The Kroger Co.

National Labor Relations Board - Board Decisions

May 5, 1967

164 N.L.R.B. 362 (N.L.R.B. 1967)

362 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
The Kroger Co. and Amalgamated Meat
Cutters and Butcher Workmen of North
America , AFL-CIO' and Retail Clerks
International Association , AFL-CIO.2 Cases
13-CA-7164 and 13-CA-7271.
May 5,1967
DECISION AND ORDER
BY MEMBERS FANNING, JENKINS , AND ZAGORIA
On November 28, 1966, Trial Examiner
Thomas A. Ricci issued his Decision in this
proceeding, finding that Respondent had engaged in
and was engaging in certain unfair labor practices
and recommending that it cease and desist
therefrom and take certain affirmative action, as set
forth in the attached Trial Examiner's Decision.
Thereafter, exceptions to the Trial Examiner's
Decision and supporting briefs were filed by
Respondent, the General Counsel, the Meat Cutters,
and the Retail Clerks. Answering briefs were filed
by the Respondent, the General Counsel, and the
Meat Cutters, and requests for oral argument were
filed by Respondent and the Meat Cutters.3
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the
National Labor Relations Board has delegated its
powers in connection with these cases to a three-
member panel.
The Board has reviewed the rulings of the Trial
Examiner made at the hearing and finds that no
prejudicial error was committed. The rulings are
hereby affirmed. The Board has considered the Trial
Examiner's Decision and the entire record in these
cases, including the exceptions and briefs, and
hereby adopts the findings,4 conclusions, and
recommendations of the Trial Examiner, with the
modifications herein set forth.
We agree with the Trial Examiner that by
maintaining and giving effect to the "exclusionary
Paragraph 4"5 in its "Savings and Profit Sharing
Plan" Respondent violated Section 8(a)(1), (3), and
(5) of the Act. We find without merit Respondent's
contention that the Board is foreclosed from finding
an unfair labor practice in these cases because the
Unions at the Respondent's adamant insistence
' Herein Meat Cutters
2 Herein Retail Clerks.
J The requests for oral argument are hereby denied as, in our
opinion, the positions of the parties are adequately presented by
the exceptions, briefs, and the entire record in these cases
4 In the second paragraph, last sentence, of section III, D, 2, of
his Decision, the Trial Examiner uses the date 1966 The record
shows, and we find, that the date should rather be 1960
5 We refer throughout our Decision to paragraph 4, as did the
Trial Examiner More precisely we mean only certain portions of
paragraph 4, as specified in our Order and notice
6 Copies of letters to this effect are in evidence The letters are
substantially similar in content. We do not find that it was
164 NLRB No. 54
executed contracts which include clauses or
"supplements" adopting Respondent's illegal
practice. We conclude, as did the Trial Examiner,
that, as Respondent refused to bargain in good faith
about its savings and profit-sharing plan,
"acquiescence by the Unions in what is tantamount
to an illegal demand by the employer, cannot serve
retroactively to excuse the improper conduct."
Moreover, the record shows that on several
occasions, when the Unions returned the signed
supplements to the contracts containing the
disputed clause to the Respondent, the former
reserved their legal rights in this matter by explicitly
stating they regarded Respondent's insistence on
excluding its represented employees from the
savings and profit-sharing plan as "discriminatory
and illegal." Indicating that they were not, in fact,
acquiescing in this practice, the Unions took the
position that "Rather than being coerced into a
strike on this matter ... we reserve our right to
proceed with such legal action in this connection, as
we deem necessary."s
THE REMEDY
The Trial Examiner found that only those
employees who were required to withdraw from
Respondent's savings and profit-sharing plan "in
consequence of contracts signed after that date
[March 13, 1965] shall be restored to their original
position." We find merit in the exceptions of the
General Counsel, the Meat Cutters, and the Retail
Clerks to this finding.
Paragraph 4 of Respondent's savings and profit-
sharing plan is clear and unequivocal-if a group
of its employees, represented by a union, is granted
the right of a separate pension plan, that group
"ceases to be eligible" and is "considered to have
withdrawn" from Respondent' s savings and profit-
sharing plan.? Indeed, the supplements which the
Unions signed were nothing more than an
acknowledgment by the Unions that, "under the
terms of the Kroger ... Program ... employees
covered by this ... agreement ... shall be
conclusively deemed to have withdrawn ...."
It is our view that the withdrawal of each of the
employees was at all times in consequence not of the
contracts, but rather of the very terms of the
;discriminatory paragraph 4 in Respondent' s savings
necessary for the Meat Cutters and the Retail Clerks to file such
letters with regard to all 46-odd units involved throughout the
country It is clear throughout the instant cases, and indeed
Respondent agrees, that the parties were at all times bargaining
about policies and conditions which would affect the employees of
Respondent in all units represented by the Meat Cutters and the
Retail Clerks throughout the country.
Respondent made it clear to the Unions that it viewed
paragraph 4 as operating automatically, several instances appear
in the record where Respondent told its employees that "under
the rules of [its) program, those employees covered by a `Union
pension' plan automatically" become ineligible to continue in the
Kroger program.
THE KROGER CO. 363
and profit-sharing plan.8 As the Trial Examiner
found, Respondent, by maintaining and continuing
to maintain paragraph 4, has in the past and is now
violating Section 8(a)(1) and (3) of the Act. We find,
therefore, that all employees who were required, on
or after March 13, 1965,9 to withdraw from the
Kroger savings and profit-sharing plan in
consequence of the exclusionary terms of
paragraph 4 of that plan, are entitled to be restored
to their original position as of the date of such
withdrawal.' 0
Finding merit in the General Counsel's exception,
we shall also order Respondent to amend existing
employee booklets and/or publications so as to
eliminate therefrom any language which indicates
that employees covered under a pension plan
resulting from collective bargaining through a union
are disqualified from participation in Respondent's
savings and profit-sharing plan. We find no merit in
the remaining exceptions of the parties. We shall, in
accord with the Trial Examiner's recommendation,
leave the details of the remedy to the compliance
stage of the proceeding."
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended , the National Labor
Relations Board hereby orders that Respondent,
The Kroger Co., Chicago, Illinois, its officers,
agents, successors , and assigns, shall:
1. Cease and desist from:
(a) Maintaining and enforcing those portions of
paragraph 4 in its savings and profit -sharing plan
which disqualify or exclude from participation
employees covered by a pension plan resulting from
collective bargaining through a labor organization; or
so advising its employees in booklets or publications
describing said plan.
(b) Discouraging membership in and activities on
behalf of Amalgamated Meat Cutters and Butcher
Workmen of North America , AFL-CIO, Retail
Clerks International Association , AFL-CIO, or any
other labor organization , by maintaining and
enforcing said portions of paragraph 4.
(c) Refusing to bargain collectively in good faith
with the foregoing identified labor organizations with
respect to its savings and profit -sharing plan.
(d) In any like or related manner interfering with,
restraining , or coercing its employees in the exercise
8 We agree with the Trial Examiner that the contracts are not,
on their face, illegal We therefore find no ment in the General
Counsel 's contention that certain portions of the contracts should
be annulled.
0 We find no merit in the Meat Cutters' contention that the date
should be fixed as March 10 rather than March 13. Respondent
was first served with a copy of the earlier charge in the instant
cases on September 13, 1965, as shown by the evidence herein,
and as stipulated by the parties at the hearing . In the seventh
paragraph , first sentence , of section III, F, of his Decision, the
Trial Examiner erroneously refers to March 13 as "the day the
first charge . was served."
10 As we find that employees were required by Respondent to
withdraw from the plan by virtue of the Respondent 's unilateral
of their right to self-organization , to form, join, or
assist unions , to bargain collectively through
representatives of their own choosing, to engage in
concerted activities for the purposes of collective
bargaining or other mutual aid or protection, or to
refrain from such activities, except to the extent that
such right may be affected by an agreement
requiring union membership as a condition of
employment, as authorized in Section 8(a)(3) of the
National Labor Relations Act, as amended by the
Labor-Management Reporting and Disclosure Act of
1959.
2. Take the following affirmative action, which we
find will effectuate the policies of the Act:
(a) Amend its savings and profit-sharing plan by
deleting therefrom those portions of paragraph 4
which disqualify or exclude from participation
employees covered by a pension plan resulting from
collective bargaining through a labor organization.
(b) Amend its existing employee booklets and/or
publications so as to eliminate therefrom any
language which indicates that employees covered
under a pension plan resulting from collective
bargaining through a labor organization are
disqualified from participation in its savings and
profit-sharing plan.
(c) Upon request, bargain collectively with
Amalgamated Meat Cutters and Butcher Workmen
of North America, AFL-CIO, and with Retail Clerks
International Association, AFL-CIO, in the units
found appropriate in the Trial Examiner's Decision,
with respect to the savings and profit-sharing plan.
(d) Restore, in a manner to be determined
hereinafter at the compliance stage of this
proceeding, to the status in the Kroger savings and
profit-sharing plan which they would have enjoyed
had they not withdrawn from the plan, all those
employees who were required, on or after March 13,
1965, to withdraw from the plan in consequence of
the terms of paragraph 4 of that plan pertaining to
coverage by collective- bargaining agreements, as
explained above under the section of the Decision
entitled "The Remedy."
(e) Post at all its stores and business locations
where rank-and-file employees work, wherever
located, copies of the attached notice marked
"Appendix." 12 Copies of said notice, to be furnished
by the Regional Director for Region 13, after being
duly signed by an authorized representative, shall be
posted by Respondent immediately upon receipt
rule rather than by operation of the contract , Local Lodge 1424,
Machinists (Bryan Manufacturing) v. N L R.B., 362 U.S. 411,
relied upon by the Trial Examiner, is inapposite with respect
to any withdrawal required by Respondent within the 10(b)
period However, employees who were required to withdraw
from the plan prior to March 13, 1965 (the cutoff date of the 10(b)
period), even though in consequence of Respondent's practice,
are, of course, not entitled to restoration to the plan
ii See Savoy Laundry, Inc, 148 NLRB 38, enfd 368 F.2d 1000
(C.A 2).
ii In the event that this Order is enforced by a decree of a
United States Court of Appeals , there shall be substituted for the
words "a Decision and Order" the words "a Decree of the United
States Court of Appeals Enforcing an Order "
364 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
thereof, and be maintained by it for 60 consecutive
days thereafter, in, conspicuous places, including all
places where notices to employees are customarily
posted. Reasonable steps shall be taken by
Respondent to insure that said notices are not
altered, defaced, or covered by any other material.
(f) Notify the Regional Director for Region 13, in
writing, within 10 days from the date of this Order,
what steps have been taken to comply herewith.
