Revco

National Labor Relations Board - Board Decisions

Oct 18, 1976

226 N.L.R.B. 493 (N.L.R.B. 1976)

EAST ST. LOUIS PHARMACY 493
M.S.C. of East St. Louis , Inc., a Wholly-Owned Sub-
sidiary of Revco , D.S. Inc., d/b/a East St. Louis
Pharmacy and Retail Clerks Union, Local No. 676,
affiliated with Retail Clerks International Associa-
tion, AFL-CIO, Petitioner. Case 14-RC-8105
October 18, 1976
DECISION ON REVIEW AND ORDER
BY MEMBERS FANNING, PENELLO, AND WALTHER
On April 8, 1976, the Regional Director for Region
14 issued a Decision and Direction of Election in the
above-entitled proceeding in which he found, inter
alia, that it would effectuate the purposes of the Act
to assert jurisdiction over the Employer herein, con-
trary to the Employer's assertion that Employer's
business is a retail store which does not meet the
Board's standard for jurisdiction.
Thereafter, in accordance with Section 102.67 of
the Board's Rules and Regulations, Series 8, as
amended, the Employer filed, a timely request for re-
view of the Regional Director's Decision on the
grounds that the Regional Director made factual er-
rors and departed from officially reported precedent.
By telegraphic order dated May 4, 1976, the re-
quest for review was granted and the election stayed
pending decision on review.
Pursuant, to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the Na-
tional Labor Relations Board has delegated its au-
thority in this proceeding to a three-member panel.
The Board has considered the entire record in this
case with respect to the issues under review and
makes the following findings:
The Petitioner seeks to represent a unit of all em-
ployees employed by'the Employer, M.S.C. of East
St. Louis, Inc., d/b/a East St. Louis Pharmacy, in
East St. Louis, Illinois. M.S.C. of East St. Louis is a
wholly-owned subsidiary of Revco, D.S. Inc., which
is a Michigan corporation with headquarters in
Twinsburg, Ohio.
M.S.C. of East St. Louis, Inc., d/b/a East St. Louis
Pharmacy, operates an ethical pharmacy situated in
East St. Louis, Illinois, in a building occupied pri-
marily by doctors' offices. The pharmacy license is
issued by the State to M.S.C., which can fill prescrip-
tions only if they are written by doctors practicing
within and licensed by the State of Illinois. The store
is not operated as a drugstore in what has become
the "traditional" sense, as it has no aisles throw
which customers can browse. Revenues are derived
from the sale of prescription drugs and the sale of a
few over-the-counter items such as bandaids, etc.
Prescription sales constitute approximately 97 per-
cent of the Employer's revenues. The Regional Di-
rector found that, even though the Employer's pre-
scription sales are for the benefit of the individual
recipients, those sales constitute nonretail sales since
they are in large part paid for by the State of Illinois.
He further found that, although the State of Illinois
is itself exempt. from the Board's, jurisdiction, the
Employer's receipt of payment from the State of Illi-
nois for drugs purchased by welfare recipients consti-
tutes indirect outflow for the Employer, as the State
of Illinois has operations of the magnitude necessary
for' the assertion of jurisdiction over comparable
nonexempt entities, citing Siemons Mailing Service,
122, NLRB 81 (1958); Carroll-Naslund Disposals, Inc.,
152 NLRB 861 (1965); and Bob's Ambulance Service,
178, NLRB 1 (1969). He concluded that the record
establishes that the Employer's business is primarily
nonretail in nature. The Employer contends that the
Regional Director erred in this conclusion, and that
the Employer is in fact engaged in a retail store oper-
ation. We agree.
