Haag Drug Co., Inc.

National Labor Relations Board - Board Decisions

Feb 16, 1968

169 N.L.R.B. 877 (N.L.R.B. 1968)

HAAG DRUG COMPANY, INCORPORATED
Haag Drug Company , Incorporated , and Hotel,
Motel , Cafeteria and Restaurant Employees and
Bartenders Union Local No . 58, affiliated with
Hotel & Restaurant Employees and Bartenders In-
ternational Union , AFL CIO, Petitioner. Case
25-RC-3429
February 16, 1968
DECISION ON REVIEW
BY CHAIRMAN MCCULLOCH AND MEMBERS
FANNING, BROWN, AND ZAGORIA
On June 7, 1967, the Regional Director for Re-
gion 25 issued the attached Decision and Direction
of Election in the above-entitled proceeding, in
which he found the requested unit, consisting of 1
of the Employer's II restaurants, to be an ap-
propriate unit for bargaining. Thereafter, the Em-
ployer filed a timely request for review of the Re-
gional Director's Decision on the grounds that in
making his unit finding he departed from National
Labor Relations Board policy, that he made factual
findings which were clearly erroneous, and that
compelling reasons exist for the Board to recon-
sider its present policy as to the presumptive ap-
propriateness of a unit comprised of a single loca-
tion in a retail chain operation. I On June 29, 1967,
the National Labor Relations Board, by telegraphic
order, granted the request for review.
The Board has considered the entire record in
this case with respect to the issues under review
and hereby adopts and affirms the Regional
Director's Decision and Direction of Election.
It was for many years our policy in retail chain-
store operations to find that an appropriate unit
should embrace all the employees within an em-
ployer's administrative or geographic area.2
However, we reexamined this policy in Sav-On
Drugs, Inc., 138 NLRB 1032, and concluded that
it had overemphasized certain factors and had un-
duly prejudiced the right of self-organization which
the Act guarantees. As we said in that case (138
NLRB at 1033):
Reviewing our experience under that [our
prior] policy we believe that too frequently it
has operated to impede the exercise by em-
ployees in retail chain operations of their rights
to self-organization guaranteed by Section 7 of
the Act. In our opinion that policy has
overemphasized the administrative grouping of
merchandising outlets at the expense of factors
such as geographic separation of the several
In effect, the Employer. in its request for review, urges an employer-
wide I I restaurant (2 State) unit , contending that "every meaningful
thing" about the single restaurant sought is "dependent on the enterprise
of eleven ( 1 1) restaurants as a whole "
2 See , e g, Safeway Stores, Inc, 96 NLRB 998, Weis Markets, Inc.,
125 NLRB 148, Daw Drug Co, Inc, 127 NLRB 1316.
877
outlets and the local managerial autonomy of
the separate outlets; and it has ignored
completely as a factor the extent to which the
claiming labor organization had sought to or-
ganize the employees of the retail chain. We
have decided to modify this policy and to apply
to retail chain operations the same unit policy
which we apply to multiplant enterprises in
general. Therefore, whether a proposed unit
which is confined to one of two or more retail
establishments making up an employer's retail
chain is appropriate will be determined in the
light of all the circumstances of the case.
Our experience has led us to conclude that a sin-
gle store in a retail chain, like single locations in
multilocation enterprises in other industries, is
presumptively an appropriate unit for bargaining. In
cases subsequent to Sav-On Drugs, we have con-
sistently found such units appropriate unless coun-
tervailing factors were present.3 In the instant case,
we have, as the Employer requests, again reviewed
our policy in retail chain operations, and we con-
clude, for the reasons discussed below, that the pol-
icy comports with the purposes of the statute and is
consistent with related Board policy, and therefore
is entitled to continued adherence.
In order to establish a valid bargaining obligation,
the Act requires only that a "majority of the em-
ployees in a unit appropriate" for bargaining freely
designate a particular representative (Section 9(a)).
(Emphasis supplied.) It is elementary that more
than one unit may be appropriate among the em-
ployees of a particular enterprise, and our choice in
a particular case "involves of necessity a large mea-
sure of informed discretion." Packard Motor Car
Company v. N.L.R.B., 330 U.S. 485,49 1.
