be able to review an individual case.
Finally, while some may argue that this rule creates a presumption in favor of unionizing, ANA
would argue that the very principle established with passage of the National Labor Relations WfWH
Act was that employees should be protected in their rights to organize into labor organizations^^^
The action of self-organization and collective bargaining is an affirmative one and the Board i
by statute, bound to enforce the NLRA and this overarching principle.
.VN'.VS CE.\TE.\M\L • CF.1.KBR.\TE Ol-R Pv^T LWISION Ol-R FVTITIE • Jl>T. 14-19. 1996 • W'VSHIMiTON. DC
a
127
The Honorable James Talent
March 5, 1996 Page Two
Thank you for the opportunity to comment on this critical issue ANA believes that the Board
should move forward in reviewing submitted comments and issue a final rule.
Sincerely,
^;V^<^
Q^JutO^/^Z^
VirgiiBA Trotter Betts
President
128
UNITED STATES GOVERNMENT
NATIONAL LABOR RELATIONS BOARD
Washington. D.C. 20570
HAND DELIVERED
March 22, 1996
Honorable James M. Talent
Chairman, Subcommittee on Regulation
and Paperwork of the Committee
on Small Business
2361 Raybum House Office Building
Washington, DC 20515
Re: Hearing to Examine the Issues Surrounding
The National Labor Relations Board's
Rulemaking Concerning Single Location
Bargaining Units in Representation Cases
Thursday, March 7, 1996
Dear Chairman Talent:
At )the hearing, the question was raised about the number of cases the Board had to decide
each year involving a single unit location issue. We have made a hurried search of both our
published and unpublished decisions which reveals the following information.
First, with regard to recent fiscal years (1990 onto the present), I would note that, to my
knowledge, the issue of scope of unit was raised or now is being raised in 31 1 identifiable cases:
Fiscal Year 1990
50 Cases
Fiscal Year 1991
54 Cases
Fiscal Year 1992
42 Cases
Fiscal Year 1993
47 Cases
Fiscal Year 1994
52 Cases
Fiscal Year 1995
53 Cases
Fiscal Year 1996
13 Cases
(To date)
Of these identifiable cases, the issue of appropriateness of requested single location bargaining
units in R cases was raised in 247 (or 79.4 percent) of the cases.
129
Honorable James M Talent
March 22, 1996
Page two
As high as both of these case numbers appear to be, they most likely could be argued to be
grossly understated for the following two reasons. First, these numbers do not take into account
those cases in which one or more parties may have "slipped" at the regional level to a unit or units
other than preferred in order to avoid the necessity of a hearing and the consequent delay in the ,
holding of an election. Absent regional reporting of every such case, it would be impossible even
to venture an approximation of these number of cases. Secondly, the computerized case
classification system which was established years ago to retrieve, inter alia, issue identification as
coded at the regional level appears, at best, not to be working for the identification of cases
raising the issue(s) of scope of unit. Theoretically, of course, this classification index should have
caught every single R case coming to the Board on a request for review in which the issue(s) of
scope of unit was litigated. However, a comparison strictly between the index and those clearly
identifiable scope of unit requests for review which were received during the time period involved
herein has adduced that the classification index identified only 1 1.25 percent (or basically one out
of every nine) of these cases. I am not comfortable with proffering the suggestion that this could
be interpreted as implying that the Agency could be experiencing nine times as many of these
scope of unit cases, but I am most comfortable in suggesting that it is highly likely that the true
count of these cases would be substantially higher in number than the numbers delineated above.
Secondly, with regard to cost, both in terms of person hours and of other expenses
(transcripts, travel, attorneys' fees for the parties involved, etc.), it is nearly impossible for me to
estimate the cost of processing either the scope of unit or the actual requested single location
bargaining unit R cases. This could be done only with great effort Agency-wide and parties-wide.
However, I would emphasize that all of the cases numerated above were litigated cases, and that
all involved one or more days of hearing. There is mention in one of the cases, Heartshare Human
(Hagerty) . 29-RC-8451, of eight days of hearing, although this number seems minuscule in
comparison to the R case which recently was transferred to the Board for decision: Peco Energy .
4-RC-18572 This case, which raises the issue of the appropriateness of the requested single
location bargaining unit, required 49 days of hearing. The transcript alone is 7559 pages in
length During the most recent fiscal year. Fiscal Year 1995, out of the 37 cases in which the
question of whether a single facility was appropriate was in issue, the single facility was found
appropriate in 32, or 86.5 percent, of the cases.
