Kresge Department Store

National Labor Relations Board - Board Decisions

Apr 21, 1948

77 N.L.R.B. 212 (N.L.R.B. 1948)

In the Matter Of SEBASTIAN S. KRESGE, INDIVIDUALLY AND DOING
BUSINESS UNDER THE TRADE NAME AND STYLE OF KRESGE DEPART-
MENT STORE AND KRESGE-NEWARK AND KRESGE-NEWARK, INC. and
NORTHERN NEW JERSEY DEPARTMENT STORE EMPLOYEES LOCAL 950,
AFL AND LOCAL JOINT EXECUTIVE BOARD OF ESSEX COUNTY, A. F. L.
and KRESGE DEPARTMENT STORE CO-WORKERS' MUTUAL AID ASSO-
CIATION (ALSO KNOWN AS KRESGE-NEWARK CO-WORKERS' ASSOCIA-
TION, INC., AND FOI11NIERLY KNOWN AS L. S. PLAUT AND COMPANY
EMPLOYEES MUTUAL AID ASSOCIATION), PARTY TO THE CONTRACT
In the Matter of SEBASTIAN S. KRESGE, INDIVIDUALLY AND DOING
BUSINESS UNDER TIIE TRADE NAME AND STYLE OF KRESGE DEPART-
MENT STORE AND KRESGE-NEWARK AND KRESGE-NEWARK, INC. and
UNITED RETAIL AND DEPARTMENT STORE EMPLOYEES OF NEW JERSEY,
LOCAL 108, AFFILIATED WITH UNITED RETAIL, WHOLESALE AND DE-
PARTMENT STORE EMPLOYEES OF AMERICA, CIO, and KRESGE DEPART-
MENT STORE CO-WORKERS' MUTUAL AID ASSOCIATION ( ALSO KNOWN
AS KRESGE-NEWARK CO-WORKERS' ASSOCIATION, INC., AND FORMERLY
KNOWN AS L. S. PLAUT AND COMPANY EMPLOYEES MUTUAL AID
ASSOCIATION), PARTY TO THE CONTRACT'
Cases Nos. 2-C-5990 and 2-C-6015, respectively. Decided April 21,
1948
Mr. Jack Davis, for the Board.
Messrs. Ward J. Herbert and A. C. Studer, Jr., of McCarter, English
& Studer, of Newark, N. J., and George Kamenow, of Detroit, Mich.,
for the respondent.
Messrs, Thomas L. Parsonnet and Abraham G. Lew, of Newark,
N. J., for the AFL.
Messrs, Abraham L. Friedman, of Rothbard, Harris & Ox f eld, of
Newark, N. J., and Irving Rosenberg, of Newark, N. J., for the CIO.
Messrs.'Sanuuel Dreskin and Leon Dreskin, of Dreskin cf Dreskin,
of Newark, N. J., for the Association.
DECISION
AND
ORDER
On December 19, 1946, Trial Examiner Thomas S. Wilson issued
his Intermediate Report in the above-entitled proceedings, finding
'At the hearing the titles of these cases wel e amended as above without objection.
77 N. L. R. B., No 25.
212
KRESGE DEPARTMENT STORE 213
that the respondents had engaged in and were engaging in certain
unfair labor practices and recommending that they cease and desist
therefrom and take certain affirmative action, as set forth in the copy
of the Intermediate Report attached hereto. Thereafter, the re-
spondents, Kresge Department Store Co-Workers' Mutual Aid Asso-
ciation, herein called the Association, and the attorney for the Board
each filed exceptions, with a supporting brief, to the Intermediate
Report. In addition, the respondents filed a supplemental brief based
upon the effect of the subsequently enacted amendments to the Act as
set forth in the Labor Management Relations Act, 1947.
On October 30, 1947, the Board, at Washington, D. C., heard oral
argument in which the respondents and the Association participated;
the AFL and the CIO did not appear. Upon the oral argument the
Association moved to dismiss the complaint upon the ground that no
charging union had complied with the provisions of Section 9 (f) or
(h) of the Act. The motion is hereby denied 2
The Board has reviewed the rulings of the Trial Examiner and finds
that no prejudicial error was committed. The rulings are hereby
affirmed. The Board has considered the Intermediate Report, the
exceptions and briefs, the contentions advanced by the respondents
and the Association at the oral argument, and the entire record in the
case, and hereby adopts the findings, conclusions, and recommendations
of the Trial Examiner, with the following additions, exceptions,3 and
modifications :
1. The respondents, in their supplemental brief, contend in effect
that the force of certain of the 1947 amendments to the Act is such
as to make impossible a valid finding that they violated the statute.
However, these amendments are prospective in their effect and in no
way impair the power of the Board to adjudicate cases arising prior to
their enactment, and to make findings in accordance with the provisions
of the Act which were in effect at the time of the occurrences con-
sidered.4 Nor have the amendments changed the legal effect of the
acts of the respondents as foetid in this proceeding. The requirement
of Section 10 (b) of the amended Act that complaints shall not issue
based upon unfair labor practices occurring more than 6 months prior
to filing of a charge with the Board, has no application to this pro-
ceeding because the complaint herein issued long before the effective
date of the amendment.,' Respondent's contention that the Board may
2 Matter of Marshall d Bruce Company, 75 N L R B 90.
3 The Trial Examiner incorrectly stated that part of the salary of Jenkins, the Association
treasurer , was paid by respondent at a time when he was soliciting memberships during
store hours. Jenkins was actually receiving a pension and not a salary at that time.
4 Matter of Marshall cC Brace Co., 75 N . L R B 90 : N. L R B v National Garment Co,
166 F. (2d) 233 (C C A 8) ; N. L R B v. Mylan-Sparta Co , 166 F (2d) 485 (C C. A. 6).
a Matter of Brrgys Manufacturing Company , 75 N. L R B 569.
7 S8886-49-vol 77 15
214 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
not utilize evidence antedating a date 6 months before filing of the
charge and notification thereof has no merit.
Moreover, wholly apart from the question of retroactive operation,
certain amendments relied upon by respondents do not have the effect
claimed. The contention that Section 14 (a) of the amended Act
prevents cognizance of the participation of supervisors in the Associa-
tion as a factor in finding a violation of Section 8 (2), plainly miscon-
ceives the purpose and effect of Section 14 (a). The claim that Section
302 of the amended Act precludes our finding that payments given
to the Association in connection with services rendered by the Welfare
Department constituted illegal support, likewise misconceives the
purpose of that section. Section 302 plainly was never intended to
legitimize the contribution of support to labor organizations which
are illegal under Section 8 (2) of the Act, merely because welfare
purposes are involved. With respect to amendments to Section 10 (c),
we are of the opinion that our findings are based upon the preponder-
ance of the testimony taken, and that we have given effect in our
decision to the requirement of equality of treatment as between affili-
ated and independent unions.
2. The Trial Examiner properly found that since 1937 the respond-
ents have dominated and interfered with the formation and adminis-
tration of the Association as a labor organization, as well as
contributing financial and other support to it. During the 44 years of
the Association's existence prior to 1937, it was plainly completely
dominated by management although it was then purely a benefit and
not a labor organization. Management approval was even necessary
for nominations for officers. Management domination continued in
the transformation of the Association into a labor organization in 1937.
This is manifest from the circumstances of the changeover. The Asso-
ciation's Directors first rejected the proposal to enlarge its scope to
that of a labor organization because of a belief that such change would
not meet with respondents' approval. But after a committee con-
sulted respondents' general manager, showed him the proposed amend-
ments, and were told that "it was all right with him," the Directors
reversed themselves and submitted the amendments to a referendum of
the members. Management's role in the transformation of the Asso-
ciation into a labor organization was further evident in the granting
of the use of store premises and store time for the referendum.
Managerial representatives continued to be members and to play a
dominant role in the administration of the Association after the
changeover in 1937. Respondents' credit manager was President of
the Association in 1942-43, and was succeeded by the carpenter fore-
man. The service manager who supervises 25-50 employees, and the
KRESGE DEPARTMENT STORE 215
store nurse have recently been Directors. Membership in the Associa-
tion with dues check-off remained a condition of employment imposed
by respondents until 1941.
