SS Kresge Company v. NLRB, 18524
| Citation | 416 F.2d 1225 |
| Decision Date | 15 October 1969 |
| Docket Number | 18622,18634.,No. 18524,18524 |
| Parties | S. S. KRESGE COMPANY, K-Mart Division, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent, and Retail Store Employees Union, Local 36, RCIA, AFL-CIO, Intervenor. NATIONAL LABOR RELATIONS BOARD, Petitioner, v. F & G MERCHANDISING, INC., Cunningham Drug Stores, Inc., Holly Stores, Inc., Miles Shoes, Dunham's Garden City, Inc., Schiller Co., and Levitt Co., Respondents, and Retail Store Employees Union, Local 36, RCIA, AFL-CIO, Intervenor. ACME QUALITY PAINTS, INC., Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent, and Retail Store Employees Union, Local 36, RCIA, AFL-CIO, Intervenor. |
| Court | United States Courts of Appeals. United States Court of Appeals (6th Circuit) |
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John C. Donnelly, Detroit, Mich., for S. S. Kresge, John C. Donnelly, Peter A. Davis, Clark, Klein, Winter, Parsons & Prewitt, Detroit, Mich., on brief.
Franklin D. Dougherty, Detroit, Mich., for F & G Merchandising, Inc., Miles Shoe Co., Dunham's Garden City, Inc., Schiller Millinery Stores, Inc. and Holly Stores, Inc.
David K. Page, Edward R. Stein, Honigman, Miller, Schwartz & Cohn, Detroit, Mich., on brief for Cunningham Drug Stores, Inc.
A. D. Childs, Robert Bielek, Cleveland, Ohio, on brief for Acme Quality Paints, Inc.
Richard S. Rodin, N.L.R.B., Washington, D. C., for N.L.R.B., Arnold Ordman, Gen. Counsel, Dominick L. Manoli, Assoc. Gen. Counsel, Marcel Mallet-Prevost, Asst. Gen. Counsel, Nancy M. Sherman, Atty., N.L.R.B., Washington, D. C., on brief.
Theodore Sachs, Detroit, Mich., for Retail Store Employees Union, Local 36, RCIA, AFL-CIO, Rothe, Marston, Mazey, Sachs & O'Connell, Detroit, Mich., on brief.
Before PHILLIPS, McCREE and COMBS, Circuit Judges.
Cases numbered 18,524 and 18,634 are before the court on petitions to review and set aside an order of the National Labor Relations Board, and on the Board's cross-petitions to enforce that order. Case numbered 18,622 is before the court on the Board's petition to enforce, and respondent's cross-petition to review and set aside, the same order. The Board's decision and order in these consolidated cases are reported at 169 NLRB No. 61 (1968).
S. S. Kresge Company, petitioner in case numbered 18,524, operates a nationwide chain of discount department stores under the trade-name K-Mart. Most K-Mart stores contain various sales departments, some of which are operated by Kresge and some of which are operated by various licensees. However, the public is given the impression of a single, integrated enterprise since, under the terms of the uniform license agreement governing Kresge's relationships with its licensees, each licensee must "conduct sales on the premises solely under the name of K-Mart."
The K-Mart store involved in the present litigation is located in Jackson, Michigan. The licensees in the Jackson store include F & G Merchandising, Inc. (automobile supplies and service dept.); Cunningham Drug Stores, Inc. (drug and pharmaceutical dept.); Miles Shoe Co. (footwear dept.); Dunham's Garden City, Inc. (sporting goods dept.); Schiller Millinery Stores, Inc. (millinery dept.); Acme Quality Paints, Inc. (home improvement dept.); Holly Stores, Inc. (women's and children's wear dept.); and Wrigley's Supermarkets, Inc. (grocery dept.). These licensees employ approximately 63 of the 163 employees working at the Jackson K-Mart.
On February 12, 1965, the Retail Store Employees Union, Local 36, filed with the Board's Regional Director a representation petition seeking certification as the bargaining representative of a store-wide unit at the Jackson K-Mart. The proposed unit included all Kresge employees and the employees of seven of the eight licensees.1 The Regional Director consolidated this petition with two others which had been filed previously by another union2 and conducted a hearing pursuant to Section 9(c) of the Labor-Management Relations Act, 29 U.S.C. § 159(c). On June 15, 1965, he issued his Decision, Order, and Direction of Election in which he decided that "although K-Mart exercises a general control over the operational policies of its licensees, there is no common control over the labor relations of the latter." Accordingly, the Regional Director concluded that Kresge and its licensees were not joint-employers of the employees in the licensed departments and that a storewide unit would not be appropriate for purposes of collective bargaining.