The basic statutory standard guiding the exercise
of our discretion in this regard is Section 9(b),
which directs us to select units to "assure to em-
ployees the fullest freedom in exercising the rights
guaranteed by this Act" -which rights, of course,
include both joining a labor organization or refrain-
ing from doing so (Section 7). Absent a bargaining
history in a more comprehensive unit or functional
integration of a sufficient degree to obliterate
separate identity, the employees' "fullest freedom"
is maximized, we believe, by treating the employees
in a single store or restaurant of a retail chain opera-
tion as normally constituting an appropriate unit for
collective-bargaining purposes. The employees in
a single retail outlet form a homogeneous, identifia-
ble, and distinct group, physically separated from
the employees in the other outlets of the chain; they
generally perform related functions under im-
mediate supervision apart from employees at other
3 See, a g., Frisch's Big Boy 711-Mar, Inc., 147 NLRB 551, 151 NLRB
454, enforcement denied 356 F 2d 895 (C.A. 7), Merner Lumber and
Hardware Company, 145 NLRB 1024, enfd 345 F.2d 770 (C.A. 9),
Purity Food Stores, Inc., 160 NLRB 651, enforcement denied 376 F.2d
497 (C.A 1), cert. denied 389 U.S 959, Davis Cafeteria, Inc, 160
NLRB 1141. And see also Capital Bakers, Inc, 168 NLRB 908.
169 NLRB No. 111
878 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
locations; and their work functions, though parallel
to, are nonetheless separate from, the functions of
employees in the other outlets, and thus their
problems and grievances are peculiarly their own
and not necessarily shared with employees in the
other outlets.4
Our conclusion in this regard is consistent with
our practice in industries other than retail chains.
We have consistently found that a single-location
unit in a multilocation enterprise is a presumptively
appropriate unit for bargaining. Thus, Section 9(b)
of the Act specifically recognizes a "plant" unit as
appropriate, and we have long held that a unit con-
fined to the single plant of a particular employer is
presumptively appropriate.5 And in the insurance
industry, we have deemed the district office as that
industry ' s analogue of a single -manufacturing
plant.6 In each of these instances, the determinative
factors in finding the single -location unit ap-
propriate were those factors discussed above in
supporting the appropriateness of a single -store unit
in a retail chain. We are unable to perceive any
reason why retail chain operations should be
treated differently. Indeed, to draw a distinction
between the single -chain store and the single plant
in a multiplant enterprise or the insurance district
office would artificially disadvantage the organiza-
tional interests of chain store employees, simply
because their employer operates a chain rather than
a single- store enterprise and would vest the chain
operator with absolute power alone to control the
scope of the appropriate unit.
Further, we do not believe that bargaining on a
less than chainwide basis would prove disruptive to
the chain employer's operation. Bargaining in less
than employerwide units has been effectively con-
ducted in other industries without such results, and
no reason has been presented, nor are we aware of
any, which indicates that the situation would be dif-
ferent in the retail chain industry. It does not neces-
sarily follow that organization of only a portion of
the chain would likely result in a lack of uniformity
of working conditions through the chain or, if it
would, that this necessitates rejecting a unit such as
is here sought. In any event, though chainwide
uniformity may be advantageous to the employer
administratively, it is not a sufficient reason in itself
4 This is not to say that units smaller than a single-location unit are inap-
propriate . In some circumstances , employees of a particular store (e.g.,
the meat department in a grocery store ) may perform work of such a dif-
ferent nature from that of the other employees that a separate unit would
be approriate . Mock Road Super Duper, Inc., 156 N LRB 983. Nonselling
employee units in department stores have also been found appropriate.
Retail, Wholesale, and Department Store Union (Saks & Co.) v.
N.L.R.B., 385 F.2d 301 (C.A.D.C.), enfg. 160 NLRB 682. In this regard,
we note that we have often found a departmental unit in a plant ap-
propriate for bargaining . S. D. Warren Company v. N.L.R.B., 353 F.2d
494 (C.A. 1), cert. denied 383 U.S. 958.
Nor are we saying that a group of retail outlets would not likewise con-
stitute an appropriate bargaining unit . Under conventional criteria govern-
ing the establishment of bargaining units, a unit composed of two or more
retail outlets would also be an appropriate unit if there were a sufficient
for denying the right of a separate, homogeneous
group of employees, possessing a clear community
of interest, to express their wishes concerning col-
lective representation.
