Duane's Miami Corp.

National Labor Relations Board - Board Decisions

Jan 15, 1958

119 N.L.R.B. 1331 (N.L.R.B. 1958)

DUANE'S MIAMI CORPORATION 1331
the Respondent resorting to other acts of interference , restraint, and coercion in
violation of the Act.- He therefore will recommend that the Respondent be ordered
to cease and desist from in any manner infringing upon the rights of the employees
as guaranteed in Section 7 of the Act
Upon the basis of the foregoing findings of fact, and upon the entire record in
the case, the Trial Examiner makes the following.
CONCLUSIONS OF LAW
1. United Rubber , Cork, Linoleum and Plastic Workers of America, AFL-CIO,
and International Association of Machinists, District 83, AFL-CIO, are labor
organizations within the meaning of Section 2 (5) of the Act.
2. By discriminating in regard to the hire or tenure of employment of:
Ruth Milner William Orr
Blanche King Beverly J Rice
Geraldine Crawford Florence Richards
Arlene Baker Theresa M Scapaticci
Ernest Frankenberger , Jr. Cora Seber
Mary Walker Arvilla Settlemire
Nettie Carder Catherine Slocum
Matilda McDaniel Walter Lee Snyder
Hazel L White
the Respondent has engaged in and is engaging in unfair labor practices within
the meaning of Section 8 (a) (3) of the Act.
3 By such discrimination , and by interfering with, restraining , and coercing its
employees in the exercise of rights guaranteed in Section 7 of the Act, the Respondent
has engaged in and is engaging in unfair labor practices within the meaning of
Section 8 (a) (1) of the Act.
4. By interfering with, restraining and coercing its employees in the exercise
of their rights guaranteed in Section 7 of the Act, the Respondent has engaged
in and is engaging in unfair labor practices within the meaning of Section 8 (a)
(1) and 8 (a) (5) of the Act.
5 The aforesaid unfair labor practices are unfair labor practices affecting com-
merce within the meaning of Section 2 (6) and (7) of the Act.
[Recommendations omitted from publication I
Duane's Miami Corporation and Retail Clerk's International As-
sociation, Local 1625, AFL-CIO, Petitioner. Case No. 12-RC-
170. January 15,1958
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 Herbert B. Mintz, hearing
officer. The hearing officer's rulings made at the hearing are free
from prejudicial error and are hereby affirmed.
Pursuant to the provisions of Section 3 (b) of the Act, the Board
has delegated its powers in connection with this case to a three-member
panel [Chairman Leedom and Members Rodgers and Jenkins].
Upon the entire record in this case, the Board finds :
1. The Employer is a Florida corporation operating a retail shoe
department under lease in the Jordan Marsh Department Store at
Miami, Florida. Its annual sales, all of which are intrastate, approxi-
mate $600,000; and its annual purchases, all of which are from out of
119 NLRB No 161
1332 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
State, approximate $330,000. Thus, the Employer has insufficient
outflow or inflow to warrant the assertion of jurisdiction over it as a
separate entity.' However, in its lease the Employer "... covenants
that a subsidiary of International Shoe Company of St. Louis,
Missouri, is and shall continue to be the owner of more than a majority
of its voting shares of stock." The lease further provides that the
Employer ". . . shall not assign this agreement nor sublet the
premises or privileges herein granted except to International Shoe
Company or another majority owned subsidiary thereof, without prior
written consent of Licensor." Moreover, as previously found by the
Board, said International Shoe Company has approximately 50 shoe
manufacturing plants located in various States of the United States,
and at 1 plant alone has direct inflow of almost $3,000,000. annually
and direct outflow of approximately $2,500,000 annually z Accord-
ingly, as the Employer is a subsidiary of International Shoe Com-
pany, and as the lease shows further integration between the Employer
and International Shoe Company, we find that the operations of the
Employer and International Shoe Company are sufficiently integrated
to constitute them a single employer.' Consequently, as the combined
operation has direct outflow in excess of $50,000 annually, we find
that it will effectuate the policies of the Act to assert jurisdiction over
the Employer. We therefore deny the Employer's motion to dismiss
the petition on the asserted ground that it does not meet the Board's
jurisdictional standards.