More recently, the respondents seemingly took some steps to divorce'
management from the Association. By letter of January 9, 1946, the
respondents informed the Association that it must pay rental for space
used for medical purposes, that supervisors should not be eligible for
active membership, and that respondents would terminate their relation
with the law firm which represented the Association. The Second
Circuit Court of Appeals has pointed out, however, that "Domination'
arising from earlier acts of an employer may be violative of the Act,
even when the Employer has stopped all active `interference'."; the
important factor is "the state of mind of the employees." 6 But as a
matter of fact the respondents here actually have not ceased "all active
interference" in connection with the Association. The respondents,
despite their letter, failed to take effective steps to remove members of
the supervisory staff from Association membership and activity, or to
collect rent from the Association for use of its medical department. As
noted, the service manager and store nurse have continued to act as
Association Directors. Buyers and other supervisors have voted in a
recent Association election and in a recent constitutional referendum.
Respondents continue to allow Association elections to be held on store
premises during working hours and pay Association directors for time
spent at board meetings. In September 1943, the respondents in-
cluded an Association membership solicitation in employee pay
envelopes; new employees are still given a store manual in which the
Association is described as "your bargaining agent with management"
and an organization which "deserves your support." Respondents
continue to provide the Association with free space for a medical de-
partment and Association offices and pay the Association for services
rendered by its doctor, nurse, and assistant, not on the basis of services
rendered but, in reality, as a maintenance subsidy measured by the
organizational needs of the Association. In May 1946, the respondents
made an outright gift of an indebtedness of $1,000 to the Association.
Under. all the circumstances, more fully set forth in the Inter-
mediate Report, we find the Association is still dominated by the
respondents. Because "the effects of long practice persist,"' we
further find that the long continued close identification of the As-
sociation with management in the minds of the employees renders the
Association a continuing obstacle to the free exercise by the employees
of their right to select a bargaining representative.
s Sperry Gyroscope Co v N. L R B ., 129 F. ( 2d) 922, 924.
' N. L R. B v. Southern Bell Telephone Company, 319 U. S. 50, 57.
216 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
3. The attorney for the Board has excepted to the Trial Examiner's
omission to recommend repayment of Association dues checked off
from 1937 to 1941, during which time membership and check-off were
compulsory, and subsequently, when dues were deducted by virtue
of individual written authorization alleged to have been coercively
obtained. We agree with the conclusion of the Trial Examiner that
the situation does not call for reimbursement of dues paid during
either period.
The situation as to the period from 1937 to 1941, differs from the
instances of employer compulsion in which we have ordered reim-
bursement. In the latter cases the dues substantially served the il-
legal employer purpose of insuring the continued existence of labor
organizations and meeting needs arising out of the functions of labor
,organizations." In the instant situation the dues fulfilled a different
purpose and one lawful for an employer to pursue, that of creating
a fund to provide for all benevolent needs. The dues were strictly
commensurate with the welfare benefits to be received, and no sub-
stantial portion was devoted to labor union functions.9 Thus, prior
to the Association's change to a labor organization, the dues, based
on 44 years' experience, were on a sliding scale and determined by
the earnings of the individual employee and the amount of sick
benefit coverage. Organizational expenses, if any, were nominal in
view of the extent of employer assistance. During the 1937-41
period, although the Association then acted also as a labor organiza-
tion, the dues and sickness coverage remained the same and employer
assistance continued unchanged. Hence the dues were still devoted
to benevolent needs and were not to any material extent diverted to
the functioning of the labor aspects of the organization. The con-
tention of Board counsel with respect to reimbursement of dues col-
lected during the period from 1941 to data necessarily fails, for the
record does not sustain his claim that membership was coerced during
that time.
4. As of the time of the hearing, the corporate respondent and the
Association were in the process of negotiating a contract. To provide
for the possibility that they may have since concluded an agreement
and successor contracts, we shall make due provision in our order.
8 Compare Matter of Baltimore Transit Co , 47 N. L R B 109, 139-144; Matter of Mc-
Gough Bakeries Corp., 58 N. L R B. 849, 855 ; Matter of Poloron Products, Inc, 64
N L It. B. 1358, 1374: Matter of Pacific Plastic & Mfg Co, 64 N. L. R B 52, 96.
9 Compare Matter of U. S Truck Company, Inc, 11 N L R B 706, 721, 723, where the
proportion of dues applicable to payment of group insurance premiums being known, the
Board ordered reimbursement only of the remaining fraction actually paid into the treasury
of the dominated organization under closed-shop contract and check-off : and Matter of
Kokomo Sanitary Company, 26 N L R B 1, 20-21, 25, wherein the amount of dues and
Insurance premiums being commingled and uncertain in proportion, the Board directed pay-
went of the entire sum of the compulsory deductions.
KRESGE DEPARTMENT STORE 217
However, nothing in our order shall be taken to require the corporate
respondent to vary or abandon the substantive features which may
be embodied in any existing contract relative to rates of pay, wages,
hours of work, or other conditions of employment.
5. In view of our finding that the respondent has dominated the
Association, in addition to interfering with its formation and admin-
istration and contributing financial and other support to it, in viola-
tion of Section 8 (2) of the Act, we shall, in accordance with our
policy as announced in Hatter of Carpenter Steel Company, 76 N. L.
R. B. 670, order the respondent to disestablish the Association.
ORDER
Upon the entire record in the case, and pursuant to Section 10 (c)
of the National Labor Relations Act, the National Labor Relations
Board hereby orders
A. That the respondents Sebastian S. Kresge and Kresge-Newark,
Inc. and their officers, agents, successors, and assigns shall:
1. Cease and desist from :
(a) Dominating and interfering with the formation or administra-
tion of, or contributing financial or other support to, the Kresge
Department Store Co-Workers' Mutual Aid Association, hereafter
called the Association, any successor thereto, or any other labor organi-
zation of their employees;
(b) In any other manner interfering with, restraining, or coercing
their employees in the exercise of their right to self-organization, to
form labor organizations, to join or assist Northern New Jersey
Department Store Employees Local 950, AFL, and Local Joint Execu-
tive Board of Essex County, A. F. L., or United Retail and Depart-
ment Store Employees of New Jersey, Local 108, affiliated with United
Retail, Wholesale and Department Stone Employees of America, CIO,
or any other labor organization, to bargain collectively through repre-
sentatives of their own choosing, and to engage in concerted activities
for the purpose of collective bargaining or other mutual aid or protec-
tion, as guaranteed in Section 7 of the Act.
B. That the respondent Kresge-Newark, Inc., and its officers, agents,
successors, and assigns shall :
1. Cease and desist from :
(a) Recognizing the Association as the representative of any of
its employees for the purposes of collective bargaining with respect
to grievances, labor disputes, wages, rates of pay, hours of work, or
other conditions of employment, provided that the withdrawal of such
recognition shall not require the interruption of the relationship be-
218 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
tween the respondent and the Association relating to the accident,
health and benevolent program sponsored by the Association;
(b) Giving effect to any and all contracts, or supplements thereto,
or modifications thereof, with the Association.
2. Take the following affirmative action which the Board finds will
effectuate the policies of the Act :
(a) Withdraw all recognition from and completely disestablish the
Kresge Department Store Co-Workers' Mutual Aid Association, or
any successor thereof, as the representative of any of its employees for
the purpose of dealing with the respondents concerning grievances,
labor disputes, wages, rates of pay, hours of employment, or other
conditions of employment;
(b) Post throughout its store at Newark, New Jersey, copies of the
notice attached to this Order, marked "Appendix A." 10 Copies of
said notice, to be furnished by the Regional Director for the Second
Region, shall, after being duly signed by the said respondent's repre-
sentative, be posted by the said respondent immediately upon receipt
thereof and maintained by it for sixty (60) consecutive days thereafter
in conspicuous places, including all places where notices to employees
are customarily posted. Reasonable steps shall be taken by the said
respondent to insure that said notices are not altered, defaced, or cov-
ered by any other material;
(c) Notify the Regional Director for the Second Region in writing
within ten (10) days from the date of this Order, as to what steps
the said respondent has taken to comply therewith.
APPENDIX A
NOTICE TO ALL EMPLOYEES
Pursuant to a Decision and.Order of the National Labor Relations
Board and in order to effectuate the policies of the National Labor
Relations Act, we hereby notify our employees that :
WE HEREBY DISESTABLISH the Kresge Department Store Co-
Workers' Mutual Aid Association (also known as Kresge-Newark
Co-Workers' Association, Inc.) as the representative of any of
our employees for the purpose of dealing with us concerning
grievances, labor disputes, hours of work, or other conditions of
employment, and we will not recognize it or any successor thereto
for any of the above purposes.