We are of course aware that retail chain opera-
tions generally are marked by a high degree of cen-
tralized administration. Thus, most retail chains
maintain central profit-and-loss records of the in-
dividual stores, keep central payroll records, handle
the chainwide purchasing and merchandising of
goods, directly pay all vendors, and perform other
similar functions. But these services, we must
emphasize, are essentially recordkeeping or ad-
ministrative functions that have little or no direct
relation to the employees' day-to-day work and em-
ployee interests in the conditions of their employ-
ment. We find these functions are of little sig-
nificance in determining whether or not the em-
ployees at a single location comprise an appropriate
unit for bargaining. Centralized administrative con-
trol can be just as readily maintained whatever the
scope of the bargaining unit. More significant is
whether or not the employees perform their day-to-
day work under the immediate supervision of a
local store manager who is involved in rating em-
ployee performance, or in performing a significant
portion of the hiring and firing of the employees,
and is personally involved with the daily matters
which make up their grievances and routine
problems. It is in this framework that the communi-
ty of interest of the employees in a single store takes
on significance, for the handling of the day-to-day
problems has relevance for all the employees in the
store, but not necessarily for employees of the other
stores.' Accordingly, we believe that, where sub-
stantial autonomy is invested in a local store
manager to handle the matters discussed above, this
is more significant in determining the appropriate-
ness of a unit than the existence of central record-
keeping and merchandising functions.
It is for these reasons that we will adhere to our
policy in retail chain operations of finding the single
store a presumptively appropriate unit. That pre-
sumption is of course not a conclusive one and may
be overcome where factors are present in a particu-
lar case which would counter the appropriateness
of a single-store unit. For example, we have been
degree of geographic or administrative coherence , and common interests
of employees in the outlets.
5 See, e .g., Temco A ircraft Corporation, 121 NLRB 1085, 1088, fn. 11;
Dixie Belle Mills , 139 NLRB 629, 631; cf., Pittsburgh Plate Glass Co. v.
N.L.R.B.,313 U.S. 146,164-166.
6 See Metropolitan Life Isurance Co., 156 NLRB 1408, 1414 (decision
on remand from 380 U.S. 438), and cases cited therein.
' This is true even in chain operations where the actual day-to-day su-
pervision of a store is, in part , in the hands of a dual -function official, who
daily divides his time between actual in-store supervision and the per-
formance of central office functions . The handling of the employees' day-
to-day problems is no less a local matter merely because the official
responsible for the day- to-day supervision of the store also performs cen-
tral office functions.
HAAG DRUG COMPANY, INCORPORATED
hesitant to disturb an existing , stable bargaining
relationship , and, where such relationship has ex-
isted in a multistore unit and there is a reasonable
expectation of continued stability in that unit, we
will find the multistore unit appropriate . See Meijer
Supermarkets , Inc.; 142 NLRB 513 , and The
Great Atlantic & Pacific Tea Co., Inc., 153 NLRB
1549 . Also, where an individual store lacks
meaningful identity as a self-contained economic
unit, or the actual day-to -day supervision is done
solely by central office officials, or where there is
substantial employee interchange destructive of
homogeneity , these circumstances militate against
the appropriateness of a single-store unit. See, e.g.,
Mary Carter Paint Co., 148 NLRB 46 ; Caribbean
Restaurants , 162 NLRB 676 . And a combination
of factors may lead to finding appropriate a citywide
unit (two stores in a multicity chain), e.g., where the
stores are geographically proximate , they are sub-
ject to common supervision , and employees are
frequently interchanged between the stores. See
Spartan Department Stores, 140 NLRB 608.
We are mindful of recent decisions by the U. S.