130
Honorable James M. Talent
March 22, 1996
Page three
Attached are copies of five cases pertaining to this issue that I referred to at the hearing or
that are relevant to this issue:
Haag Drug Company. Inc.. 169 NLRB 877 (1968)
Kapok Tree Inn. Inc. . 232 NLRB 702 (1977)
Eschenbach-Boysa Management Company. Inc.. 268 NLRB 550 (1984)
d/b/a Red Lobster. 300 NLRB 908 (1990)
Executive Resources Associates. Inc.. 301 NLRB 400 (1991)
I request that they be made part of the oflBcial record. Given the fact that you referred to
former Chairman Stephens's statement which claimed that we were ignoring or discounting
relevant criteria in the proposed rule, it will be of interest to you to see that Mr. Stephens himself
did not go beyond the criteria contained in our proposed rule when he was engaged in the
deliberative process of adjudication regarding the restaurant industry in d^/a Red Lobster .
Finally, I wish to emphasize that some parties have a misconception about the current
state of Board law on whether a single or multilocation unit can be an appropriate unit. That
misconception is that current Board law does not allow single location bargaining units and that it
only allows multifacility units. That is not the law. The Act itself, in Section 9(b), specifically
states that a "plant unit" is an appropriate unit. Thus, the Board has permitted single location
bargaining units since the inception of the Act. As we pointed out in the Advance Notice of
Proposed Rulemaking (ANPR), 59 FR 28501 (June 2, 1994), the issue of the appropriateness of a
single facility unit when requested by a labor organization has been an issue in Board proceedings
for over 60 years. See e.g., Atlantic Refining Co.. 1 NLRB 359, 364-65 (1936). In the mid-
1950s the Board began to apply a presumption that a single location unit is an appropriate unit.
See Kearfott Company . 1 12 NLRB 979 (1955). The presumption gradually has been applied by
the Board to most industries under the Board's jurisdiction. Thus, the proposed rule does not
change Board Law to allow single facility units; Board law already promotes such units if they are
an appropriate unit. The proposed rule merely sets forth the decisive factors for finding single
location units appropriate.
Very truly yours,
ujdL^ ^%^ ^ (^^^'>
William B Gould IV
Chairman
Enclosures: (5)
131
HAAG DRUG COMPANY. INCORPORATED
877
Haag Drug Company. Incorporated, and Hotel,
Motel. Careteria and Restaurant Employees and
Bartenders Union Local No. 58, afTiliated with
Hotel & Restaurant Employees and Bartenders In-
ternational Union, AFL-CIO, Petitioner. Case
25-RC-34:9
February 16, 1968
DECISION ON REVIEW
Bv Chairman McCulloch and Members
Fanning, Brown, and Zagoria
On June 7, 1967, the Regional Director for Re-
gion 25 issued the attached Decision and Direction
of Election in the above-entitled proceeding, in
which he found the requested unit, consisting of I
of the Employer's 1 1 restaurants, to be an ap-
propriate unit for bargaining. Thereafter, the Em-
ployer filed a timely request for review of the Re-
gional Director's Decision on the grounds that in
making his unit finding he depaned from National
Labor Relations Board policy, that he made factual
findings which were clearly erroneous, and that
compelling reasons exist for the Board to recon-
sider its present policy as to the presumptive ap-
propriateness of a unit comprised of a single loca-
tion in a retail chain operation.' On June 29, 1967.
the National Labor Relations Board, by telegraphic
order, granted the request for review.
The Board has considered the entire record in
this case with respect to the issues under review
and hereby adopts and affirms the Regional
Director's Decision and Direction of Election.
It was for many years our policy in retail chain-
store operations to find that an appropriate unit
should embrace all the employees within an em-
ployer's administrative or geographic area.-'
However. we ree.xamined this policy in Sav-On
Druns. Inc., 138 NLRB 1032, and concluded that
it had overemphasized certain factors and had un-
duly prejudiced the right of self-organization which
the Act guarantees. As we said in that case (138
NLRB at 1033):
Reviewing our e.xperience under that [our
prior] policy we believe that too frequently it
has operated to impede the exercise by em-
ployees in retail chain operations of their rights
to self-organization guaranteed by Section 7 of
the Act. In our opinion that policy has
overemphasized the administrative grouping of
merchandising outlets at the expense of factors
such as geographic separation of the several
, l„
eftccl
. the Employer, m
Its request for review, urj
widt
launinc i: Srarel >
unit, contending that "e.
