Morse Shoe, Inc.

National Labor Relations Board - Board Decisions

Dec 17, 1976

227 N.L.R.B. 391 (N.L.R.B. 1976)

MORSE SHOE, INC.
Morse Shoe, Inc. and Retail Clerks Union Local 324,
Retail Clerks International Association, AFL-CIO.
Case 21-CA-13855
December 17, 1976
DECISION AND ORDER
BY CHAIRMAN MURPHY AND MEMBERS
JENKINS AND WALTHER
Upon a charge filed on July 30, 1975, as amended
on October 10, 1975, by Retail Clerks Union Local
324, Retail Clerks International Association, AFL-
CIO, herein called the Union, and duly served on
Morse Shoe, Inc., herein called the Respondent, the
General Counsel of the National Labor Relations
Board, by the Regional Director for Region 21, issued
a complaint and- notice of hearing on October 22,
1975, against Respondent, alleging that Respondent
had engaged in and was engaging in unfair labor
practices affecting commerce within the meaning of
Section 8(a)(5) and (1) and Section 2(6) and (7) of the
National Labor Relations Act, as amended. Copies of
the charges and complaint and notice of hearing
before an Administrative Law Judge were duly
served on the parties to this proceeding.
The General Counsel alleged, :inter alia, that: (1) at
all times material herein, the Union has been' the
representative for the purposes of collective bargain-
ing of a majority of the employees in an appropriate
unit and is the exclusive representative `of all the
employees in the unit for the purposes of collective
bargaining with respect to rates of pay, wages, hours
of employment, and other terms and conditions of
employment; and that a collective-bargaining agree-
ment between the Union and the Respondent cover-
ing the terms: and conditions of employment of the
unit employees was in ,;full force and effect from
October 2, 1973, to September 30, 1975; and(2)
Respondent, since on or about March 24, 1975, has
violated Section 8(a)(5) and (1) of the Act, as
amended, by withdrawing recognition from the
Union and continuing thereafter to withhold recogni-
tion, by refusing to recognize- the Union as the
exclusive representative for purposes of collective
bargaining of its employees in the appropriate unit,
and by repudiating and failing to abide by the terms
and conditions of employment as provided in the
collective-bargaining agreement. On November 7,
1975, Respondent filed its answer to the complaint
denying the commission of any unfair labor practice.
The parties executed a stipulation on May 10 and
14, 1976, in which they agreed to certain facts, waived
a hearing before an Administrative Law Judge and
39-1
the issuance of an Administrative Law Judge's
Decision, and submitted the case to the National
Labor Relations Board for findings of fact, conclu-
sions of law, and an order. based upon a record
consisting of the charges, the complaint and notice of
hearing, the answer, and the stipulation of facts.
On June 15, 1976, the Board approved the stipula-
tion of the parties and ordered the proceeding
transferred to the Board, granting permission and
time for the filing of briefs. Thereafter, the General
Counsel, the Charging Party, and Respondent filed
briefs.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the
National Labor Relations Board has delegated' its
authority in this proceeding to a three-member panel.
Upon the basis of the stipulation, the briefs, and the
entire record in this proceeding, the Board makes the
following findings:
I. BUSINESS OF EMPLOYER
Respondent is engaged in the manufacture and
retail sale of shoes and operates 10 leased shoe
departments in stores in Southern California, owned
and operated by Vernando, -Inc., d/b/a Two Guys,
herein called Two Guys. Since at least 1973, Respon-
dent has operated a leased shoe department in the
Two Guys store located at 9882 Adams Street,
Huntington Beach, California. Respondent derives
gross revenues in excess of $500,000 each year and
annually - receives goods and products valued in
excess of $50,000 directly from suppliers located
outside the State of California. -
The parties stipulated, and we find, that the
Respondent is engaged in commerce within the
meaning of Section 2(6) and (7) of the Act, and we
find that it will effectuate, the purposes of the Act to
assert jurisdiction herein.'