Courts of Appeals for the Seventh and First Cir-
cuits, denying enforcement of single-restaurant and
single-store units in retail chain operations . Frisch's
Big Boy Ill-Mar, Inc., 147 NLRB 551; 151 NLRB
454, enforcement denied 356 F.2d 895 (C.A. 7);
Purity Food Stores, Inc., 160 NLRB 651, enforce-
ment denied 376 F.2d 497 (C.A. 1), cert. denied
389 U.S . 959. We note, however , that these
holdings are inconsistent with decisions in these
and other circuits affirming the Board's findings
that single-store units were appropriate ." Moreover,
we believe those decisions unduly emphasized the
relevance of central administration , a factor which,
as discussed above, we feel is of little significance
in determining the question . Also, we believe that
both courts misinterpreted our holding in Weis
Markets, Inc., 142 NLRB 708. In that case, we
found that a citywide unit (two stores) in a multicity
chain was appropriate because ' of a combination of
factors: the two stores were geographically proxi-
mate, there were frequent transfers of employees
among the intracity stores, and the union sought no
other unit while the employer argued that the two-
store unit could not be appropriate . In stating our
reasons for finding the citywide unit appropriate,
we pointed , out that our decision in Sav-On-Drugs
had not eliminated the possibility that a unit coex-
tensive with an employer 's administrative or geo-
graphic area would be found appropriate , but had
merely added the possibility that a single -store unit
could also be ' appropriate . Our holding in Weis
Markets is thus consistent with Sav-On-Drugs and
8 N L R.B. v Sun Drug Co., 359F 2d408,412-413 (C.A 3),enfg. 147
NLRB 669, N L R.B v. Winn-Dixie Stores , Inc, 341 F.2d 750, 755
(C A 6), enfg. 143 NLRB 848, 860-861 , cert demed 382 US 830;
N L R.B v Merner Lumber and Hardware Company. 345 F 2d 770,
879
with our discussion here; Weis Markets merely
stands for the proposition that citywide units may
be appropriate for bargaining, despite the single-
store presumption, where countervailing factors are
present. Accordingly, we conclude that the court
decisions in Purity and Frisch do not compel a
reversal of our policy. Since we believe our policy
in retail chain operations is consistent with the aims
of the statute and with our policies in other indus-
tries, we will continue to adhere to the policy of
finding single-store units presumptively appropriate
until the Supreme Court rules on the issue.
In the instant case, the Regional Director has set
forth the relevant facts in considerable detail, and
we find it unnecessary to repeat those facts here.
We note briefly, however, that the central
headquarters performs those administrative and
merchandising functions typically performed by the
central office of a retail chain operation: it keeps all
personnel and payroll records, it negotiates all con-
tracts with vendors, it pays all bills and keeps all
financial records, it establishes the budget for each
individual restaurant, it maintains a profit-and-loss
statement for each restaurant, it establishes pay
scales for the particular jobs, and establishes all per-
sonnel policies. Also, a company vice president is
in charge of all restaurant operations, and he is
assisted by one official who oversees all the restau-
rant operations. Each restaurant has a manager,
who orders all the restaurant's needs from the ven-
dors, contracts for major repairs, does approximate-
ly 60 percent of the hiring, fixes wage rates within
the ranges established by headquarters, trains em-
ployees, makes recommendations to headquarters
with regard to employees, and discharges em-
ployees. As the Director found, transfer of em-
ployees among the restaurants is minimal.
From these facts, and those discussed in more
detail in the Director's Decision, it is clear that no
factors are present to rebut the presumption of the
appropriateness of the single-store unit. The cen-
tralized administrative functions are related entirely
to the Employer's own records and have little or no
direct relation to the employees' day-to-day work.
While employee benefits have been centrally
established, and the uniformity thereof is of some
significance, no greater control or uniformity has
been shown here than is characteristic of retail
chain store operations generally. We see no reason
to permit this centralization to overshadow such im-
portant factors as infrequent interchange and com-
munication among the employees of the various
restaurants and the separate immediate supervision
by the local manager who hires and fires the restau-
rant employees, rates employee performance, and
771-772 (C A. 7), enfg. 145 NLRB 1024 , cert, denied 382 U S 942;
N L.R B v Primrose Super Market of Salem, Inc , 58 LRRM 2863 (C A.
1), enfg. without opinion 148 NLRB 610, cert. denied 382 U.S. 830, mo-
tion for reconsideration demed 353 F.2d 675 (C.A 1)
880 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
is involved in their day-to-day grievances and
problems. Further, the functions of the employees
at one restaurant are entirely separate from the
other restaurants in view of the geographic separa-
tion and the minimal amount of interchange. Thus,
we conclude that a single-restaurant unit here is an
appropriate unit for bargaining.
Accordingly, the case is hereby remanded to the
Regional Director for Region 25 for the purpose of
holding an election pursuant to his Decision and
Direction of Election except that the period for
determining eligibility shall be the payroll period
immediately preceding the date below.9
9 A corrected election eligibility list, containing the names and ad-
dresses of all the eligible voters , must be filed by the Employer with the
Regional Director for Region 25 within 7 days after the date of this Deci-
sion on Review and Direction of Election . The Regional Director shall
make the list available to all parties to the election . No extension of time
to file this list shall be granted by the Regional Director except in extraor-
dinary circumstances . Failure to comply with this requirement shall be
grounds for setting aside the election whenever proper objections are
filed. Excelsior Underwear Inc., 156 NLRB 1236.
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 a Hearing Officer of the National Labor
Relations Board. The Hearing Officier'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 connec-
tion with this case to this Regional Director.