APPENDIX
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, as
amended, we hereby notify you that:
WE WILL NOT discourage membership in
Amalgamated Meat Cutters and Butcher
Workmen of North America, AFL-CIO, Retail
Clerks International Association, AFL-CIO, or
any other labor organization, by disqualifying or
excluding our employees from participation in
our savings and profit-sharing plan because of
coverage under a pension plan resulting from
collective bargaining through a union.
WE WILL amend our savings and profit-
sharing plan to eliminate therefrom those
portions of paragraph 4 which disqualify or
exclude from participation employees covered
by a pension plan resulting from collective
bargaining through a labor organization.
WE WILL NOT refuse to bargain collectively in
good faith with any collective-bargaining
representative of our employees with respect to
continued participation in our savings and
profit-sharing plan by any of our employees.
WE WILL, upon request, bargain collectively
in good faith with Amalgamated Meat Cutters
and Butcher Workmen of North America,
AFL-CIO, and Retail Clerks International
Association, AFL-CIO, with respect to our
savings and profit-sharing plan.
WE WILL restore, in a manner to be
determined hereafter, to the status in our
savings and profit-sharing plan which they
would have enjoyed had they not withdrawn
from the plan, all those employees who were
required, on or after March 13, 1965, to
withdraw from the plan in consequence of the
terms of paragraph 4 of that plan pertaining to
coverage by collective-bargaining agreements.
WE WILL NOT in any like or related manner
interfere with, restrain, or coerce our employees
in the exercise of their right to self-organization,
to form, join, or assist unions, to bargain
collectively through representatives of their
own choosing, to engage in concerted activities
for the purposes of collective bargaining or
other mutual aid or protection, or to refrain from
such activities , except to the extent that such
right may be affected by an agreement requiring
union membership as a condition of
employment , as authorized in Section 8(a)(3) of
the National Labor Relations Act, as amended
by the Labor-Management Reporting and
Disclosure Act of 1959.
THE KROGER CO.
'Employer)
Dated By
(Representative) (Title)
This notice must remain posted for 60 consecutive
days from the date of posting, and must not be
altered, defaced, or covered by any other material.
If employees have any question concerning this
notice or compliance with its provisions, they may
communicate directly with the Board's Regional
Office, 881 U.S. Courthouse and Federal Office
Building, 219 S. Dearborn Street, Chicago, Illinois
60604, Telephone 828-7597.
TRIAL EXAMINER'S DECISION
STATEMENT OF THE CASE
THOMAS A. Ricci, Trial Examiner: A hearing in the
above-entitled proceeding was held before the duly
designated Trial Examiner from May 9 through May 20,
1966, at Chicago, Illinois. A consolidated complaint, based
upon separate charges filed by Amalgamated Meat
Cutters and Butcher Workmen of North America,
AFL-CIO, herein called the Meat Cutters, and by Retail
Clerks International Association, AFL-CIO, herein called
the Retail Clerks, was issued against The Kroger Co.,
herein called the Respondent or the Company. The
essential issues presented are whether the Respondent
violated Section 8(a)(1), (3), and (5) of the Act by
maintaining and giving effect to a certain exclusionary
provision in its savings and profit-sharing plan. Briefs were
filed by all parties after the close of the hearing.
Upon the entire record, and from my observation of the
witnesses , I make the following:'
FINDINGS OF FACT
I. THE BUSINESS OF THE RESPONDENT
The Kroger Co., an Ohio corporation, with its principal
office in Cincinnati, Ohio, maintains and operates retail
food stores in many States of the United States. In the
course and conduct of its business operations during the
past year the Respondent sold and distributed food
products the gross value of which exceeded $1,000,000.
During the same period the Respondent received goods at
its Illinois and Indiana stores valued in excess of $100,000,
all of which was transported to such stores in interstate
commerce directly from States other than the States of
Illinois and Indiana. I find that the Respondent is engaged
' Separate motions by counsel for the Meat Cutters and for the
Respondent, unopposed by any of the parties, to correct the
transcript are hereby granted.
THE KROGER CO. 365
in commerce within the meaning of the Act and that it will
effectuate the policies of the Act to exercise jurisdiction
herein.
II. THE LABOR ORGANIZATIONS INVOLVED
Amalgamated Meat Cutters and Butcher Workmen of
North America, AFL-CIO, and its constituent locals, and
Retail Clerks International Association, AFL-CIO, and its
constituent locals, are labor organizations within the
meaning of Section 2(5) of the Act.
III. THE UNFAIR LABOR PRACTICES
A. The Question in General
The essential and precise allegations of the complaint in
this case are threefold, and charge the Respondent
Company with having violated three separate
proscriptions of the statute: Section 8(a)(1), (3), and (5).
The critical and truly pertinent facts upon which these
charges rest are uncontrovertible, and are proved by
formal documents from the Respondent's own records.
Since 1947 the Company has maintained a retirement plan
applicable to all employees, necessary money
contributions made only by the Company, the employees
receiving pension benefits only upon retirement;
thereafter the employees enjoy the benefits as long as they
live. In 1951 the Respondent established a savings and
profit-sharing plan, in which participation is optional to the
employees. Those who wish to do so contribute so many
dollars from their pay periodically, and at the end of each
year the Company pays a percentage of its profits into the
savings and profit-sharing plan trust fund. The money is
invested by trustees, with the result that at any given.
moment each participating employee is entitled to a
divisible share depending upon the proportion of the total
represented by his individual contribution, in each of two
funds, one arising from employee savings, and the other
funded from company profits. An employee may withdraw
from this plan at will, and when he does so, receives a
single cash payment for the value of his share. There is no
provision for periodic payment after separation from the
Company, or for leaving any part of the employee's share
with the trust fund for withdrawal by installments
thereafter.
In 1956, by resolution of the Kroger Company board of
directors, both the retirement and the savings and profit-
sharing plans were modified by insertion of a new
paragraph in each, automatically excluding from further
eligibility from each plan all employees in a particular
circumstance. To the savings and profit-sharing plan the
following paragraph was added:
Notwithstanding the foregoing provisions, any
employee who is covered by a limited group pension
plan as herein defined shall cease to be eligible
hereunder and, if a member of this Plan, shall be
considered to have withdrawn therefrom on the date
when such coverage commenced. The term "limited
group pension plan" means a plan for the payment of
pensions or other retirement benefits which (a) is
limited in its coverage to a particular group of
employees, and (b) is established by or at the request
of the covered employees or their authorized
representatives.
By formal resolution of the board of directors in 1962, a
further clarifying provision was added, bearing directly
upon the foregoing exclusion.
Every employee who is a member of a group of
employees or of a collective-bargaining unit which
establishes or adopts a limited group pension plan for
any employees of the Company (regardless of whether
or not such employee participates therein) shall, for
the purposes hereof, be deemed "covered" thereby.
The term "coverage commenced" as used above
shall mean the time when the Company, any group,
collective-bargaining unit, or employee first becomes
obligated to accrue or to make payments or
contributions to such limited group pension plan.
A comparable exclusionary provision was placed in the
Company's retirement plan at the same time.
Each of the basic allegations of wrongdoing appearing in
the complaint is grounded upon the Respondent's
maintenance and enforcement of this composite
paragraph 4 of its savings and profit-sharing plan. It is
argued that the very continued existence of such an
exclusionary clause necessarily exerts an illegally coercive
and restraining effect upon the employees in their freedom
to join unions and to engage in unfettered collective
bargaining with the employer with respect to a substantial
aspect of their working conditions, and therefore
constitutes a violation of Section 8(a)(1) of the Act.
Enforcement of the clause precisely as written, an
eventuality in each and every instance dictated beyond the
possibility of deviation by the fiat of the Company's
highest authority, automatically removed from the area of
collective bargaining the question of union-represented
employees continuing to enjoy the benefit of sharing in the
employer's profits. Because the Respondent thereby
precluded any discussion of the matter with the
employees' bargaining agent, it has, according to the
theory of complaint, literally refused to bargain with
respect to a normally bargainable issue, in violation of
Section 8(a)(5). An inseparable aspect of effective
fulfillment of the board of directors' resolution was, very
widely, the compulsory denial to employees of all further
payments to the savings and profit-sharing fund on their
behalf, all directly in consequence of the collective,
bargaining activities they chose to carry on vis-a-vis the
employer. The material discrimination is not disputed; the
employees virtually doubled their money by placing it in
the savings and profit-sharing plan instead of just putting it
in the bank. Collective bargaining being, concededly, the
end purpose of joining any union, it follows, if the General
Counsel is correct, that such ipso facto reduction of the
material compensation of these employees amounted to
direct discrimination against them founded inevitably
upon a purpose of discouraging them from joining, or
remaining members of, unions, and therefore conduct
proscribed by Section 8(a)(3) of the Act.
Apart from statements relating to such things as the
volume and the nature of the Company's business, or the
status of the Charging Parties as labor organizations, the
answer denies virtually every substantive allegation of the
complaint. The real issues, however, are plain enough.
And perhaps it is a single question: May an employer
maintain such a limitation upon what is otherwise a
companywide profit-sharing plan, and may it in fact
enforce it whenever the specified situation materializes?
A number of collateral assertions, outside the pleadings,
are advanced, largely by the Respondent in defense, but
also by the Charging Unions in coloration of the main
366 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
question , all of which tend only to obscure the issue of the
case. They must therefore be considered and placed in
clear and unmistakable perspective before the merits of
the complaint can be understood and evaluated . Indeed
the bulk of the extended testimony , and much of the
voluminous documentary evidence , deals with what words
the contending parties used , both in the past and during
the hearing , to describe the retirement plan, or the savings
and profit-sharing plan, or their respective feelings in prior
years. This unending play on words is really an attempt to
alter the format of the basic question and thereby
deceptively predetermine the desired answer.
union at the bargaining table, the employer is relieved
altogether of the statutory duty to discuss it with the
collective-bargaining agent. If this be the reason for such
evidence in this case, and I can think of no other coherent
basis for its introduction, I find the argument totally
without merit as a defense. This is not to be taken as an
implied finding that the record evidence supports the
assertion of greater cost in the union-sponsored pension
system than in the unilateral retirement and profit-sharing
plans. In fact, were I to pass judgment upon the total
evidence on this subject, I would conclude that the
Respondent has not affirmatively proved its assertion as to
the relative economic cost.