II. THE UNFAIR LABOR PRACTICES
A. Facts
Two Guys and the Union entered into a collective-
bargaining - agreement, effective from October 1,
1970, through December 31, 1974. In article I of the
contract, Two Guys "recognizes Union as the sole
collective bargaining agency . . . for all employees
... including leased departments, employed by
Employer ...." at its Huntington Beach store. The
agreement further states in article XI, section 7:
If Employer has a shoe department -,operated by
a licensee, concessionaire, or any party other than
Employer, and if such department normally
i Siemons Mailing Service, 122 NLRB 81 (1958).
227 NLRB No. 53
392 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
employs not more than 4 employees covered by
this Agreement, such employees shall not be
covered by this Agreement, but under Union's so-
called retail shoe industry agreement, including,
but not limited to, the hourly wage rates and
Employer contributions to the various benefit
funds; but as to-all other' conditions of employ-
ment that are common to employees generally at
the store, this Agreement supersedes any inconsis-
tent provisions of said shoe agreement.
According to the contract, the Employer was under
an obligation to "exert its best efforts" to insure that
any licensee operating the shoe department would
execute. and abide by the terms of the applicable
union-industry agreement.
Karl's Shoe Stores, Ltd., herein called Karl's, had
formerly-operated a shoe department in the Hunting-
ton Beach store pursuant to a lease agreement. with
Two Guys. In accordance with the contract between
Two Guys and the Union set forth above, Karl's
executed an agreement with the Union, effective
October 1, 1972, `through September 30, 1975, incor-
porating all the provisions of the, retail shoe agree-
ment.2 However, on or about October 2, 1973,
Respondent 'commenced operating the shoe depart-
ment at the aforesaid store, also pursuant to a lease
agreement with Two Guys. The stipulated record
shows that Respondent, a ' completely distinct and
separate business entity from Karl's,' did not assume
the lease agreement of its predecessor but entered
into its own lease directly with Two Guys: Moreover,
none of the employees of Karl's became employees of
Respondent, which hired its own work force upon
taking over the shoe department.3
To comply with the' terms of the Two Guys'
agreement, Respondent immediately entered into a
letter of understanding with the Union, which incor-
porated all the relevant provisions contained in the
agreement between Karl's and the Union. There was
no election of representatives by the employees of
Respondent's leased shoe department, nor was the
Union required to prove its majority status through
authorization cards. Thus, as the parties stipulated,
the Union became the representative of Respondent's
leased shoe department employees solely by reason of
the provisions in the collective-bargaining agreement
2 According to the parties' stipulation of facts, the retail shoe agreement
was effective from October 1, 1972, through November 30, 1975. However,
the exhibits contained in the record clearly show that both the retail shoe
agreement and the contract executed by Karl's and the Union, which
incorporated all the provisions of the retail shoe agreement, were effective
from October 1, 1972, through September 30, 1975
Art h, sec 'A, par. I of the collective-bargaining agreement between
Karl's and the Union reads as follows
1. The Employer agrees to recognize and hereby does recognize the
Union as the sole and exclusive collective bargaining agent for the unit
consisting of all employees, excluding one overall store manager and all
between Two Guys and the Union. Thereafter, on
April 29, 1974, the Union requested that Two Guys
implement the provisions of the contract by directing
Respondent to sign an assent agreement. After being
forwarded this information by Two Guys, Respon-
dent executed the assent agreement on May 28, 1974,
in which it reaffirmed the contract with the Union
and specifically acknowledged an obligation to con-
tribute to various trust funds of the Union.
An employee of Two Guys filed a petition on
October 22, 1974, to decertify the Union as the
bargaining representative for Two Guys' employees.
Subsequently, the parties entered into a Stipulation
for Certification Upon-Consent Election Agreement,
providing for an election in a unit of all-Two Guys
employees, excepting certain categories not relevant
herein, at the instant store and another in Garden
Grove; California. After an election was held on
March 14 and 24, 1975, the Regional Director for
Region 21 issued a Certification of Results of
Election, wherein he specified that a majority of the
valid ballots had not been cast for any participating
labor organization. However, Respondent was nei-
ther apprised of the pendency of the decertification
proceedings nor made a party to such proceedings.