Upon the entire record in this case, the Regional
Director finds:
1. The Employer is engaged in commerce within
the meaning of the Act and it will effectuate the pur-
pose of the Act to assert jurisdiction herein.
2. The labor organization involved claims to
represent certain employees of the Employer.
3. A question affecting commerce exists con-
cerning the representation of certain employees of
the Employer within the meaning of Sections
9(c)(1) and 2(6) and (7) of the Act.
4. The Employer operates a chain of 35 full-line
and 6 discount drugstores in Indiana and Ohio, as
well as 11 restaurants.' Six of the eleven restau-
rants are located in Indianapolis and the remaining
five in Kokomo, Bloomington , Fort Wayne, and
Marion, Indiana , and Lima, Ohio. Judicial notice is
taken that restaurant 206, the establishment con-
taining the unit sought by Petitioner, is located ap-
proximately 3 or 4, 5 or 6, 9 or 10, 11, and 14 or 15
miles, or an average of about 8 or 9 miles from the
other five Indianapolis restaurants. The Employer
also franchises or licenses a number of indepen-
dently owned enterprises, herein called licensees,
to operate restaurants which, like all but one2 of the
Employer's own, use the trade name, "Huddle,"
and are in many respects difficult to distinguish
from the Employer's own restaurants. Concededly,
the licensee's restaurants are not part of the ap-
propriate unit.
In the past, pursuant to petitions under the Act,
representation elections have been held among (a)
the Employer's warehouse3 employees in 1956, as
well as (b) its drugstore employees (exclusive of
restaurant employees) in four Indiana counties (in-
cluding Marion County) in 1963 and 1966.4 No cer-
tification of representatives, contract, or history of
collective bargaining resulted from any of the elec-
tions.
Headquarters of the restaurant operations, along
with the drug operation, is located in the company
office in Indianapolis. Among other functions it
houses the corporate officers and offices. All Em-
ployer-owned Huddle operations are administered
by Theodore J. Shaver, vice president of Huddle
Restaurant operations, who stands on the same
level of supervision as the vice president in charge
of drug operations and immediately subordinate to
Vice President in Charge of Sales Latter and Secre-
tary-Treasurer Steele, who in turn are immediately
subordinate to President Moxley. Personnel
Director Martin, whose responsibilities are em-
ployerwide, reports to President Moxley and Secre-
tary-Treasurer Steele. Liaison between Shaver and
the store managers is maintained by a single super-
visor, who, together with Shaver, visits the various
restaurants checking on operations. Headquarters
maintains substantial control over the operations of
the various units. The Employer's president "in the
final analysis" establishes labor policy and the
comptroller prepares the various restaurants'
budgets. Headquarters negotiates contracts with
the vendors with whom the restaurants deal, and
fixed asset expenditures require headquarters ap-
proval. Other elements of liaison or control are
found in the fact that the restaurants remit or report
cash intake to headquarters, and report purchases,
sales, labor and other costs, warehouse requisitions,
and hours worked by employees for payroll pur-
poses. A plethora of standardized intracorporate
forms are used for reporting purposes; i.e., each
restaurant is not permitted to make its own forms.
Based on the material submitted by the individual
resturants, headquarters prepares a monthly profit-
and-loss statement for each restaurant. The Em-
ployer does not maintain a clerical force at the
respective restaurants and substantial clerical and
administrative work relating to the restaurants is
An additional or twelfth restaurant was temporarily closed at the time
of the hearing.
2 Preemption of the name in Ohio by a competitor bars the Employer
using the name, Huddle, for its Lima operation.
' The warehouse services both the Employer 's drug and restaurant
operations.
' Petitioner was one of two joint petitioners in the 1966 proceeding.
HAAG DRUG COMPANY, INCORPORATED
performed at the headquarters. Thus, the headquar-
ters office recruits personnel, prepares paychecks,
keeps and maintains financial, personnel, and other
records, pays bills incurred by the restaurants, and
administers workmen's compensation, and group
insurance plans.5 Advertising is generally prepared
or handled by the headquarters-located advertising
departments and the personnel department tem-
porarily transfers employees between restaurants
and drugstores to meet the daily needs of the or-
ganization. A maintenance department performs
minor maintenance on Indianapolis operations.
Costs of operation of the headquarters are prorated
among the restaurants and the drugstores. Addi-
tionally, the Employer maintains a warehouse used
by both the drugstores and restaurants, as well as
some of the licensees as a source of supply.