B. Defense Based on Cost: an Irrelevancy
For example, there is no contention that an employer is
obligated to continue any particular term of employment,
however beneficial to the employees, when in the give and
take of good-faith collective bargaining about all working
conditions, he honestly and openly discusses the diverse
matters of proper interest to the employees. The cost of a
pinpointed economic demand by the union is a pertinent
factor in the appraisal of an employer's hard or amenable
reaction. The sole question here, however, is whether the
Respondent bargained at all with the Unions on the
subject of continuing to give a share of the profits to these
employees; whether the unequivocal and widely
publicized determination of its board of directors years in
advance of bargaining in fact tied the hands of its
negotiators so that there could be no discussion across the
table, no consideration whatever given the Unions'
position. There is no evidence, nor is it claimed, that in
summarily waiving aside every union demand to talk about
the profit-sharing money the employees were receiving,
company representatives justified their arbitrary position
on the ground of its cost to the Company. Despite these
facts and the clear nature of the issue presented, the
Respondent offered much evidence intended to prove that
the contributions it ultimately agreed to make to jointly
administered union-employer pension plans, exceeded the
cost of the Company's established retirement plan and
savings and profit-sharing plan combined. But such
evidence would only be relevant in response to a charge
that the wrong lay in refusing to continue the profit-sharing
arrangement exactly in accordance with past practice.
There is no such allegation here. Moreover, if, as it also
asserts in a collateral defense, the Company in fact did
bargain in good faith on whether that particular benefit
should or should not be continued, in whatever form or to
whatever extent the parties might have agreed, its
absolute cost to the Company, or even its relative cost in
comparison to any one or all of the Union's economic
demands, would still be immaterial to any issue that could
be raised under this statute. An employer who bargains in
good faith, as the statute commands, has no duty to
convince the Board or the courts of the reasonableness of
its position.
In the light of the complaint and of the Government's
limited supporting contention, therefore, all of this
evidence about cost is immaterial in this proceeding.
Unless, of course, by implication the Respondent suggests
a broader argument based upon the economics of the
picture. This sort of evidence could be tied logically to the
complaint as it stands by a contention that whenever an
established monetary benefit of the employees costs more
than the price of an economic demand presented by a
C. The Respondent's Statutory Obligation to Bargain with
the Charging Unions; Alleged Inappropriateness of the
Bargaining Units
The charges were filed by Amalgamated Meat Cutters
and Butcher Workmen of North America, AFL-CIO, and
Retail Clerks International Association, AFL-CIO. For a
number of years the Company has negotiated with many
locals of these International unions for employees in many
regions of the country. In some areas the bargaining, and
the resultant contracts, was based on multiemployer,
areawide units; in some the contract covered only
employees of this company in designated locations. There
are also instances where negotiations and resultant
contract applied only to a single store or warehouse. It
does not appear that any of the bargaining units, or
exclusive bargaining agency status of the various local
unions, came into being as the result of Board
proceedings; recognition and unit arrangements were by
agreement of the parties.
In keeping with the customary practice appropriate in
cases involving alleged refusals to bargain, the General
Counsel set out in his complaint 46 separate bargaining
unit descriptions, and as to each the further statement of
which particular local union is the exclusive bargaining
agent; exact inclusion and exclusion of employee
categories appears in detail. In a single word the answer
denies the appropriateness of every one of these units, as
well as the Government assertion that the many related
and numbered local unions in fact are the majority
representatives. The grounds upon which this denial was
made were not explained until toward the end of the
protracted hearing.
Because the General Counsel deemed it necessary to
prove the appropriateness of the bargaining units and the
Union's majority status, there were received into evidence
collective-bargaining agreements applicable to each of the
many units. In every instance the unit description parallels
exactly that set out in the complaint . The contracts are all
currently in effect, either executed in recent years, or by
their terms reaching into the time of the hearing, or
negotiated and signed in the immediately preceding
months. In some situations negotiations looking to
contract renewal were in process as the hearing
progressed. In partial defense the Respondent then
offered to prove that all of these bargaining units, or
almost all of them, are inappropriate for bargaining
purposes, and that therefore the refusal-to-bargain
allegations must be dismissed; the attack upon the
appropriateness of the units in turn rests upon a
contention that they include employees who in fact are
supervisors within the meaning of the Act. The employees
THE KROGER CO.
in question are head meatcutters, head produce clerks,
head grocery clerks, head checkers, head cashiers, head
night stockers, and head dairy clerks. I sustained the
General Counsel's objection to evidence relating to the
alleged supervisory status of any of these employees.2
Not once, during the many years of amicable
negotiations between the Company and either of these two
International unions, did the Respondent attempt to
exclude these employees from contract coverage. They
have been included in all past agreements, and are,
indeed, by expressly named classification, listed in all of
the current contracts, with exact wage rates provided for
all of them. One of the contracts among the exhibits was
signed only 1 month before the hearing. The contention
that such employees are not appropriately included in the
contracts came as a surprise to the Unions at the hearing.
The issue of this case is entirely unrelated to the correct
unit placement of any employees of the Respondent.
Inquiry now into the merits of the belated contentions
concerning the alleged supervisors would extend the
hearing unduly, and require the taking of oral testimony in
a great number of widely dispersed locations throughout
the country. The net result would be to confuse the record
with respect to the real question to be decided. It is true
that here, as in any case involving asserted refusal-to-
bargain violations, it must first be found that the employer
was obligated to bargain with the union in an appropriate
unit at the time of the conduct said to have been illegal.
That the Respondent in this case was so obligated, apart
from any question of individual supervisor, in each and
every unit set out in the complaint, was conceded on the
record by counsel for the Kroger Company. Asked by the
Trial Examiner whether, with exclusion of the disputed
employees, the Unions' majority status would in any single
situation be questioned, he replied in the negative. "Mr.
Trial Examiner, we do not question, and will not question
the majority status of the two charging unions in those
locations where we deal with them and represent most of
our employees. We will not question them. We have not
said that we are not going to bargain with this union. We
have bargained with both unions in good faith under the
law; and we are going to fulfill our obligations under the
law."
With the Respondent thus candidly admitting that it
always was and is now obligated to bargain with the
different locals of these two International unions in the
very units set out in the complaint, there really was no
necessity for the General Counsel to prove, while
introducing evidence to support the complaint, either the
correctness of the unit descriptions or the identity of the
specific recognized locals. As the record was finally made,
all of these underlying matters are virtually admitted.
Accordingly, no useful purpose would be served by
restating in extended language in this report all the many
unit descriptions underlying the established and
continuing bargaining relationships between the Company
and the many local unions. The complaint, as amended,
exactly details them; against each such bargaining unit
there is the name and the number identifying the local
union long and presently recognized as the exclusive
agent. I therefore hereby adopt, by reference incorporate
herein, all the unit descriptions appearing in the amended
complaint, and find that in each instance the unit so
described is appropriate for purposes of collective
2 Bethlehem Steel Company (Shipbuilding Division), 133 NLRB
1347,1349.
367
bargaining, and that the named local union set out in the
complaint relative to each such unit was at all pertinent
times and now is the exclusive bargaining agent within the
meaning of Section 9(a) of the Act.
D. The Theory of Illegality; the Real Defense
As in every unfair labor practice case before the Board,
the issue is framed by the pleadings, and these are always
worded essentially in conclusionary language. Here the
complaint sets out paragraph 4 of the Kroger savings and
profit-sharing plan, and then goes on to say that the
Company implemented that clause, insisted adamantly
and without discussion upon its full observance by every
party concerned, and by such conduct violated the statute
in the various respects mentioned; i.e., Section 8(a)(1), (3),
and (5). Exactly by what reasoning adherence without
quarter upon that decision of the Company's board of
directors illegally coerced the employees, unlawfully
discriminated against them in their conditions of
employment, and predetermined a refusal to bargain, was
not articulated by the General Counsel or by counsel for
the Charging Parties at the hearing. Faced with an answer
which did nothing more than deny, in the briefest language
possible, practically every paragraph of the complaint, the
prosecuting side of the proceeding could only prove that
the clause existed, that employees were forced out of the
plan pursuant to its paragraph 4, and that in bargaining
negotiations which took place the Unions always met the
uncompromising wall of the Board of directors' fiat
whenever attempts were made to bargain about union-
represented employees participating in the profit sharing,
and then rest. The remainder of the case consists of
argument , or a statement of why the net effect of the
clause was illegal under the statute.
Throughout the hearing the Respondent, in turn,
avoided any direct statement of position; it stressed
certain descriptive words used by union representatives
during the bargaining sessions that were related by the
witnesses , or in the course of their oral testimony. More
than once its counsel refused to state whether or not
certain underlying facts, upon which the Government
rests, are or are not true. So far as could be learned during
the hearing concerning its theory or theories of defense,
there seemed to be a continuing play on words, as though
the substantive issue of the case could be decided by the
language any one of the many union or company
representatives may have used in the course of the events
spanning several years. In its very articulate and extensive
brief, the Respondent argues a number of conclusions,
some mixed with factual assertions , and many
overlapping. I can only set out here what appears to be the
essence of the arguments, both by the Government and by
the Company.
There are three sets of pertinent facts which can be said
to underlie the basic complaint. (1) The details of
employee participation in the savings and profit- sharing
plan, as distinguished from their benefits under the
Company's retirement plan. (2) The extent of the monetary
advantages enjoyed in recent years by the employees by
virtue of the savings and profit-sharing plan. (3) The
language of the critical paragraph 4 of the savings and
profit-sharing plan , coupled with the attitude of company
representatives whenever union agents brought up the
subject of that plan in bargaining negotiations . Number 1
bears upon the Respondent's contention that the savings
and profit-sharing plan is only a retirement plan under a
368 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
different name. Number 2 serves to show that the
enforcement of paragraph 4 always was, and still is, a very
substantial discrimination in economic conditions of
employment. Number 3 is half argument-that by its
terms paragraph 4 precludes any possibility of collective
bargaining-and half factual disproval of the Company's
defense that it did bargain about savings and profit-sharing
whenever asked to do so.
plain desire or need for immediate cash. There is no
provision for leaving any part of an individual's share with
the plan for periodic payments after retirement or other
separation from the Company. All this money-the
employees' savings, the Company's payments out of its
profits, and the investment earnings of both fund A and
fund B-is held by trustees. It is a funded financial
operation entirely separate from the Company's assets.
1.
a. The retirement plan
Every employee who works for Kroger is a potential
beneficiary under its retirement plan, and the cost is borne
entirely by the Company; he must be over 25 years of age
and have worked at least 15 years. Retirement comes at
age 65, with annual payments thereafter continued until
death. An employee with 15 years of service may retire at
age 60, at reduced payments. There are minor provisions
not significant here. Twenty years of service guarantees
minimum annual benefits of $1,200, 15 years assures at
least $600 annual benefit. The only money the Company
ever parts with consists of the payments in fact made to
retirees. There is no separate fund and the plan is
administered entirely by company officers.
b. Savings and profit-sharing plan
Participation in the savings and profit-sharing plan is
voluntary; any employee may put away 5 percent of his
salary, but no more than $15 weekly, by placing it in the
savings fund (fund A). This money is invested by trustees
and at the end of each year every employee is permanently
entitled to his own money plus his divisible
share-depending upon his proportionate contribution-in
the total earnings of the savings fund. This is called A
credit. Annually the Company gives to the trustees a
percentage of its profits; this becomes fund B, and is also
invested by the trustees, largely in Kroger and other
corporate stocks. Again at the end of each year every
employee who has money in fund A is credited with a
proportionate share of the profits contributed plus
whatever fund B earned during the year. This is the
employee's B credit. In addition, at each year's end the
total value of all the B credits that have been forfeited (see
below) by employees who withdrew their savings during
the year, is credited, in the usual alliquot manner, to
employees still participating.
