First Food Ventures, Inc.

National Labor Relations Board - Board Decisions

Jun 6, 1977

229 N.L.R.B. 1228 (N.L.R.B. 1977)

DECISIONS OF NATIONAL LABOR RELATIONS BOARD
First Food Ventures, Inc. and Retail Clerks Interna-
tional Association, Local 1439. Case 19-CA-8472
June 6, 1977
DECISION AND ORDER
BY CHAIRMAN FANNING AND MEMBERS
PENELLO AND MURPHY
On December 21, 1976, Administrative Law Judge
Roger B. Holmes issued the attached Decision in this
proceeding. Thereafter, the General Counsel filed
exceptions and a supporting brief.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the
National Labor Relations Board has delegated its
authority in this proceeding to a three-member panel.
The Board has considered the record and the
attached Decision in light of the exceptions and brief
and has decided to affirm the rulings, findings, and
conclusions of the Administrative Law Judge only to
the extent consistent herewith.
The complaint alleges that Respondent, on and
after January 19, 1976, failed and refused to bargain
with the Union as the exclusive bargaining represen-
tative of its employees in violation of Section 8(a)(5)
of the Act. The Administrative Law Judge dismissed
the complaint allegations because he concluded that
Respondent incurred no obligation to recognize or
bargain with the Union since it was not a successor
employer. Contrary to the Administrative Law
Judge, and for the reasons set forth below, we
conclude that Respondent was a successor employer
and, as such, unlawfully failed and refused to bargain
with the Union in violation of Section 8(a)(5) of the
Act.
Facts
On December 28, 1971, the Union was certified as
the collective-bargaining representative of the em-
ployees of ITCO, Inc., a retail supermarket in
Spokane, Washington.' Thereafter, the Union en-
tered into three collective-bargaining agreements
with ITCO, the last of which was reached in the latter
part of August or the first part of September 1975.2
On April 3, 1974, ITCO, Inc., by its owners, Lewis
and Lee McBride, signed a promissory note in the
amount of $61,000, and an underlying security
agreement in favor of the Roundup Co. By about
November 1975, ITCO had incurred serious financial
i The certified bargaining unit was:
All checkers, stockers, and boxboys employed by ITCO, Inc., d/b/a
Indian Trail IGA Foodliner, at its retail store located at 3321 West
Indian Trail Road, Spokane, Washington, excluding office clerical
employees. meatcutters and meatwrappers, bakery employees, guards.
managers and supervisors as defined in the Act.
229 NLRB No. 154
difficulties. On November 21, Roundup commenced
foreclosure proceedings and, on November 22, ITCO
agreed, in lieu of foreclosure, to sell its assets to
Roundup for $150,000.
Roundup is a wholesale food distributor which
does not, in general, own or operate retail marketing
facilities. However, Roundup, as a regular business
practice, does seek to organize investment groups of
retailers in order to develop retail outlets through
which it can market its products. Accordingly,
Roundup undertook temporary operation of the
ITCO market on November 25 pending its effort to
locate a permanent buyer. At the same time,
Roundup had its attorney, Paul Allison, file articles
of incorporation for Respondent in anticipation of its
successfully obtaining investors in the newly incorpo-
rated entity. For, although some businessmen had
expressed interest in investing in Respondent,
Roundup, as of November 25, did not know who the
stockholders would be. Within the next 2 weeks,
however, eight persons became the original share-
holders of stock in Respondent, none of whom was
an employee of Roundup.
From November 25 until December 5, when
Respondent became the owner and operator of the
store, Roundup continued to operate and manage
the store. During that period Roundup employed 11
employees in the store, 8 of whom had previously
worked for ITCO. In addition, Roundup undertook
certain cleanup and repair work, including steam
cleaning the meat and produce cases, replacing the
compressor on the frozen food case, and instituting
certain electrical repairs. It also maintained separate
accounting of all transactions relating to the store
with the intention of adding all costs not covered by
cash inflow to the sales price to be paid by
Respondent. Finally, in order to avoid legal compli-
cations that might arise from having two bulk
transfers of property in such a short time, the
schedule of property transferred in bulk, dated
December 2, 1975, sets forth ITCO, Inc., as the seller
and Respondent as the buyer in contemplation of the
assignment by Roundup to Respondent of its interest
as purchaser of the ITCO store.
The first board of directors' meeting of Respondent
was held on December 4, at which time Respondent
ratified the assignment and agreed to undertake the
obligations as if the corporation had been the
original purchaser as of November 22, 1975. Respon-
dent commenced full operation of the store with 14
employees on December 5. Of the 10 unit employees
2 The agreement was not actually signed until December 5, 1975. Prior to
that time ITCO had refused to sign it. As a result, the Union filed charges.
In partial settlement of those charges, ITCO executed the agreement, albeit
by then it no longer owned or operated the store (see infra).
1228
FIRST FOOD VENTURES, INC.
employed by Respondent, 7 were formerly employed
by ITCO, Inc.3
Respondent, on or after December 5, continued to
operate the facility as a retail supermarket under the
IGA name.4 In addition to various improvements in
the appearance of the store, including cleaning,
painting, and rearranging store shelving, Respondent
instituted the following changes: eliminated about
half of the "simply wonderful" line and expanded the
IGA line to the point where it carried the full line;5
reduced the number of dairies it used as suppliers
from six to two and expanded the number of dairy
products; changed the line of magazines offered for
sale in the store; reinstituted the customer service of
handling money orders and discontinued the Master
Charge service utilized by ITCO; paid its employees
by check rather than cash; and changed the uniforms
required to be worn by its employees.
Union Request for Recognition
The Union was first notified that Respondent
would be the new owner of the marketing facility on
or about November 22. By letter dated January 19,
1976, Union President Dale Harris enclosed a copy
of its recently executed collective-bargaining agree-
ment with ITCO, stating that it was in effect at the
time of the takeover and still in effect. He further
stated that the Union requested current payroll
information. Respondent did not respond to this
letter. Consequently, on January 30, Harris wrote
another letter reiterating the Union's earlier requests,
as well as requesting that Respondent meet with the
Union on February 4.
By letter dated February 2, Respondent informed
the Union, inter alia, as follows:
We recognize that your union claims to be the
certified bargaining representative of certain of
the employees at Indian Trail IGA. In this regard
we must inform you that First Food Ventures,
Inc. entertains a sincere doubt as to whether or
not your union does in fact represent a majority
of the employees who would presumably make up
a bargaining unit. Be assured that we are willing
to discuss with you the basis for this doubt.
Respondent's letter made no reference to the
bargaining meeting proposed by the Union.
Pursuant to a further union request for a meeting
for clarification of the contract in effect at the time of
the takeover, the parties met on February 25. Allison,
Respondent's attorney, stated that he doubted
3 If James Glenn is a supervisor, as General Counsel asserts, then of the
nine unit employees employed by Respondent six were formerly employed
by ITCO, Inc.
4 The name "Lewis" was dropped from in front of the name.
Respondent was a successor to the Union's contract
with ITCO. Union Attorney Schuchart replied that,
even assuming no successorship relationship existed,
Respondent was still obligated to bargain inasmuch
as the Union represented a majority of employees in
the unit. Attorney Allison declined to comment on
the Union's assertion, stating he was only prepared
to discuss whether the ITCO contract applied.
By letter dated March 11, Attorney Allison again
notified the Union that Respondent entertained a
good-faith doubt as to the Union's majority status
and declined to enter into negotiations. In support of
its doubt as to the Union's majority status, Respon-
dent relied solely on a letter dated February 11, 1976,
signed by nine employees of the store. The document
stated:
We the undersigned employees feel that the retail
clerks union Local 1439 should have no jurisdic-
tion over Indian Trail IGA. We feel we can
handle any negotiations between management
and labor put before us. We have an excelent [sic]
medical program and will have a better dental
and optical program than Retail Clerks at no cost
to us.
