B. G. Wholesale, Inc.

National Labor Relations Board - Board Decisions

Dec 20, 1955

114 N.L.R.B. 1429 (N.L.R.B. 1955)

B. G. WHOLESALE, INCORPORATED 1429
B. G. Wholesale, Incorporated and Its Subsidiaries , Houchens
Market of Glasgow , Inc., Houchens Food Market of Bowling
Green, Inc., and Houchens Market of Bowling Green , Inc. and
Retail Clerks Local Union No. 1557 Retail Clerks International
Association , AFL-CIO,' Petitioner . Case No. 9-RC-2233.
December 20,1955
DECISION AND DIRECTION OF ELECTION
Upon a petition duly filed under Section 9 (c) of the National Labor
Relations Act, a hearing was held before William G. Wilkerson, hear-
ing officer. The hearing officer's rulings made at the hearing are free
from prejudicial error and are hereby affirmed 2
Upon the entire record in this case, the Board finds :
1. B. G. Wholesale, Incorporated,' engages in the wholesale dis-
tribution of groceries in Bowling Green, Kentucky. In addition it
has 20 wholly owned subsidiary corporations, each of which operates
a single retail grocery store. Nineteen of the retail stores are located
in Kentucky and one is located in Tennessee. The Petitioner seeks
to represent in a single unit the employees of three of the retail stores
located in Bowling Green.4 The Employer contends that each of the
corporations operating the retail stores should be considered as a
separate entity and, as such, is not engaged in commerce within the
meaning of the Act. The Petitioner contends that B. G. Wholesale,
Incorporated, and all of its subsidiaries should be considered as a
single employer for the purpose of determining whether the Board
should assert jurisdiction over the employees here involved.
Each of the retail stores operates under the trade name of Houchens
Food Stores derived from the name of E. G. Houchens, president and
general manager of the parent corporation. All clerical work for
the subsidiaries is performed at the parent's offices. Employees of
the subsidiaries are paid by check drawn upon the parent corpora-
tion and appropriate charges are then made against the subsidiary by
the parent. Hospitalization and insurance benefits are likewise con-
tracted for by the parent and charged against the subsidiaries. For
administrative purposes the retail stores are divided into 2 groups of
10. Each group is under the supervision of a store supervisor, whose
salary is paid by the parent corporation and is apportioned among
1 The AFL and CIO having merged subsequent to the hearing in this proceeding, we are
amending the identification of the affiliation of the Union.
2 After the hearing, the parties stipulated to additional commerce facts which are
made part of the record herein.
'The name of the Employer appears as corrected at the hearing.
'The names of the corporations operating these stores are set forth in the caption
herein. These stores are known as No. 1, No 11, and No . 12, respectively, and will be
referred to as such herein
114 NLRB No. 224.
1430 DECISIONS OF N'tTIONAL LABOR RELATIONS BOARD
the stores in the group he supervises. In addition, each store has its
own store manager. However, matters pertaining to the hire and
discharge of employees at each individual store are normally handled
by the store supervisors, usually after consultation with president of
the parent corporation. It appears that the president and directors
of the parent also take an active part in other aspects of the manage-
ment of the retail stores. Under all the circumstances, we find that
B. G. Wholesale and its subsidiaries constitute a single employer for
jurisdictional purposes.'
B. G. Wholesale, Incorporated, purchases merchandise valued at
between 3 and 4 million dollars annually, of which over 50 percent
represents purchases received from sources outside the State. The
subsidiary stores in Kentucky purchase merchandise valued at more
than $5,000,000 annually, of which approximately $2,000,000 repre-
sents merchandise received from sources other than B. G. Wholesale,
Incorporated. In addition, the 3 stores involved in this proceeding
themselves purchase directly from sources outside the State over 10
percent of their merchandise.'
The Board finds that the Employer is engaged in commerce within
the meaning of the Act. A majority of the Board finds further that it
will effectuate the policies of the Act to assert jurisdiction herein.
2. The labor organization involved claims to represent certain em-
ployees of the Employer.
3. A question affecting commerce exists concerning the representa-
tion of employees of the Employer within the meaning of Section 9
(c) (1) and Section 2 (6) and (7) of the Act.
