McDonald's

National Labor Relations Board - Board Decisions

Aug 23, 1971

192 N.L.R.B. 878 (N.L.R.B. 1971)

878 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Walakamilo Corporation, d/b/a McDonald 's and Ho-
tel, Restaurant Employees & Bartenders' Union,
Local S, AFL-CIO,' Petitioner
Moanalua Bay Corporation , d/b/a McDonald's and
ILWU, Local 142,2 Petitioner. Cases 37-RC-1565
and 37-RC-1573
August 23, 1971
DECISION ON REVIEW
BY CHAIRMAN MILLER AND MEMBERS
FANNING AND KENNEDY
On September 2, 1970, the Regional Director for
Region 20 issued a Decision, Order, and Direction of
Election in the above-entitled proceeding, inter alia,
finding inappropriate petitions seeking single-restau-
rant units of employees at two of the Employer's
restaurants on the island of Oahu in the State of
Hawaii.3 Thereafter, Local 5 and Local 142 filed
timely requests for review of the Regional Director's
decision on the grounds that in finding the units
petitioned for inappropriate he departed from pre-
cedent and made erroneous findings of fact. The
Employer filed opposition to the request for review.
By telegraphic Order dated October 1, 1970, the
National Labor Relations Board granted the Peti-
tioners' requests for review and remanded Cases
37-RC-1565 and 37-RC-1573 to the Regional
Director for further hearing, particularly for addi-
tional evidence as to the degree of temporary
interchange of employees among the Employer's
restaurants on the island of Oahu. On October 22
and 30, 1970, pursuant to such order, a further
hearing was held before Dennis R. MacCarthy,
Hearing Officer. The Hearing Officer's rulings made
at the reopened hearing are free from prejudicial
error and are hereby affirmed.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the
Board has delegated its powers in connection with
these cases to a three-member panel.
The Board has considered the record of the original
and reopened hearings with respect to the issues
under review, including the Employer's brief on
review.
"McDonald's" outlets provide a uniform type of
fast, inexpensive food service with a standardized
menu of limited selection. They are similar in
appearance and layout. By utilizing assembly line
1 Referred to herein as Local 5.
2 Referred to herein as Local 142.
3 The Regional Director has directed an election in Case 37 -RC-1592,
which had been consolidated with the cases herein . As the Board denied the
Employer's request for review of the Regional Director 's decision relating to
that case, it was severed herefrom for further proceedings.
techniques, they are able to give predictably fast
service. Operations manuals are provided and fol-
lowed. The restaurants involved herein are located
within a 15-mile radius of Honolulu. Representatives
of central management make regular daily visits.
Administration is centralized, while individual store
managers may hire employees, the director of
operations sets wages, grants promotions, discharges
employees,4 and is the final authority in grievance
adjustments. Like the Regional Director, we find that
the individual store managers exercise little discre-
tion other than to oversee the details of daily
operation such as supplies, sanitation, and sufficien-
cy of the work force.
The Regional Director has found systemwide
seniority, as well as common wages and benefits. The
reopened record indicates that the entire system has
an average employee complement of 245.5 Tempo-
rary transfers totaled 58, of which 23 were for store
openings. Uniformity of layout and methods of
operation would appear to make employees in the
various outlets readily interchangeable, and the
Employer has taken advantage of this circumstance
by making such transfers whenever necessary.
Based upon the lack of autonomy of individual
stores, the common working conditions shared by all
employees of the Oahu stores, the Employer's central
administration, the close geographic proximity of the
outlets, their close and regular supervision, and the
Employer's relatively frequent reliance upon tempo-
rary transfers, we find in accordance with the
Regional Director, whose Decision is attached in
pertinent part hereto, that the single-stand units
sought herein are inappropriate.6
His Decision with respect to Cases 37-RC-1565
and 1573 is hereby affirmed.
MEMBER FANNING, dissenting:
This is one of two similar cases in which my
colleagues are requiring employees of a nationwide
restaurant chain to select a bargaining representative
on a multistore basis. See also Twenty-First Century
Restaurant of Nostrand Avenue Corp., Licensee of
McDonald's Corporation, 192 NLRB No. 103, and my
dissent therein.
Here the majority is affirming a decision from the
Region that emphasizes "numerous temporary
transfers"-not actually discussed by the Regional
Director, the record testimony being in general
terms-among the five McDonald franchise restau-
rants located within a 15-mile radius on the island of
Oahu, and "the exercise of little discretion" by store
4 As stated by our dissenting colleague, managers may discharge
employees for pilferage and insubordination . However, if grievances arise,
these are received by the director of operations.