The petition was composed and circulated by
James Glenn, manager of the store's grocery depart-
ment.
Conclusions
Contrary to the conclusion reached by the Admin-
istrative Law Judge, we find that Respondent is a
successor employer for purposes of the Act. Thus,
Respondent has continued the "employing industry"
by using substantially the same facilities and work
force for the same basic purposes for essentially the
same customers in the same geographic area.6 It is
undisputed that Respondent continues to operate the
facility as a retail grocery store and that a majority of
the work complement employed by Respondent was
formerly employed by ITCO. In addition, Respon-
dent distributes essentially the same products as its
predecessor-groceries, produce, meats, and various
other items normally available at a retail food
market. The physical facility is in the same location
and Respondent maintains comparable business
relationships and services customers in the same
geographical area.
The Administrative Law Judge, in reaching a
contrary result, relied on what he found were
significant changes from the ITCO operation. We do
5 ITCO had only camed a partial line of IGA products.
6 Ranch-Way, Inc., 183 NLRB 1168, 1169 (1970); N.LR.B. v. Burns
International Security Services, Inc., 406 U.S. 272, 278 (1972).
1229
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
not believe that those changes are of sufficient
significance to warrant a finding that Respondent is
not a successor to ITCO. Respondent has engaged in
certain cleanup and repair work and has initiated
certain changes in the brands of products offered as
well as adding new products, and it has changed
customer services, employee dress, and manner of
compensation. Such changes, however, constitute
relatively small operational variances which do not
materially alter the nature of the operation of the
employing industry. The store is still a grocery store
operating basically as it did before. Accordingly, we
find that there exists the requisite continuity in the
identity of Respondent's enterprise to qualify it as a
successor to ITCO.
Nevertheless, the question remains whether
Roundup's operation of the store between ITCO and
Respondent broke the successorship chain. The
Administrative Law Judge attached a great deal of
significance to the fact in finding that Respondent
was not ITCO's successor. In the circumstances of
this case, however, we accord no weight to Round-
up's transitory interim employer status. The evidence
establishes that in operating the store in the transi-
tional 2-week period it took to perfect the change in
ownership and operation from ITCO to Respondent,
Roundup was really active as a custodian of ITCO's
assets pending a permanent transfer of those assets to
Respondent. As noted above, Roundup assumed
temporary ownership of the facility in lieu of its
interest as a foreclosing creditor and for the limited
purpose of retaining the facility as a retail outlet for
its products as a wholesale distributor. Thus, Re-
spondent was created and incorporated by Roundup
on November 25, 3 days after it assumed ownership
of the store; all legal documents pertaining to the
sale of the ITCO facility contemplated a transfer of
assets from ITCO to Respondent; and Respondent,
by its board of directors, ratified an assignment to it
by Roundup of its interest as purchaser and agreed
to undertake all obligations incurred by Roundup in
operating the store during the transition in ownership
as if Respondent had been the original purchaser on
November 22. We find, therefore, that Roundup's
temporary operation of the ITCO facility was
undertaken in a custodial capacity in order to protect
its interest as a creditor and to maintain the store as a
7 Moreover, had Roundup not intervened to maintain operation of the
store in the interim period with the result that a 2-week hiatus between
ITCO's cessation and Respondent's commencement of operations ensued,
we would not find such a time lapse sufficient to break the continuity of the
employing industry. Cf. The Daneker Clock Company, Inc., 211 NLRB 719,
721 (1974). Accordingly, in the instant case, wherein no disruptions in
business operations occurred, we find even less justification for concluding
that successorship relationship is precluded by Roundup's limited operation
of the retail store.
8 In view of this finding it is unnecessary to pass on General Counsel's
alternative contention that Roundup was a successor to ITCO and that
Respondent is a successor to Roundup.
going concern pending the transfer to Respondent,7
and thus its intervention does not affect Respon-
dent's status as a successor employer to ITCO.8
In view of this finding, we conclude, for the reasons
set forth below, that Respondent was obligated to
bargain with the Union and that its refusal to
bargain on 9 and after January 19 violated Section
8(a)(5) and (1) of the Act.
It is well established that a successor employer is
obligated to bargain with a union which is recog-
nized as the majority representative of the employees
in the unit to which the employer succeeds, unless it
is demonstrated that the union no longer represents a
majority of employees on the date of refusal to
bargain, or that the refusal to bargain was grounded
on a good-faith doubt of the union's majority
status.1O
Respondent took over physical possession of the
store on December 5, 1975. On and after that date, a
majority of unit employees employed by Respondent
was formerly employed by ITCO. On January 19 and
again on January 30, the Union declared itself to be
the certified bargaining representative of the store's
employees. Respondent thereafter asserted a good-
faith doubt as to the Union's majority status on
February 4. However, in support of its asserted
doubt, Respondent relies solely on the document
circulated by James Glenn dated February 11, 1976.
Thus, the sum total of evidence of employee
disaffection available to Respondent was discovered
only after Respondent's initial refusal to bargain.
Accordingly, we find that Respondent's duty to
bargain as a successor employer arose at a time when
Respondent had no objective basis to support its
claim of doubt as to the Union's majority status."
We thus find that Respondent violated Section
8(aX5) and (1) of the Act by, on and after January
19, refusing to bargain with the Union as the
collective-bargaining representative of a unit of its
employees.12
THE REMEDY
Having found that Respondent has engaged in
unfair labor practices violative of Section 8(a)(5) of
the Act, we shall order that it cease and desist
therefrom and take certain affirmative action de-
signed to effectuate the policies of the Act.
9 Maintenance, Incorporatec 148 NLRB 1299 (1964).
LO N. L R.B. v. Wayne Convalescent Center, Inc. 465 F.2d 1039, 1043 (C.A.
6, 1972).
11 Valley Nitrogen Producers, Inc., 207 NLRB 208 (1973).
12 We find it unnecessary to consider the reliability of the evidence of
employee disaffection with the Union (or in this connection decide whether
Glenn is a supervisor) inasmuch as we find that Respondent's reliance on
such evidence, even if accurate, is vitiated by its preexisting unlawful refusal
to bargain and, accordingly, is entitled to no weight. Valley Nitrogen
Producers, supra at 209.
1230
FIRST FOOD VENTURES, INC.
Having found that Respondent unlawfully refused
to bargain with the Union as the certified representa-
tive of its employees in an appropriate unit, we shall
order Respondent to bargain collectively with the
Union, upon request, concerning rates of pay, wages,
hours, and other terms and conditions of employ-
ment, and embody any understanding reached in a
signed agreement.
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor
Relations Board hereby orders that the Respondent,
First Food Ventures, Inc., Spokane, Washington, its
officers, agents, successors, and assigns, shall:
I. Cease and desist from:
(a) Refusing to bargain collectively with Retail
Clerks International Association, Local 1439, as the
exclusive collective-bargaining representative of its
employees in the following appropriate unit:
All checkers, stockers, and boxboys employed by
First Food Ventures, Inc., at its retail store in
Spokane, Washington, excluding office clerical
employees, meatcutters and meatwrappers, bak-
ery employees, guards, managers, and supervisors
as defined in the Act.
(b) In any like or related manner interfering with,
restraining, or coercing its employees in the exercise
of the rights guaranteed in Section 7 of the Act.
2. Take the following affirmative action designed
to effectuate the policies of the Act:
(a) Upon request, bargain collectively with Retail
Clerks International Association, Local 1439, as the
exclusive representative of the employees in the unit
found appropriate above, with respect to rates of
pay, wages, hours, and other terms and conditions of
employment, and embody in a signed agreement any
understanding reached.