Accordingly, the Respondent's employees at the
Huntington Beach ' store did ' not participate in the
election in any manner.
The record herein also reveals that Respondent
made fringe benefit payments until March 24, 1975,
on behalf of employees in the leased shoe depart-
ment, to certain health and welfare benefit trust funds
of the Union. But since that date 'and continuing to
the present, Respondent has withheld these ' fringe
benefit payments, Furthermore, Store Manager Char-
lene McCormick told agents of the, Union, on or
about April 15, 1975, that Respondent no longer had
a contract with the Union.
On July 21, 1975, Respondent filed a petition for a
representation election among the shoe department
employees at the Two Guys store here involved. In
support of said petition, Respondent submitted
objective evidence to, the Regional Director, which
allegedly demonstrated that the Union did not
represent a majority of its employees.4 Thereafter, the
manager trainees in each store in the Employer's present establishments
within the Union's present geographical jurisdiction with respect' to
rates of pay, wages, hours, and other conditions of employment.
3 According to the record, Respondent has normally employed a
complement of two employees since commencing operations at the Hunting-
ton Beach store' Therefore, as set forth in art. Xl; sec . 7 of the contract
between Two -Guys and the Union, Respondent and its employees came
under the auspices of the retail shoe agreement.
4 This evidence consisted of a signed affidavit by McCormick. According
to this document , one of the two employees in the shoe department had said
that he no longer wanted to be represented by the Union
MORSE SHOE, INC.
Regional Director dismissed the representation peti-
tion after issuing the complaint in this proceeding.
B. The Contentions of the Parties
The General Counsel and the Union assert that
Respondent's challenges to the appropriateness of the
unit and the legality of its initial recognition` of the
Union are, at this . point in time, untimely under
Section 10(b) of the Act. In any event, they contend
that a separate unit of Respondent's-shoe department
employees is an appropriate unit, citing Esgro Valley,
Inc., 169 NLRB 76 (1968), and Bargain Town, U.S.A.
of Puerto Rico, Inc., 162 NLRB 1145 (1967). They
-further argue that the Respondent cannot defend the
8(a)(5) allegation on the grounds that its obligation to
bargain with the Union ceased upon the expiration of
the -master agreement between Two Guys and the
Union or the decertification -of the unit set forth
therein. According to the contractual language, the
General Counsel and the .Union contend, the unit
covering employees of Respondent is defined in the
retail shoe agreement, not in the master agreement
referred to above, and, therefore, Respondent's
employees constitute a separate unit from that
described in the agreement with Two Guys.
-For these reasons, the. General Counsel and the
Union maintain that Respondent violated and is
violating Section 8(a)(5) and (1) of the Act by
withdrawing recognition of the Union and by repudi-
ating the terms and conditions of employment as
provided in the collective-bargaining agreement.
Respondent contends that the only basis for the
Union's representation of its employees was the
master agreement executed by Two Guys, which
covered the entire store. Thus, Respondent asserts
that inasmuch as any and all of its obligations under
the'retail shoe agreement emanated solely from Two
Guys' obligations, it could not have refused to
bargain with the Union in violation of the Act after
the Union was decertified by the overall unit.
Furthermore, -according to Respondent, the indus-
try agreement between the lessee and the Union
merely supplemented the contract between two
Guys and the Union, which had expressly provided
that the unit include "all employees" in the store,
"including leased departments." In this connection,
Respondent notes that under article XI, section 7, as
set forth above, the master agreement superseded any
inconsistent provisions -of the shoe agreement. Since
the shoe department was not a separate, appropriate
unit under the master agreement, Respondent there-
fore argues that the application of the aforesaid
provision resulted in the termination of its assent
agreement with the Union on the expiration date of
393
Two Guys' contract; i.e., before recognition was
withdrawn. -
Assuming arguendo that the Two Guys' agreement
did not designate an overall , ,storewideunit, Respon-
dent further contends the stipulated 'facts clearly
establish that such is the only appropriate unit under
Thriftown, Inc., d/b/a Value Village, et al., 161 NLRB
603 (1966), and Jewel Tea Co. -Inc. and Its Operating
Divisions, 162 NLRB 508 (1966). Finally, Respondent
asserts that it should not be required to bargain with
the Union because there - is "ho -presumption of
continuing majority status where the Union initially
obtained its representative status without ever dem-
onstrating majority support'.