An effort is made to maintain uniformity of ap-
pearance among the various restaurants. All save
one? use the trade name, Huddle,8 use "out front"
or exhibition cooking, generally seat 105 to 120
persons,9 serve a standarized semipermanent
menu,1° and have the same or similar kitchen equip-
ment, parking facilities, decor, and general layout. I'
In many other respects, conditions are uniform at
least in the restaurant division of the Employer's
operation. Thus, there is a uniform pay scale sub-
ject to local variation within the established range,
a uniform fidelity bond requirement, a standard
operations manual,12 which governs many person-
nel matters, and a standard or substantially stan-
dard policy governs the supply and laundering of
uniforms, vacations, group insurance, holidays,
discounts, paid leave of absence, meals, Christmas
and Thanksgiving bonus, and timeclocks.
5 Of necessity, much of this work is done on the basis of facts and re-
ports submitted by the individual restuarants.
6 As it is for many of the franchised restaurants
' See in, 2, supra
s As do a number of the admittedly nonunit separately owned
franchised restaurants.
Two of the eleven seat only 52 to 68 persons.
As do some of the franchised operations with minor exceptions.
11 As do some of the franchised operations.
i 2 Which is prepared by the Employer's central headquarters.
13 As do some of the franchised restaurants.
14 Subject to a check of whether the applicant is disqualified on the
basis of prior unsatisfactory service.
is Although both hiring and changes in range are subject to the approval
or require the initials of the personnel director and the vice president in
charge of Huddle operations, in view of their extremely slight contact with
the employees, to say nothing of job applicants, it is found the effective
power lies with the manager. Indeed, newly hired employees can be on the
payroll and working before either of the two officials who allegedly must
approve their hiring even know about it.
11 In connection with Petitioner 's cross-examination of the witness who
identified the exhibit that purported to reflect the degree of transfer and in-
terchange of employees between the Employer's various restaurants,
without objecting to Petitioner's questions, which went to the issue of why
original and more complete records in the Employer's possession could
881
Local administration is vested in the restaurant
manager. Each manager orders his own self-deter-
mined needs from suppliers selected by headquar-
ters or the Employer's warehouse. 13 Similarly, ex-
cept for Indianapolis restaurants which use the Em-
ployer's maintenance crew for minor repairs, the
manager, after determining the need therefor con-
tracts with Employer designated mechanics for
major and minor repairs. Although some hiring is
done through headquarters, 60 percent of the hiring
is done by the manager'14 who at the time of hiring,
as well as throughout his employment, fixes the em-
ployee's pay rate within a rate range for each clas-
sification prescribed by headquarters. 15 The
manager trains and rates employees, makes recom-
mendations as to employees with questionable
ratings, and discharges employees. Although, as
previously noted, in many respects there is
uniformity in standard wages, hours, and working
conditions throughout the Employer's operation, in
other respects differences exist. Thus, many of the
restaurants have different hours with concomitant
different shift hours for employees. Employee clas-
sifications differ in various restaurants, some using
a cashier-hostess, others simply a cashier and
others, neither. Although, as noted above, the
restaurants are generally of substantially the same
size, the manning schedules vary from 2 part- and
13 full-time employees to 23 full- and 7 part-time
employees.
Interchange and transfer between the various
restaurants in the chain is insignificant and averages
not more than 1.1 ,permanent and 2.5 temporary
transfers per week's in a group of approximately
200 employees.17
not have been submitted in lieu of the 10 week summary specially
prepared for the hearing , Employer's counsel instructed its witness as fol-
lows: "I'll instruct the witness to tell the Union, attorney for Union,
`Because we didn't want to do it , goddammit.' Put a comma before the
goddammit. That's on the record .. I'll instruct this witness whenever I
feel like it . Counsel is arguing with the witness ." In response to Peti-
tioner's explanation it was seeking to find out whether "this thing is
representative or not," Employer's counsel asserted, "I instruct the wit-
ness to tell counsel for the union that you have nothing to say on the sub-
ject. We are not going to argue about this. All this is argumentative. If you
want to attack this exhibit by innuendo, do that in your brief." In the cir-
cumstances, where Petitioner's attempt to explore the representative
status of the Employer's statistics was seriously obstructed the exhibit
must be carefully scrutinized. At the outset, it is noted that the Employer's
business is affected and normally will be increased by holidays. Addi-
tionally, both Christmas and New Year's Day are paid holidays for em-
ployees In such circumstances it is a reasonable inference that the Christ-
mas-New Year's week would provide more than the normal number of
temporary transfers. In point of fact, it appears that twice the average
number of temporary transfers occurred in the 2-week payroll period end-
ing December 3 1, which furnishes internal evidence within the exhibit it-
self that the Christmas-New Year's payroll period is not representative.