4. As noted above, the Petitioner seeks to represent in a single unit
the employees at the three retail stores located in Bowling Green,
Kentucky. The Employer contends that three separate single store
units are alone appropriate. However, the parties are in agreement
as to the composition of whatever unit or units are found. The 3
Bowling Green stores are in the same administrative group, and are
located within 10 blocks of one another. The next nearest stores in
the chain are 12 to 20 miles away. There is no temporary interchange
of employees between stores . However, there are some transfers be-
tween stores, and such transfers are usually made only between stores
located in the same city or town. Also promotions of employees occur
between stores located in the same city or town.
. Under all the circumstances, including particularly the geographical
proximity of the three Bowling Green stores and their separation from
other stores in the chain, and the fact that employees' transfers and
5 Marvel Roofing Products, Incorporated, et al., 108 NLRB 292; Rushville Metal Prod-
ucts, Inc.; 107 NLRB 1146.
6 There is no evidence in the record of the proportion of purchases made by the other
Kentucky stores directly from out-of-State sources.
B. G. WHOLESALE, INCORPORATED 1431
promotions are made only between stores in the same town`or' city, we
find that the employees at the Bowling Green stores have a substantial
community of interest apart from the other employees of the Employer
and that the unit proposed by the Petitioner is appropriate.? We find
the following employees of the Employer at its three Bowling Green
stores constitute a unit appropriate for the purposes of collective bar-
gaining within the meaning of Section 9 (b) of the Act :
All employees of Houchens Supermarket Stores in Bowling Green,
Kentucky, including checkers, grocery clerks, meat clerks, meat
managers," head checkers, and part-time employees working at least 15
hours per week, but excluding all store managers and all guards, pro-
fessional employees, and supervisors as defined in the Act.
[Text of Direction of Election omitted from publication.]
CHAIRMAN LEEDOM, concurring :
I concur in the assertion of jurisdiction herein for the following
reasons : It appears that the Employer's, Kentucky operations alone in-
volve combined direct and indirect inflow exceeding $2,000,000 an-
nually. That portion of its business, standing alone, therefore meets
the Board's present standards for asserting jurisdiction over intrastate
retail enterprises.9 Under similar circumstances in Greenberg Mer-
cantile Corp.10 the Board stated, "We do not believe that dismissal of
this case on jurisdictional grounds would be consistent with the overall
policy of the Board's present jurisdictional standards," and concluded
that it would assert jurisdiction over an intrastate portion of a
multistate retail chain on the basis of inflow to all stores in that portion
of the chain. In accord with that decision, I find that it will effectuate
the policies of the Act to assert jurisdiction in this case, and concur in
the direction of an election herein.
MEMBER MURDOCK, concurring :
I agree that it will effectuate the policies of the Act to assert juris-
diction over the Employer, an interstate retail chain enterprise, and to
direct an election among the employees in the unit herein found to be
appropriate. In view of the fact that the majority is not in agree-
ment on the reason for the assertion of jurisdiction, I believe it is
incumbent on me to state why I will assert jurisdiction.
7L. Wiemann Company, 106 NLRB 1167
8 In accord with the agreement of the parties, it is found that the meat managers have
no supervisory duties within the meaning of the Act, and they are therefore included in
the unit.
8 Hogue and Knott Supermarkets , 110 NLRB 543: The Brass Rail, Inc., 110 NLRB
1656. While one element of the combined enterprise is nominally a wholesale enterprise,
it is apparent that it is no more than a common warehouse and purchasing agent for the
chain of Houchens stores, and the combined operation is clearly a retail enterprise. As
noted above, 98 percent of its sales are made to the subsidiary stores, and there appears
to be general interrelationship of management and services.
Io Greenberg Mercantile Corp., 112 NLRB 710.
1432 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
I think that the necessity to assert jurisdiction in this kind of a case,
if,the Board is to perform its designated functions, is obvious, so ob-
vious, that extended comment might be unnecessary, were it not for the
fact that assertion of jurisdiction herein is contrary to the express
wording of the Board's jurisdictional standard for interstate retail
chain enterprises adopted a year ago and under which standard the
enterprise herein involved would come.
The Hogue and Knott decision which sets forth that standard
states:
We have also determined that in the future cases involving a
multistate chain of retail stores or service establishments we will
assert jurisdiction over the entire chain or any integral part of
it if the annual gross sales of all stores or establishments in the
chain amount to at least $10,000,000. Otherwise we will assert
jurisdiction only over those individual stores or establishments
comprising integral parts of the chain which independently satis-
fy the inflow or outflow standards set forth above. [Emphasis
supplied.]