2. The labor organization involved claims to represent certain
employees 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.
The Employer and Jordan Marsh Co., the Intervenor herein,
contend that the shoe department'employees involved herein are not
employees of the Employer but are employees of the Intervenor. In
support of this contention, they introduced testimony to show that :
(1) The Intervenor's handbook is distributed to all employees in the
store, including shoe department employees, and the working condi-
tions and benefits set forth in this handbook, such a working hours,
lunch time, payday, dress requirements, merchandise discounts, holi-
days, and contributory life insurance, are equally applicable to all
employees in the store; (2) the Intervenor president is the overall
operations manager of the entire store, including the shoe depart-
ment; (3) the Intervenor hires shoe department employees in its
1 See Hogue and Knott, Supermarkets , 110 NLRB 543; The T. H. Rogers Lumber Com-
pany , 117 NLRB 1732:
2 See International Shoe Company , 93 NLRB 907, 918.
3 See Warrior Cooperative Mercantile Company , 117 NLRB 1773.
DUANE'S MIAMI CORPORATION `1333
personnel office; (4) the Intervenor transfers employees in and out of
the shoe department; (5) shoe department employees are paid by
Intervenor check; (6) no shoe department employees are hired or fired
.without Intervenor approval, but the Intervenor can hire or fire such
employees without the Employer's approval; (7) the shoe department
employees take the Intervenor training program; (8) the Intervenor
has a blanket fidelity bond covering all employees in the store;
and (9) the Intervenor has ultimate labor relations control over all
employees in the store.
We note,'however, that the license agreement between the Employer
and the Intervenor, which of course represents the contract between
the parties which legally governs their relationship, contains the
following provisions : article 5 states that there shall be deducted from
the monthly settlement between the Intervenor and the Employer
"... all monies that Licensor may have advanced for the . . . Li-
censee for payment of salaries of employees . . .," which clearly
indicates that the payment of shoe department employees by Inter-
venor check only represents an advance of money by the Intervenor,
with such employees actually being paid their wages by the Employer.
Article 7 contains three references to "Licensee's employees," thus
clearly indicating that the parties themselves consider the employees
in issue as employees of the Employer; and further states that "Li-
censee . . . shall reimburse Licensor for whatever portion of em-
ployee sick benefit costs (including necessary administrative costs) as
may be paid by Licensor to or for the benefit of Licensee's employees,"
which clearly indicates that shoe department employee sick benefits
also represent only an advance with actual payment by the Employer.
Article 9 states that "Licensee agrees that all employees employed by
it . . . shall be contracted for 'in Licensee's name through Licensor's
employment division" [emphasis supplied], which not only constitutes
further evidence that the parties themselves consider the employees in
issue as employees of the Employer, but also shows that the Intervenor
only acts as an agent of the Employer in hiring shoe department
employees with the Employer being the actual hiring employer.
Article 9 further provides that "Licensee shall have the right to fix
and regulate the salaries, commissions, bonuses, gratuities, and vaca-
tions of Licensee's employees, except that Licensee shall conform to
the minimum standards established by the Licensor with respect to
earnings, hours, and other basic conditions of employment, and shall
also conform to all the laws and regulations now in force or which
may be enacted by any governmental authority." Thus, except for
adherence to minimum standards established by the Intervenor or
by law, the Employer has the all-important right to fix and regulate
the pay and other benefits of the employee in issue. Article 9 further
provides that "... the said shoe department . . . shall be under the
1334 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
supervision of a competent and experienced manager," which reserves
to the Employer the immediate supervision over the shoe department
and the employees thereof. Article 13 requires "Licensee ... to carry
Workmen's Compensation insurance for employees of this depart-
ment ...," another indication of the licensee's employer status
Article 14 provides that "Licensor agrees to allow employees of Licen-
see the same discount on purchases made in other departments of the
store as Licensor allows its own employees; and Licensee agrees to allow
employees of Licensor the same discount on purchases made in this de-
partment." [Emphasis supplied.] This latter provision constitutes
additional proof that the parties themselves consider the employees
in issue as employees of the Employer as distinguished from the
Intervenor 's own employees. Article 19 provides that "Licensee
agrees to assume exclusive liability for the payment of any sums im-
posed by Federal and/or State and/or local authorities upon its
-employees or others, for or relating to unemployment insurance, old
age pensions, health or life insurance or the social security of em-
ployees or other persons who perform work or services for it in said
department," which is further evidence of the employer status of
the Employer. Finally, article 22 contains further references to
"employees of Licensee."