11 In the event this Order is enforced by decree of a Circuit Court of Appeals, there shall
be inserted in the notice before the words "A Decision and Order " the words "A Decree of
the United States Circuit Court of Appeals Enforcing."
KRESGE DEPARTMENT STORE 219
WE WILL NOT dominate or interfere with the formation or ad-
ministration of any labor organization or contribute financial or
other support to it.
WE WILL NoT in any manner interfere with, restrain, or coerce
our employees in the exercise of their right to self-organization,
to form labor organizations, to join or assist Northern New Jersey
Department Store Employees Local 950, AFL, and Local Joint
Executive Board of Essex County, A. F. L., or Uriited Retail and
Department Store Employees of New Jersey, Local 108, affiliated
with United Retail, Wholesale and Department Store Employees
of America, CIO, or any other labor organization, to bargain
collectively through representatives of their own choosing, and
to engage in concerted activities for the purpose of collective
bargaining or other mutual aid or protection.
All our employees are free to become or remain members of
these unions or any other labor organization.
KRESGE-NEWARK, INC.
EmpploJer.
Dated ---------------------- By ------------------------------
(Representative ) (Title)
This notice must remain posted for 60 days from the date hereof,
and must not be altered, defaced, or covered by any other material.
INTERMEDIATE REPORT
Mr. Jack Davis, for the Board.
Messrs. Ward J Herbert and A. C Studer, Jr., of McCarter, English & Studer,
of Newark, N. J., and George Kamenow, of Detroit, Mich., for the respondent.
Messrs. Thomas L. Parsonnet and Abraham U. Lew, of Newark, N. J., for the
AFL.
Mr Abraham L. Friedman, of Rothbard, Ha?ris & Oxfeld, of Neward, N. J,
and Mr Irving Rosenberg, of Newark, N. J., for the CIO.
Messrs. Samuel Dreskiia and Leon Dreskin, of Dreskin & Dreskin, of Newark,
N. J., for the Association.
STATEMENT OF THE CASE
Upon a first amended charge duly filed on August 26, 1946, by Northern New
Jersey Department Store Employees Local 950, AFL, and Local Joint Executive
Board of Essex County, AFL, herein called the AFL, and upon a first amended
charge duly filed on September 3, 1946, by United Retail and Department Store
Employees of New Jersey, Local 108, affiliated with United Retail, Wholesale
and Department Store Employees Union, CIO, herein called the CIO, the
National Labor Relations Board, herein called the Board, by its Regional
Director for the Second Region (New York City, New York), issued its com-
plaint dated September 4, 1946, against Sebastian S. Kresge, individually and
doing business under the trade name and style of Kresge Department Store and
Kresge-Newark , and Kresge-Newark, Inc., herein called the respondents , alleging
that the respondents had engaged in and were engaging in unfair labor practices
220 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
affecting commerce within the meaning of Section 8 (1) and (2) and Section
2 (6) and (7) of the National Labor Relations Act, 49 Stat. 449, herein called the
Act' Copies of the complaint and the notice of hearing were duly served upon
the respondents, the AFL, and the CIO, and Kresge Depai t went Store Co Workers'
Mutual Aid Association, also known as Kresge-Newark Co-Workers' Association,
Inc, hereinafter referred to as the Association.
With respect to the unfair labor practices, the complaint alleges in substance
that: (1) in the early part of 1937 the respondents initiated, formed, sponsored
and promoted the Association as a labor organization and from that time to the
date of the complaint the respondents have assisted, dominated, contributed to
the support of, and interfered with the administration of said Association by
various enumerated acts; and (2) by each of the above enumerated acts the
respondents have interfered with, restrained, and coerced and are interfering
with, restraining, and coercing their employees in the exercise of the rights
guaranteed in Section 7 of the Act, thereby engaging in unfair labor practices
within the meaning of Section 8 subsection (1) and (2) of the Act.
On September 16, 1946, the respondents filed their answer admitting that they
were engaged in commerce within the meaning of the Act but denying that they
had engaged in any of the unfair labor practices alleged.
On September 23, 1946, the Association filed its answer to the same effect.
Pursuant to notice, a hearing was held in New York City, New York, and in
Newaik, New Jersey,' from September 30 to October 15, 1946, before the under-
signed, the Trial Examiner duly designated by the Chief Trial Examiner. The
Board, the respondents, the AFL, the CIO, and the Association were represented
by counsel. Full opportunity to be heard, to examine and cross-examine wit-
nesses, and to introduce evidence bearing upon the issues was afforded all parties.
During the hearing the Board was allowed without objection to amend the title
of the cases as hereinbefore shown. No objection was made to this amendment.
The Board was further permitted to amend its specifications of the unfair labor
practices by adding one additional act. This also was done without objection.
At the close of Board's case, the respondent's motion, joined in by the Association,
to dismiss the complaint for lack of proof was denied. The same motions
were reviewed at the close of the hearing and ruling thereon was reserved.
Except as hereinafter provided, these motions are hereby denied. At the
close of the hearing, the Board moved to conform the pleadings to the proof
with respect to dates, misspellings, names, and other minor variations. This
motion was allowed without objection All parties waived oral arguments at
the close of the hearing. Briefs have been received from counsel for the
respondents and the Association.
Upon the entire record in the case, and from his observation of the witnesses,
the undersigned makes the following:
FINDINGS OF FACT
1. THE BUSINESS OF THE RESPONDENT
Sebastian S. Kresge is an individual who for some time past and up to
February 4, 1946, has been doing business under the trade name and style of
Kresge Department Store and Kresge-Newark . Kresge-Newark , Inc. is a corpo-
1 By order dated September 18, 1946, the Board ordered these two cases consolidated for
the purpose of hearing.
3 The bearing opened' in New York City, New York, but, after the first 2 days of the
hearing , was moved to Newark , New Jersey , at the request of the respondents
KRESGE DEPARTMENT STORE 221
ration duly organized and existing by virtue of the laws of the State of New
Jersey, and on February 4, 1946, became the successor to the aforesaid business
formerly operated by Sebastian S. Kresge, individually, and has continued said
business as a corporation. They are hereinafter referred to as the respondents
or the respondent.
At all tunes herein mentioned the respondents have maintained a principal office
and place of business at Broad Street, in the city of Newark and State of New
Jersey, hereinafter called the Newark store, the only operation involved in
this proceeding, and have been continuously engaged at this store in the pur-
chase, sale and distribution of a general line of merchandise, including ladies',
men's and children's clothing, hats and other wearing apparel, drugs, household
furnishings, rugs and other merchandise; and have leased several departments
in said store for services and the sale of merchandise, including the beauty
parlor, sewing machine, watch repair and millinery department, to. corporations
or partnerships outside the State of New Jersey.
During the past year the respondents, in the course and conduct of their busi-
ness operations, caused to be purchased, transferred and delivered to the Newark
store, general merchandise, including ladies', men's and children's clothing, hats
and other wearing apparel, drugs, household furnishings and other merchandise,
valued at in excess of $8,000,000, of which approximately 35 percent was trans-
ported to said Newark store in interstate commerce from States of the United
States other than the State of New Jersey.
During the past year the respondents in the course and conduct of their business
operations, caused to be sold at the Newark store, general merchandise valued
at in excess of $14,000,000, of which approximately one-tenth of 1 percent was
transported from said Newark store in interstate commerce to States of the
United States other than the State of New Jersey 3
U. THE ORGANIZATIONS INVOLVED
Northern New Jersey Department Store Employees Local 950, AFL, and Local
Joint Executive Board of Essex County, AFL, herein referred to as the AFL;
United Retail and Department Store Employees of New Jersey, Local 108,
affiliated with United Retail, Wholesale and Department Store Employees of
America, CIO, herein referred to as the CIO, and Kresge Department Store Co-
Workers' Mutual Aid Association (also known as Kresge-Newark Co-Workers'
Association, Inc., and formerly known as L S. Plant and Company Employees
Mutual Aid Association) herein referred to as the Association , are labor or-
ganizations admitting to membership employees of the respondent.