As the individual stores involved herein do not independently sat-
isfy the outflow or inflow standards, and as the chain as a whole has
less than $10,000,000 gross sales, it is readily apparent that the Em-
ployer's operations do not satisfy the Hogue and Knott jurisdictional
standard.
In my original basic dissent to the new jurisdictional standards last
year, I made reference to "the confusion and contradictions implicit
in the complexity of many of these standards." 11 This observation had
peculiar pertinence to the standard for retail stores which was laid
down in the Hogue and Knott case.12 In the dissent therein, Member
Peterson and I pointed out among the "incongruities," the inconsistent
treatment given to intrastate and interstate retail chains. Although
the Hogue and Knott standard permitted totaling inflow or outflow
figures in the case of intrastate chains, and the assertion of jurisdiction
over the chain if the total met the direct or indirect inflow or direct
outflow figures applicable to a single store, it did not permit the total-
ing of these figures for interstate chains. In other words, paradoxi-
cally, if this Employer did not have the Tennessee store which makes
it an interstate chain, but was limited to the single State of Kentucky,
it could meet the Hogue and Knott jurisdictional test. Although the
dissent in that case pointed out the anomaly in a standard which was
more restrictive as to interstate chains than to intrastate chains, the
majority in that case obviously was little disturbed by it.
11 Breeding Transfer Company, 110 NLRB 493.
n 110 NLRB 543.
B. G. WHOLESALE, INCORPORATED 1433
The history of the instant case and a companion case involving an-
other interstate retail chain more recently issued-Greenberg Mer-
cantile Corp.13-provides a graphic picture of the delays and predicted
confusion resulting from the Board's substitution and application of
new and ill-conceived standards for retail stores last year in place of
the simple and comprehensive standards applicable under the 1950
jurisdictional plan. In fact it seems safe to say that it is now impos-
sible to tell just what is the Board's standard for interstate retail
chains.
The hearing in the Greenberg case was held on April 29, 1954, after
which it was pending before the Board for decision for more than 1
year. The hearing in the instant case was held on May 26,'1954, and
it too has been pending before the Board for decision for over 1 year.
Under the 1950 standards in effect when both these cases were origi-
nally transferred to the Board for decision, jurisdiction would have
been asserted and a direction of election might quickly have issued
as there were no serious issues on the merits. The cases were not dis-
posed of, however, before the adoption of new standards for retail
stores announced in the July 15, 1954, press release. Under the
standard laid down in the press release it was not possible to total
inflow or outflow of stores in either an intrastate chain or an interstate
chain-the release stated that "a chain of stores operating entirely
within one State will not come within the Board's jurisdiction unless
the store involved in the case has" the requisite inflow or outflow.
However, by the time the standard was laid down in a decision in
Hogue and Knott on October 26, 1954, it had been altered to permit
this totaling 14 for intrastate chains only. Under that revised stand-
ard laid down in Hogue and Knott, both the instant case and the
Greenberg case would properly have been dismissed long months ago
as neither chain met the $10,000,000 gross sales test; and although the
inflow figures of the stores could have been totaled to meet that test
had they been intrastate chains, as they were interstate chains it could
not be done. But the majority members who adopted the Hogue and
Knott standard apparently were unwilling to give a concrete demon-
stration of the inconsistency involved in the standard by applying it to
dismiss a case involving an interstate chain over which jurisdiction
would have been taken had the same stores been located in a single
State, and these cases continued to gather dust. The dilemma was
"solved" in the Greenberg Mercantile case, which issued in May of
this year by the expedient of not applying the interstate test to an
interstate chain, but using the intrastate standard instead, despite the
13112 NLRB 710.
14 "As to intrastate chains of retail stores and service establishments, we shall continue
the practice of totaling direct inflow , indirect inflow, or direct outflow of all stores in
the chain to determine whether any one of these standards is met."
1434 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
clear conflict with Hogue and Knott which specifies different tests for
interstate and intrastate retail chains. The Greenberg decision said
in substance that since part of the interstate chain was located in 1
State, and the total inflow figures of the stores in that State met the
required total for an intrastate chain, the Board would apply the
intrastate'test to that part of the interstate chain to take jurisdiction of
the single Illinois store involved. That this rationale could not be
embraced as a permanent Board policy seems evident from the fact
that a majority of the members who signed the Greenberg Mercantile
decision have now apparently abandoned the decision. It seems to be
recognized as only a temporary expedient which permitted getting rid
of an ancient case without dismissal which would have given a con-
crete demonstration of the inconsistent treatment of interstate chains
in the Hogue and Knott standard had it been applied. I would cer-
tainly not deem it a sound basis for asserting jurisdiction herein.