In view of the foregoing, Respondent submits that
the Board should dismiss the complaint in its entirety
and reinstate its representation petition filed on July
21, 1975.
C. Discussion and Conclusion
- We do not agree with Respondent 's argument? that
the election which decertified the Union as the
bargaining-, representative of Two Guys employees
also terminated Respondent 's obligation to bargain
with the, Union. According to the stipulated record,
the unit that participated in that election included
only "All employees of the Employer [Two. Guys ]
employed at its retail operations located at .. .
Huntington, Beach, California, and . . . Garden
Grove, California .... "'T`he decertification petition
made no mention with respect to the eligibility of
leased department employees , nor did they vote in the
election . Therefore, inasmuch as Respondent's em-
ployees were not listed on the voter eligibility list and
did not vote in the election held on March 14, 1975,
we find that the election referred to above did not
decertify the Union as the collective-bargaining
representative for employees in the shoe department
operated by Respondent,
Nor do we agree with Respondent's further asser-
tion that its contract with the Union terminated on
the expiration date 'of the master ' contract between
Two Guys and the Union because its shoe employees
were part of a storewide unit. The record shows that
the 'separate contract originally executed by Karl's
and the Union, and later assumed in the assent
agreement by Respondent, incorporated ' all the
relevant provisions of the retail shoe agreement. As
set forth in footnote 2 above, the recognition clause in
Respondent's agreement defined the bargaining- unit
as encompassing all nonsupervisory employees em-
ployed by Respondent in its shoe department.
Accordingly, we conclude that Respondent recog-
nized the Union as the bargaining. representative of
Respondent's employees in a separate, distinct unit
394 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
apart from the overall' unit of Two Guys' employees
defined by the master agreement. Hence, inasmuch as
its contract with the Union by its terms did not expire
until the following September, the Respondent could
not have lawfully withdrawn recognition of the
Union on March 24, 1975..
With respect _ to the other contentions made by
Respondent, the Board,. has held, in light of the
Supreme Court's , decision in Bryan Manufacturing
Co., 5 `that an, employer :may not defend against a
refusal-to-bargain allegation on the basis that the
original recognition, occurring more than 6 months
before'chaiges had been filed in the proceeding
raising the issue, was unlawful 6 Any such defense is
barred by Section 10(b) of the Act, which, as the
Court explained in Bryan, was specifically intended
by Congress to stabilize bargaining relationships. For
similar reasons we must reject Respondent's argu-
ment that the previously agreed-upon unit was
inappropriate. The record herein shows that Respon-
dent signed the assent agreement almost 10 -months
before it withdrew recognition from the Union and
over a year prior to the time the Union filed the
instant charge . Hence, it cannot now attack the
Union's- majority status -among its employees or the
appropriateness of the unit. -
'Respondent concludes by asserting that the Re-
gional Director erred- in-dismissing its representation
petition because of the complaint issued herein.
Based on the strict requirements set forth in United
States Gypsum Company, 7 an `Employer may refuse
to bargain on the terms of a new contract if it can
"demonstrate by objective considerations that it has
some reasonable grounds for believing that, the union
has lost its majority status . . . ."g In this instance,
however, Respondent not only withdrew recognition
before the end of the contract period, but also filed
the petition prior to the appropriate date. Moreover,
Respondent's showing of objective considerations is
tainted by its withdrawal of recognition during the
contract term,..thereby unlawfully undermining the
strength of the Union.9 -
Accordingly, we find that Respondent has refused
to abide by the terms of its bargaining agreement,
and has refused to bargain collectively with the
Union as the exclusive representative of the employ-
ees in the appropriate unit, and that, by such refusal,
Respondent has engaged in and is engaging in unfair
labor practices within the meaning of Section 8(a)(5)
and (1) of the Act. _ :I - -
5 Local Lodge No. 1424, International Association of Machinists, AFL-CIO
[Bryan' Manufacturing Co ] v. N L R. B, 362 U:S 411 (1960).