Employees are free to move in or out of the plan at will.
When they cash in they get back all they have contributed
themselves plus all the B credits allotted to their
individual shares during the years they were in. As to what
B credits were allotted to them in the past, they receive
only that portion "vested." Five percent of B credits
"vest" each year; this means an employee who has been
"in" for 20 years, gets it all, one who has participated 10
years receives 50 percent of his B credits in cash, and one
who joined only 1 year before is paid 5 percent of his B
credits. It is that portion of the B credits which during any
given year, although allotted to employees, is not paid to
them on their separation, that is called the "forfeited B
credits," and goes to the remaining participants who stay
in the plan.
All payments out of the savings and profit- sharing plan
are by lump sum , regardless of the occasion for
withdrawal-death, permanent disability, retirement, or
2.
a. Monetary value to employees of prof t-sharing as a
condition of employment
In recent years the contribution of the Company into the
plan from its profits, and the credits assigned to employees
in consequence of the decision of others to withdraw their
money, have been very substantial . For the year 1965, the
trustees reported as follows to the employees:
For 1965 the Company contributed $4,156,894 to
Fund B out of Company profits. This figure is
equivalent to 67 cents for each $1 of your 1965
savings. In addition, members who withdrew from the
Plan gave up $3,222,476 of Fund B credits and
earnings . This amount is equal to an additional 52
cents for each $1 of your 1965 savings and has been
transferred to those who remained in the plan.
For each $1 you deposited in Fund A in 1965 you
received a total of $1.19 of Fund B credits.
In 1964, for each $1 of savings the employees were
credited with 68 cents constituting Kroger's contributions
from profits and 35 cents constituting forfeited B credits;
as a further increment, the employees were credited with
10 percent of the preceding yearend balance constituted
earnings on investment and capital appreciation in the
combined funds. In 1961, the sums were respectively 44
cents, 46 cents, and 6 percent; in 1966, 74 cents, 39 cents,
and 7.5 percent; in 1956, 39 cents, 19 cents, and 7.1
percent.
6. The implicit defense: is the Kroger profit-sharing plan
a retirement pension system?
That the substance of the Respondent's retirement plan,
as well of its savings and profit-sharing plan, are subjects
that fall within the area of mandatory collective
bargaining, is not disputed. As this report in its entirety
will show, the Respondent makes essentially two defenses
to the entire complaint. One is a direct denial of having
refused to bargain about its savings and profit-sharing
plan, coupled with what it called documentary and
objective proof that it did in fact negotiate the Unions'
demands with respect to that plan. The other may be
called an implicit argument, and rests entirely upon an
assertion that the two company plans-retirement and
profit-sharing-are one and the same thing, that they
"cannot be split." Clarity will be served by considering the
latter defense now.
This defense precedes via a logical structure of ideas
built entirely upon the premise that the profit-sharing plan
is a "retirement" system, or a "pension plan" under
another name . From this one "fact," which the
Respondent attempted to establish by many indirect forms
of proof, it argues that necessarily, as a matter of pure
logic, participation by any employee in a company-union
THE KROGER CO.
administered pension plan must exclude him from sharing
in the current profits from time to time, and therefore it
cannot be said that the Company did anything wrong in
insisting that things be done coherently. Although not
exactly articulated, what this really means, according to
the Respondent's basic position, is that the Union
recognized the fundamental logic that the profit-sharing
plan is a retirement plan and that therefore there cannot
be at any single moment, in a single employer-employee
relationship, more than one pension system.
No amount of argument can alter the facts of what this
Company's profit-sharing plan is. An employee need not
remain with the Company long, much less work for it into
his middle years, or until the age of normal retirement, to
be entitled to some, if not all of the cash payment
distributed from company profits. Conversely, he can put
aside part of his wages periodically as long as he wishes,
well into old age, but if the Company nets less than $15
million per year in its operations, all he gets when he quits
is his own money back, quite as though he had deposited it
in a bank at interest. Every witness for the Company
consistently and repeatedly referred to this plan as part of
the Company's "retirement program." Words cannot
change realities.
Entirely apart and separate from its profit-sharing plan,
the Company's long-established retirement plan, unlike
profit sharing, applies to all employees without regard to
their individual desires, contributions are made solely by
the employer, payments are made only upon retirement at
old age, and they continue without interruption throughout
life, the man who survives 20 more years receiving four
times the amount given another who lives only 5 years as a
retiree. If the word "pension" has a generic meaning, this
is it.
Theoretically, a union desirous of winning the benefits
of a jointly administered retirement arrangement for the
particular single location or area employees it represents,
could also request that they continue to enjoy the benefits
of the employer's companywide, separate, and unilaterally
administered retirement system. This would be a
duplication of benefits for union-represented workmen,
but the extent of a bargaining agent 's economic demand
cannot of itself determine the legality of its action, or of the
employer's reaction thereto under the provisions of this
statute. Unions do not make such demands, just as they do
not ask that a newly proposed hourly wage rate be paid in
addition to an established piecework system. But no such
question arises in this case, for the unions involved never
suggested Kroger continue for the same employees both
its own retirement plan and one that might be
administered by the Company and the Union jointly. It is
at this point precisely-on this one fact of life-that the
Respondent's implicit defense, or attempt to explain away
the entire complaint, is built. Like the profit-sharing plan,
the Company's retirement plan includes a specific clause,
also by resolution of the board of directors, disqualifying
employees who became subject to a jointly administered
retirement system with any union. The complaint does not
allege, and no union has charged, that maintenance of that
exclusionary clause is coercive upon the employees within
the meaning of the Act. The argument then continues that
if the retirement plan's restrictive clause is not illegal (or
at least not attacked in this proceeding) because it applies
3 That concomitant grants to employees of what are clearly two
straight pension or retirement benefits would be unrealistic and
illogical is conceded by the Meat Cutters International Union in
its brief. " . . . since the very purpose of a union negotiated
369
to a pension and because there cannot exist two pension
systems simultaneously, it follows by parity of reasoning
that exclusion of paragraph 4 of the profit-sharing plan
must be equally free from attack.3 For such reasoning to
be at all correct, it is necessary that pension rights and
profit shari ng be literally equated.
There is no significant relationship, in terms of what is
material to the issue of this case, between the two Kroger
plans. Commitment to pay pensions under the retirement
plan is a burden upon the Company's assets without
regard to the success or failure of its business operations;
profits are shared only when there are such earnings to be
distributed. The first is an automatic benefit to all
employees, the latter is a matter of choice. More
important, the retirement plan brings a benefit only after
employment has ceased, only in the event an employee
lives into his 60's or later, and in an amount determined by
a workmen's fortuitous longevity, a matter beyond the
control of man or corporation. In contrast, profit sharing is
money in the bank now, to be drawn by an employee at
will, the amount in any given instance depended in major
part upon the frugality and the saving habits of the
individual, with the ultimate benefit terminating with
finality at the moment of his separation from the
Company. In sum, what share of profits, added to his own
savings, an employee is entitled to recover in a single sum
on quitting his employment, is only added to his old age
support if he knew how and was in a position to husband
his accumulated resources. But the essence of retirement
pay, or pension, is assurance that come what may a man
will die for causes other than want of food. It protects a
man against his folly and against his weakness. This is
what the Kroger retirement plan does; this is what a union
pension plan does; this is not what the savings and profit-
sharing plan assures a man.
The "proof" that the profit-sharing plan is a retirement
system consists entirely of repeated statements by
company representatives to that effect. Typical of the
supporting evidence is a form document that Respondent
prepares for the convenience of employees contemplating
retirement after the appropriate age. It lists the exact
amount he would receive under the Kroger retirement
plan, the sum to be paid him under applicable social
security laws, and the value-if he is entitled to any at
all-of his then divisible share in the savings and profit-
sharing fund. Aside from being another example of the
technique of labeling a man's savings as "pension," the
last item no more can be called part of a man's "retirement
benefit" than any other savings he may have been able to
accumulate from other sources. No doubt a rich man lives
better in old age than a poor one, but so does a squirrel
who works harder and saves more chestnuts before the
snow falls.
And there is much in the record to prove that, apart
from language characterization aimed at defeating the
very thrust of this complaint while its threat built up over
the years, the Company itself saw fit to sell this profit-
sharing plan to its employees as a benefit in employment
quite unrelated to their contingent old age needs after
retirement. During 1965, while the Unions were inviting
the company negotiators in various cities to talk of the
profit-sharing plan and the possibility of continuing it in
some form or other, the Respondent carried on a campaign
pension plan is to replace the Retirement Income Plan, exclusion
from the Retirement Income Plan upon establishment of a union-
negotiated pension plan simply expresses a truism which would
eventuate even if unarticulated."
370 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
directly intended to influence the employees towards
continuing the company retirement "program" and to
reject any union-proposed pension system. Among the
central office material placed in the hands of store
managers for this purpose was a document entitled
"questions and answers-union pension." It included the
following:
Q. I am a journeyman meat cutter. Looking at the
two plans (Kroger and the union plan) which one is
best for me?
A. This is difficult to do since we don't really know
what plan the union is offering. However, we can
compare known union plans and the Kroger Profit-
Sharing and Retirement Income Program. Not
considering the Profit-Sharing portion at this time,
and looking only at retirement, any meat cutter with
30 years service would do better under Kroger's plan
.... To these figures, we must add the Profit-Sharing
payoff which can be used to purchase additional
monthly income if desired. This is a large sum of
money in cold hard cash to be spent any way you
want.
This stress upon a "payoff" of "cold, hard cash" that can
be used "any way you want" has nothing to do with old age
pension.
The stated purpose of the savings and profit-sharing
plan, as set out in its inception, only speaks of it as a
supplement to retirement benefits, recognition of the fact
it is comparable to any other savings or reserve asset an
employee may enjoy in consequence of early economies .4
Repeatedly company literature for employee distribution
highlighted the quick benefits, as distinguished from old
age benefits, inherent in the savings and profit-sharing
plan:
As a young lady expecting to be married, I do not
know how long I will be working. Is there any
advantage to my joining the plan?
Yes. Your savings will grow each week. A nice
savings account can be very helpful in providing a
nest egg with which to start your marriage. And if you
should later decide to continue working longer, your
earned share of the Profit Sharing Fund will add
considerably to your savings.
Do I receive any benefit from the Kroger Employee's
Profit-Sharing and Retirement Income Program if I
should leave Kroger before retirement age?
