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National Labor Relations Board v. Sun Drug Co.

decided: April 19, 1966.

NATIONAL LABOR RELATIONS BOARD, PETITIONER
v.
SUN DRUG COMPANY, INC., RESPONDENT



Staley and Freedman, Circuit Judges, and Cohen, District Judge.

Author: Freedman

FREEDMAN, C. J.:

The National Labor Relations Board seeks enforcement under Section 10(e) of the National Labor Relations Act (29 U.S.C. § 160(e)) of its order directing respondent to bargain with the Retail Clerks International Association, Local 298, which the Board had certified as the collective bargaining representative at the respondent's drug store in New Castle, Pennsylvania.*fn1 The order is based upon the Board's finding that respondent violated § 8(a)(1) and (5) of the Act (29 U.S.C. § 158(a)(1), (5)) by its refusal to bargain collectively with Local 298.

Respondent admits its refusal to bargain, but seeks to justify it by attacking the certification of the Union on the grounds that its New Castle store was not properly designated as the appropriate bargaining unit and that even if it was, the majority vote for the Union in the election resulted from the invalidation of a decisive ballot without an adequate trial.

The Act makes no provision for direct judicial review of Board decisions in representation proceedings. Such orders are interlocutory. Review is indirectly available to a dissatisfied employer by refusing to bargain with the certified collective bargaining agent and thereby incurring an unfair labor practice charge. Available defenses may then be asserted in resisting the Board's petition for enforcement of its order to cease and desist from the refusal to bargain.*fn2 Respondent has fully preserved its objections and they are now properly before us.

1. THE UNIT DETERMINATION. -

Respondent operates a chain of fifty-three drug stores, one in Parkersburg, West Virginia and fifty-two, including the one in New Castle, in Western Pennsylvania. Its main office and administrative headquarters are in Pittsburgh.

On June 7, 1963, the Union petitioned the Board to hold an election in a bargaining unit consisting of the non-supervisory employees of respondent's New Castle store. At a hearing held on behalf of the regional director, respondent sought to show that because of the integrated nature of its operation the New Castle store was not an appropriate unit for bargaining. It claimed that all its stores should constitute one unit, or in the alternative, that they should be divided into two units following the line of its subdivision of its administrative supervision into two areas. The Union claimed that because the New Castle store operated in an autonomous manner and its employees were more closely identified with it than with the chain, the store constituted the appropriate bargaining unit. The regional director found that respondent's central office in Pittsburgh services administratively all of its stores, handles various record keeping functions relating to personnel, payroll, sales and inventory, and establishes personnel policies, wages, conditions of employment and product prices. The individual store managers, however, including the New Castle store manager, are in charge of the day-to-day operations of their respective units with authority to hire, fire and discipline store personnel. They make work assignments, departmental transfers within the store, grant overtime, leaves of absence up to a week and deal with personnel problems of the store's employees. An employee who wishes to transfer from one store to another must make his request through his store manager. The store manager supplies the central office with personnel information, keeps records of sales, makes recommendations as to advertising, requisitions merchandise and purchases some pharmaceutical items and perishable food supplies.

The New Castle store is situated fifty miles from respondent's central office and is its only store in that city. The stores of respondent nearest to New Castle are in Beaver Falls, Pennsylvania, fifteen miles away, where there are two stores, at Sharon, Pennsylvania, approximately twenty miles away, and in Butler, Pennsylvania, thirty-five miles distant. There had been no employee interchange involving the New Castle store because respondent's policy is not to make a transfer between stores over ten miles apart.

On these facts the regional director found that the New Castle store was the unit appropriate for bargaining,*fn3 and accordingly directed an election.

Respondent thereupon filed with the Board a petition for review of the regional director's decision challenging his factual findings and claiming that his legal conclusion violated § 9(c)(5) of the National Labor Relations Act, (29 U.S.C. § 159(c)(5)), which provides: "In determining whether a unit is appropriate . . . the extent to which the employees have organized shall not be controlling." The Board denied the petition, stating that it raised no substantial issues warranting review and that there was no compelling reason for reconsideration of Board policy and thereby adopted the opinion of the regional director as its own. The election and certification followed.

The Act confides to the Board the determination of the appropriate unit for bargaining purposes. Section 9(b) (29 U.S.C. § 159(b)) provides: "The Board shall decide in each case whether, in order to assure the employees the fullest freedom in exercising the rights guaranteed by [the Act],*fn4 the unit appropriate for the purposes of collective bargaining shall be the employer unit, craft unit, plant unit, or subdivision thereof . . ."

In performing its function the Board has a wide discretion,*fn5 one which the Taft-Hartley Act did not withdraw when it added the proviso of § 9(c) (5), which the Board of course is bound to obey.*fn6 The determination of the appropriate unit is a difficult and complex decision and may seriously affect not only the employer and the employees, but rival unions, as Judge Madden, a former member of the Board, has recently written in recalling the bitter rivalry between the craft and industrial unions in the early days of the Board's existence.*fn7 Not lightly therefore may we interfere with the Board's exercise of its broad discretion.

Respondent does not attack the sufficiency of the facts to support the Board's conclusion. It argues that the Board's opinion is inadequate in the light of NLRB v. Metropolitan Life Insurance Co., 380 U.S. 438, 13 L. Ed. 2d 951, 85 S. Ct. 1061 (1965), which requires that the Board's opinion ...


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