That payroll period ending December 31, accordingly , has been disre-
garded in computing temporary interchange of employees.
17 Employees retain seniority and any and all benefits incident thereto
in the case of temporary or permanent transfer.
882 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Conclusion
From the above it would appear that while the
Employer, in a significant measure, controls and
seeks to maintain uniformity among, performs ad-
ministrative and clerical functions of various sorts
for, and uses various standard forms in, its various
restaurants, the degree of control or uniformity is
not unusual or a type unexpected in a chain of retail
establishments. Indeed, what would be totally
unexpected would be a situtation where each unit
of a commonly owned chain functioned in its un-
controlled discretion. Additionally, it is noted that
many of the separately owned licensed or
franchised restaurants (whom all agree are outside
the unit) bear many of the attributes that the Em-
ployer urges to establish the need for a multirestau-
rant unit. It would seem that if such factors are sig-
nificant considerations in determining whether
several restaurants should be merged in a single
unit, they would require the merging of the licensed
and Employer-owned restaurants in a single unit,
which obviously and admittedly is not the case.
From still another point of view, it is clear that
the considerations advanced in opposition to the
unit petitioned for do not disprove the appropriate-
ness of the unit sought. Thus, the Employer's, or
headquarters', relationship to all the restaurants it
operates is substantially the same. If this relation-
ship is controlling in making unit determinations,
then only an Employerwide unit, be it 7, 2,18 or 50
statewide in scope is appropriate. Again, obviously
the law does not require employees to organize in
national, or employerwide units or forfeit their
rights under the Act, although, of course, they are
free to do so if they so elect. The issue for decision
is not whether the restaurant employees may or-
ganize on a nationwide, statewide, or citywide unit,
but whether they must. 19
Phrased differently, the issue presented is
whether the Employer's form or extent of organiza-
tion controls the unit into which employees must or-
ganize . This is clearly not the case. Thus, Section
9(b) of the Act sets forth the criterion to be used in
determining the appropriateness of units where it
says:
The Board shall decide in each case whether,
in order to assure to employees the fullest
freedom in exercising the rights guaranteed by
this Act, the unit appropriate for the purpose of
collective bargaining shall be the employer unit
plant unit or subdivision thereof.
[Emphasis supplied.]
One of the most significant rights guaranteed to
employees by the Act is the right to exercise or
refuse to exercise the right of self-organization.
Although at a time in the past the Board did look to
considerations such as those relied on by the Em-
ployer, including the form of employer organization
and whether various practices and intra-coporate
forms were standardized to determine the units into
which the employees must organize, it rejected
these practices in Sav-On Drugs, Inc., 138 NLRB
1032, where it said:
Reviewing our experience under that policy we
believe that too frequently it has operated to
impede the exercise by employees in retail
chain operations of their rights to self-organiza-
tion guaranteed in Section 7 of the Act. In our
opinion that policy has over emphasized the
administrative grouping of merchandising out-
lets at the expense of... geographic separation
of the several outlets and [their] local
managerial autonomy ... and it has ignored
completely as a factor the extent to which the
claiming labor organization had sought to or-
ganize the employees of the retail chain. We
have decided ... to apply to retail chain opera-
tions the same unit policy which we apply to
multiplant enterprises in general.
In the subsequent Dixie Belle Mills case (139
NLRB 629) the Board redefined the multiplant
criterion as follows:
A single-plant unit, being one of the unit
types listed in the statute as appropriate for
bargaining purposes, is presumptively ap-
propriate. Therefore, unless such plant unit has
been so effectively merged into a more com-
prehensive unit by bargaining history, or is so
integrated with another as to negate its identity,
it is an appropriate unit, even though another
unit, if requested, might also be appropriate. .
.. It has not been the Board's policy to compel
labor organizations to seek representation in
the most comprehensive grouping, or indeed in
any larger unit unless an appropriate unit com-
patible with that requested does not exist.
Therefore, the critical question in each case is
whether the requested unit is appropriate.