Although the Kroger Employee's Profit-Sharing and
Retirement Income Program was established to
provide the maximum benefit payoff at retirement the
program is also designed to provide modified benefits
for individual employees who participate in the plan
for even a short period of time. An example could be a
young checker who has fulfilled the requirements for
membership and who has been a member of the
program for 3 years and who now becomes married
and stops working. The employee would receive the
following:
Fund A.-100% of all deposits plus interest and
growth in market value of securities in Fund A.
Fund B-15% of all earnings credited to her account.
(Earnings in Fund B consist of interest on bonds,
dividends on stocks, rent on stores owned by the fund,
and increase in market value of the stocks and bonds
within Fund B.)
The fact that in 1 year over $3 million in B credit funds
are forfeited by employees who choose to withdraw their
savings, greatly weakens the contention that this is no
more than retirement financing. Moreover, at the hearing,
Parker, the vice president of labor relations, while
persisting in referring to the two plans as "one program,"
conceded "obviously, it can be split."
And finally at one stage during the hearing, company
spokesman took a position completely at variance with,
and utterly destructive of, this implicit defense bottomed
upon logical reasoning. Parker said that his assistants, the
first linemen who do the bargaining in the field, are
authorized to negotiate changes in the savings and profit-
sharing plan, that the exclusionary paragraph 4 was not an
impediment to negotiating some form of continued profit-
sharing even by employees who might be covered by a
point pension plan with the Union. At this point the entire
argument that one is a pension counterpart of the other
and that the two cannot coexist fell apart.
Whatever may be said of the propriety in arbitrarily
denying employees double coverage in retirement benefits
under two pension plans-one operated exclusively by the
employer and the other jointly with his union-has no
relevance to the facts here considered.
3. Did the Company bargain?
The savings and profit-sharing plan was originally
established pursuant to definitive resolution of the
Company's board of directors, and every modification
thereafter was made only by express resolution of that
authority. The 1956 innovation excluding persons covered
by other pension systems, and its further clarification in
1962 were also of such character. It was also by express
board of directors' resolution that employees of other
stores, or chains of stores, later purchased by Kroger, were
brought within the coverage of the profit-sharing plan.
There is no indication that there has ever been a deviation
from any provision of the plan, as precisely decided by the
board of directors, by any subordinate official of the
Company. When paragraph 4 was first added, and its
terms brought to the attention of the employees, the Meat
Cutters Union learned of the fact and protested, in writing,
to the Company its view that the very existence of such an
exclusionary clause was illegal under this statute, that it
improperly interfered with the employees' freedom to
engage in untrammeled collective bargaining through a
union of their choice. The Respondent never replied to
that Union's protestation.
It was not until the early 1960's, however, that either of
the two Charging Unions embarked upon a program of
jointly administered pension plans with this employer.
' The resolution of the board of directors establishing the plan
contains the following statement of purposes
The plan is designed to provide an additional incentive for
improved operating and merchandising by enabling
employees to share with stockholders in the profits of the
Company ; to attract better caliber people to seek
employment with the Company; to encourage individual
thrift and continuity of employment, to aid the Company's
employees in providing old age security by supplementing
the noncontributory Kroger Retirement Program with a
participating savings plan.
THE KROGER CO. 371
From that day forward it was the Respondent's unqualified
and unyielding position that the continued profit-sharing of
employees covered by a union-sponsored pension system
was a matter not only impossible thereafter but not even to
be discussed in bargaining negotiations. The tone of the
attitude that was to follow consistently thereafter was set
at the very first conference where a union pension plan
was proposed. When, at the opening bargaining session for
a multiemployer unit in the Kansas City area in the year
1963, the Meat Cutters included the subject of pensions
among its introductory demands, the Company's
immediate reaction was to withdraw from the
multiemployer negotiations entirely. There followed, in the
several years later, a series of contracts negotiated with
each of the Charging Unions; in some there was agreement
to establish jointly administered pensions, in others the
idea was abandoned. The signed contracts total about 38
for the Meat Cutters and 16 for the Retail Clerks. At first,
when the Union insisted on its own pension arrangement,
the Company asked that the employees be polled
specifically on which pension they wished, the
Company's or the Union's, this apart from any vote for
ratification of the total contract. Later, the Company was
satisfied if the union negotiators made the decision as part
and parcel of the total bargaining.
In every instance where a union-negotiated pension was
included in the contract, the Company refused to sign the
agreement unless and until the Union accepted either a
clause in the contract proper or, as a special addendum,
language fully embodying the exclusionary provision of
paragraph 4. The pattern was so fixed that in later stages,
while the Unions were considering bringing the matter to
the Board for determination, and even after the charges
had been filed, the Unions accepted the clause without
discussion at all in order to expedite regularity and
stability in other economic matters. The Respondent even
refused to provide in the contracts that the question be
reserved for Board determination.
The heart of this case, as already stated, is the fact that
by formal, extensively publicized decision of the
Respondent's board of directors, all employees who
choose to bargain successfully about pensions with the
Company are automatically debarred from further
enjoyment of part of the Company's profits. All
contentions urged by the Government and by counsel for
the Charging Unions in support of the complaint
allegations stem from this one reality. In turn the focal
point of the real defense-which starts by recognizing that
as a matter of law a share of the profits in return for work
performed is a bargainable condition of employment is
the plain assertion that the Company did bargain about it
and always does so. The objective evidence said to support
the defense is the fact that the contracts, normally
reflecting the agreement of the parties in collective
bargaining, literally set out the Union's consent to have
paragraph 4 of the savings and profit-sharing plan be
implemented. In its proposed findings of fact, here
reduced to capsule form, the Respondent suggests that the
record in its entirety amounts to no more than the
following:
There came a time when the union agents included in
their list of demands preliminary to negotiating contract
renewals, a jointly administered straight retirement
system. The company representatives, usually a labor
representative from the Cincinnati main office together
with a divisional vice president, responded with saying
that the proposal would be considered, but that the
Company would wish to discontinue the benefits of the
profit-sharing plan if the employees were to receive such a
joint pension plan advantage. The Union argued against
this counterproposal, claiming that there was no logical
relationship between pension and profit-sharing. The
company negotiators maintained the position, explained
their reasons, talked to persuade the opposite members to
their view. In the end-in every instance-the Union
yielded, either by signing the supplemental to the contract,
or by agreeing to the inserted clause, and thereby
completed the bargaining negotiations. After distilling the
record and reducing it to this simple statement, the
Respondent then goes on to characterize the events as no
more than the usual bartering of one economic demand
against another, with its position respecting further
participation in profit-sharing and the union's request for a
joint pension as only two of the many interlaced and
interdependent terms and conditions of employement
which together, in the give and take of normal collective
bargaining, are resolved one way or the other in the total
package which finally is codified in the contract.
The record in its entirety does not support this proposed
"findings of fact"; indeed it required a contrary
conclusion. Had the company negotiators in truth
considered, before rejecting, the merits of the union
argument against automatic exclusion of employees from
profit-sharing, had they discussed this knotty conflict
between their insistence upon adherence to paragraph 4
and the Union's objection to it-in short, had they
bargained about the matter as the statute requires
concerning so substantive a condition of employment, the
merits of the complaint would appear in a different light.
It is true that in the end, after all other issues had been
successively and amicably negotiated for the early
contracts, and because the Company then adamantly
refused to sign unless the Unions agreed to incorporate
paragraph 4 into the contracts, the union negotiators
yielded to the inevitable. It does not follow from the fact of
such unqualified surrender to the Company's insistence,
however, that capitulation was preceded by what can be
called good-faith bargaining on the subject. To so hold
requires a form of inverse reasoning, starting from the fact
of contract language and rationalizing backward that
necessarily, or by implication, there must have been the
usual precontract bargaining. The evidence, both oral and
documentary, shows otherwise. And this is equally true of
the last several contracts signed, where the Meat Cutters
wasted no time arguing all over again against the fixed
position of the Company, but instead went right ahead
with all other negotiated terms by adding the requisite
exclusionary language offhand. By this time it was clear
there was no way of provoking real bargaining about profit-
sharing short of bringing the entire question to the Board
in this proceeding.
Much more persuasive is the reasoning and conclusion
that must flow from the starting point of things as they
were before negotiations began, and as they still face the
union negotiators today so long as paragraph 4 stands as
automatic debarment from profit-sharing of all employees
covered by a union pension system. It hardly needs saying,
or citation of supporting legal authority, that the board of
directors of so large a corporation by their formal
resolutions dictate rules of operations which subordinates
are not free to ignore. There is nothing, by either direct or
inferential language, in paragraph 4 or in any other
resolution of the directors, even remotely suggesting that
the lower officers of the Company may in their discretion
298-688 0-69-25
372 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
vary one iota the orders of the top officials. When the
negotiators from the office of John Parker, vice president
in charge of labor relations, went to the various cities to
meet with union agents and hammer out the terms of new
contracts, on this one point-the binding effect of
paragraph 4 of the savings and profit-sharing plan-their
lips were sealed and their hands were tied.
As a witness, Vice President Parker attempted to create
the impression that the company negotiators were free to
bargain on the question of whether employees who might
be covered by a joint company-union pension plan could
nevertheless continue to participate in the profit-sharing
plan. His testimony on this critical point was evasive,
argumentative, and totally unpersuasive. After repeated
equivocation, he said his negotiators "could have" given
both a company-union pension plan and profit sharing, or
"could have" departed from the structure of paragraph 4;
"This could have happened." Asked what the
consequences would have been had they ignored
paragraph 4 of the plan, he answered ". . . what the legal
implications are, I am sure I don't know, I am not a
lawyer." He "imagined" his assistants were aware of
paragraph 4: "these men know the economics involved,
they know the consequences." Did the resolutions of the
board of directors dictate company policy? "A: I don't
know whether they do or not." What is the Company's
position that if the Union were successful in negotiating a
pensin plan employees "would automatically be dropped"
from profit sharing? "A: I'd say that that is not the
Company's position." Here in one breath Parker swept
away 10 years of his board of directors' authority.
Twelve local union officers-five of the Meat Cutters
and seven from the Retail Clerks - testified of their experi-
ence with company agents in their attempts to bargain
about-the profit-sharing plan. Northnagel of Meat Cutters
Local 476, in 1963 met with a large multiemployer group in
Kansas City; he stated at the outset that he would propose
a pension plan, with Kroger's employees continuing, in
some fashion, in the profit-sharing plan. The Respondent's
sole reaction was to withdraw forthwith from the negotia-
tions. The Company was kept informed of bargaining as it
proceeded, and when Local 476 again advised Snead,
personnel manager, they viewed retirement and profit
sharing as separate negotiable items, the Company's sole
answer was: "You understand the Company's position."