III. THE UNFAIR LABOR PRACTICES
A. Intel ferenee, resti aint and coercion; domination and support of the Association
1. The Association prior to 1937
In the late 1800's L. F. Plant and Company owned and operated a department
store in Newark, New Jersey, known as The Beehive. In 1893 there was or-
ganized for the employees of this store, under circumstances undisclosed in
the present record, the L. F. Plaut and Company Employees Mutual Aid As-
sociation. This organization had the reputation of being the first organization
8 These findings are made from the allegations of the complaint which were admitted by
the answer.
222 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
of its type to be formed in the United States. The Association was formed to
look after the health of the employee, to pay a certain percentage of the em-
ployee's wages to him as sick benefits when he was ill, to send flowers to the
family in case of death and to sponsor social life for the employees. During
this period of time, the Association was the recipient of gifts anrounting to at
least $1,000 from members of the Plant family.
In 1923 Sebastian S. Kresge, an individual, purchased The Beehive from
its then owners. The following year the Association changed its name to Co-
Workers' Mutual Aid Association of the Kresge Department Store"
The object of this Association as set forth in its constitution in effect during
the first of the year 1937 was stated as follows :
To cooperate in various store activities conducted for the health, comfort,
happiness and efficiency of the co-workers ; provide benefits for its members
in case of disability due to sickness or accident which may unfit them for
their daily work.
"Every regular co-worker of Kresge Department Store" became a member "by
virtue of his employment" if he were able to pass the required physical ex-
amination and retained his membership during and until "termination of his
employment, whether by resignation, lay-off or discharge." Under this con-
stitutional provision ever able-bodied employee of the respondent including
its general manager, Hugh E Barnes, was a dues paying member until June 7,
1937, and entitled to vote at the Association elections. The respondent made
membership in the Association a condition of employment. Monthly membership
dues were deducted by the store from the employee's salary and paid over to the
Association.
The president and vice president of Kresge Department Store,' the general
superintendent, superintendent of operations and superintendent of service were
made "honorary members" of the Board of Directors of the Association by its
constitution. The only qualification for officers of the Association was that of
membership in the Association for a period of 6 months prior to elections The
Association's officers were elected by all members in an election conducted in the
store annually by secret ballot. Candidates for offices were selected by a nominat-
ing committee appointed annually by the then president of the Association. The
annual elections were conducted in the store during business hours as were the
meetings of the officers and of the Board of Directors. High executives of the
store sat in on meetings of the Board of Directors and occasionally were elected
as members of the Board The constitution made no provision for a meeting of
the general membership nor for the nomination of officers by the membership.
During these years it is clear that the Association was not a labor organization
within the meaning of Section 2 (5) of the Act but limited its activities to wel-
fare and health work among the employees of this store. Benefits were paid
to the sick and injured employees and the Association operated a medical de-
partment on the tenth floor of the store where a doctor and a registered nurse
administered to the health of the employees and, occasionally, to the customers of
the store. The respondent provided the offices for the Association without charge.
' Kresge Department Store is the trade name under which Kiesge originally operated
this store.
6 The anachronism of mentioning these corporate offices probably resulted from careless
copying of the prior L S Plaut and Company Employees Association constitution when
such officers existed
KRESGE DEPARTMENT STORE, 223
The above findings are made solely for the purpose of giving the background
of the Association, for it is clear that this organization was not transformed
into a labor organization until June 7, 1937.
2. The Association in 1937 and subsequent years
Early in 1937 nationally affiliated unions attempted to secure membership
among employees of the respondent by handing out literature and by personal
solicitation. According to witness David Scott, who was to become the president
of the Association for the year 1937-1938, this solicitation caused "a lot of unrest
in the store."
In accordance with the terms of the Association's constitution, the nominating
committee appointed by the then president on February 24, 1937, made the cus-
tomary nomination of two individual employees for each office of the Association.
As was then customary, this list of candidates was submitted by the Associa-
tion to the general superintendent of the respondent and approved by him prior
to the election
This election was held early in April 1937, during a working day. Secret ballots
were distributed to all the members of the Association in the store by either the
division superintendent or the floor director of the Association These ballots
were marked by the employees when they had time, returned to the person who
distributed them and then taken to the medical department on the tenth floor of
the store where they were counted. The polls remained open from 9 a. in. to 3
p. in. All members of the Association, including Hugh E Barnes, respondent's
general manager, and other top store executives, were entitled to vote The
result of this election was that David Franklin Scott, it division superintendent,
was elected the president of the Association for the ensuing year 7
Promptly after his elevation of office, Scott decided to see if the Association
"could do something and stop this [unrest caused by the organizational drives of
outside unions] and have our own union, as it should be, without the other
[unions]." After talking the matter over with a few of the other officers, they
consulted Samuel Dreskin of the firm of Dreskin and Dreskin. attorneys for the
6In this particular instance the secretary of the Association who presented the list
of candidates to the general superintendent for approval happened also to be the secretary
of that-same general superintendent
7 A division superintendent ( D S ) in the respondent 's store is more commonly known
among customers of department stores as a floor walker Respondent employs at least
19 D S in its Newark store. Each D S. is in charge of a certain geographical section
of the stoie in which he has limited supervision over the sales people and takes care of
customers ' complaints and inquiries The D . S. has authority to set the lunch periods.
and shopping peiiods of the sales people, to transfer them from one department to another
in emergencies, reprimand them for improper conduct and generally supervise their activity.
In cases of serious infractions of the respondent 's rules, the D S. reports the sales person
to the proper higher authorities for proper action He has no authority to employ or
discharge sales personnel as, under the present organization of the store , the first is under
the jurisdiction of the Personnel Depailment and the second is under the jurisdiction of
it special committee set up for that purpose. His recommendations on these questions and
on such matters as increases in salary would naturally be considered but would not he
determinative Under the present si stem nil sales people are "rated" by the buyei of their
department twice a Near and considered by the above-mentioned committee for wage in-
creases, promotions , etc A D S does not rate the employees under his supervision and,
at most, would have only an indirect recommendation through the buyer rating A D S.
is paid a straight salary considerably higher than that of an ordinary sales person who
also i eceives some commission on the goods sold It is clear that a 1). S is a minor
supervisor with limited authority but no policy-making functions For the purpose of
this report the undersigned will find that the D S is not such a supervisory official of
the respondent as should necessarily be excluded from the proper unit of store employees.
224 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Association.' Acting upon the advice of Samuel Dreskin this group prepaiecl
the necessary amendments to the Association constitution to permit it to bargain
with the respondent.
On June 24, 1947, President Scott presented these proposed amendments to
the Association constitution, which would authorize the Association to bargain
with the respondent on behalf of the employees, to the Board of Directors at
a special meeting held in the store He urged the speedy adoption of the
amendments. According to the uncontradicted evidence some of the Board's
members feared that by adopting the amendments they would be doing "some-
thing against the store or against Mr Barnes." Allliough Scott explained that
the Association belonged to the employees and that they could do anything they
wanted to with it, the dii ectors voted nine to one against the proposed amend-
ments. Just before the meeting recessed, it was suggested that a committee of
five call upon Barnes "to discuss the matter with him."
Such a committee did call upon Bai nes that day or the follow ing day, showed
him the proposed amendments, and were told by him that "it was all right with
him." s
The next day, June 25, 1937, the recessed meeting of the Board of Directors
of the previous day was continued and the question of the amendment rein-
troduced by Scott. The committee which had waited on Barnes reported that
"it was favorable with Mr Barnes that we had a right to go ahead " While
there was still some objection to the proposed amendments, it was decided by
the Board to recommend to the membership the adoption of the amendments.
The vote on this occasion was 11 to 4 in favor of recommending the adoption
of the amendments.
Copies of the proposed amendments were posted in the employees' entrance to
the store, for a period of about 10 days. On June 7, 1937, the D. S. and the
floor directors of the Association passed out ballots to each of the members of
the Association so that they could vote for or against the proposed amendments.