Applying these principles hereinabove discussed
to the instant case, it is clear that the various restau-
rants have neither been merged into a multiplant
unit by bargaining history, nor are they so in-
tegrated with one another as to lose their separate
identity. Nor, returning to the statutory criterion for
11 As it is in the instant case.
19 Thus, the Board has repeatedly held that in any given situation not
only one, but several units may well be appropriate. Skagg's Pay Less
Drug Stores, 134 NLRB 168; Buy Low Supermarket, Inc., 131 NLRB
23. Quite possibly, an employerwide, or a statewide, or a citywide unit, or
a unit conforming to an administrative division of the Employer's opera-
tion may be appropriate. However, it by no means follows from this that
the storewide or plantwide unit is inappropriate. Indeed, quite to the con-
trary, absent situations not here present, a store or plantwide unit is al-
ways appropriate. Dixie Belle Mills, Inc., 139 NLRB 629. This does not
mean that an employerwide unit is, ipso facto, inappropriate, since the
statute does not command that the Petitioner represent a majority in "the"
appropriate unit . Rather, Section 9(a) of the Act provides that a labor or-
ganization is the representative of employees when it is selected by a
majority of the employees in "an" appropriate unit. Accordingly, the fact
that an employer-, state-, and/or city-wide unit is appropriate does not in
anyway negate the fact that the'ingle store or plant unit may not also be
appropriate. Miratile Manufacturing Company, Inc., 124 N LRB 48.
HAAG DRUG COMPANY, INCORPORATED
unit determinations, does it appear that most of the
factors relied on by the Employer (such as form of
employer organization and the standardization of
manuals, forms, decor, etc.) are dispositive of the
question of whether or not the unit sought is one
which will "assure to employees the fullest freedom
in exercising the rights guaranteed by [the] Act."
Indeed , two other factors developed in the record
bear more significantly on the appropriateness of
the unit sought from the point of view of the statuto-
ry criterion, to wit, the distance and the degree of
transfer and interchange between the restaurants.
Basically, the choice presented is a single-store
or restaurant unit, or a city-, State-, or employer-
wide unit. Considered solely from a citywide point
of view, the evidence of interchange reflects that
during the 8-week period there were two occasions
when employees temporarily transferred and two
occasions when an employee permanently trans-
ferred from unit 206 to unit 232, and two instances
of temporary transfer between unit 206 and unit
202, plus a single incident when an employee trans-
ferred between units 205 and 206. In the 8-week
period there were no permanent transfers or tempo-
rary interchange between unit 206 and units 203
and 238. Add to this the substantial distances
between the various restaurants in the city, ranging
up to 14 and 15 miles and averaging 8 or 9 miles,
20 Except as heremabove noted, the record does not reflect disagree-
ment between the parties as to the composition of the unit.
21 An election eligibility list, containing the names and addresses of all
the eligible voters, must be filed by the Employer with the Regional
Director within 7 days of this Decision and Direction of Election The Re-
gional Director shall make the list available to all parties to the election In
order to be timely filed such lists must be received in the Regional Office,
National Labor Relations Board, Region 25, Sixth Floor, ISTA Center,
883
and the conclusion is inevitable that the geographi-
cal separation of the restaurants and lack of oppor-
tunity for communication among the employees em-
ployed at the several restaurants constitutes a suffi-
cient impediment to the right of and opportunity for
self-organization as to preclude a finding that the ci-
tywide and not the single-restaurant unit is the only
appropriate unit. What has been - said of the citywide
unit applies with equal and greater force State- or
employer-wide units. In the circumstances, the
statutory criterion for unit determination precludes
the Regional Director from making a unit deter-
mination which would require the employees' self-
organizational efforts to be conducted on a citywide
or broader basis. In accordance with Petitioner's
contention , and contrary to the Employer, a unit
limited to restaurant 206 is found appropriate.
For reasons hereinabove set forth , it is found the
following employees of the Employer constitute a
unit appropriate for the purpose of collective bar-
gaining within the meaning of Section 9(b) of the
Act: All regular and regular part-time employees at
the Employer ' s restaurant at 3 805 South East
Street , Indianapolis , Indiana, but excluding all of-
fice clerical employees , managers , assistant
managers , professional employees , guards and su-
pervisors as defined in the Act.20
[Direction of Election21 omitted from publica-
tion.]
150 West Market Street, Indianapolis, Indiana 46204, on or before June
14, 1967 . Under Board directives , no extension of time to file this list may
be granted except in extraordinary circumstances, nor shall the filing of a
request for review operate to stay the filing of such list Failure to comply
with this requirement shall be grounds for setting aside the election when-
ever proper objections are filed. Excelsior Underwear, Inc, 156 NLRB
1236.
350-212 0-70-57