Szabo Food Services, Inc. v. N.L.R.B.

• Decision Date: 27 December 1976
• Docket Number: No. 72,D,72
• Citation: 550 F.2d 705
• Parties: 94 L.R.R.M. (BNA) 2264, 79 Lab.Cas. P 11,802 SZABO FOOD SERVICES, INC., Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent. ocket 76-4100.
• Court: U.S. Court of Appeals — Second Circuit

Page 705

550 F.2d 705

94 L.R.R.M. (BNA) 2264, 79 Lab.Cas. P 11,802

SZABO FOOD SERVICES, INC., Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.

No. 72, Docket 76-4100.

United States Court of Appeals Second Circuit.

Argued Oct. 18, 1976.

Decided Dec. 27, 1976.

Joseph C. Wells, Washington, D. C. (Bernard J. Casey, and Reed, Smith, Shaw & McClay, Washington, D. C., on the brief), for petitioner.

Allison W. Brown, Jr., Atty., N.L.R.B., Washington, D. C. (John S. Irving Jr., Gen. Counsel, John E. Higgins, Jr., Deputy Gen. Counsel, Carl L. Taylor, Associate Gen. Counsel, Elliot Moore, Deputy Associate Gen. Counsel, Grant E. Morris, Atty., N.L.R.B., Washington, D. C., on the brief), for respondent.

Before SMITH, OAKES and TIMBERS, Circuit Judges.

TIMBERS, Circuit Judge:

Petitioner Szabo Food Services, Inc. (the employer) has petitioned to review and to have set aside an order of the National Labor Relations Board (the Board), 222 N.L.R.B. No. 193 (1976), ordering it to bargain with Local 217 of the Hotel and Restaurant Employees and Bartenders Union, AFL-CIO (the union) and to cease and desist from refusing to bargain and interfering with employees' exercise of their rights in violation of §§ 8(a)(5) and (1) of the National Labor Relations Act (the Act), 29 U.S.C. §§ 158(a)(5) and (1) (1970). The Board has cross-petitioned to enforce its order.

The single question presented is whether the Board erred in determining that the collective bargaining unit in question was appropriate. We hold that it did. We grant the petition to review, set aside the order and deny enforcement.

I.

The employer is an industrial food service contractor primarily engaged in the operation of cafeterias and food catering services. It has a contract with the United Aircraft Corporation (United Aircraft) to provide such services in nineteen cafeterias at ten United Aircraft locations in Connecticut. The employer considers these nineteen cafeterias in Connecticut to be a single operating unit (that is, an operating "cost center"), referred to as its United Aircraft district. District headquarters is located at East Hartford. The administration of the district is highly centralized. Each local manager reports to one of three area supervisors who in turn reports to the overall district manager. The employer's business is highly integrated. All units are administered pursuant to a single contract with United Aircraft. All facets of the food service operation including menus, food prices, methods of preparation and purchasing (which is directed by a corporate vice-president in Chicago) are identical at each of the cafeterias. All baked goods are prepared at the central kitchen in East Hartford and delivered to the other locations.

The union sought a collective bargaining unit composed of the three cafeterias at the Bridgeport and Stratford plants which comprise the Sikorsky Division of United Aircraft. Those plants are located five miles apart and are treated as a single operation. They have a combined work force of about fifty employees and share a local manager. The Regional Director denied the union's petition for certification on the ground that the unit requested was not an appropriate bargaining unit. The Board reversed the decision of the Regional Director, Member Kennedy dissenting. After a majority of those who cast votes in the Board-directed election voted for the union, the union was certified as the exclusive bargaining representative of all food service employees in the employer's Sikorsky Division. The employer refused to bargain with the union, claiming that the bargaining unit was inappropriate. The Board, rejecting the employer's argument, found that the employer had violated §§ 8(a)(5) and (1) of the Act and ordered the employer to cease and desist. The employer now petitions this Court to review and set aside the Board's order. The Board cross-petitions to enforce the order.

II.

Our scope of review is narrow. The "issue as to what unit is appropriate for bargaining . . . involves of necessity a large measure of informed discretion, and the decision of the Board, if not final, is rarely to be disturbed." Packard Motor Car Co. v. NLRB, 330 U.S. 469, 491 (1947). The parties agree that the Board's unit determination may be overturned only if arbitrary, unreasonable, and not supported by substantial evidence. See Wheeler-Van Label Co. v. NLRB, 408 F.2d 613, 616 (2 Cir.), cert. denied, 396 U.S. 834 (1969); Empire State Sugar Co. v. NLRB, 401 F.2d 559, 562 (2 Cir. 1968). They also agree that the unit designated "need not be the only appropriate unit, nor even the most appropriate unit", but "need only be an appropriate unit", MPC Restaurant Corp. v. NLRB, 481 F.2d 75, 78 (2 Cir. 1973) (emphasis in original), as long as the Board does not give controlling weight to the extent to which the union has organized the particular unit. NLRB v. Metropolitan Life Insurance Co., 380 U.S. 438 (1965); § 9(c)(5) of the Act, 29 U.S.C. § 159(c)(5) (1970).

We hold, based on our review of the evidence relied on by the Board, that the Board's order is not supported by substantial evidence and therefore is arbitrary and unreasonable.

In determining that the Sikorsky Division is an appropriate bargaining unit, the Board relied on the following factors to support its finding that the employees at the three Sikorsky cafeterias "have a community of interest separate and distinct from the broader one they share with other district employees":

"First, and foremost, the requested employees are under the common immediate supervision of a single manager by virtue of the fact that the three Sikorsky Division cafeterias are grouped together as a single unit or cost center for purposes of accountability. Also, despite the integration of all operations of the district, the Sikorsky unit manager retains significant control over day-to-day operations, especially with regard to discharge of employees for serious misconduct and the hiring of replacements. Geographically, the Sikorsky plants are but 5 miles apart and the next closest cafeteria is 14 miles away. Temporary interchange of employees appears to involve for the most part special functions and does not occur on a regular or frequent basis. Finally, there is no history of bargaining for employees in the district and no labor organization is seeking to represent the broader unit favored by the Employer."

We hold that the Board, in making the determination referred to above, distorted some evidence and ignored or overlooked other contrary evidence. Its findings regarding the separateness of the Sikorsky unit as a "cost center", the authority of the local manager, and the extent of interchange among employees throughout the district, are not supported by substantial evidence. In short, in making the "community of interest" determination, the Board elevated the factors of geographical proximity and the extent of union organization over the factors of complete integration of the employer's managerial structure and labor relations policy.

We hold that the Board erred in according as much significance as it did to the fact that the Sikorsky unit is designated a separate "cost center" for accounting purposes. Rather than being a production or accounting entity for whose performance the local manager is in any way responsible, the evidence established that the cost center is no more than an informational subdivision used to facilitate the collection and analysis of data on the performance of the United Aircraft district as a whole. The entire United Aircraft district is the employer's cost center for operational purposes. The only potentially significant aspect of the Sikorsky unit's separateness as one cost center is that all three of its cafeterias are under the immediate supervision of one local manager. The...