Now, the instant case, which might have been disposed of in dif-
ferent ways during its 18 months'sojourn before the Board, depending
on whether the action was taken while the 1950 plan was still in effect,
while the Hogue and Knott standard was in full effect, or during the
brief period that Greenberg Mercantile Corp. was apparently the
rule, is finally being disposed of because 3 Board Members are in
agreement to assert jurisdiction though not for the same reason.
It is apparent from this recitation of the subsequent history of the
Hogue and Knott standard, that it is impossible for anyone to tell
today exactly what is the state of the law on the jurisdictional stand-
ard governing interstate retail chains. It is obvious that there is not
a majority of the Board who are willing to reaffirm unqualifiedly the
Hogue and Knott standard with its anomalous treatment of interstate
retail chains as compared with less restrictive treatment of intrastate
chains; nor to remove the anomaly by permitting totaling inflow and
outflow figures for the former as well as the latter; nor to reaffirm the
Greenberg Mercantile decision. In this state of uncertainty I believe
I am free to vote to assert jurisdiction on my basic conviction that it
will effectuate the purposes of the Act to assert jurisdiction over all
multistate enterprises, which was the clear and simple rule under the
1950 jurisdictional plan.15
I would also note that there is something patently wrong with
jurisdictional standards which do not result in the quick resolution of
questions concerning representation.
MEMBER PETERSON, concurring :
I concur in the assertion of jurisdiction in this case. In the absence
of a majority to dismiss on a literal application of the standard
enunciated in Hogue and Knott, or to adopt a modification, I think a
15 See my dissent in The Ransom and Randolph Company, 110 NLRB 2204, 2206.
RICHARDS CONTAINER CORPORATION 1435
sufficient reason for taking jurisdiction is that the Employer is en-
gaged in commerce within the meaning of the Act.
MEMBERS RODGERS and BEAN took no part in the consideration of
the above Decision and Direction of Election.
Richards Container Corporation and Miscellaneous Warehouse-
men & Production Employees' Union, Local 781, I. B. T. C. W.
& H, Petitioner. Case No. 13-RC-4537. December 20, 1955
DECISION, ORDER, AND DIRECTION OF SECOND
ELECTION
Pursuant to a stipulation for certification upon consent election,
approved on August 30, 1955, an election by secret ballot was con-
ducted under the direction and supervision of the Regional Director
for the Thirteenth Region on September 15, 1955, among employees
'in the stipulated unit. Upon the conclusion of the election, a tally
of ballots was furnished the parties in accordance with the Rules and
Regulations of the Board. The tally shows that, of approximately
23 eligible voters, 22 cast ballots, of which 9 were for and 12 against
the Petitioner, and 1 ballot was challenged. The challenged ballot
is not sufficient to affect the results of the election.
On September 19, 1955, the Petitioner filed timely objections to
conduct affecting the results of election. In accordance with the
Board's Rules and Regulations, the Regional Director for the Thir-
teenth Region caused an investigation to be made, and on November
2, 1955, issued and duly served upon the parties a report on objec-
tions. In his report, the Regional Director found, without ruling on
the Petitioner's objections Nos. 1 and 2, that the Employer's acts as
-alleged in Petitioner's objection No. 3 interfered with the employees'
.freedom of choice in the selection of a bargaining representative.
Accordingly, he recommended that the objection No. 3 be sustained
and that the election be set aside. Thereafter, on November 14, 1955,
the Employer filed timely exceptions to the Regional Director's
report and to his recommendation that the election be set aside.
The Board, having considered the Regional Director's report on
objections, the Employer's exceptions, and the entire record in this
case, finds :
1. The Employer is engaged in commerce within the meaning of
the National Labor Relations Act.
2. The Petitioner is a labor organization claiming to represent em-
ployees of the Employer.
3. A question affecting commerce exists concerning the representa-
tion of certain employees of the Employer within the meaning of Sec-
tion 9 (c) (1) and Section 2 (6) and (7) of the Act.
114 NLRB No. 220.