On November 16, 1966, the Board reversed the findings of the Regional Director. 161 NLRB No. 92 (1966). It found that under the license agreement Kresge retained "the power substantially to affect the employment conditions of employees in licensed departments" and that a joint-employer relationship did exist. Accordingly, the Board ordered an election in a unit consisting of all Kresge employees and the employees of seven of the eight licensees in the Jackson K-Mart.3
The union won the election 113 to 31 and was certified as the employees' bargaining representative on February 27, 1967. However, Kresge and its licensees continued to protest the appropriateness of the bargaining unit and refused the union's request to enter into negotiations. They also contended that substantial changes in the factual situation since the date of the representation hearing before the Board had rendered the original determination inappropriate.
On May 10, 1967, the General Counsel issued a complaint charging the employers with a refusal to bargain in violation of Sections 8(a) (5) and 8(a) (1) of the Labor-Management Relations Act, 29 U.S.C. § 158(a) (5) and § 158(a) (1). The Trial Examiner concluded that there had been no changes in the K-Mart operation which had rendered the Board's determination of a storewide unit inappropriate and that the employers had unlawfully refused to bargain. He also found that Holly Stores, Inc. was a successor employer to Countess Joy Dress Corp. (the licensee of the women's and children's wear department at the time the original representation petition was filed) and was therefore bound by the Board's determination of a joint-employer relationship between Kresge and Countess Joy.4 Finally, the Trial Examiner found that Acme Quality Paints, Inc. had committed independent violations of Section 8(a) (5) by unilaterally changing the working conditions of its employees subsequent to the union's certification as the employees' bargaining representative.5 The Board affirmed the findings6 of the Trial Examiner and ordered the employers to cease and desist from committing the violations of Section 8(a) (5) and to bargain with the union upon request.
It is undisputed that Kresge and its licensees refused to bargain with the union despite its election victory and certification by the Board. The employers contend, however, that their refusals were justified because the Board erred in finding that a joint-employer relationship exists and that a storewide unit is the appropriate bargaining unit in the Jackson K-Mart department store. Our decision whether to enforce the Board's order in the unfair labor practice proceeding therefore depends on the appropriateness of the Board's findings in the underlying representation proceeding.
Initially, we observe that we are not the first federal appellate court to review a Board finding that in a K-Mart store Kresge and its licensees are joint-employers and a storewide unit is appropriate for purposes of collective bargaining. In Gallenkamp Stores Co. v. N.L.R.B., 402 F.2d 525 (9th Cir. 1968), the court considered this issue and upheld the Board's designation of a storewide unit in the Commerce, California K-Mart. We agree with that decision.
The scope of judicial review of Board findings in representation proceedings is limited. Congress has provided that:
The Board shall decide in each case whether, in order to assure to employees the fullest freedom in exercising the rights guaranteed by this subchapter, the unit appropriate for the purposes of collective bargaining shall be the employer unit, craft unit, plant unit, or subdivision thereof. Section 9(b) of the Labor-Management Relations Act, 29 U.S.C. § 159(b).
Accordingly, courts are reluctant to disturb Board determinations and will do so only if they are arbitrary or capricious. See Local 620, Allied Industrial Workers of America v. N.L.R.B., 375 F.2d 707 (6th Cir. 1967); Uyeda v. Brooks, 365 F.2d 326 (6th Cir. 1966); N.L.R.B. v. Prudential Life Insurance Co., 154 F.2d 385 (6th Cir. 1946). Accord, Gallenkamp Stores Co. v. N.L.R.B., supra; S. D. Warren Co. v. N.L.R.B., 353 F.2d 494 (1st Cir. 1965).
In the present case, the Board's conclusions that Kresge and its licensees are joint-employers and that a storewide unit is appropriate were based on its finding that Kresge had retained the right to control substantially the labor relations of the various licensees. See Frostco Super Save Store, Inc., 138 NLRB 125 (1962); United Stores of America and Collins Mart, Inc., 138 NLRB 383 (1962); Spartan Department Stores, 140 NLRB 608 (1963); United Mercantile, Inc. d/b/a Globe Discount City, 171 NLRB No. 103 (1968). Neither of these conclusions, or the finding on which they are based, are arbitrary or capricious.
Kresge's ultimate authority over the labor relations of its licensees is established by Paragraph 10 of the uniform license agreement, which confers upon Kresge alone the power to "establish, amend, modify or revise uniform Rules and Regulations * * * which shall govern but not be limited to the followin subjects: order and appearance of the store, * * * employment practices, personnel and store policies * * *." This provision is supplemented by Paragraph 21(D) of the uniform license agreement, which provides: "Should the Licensee not comply with the Rules and Regulations established by the Licensor * * * the Licensor may terminate the License upon 30 days written notice * * *."
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