While this was going on, the Company advised each of the
employees involved by letter that exclusion from profit
sharing would be "automatic" in the event of a "union
pension plan," that the two "could not be split." Failing to
obtain strike authorization from its International, and with
the Company adamantly insisting the exclusionary clause
of the profit-sharing plan must be incorporated in any
contract, Local 476 finally conceded. The special contract
provision, substantially as it appears in all the later
contracts, reads as follows:
It is understood and agreed that under the terms of
the Kroger Employees' Profit Sharing and Retirement
Income Program (hereinafter sometimes called the
Program) all employees covered by this collective
bargaining agreement, shall, as of midnight, June 30,
1965 be ineligible to participate in or receive any
benefits under the Program, and if any such employee
is then a member of the Kroger Employees' Savings
As a witness for the Respondent Bedell denied any agent of
either union ever asked him to bargain with respect to
paragraph 4 of the savings and profit - sharing plan . He also denied
having said to a representative of the Retail Clerks that "It was
and Profit Sharing Portion of the program, such
employee under the terms of the Program shall be
conclusively deemed to have withdrawn as of
midnight, June 30, 1965.
Shortly thereafter Northnagel dealt with Howard Harris,
also from Vice President Parker's office, for other
areas-Leavenworth and Florence in Kansas and Sadalia
in Missouri. As the negotiations proceeded, according to
Northnagel's testimony, ". . . he [a conciliator] asked the
company if they would negotiate separate on the two
programs. The company said no."
Kelly, Meat Cutters International vice president, told a
like story of late 1964 bargaining on behalf of many locals
for multistore units in the general Chicago area; again
Kroger had for many years bargained jointly with other
retail companies. Here Van Ausdall, representing Kroger,
told Kelly he must have a letter from the Union agreeing in
advance there would be no talk of pension if he was to
continue to participate in the multiemployer negotiations.
When Kelly said he would talk pensions, Van Ausdall,
according to Kelly ". . . said `We are not going to be
influenced by any other offers.' That as far as they were
concerned, if their people made a decision on pensions,
that they would have to do so separately and alone. And
that they would have to be voted by the union separately
and alone. They pointed up that if they voted to come into
the union plan, they would automatically stop participating
in the pension and the profit-sharing plan of the
Company." Kroger's answer to the Union's demand here
was "This was company policy." The employees in this
area were polled twice, first choosing the Company's
arrangement and then agreeing to a union pension. Here
the contracts were signed in July 1965, with the
exclusionary clause demanded by the Company. Again the
Company kept the employees advised by letter: "Should
you vote to enter the Union program, the complete
company program-retirement income and profit
sharing-will be terminated. Such termination would be
effective at the time Kroger began contributions to the
union pension fund."
In the St. Louis area early in 1965, Bedell, from Parker's
office, took a like position; he told Hook, of Meat Cutters
Local 88, that Kroger would not bargain with the industry,
despite a 20-year history of multiemployer negotiations;
Hook was to finish off negotiations with the industry and to
see him later about Kroger. By May 25, 1965, a union
pension was negotiated with other stores, but when he was
asked to sign the multiemployer agreement, Bedell said
" .. you know the company's policy. The employees will
have to drop profit sharing .... You can have one, but you
cannot have both." Bedell also said, according to Hook,
"The Company felt very stongly that the Kroger
employees should be given the opportunity to express
themselves, whether they wanted to be covered by the
union Industry Pension Plan or maintain the Kroger
retirement and profit sharing income program." Hook told
Bedell "we want to negotiate with you on the profit sharing
plan of the Company," and Bedell answered, "The answer
is no."5
The Kroger employees in this area voted in favor of the
union pension plan, but the Company held firm to its
refusal to sign a contract unless paragraph 4 was expressly
incorporated by supplement to the agreement. All this led
company policy " that no employee could continue to enjoy profit
sharing together with a union pension system In the light of the
total record, I do not credit such denials by Bedell.
THE KROGER CO.
to a conference among the lawyers in July, because a
strike threat developed over the issue. The Respondent,
throug i its lawyer, Vaughn, was adamant: "No
supplement, no contract." The Union suggested the
contract be executed and the question of adamant
insistence that the Company's two plans were but a single
pension system be submitted to the Labor Board as a
matter of litigation. Again the answer was "No," with the
Company stating it would take a strike if necessary on the
issue. The local chose to yield instead of striking; it signed
the contract amendment agreeing to the exclusionary term
of paragraph 4.
Bedell also acted for the Respondent in the Ohio area
late in 1965. Pollack, president of Meat Cutters Local 427,
asked would the Company consider having a union
representative sit with the trustees of the saving and
profit-sharing fund. Bedell answered: "No, that would be
impossible ... the Company's position was well known ...
if they would consider and agree to a jointly-administered
pension plan, the union would have to agree to include in
as part of it the dropping of the profit-sharing plan."
Pollack called paragraph 4 "devisive," saying it pitted the
Company against the Union, and asked would Kroger
consider altering the profit-sharing plan for these
employees. Bedell's response was: "I can't handle this any
other way except as we have presented it to you ...."
Pollack testified to similar experiences in the Pittsburgh
area in September 1965, where Saunders, representing
the Company, rested with saying "Mr. Sabel [union
negotiator] ... was well aware of the Company's position.
That, if the union wanted to negotiate a jointly
administered pension plan, that it was the Company's
position that the people through the union would have to
agree to drop the profit-sharing plan." In Cleveland the
Meat Cutters signed a contract with a pension clause, but
also with the exclusionary supplement; in Pittsburgh it
gave up on its pension demand , and paragraph 4 was not
added to the agreement.
Meat Cutters International Representative Hall
negotiated contracts for a number of locals during 1965 in
the Indiana, Kentucky, Tennessee, and Georgia regions.
Many contracts were signed here in 1965 and 1966, and in
some sections negotiations were still in progress at the
time of the hearing. At South Bend, Hall asked Company
Spokesman Van Ausdall "... if he wanted to talk about
profit-sharing, would he put the profit-sharing situation on
the table and bargain or negotiate on the subject of profit
sharing. Mr. Van Ausdall said he could not ...... Ausdall
added that Hall "knew the policy of the company, and that
it was not the policy of the Company-not to bargain or
negotiate on the profit sharing." In Atlanta, in June 1965,
Company Negotiator Saunders told Hall "You can have
one, but you can't have both ... you know the policy." In
Nashville, Tennessee, Bedell gave Hall the same position.
And so it went. At Louisville no union pension was agreed
upon. In all the locations where the parties established a
union pension, the usual exclusionary supplement was
placed in the contract . Bargaining is still continuing in this
fashion in Memphis and South Bend.
Holding firm to the basic contention that the two plans
could in no event be "split,"- the Respondent's
representatives pursued the same technique in their
dealings with the various locals of the Retail Clerks Union
throughout the country. At the hearing spokesmen for
these unions gave much detailed testimony of contract
negotiations from 1962 to the present, but the tenor of their
stories is the same, and no useful purpose would be served
373
by comprehensive repetition here. Fundamentally, the
Company's position was one and the same throughout.
Where the Retail Clerks wished to negotiate a union-
company administered system, the answer was that the
Company was willing to discuss the proposal and come to
agreement if possible, but that in no circumstances would
its retirement plan and savings and profit-sharing plan be
considered as separate or divisible conditions of
employment. In every instance the Company's insistence
was that a union pension system automatically meant
surrender of profit sharing, and that it would in no event
discuss any possibility of continuing profit sharing or
altering it in any way in the light of a newly established
union retirement system. Always the refrain which met the
local union's request to discuss the matter was that this
was "company policy," something beyond the authority of
the Company 's negotiating teams.
Thus Howard Harris, of the Company, told Renschen, of
Retail Clerks Local 655 in St. Louis in late 1962, that "the
Kroger Pension and Profit Sharing were tied together ...
that that was the company policy and he couldn't do
anything about it ... that his hands were tied by the
company's position on company policy in reference to
pension and profit sharing." At one point here the Union
proposed that, instead of union pensions, the two company
plans be set out in the contract so there could be no
reduction of the benefits during the life of the agreements.
Harris' reply was that "it was impossible, they could not
put anything like that into the plan, that they were not
negotiating for it at that time and they absolutely would not
put it into the contract." Again in 1964 the Company
refused a like request to incorporate its two plans into a
signed agreement.
Negotiating with Leeby, of Retail Clerks Local 954 in
1963, Harris again insisted profit sharing must be
surrendered, that his two plans were not separable, that it
was the "corporate officer's position" of 1956 "that they
would not separate those two." In 1965 Local 880
President McDonald complained to Bedell in Cleveland
that the Company had increased its contribution to the
profit-sharing fund without discussing the change in
benefits with the Union. Bedell's answer was: "You know,
if you are fortunate to receive a pension plan, that the
employees will lose the profit sharing?" Again in August
1965, in Pennsylvania, McDonald asked Bedell to
incorporate the two company plans in the contract they
were negotiating . The answer was . I knew the
company policy, and we would not get it ." When, in 1964,
Local 782 negotiated a union pension, Bedell told the
union agents: "Well, the people have made their choice
that they want a jointly administered pension program
and, therefore, the Company will take away the profit-
sharing program. And he went on to say this is a matter of
company policy and it was a decision made by the Board of
Directors."
These excerpts from the record testimony, plus many
others too detailed and cumulative to warrant restating
here, stand uncontradicted as statements made by
company representatives in the course of bargaining
during the past several years. The consistent pattern, the
logical coherence between such statements, and the
compelling force of the board of directors' resolution
always effectively publicized and enforced, make the
testimony fully credible. It cannot be said that in response
to repeated invitations for discussion of so substantial a
condition of employment as this profit-sharing plan an
employer bargaining in good faith may limit his responses
374 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
to robot repetition of such phrases as "it is company
policy," or "the two items cannot be split," or "the matter
has been set at rest by our Board of Directors years ago." I
find, on the record in its entirety, that the Respondent in
fact refused to discuss with any of the union
representatives, and therefore literally refused to bargain
about, either the possibility of viewing its retirement plan
and savings and profit-sharing plan as separate negotiable
conditions of employment, or the possibility of altering its
profit-sharing plan for union represented employees, or
substituting some other benefit in its place.
It is no comfort to the defense that in the end, in each
and every case where a pension clause was negotiated, the
many local unions acceded to the Respondent's
unalterable insistence that the questionable paragraph 4
be inserted in the contract. Where there is no good-faith
bargaining, as the statute commands, humble
acquiescence by the union in what is tantamount to an
illegal demand by the employer, cannot serve retroactively
to excuse the improper conduct. What the Company was
really saying to the union officers, after all other issues had
been resolved but before it would sign , and what it is still
saying today, is: "Agree with us, in writing, that profit-
sharing and pension are one and the same condition of
employment, that there is no legal duty upon us to discuss
the profit-sharing plan with you separately, and that by
force of our Board of Directors' unilateral decision in 1956
every employee who chooses to be covered by a union-
negotiated pension program must automatically surrender
the profit-sharing part of his compensation." That anyone
of the unions could have struck in order to compel proper
bargaining is beside the point.6
E. Conclusions
However the case be viewed, the finger of fault points
always to the board of directors' resolution placed in the
profit- sharing plan in 1956 and standing there firmly as an
absolute impediment to any collective bargaining on the
subject. Its inflexible application to employees who chose
to engage in unfettered collective bargaining effectively
deprived them of a substantial benefit in employment they
would otherwise have continued to enjoy. The consequent
restraint upon the employees' statutory freedom to carry
on their protected union activity is clear. I find, as alleged
in the complaint, that by maintaining and giving effect to
the exclusionary paragraph 4 in its savings and profit-
sharing plan the Respondent has in the past committed,
and is now committing, unfair labor practices in violation
of Section 8(a)(1), (3), and (5) of the Act.