5 Figures supplied are for a period from April 22, 1969, to October 22,
1970.
e See cases cited in Regional Director's Decision.
192 NLRB No. 102
McDONALD'S
managers in day-to-day operations. On both scores,
however, it seems clear to me that the Regional
Director should be reversed under Sav-On Drugs,
Inc, 138-NLRB 1032; Davis Cafeteria, 160 NLRB
1141; Haag Drug, Company, 169 NLRB 877; and
similar pertinent cases.
First : Employee interchange is minimal, less than 1
percent per month. This is what we have there when
the 35 temporary transfers during an 18-month
period, -gleaned from, the testimony at the reopened
hearing,. are compared with a total-employee comple-
ment of approximately 345.7
Second: Store managers who admittedly do all
hiring, as,, well as, discharging,, on two important
grounds insubordination and,pilferage--are, under
existing criteria , surely acting autonomously ,-in the
crucial area of labor relations.8 My colleagues, affirm
a decision in which undue importance is attached to
an operations manual,rdescribing--as such manuals
can be expected to do--precisely-how these fran-
chised restaurants are to be operated and requiring
approval from higher management for deviation
from the manual. This arrangement of course tends
to, guarantee uniform. appearance of the facility as
well as, uniform service and equality to the -public,
and is, thus a matter of great importance to the
franchisor, but it does not deprive the store manager
of meaningful day-to-day autonomy, and it does not
necessarily confer upon the employees-who are
hired locally, and for all practical purposes can be
discharged locally, and who seldom go to another
location except, on,a temporary basis for a new store
opening -a community ' of interest, with employees
hired, directed, and discharged 5, 10, 15, or more
miles away.
For the reasons here stated, I do not see in this
case-under existing precedent-need to deny sin-
gle-store choice of a bargaining representative.9
Accordingly, I would reverse the Regional Director.
DECISION , ORDER, AND DIRECTION
OF ELECTIONS
All McDonald's Drive-In Restaurants in the State
of Hawaii are operated under a franchise agreement
between Maurice Sullivan and McDonald's Drive-In
Restaurants, Inc. At present there are five restau-
rants on the Island of Oahu and one on the Island of
I My colleagues prefer another approach. They take the "average-
employment complement of 245 and contrast it with the total instances of
interchange--during an 18-month period, as their footnote indicates. They
attempt no percentage . However, as there are only 35 instances of normal
temporary interchange (23 of the 58 being abnormal in type, such as those
incident to new store openings), there are at most 2 instances per month, as
an average. Translated into a percentage , this is less than 1 percent per month
Thus percentagewise my colleagues and I are in agreement . However, when
it comes to weighing the importance of this degree of interchange with
respect to the single-store unit issue, we are in marked disagreement. To
879
Hawaii; each is separately incorporated. -Hawaii Loa
Ridge Corporation is the service company for,all of
the McDonald's-Drive-In,Restaurants^in(`the State of
Hawaii . In addition to supplying them-with various
products, it provides. them with operating, adminis-
trative and management services. Allsevencorpora-
tions have common stockholders, officers;,and direc-
tors. Phillip Morrison, director of operations, for,the
service corporation,— is responsible,-for,the overall
operations of all seven corporations, including labor
relations -policies. He personally. visits each of the
Honolulu restaurants two or, three.times_ a week, and
the restaurant located on the Island of Hawaiionce a
week. He has one- assistant, an area-supervisor, Twho
visits each restaurant ,on. a daily, basis. Each restau-
rant has a manager and an-assistant manager, While
managers are hired and trained. by Morrison, "the
restaurant employees are hired and trained by, each
manager. All employees at each--of,the,six-restaurants
receive the same wages and -employees-benefits. All
promotions, other' than automatic promotions are
granted personally by Morrison, Seniority-is comput-
ed on a state-wide, basis. Morrison sets the vacation
schedule for all, restaurants. Within the lasly_ear and
a ,half since McDonald's began operations in--the
State of Hawaii„ there have been two_, or three
permanent transfers and numerous=temporary trans-
fers between the five, restaurants,, located -on_ the
Island of Oahu, which are situated;,within, a fifteen
mile radius. Although: the managers of each restau-
rant hire employees, they have,authorityyto-discharge
employees only ,f©r, gross insubordtion-pr pilfer-
age. All, other discharges are handled -personally by
Morrison. The managers are given: , an :operations
manual which describes exactly how each restaurant
is to be operated. Changes regarding the basic day-
to-day operations cannot be made without the
express approval of Morrison. Thus, it is clear that
the managers exercise little discretion in the day-to-
day operations.