Under the existing provisions of the constitution, Barnes and the other major
executives of the respondent were still eligible to vote. According to the Asso-
8 Dreskin and Dreskin had been for some years attorneys for the Association Also since
before 1937 and continuing until 1946, when agents of the Board called attention to the
dual role being played, Dreskin and Dreskin represented the respondent in numerous col-
lection actions At the hearing Samuel Dreskm, the senior partner of the firm, stated
that this woik had been done by his junior partner and brother, Leon Dreskin, in the
firm's name but for his own account However, the June 1944 issue of the K. D S News
the respondent's store magazine, contains the following announcement "For the benefit
of members of our mutual aid Association, we maintain, without tee, a legal depaitment
in charge of Samuel Dreskin and Leon Dreskin, counselors at law of Newark " The June
1945 issue of Kiesge-Newark News , the then store publication, also contains a picture
of the newly elected officers of the Association, with Leon Dreskin present and identified
in the caption as "Attorney for the Association " Both Dreskins represented the Associa-
tion at the present hearing
9 Barnes testified that he had no recollection of this committee waiting upon him between
the two parts of the Board of Director's meeting. He testified that he only had
"grapevine information" regarding the attempt to amend the constitution. Scott's testi-
mony further indicated that Barnes had made it similar statement to the Board of Directors
at one of their meetings about this time Barnes did not contradict Scott on this latter
point . Without intending to impugn Barnes ' truthfulness in any way, for the undersigned
believed him to be an honest witness , the undersigned believes that Barnes was honestly
mistaken in this matter , peihaps not recognizing the group which called on him to be a
committee , and finds the facts in accordance with the testimony of Scott.
KRESGE DEPARTMENT STORE 225
elation's minutes 1,400 employees voted in favor of the amendments while 77
voted against them l0
The adoption of these amendments created several changes in the Association.
The name was changed to The Kresge Department Store Co-Workers Mutual
Aid Association and the purposes of the Association increased from those quoted
above by the addition of the following language: "To deal with the co-workers'
employer, Kresge Department Store, concerning grievances, labor disputes, wages,
rates of pay, hours of gunployment, conditions of work, and generally with respect
to all matters concerning the welfare of the co-workers "
The provision on qualifications for membership in the Association was amended
to read as follows : "Every regular co-worker of the Kresge Department Store,
(part time or otherwise, but excluding however the executive officers of the com-
pany), shall become a member of the co-workers' Association by virtue of his
employment provided he shall pass a satisfactory physical examination of the
Health Department
The provision of the constitution making ceitinn company executives "honor-
ary members" of the Board of Directors of the Association was eliminated: Fur-
ther, while the old practice of nominating candidates for election as officers for the
ensuing year by a nominating committee appointed by the then president was con-
tinned, the constitution was amended to provide a method by which a person could
he nominated for office by petition. There were some few other minor changes
made by the amendment
Soon after the vote had been counted, a grievance committee appointed by
the Association called upon General \Ianagei Barnes, showed him the result of the
vote on the amendment and asked for recognition of the Association as the bar-
gaining agent for the co-workers Barnes orally granted this request.
Thereafter things went on vei y much as they had prior to the vote on the aniend-
meuts Dlembership in the Association remained a condition of employment at
the respondent's store. Respondent's employment application form contained the
following statement which the applicant was required to sign before being accepted
for employment "In consideration of employment by Kresge Department Store,
I agree to confoinn to their rules and regulations Also to enroll as a member
of the Kresge Department Store Employee Mutual Aid Association, subject to its
constitution and by-laws This agreement can be terminated at any time at the
action of either party, and wages will be paid pro rata for services rendered."
This was a carry-over from the welfare days of the Association So far as the
record shows, the Association did not ever even request the respondent for such a
closed shop In tact, the major store executives were eligible to vote on the 1937
amendment which continued this closed shop practice. This condition of em-
ployment remained in effect until 1941 when General Manager Barnes "o•deaed"
it changed because, as lie testified, lie "did not want any closed shop idea to get
10 Barnes conducted a meeting of all the store employees on the main floor of the store on
the morning of July 7, 1937, before the store opened to the public and prior to the vote on
the amendments There was testimony given in regard to Baines' speech made at this
meeting which, if believed, would show direct coercion on the employees to vote in favor
of the amendments. There was also completely contradictory testimony to the effect that
no such statements were ever made The undersigned is unable to reconcile this conflicting
testimony or to resolve the conflict As this testimony is not determinative of the issues
here, the undersigned is making no finding in regard to this meeting and deciding this case
without regard to this testimony
226 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
into our organization."" So far as the record shows, the Association made no
protest over the loss of this highly valuable prerogative by the unilateral action
,of the respondent's general manager. As a result of this order, the Personnel
Department eliminated from its employment application form the statement
quoted above.
Another result of this order was a drop in the membership of the Association
together with a resulting loss of revenue. To remedy the first, Harry Jenkins,
the Association treasurer who had been reelected annually for the better part of
30 years, spent about 3 weeks' time approaching all the employees in the store to
have them execute membership applications and pay-roll deduction authorizations,
in favor of the Association. He succeeded in securing such signed cards from
almost every employee in the store. Although part of Jenkins' salary at this
time was paid by the respondent and although it knew that such a drive was going
on during store hours, the respondent made no objection to this membership drive
in the store during working hours.
In order to offset the loss of revenue, Mrs. Dickinson, the Association nurse
and member of the Board of Directors of the Association by reason of a constitu-
tional provision and whose salary had always been paid by the respondent,12 se-
cured the oral agreement of respondent's general manager that the respondent
would pay to the Association 50 cents for each treatment given by the Association
to a customer of the store or to a non-member employee. The Association made
this request of the respondent because their funds were running low and because
membership in the Association had been made a voluntary matter for the
employee. The receipt for these charges amounted to about $1,000 per year for
1941 and 1942.
Again in 1943 the funds of the Association began to run low. On this occasion
the respondent agreed that the Association charge for each treatment should be
$1 and further agreed to pay $1 for each physical examination of prospective
store employees who did not later become members of the Association. By store
rule each prospective employee had to undergo a physical examination prior to
employment by the respondent. These examinations were conducted by the
doctor for the Association. At the conclusion of each physical examination of
such prospective employee, the employee was given a membership application
card for the Association and asked to become a member thereof When such
employee did not avail himself of the opportunity of becoming a member of the
Association, the Association was allowed to charge the respondent $1 for his
physical examination As the result of these changes in the rate the respondent
paid the Association $1,807 in 1943 and $2,569 in 1944.
The same process was repeated in 1945 at a time when Mrs Dickinson testified
that there "was an awful lot of union activity" and the Association felt it neces-
sary to engage counsel which would entail fees running "into quite a lot of
money." " After refusing a suggested "welfare fund" based upon the percentage
of the salary paid, the respondent agreed to pay $3 for each treatment and each
examination instead of the $1 fee. Based on this new charge the respondent
11 Barnes testified that he ordered this change in 1937. Except for the testimony of
Barnes it was universally agreed by the witnesses that the change was ordered in 1941
Again the undersigned believes Barnes was honestly mistaken as to the date this change
was made
12 Mrs Dickinson had been a member of the Board for about 22 years, the first part of
which she served by reason of popular election and the latter part by reason of the consti-
tutional provision.
13 By this time the Board had begun its investigation of the unfair labor practices then
pending against the respondent.
KRESGE DEPARTMENT STORE 227
paid the Association the sum of $20,808 in 1945 and about $8,500 for the first 6
months of 1946.
For many years prior to 1937 and at all times subsequent thereto, the respond-
ent has provided the Association with several rooms on the tenth floor of the
respondent's store rent free. It is in these rooms that members of the Associa-
tion, customers, and non-Association employees have been treated and where the
Association has conducted its physical examinations of the prospective employees.
Both the respondent and the Association keep files on the physical condition of
the employees in these rooms. All the physical equipment and medical supplies
there amounting to about $4,000 in value belongs to the Association. The staff
presently employed in the medical department consists of a doctor for a few
hours a day, a registered nurse (Mrs. Dickinson), and an assistant nurse and
a secretary as well as Harry Jenkins who assists Mrs. Dickinson. The doctor
is paid exclusively by the Association. Mrs. Dickinson is paid exclusively by
the store except that the Association reimburses her for any time she may spend
on Association business outside of store hours. The respondent pays the secretary
in the office. For several years the Association and the respondent each con-
tributed a portion of the salaries of both the assistant nurse and Jenkins but in
November 1943, the respondent agreed to, and did, assume both these salaries in
full. Part of the records kept by these employees are for the respondent and
part for the Association.