ih.ng-
aboul
the Mngle restaurs
of«lcv
en III
1 reslaumnts as a w
hole
■St
e e-S-
.Sul\'.^ySm„,.l
nc . •*^ NLRBW*: We>
i:5 N
LRB 1
\ii.Du«,Dri,vCa
/.U.i:-NLRBI3I6
169 NLRB No. Ill
outlets and the local managerial autonomy of
the separate outlets; and it has Ignored
completely as a factor the extent to which the
claiming labor organization had sought to or-
ganize the employees of the retail chain. We
have decided to modify this policy and lo apply
to retail chain operations the same unit policy
which we apply to multiplani enterpnses in
general. Therefore, whether a proposed unit
which is confined to one of two or more retail
establishments making up an employer's retail
chain is appropriate will be determined in the
light of all the circumstances of the case.
Our experience has led us to conclude that a sin-
gle store in a retail chain, like single locations in
multilocation enterprises in other industries, is
presumptively an appropriate unit for bargaining. In
cases subsequent to Sav-On Dru^s. we have con-
sistently found such units appropriate unless coun-
tervailing factors were present.' In the instant case,
we have, as the Employer requests, again reviewed
our policy in retail chain operations, and we con-
clude, for the reasons discussed below, that the pol-
icy compons with the purposes of the statute and is
consistent with related Board policy, and therefore
is entitled to continued adherence.
In order to establish a valid bargaining obligation,
the Act requires only that a "majority of the em-
ployees in a unit appropriate" for bargaining freely
designate a particular representative (Section 9(a)).
(Emphasis supplied.) It is elementary that more
than one unit may be appropriate among the em-
ployees of a panicular enterprise, and our choice in
a panicular case "involves of necessity a large mea-
sure of informed discretion." Packard Motor Car
Company v. \'.L.R.B.. 330 U.S. 485. 49 1 .
The basic statutory standard guiding the exercise
of our discretion in this regard is Section 9(b).
which directs us to select units to "assure to em-
ployees the fullest freedom in exercising the rights
guaranteed by this .Act"-which rights, of course,
include both joining a labor organization or refrain-
ing from doing so (Section 7). Absent a bargaining
history in a more comprehensive unit or functional
integration of a sufficient degree to obliterate
separate identity, the employees' "fullest freedom"
is maximized, we believe, by treating the employees
in a single store or restaurant of a retail chain opera-
tion as normally constituting an appropriate unit for
collective-bargaining purposes. 'The employees in
a single retail outlet form a homogeneous, identifia-
ble, and distinct group, physically separated from
the employees in the other outlets of the chain; they
generally perform related functions under im-
mediate supervision apan from employees at other
' See. eg. Fnsch, Bin 8u> Ill-Mar Inc . 147 NLRB 551. 151 NLRB
454 enforcement denied 356 F lA Xff iC A 7l; Mernrr Lumbrr and
Hi,rdua,r C.ympan^ 145 NLRB I0:4 enfd 345 F :d 770 iC A. 91;
Puni\ Fixid Siorrs Inc I6U NLRB 63 I . enlorcemeni denied 376 F :d
497 lC.\ II. cen. denied !|I9 US 959 Duns Culrirna. Inc. 160
NLRB I 141 And tee also C.ipi/u/S.iirrs/'ir. 168 NLRB90lt.
132
878
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
locations: and their work functions, though parallel
to. are nonetheless separate from, the functions of
employees in the other outlets, and thus their
problems and grievances are peculiarly their own
and not necessarily shared with employees in the
other outlets.'
Our conclusion in this regard is consistent with
our practice in industries other than retail chains.
We have consistently found that a single-location
unit in a mullilocation enterprise is a presumptively
appropriate unit for bargaining. Thus. Section 9(b)
of the Act specifically recognizes a "plant" unit as
appropriate, and we have long held that a unit con-
fined to the single plant of a particular employer is
presumptively appropriate.' And in the insurance
industry, we have deemed the district office as that
industry's analogue of a single-manufacturing
plant.* In each of these instances, the determinative
factors in finding the single-location unit ap-
propriate were those factors discussed above in
supponing the appropriateness of a single-store unit
in a retail chain. We are unable to perceive any
reason why retail chain operations should be
treated differently. Indeed, to draw a distinction
between the single-chain store and the single plant
in a multiplant enterprise or the insurance district
office would artificially disadvantage the organiza-
tional interests of chain store employees, simply
because their employer operates a chain rather than
a single-store enterprise and would vest the chain
operator with absolute power alone to control the
scope of the appropriate unit.