(b) Post at its place of business in Spokane,
Washington, copies of the attached notice marked
"Appendix."' 3 Copies of said notice, on forms
provided by the Regional Director for Region 19,
after being duly signed by Respondent's representa-
tive, shall be posted by Respondent immediately
upon receipt thereof, and be maintained by it for 60
consecutive days thereafter, in conspicuous places,
including all places where notices to employees are
customarily posted. Reasonable steps shall be taken
by Respondent to insure that said notices are not
altered, defaced, or covered by any other material.
13 In the event that this Order is enforced by a Judgment of a United
States Court of Appeals, the words in the notice reading "Posted by Order
of the National Labor Relations Board" shall read "Posted Pursuant to a
Judgment of the United States Court of Appeals Enforcing an Order of the
National Labor Relations Board."
(c) Notify the Regional Director for Region 19, in
writing, within 20 days from the date of this Order,
what steps Respondent has taken to comply here-
with.
APPENDIX
NOTICE To EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
WE WILL NOT refuse to bargain collectively with
Retail Clerks International Association, Local
1439, as the certified collective-bargaining repre-
sentative of our employees in the appropriate
unit.
WE WILL NOT in any like or related manner
interfere with, restrain, or coerce employees in the
exercise of the rights guaranteed in Section 7 of
the National Labor Relations Act, as amended.
WE WILL, upon request, bargain collectively
with the aforesaid Union as the certified represen-
tative of our employees in the appropriate unit
with respect to rates of pay, wages, hours, and
other terms and conditions of employment, and
embody in a signed agreement any understanding
reached. The bargaining unit is:
All checkers, stockers, and boxboys em-
ployed by us at our retail store in Spokane,
Washington, excluding office clerical em-
ployees, meatcutters and meatwrappers,
bakery employees, guards, managers, and
supervisors as defined in the Act.
FIRST FOOD VENTURES,
INC.
DECISION
STATEMENT OF THE CASE
ROGER B. HOLMES, Administrative Law Judge: The
charge in this case was filed on April 1, 1976, by Retail
Clerks International Association, Local 1439, herein called
the Union. The complaint was issued on May 21, 1976, on
behalf of the General Counsel of the National Labor
Relations Board, herein called the Board, by the Regional
Director for Region 19. The complaint, as amended at the
hearing, alleges that First Food Ventures, Inc., herein
called the Respondent, has engaged in unfair labor
practices within the meaning of Section 8(aX)(1) and (5) of
the National Labor Relations Act, as amended, herein
called the Act. The Respondent filed an answer to the
complaint, which answer was amended at the hearing, and
denied, inter alia, the commission of the alleged unfair
labor practices.
1231
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
The hearing was held before me on September 2 and 3,
1976, at Spokane, Washington. Briefs were timely filed by
October 8, 1976, by counsel for the General Counsel and
the attorney for the Respondent. Those briefs have been
read and duly considered. Thereafter, on December 15,
1976, a stipulation by the parties concerning certain
commerce facts was received. That stipulation is hereby
received into evidence as Administrative Law Judge's
Exhibit I.
Upon the entire record and based upon my observation
of the demeanor of the witnesses, I make the following:
FINDINGS OF FACT
I. JURISDICTION
The Respondent was incorporated on November 25,
1975, under the laws of the State of Washington, and on
December 5, 1975, the Respondent began operation of a
retail grocery store located at West 3321 Indian Trail Road
in Spokane, Washington.
The Respondent sold grocery products at retail valued in
excess of $200,000 during the period of time between the
Respondent's commencement of its business and the time
of the issuance of the complaint by the General Counsel.
On the basis of such sales, it may be fairly anticipated that
the gross volume of the Respondent's sales after I year of
operation exceeded $500,000. Furthermore, the Respon-
dent has purchased grocery products for retail sale valued
in excess of $50,000 from firms which in turn purchased
these products from outside the State of Washington.
Upon the foregoing facts, I find that the Respondent has
been at all times material herein an employer engaged in
commerce within the meaning of Section 2(6) and (7) of the
Act.
II. THE LABOR ORGANIZATION INVOLVED
It is admitted that the Union has been at all times
material herein a labor organization within the meaning of
Section 2(5) of the Act.
III. THE ALLEGED UNFAIR LABOR PRACTICES
A. The Issues
The principal issues raised by the pleadings in this case
are:
1. Whether the Respondent became a successor em-
ployer to ITCO, Inc., on or about December 5, 1975, in the
operation of a retail grocery store at West 3321 Indian
Trail Road in Spokane, Washington.
2. If the answer to the first issue is in the affirmative,
then whether the Respondent refused to bargain with the
Union on and after January 19, 1976, in violation of
Section 8(aX)(1) and (5) of the Act.
3. Whether James Glenn was a supervisor within the
meaning of Section 2(11) of the Act on or about February
11, 1976.
B. The Background
Pursuant to a Board-conducted representation election
which was held on December 18, 1971, the Union was
certified on February 17, 1972, as the collective-bargaining
representative of certain employees of ITCO, Inc., in the
following described unit:
All checkers, stockers, and box boys employed by
ITCO, Inc., d/b/a Indian Trail IGA Foodliner, at its
retail store located at 3321 West Indian Trail Road,
Spokane, Washington, excluding office clerical employ-
ees, meatcutters and meat wrappers, bakery employees,
guards, manager, assistant manager, and supervisors as
defined in the Act.
Thereafter, the Union and ITCO engaged in three
negotiations for collective-bargaining agreements. The last
agreement between the Union and ITCO was signed on
December 5, 1975, at a time when ITCO no longer owned
and operated the retail grocery business involved in this
proceeding. Dale Harris, president of the Union, explained
that the Union and ITCO had reached an agreement
during the last part of August or the first part of
September, but that ITCO had refused to sign the
agreement. As a result, the Union filed unfair labor
practice charges against ITCO. In partial settlement of
those charges, ITCO agreed on December 5, 1975, to
execute the agreement with the Union and to pay certain
moneys to the Retail Clerks trust fund and the Retail
Clerks pension fund.
The other part of those unfair labor practice charges
against ITCO involved two alleged discriminatees. The
General Counsel issued a complaint involving them, but
there was a further settlement and the complaint was
subsequently withdrawn. Payment of backpay to the two
alleged discriminatees was made out of ITCO's funds
realized from the sale of its assets. First Food Ventures,
Inc., offered employment, by letters dated January 6, 1976,
to the two persons. Paul J. Allison, attorney for First Food
Ventures, Inc., explained that the offers of employment
were made to minimize the fees and expenses which
necessarily would have been incurred by his client in
defending the claim. The letters to the two persons indicate
that First Food Ventures did not abandon its position that
it was not the successor employer to ITCO. In part the
letters stated:
It has been suggested by counsel for the National
Labor Relations Board that First Food Ventures may
be a successor to Itco and if it is a successor it may be
obligated to hire you under conditions that would
constitute your reinstatement as an employee of the
store. It has also been suggested that First Food
Ventures may be obligated to pay you back pay in
some amount and for some period.
First Food Ventures denies that it is a successor to
Itco. First Food Ventures denies that it is obligated to
offer you employment. First Food Ventures denies that
it owes you any back pay. First Food Ventures denies
that it is obligated to you at all.
1232
FIRST FOOD VENTURES, INC.
Nevertheless, in order to minimize the possibility of
future disputes, claims and disagreements, First Food
Ventures hereby offers you employment at Indian Trail
IGA on as nearly as possible the same terms and
conditions of employment as you were working under
at the time your employment was terminated, or earlier
at the time of the alleged commission of an unfair labor
practice. It is the intention of this offer of employment
that it constitute the equivalent of reinstatement to
your prior employment without loss of seniority or
other benefits of employment. This employment offer is
effective for you to start work the day after you receive
this letter.