For years the medical work clone in this medical department has been the
treatment of employees who are members of the Association and of customers
as well as the giving of physical examinations for the new employees. For all
these things the respondent pays the Association. In recent years the medical
department has only treated non-member employees in the event of an emer-
gency or else as an inducement for such employee to join the Association. In
194,5 the medical department also began giving semi-annual examinations to
those employees of the respondent who handled food as required by State law
and taking care of the medical end of the respondent's liability cases. The
Association bills the respondent for these services as performed. The food
handlers' examinations alone increased the Aseociation's income over $1,000
per year.
Witnesses for the Association as -well. as witnesses for the respondent each
referred to this set-up as "our medical department" meaning that of the Asso-
ciation or of the respondent respectively. The personnel director of the re-
spondent gave the best description of the relationship existing when he described
the medical department as a "cooperative undertaking." n The respondent
has always worked very closely with the Association welfare matters. In
numerous instances when the benefit fund of the Association has been exhausted
in the case of an injured employee, the respondent has contributed money
toward the welfare of that employee. On October 18, 1943, the respondent
offered to "take over" the medical department but the arbitration board of
the Association 16 refused the offer, according to the Association's minutes,
"because it is the only wedge the Mutual Aid has to stand on when getting new
members." When Jenkins solicited new members in 1941 and again in 1943
when membership fell off again, he laid great stress on the medical and welfare
features of the Association.
'" The existence of such a medical department in the store reduces the respondent's
insurance premiums by at least $ 8,000 per year and has proved of great value m the
recruitment of new employees.
15 The arbitration board of the Association is in reality its grievance committee
228 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
In fact, the only selling point the Association had with which to secure mem-
bers was the medical and the welfare features for until January 1, 1944, its
only asset as a labor organization was the oral recognition granted to it in 1937
following the vote on the amendments to the constitution. On January 1, 1944,
the Association received the following letter over the signature of Barnes :
In accordance with your request, we wish to advise that we recognize
your association, as we have for many years, as the representative of
the co-workers of the Kresge Department Store, for the year 1944, but only
as set forth in Article I of your constitution (copies of which you have fur-
nished us for our files), the copy of which is attached hereto, except for
those co-workers (more specifically listed below) who are members of
and represented by, various A. F. of L. Locals ; electricians, painters,
finishers, carpenters, warehousemen, building service employees, firemen,
engineers.
This arrangement was confirmed by another letter from the respondent
over the signature of the general manager dated December 15, 1944, covering the
year 1945.
Although the Association has been recognized by the respondent since 1937,
these parties have yet to execute their, first written agreement The Associa-
tion has presented grievances to the respondent and has secured some changes
in the hours and rates of pay for the employees These changes have never been
embodied in a bilateral agreement, but, when in writing at all, are contained in
a letter to the Association over the general manager's signature only. While
the Association has presented grievances to management, there is still no written
statement of any agreed grievance procedure Barnes has requested that the
indiv-dual employees present their own grievances to him or to his personnel
director in person, and only bring in the Association in the event that a satis-
factory settlement could not be reached between the individuals involved. While
not enthusiastic about this procedure, the Association has acquiesced therein.
Until about 1943 all meetings of the Association's officers, Board of Directors,
and arbitration board have been held on the respondent's premises furnished
them by the respondent without cost to the Association. The Board of Direc-
tors' meetings aie held monthly during working hours and last for a period
varying from a few minutes to a few hours. The respondent has never made
any deduction of pay for the time spent in any such meeting of the Association.
The Association pays for this time only when an officer happens to attend such
a meeting on his day off. Beginning in 1943 the Association meetings have
been held in the YMCA building which does not belong to the respondent How-
ever, the respondent continued to excuse the employees from work and to pay
for the time thus spent The respondent had also permitted the Association
to hold a few mass meetings on the respondent's property without charge.10
The respondent has assisted the Association in other particulars. It has fur-
nished the Association free publicity in its house magazine where pictures of the
Association activities frequently appear. On at least one occasion a solicitation
for members detailing the medical, welfare, and legal services rendered to the
employees by the Association was enclosed in the pay envelope for each employee
by the respondent at the request of the Association. And the respondent has
always included a laudatory article on the benefits of the Association in its man-
ual which the personnel department gives to each new employee The first
paragraph of this article reads as follows:
16 The respondent grants this privilege to various other groups in Newark.
KRESGE DEPARTMENT STORE
Mutual Aid Association
229
This is a worth -while organization-operated for your benefit-and de-
serves your support-and is your bargaining agent with the management.
(Emphasis as in original)
The Association has continued to conduct its annual election of officers as
well as its balloting on amendments to the constitution in the store in the same
general fashion as the 1937 elections described above were conducted . However,
it appears that since 1937 there is no longer a custom to have the slate of candi-
dates for Association office approved by the respondent. Nor since the amend-
ment of 1937 are the major executives of the respondent allowed to be members
of the Association or to vote . The definition of "executive officers of the com-,
piny" who are excluded from the Association , is omitted from the constitution,
and remains equally vague in practical application , it would appear from the
testimony of the present president of the Association . At least the major execu-
tives who sit on the Operating Board " are excluded while minor supervisory
employees such as division superintendents , buyers, assistant buyers, department
heads such as the credit manager who was the Association president in 1942-3
and the head of the auditing department , retained their membership and voting
privileges in the Association.
One other financial transaction between the parties must be mentioned here.
During a 6 -month period in 1943 the Association borrowed from the respondent
an aggregate sum of $5,02150 . The books of the Association show the repayment
of $4,021 50 to the respondent within the period of 4 months after the last loan
and on May 3, 1946, the repayment of $1,000 This last $1,000 payment was
merely a bookkeeping transaction as no money changed hands . Jenkins, the
treasurer of the Association , suddenly in 1946 called the indebtedness to the at-
tention of the Board of Directors and suggested its repayment . In conference
with the respondent on this matter at a time when the respondent ' s auditor was
unable to find this account on his books, it was decided that the Association
should "write the $1,000 off" its books and that closed the transaction . Although
Jenkins testified that he was positive that his accounts were correct despite
the failure of the store auditors to locate the account , the respondent presented
no evidence as to the actual repayment of the $1,000. The undersigned believes,
and therefore finds , that the respondent made a $1,000 gift to the Association on
this transaction.18
Sometime about October 1945, the testimony shows that the Association pre-
sented some sort of a proposed contract to the respondent . 18 Thereafter there
were several negotiating meetings on this proposal . The evidence indicates
there has been agreement on some issues but not on others. No agreement had
been executed prior to January 9, 1946, and , indeed, none had been executed
to the date of the hearing.
On January 9, 1946, the respondent wrote the Association that the Board's
agents investigating the charges of unfair labor practices against the respondent
had questioned certain features in the organization and activities of the As-
sociation and, that , while emphatically denying that these matters constituted
unfair labor practices , the respondent believed it "preferable to eliminate things
17 The respondent's highest echelon policy-making committee
is Recognizing that Jenkins does not purport to be a trained bookkeeper, the undersigned
would be more hesitant about this finding if the case hinged upon his testimony alone.
11 No copy of this proposed contract was introduced into evidence
788886-49-vol. 77-16
230 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
which would even lend color to a charge of unfair practices." The letter then
continued :
In view of the developments, Kresge-Newark will not be in a position to
consider any new collective bargaining agreement with your Association
unless the following points, which may be objectionable from the standpoint
of the National Labor Relations Board and which have come to my at-
tention as a result of discussions and correspondence with the Board, are
eliminated.
There followed four points which were to be eliminated. The first two covered
the question of the payment of rent to the respondent and reimbursement by
the respondent "on a reasonable basis for services rendered it by the Association."
The third point raised was the elimination of executives from membership in the
Association. In this connection the job qualifications of "executives, department
heads, division superintendents, buyers, secretaries of executives, nurse and
social worker" as well as employees of leased departments were specifically men-
tioned, in which connection the letter stated that "whether the groups men-
tioned shall be eligible for health benefits is for the Association to decide." The
fourth point read as follows :
(4) In the past, as you know, Dreskin and Dreskin have represented
Kresge-Newark in connection with the collection of certain accounts and
they have also represented your Association. It has been suggested that this
relationship may be a basis for influence on collective bargaining. I do
not think it would be, but to avoid any possible criticism the relationship
between Dreskin and Dreskin and Kresge-Newark will be terminated.
Thus the firm of Dreskin and Dreskin lost a client.