It matters not whether the disputed clause be
approached from one end of this spectrum or from the
other. The General Counsel calls it illegal on its face; the
Respondent relies heavily on the contention that there is
no direct evidence of union animus or of an intent either to
6 "A claim of ` waiver' with respect to charges or refusal to
bargain on an issue as to which bargaining is mandatory, or to
include in a contract a point on which agreement has in fact been
reached, requires some rather nice discriminations A party faced
with a stiff position by its opposite number on such an issue may
decide against pressing it, preferring not to jeopardize other
advantages it may obtain It is somewhat misleading to speak of
such conduct as a waiver of a refusal to bargain, rather, when the
course of the negotiation is considered as a whole, no such refusal
was ever consummated But when the issue has been pressed
throughout, the party unable to force the other to bargain or to
include an agreed provision in the written contract does not
"restrain and coerce" or to discourage "union
membership." There are some things that employers and
unions do which run afoul of the proscriptions of this
statute and are therefore "unlawful even absent a
discriminatory motive" (Textile Workers Union v.
Darlington Manufacturing Co., 380 U.S. 263, 269), and
"whatever the employers' motive" (N.L.R.B. v. Burnup
and Sims, Inc., 379 U.S. 21, 22). Although the word
"union " nowhere appears in the exclusionary paragraph 4,
there is no question but that its purpose is to exclude from
profit sharing those employees, and only those employees,
who wish to enjoy a pension benefit negotiated by a labor
organization. In the very nature of a limitation of this sort
there inheres a restraining effect upon the desire and the
freedom to bargain collectively. And if the practice of
collective bargaining in turn is the very reason for joining
or forming unions at all, discouragement of the tendency to
become a union member must flow necessarily from the
flat provision of the disputed paragraph. This is a case
where "the intent is founded upon the inherently
discriminatory or destructive nature of the conduct itself.
The employer in such cases must be held to intend the
very consequences which foreseeably and inescapably
flow from his actions ." N.L.R.B. v. Erie Resistor
Corp., 373 U.S. 221. As the court stated in Great Lakes
Carbon Corp. v. N.L.R.B., 360 F.2d 19 (C.A. 4): "The
significant factor in assessing the validity of such a plan is
its effect on the employees." In his brief counsel for the
Meat Cutters paraphrases the exclusionary clause; his
rewording is correct. "The only pension plan that Kroger
will allow to exist in conjunction with participation in its
Savings and Profit-Sharing Plan is its own unilaterally
adopted Retirement Income Plan. Joint negotiation of a
pension plan in substitution for unilateral determination of
a pension plan means ipso facto debarment from the
Savings and Profit-Sharing Plan." And it then becomes
"the union's exercise of its statutory prerogative as the
representative to negotiate a pension plan which causes
the employees to lose participation in the Savings and
Profit-Sharing Plan."
To offset this finding that paragraph 4 necessarily and
directly tends to discourage union membership, the
Respondent points to the fact that its employees'
membership in the two Charging Unions has mounted in
recent years and stands at over 95 percent today. It
distinguishes the related precedents on the ground that
disqualification here does not, in so many words, flow from
union membership as such,7 or establishment of a majority
representative," or mere execution of any collective-
bargaining agreement.9 But it is not the quantum of
restraining effect upon the employees' desire or freedom
to join a union that determines the legality or propriety of
repressive conduct under this statute. It is enough that the
behavior complained of, or the rules of conduct
unilaterally imposed and enforced by the employer, tend
in that direction. The Act does not require that "this
`waive' a completed refusal to bargain simply by signing up for the
best it can get It would seriously contravene the basic objective
of industrial peace to place such a party in the predicament where
it could make a valid charge of an unfair labor practice only if it
forewent a contract altogether " Henry!. Siegel Co , Inc. v
N L R B , 340 F 2d 309 (C A 2) See also McQuay-Norris
Manufacturing Company v N L R B , 116 F 2d 748 (C.A 7)
' Jim O'Donnell, Inc , 123 NLRB 1639
8 Melville Confections, Inc., 142 NLRB 1334, enfd. 327 F 2d 689
(C A 7)
" Toffenettt Restaurant Co , 136 NLRB 1156, enfd 311 F 2d 219
(C A 2).
THE KROGER CO. 375
change in employees' `quantum of desire' to join a union
have immediate manifestations" (Radio Officers' Union
(A.H. Bull Steamship Co.) v. N.L.R.B., 347 U.S. 17, 51). I
hold it true that when employees are told, as the Kroger
employees were frequently reminded by central office
literature, that they will lose profitable participation in the
savings and profit-sharing plan because of coverage by a
pension plan negotiated by a union, their desire to join or
remain with that union is diminished.
In support of its insistence that the exclusionary clause
was motivated by other than antiunion purposes the
Respondent asserted at the hearing that it was timed with
an acquisition program-the purchase of other retail
stores or chains of stores-and to avoid double coverage
by employees so associated with the Respondent. In the
face of the assertion, Vice President Parker, while
speaking of the acquisition program, admitted, as a
witness, "I don't know as there is any connection between
the two." His adverse admission is consistent with the
further fact that, whenever the Respondent did add
existing stores to its group, in every instance it was
necessary for the board of directors to take positive action
via its own resolutions before any employees of newly
acquired stores were brought under the coverage of the
savings and profit-sharing plan. It is thus clear that the
acquisition program had nothing to do with paragraph 4;
double coverage was avoided by inaction. Moreover, the
clause is expressly limited in application to Kroger's own
employees and makes no reference to acquisition or
employees of other stores. More significant, when
paragraph 4 was first established it excluded all
employees "covered by a limited group pension plan,"
then defined only as "established by or at the request of
the covered employees or their authorized
representatives." Six years later the board of directors
added more precise language to specify the exclusion with
greater clarity. It will be recalled that by this time the
Charging Unions had started to make bargaining demands
respecting both the Company's retirement plan and its
savings and profit-sharing plan. Now the clause was
amplified to make clear that "covered" by a limited group
pension, meant eligibility, even absence participation, in a
"collective bargaining unit" so covered. This revealing
phrase appears twice in the rather brief 1962 addendum to
paragraph 4. Thus not only is there no support for the
requested finding that the exclusion was motivated by
pure business reasons, but the final language of the
paragraph affirmatively shows its real intended reach to be
aimed at "union" pension plans. And finally, there is no
indication of the exclusion ever having applicability to any
other kind of external pension plan coverage.
Paragraph 4 of the Respondent's profit-sharing plan
illegally infringes upon the employees' statutory rights
because it interferes with, restrains, and coerces the
employees in their exercise of the right guaranteed in
Section 7 of the Act. The statutory right upon which the
Respondent places a monetary price is the privilege of
negotiating the matter of pensions collectively through a
union. If the employees are not satisfied to leave this
substantial aspect of their working conditions to the
exclusive and unilateral determination of the Respondent,
their Section 7 rights are pro tanto denied them.
Ineligibility in profit sharing is thus based upon a facet of
union representation. In the language of the statute,
Kroger levies a toll upon the employees' exercise of the
right "to bargain collectively through a representative of
their own choosing," or to engage in concerted activities
for "mutual aid and protection." In Jim O'Donnell, supra,
the employer's pension trust plan was limited to
"nonunion" employees, and the Board held it to violate
Section 8(a)(1) by its very existence and Section 8(a)(3) in
its effective application. That case differs from this only in
a matter of degree; qualitatively the vice is the same. Just
as union membership cannot be a predicate for
ineligibility, neither can union representation. Restriction
of profit sharing to employees "not represented by a union
designated as the bargaining agent" was held to violate
Section 8(a)(1) in Melville Confections, supra. Here the
debarment was not as broad as in Jim O'Donnell; a man
could be a union member and still enjoy profit sharing, and
only lost it if his union were established as the bargaining
agent. Now the distinction between the two cases is of
lesser degree, but again the character of the infringement
upon Section 7 rights precisely parallels the case at bar.
And in Toffenetti, supra, the profits could be shared by a
union member, or even when represented by a union
under contract, and it was only if the employer became
obligated to contribute, by agreement, to a union welfare,
disability, or pension plan, that the employee was
automatically debarred. The case-where the Board found
violations of Section 8(a)(1), (3), and (5)-differs from the
present situation more in words than in substance. Exactly
as in Toffenetti, Kroger's employees are debarred from
profits only if the Company is contractually obligated to
contribute to a union pension for them.
The price for the privilege of exercising the full gamut of
rights guaranteed by Section 7 was exacted from
employees in the past, and is being exacted today. As set
out above, it is a substantial toll being paid. The employees
who refrained from full collective bargaining-the
fulfillment of union membership-have continued to share
in the company profits; those who chose to do otherwise
have been, and are even now being, deprived of the "hard
cash," as the Respondent describes it. This is a
discrimination in "conditions of employment," as defined
in the statute.
The supplemental attachments to the many contracts
were signed by union agents in object defeat before the
unyielding "take it or leave it" attitude of the company
spokesmen. The reaction reflected no more than realistic
acceptance of the finality already predetermined by the
Company within its own council years earlier. It is only in
a superficial sense that the Union can be said to have
"agreed" to universal application of paragraph 4. The
dispute between the negotiators on that question was not
resolved between them in 1962, or 1963, or later, at any of
the bargaining locations, when the many contracts now in
evidence were signed. Instead, if it can be said to have
been resolved at all, it was settled once and for all-with
all possibility of discussion completely foreclosed-by the
board of directors, unilaterally and certainly without
consultation with any union. The "refusal to bargain" is
clear.
There is a final truism in this situation that is also
advanced, albeit obliquely, as a defense, again
superficially persuasive but not really in point. For the
Respondent to alter the terms of its companywide savings
and profit-sharing plan in its application to the employees
of only one store, or even a small grouping of stores, would,
in a practical sense, be virtually impossible. In any one of
the many separate unit bargaining relationships reviewed,
the Union involved spoke for the employees intimately
involved, and only for those. But establishment of a limited
and exclusive savings and profit-sharing plan would be
376 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
only one method for concluding good-faith bargaining on
the subject, and the mere fact such a solution would be
quite unworkable and impractical is not sufficient reason
for precluding,,g any consideration of all other possible
adjustments. The fact is the parties never reached the
question of how the Unions' demands to discuss the
benefits enjoyed by the employees could be dealt with in
view of changes made in retirement systems. It is the fact
that all talk was excluded from the negotiations that
governs here, not the perhaps illogical idea of separate and
maybe multiform profit-sharing systems.