The foregoing unfair labor practice charges against
ITCO had earlier served as the basis for dismissing a
decertification petition which was filed on October 6, 1975,
with Region 19 of the Board. The Acting Regional Director
stated in his dismissal letter dated October 22, 1975: "The
investigation discloses that there are two outstanding
meritorious 8(aX5) charges (Case 19-CA-7391 and 19-
CA-7881) against this Employer. The Board's internal
instructions and guidelines direct that a pending R petition
be dismissed in the face of a meritorious 8(aX5) charge.
Accordingly, further proceedings are not warranted and I
am dismissing the petition in this matter." '
C. The Business Dealings Between ITCO, Inc., and
Roundup Co.
On April 3, 1974, ITCO, Inc., a corporation, and Lewis J.
McBride and Lee McBride, as husband and wife, jointly
and severally, signed a promissory note to Roundup Co. in
the amount of $61,000. At the same time a security
agreement was executed among those parties whereby
Roundup Co. was given a security interest in "all of the
stock of goods, wares, merchandise and supplies, furniture,
fixtures and equipment located at and held in connection
with the grocery business which is located at Indian Trail
IGA, West 3321 Indian Trail Road, Spokane, Washing-
ton."
Roundup Co. is a wholesale food distributor. It is a State
of Washington corporation and is a wholly owned
subsidiary of Fred Meyer, Inc., which is a publicly held
Oregon corporation. Roundup also owns McClintock-
Trunkey which operates a group of retail grocery stores
known as the Sigman stores. However, the Sigman stores
are supervised by Fred Meyer, Inc., rather than by
Roundup personnel.
ITCO occupied the premises where it conducted its retail
grocery business pursuant to a sublease from Roundup.
Roundup was the prime lessor of the premises from Indian
Trail Shopping Center, Inc. Even though ITCO was a
sublessee, ITCO made its lease payments directly to the
management firm acting for the owners of the shopping
center.
ITCO began experiencing financial difficulties for some
time prior to November 1975, but it was during that month
I The findings of fact in this section are based on documentary evidence
and portions of the testimony given by the local union president. Dale
Harris, and the Respondent's attorney, Paul J. Allison.
2 The foregoing findings of fact in this section are based on exhibits
that Roundup felt that ITCO's situation had become
critical. Attorney Allison testified:
Roundup Co. was his general supplier and he was
behind-Roundup Co. had a security interest in
inventory, furnitures, fixtures and equipment to secure
long-term financing which is fairly standard pattern in
the industry. Roundup Co. is the general supplier, not
under any supply agreement but as a course of doing
business. McBride had been financially going down hill
for some time. Roundup Co. had tried to enlighten him
and guide him. The Committee of Retired Executives
had been brought in and they had tried to enlighten
him and guide him as to how he could run his business
better but he wouldn't listen to anybody and kept on
going down hill and it got to the point in the first part
of November that his checks didn't clear. And he didn't
have the funds with which to order enough groceries to
stock the shelves and he was behind in his note
payments so his security agreement and note became in
default. And it was obvious that he wasn't able to keep
going. He was behind with his note and security
agreement to the Old National Bank which was
financed by the SBA. They had gotten into the act and
made it clear that they were also on the verge of taking
action to realize upon their security. And so it reached
a point, a critical point, when something had to be
done. And because I was Roundup's lawyer, that was
my job.
On Friday, November 21, 1975, Attorney Allison served
Lewis McBride with a notice of default, a summons, and
complaint for foreclosure of a security interest, and
contemporaneously handed McBride an offer from
Roundup to purchase ITCO's assets for the sum of
$140,000 in lieu of the foreclosure action. On the same date
McBride obtained from one of Roundup's competitors an
offer of $150,000. After learning of the competing offer,
Roundup raised its offer to $150,000 which was accepted
by ITCO and McBride on Saturday, November 22, 1975.
The assets of ITCO which were purchased by Roundup
consisted of furniture, fixtures, equipment, and inventory.
At that point in time McBride ceased operation of the
retail grocery store and terminated his employees. The
employees were notified of their termination on that
Saturday except for one or two employees who could not
be contacted until the following Monday morning, at
which time they were advised that they had been terminat-
ed effective the previous Saturday night.
The store was closed for an inventory which was taken
by the Washington Inventory Service on Sunday, Novem-
ber 23, 1975.2
D. Roundup Commences Operation of the Store
As a result of the inventory taken on Sunday, Theodore
File, sales manager for Roundup Co., discovered that there
was no milk and no meat in the grocery. Accordingly, he
which were introduced into evidence at the hearing and on testimony given
by Attorney Allison and Theodore File, who was sales manager of Roundup
Co. at the time of the hearing.
1233
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
contacted his warehouse for delivery of merchandise on
Monday morning, November 24, 1975, and he contacted
various suppliers and requested them to bring in supplies to
build up the store's inventory. File was anxious to reopen
the store quickly for two reasons. First, because Thanksgiv-
ing was on Thursday, November 27, 1975, and the Tuesday
and Wednesday preceding Thanksgiving are exceptionally
good days in a retail grocery store. Secondly, File wanted
to have the store reopened so that customers would not
take their business to competing stores.
None of the McBrides were retained by Roundup in any
managerial capacity. Instead, Roundup brought in com-
pletely new management to the store.
In addition to Sales Manager File, there were eight
merchandising specialists from Roundup who spent por-
tions of the first week and second week in "trying to do
some resetting in the store, trying to do a lot of clean up
work." They worked as operating personnel in the store.
According to File, "there was an exceptional lot of clean up
work that had to be done." He enumerated the steam
cleaning of both the meat case and the produce case,
cleaning the frozen food case which was clogged with ice,
and replacing the compressor on that fixture. In addition
File called in an electrician to replace over 80 ballasts
which had burned out in the store and also to do some
rewiring.
Although Roundup has the capacity for operating a
retail grocery store with its merchandisers who possess at
least 5 years' management experience in retail stores,
Roundup intended to operate this store only for a period of
time until investors could be found to purchase the store.
File said that it was within a day or two after Thanksgiving
when they were able to get investors to come in and look
over the store.
Meanwhile, File advised the persons formerly employed
by ITCO that they would have to fill out a new application
form if they desired to work for Roundup. File stated: "We
took their applications and we told them that if we could
hire some back we would hire them back on a part-time
basis recognizing this was an interim period here until we
sold the store and the new owner would have to make the
decision and they might have to go through the process
again." As a result, Roundup hired 11 employees who
worked during the approximately 2 weeks that Roundup
operated the store. Only I of these I I employees worked a
40-hour week during the first week. That was James Glenn.
Out of those 11 I employees, 3 had not previously worked for
ITCO. 3 File stated that he did not know whether or not
Roundup had hired a majority of the employees of ITCO.
Roundup paid the employees the same wage scale as ITCO
had paid.4
3 This information is based on a list compiled for the hearing by Ronald
W. Meredith. manager of the store for First Food Ventures.
Ken Powell was I of the I employees hired by Roundup. He had been
grocery manager under ITCO, but he was given no managerial responsibili-
ty under Roundup other than closing the store at night and, if the manager
was not there, to carry out the policies established by management. James L.
Glenn, a journeyman, said that during those first 2 weeks that Powell "was
E. First Food Ventures Commences Operation of
the Store
Chuck Balinger was in charge of store development for
Roundup. Since Roundup was primarily a wholesale
grocer, it was Balinger's responsibility to obtain retail
stores as customers of Roundup. Since the Indian Trail
store under ITCO had been a customer of Roundup, it was
his objective to try to keep that store as a customer.