Further, we do not believe that bargaining on a
less than chainwide basis would prove disruptive to
the chain employer's operation. Bargaining in less
than employerwide units has been effectively con-
ducted in other industries without such results, and
no reason has been presented, nor are we aware of
any. which indicates that the situation would be dif-
ferent in the retail chain industry. It does not neces-
sarily follow that organization of only a portion of
the chain would likely result in a lack of uniformity
of working conditions through the chain or. if it
would, that this necessitates rejecting a unit such as
is here sought. In any event, though chainwide
uniformity may be advantageous to the employer
administratively, it is not a sufficient reason in itself
for denying the right of a separate, homogeneous
group of employees, possessing a clear community
of interest, to express their wishes concerning col-
lective representation.
We are of course aware that retail chain opera-
tions generally are marked by a high degree of cen-
tralized administration. Thus, most retail chains
maintain central profit-and-loss records of the in-
dividual stores, keep central payroll records, handle
the chainwide purchasing and merchandising of
goods, directly pay all vendors, and perform other
similar functions. But these services, we must
emphasize, are essentially recordkeeping or ad-
ministrative functions that have little or no direct
relation to the employees' day-to-day work and em-
ployee interests in the conditions of their employ-
ment. We find these functions are of little sig-
nificance in determining whether or not the em-
ployees at a single location comprise an appropriate
unit for bargaining. Centralized administrative con-
trol can be just as readily maintained whatever the
scope of the bargaining unit. More significant is
whether or not the employees perform their day-to-
day work under the immediate supervision of a
local store manager who is involved in rating em-
ployee performance, or in performing a significant
portion of the hiring and firing of the employees,
and is personally involved with the daily matters
which make up their grievances and routine
problems. It is in this framework that the communi-
ty of interest of the employees in a single store takes
on significance, for the handling of the day-to-day
problems has relevance for all the employees in the
store, but not necessarily for employees of the other
stores.' Accordingly, we believe thai, where sub-
stantial autonomy is invested in a local store
manager to handle the matters discussed above, this
is more significant in determining the appropriate-
ness of a unit than the existence of central record-
keeping and mercha.-idising functions.
It is for these reasons that we will adhere to our
policy in retail chain operations of finding the single
store a presumptively appropriate unit. That pre-
sumption is of course not a conclusive one and may
be overcome where factors are present in a particu-
lar case which would counter the appropriateness
of a single-store unit. For example, we have been
• Thi> IS nol 10 say ihil unils smaller than a singlt-localion unil are imp-
„d common intemll
propnait In some circumstances, employees of a panicular slore (ej .
of employees in the outlets.
ihe meal depanmcni m a grocery siorel may perform work of such a dcf-
■ See. e g. . Trmco A.rcraft Corpofuiwo. 1 : 1 N L R
BlO«5.lO««.fi».lh
fereni nature from ihai of ihe other employees that a separate unit would
Dine Bfllr Wi«j. 139 NLRB 6:9,631. cf.. Pmibur:
:h Plait Clan Co.y.
be appronate Uock RooJ Suprr O.per. Inc. 1 56 N LRB 983 Nonselling
NL/?-fl.3l3U.S M6. 164-166
employee units in department stores have also been found appropnue
• Set Mrirupol.ian Ufr hurancr Co . 156 NLRB
l40«.l4Uideci..on
R>la,l Whoirtal, anj DfDarlmem Slot, Unwn (SuU 4 Col v
on remand from 380 U S 4381. and cases cited there,,
,\.LF B.n^ F:d 101 iC A DCl. enfg. 160 NLR8 68: In this regard.
ictual daytOKiay su-
we note that we ha»e often found a depanmental unit m a plant ap-
pervision of a store is. in pan. in the hands of J dual..