The Board has recently indicated that the question as to whether
the lessor or the lessee is the employer of leased department employees
in this type of case is determined by which of the two has the primary
right of control over matters fundamental to the employment rela-
tionship.' In the instant case, it appears that the lessee has this
primary right of control. Thus, under the controlling license agree-
ment, the lessee has the following elements of control over the employ-
ment relationship: (1) the lessee pays the wages of the employees;
(2) the lessee pays for employee sick benefit costs; (3) the lessee
is the actual hiring employer; (4) except for adherence to minimum
standards established by the lessor or by law, the lessee has the all-
important right to fix and regulate the pay and other benefits of the
employees; (5) the lessee exercises immediate supervision over the
employees; (6) the lessee carries the workmen's compensation in-
surance for the employees;' and (7) the lessee makes Federal and/or
State and/or local unemployment insurance, old age pension, health
and life insurance, and social-security payments for the employees.
4 There was also testimony that the Employer submits withholding tax returns for the
employees in issue.
5 See The Sperry and Hutchinson Company, 117 NLRB 1762.
Although not provided for in the lease, it is also clearly established that the lessee
submits withholding tax returns for the employees.
DUANE'S MIAMI CORPORATION 1335
Moreover, with its many references thereto, the license agreement
clearly shows that the parties themselves consider the employees in
issue as employees of the lessee. Accordingly, and as we are convinced
that such control as the lessor exercises over the shoe department em-
ployees is limited to the extent necessary for efficient operation of the
lessor's store, we find that the Employer-lessee is the employer of the
shoe department employees.?
4. The Petitioner seeks a unit of the shoe department employees of
the Employer. The Employer and the Intervenor take the position
that only a storewide unit, including all employees of the Intervenor,
is appropriate. In view of our finding above that the shoe depart-
ment employees are employed by a separate employer who has the
primary right of control over their terms and conditions of employ-
ment, as the shoe department employees therefore have interests sepa-
rate and distinct from those of the other store employees, and because
the Board usually excludes leased department employees from store-
wide units, we find that the leased department employees sought con-
stitute a separate appropriate unit.'
The Employer also employs 2 office clerical employees at the store,
and 5 other office clericals at a different address 10 blocks away in
Miami, Florida. Under established Board Practice of grouping sell-
ing and nonselling employees of a retail department store in 1 unit,
it is clear that the 2 office clericals at the store should be included in
the unit.' Moreover, despite the physical separation of the other
five clericals, this practice also requires their inclusion.10
Accordingly, we find that all employees in the Employer's shoe de-
partment in the Jordan Marsh Department Store at Miami, Florida,
including office clerical employees, and also including the Employer's
office clerical employees at 1721 N. E. Miami Court, Miami, Florida,
,but excluding supervisors as defined in the Act, constitute a unit ap-
propriate for the purposes of collective bargaining within the mean-
ing of Section 9 (b) of the Act.
[Text of Direction of Election omitted from publication.]
° See The Sperry and Hutchinson Company , supra; Maas Brothers , Inc., 88 NLRB 129,
134, 135; The P. B . Magrane Store, Inc., 84 NLRB 345, 347, 348. Cf. Stack & Company,
97 NLRB 1492, 1493 , 1494, where the lessor rather than the lessee had almost complete
control over the employment relationship.
Accordingly , we deny the motions of the Employer and the Intervenor to dismiss the
petition on the asserted ground that the Intervenor rather than the Employer is the
employer of these employees ; and we further deny the motion of the Petitioner to amend
the petition to include the Intervenor as the employer herein.
8 See cases cited in footnote 7, supra. Accordingly, we deny the Intervenor 's motion to
dismiss the petition on the asserted ground that the unit sought is inappropriate.
9 See J. J. Moreau & Son, Inc., 107 NLRB 999.
11 See J. J. Moreau & Son, Inc., supra.