At the direction of Roundup, Attorney Allison filed on
November 25, 1975, articles of incorporation for First
Food Ventures, Inc. Allison was the sole incorporator of
the new corporation. It was not definitely known at the
time of incorporation who the shareholders of the new
corporation would be, but some people had indicated an
interest to Balinger. Eight persons became the original
shareholders of stock in First Food Ventures. None of
those eight persons were employees of Roundup; they were
independent businessmen.
The first meeting of the incorporator, the shareholders,
and the directors of the Respondent took place on
December 4, 1975. At that meeting the Respondent entered
into an employment agreement with Ronald W. Meredith
to manage the Indian Trail store. Meredith also became a
stockholder of the Respondent. He had been previously
employed by Roundup as the coordinator of a group of
stores called the Empire Food Stores.
The financing for the Respondent came from $64,000 in
cash put up by the shareholders; a loan of $48,276.55 from
Roundup, and a loan of $170,000 from the Old National
Bank.
In less than 2 weeks' time, the operation of the store by
Roundup increased the value of the assets of the Indian
Trail store considerably. While Roundup had paid
$150,000 for the assets of ITCO, which consisted of
furniture, fixtures, equipment, and inventory, the Respon-
dent paid $224,000 for the assets which it purchased from
Roundup. A new sublease for the premises was let from
Roundup to the Respondent and the Respondent com-
menced operation of the store on Friday, December 5,
1975.
At the request of McBride's attorney, Allison handled
the bulk transfer of property from ITCO. To avoid having
two bulk transfers in such a short time the transfer of
property was shown from ITCO to the Respondent. The
creditors of ITCO were formally notified on December I1,
1975.
Application forms and personnel records show the
names of 14 persons in addition to Store Manager
Meredith who were employed by the Respondent after it
commenced operation of the store. One of those was
Margaret Hundahl who the record shows did not come to
work for the Respondent until Monday, December 8, 1975,
as a checker. That was 3 days after the Respondent had
commenced operation of the store. She was not previously
just a journeyman, just stocked." Powell later became assistant manager
under First Food Ventures.
4 The foregoing findings of fact are based on testimony given by
Theodore File, sales manager of Roundup; James Glenn, journeyman at the
Respondent's store; and Ronald W. Meredith, manager of the Respondent's
store.
1234
FIRST FOOD VENTURES, INC.
employed by ITCO. Out of the 14 persons 2 others were
employees in the meat department and not in the
bargaining unit. Their names are Sherry M. Whitman and
Gerald K. Ruhling. Another person was Kenneth C.
Powell, who was the assistant manager of the store and a
supervisor who would not have been in the bargaining unit.
Thus, that leaves 10 persons in the bargaining unit at the
time that the Respondent commenced operation of the
store. Of those 10 persons, 3 were not previously employed
by ITCO. Their names are Jeffrey L. Franklin, Sally J.
Lounsberry; and Marian L. Young. The other seven
persons were former employees of ITCO. Three of the
seven former employees of ITCO were part-time employees
of the Respondent who worked less than 20 hours a week.
Their names are David Schlosser, Lawrence Kuciemba,
and Craig Cogley. While they were part-time employees of
the Respondent at that time, the evidence does not show
that they were not employed on a regular basis. The four
remaining persons were Stuart W. Lee, James Glenn,
Deborah J. Gage, and Michael D. Phillips.
While Stuart Lee had the title of produce manager, the
uncontradicted testimony of Meredith reveals that Lee was
not a supervisor within the meaning of the Act. Glenn was
a journeyman. The General Counsel takes the position that
Glenn was a supervisor while the Respondent takes the
position that he was not. Glenn's duties will be discussed
later herein. For the reasons which will be set forth, I
conclude that the evidence does not establish that Glenn
was a supervisor within the meaning of the Act. Therefore,
in summary, it appears that at the time that the Respon-
dent commenced operation of the store on December 5,
1975, 7 out of the 10 bargaining unit employees had been
previously employed by ITCO.5
F. The Changes in the Operation of the Store
Ronald W. Meredith took over as manager of the Indian
Trail store on Friday, December 5, 1975. He stated that the
week that he got there, "we started changing everything in
the store."
With regard to the store's product lines, Meredith
eliminated about one-half of the Simply Wonderful line of
products which ITCO had carried. That line consisted of
products such as canned vegetables, canned meats, and dry
foods. Instead, Meredith added the full line of IGA
products to the store whereas ITCO had only carried a
certain degree of IGA products. That line consisted of such
products as canned goods, bread, luncheon meats, bakery
products, and soft drinks.
The number of dairies used by ITCO was reduced from
six dairies to two dairies after Meredith took over.
However, the number of dairy products was expanded. A
better variety of produce was introduced to the store and
the deli line was enlarged. Meredith said that he made no
effort to buy from the same sources for produce that ITCO
had.
Meredith added the customer service of handling money
orders which ITCO had discontinued. He also changed the
line of magazines for sale in the store. He continued to rent
I The findings of fact in this section are based on documentary evidence
and on the testimony given by Attorney Allison and by Store Manager
Meredith.
rug shampooers and floor cleaners as ITCO had done. He
eliminated damaged merchandise which ITCO had.
A custom bakery was opened in the store, but not until
May 1976. The decision to do so had been made several
months earlier. However, additional equipment was neces-
sary and had to be obtained. The bakery in the store under
ITCO was inoperable at the time that the Respondent
began operation of the store.
The Master Charge service which ITCO had utilized was
discontinued by the Respondent. ITCO had also main-
tained charge accounts for certain customers, and those
accounts were discontinued by the Respondent except for
purchases by a certain convent.
Under ITCO the employees were paid in cash whereas
under the Respondent's operation the employees are paid
by check. A timeclock was maintained by ITCO and the
employees were required to punch in and out at the
timeclock. The Respondent removed the timeclock and
only required that the employees initial the work schedule.
Employees wore aprons under ITCO, but the Respondent
purchased vests and smocks for its employees.
The sign outside the store was changed by eliminating
the name "Lew's" so that the sign simply read "IGA
Foodliner." The decision to make that change was made
on December 4 or 5, 1975, but it was about a week before
that portion of the sign was taken down.
Four new cash registers were placed in the store and the
courtesy booth was moved and enlarged. All lights in the
store were replaced, the reflectors washed, and new ballasts
installed. The store was cleaned up and, about a month
after Meredith arrived at the store, painting and rearrang-
ing of the shelves in the store was undertaken. Meredith
explained that about 75 percent of the shelving in the store
was changed and moved into the opposite direction which
had the effect of changing the whole shopping pattern in
the store. A new wall was built at the back of the store
which created a room for cutting and marking in an area
which had previously been part of the sales area. Meredith
said that there was extensive remodeling of the whole
interior of the store, including the walls, aisle markers, and
department identification markers. 6
G. The Document Prepared by James L Glenn
A document dated February 11, 1976, and addressed
generally "to whom it may concern" was prepared by
James L. Glenn after he had discussed the matter with
Stuart Lee and a couple of other employees. Glenn was a
journeyman at the time. The General Counsel contends
that Glenn was a supervisor within the meaning of the Act,
whereas the Respondent contends that Glenn was an
employee.
Glenn said that he prepared the document and that no
one told him to do so. He took it around to other
employees and told them: "If you agree with me, sign it. If
you don't, give it back."
Glenn acknowledged that he had earlier spoken with
Store Manager Ron Meredith about the Respondent's
medical coverage. He said that this took place in the latter
6 The findings of fact in this section are based on the testimony of Store
Manager Meredith and journeyman Glenn.
1235
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
part of December 1975 or the early part of January 1976.