Pour days thereafter the parties executed their first bilateral agreement which
read as follows :
It is hereby stipulated and agreed by and between Kresge-Newark and
Kresge Department Store Co-Workers' Mutual Aid Association, Inc., that the
present agreement between the parties entered and signed December 31, 194.5,
shall remain in full force and effect during the pendency of negotiations and
until a new agreement is reached and executed. (Signed) Kresge-Newark by
Hugh E. Barnes Kresge-Department Store Co-Workers' Mutual Aid Asso-
ciation, Inc. by Charles W Jacobus, President"
It is interesting to note that the Association passed further amendments to
its constitution early in the year 1946 One of these amendments was to divide
the Association into two separate units; first, the bargaining division and second,
the welfare division This is in line with the suggestion contained in point three
of the letter of January 9 from the respondent. A long discussion of these amend-
ments does not seem warranted here other than to note that upon payment of the
same amount of dues a member is entitled under these new amendments to the
benefits of either of these two divisions or of both. '
Concluding findings
The complaint charges in substance that in 1937 the respondent initiated,
formed, sponsored and promoted the Association as a labor organization.
The evidence clearly shows that prior to 1937 the Mutual Aid Association was
solely a welfare organization for the respondent's employees, dominated by the
20 The "agreement" mentioned in the above document must necessarily refer to the
recognition of the Association by the respondent.
KRESGE DEPARTMENT STORE 231
respondent through its major store executives who were members of the Associa-
tion as well as honorary members of its Board of Directors, and assisted by the
respondent through a company-imposed compulsory membership for all its em-
ployees and by financial contribution such as gifts and free use of company fa-
cilities . If the Association had been a labor organization prior to 1937, which
it was not, it would clearly have fallen under the ban of-Section 8 (2) of the Act.
In April 1937, the very month the Supreme Court upheld the constitutionality of
the Act, the newly elected president of the Association whose candidacy for
office had been approved by the respondent, decided, of his own volition, so far as
the evidence shows, to transform this welfare organization into a labor organiza-
tion in order that the employees could have their own union and in order to quiet
the "unrest" among the employees caused by the organizing campaign then being
conducted by nationally affiliated unions. He and a few of his fellow officers as-
sisted by a firm of attorneys who at that same time were also representing the
respondent on other legal matters, as the Association officers well knew, and who
retained both organizations as clients until January 9; 1946, prepared the nec-
essary amendments to the constitution of the Association to transform it into a
labor organization while retaining its functions as a welfare organization.
When these proposed amendments.vere presented to the Board of Directors on
June 24, 1937, the Directors voted nine to one against their adoption because they
feared that, by doing otherwise, they would be doing something "against the
store or against [the general manager]." Before adjourning, the directors dis-
cussed the possibility of sending a committee to discuss the matter with the
general manager or to have the general manager attend a special meeting of the
Association.
A committee from the Board did wait on the general manager, showed Jilin
the proposed amendments and discussed the proposition with him. The general
manager, after looking over the proposed amendments, told them that the As-
sociation was the employees' organization, that they could do as they saw fit
about amending the constitution, and that "it was all right with him "
The following day, June 25, the Board of Directors continued their meeting
on the question of the amendment and, after the statement of the general manager
had either been reported by the committee or made by him in person to the
Board, it was decided by a vote of 11 to 4 to reverse their stand of the previous
day and to submit the amendments to the membership It is clear that without
the respondent's approval of the move, the amendments would never have been
submitted to a vote and the Association would have remained a welfare or-
ganization.
So, while respondent's major executives remained full-fledged members of
the Association and honorary members of its Board of Directors, the amendment
was submitted to the entire membership for approval or rejection in a vote
conducted on the respondent's property during working hours Even assuming
that knowledge of the general manager's approval of the amendments had been
strictly limited to the membership of the Board of Directors, it would seem
that the respondent's approval of the holding of the vote on acceptance or re-
jection of the amendments on the respondent's time and property would con-
stitute a sufficient endorsement of them to insure their passage. The vote of
1400 in favor of the amendments to 77 against indicates the truth of this
statement.
Occasionally the courts have held that it is possible for an organization
which has been company dominated to become free and independent. These
courts, though, have unanimously required that there be a sufficient cleavage or
232 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
hiatus between the new Wand the old organizations to insure that.the influences
of company domination and support have been completely dissipated as a factor
negating or restricting the employees' freedom of choice. They have also re-
quired a complete cessation of all company assistance thereafter These condi-
tions have not been fulfilled here.
It is therefore clear that the allegations of the complaint that in 1937 the
respondent initiated, formed, sponsored and prompted the Association as a
labor organization have been sustained by the evidence
The complaint also alleges in substance that the respondent from 1937 on
has assisted, dominated, contributed to the support of, and interfered with
the administration of the Mutual Aid Association by various enumerated means.
The evidence adduced at the hearing proved that the respondent continued until
1941 to make membership in the Association a condition of employment in its
store and checked off the dues of the employees for the Association. This
assistance was rendered by the respondent to the Association not as a result of
any agreement reached with the Association by collective bargaining but by the
respondent's own unilateral act. Practically nothing the respondent could have
done would have been of greater assistance to the Association than the above
Besides that, the respondent supplied the Association with premises without
charge, all Association meetings prior to 1943 and elections to date were held
on the respondent's time and property, Association directors were paid by the
respondent for time spent on Association business which, incidentally, was all
transacted on Company premises until 1943, and has paid the salary of various
persons on Association business such as the nurse, her assistant, and the Asso-
ciation treasurer Further financial aid was also given the Association as its
treasury became depleted, through the medium of paying the Association for
various medical services rendered on the respondent's own property by employees
paid by the respondent. The size of the fee decided upon and the method of
deciding on such payment indicates that issue was decided on the basis of the
need of the Association and the activity of the outside unions at the time rather
than on the type of service rendered Prior to 1041 the very medical services foi
which payment was made thereafter had been paid for by the dues collected
for the Association. In 1945, when it became necessary for the Association to
employ legal counsel and at a time when there was a great deal of outside union
activity, those fees were increased 300 percent and the total contribution to the
Association increased from about $2500 per year to over $20,000
Still further, invaluable aid and assistance was rendered to the Association
by the respondent's oral recognition of the Association as the bargaining agent
for the employees based upon the result of a vote of the employees at a time when
the respondent itself had made membership in the Association compulsory
Under no condition could this vote have been considered as constituting the free
choice of the employees in selecting the Association as their own bargaining
agent. This type of assistance which also prevented the entry of any other labor
organization on the scene was continued by written letters of recognition of the
Association dated January 1, 1944, December 15, 1944, and January 13, 1946
As the result of the respondent's domination and assistance, the Association
has never had a written, signed bargaining agreement with the respondent
exclusive of recognition. The susceptibility of the Association to the respondent's
suggestion is also evidenced in the 1946 amendment when the Association was
divided into the two sections, bargaining and welfare.
On the entire record, therefore, the undersigned finds that the respondents
initiated, formed, sponsored and promoted the Association as a labor orgapiza-
KRESGE DEPARTMENT STORE 233
tion and have assisted, dominated, contributed to the support of and interfered
with the administration of said Association, and have thereby interfered with,
restrained and coerced its employees in the exercise of the rights guaranteed in
Section 7 of the Act.
IV TIIE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE
The activities of the respondents set forth in Section III, above, occurring in
connection with the operations of the respondents described in Section I, above,
have a close, intimate, and substantial relation to trade, traffic, and commerce
among the several States, and tend to lead to labor disputes burdening and
obstructing commerce and the free flow thereof.
V. THE REMEDY
Having found that the respondents have engaged in certain unfair labor prac-
tices affecting commerce, the undersigned will recommend that they cease and
desist therefrom and take certain affirmative action which the undersigned finds
necessary to effectuate the policies of the Act.