F. The Statute of Limitations: The Remedy
Because this business of excluding certain employees
from a share of the profits is an old story, that section of
the statute which was intended to put old sins at rest
without revival day, comes into play. Section 10(b) of the
Act lowers a curtain, as it were, upon the acts that were
played more than 6 months before the filing of any charges
of wrongdoing. 10 As is often the case, the prosecution side
here too has no difficulty seeing right through the curtain,
and in effect, if not in words, would right the wrongs
committed as of old. To the defender, understandably, the
curtain is of iron, and casts a prospective shadow shielding
also the derelictions going on downstage. In reality, the
curtain is opaque. Some light penetrates out of the events
of the past, and makes current events more
understandable. The light is not so distinct, however-and
this is because Congress threw dust into the eyes of the
judge-that it can be said with assurance anyone
committed unfair labor practices upstage.
Thus the Kroger Company argues that even if the
exclusionary paragraph 4 is improper for any reason, its
establishment, by the directors, was a deed of 1956,
completed by 1962, all behind the curtain, and therefore
may not be the basis for an unfair labor practice finding
today. From this the Company then would have it that the
protection of Section 10(b) extends prospectively and
permits whatever coercive effects, legal or illegal,
continued existence and implementation of the debarring
provision may have now, and forever hereafter. The
position is not well taken. No more persuasively could it be
said an established employer policy against hiring union
members-formally documented, publicized, and
recorded-could warrant such a refusal to hire today
merely because the practice is an old one. The
exclusionary provision of the profit-sharing plan illegally
coerces employees now, is effectively being used to
discriminate against them in their employment because of
the exercise of protected activities, and precludes good-
faith collective bargaining . These are unfair labor
practices being committed now; the remedy must fit the
offense." The Respondent must be ordered to delete
paragraph 4 from its savings and profit-sharing plan, to
bargain in good faith with the majority representatives of
any of its employees on the subject of profit sharing,
regardless of whatever other proper subjects of collective
bargaining the Unions may propose, and to make whole all
those employees who, starting at a time 6 months before
the filing of a charge by the Meat Cutters, have suffered a
financial deprivation in consequence of effective
In pertinent part Section 10(b) of the Act reads as follows
no complaint shall issue based upon any unfair labor
practice occurring more than six months prior to the filing of
the charge with the Board and the service of a copy thereof
upon the person against whom such charge is made
implementation of the debarring paragraph 4. The
character and scope of the improper conduct imputed to
the Respondent in the charge filed by the Meat Cutters
International Union on September 10, 1965, and served
upon the Respondent 3 days later, was such that there
never was, nor could there be, any question in the minds
of any of the parties or their representatives but that the
purpose was to correct a companywide practice. Indeed,
the unfair labor practices found are such that the order
below, both the negative injunction to cease giving effect
to paragraph 4 and the affirmative dictate to bargain in
good faith, extends to the benefit of all Kroger employees
and any statutory majority representative, whether or not a
party to this proceeding, and whether or not now in
existence.
In turn , the General Counsel and counsel for both
Charging Unions want money remedies now for unfair
labor practices they say were committed behind the
curtain of Section 10(b), or before March 13, 1965. As
reported above, many contracts providing for jointly
administered pensions were executed in the early period;
in each of these, quite as the Respondent insisted in the
current negotiated agreements , the Unions had to agree to
the exclusion from the profit-sharing before the Company
would have anything to do with the agreements reached. X
is an employee covered by such a contract signed before
March 13; as required by the debarring paragraph 4 of the
savings and profit-sharing plan, but also pursuant to the
contract clause reluctantly accepted by the Unions, he
ceased participating in profits and was paid off.
Recognizing the imperative that there can be no finding of
an unfair labor practice committed at that time by the
maintenance of paragraph 4, by the refusal to bargain
about profit sharing, or by the coerced acceptance of the
inevitable by the Unions, the General Counsel waives any
suggestion that X be compensated for profits lost before
that date. X must nevertheless be made whole, according
to the General Counsel, for the profits that would have
been credited to his account in the profit fund B after
March 13. This means, of course, retroactive'
compensation to all those employees who were forced out
of the savings and profit-sharing plan in consequence of
activities occurring before the curtain fell dividing the
stage in two.
The difficulty with this contention of the Government is
that before a remedy may be fashioned for X , it must first
be said an unfair labor practice has been committed as to
him. Every employee of the Kroger Company who left the
savings and profit-sharing plan following establishment of
a jointly administered pension system, did so in keeping
with the literal wording of the applicable contract. As you
look at the contract, there is no indication of illegality or
coercion on its face. Had the Company bargained in good
faith on the question of profit sharing, had the Union
negotiated the matter-one subject against another-and
in consequence of regular bargaining agreed to surrender
profit sharing for its employees in return for a revised
pension agreement, or any other of its demands, there
would be nothing improper in the withdrawal of those
employees pursuant to the written agreements . It is only
by looking to the fact there was no real bargaining about
profits when those early contracts were executed, and the
11 The Respondent's purported equation of its unilaterally
adopted exclusionary rule with the prima facie proper union-
security clause found in the collective-bargaining agreement
considered by the Supreme Court in Bryan Manufacturing Co
infra, is patently false See Melville Confections, supra
THE KROGER CO.
fact that there then existed the automatic and unilateral
exclusionary paragraph 4 in the Company 's plan , that the
agreements can be characterized as anything other than
perfectly valid accords.
This situation parallels the one presented in Local
Lodge No. 1424, International Association of Machinists,
AFL-CIO v. N.L.R.B . (Bryan Manufacturing Co), 362 U.S.
411. There a contract making union membership a
condition of employment was executed before the start of
the 10(b) period with a minority union . Conceding that a
complaint predicated on the execution of the agreement
was barred by the statute of limitations , the Board
nevertheless found that it continued enforcement after the
10(b) period was unlawful and ordered reimbursement to
the employees of all initiation fees and dues paid to the
union as required by the contract . In disagreeing, the
Court applied the rule that "where conduct occurring
within the limitations period can be charged to be an
unfair labor practice only through reliance on an earlier
unfair labor practice ... the use of the earlier unfair labor
practice is not merely `evidentiary ' . " but "Rather ...
serves to cloak with illegality that which was otherwise
lawful . And where a complaint based upon that earlier
event is time-barred , to permit the event itself to be so
used in effect results in reviving a legally defunct unfair
labor practice." 12
The analogy is perhaps best illustrated if it be assumed
that instead of providing for withdrawal from profit
sharing, the old contracts required outright discharge of X
under circumstances that , but for Section 10(b), could be
found illegal. The hurt to the employee so released under
that contract would also be continuing ; he might be
without a job today. X is still at work but minus a share of
the profit . In each case the act of discrimination occurred
in the past , and while still effective today, cannot be said
to flow from mere continuation of the contract. The
employees in Bryan Manufacturing must continue to pay
union dues now; X stays out of the savings and profit-
sharing plan. Unless , of course , good -faith bargaining in
contract renewals hereafter brings about a different
accord.
The cutoff date is March 13 , the day the first charge in
this proceeding was served upon the Respondent. Only
those employees who were required to withdraw from the
savings and profit - sharing plan in consequence of
contracts signed after that date shall be restored to their
original position . The curtain has fallen on all others
previously excluded . Because of fiscal practices and
requirements , the contracts have specified the precise
date for withdrawal of employees from the plan, usually at
a time after the signing of the contracts . What . governs
here is the date when the contract was signed , even though
the particular employees affected may for some months
thereafter have continued to participate.
As to those employees whose debarment came about by
application of paragraph 4 unlawfully forced upon the
Unions in contracts signed after March 13, a reasonable
p
i' The Supreme Court also said in Bryan Manufacturing at
423
In any real sense the complaints in this case are "based
upon" the unlawful execution of the agreement, for its
enforcement , though continuing , is a continuing violation
solely by reason of circumstances existing only at the date of
execution To justify reliance on those circumstances on the
ground that the maintenance in effect of the agreement is a
377
restoration of their original status must be made. A final
requirement for an affirmative remedy is that each such
employee must be permitted to rejoin the plan, either
immediately or, if the mechanics of bookkeeping prevent,
at such times as the established plan rules for entry and
withdrawal otherwise provide.
Equitable restoration of employees adversely affected
by the unfair labor practices found, to the status as
participants in the savings and profit-sharing plan which
they would otherwise have enjoyed, presents very complex
problems with multiple ramifications. In the
circumstances, and absent expert advice on the problem,
the sundry details of this aspect of the remedy are best left
to amicable adjustment by the parties at the compliance
stage of the proceeding.
IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON
COMMERCE
The activities of the Respondent set forth in section III,
above, occurring in connection with the Respondent's
operations described in section I, above, have a close,
intimate, and substantial relationship to trade, traffic, and
commerce among the several States and tend to lead to
labor disputes burdening and obstructing commerce and
the free flow of commerce.
Upon the basis of the foregoing findings of fact, and
upon the record in its entirety, I make the following:
CONCLUSIONS OF LAW
1. The Respondent is an employer within the meaning
of Section 2(2) of the Act.
2. The International Unions and all of their locals are
labor organizations within the meaning of Section 2(5) of
the Act.
3. By maintaining and continuing to maintain a savings
and profit - sharing plan which by its terms automatically
excludes from participation employees covered by a
pension plan resulting from collective bargaining through
a labor organization , Respondent has interfered with,
restrained , and coerced its employees in their exercise of
the rights guaranteed in Section 7 of the Act, and is
thereby violating Section 8 (a)(1) thereof, has discouraged
and is discouraging membership and activities on behalf of
Amalgamated Meat Cutters and Butcher Workmen of
North America , AFL-CIO, Retail Clerks International
Association , AFL-CIO, and other labor organizations, and
is thereby violating Section 8 (a)(3) of the Act, and has
refused and is refusing to bargain with the foregoing
named Unions, and is thereby violating Section 8 (a)(5) of
the Act.
4. The aforesaid unfair labor practices are unfair labor
practices within the meaning of Section 2(6) and (7) of the
Act herein.
[Recommended Order omitted from publication.]
continuing violation is to support a lifting of the limitations
bar by a characterization which becomes apt only when that
bar has already been lifted Put another way, if the § 10(b)
proviso is to be given effect, the enforcement, as
distinguished from the execution, of such an agreement as
this constitutes a suable unfair labor practice only for 6
months following the making of the agreement.