He inquired because some employees who were not
members of the Union during the time that ITCO operated
the store had coverage under the Roundup program. Glenn
said that he made his own decision regarding the coverage
and that he did not tell Meredith that he was going to draw
up the document in question.
The handwritten document reads as follows:
To whom it may concern
We the undersigned employees feel that the retail clerks
union Local 1439 should have no jurisdiction over
Indian Trail IGA. We feel we can handle any
negotiations between management and labor put
before us. We have an excellent medical program and
will have a better dental and optical program than
Retail Clerks at no cost to us.
Thereafter followed what appear to be the signatures of
nine employees of the Respondent with Glenn's name
appearing first.
Store Manager Meredith said that he first saw the
document sometime after February 11, 1976, when he
discovered it on his desk one morning in a plain white
envelope with no address on it. He opened the envelope
and read the document. He recognized Glenn's handwrit-
ing and saw that Glenn's name was first among the names
on the document. Meredith said that he had not previously
discussed the document with Glenn. He said that Glenn
did ask him one day if he had received the letter and
Meredith simply told Glenn "yes."
Meredith said that either Glenn or Stuart Lee asked him
if they would have a medical program and he said "yes."
Meredith said it was on the basis of that document that
he questioned whether the Union had a majority. 7
H. The Duties of James L Glenn on
February 11, 1976
As already noted, February 11, 1976, was the date of the
document which Glenn prepared and circulated to employ-
ees of the Respondent. At that time he worked a schedule
of I to 10 p.m. at the store 5 days a week. That was his
working schedule during the period from the end of
January 1976 until the first of July 1976.
Store Manager Meredith worked during the daytime and
until 6 or 7 p.m. at night. Assistant Manager Powell
worked at first from 9 a.m. to 9 p.m. and then from 8 a.m.
until 10 p.m. However, on 3 nights a week from 8 to 10
p.m., Glenn worked in the store when neither Meredith nor
Powell was present.
Glenn was a journeyman and was hourly paid. He was
paid overtime if he worked any overtime hours. He
received the same benefits as an experienced checker and
he did not receive any extra compensation beyond his
regular hourly wage.
Glenn commented, "I did a little bit of everything." He
worked as a checker when he was needed. He ordered
' The findings of fact in this section are based on the testimony of
journeyman Glenn and Store Manager Meredith.
groceries from the Roundup warehouse when an item on
the shelf was low or sold out. He did not have the authority
to order new items not handled by the store, but only to
keep those items handled by the store stocked on the
shelves. Glenn did not have any authority to order
produce, meat, or bakery items. However, he gave himself
the title of "grocery manager because I ordered the
groceries." He acknowledged that no one had ever given
him that title.
If there were items which needed to be stocked in the
soap section, for example, and the boxboy was working in
another part of the grocery department, Glenn would tell
the boxboy to stock the soap items. Glenn pointed out that
a checker also had authority to similarly tell the boxboy to
do something. He said that this happened "all the time"
and gave as an example the situation where an advertised
item ran out. In such situations the checker was the first to
know and to tell the boxboys to restock the shelves with
that item. Glenn said that the checkers also told him to do
so and that "it happens every day."
Glenn also cut open cases and put the price on the
merchandise. He explained that all of the pricing informa-
tion was on the tag with the items. He said that he did not
decide what price to put on the items, but instead merely
cut open the packages and placed the gummed label on the
packages.
With regard to his authority, Glenn said that Store
Manager Meredith told him "if I caught somebody stealing
merchandise that I could lay them off, but ... he's the one
that would determine it from there." Glenn never saw an
employee stealing, so the situation never arose where he
had to exercise that authority.
During the 3 nights a week from 8 to 10 p.m. that neither
Meredith nor Powell was present in the store, there were
usually just two persons in the store other than Glenn. One
was a checker and one was a boxboy. Glenn described a
boxboy's duties as following an established routine in the
grocery store of sweeping, mopping, and covering the
produce, meat, and ice cream. If the boxboy did not clean
the store properly, then Glenn would tell the boxboy to do
it over again. He said that he never disciplined or
suspended an employee. Similarly, he said that he had not
granted a raise or extra day off to an employee. He said
that the occasion never arose where an employee wanted to
leave early, nor did they work late. Glenn explained: "They
work the schedule and that was it."
A checker possessed the authority to cash the check of a
customer whom she knew without asking Glenn. If a large
amount was involved, the checker came to Glenn for
approval or, if the checker did not know the customer, the
checker would come to him.
Glenn was responsible for taking the money out of each
cash register at night and placing it in a bag with the
adding machine tape. The bags from each register were
then placed in the store's safe. Glenn knew the combina-
tion to the safe and he followed the instructions which were
given to him for the handling of the day's receipts. He also
locked the store on those nights.
1236
FIRST FOOD VENTURES, INC.
Glenn did not have the authority to transfer an employee
from the grocery department to any other department. In
addition, he had no authority to promote a boxboy to a
checker's position. Glenn never settled disputes between
employees concerning their wages, hours, or conditions of
employment.8
I. The Correspondence and the Meeting Between
the Union and the Respondent
On January 19, 1976, Dale Harris, the president of the
Local Union, wrote the following letter to the Respondent:
We hereby are enclosing a copy of the labor agreement
that was effective at the time of your taking over Indian
Trail IGA (ITCO) and still is in effect.
Since you are a successor to ITCO, we hereby are
requesting a list of all employees, presently employed
by you, their hours worked each week and rates of pay.
Please forward this information to our office by
January 26, 1976.
We look forward to working with you in your new
venture here in Spokane.
Harris did not receive a response to the foregoing letter,
so he again wrote to the Respondent on January 30, 1976,
and requested that a meeting be held on February 4, 1976.
Attorney Allison replied by letter dated February 2,
1976, that the Respondent was willing to meet and discuss
the situation, but that February 4 was not sufficient notice.
On February 4, 1976, Attorney Allison again wrote to
Harris. In that letter he referred to the bulk transfer of
equipment and inventory and his understanding that Lew
McBride had signed the collective-bargaining agreement
with the Union after First Food Ventures had commenced
operation of the store. The letter stated, inter alia: "Under
all the circumstances, we must inform you that we do not
believe that there is a collective-bargaining agreement in
effect which would in any way be binding upon First Food
Ventures, Inc."
Local Union President Harris wrote another letter to the
Respondent on February 13, 1976, and stated, inter alia:
"We hereby are requesting a meeting in regards to
clarification of the Union contract that is and was in effect
when you took over Indian Trail I.G.A. on November 22,
1975."
A meeting between representatives of the Union and
representatives of the Respondent took place on February
25, 1976. At that meeting the Union took the position "that
First Food Ventures was a successor to the ITCO
contract." The Union had previously sent a copy of that
document to the Respondent and the Union had another
copy at the meeting that day. Attorney Allison replied that
he doubted that First Food Ventures was a successor to the
ITCO contract. Harris said that he did not recall exactly
what Allison stated as his explanation, but Allison did tell
them about the foreclosure papers and offer to purchase
which he, as attorney for Roundup, had presented to
McBride. Harris said that the Union's attorney, Fred M.
Schuchart, told Allison that, even if First Food Ventures
8 The findings of fact in this section are based on the testimony of
journeyman Glenn.
was not a successor, the Union still represented the
majority of the people, and the Company was bound to
negotiate or bargain with the Union. Harris stated that
Allison explained that he was not prepared to go into that
and that he would have to meet with the board of directors
concerning that. Harris acknowledged that Allison proba-
bly explained that Allison had understood that the purpose
of the meeting was to consider the question of whether or
not the contract was applicable to First Food Ventures and
that was the only question Allison had come prepared to
take up at that time. Harris said that Allison stated he
would notify the Union of the results of the meeting with
the board of directors.