The undersigned has found that the respondents have dominated and inter-
fered with the formation and administration of the Association and have con-
tributed financial and other support to it. Also the undersigned has found that
the present existence of the Association and its continued recognition constitutes
a continuing obstacle to the exercise by the employees of the rights guaranteed
them under the Act. Therefore, in order to effectuate the policies of the Act,
and to free the employees from the effects of the respondents' unfair labor prac-
tices, the undersigned will recommend that the respondents withdraw all recog-
nition from the Association as the representative of any of the respondents'
employees for the purpose of dealing with the respondents concei ning grievances,
labor disputes, wages, rates of pay, hours of employment, and conditions of
employment, and completely disestablish it as such representative
The findings above extending as they do over the whole period of the existence
of the Act disclose a determination on the part of the respondents to engage in
persistent efforts, by a variety of methods, to continue to prevent and to defeat
all attempts at self-organization by its employees. Because of the respondents'
unlawful conduct and the underlying purpose thereof, the undersigned is con-
vinced that the unfair labor practices committed by the respondent are inti-
mately related to the other proscribed unfair labor practices and that the danger
of their commission in the future is to be anticipated from the respondents' long
course of conduct in the past. The preventive purpose of the Act will be thwarted
unless the recommended order is co-extensive with the threat. In order, there-
fore, to make effective the interdependent guarantees of Section 7 of the Act
to prevent a recurrence of unfair labor practices thereby minimizing industrial
strife burdening and obstructing commerce and thus effectuate the policies of the
Act, it will be recommended that the respondents be ordered to cease and desist
from in any manner infringing upon the rights guaranteed in Section 7 of the Act.
The undersigned will not recommend that the respondents make restitution to
their employees for the dues they illegally collected from the employees and
turned over to the Association between 1937 and 1941 only because, while such
collections, made withoufthe authorization from the individual employees for a
compajiy-dominated labor organization such as the Association, should ordinarily
be ordered refunded, in this case the employees were given medical and welfare
benefits in return for such money. Nor will the undersigned order restitution of
234 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
the dues so collected since 1941 and to date for the same reason and the additional
reason that such deductions were made upon the authorization of the individual
employees.
Upon the basis of the above findings of fact and the entire record in the case,
the undersigned makes the following:
CONCLUSIONS OF LAW
1. Northern New Jersey Department Store Employees Local 950, AFL ; Local
Joint Executive Board of Essex County, AFL ; United Retail and Department Store
Employees of New Jersey, Local 108, affiliated with United Retail, Wholesale and
Department Store Employees of America, CIO; Kresge Department Store Co-
Workers' Mutual Aid Association (also known as the Kresge-Newark Co-Workers'
Association, Inc, and formerly known as L. S. Plant and Company Employees
Mutual Aid Association) are labor organizations, within the meaning of Section
2 (5) of the Act.
2. By dominating and interfering with the formation and administration of
The Kresge Department Store Co-Workers' Mutual Aid Association and by con-
tributing financial and other support to it, the respondents have engaged in, and
are engaging in, unfair labor practices within the meaning of Section 8 (2)
of the Act.
3. By interfering with, restraining, and coercing their employees in the exercise
of the rights guaranteed in Section 7 of the Act, the respondents have engaged in,
and are engaging in, unfair labor practices within the meaning of Section 8 (1)
of the Act.
4. The aforesaid unfair labor practices are unfair labor practices affecting
commerce within the meaning of Section 2 (6) and (7) of the Act.
RECOMMENDATIONS
Upon the basis of the foregoing findings of fact and conclusions of law, the
undersigned recommends that Sebastian S. Kresge, individually and doing business
under the trade name and style of Kresge Department Store and Kresge-Newark,
and Kresge-Newark, Inc, Newark, New Jersey, their officers, agents, successors,
and assigns shall :
1. Cease and desist from :
(a) Dominating and interfering with the formation or administration of, or
contributing financial or other support to, The Kresge Department Store Co-
Workers' Mutual Aid Association, any successor thereto or any other labor
organization of their employees ;
(b) In any other manner interfering with, restraining, or coercing their em-
ployees in the exercise of the right to self-organization, to form, join, or assist
Northern New Jersey Department Store Employees Local 950, AFL, and Local
Joint Executive Board of Essex County, AFL, or United Retail and Department
Store Employees of New Jersey, Local 108, affiliated with United Retail, Wholesale
and Department Store Employees of America, CIO, or any other labor organiza-
tion, to bargain collectively through representatives of their own choosing, and to
engage in concerted activities for the purpose of collective bargaining or other
mutual aid or protection, as guaranteed in Section 7 of the Act.
2. Take the following affirmative action which the undersigned finds will
effectuate the policies of the Act:
(a) Withdraw all recognition from and completely disestablish the Kresge
Department Store Co-Workers' Mutual Aid Association, or any successor thereof,
as the representative of any of their employees for the purpose of dealing with the
KRESGE DEPARTMENT STORE 235
respondents concerning grievances, labor disputes, wages, rates of pay, hours of
employment, or other conditions of employment ;
(b) Post throughout their store at Newark, New Jersey, copies of the notice
attached to the Intermediate Report herein, marked "Appendix A." Copies of
said notice, to be furnished by the Regional Director for the Second Region, shall,
after being duly signed by the iespondents' representative, be posted by the
respondent immediately upon receipt thereof and maintained by it for sixty (60)
consecutive days thereafter in conspicuous places including all places where
notices to employees are customarily posted. Reasonable steps shall be taken
by the respondent to insure that said notices are not altered, defaced or covered
by any other material;
(c) File with the Regional Director for the Second Region on or before ten (10)
days from the date of the receipt of this Intermediate Report a report in writing
setting forth in detail the manner and form in which the respondents have
complied with the foregoing recommendations.
It is further recommended that unless on or before ten (10) days from the
receipt of this Intermediate Report, the respondent notifies said Regional Director
in writing that it will comply with the foregoing recommendations, the National
Labor Relations Board issue an order requiring the respondent to take the action
aforesaid.
As provided in Section 203 39 of the Rules and Regulations of the National
Labor Relations Board, Series 4, effective September 11, 1946, any party or counsel
for the Board may, within fifteen (15) clays from the (late of service of the order
transferring the case to the Board, pursuant to Section 203 38 of said Rules and
Regulations, file with the Board, Rochambeau Building, Washington 25, D. C., an
original and four copies of a statement in writing setting forth such exceptions
to the Intermediate Report or to any other part of the record or proceeding
(including rulings upon all motions or objections) as he relies upon, together with
the original and four copies of a brief in support thereof ;,and any party or counsel
for the Board may, within the same period, file an original and four copies of a
brief in support of the Intermediate Report. Immediately upon the filing of such
statement of exceptions and/or briefs, the party or counsel for the Board filing
the same shall serve a copy thereof upon each of the other parties and shall file a
copy with the Regional Director. Proof of service on the other parties of all
papers filed with the Board shall be promptly made as required by Section 203 65.
As further provided in said Section 203 39, should any party desire permission to
argue orally before the Board, request therefor must be made in writing to the
Board within ten (10) days from the date of service of the order transferring
the case to the Board.
THOMAS S. WILSON,
Trial Examiner.
Dated December 19, 1946.
APPENDIX A
NOTICE TO ALL EMPLOYEES
Pursuant to the recommendations of a Trial Examiner of the National Labor
Relations Board, and in order to effectuate the policies of the National Labor Rela-
tions Act, we hereby notify our employees that:
WE HEREBY DISESTABLISH The Kresge Department Store Co-Workers ' Mutual
Aid Association ( also known as Kresge -Newark Co -Workers' Association,
236 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Inc.) as the representative of any of our employees for the purpose of dealing
with us concerning grievances, labor disputes, wages, rates of pay, hours of
employment, or other conditions of employment, and we will not recognize
it or any successor thereto for any of the above purposes.
WE WILL NOT dominate or interfere with the formation or administration of
any labor organization or contribute financial or other support to it.
WE WILL NOT in any manner interfere with, restrain, or coerce our employ-
ees in the exercise of their right to self-organization, to form labor organiza-
tions, to join or assist Northern New Jersey Department Store Employees
Local 950, AFL, and Local Joint Executive Board of Essex County, AFL, or
United Retail and Department Store Employees of New Jersey, Local 108,
affiliated with United Retail, Wholesale and Department Store Employees of
America, CIO, or any other labor organization, to bargain collectively through
representatives of their own choosing, and to engage in concerted activities
for the purpose of collective bargaining or other mutual aid or protection.
All our employees are free to become or remain members of this union, or
any other labor organization.
Dated --------------------
SEBASTIAN S. KRESGE,
Employer.
By --------------------------------------------
(Representative ) ( Title)
KRESGE-NEWARK, INC
Employer.
Dated -------------------- By --------------------------------------------
(Representative) (Title)
This notice must remain posted for 60 days from the date hereof, and must not
be altered, defaced, or covered by any other material.
0