Thus, we find, contrary to the Regional Director,
that the Employer's sale of prescriptions and other
items to individual consumers for their own benefit
constitutes a retail sales operation. The fact that a
large percentage of the consumers utilizing the
Employer's store are welfare recipients whose pre-
scription bills may ultimately be paid by a third party
does not change the essential nature of this retail en-
terprise.' A consumers' cost with respect to, prescrip,
tion and drug items is frequently paid for either in
whole or in part by third party agents; thus, Blue
Cross-Blue Shield, or various insurance carriers, or in
this case the State itself, may assume payment on
behalf of the consumer, for items which the consumer
has' purchased. This fact changes neither the nature
of the retail sales operation itself, nor the, fact that
the purchases were made by the consumers them-
selves for their personal or family use. Thus, we view
the cases cited by the Regional Director for finding
nonretail standards applicable herein, as inapposite in
these circumstances.2
i Alameda Glass & Mirror Company; 218 NLRB 557 (1975).
2 In Carroll-Naslund Disposal, the Board asserted jurisdiction over a re-
spondent in the business of collecting and disposing of garbage and refuse
For the purpose of jurisdiction, the Board treated the services rendered to
the city of Lewiston as indirect outflow while it may be that individuals
living within the city were the ultimate beneficiaries of Respondent's collect-
ing of garbage, the Respondent did not sell its services directly to the indi-
viduals; rather, its billings were pursuant to a contract with the city of
Lewiston. In Bob's Ambulance Service, although there was no formal con-
tract, the Employer billed Kaiser Hospitals directly for its ambulance serv-
ices , and billed the patients only in the approximately 1 percent of the cases
where Kaiser rejected the bill. In that case , individuals did not themselves
seek out the employer for ambulance services, rather, Kaiser called the
employer approximately 90 to 100 times a week for. such services., In the
Continued
226 NLRB No. 67
494 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
The M,S.C., d/b/a East St. Louis Pharmacy, be-
gan operations in July 1975; it had, as of the time of
the hearing in March 1976, made sales of approxi-
mately $105,000. Projected sales for the calendar
year 1976 are approximately $200,000 as found by
the Regional Director. Thus, we conclude that the
operation of this retail drug store or pharmacy does
not by itself satisfy the Board's jurisdictional stan-
dards for retail enterprises.3
The Regional Director did not address the ques-
tion of whether M.S.C. of East St. Louis and Revco
D.S. Inc. constitute a single Employer, whose opera-
tion of numerous retail outlets meets the Board's ju-
risdictional standards. However, this question, was
addressed by the parties in the hearing herein, and
was treated in their briefs both to the Regional Di-
rector and to the Board, and we find the evidence
sufficient to decide this issue.
M.S.C. is a wholly-owned subsidiary of Revco D.S.
Inc. The parties stipulated that Revco D.S. Inc. is
engaged in the sale of drugs, in interstate commerce,
and has sales in excess of $500,000 annually. Revco
operates a chain of some 780 drug stores nationwide,
and also operates other subsidiary businesses; e.g.,
optical centers, a travel agency, and a medical'e,quip-
ment company.
Mr. Max Bunin, the principal witness at the hear-
ing herein, is an employee of Revco who is director
of nondrug subsidiaries. He is a vice president and
chief operating officer of M.S.C., as well as an officer
of other Revco subsidiaries and partnerships.
Although the Employer contends that Revco does
not have anything to do with M.S.C.'s labor policies
or operations, the record evidence is to the contrary.
Thus, the officers of M.S.C: are"employees of Revco,
and are officers of other Revco subsidiary corpora-
tions as well. Mr. Moore, store manager of M.S.C.,- is
also an employee of Revco. He is not an officer of
M.S.C. and is not shown to, have any financial inter-
est in it.
Mr. Bunin hired Mr. Moore as store manager.
While the authority and responsibility for day-to-day
operations, including hiring and firing of employees,
has been delegated to Mr. Moore, he sends weekly
reports for 'Mr. Bunin to monitor. Mr. Bunin's meth-
od of reviewing Moore's activities is to examine the
bills and sign all checks. Mr. Bunin is in overall
charge. He conceded in testimony that, if he consid-
ered Moore's performance detrimental to Revco's
instant case , however , M S.C has no contract with the State of Illinois or
any other commercial organization to provide care or sell prescriptions All
sales are made directly to individual consumers and are rung on cash regis-
ters by store clerks The difference between the Employer and retail drug
stores generally is that here a large percentage of the customers are eligible
to have their prescriptions paid for by'a third party.