The next day, February 26, 1976, Harris wrote a letter to
Allison and requested that a meeting between the parties
be held on March 12, 1976, "for the purpose of negotiating
a labor agreement." Allison responded by letter dated
March 8, 1976, to Harris and advised him that the board of
directors was scheduled to meet on Tuesday, March 9,
1976, to consider this matter.
On March 11, 1976, Allison wrote the following letter to
Harris:
This letter is a further response to your letter of
February 26, 1976.
The board of directors of First Food Ventures, Inc.,
met on Tuesday, March 9, 1976. After reviewing the
information available to them, they concluded that
your union is not, in fact, the bargaining representative
of a majority of the employees in an appropriate
bargaining unit. The board entertains a good faith
doubt with respect to your assertion that you do
represent a majority of the employees. Accordingly, we
do not feel that it is appropriate to enter into
negotiations as you have requested and we respectfully
decline to do so.
You might want to consider filing a representation
petition with the National Labor Relations Board in
order to be sure that the employees have an opportuni-
ty to make their preference known in a secret ballot
election.
The foregoing findings of fact are based on exhibits
introduced at the hearing and on the testimony of Local
Union President Harris.
J. Analysis and Conclusions
The Supreme Court in N.LR.B. v. Burns International
Security Services, 406 U.S. 272, 279 (1972), stated:
It has been consistently held that a mere change of
employers or of ownership in the employing industry is
not such an "unusual circumstance" as to affect the
force of the Board's certification within the normal
operative period if a majority of employees after the
change of ownership or management were employed by
the preceding employer.
1237
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
The Board in Valley Nitrogen Producers, Inc., 207 NLRB
208 (1973), observed:
It is well established that an enterprise which continues
the "employing industry" of a predecessor employer is
properly regarded as a successor employer whenever it
uses substantially the same facilities and work force to
produce the same basic products for essentially the
same customers in the same geographic area.
However, the Supreme Court has cautioned that the
question of successorship must be examined in light of the
particular facts and legal obligations arising in each
situation. Howard Johnson Co., Inc. v. Detroit Local Joint
Executive Board, Hotel Restaurant Employees & Bartenders
International Union, AFL-CIO, 417 U.S. 249 (1974). The
Court observed in footnote 9:
The question whether Howard Johnson is a "successor"
is simply not meaningful in the abstract. Howard
Johnson is of course a successor employer in the sense
that it succeeded to operation of a restaurant and
motor lodge formerly operated by the Grissoms. But
the real question in each of these "successorship" cases
is, on the particular facts, what are the legal obligations
of the new employer to the employees of the former
owner or their representative. The answer to this
inquiry requires analysis of the interests of the new
employer and the employees and of the policies of the
labor laws in light of the facts of each case and the
particular legal obligation which is at issue, whether it
be the duty to recognize and bargain with the union,
the duty to remedy unfair labor practices, the duty to
arbitrate, etc. There is, and can be, no single definition
of "successor" which is applicable in every legal
context. A new employer, in other words, may be a
successor for some purposes and not for others.
In examining the particular facts in the present case, it is
helpful to look at the criteria which the Board has utilized
in determining whether the "employing industry" has
remained the same notwithstanding a change in the
ownership or management. As set forth in Georgetown
Stainless Mfg. Corp., 198 NLRB 234, 236 (1972), the Board
has sought answers to the following questions:
1. Whether there has been a substantial continuity
in the same business operations.
2. Whether the new employer uses the same plant.
3. Whether he has the same or substantially the
same work force.
4. Whether the same jobs exist under the same
working conditions.
5. Whether he employs the same supervisors.
6. Whether he uses the same machinery, equip-
ment, and methods of production.
9 The Respondent's explanation for the bulk transfer of property being
shown from ITCO to the Respondent is convincing. Rather than go through
the process of having two bulk transfers in a short period of time, it was
simpler to show the transfer of the property to the Respondent. It should be
noted that at the time of the bulk transfer Roundup had ceased operation of
the store and had sold the assets to the Respondent.
7. Whether he manufactures the same product or
offers the same services.
The strongest factor favoring a finding that the Respon-
dent is a successor to ITCO is the fact that a majority of the
unit employees of the Respondent at the time that it
commenced operation of the store had previously been
employees of ITCO. As set forth in detail before, there
were 7 out of 10 such employees of the Respondent as of
December 5, 1975. While the work force was not identical
with that of ITCO, at least a majority of the unit employees
of the Respondent were the same. The record does not
disclose the number of employees of ITCO at the time it
ceased operation of the store. Therefore, it is not known
whether the Respondent employed a majority of ITCO's
employees who were working there at the time ITCO went
out of business.
Nevertheless, the Board has advised against giving
controlling weight to any one factor. In Lincoln Private
Police, Inc. as Successor to Industrial Security Guards, Inc.,
189 NLRB 717 (1971), the Board stated at 719:
In the many cases that have been before the Board on
the successorship issue, it has not accorded controlling
weight to any single factor, but has evaluated all the
circumstances present in any given case in arriving at
an ultimate conclusion.
Looking further at the other factors, it is well to
remember that the complaint alleges that the Respondent
is "ITCO's successor." The Respondent's attorney argues
in his brief: "At first blush, it might appear that First Food
Ventures replaced Itco, but in fact, there is a very
significant intervening entrepreneur." The intervening
entrepreneur, of course, was Roundup Co. which pur-
chased certain assets from ITCO and operated the store for
approximately 2 weeks. 9
There can be little question that the sale of certain assets
from ITCO to Roundup was a bona fide arm's-length
transaction. In view of its default on the promissory note,
ITCO had little choice in view of the impending foreclosure
action. It seems clear that ITCO and Roundup are two
entirely separate legal entities. It seems equally clear after
examining all the facts that Roundup and First Food
Ventures are also. While Roundup was instrumental in the
formation of the Respondent and made a loan to the
Respondent, the original shareholders of the Respondent
were independent businessmen and investors who were not
employees of Roundup. Roundup desired to continue to be
the wholesale supplier for the Indian Trail store, but
Roundup did not desire to operate the retail grocery.
Therein lies the explanation for its role in the formation of
First Food Ventures.
Roundup made a complete change in the management
and supervision of the store. None of the McBrides, who
had operated the store under ITCO, were retained by
In a similar manner I find the Respondent's explanation for offering
employment to the two alleged discriminatees to be persuasive. The letters
from the Respondent to the two alleged discriminatees make it clear that the
Respondent was not abandoning its position that it was not the successor to
ITCO. Instead, the offers were made to avoid additional legal expenses and
to bring about a settlement of the charges then outstanding against ITCO.
1238
FIRST FOOD VENTURES, INC.
Roundup. Instead, Roundup brought in its own sales
manager, File, to get the store restocked and reopened for
business as soon as possible. The hiatus between the
closing of the store by ITCO and the reopening by
Roundup was indeed brief since it lasted only I day. The
inventory taken on that Sunday revealed, however, that
even such basic items for a grocery store such as meat and
milk were absent from the store. File worked quickly to get
supplies into the store to avoid the further loss of customers
and to take advantage of the approaching pre-Thanksgiv-
ing days.
Roundup also brought in to work in the store eight
merchandising specialists who worked as operating person-
nel during portions of the 2 weeks that Roundup operated
the store. These merchandising specialists were employees
of Roundup and were not former ITCO employees.
Roundup also hired II employees, 8 of whom had been
terminated at the time ITCO ceased business and who had
filled out new applications for Roundup.