unction ofTicial. who
propriate fur barsaining S Ifurrr,, Cimpunv . ,\ LKB iii Fid
daily divides his time between actual in-store supe
rvijion and the p«r-
494 iC A 1, cert denied 58) U S 958
formance of central office functions The handlini; .M
,he employees' day-
Nor are we ..aying Ihat a group of retail outlets would not likewise con-
lo-day problems is no less a local matter mereK
because the oflicial
stitute an appropriate bargaining unit U ndcr conventional critena govern-
responsible for the daylo-day supervision of the .toi
■e also pcrtorms ten-
tml otTiLC Tunctiuns
133
HAAC DRUG COMPANY, INCORPORATED
879
hesitant to disturb an existing, stable bargaining
relationship, and. where such relationship has ex-
isted in a multistore unit and there is a reasonable
expectation of continued stability in that unit, we
will find the multistore unit appropriate. See Meijer
Supermarkets. Inc.. 142 NLRB 513. and The
Great Atlaniic & Pacific Tea Co.. Inc.. 153 NLRB
1549. Also, where an individual store lacks
meaningful identity as a self-contained economic
unit, or the actual day-to-day supervision is done
solely by central office officials, or where there is
substantial employee interchange destructive of
homogeneity, these circumstances militate against
the appropriateness of a single-store unit. See. e.g.,
Mary Carter Paint Co.. 148 NLRB 46: Caribbean
Restaurants, 162 NLRB 676. And a combination
of factors may lead to finding appropnate a city wide
unit (two stores in a multicity chain), e.g.. where the
stores are geographically proximate, they are sub-
ject to common supervision, and employees are
frequently interchanged between the stores. See
Spartan Department Stores. 140 NLRB 608.
We are mindful of recent decisions by the U. S.
Couns of Appeals for the Seventh and First Cir-
cuits, denying enforcement of single-restaurant and
single-store units in retail chain operations. Frisch's
Big Bov Ill-Mar. Inc.. 147 NLRB 551; 151 NLRB
454. enforcement denied 356 F.2d 895 {C.A. 7);
Puritv Food Stores. Inc.. 160 NLRB 651, enforce-
ment denied 376 F.2d 497 (C.A. I), cert, denied
389 U.S. 959. We note, however, that these
holdings are inconsistent with decisions in these
and other circuits affirming the Board's findings
that single-store units were appropriate." Moreover,
we believe those decisions unduly emphasized the
relevance of central administration, a factor which,
as discussed above, we feel is of little significance
in determining the question. Also, we believe that
both courts misinterpreted our holding in Weis
Markets. Inc.. 142 NLRB 708. In that case, we
found that a citywide unit (two stores) in a multicity
chain was appropriate because of a combination of
factors; the two stores were geographically proxi-
mate, there were frequent transfers of employees
among the intracity stores, and the union sought no
Other unit while the employer argued that the two-
store unit could not be appropriate. In stating our
reasons for finding the citywide unit appropriate,
we pointed out that our decision in Sav-On-Drugs
had not eliminated the possibility that a unit coex-
tensive with an employer's administrative or geo-
graphic area would be found appropriate, but had
merely added the possibility that a single-store unit
could also be appropriate. Our holding in Wets
Markets is thus consistent with Sav-On-Drugs and
with our discussion here: Weis Markets merely
stands for the proposition thai citywide units may
be appropriate for bargaining, despite the single-
store presumption, where countervailing factors are
present. Accordingly, we conclude that the court
decisions in Purity and Frisch do not compel a
reversal of our policy. Since we believe our policy
in retail chain operations is consistent with the aims
of the statute and with our policies in other indus-
tries, we will continue to adhere to the policy of
finding single-store units presumptively appropriate
until the Supreme Court rules on the issue.
In the instant case, the Regional Director has set
forth the relevant facts in considerable detail, and
we find it unnecessary to repeat those facts here.
We note briefly, however, that the central
headquaners performs those administrative and
merchandising functions typically performed by the
central office of a retail chain operation: it keeps all
personnel and payroll records, ii negotiates all con-
tracts with vendors, it pays all bills and keeps all
financial records, it establishes the budget for each
individual restaurant, it maintains a profit-and-loss
statement for each restaurant, it establishes pay
scales for the particular jobs, and establishes all per-
sonnel policies. Also, a company vice president is
in charge of all restaurant operations, and he is
assisted by one official who oversees all the restau-
rant operations. Each restaurant has a manager,
who orders all the restaurant's needs from the ven-
dors, contracts for major repairs, does approximate-
ly 60 percent of the hiring, fixes wage rates within
the ranges established by headquarters, trains em-
ployees, makes recommendations to headquarters
with regard to employees, and discharges em-
ployees.' As the Director found, transfer of em-
ployees among the restaurants is minimal.
From these facts, and those discussed in more
detail in the Director's Decision, it is clear that no