howard Johnson Co. v. Detroit Local Joint Executive Board, Hotel & Restaurant Employees, 417 U.S. 249, 262-65, 94 S.Ct. 2236, 2243-44, 41 L.Ed.2d 46 (1974). Until August 12, 1977, Gimbels employed 35 alterations workers in the Pittsburgh metropolitan area, 28 of whom worked at its downtown Pittsburgh store. Of the first 20 alterations workers employed at Saks' new Pittsburgh store, 16 were formerly employed by Gimbels to work on Saks garments.
Saks contends that because it did not hire a majority of the employees in the predecessor bargaining unit at Gimbels, a finding of successorship is inappropriate here. 1 This argument is precluded, however, by our decision in Nazareth, supra. In that case, the predecessor bargaining unit included approximately 400 lay teachers employed in nine diocesan schools. The successor unit comprised 55 teachers in one school of which 47 had been employed by the predecessor. Using as a denominator the number of employees in the successor employer's bargaining unit, we found the requisite continuity of identity in the work force satisfied by the proportion of 47 to 55, even though those 47 employees fell far short of a majority of the predecessor's bargaining unit of 400. On the...
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