In addition to restocking the inventory of the store,
Roundup made significant improvements in the appear-
ance of the store and the operation of the equipment in the
store. Roundup personnel did extensive cleaning of the
store and the display cases and made the frozen food case
operable once again. Also, the lighting in the store was
greatly improved with the replacement of over 80 ballasts
and some rewiring.
The changes in the operation of the grocery store after
the Respondent commenced business were even more
extensive than the changes which had been between
ITCO's operation and Roundup's operation.
Among the features which distinguish one type of
grocery store from another type of grocery store are the
products carried by the store for sale to customers. With
regard to this factor, the Respondent made important
changes in the products which it offered for sale. About
half of the Simply Wonderful canned goods and products
which had been carried by ITCO were discontinued by the
Respondent. Instead, the Respondent introduced the full
line of IGA products for sale to its customers. The
Respondent changed its dairy operation by reducing the
number of dairies supplying the Respondent from the six
dairies used by ITCO to only two dairies used by the
Respondent. Nevertheless, although the number of dairies
was reduced, the dairy product line was expanded. The
Respondent also changed to a better variety of produce
than ITCO had offered, expanded the deli line, and
brought in a new line of magazines. Several months later,
the custom bakery was opened after additional equipment
was obtained.
Top level supervision of the store changed once again
from what it had been under ITCO and under Roundup.
Meredith became the new store manager. He had been an
employee of Roundup previously, but he was not involved
in the operation of the Indian Trail store during the period
of Roundup's operation of the store. Meredith had also not
been involved in the supervision of the store under ITCO.
Thus, the top level management changed twice after ITCO
ceased to operate the store. Second level management
changed from what it had been under Roundup when
Powell became assistant manager under the Respondent.
Powell had earlier been assistant manager under ITCO but,
when Roundup operated the store, Powell worked as a
journeyman with limited responsibility.
The work force changed under the Respondent from
what it had been under Roundup in that the eight
merchandising specialists who had worked in the store
under Roundup were no longer working in the store. As
previously noted, however, a majority of the employees in
the unit when the Respondent commenced business were
former employees of ITCO. The Respondent changed the
method of payment of the employees and eliminated the
timeclock requirement. The Respondent also provided to
its employees new uniforms of a different style from what
they had worn when employed by ITCO.
The Respondent changed the former credit operation
under ITCO by eliminating the Master Charge service and
by eliminating customer charge accounts with one excep-
tion. The Respondent resumed the customer service of
selling money orders which ITCO had stopped doing.
While the store is in the same building as it was under
ITCO, the extensive remodeling and physical alterations
made by the Respondent have created a new store in
appearance, with about 75 percent of the shelving rear-
ranged, with much improved lighting, with new equipment
such as the cash registers, and with a new room for the
cutting and marking of merchandise.
In summary, the foregoing analysis shows that there have
been substantial and significant changes in the operation of
the retail grocery store from what it once was to what it
became under the Respondent. As the Supreme Court
pointed out in the Howard Johnson case, supra, "Howard
Johnson is, of course, a successor employer in the sense
that it succeeded to operation of a restaurant and motor
lodge .... " In a similar manner, it can be said that the
Respondent in this case is a successor in the sense that it
still operates a retail grocery store, but the Supreme Court
held that the inquiry does not stop there. In view of: (1) the
total change in management and supervision from ITCO's
operation to Roundup's operation; (2) the change in top
level supervision once again from Roundup's operation to
the Respondent's operation; (3) the change in the work
force at the store when Roundup brought in eight
merchandising specialists and three other employees who
had not previously been employed by ITCO; (4) the
changes in employee uniforms, method of payment, and
punching the timeclock by the Respondent; (5) the
important changes in the products offered for sale by the
Respondent; (6) the changes in the customer services and
credit arrangements by the Respondent, and (7) the
extensive physical changes and alterations in the store by
the Respondent, I conclude that there was a definite
change in the "employing industry" from what the store
had been under ITCO, and that the Respondent in these
circumstances is not the successor employer to ITCO.
Having reached that conclusion, I further conclude that the
Respondent was not obligated as a successor to recognize
and bargain with the Union which had represented certain
employees of ITCO.
At the February 25, 1976, meeting between representa-
tives of the Union and the Respondent, the Union took an
alternative position for the first time that, even if the
1239
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Respondent was not a successor, the Respondent was
obligated to bargain with the Union as it represented a
majority of the unit employees. Up to that point in time the
correspondence from the Union to the Respondent had
indicated that the Union considered the Respondent to be
bound to the collective-bargaining agreement signed by
ITCO on December 5, 1975. It was this alternative position
enunciated at the meeting which caused Allison to state
that he had not been prepared to discuss that aspect and
would have to consult with the board of directors. The
alternative position was underscored the next day in the
Union's letter of February 26, 1976, when the Union asked
for a meeting "for the purpose of negotiating a labor
agreement."
However, by that time the Respondent had knowledge of
the document which James Glenn had circulated among
the employees on February 11, 1976, and which purported-
ly bore the signatures of nine employees. The import of the
document was that a majority of the employees did not
desire representation by the Union.
The General Counsel contends that James Glenn, who
prepared the document and circulated it, was a supervisor
within the meaning of the Act, whereas the Respondent
takes the opposite position. It is recognized that it is not
necessary that a person possess all of the statutory
authority set forth in Section 2(11) of the Act because that
section is to be read in the disjunctive. Ohio Power
Company v. N.LR.B., 176 F.2d 385 (C.A. 6, 1949), cert.
denied 338 U.S. 899; Arizona Public Service Co. v.
N.LR.B., 453 F.2d 228 (C.A. 9, 1971).
Although the title of "grocery manager" was one not
conferred on Glenn, but instead was assumed by him
because he ordered the groceries, such a title is not
determinative. As observed by the Administrative Law
Judge whose findings were adopted by the Board in D. H.
Overmyer Co., Inc., 196 NLRB 789, 791 (1972): "But it is
familiar and sound doctrine that such a title is not
determinative of supervisory status. Critical rather are the
functions performed and the authorities possessed or
exercised."
After considering the evidence with regard to Glenn, I
conclude that the directions which he gave to the boxboys
were routine in nature and that his authority to lay off an
employee was limited to the single criterion of his
observing an employee stealing merchandise from the
store. The Board has commented on such routine direction
and limited authority in Dad's Foods, Inc., 212 NLRB 500
(1974), where the Board stated at 501:
On this record, we are less than persuaded that Gott
has genuine or meaningful authority to discharge or
discipline employees. At the very most, it is only a very
restricted, and sporadic kind of authority, limited to
certain specific predetermined kinds of misconduct. We
do not believe that "authority" so narrowly confined
both in time and scope, if it can be said to exist at all, is
sufficient to establish supervisory status. We also note
that any directions given by him to other employees are
of a routine nature or pursuant to instructions of the
plant manager. We therefore find that Gott is not a
supervisor as defined in the Act.
After considering the foregoing, I conclude that James
Glenn was not a supervisor within the meaning of the Act
on February II, 1976, when he prepared and circulated the
document among the employees. I further find that the
Respondent did not instigate or initiate the preparation or
circulation of the document.
Finally, I conclude that a preponderance of the evidence
does not establish that the Respondent has violated Section
8(aX I) and (5) as alleged in the complaint.
Upon the basis of the foregoing findings of fact and upon
the entire record, I make the following:
CONCLUSIONS OF LAW
I. First Food Ventures, Inc., is an employer engaged in
commerce within the meaning of Section 2(6) and (7) of the
Act.
2. Retail Clerks International Association, Local 1439,
is a labor organization within the meaning of Section 2(5)
of the Act.
3. The Respondent has not engaged in the unfair labor
practices alleged in the complaint in this proceeding.
[Recommended Order for dismissal omitted from publi-
cation.]
1240