6 North Bros Ford Inc, 220 NLRB 1021 (1975), and cases cited therein.
7 157 NLRB 652 (1966).
8 Id at 656.
III. THE REMEDY
Having found that Respondent has engaged in and
is engaging in unfair labor practices within the
meaning of Section 8(a)(5) and (1) of the Act, we shall
order that it -cease' and desist therefrom and take
certain affirmative action designed to effectuate the
policies of the Act. - -
- The stipulated record shows that Respondent on or
about March 24, 1975, and at all times thereafter, has
withdrawn recognition from the Union and continues
to withhold recognition, and thus has refused to
recognize the Union:as the exclusive representative
for purposes of collective bargaining of its employees
in the appropriate unit; and has repudiated and failed
to abide by the terms and conditions of the collective-
bargaining agreement in that, inter alia, it has refused
to make payments to the Union's welfare and pension
funds. We shall therefore order that Respondent
recognize and bargain with the Union as the exclusive
bargaining representative of the employees in the
appropriate unit, and make contributions to the
Union's welfare and pension trust funds as required
by the collective-bargaining agreement.
The appropriate remedy for Respondent's unilater-
al action in discontinuing contributions to the welfare
and pension plan, just like the appropriate remedy for
any other unlawful unilateral action, is, where feasi-
ble, to reinstate the status quo ante and retain it until
Respondent fulfills its bargaining obligation by either
consummating a new agreement covering the subject
or bargaining for a reasonable period of time to an
impasse. For these reasons, we shall order Respon-
dent to make whole the employees in the unit by
remitting all pension and welfare contributions, as
provided in the retail shoe agreement, which have not
been paid prior to September 30, 1975, the expiration
date of the assent agreement' it executed with the
Union, and which would have been paid absent
Respondent's unlawful unilateral discontinuance of
such payments found herein, and by providing them
with any other benefits they may have lost because of
Respondent's repudiation of said agreement.10
The Board, upon the basis of the foregoing facts
and the entire record, makes the following:
CONCLUSIONS OF LAW
1. ' Respondent, Morse Shoe, Inc., is an employer
engaged in commerce within the meaning of Section
2(6) and (7) of the Act.
9 See Retired Persons Pharmacy, t/a NRTA-AARP Pharmacy, 210 NLRB
443, fn. 2 (1974).
10 Harold W Hinson, d/b/a Hen House Market No 3, 175 NLRB 596
(1969)
MORSE SHOE, INC.
- 2. Retail Clerks Union Local -324, Retail Clerks
International Association, AFL-CIO, is a labor
organization within the meaning of Section 2(5) of the
Act.
3. The following employees of Respondent consti-
tute an appropriate unit for the purposes of collective
bargaining within the meaning of -Section 9(b) of the
Act:
All employees employed - by Respondent at its
Huntington Beach, California, location, excluding
one overall store manager, all manager trainees,
and supervisors, as defined in the Act.
4_ By refusing on or about March 24, 1975, and at
all times thereafter, to bargain collectively with the
above-named labor organization as the exclusive
representative of all the employees in the appropriate
unit; by making a unilateral modification of the
collective-bargaining agreement between the Union
and by refusing to make payments to the Union's
welfare and pension trust funds prior to September
30, 1975; and by withdrawing recognition from the
Union and by repudiating the contract, the Respon-
dent has engaged in and is engaging in unfair labor
practices within the meaning of Section 8(a)(5) of the
Act.
5. By the aforesaid conduct, Respondent has
interfered with, restrained, and coerced, and is
interfering with, restraining, and coercing, employees
in the exercise of the rights guaranteed them in
Section 7 of the Act, and thereby has engaged in and
is engaging in unfair labor practices within the
meaning of Section 8(a)(1) of the Act.
6. The aforesaid unfair labor practices are unfair
labor practices affecting commerce within the mean-
ing of Section 2(6) and (7) of the Act.