In Case 37-RC-1565, the Petitioner, Hotel, Restau-
rant Employees & Bartenders' Union, Local 5,
AFL-CIO, herein called Local 5, and the Intervenor,
ILWU Local 142, herein called ILWU, seek a unit
consisting of all employees employed by Waiakamilo
Corporation at the McDonald's Drive-In Restaurant
located on Dillingham Boulevard in Honolulu, on
the Island of Oahu. In Case 37-RC-1573, the ILWU
them it constitutes "relatively frequent reliance upon temporary transfers.-
At what point, may I ask , does reliance become Infrequent" or "minimal"?
9 Store managers , according to my colleagues, exercise little discretion
other than to oversee the details of daily operation such as supplies,
sanitation, "and sufficiency of the work force." Surely the words quoted are
the fewest possible to describe so much. See my dissent in Twenty-First
Century emphasizing the judgment and initiative implicit in providing a
steady , efficient, and obedient work force for an operation of this sort.
9 See also my dissent in the Twenty-First Century case referred to above.
880 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
and : Local- 5 seek a ,unit of all employees employed by
the Moanalua Bay Corporation at the McDonald's
-Drive-Inr Restaurant located- on Kapiolani Boule-
vard, Honolulu, on, the Island of Oahu. In, Case
37-RC-1592, ILWU and Local- 5 seek a unit of • all
employees employed :by "the:Ahaine Corporation at
the McDonald's Drive-In -Restaurant located at
Kailua-Kona on the Island of Hawaii.
The Employer contends 'that ° either - a single
statewide unit, or "tha t units which are islandwide ;in
scope - are appropriate,' and that single-store units
would unduly fragmentize an otherwise homogenous
business operation.
In Sav-On Drugs, Inc., 138 `NLRB 1032, the Board
extended ' its policy, regarding -multiplant enterprises
to` retail` chain operations. In so doing, the Board
stated that it would7no--longer rely solely upon the
administrative grouping of the -chain employer,
'rather it would carefully consider all of , the -circum-
stances= of each-,,case, including . geographic-proximity,
interchanges :'of employees and bargaining history.
In the present case the evidence discloses that the
Employer's operations 'are, highly, integrated. As
noted- above, -withtthe exception of the one restaurant
located- on the Island of Hawaii ;, the other restaurants
are all, located within a' fifteen mile radius in,the city
of" Honolulu . Al ' employees receive identical wages
and other -employee -benefits . Significantly;' there
exists substantial interchange of employees between
then five -Oahu restaurants . -The-individual managers
of each' restaurant exercise little discretion, and the
labor relations and store policies-are administered by
the -director of - 'operations . and 'his' assistant.
In= support, of, its ,contention that single restaurant
units are appropriate , Local 5^argues.:that,the ;Board',s
decision in- Davis Cafeteria, 160 = NLRB 1141, is
dispositive^,of this case . However, a,close examina-
tion- reveals ° significant factual differences which
compel a contrary conclusion . Thus, unlike ; the
instant case, in Davis there was no interchange-of
`employees between the various " locations ,- nor, was
there 'multilocation seniority) The managers inDavis
exercised considerable autonomy with -regard to
hiring, firing, disciplining and granting of vacations
to` employees. Here , the manager's discretionin these
areas is greatly limited,' e.g., the _ manager - can
discharge an employee only - on - two grounds, and
they, do not schedule vacations. Again, unlike Davis,
the service corporatioin 'officialsvisit each= location-16n
a`daily basis.
-In lview. -'of all of the foregoing and' the, entire
record , it is concluded thafa`unit encompassing all
McDonald's- Drive-In Restaurants' located'- on the
Island of Oahu is. appropriate, and that the individu-
al 'units petitioned for-`in Cases 37-RC-1565 and
37-RC-1573 are inappropriate for the, purposes of
collective bargaining. See, for̀ ' example,, 'Mofi's Shop-
Rite of 'Meriden, Inc., 174 NLRB` No. 157:',The"Pep
Boys-Manny, - foe and Jack, ` 172 NLRB No. 23;
Caribbean Restaurants, Inc.,' 162 NLRB 676.
ORDER
It is hereby ordered that the petitions filed in Cases
374C-1565 and-,37-RC-1573 be, and they hereby
are, dismissed.'