3 Carolina Supplies and Cement Co, 122 NLRB 88 (1958)
best interests, he would not hesitate to exercise his
authority to 'discharge him; and that he, Bunin, runs
the operation except for what he delegates to-Moore.
While Moore possesses and exercises authority to
hire, discharge, promote, and discipline employees,
he nevertheless consulted Bunin to obtain his ap-
proval of a vacation plan for M.S.C. employees. The
health plan for M.S.C. employees was incorporated
into the Revco plan, holidays for M.S.C. employees
are similar to those of other subsidiaries under Mr.
Bunin's control, and the rate of pay for clerks is al-
most identical. Bunin further testified that, although
the seniority of an M.S.C. employee would not "tech-
nically" be transferable to 'Revco if the employee
wished to transfer, he "could work something out."
We note. also that Revco is a substantial stockholder
in the corporation owning the building wherein
M.S.C. leases space. -
While M.S.C.'s pharmacy is somewhat different in
operation from Revco's several hundred other drug
stores, all dispense drugs by prescription. M.S.C.
buys Revco private brand items at wholesale for the
few nonprescription drug items which it handles.
Hence, based on common ownership and financial
control, interrogation of operations, overall control
over labor relations, and management control by the
parent over this wholly owned subsidiary, we find
that M.S.C. and Revco constitute a single Employer
for jurisdictional purposes.4 Based upon the parties'
stipulation that Revco meets the Board's standards
for retail operations, we find it will effectuate the
purposes of the Act to"assert jurisdiction herein.
ORDER
Accordingly, we shall remand the case to the Re-
gional Director in order that he may conduct an elec-
tion pursuant to his Decision and Direction of Elec-
tion,' with updated payroll period requirement and
eligibility list.
4 See Royal Typewriter Company, a Division of Litton Business Systems,
Inc, a Subsidiary of Litton Industries, Inc, 209 NLRB 1006, 1011 (1974), cf
Miami Industrial Trucks, Inc, and Bobcat of Dayton, Inc, 221 NLRB 1335
(1975), where the Board declined to find a single employer in view of lack of
evidence of any control over labor relations policies by Miami as corporate
owner of 50 percent of the Bobcat stock , but asserted jurisdiction on the
basis of successorship , there being substantial continuity between the two
employingentities, and amended the certification to reflect a separate Bob-
cat unit See also Parklane Hosiery Co, Inc and Mervyn Roberts d/b/a Park-
lane Hosiery, 203 NLRB 597, 613, 619 (1973), where common ownership
was not found inasmuch as the related employer was a franchisee , the re-
spondent had no legal right to share in the net profit or proceeds of
franchisee's business , and managerial responsibility was not shared It was
concluded , however, that the franchisee acted as alter ego of respondent,
hence the two were a single integrated enterprise
5 Respecting Filer, Leonard , and Jackson , we affirm the Regional
Director 's decision to include them in the unit
EAST ST LOUIS
MEMBER WALTHER , concurring:
I agree with the majority's disposition of this case,
but not with their rationale for asserting jurisdiction.
The Employer is a wholly-owned subsidiary of
Revco, D.S. Inc., which operates a nationwide chain
of several hundred drug stores. The majority finds
that the Employer and Revco are a single employer
and assert jurisdiction on this basis, However, I be-
lieve that the correct standard is whether the Em-
ployer is an integral part of a larger enterprise whose
total operations meet the Board's jurisdictional stan-
PHARMACY 495
dards.b As the Employer is a wholly-owned subsid-
iary of Revco, a multistate enterprise which meets
the Board's jurisdictional standards, I would assert
jurisdiction on this basis without the necessity of de-
ciding whether the Employer and Revco are a single
employer.
6 Ben Kostel, d/b/a Kostel Shoe Company. Big Ben Shoe-Per Markets, and
Kostel's Big Shoe Store, 124 NLRB 651 (1959), Potato Growers Cooperative
Company, 115 NLRB 1281 (1956). Orkin Exterminating Company. Inc (of
Kentucky), 115 NLRB 622 (1956)