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor
Relations Board hereby orders that the Respondent,
Morse Shoe, Inc., Huntington Beach, California, its
officers, agents, successors, and assigns, shall:
1. Cease and desist from:
(a) Refusing to bargain collectively with Retail
Clerks Union Local 324, Retail Clerks International
Association, AFL-CIO, as the exclusive representa-
tive of all the employees in the appropriate unit by
withdrawing recognition from the Union; by repudi-
ating the agreement; by making unilateral modifica-
tions of the collective-bargaining agreement between
the Union and the Respondent; and by refusing to
make payments to the Union's welfare and pension
funds prior to the expiration of the' contract on
September 30, 1975.
395
(b) In any-like or related-manner interfering with,
restraining,` or coercing employees in the exercise of
the rights guaranteed them in, Section 7 of the Act.
2. - Take the following-affirmative action which the
Board finds will effectuate the policies of the Act:
(a) Upon request, bargain for a reasonable- period
of time with the above-named labor organization as
the exclusive bargaining representative of all employ-
ees _in , the aforesaid appropriate unit, with respect to
any modification of the prior or -future collective-
bargaining agreement between the- Union and the
Respondent.
(b) Make whole the employees ' in- the- appropriate
unit by remitting all pension' and welfare contribu-
tions, as provided in the retail shoe agreement, which
have not been paid prior to September 30, 1975, the
expiration date of the assent agreement between
Respondent and the Union, and which would have
been paid absent Respondent's unlawful conduct
found herein. Further, make whole the employees for
whatever benefits were lost to them by Respondent's
unlawful repudiation of the contract.
(c) Post at its principal place of business in
Huntington Beach, California, copies of the attached
notice marked "Appendix."" Copies of said notice,
on forms provided by the Regional Director for
Region 21, after being duly signed by Respondent's
representative, shall be posted by Respondent imme-
diately upon receipt thereof, and be maintained by it
for 60 consecutive days thereafter, in conspicuous
places, including all places where notices to employ-
ees are customarily posted. Reasonable steps shall be
taken by Respondent to insure that said notices are
not altered, defaced, or covered by any other materi-
al.
(d) Notify the Regional Director for Region 21, in
writing, within 20 days from the date of this Order,
what steps the Respondent has taken to comply
herewith.
ii In the event that this Order is enforced by a Judgment of a United
States Court of Appeals , the words in the notice reading "Posted by Order of
the National Labor Relations Board" shall read "Posted Pursuant to a
Judgment of the United States Court of Appeals Enforcing an Order of the
National Labor Relations Board."
APPENDIX
NOTICE To EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
WE WILL NOT refuse to bargain collectively with
Retail Clerks Union Local 324, Retail Clerks
International Association, AFL-CIO, as the ex-
clusive representative of all the employees in the
bargaining unit described below, by withdrawing
396 DECISIONS OF NATIONAL
recognition from the Union; by repudiating the
agreement; .by making unilateral modifications of
the collective-bargaming agreement executed with
said Union; or by refusing to make payments to
the Union's welfare and pension funds prior to the
expiration of the contract on -September 30, 1975.
WE WILL NOT in any like, or related manner
interfere with, restrain, or coerce our employees in
the 'exercise of the rights guaranteed them in
Section 7 of the Act.
WE WILL bargain with the above-named Union
as the, exclusive bargaining representative of all
employees in the bargaining unit-described below,
with respect to any modification of the prior or
future collective-bargaining agreement between us
and the Union. The bargaining unit-is:
LABOR RELATIONS BOARD
All employees employed by Respondent at
its Huntington Beach, California, location,
excluding one overall store manager, all
manager trainees, and supervisors as defined-
in the Act.
WE- WILL, make whole the employees in the
appropriate unit by remitting all pension and
welfare contributions, as provided in the retail
shoe agreement, which have not been paid prior to
September 30, 1975, the expiration date of our
assent agreement with the Union, and which
would have been paid absent our unlawful con-
duct found herein; and WE WILL make whole said
employees for whatever benefits were lost to them
by our unlawful repudiation of the contract.
MORSE SHOE, INC.