ices employees wanting pay panty and the Echo Range
employees wanting pay increases for themselves.
Finally, an important factor demonstrating that the
employees covered by the Echo Range contract enjoy
a separate community of interest is that they perform
their day-to-day work under the immediate supervision
of the contract's program manager. It is he who rates
their performance and it is he who makes rec-
orunendauons affecting their pay and job status and
tenure. In this regard, the executive director overseeing
the China Lake contracts testified that a separate
project manager for the Echo Range is required to pro-
vide onsite technical guidance and supervision because
of the large number of employees covered by the Echo
Range contract. Although the executive director has to
approve all hiring and personnel actions recommended
by this and all other program managers reponing to
him and in general has final authority over labor rela-
tions matters concerning the contract groups for which
he is responsible, the record is silent on the extent to
which he docs or docs not rely on the program man-
agers' recommendations or how often and under what
circumsunces he rejects them. Although the executive
director has corporate documents that were filled out
by the program managers to aid his review of their
recommendations, and in some instances consults with
them concerning the recommendations, the record does
not indicate whether approval of those recommenda-
tions is routinely given by him if the documents are
in order or. if not. what steps or methods are then
taken by him to conduct an independent investigation
to determine the ments of the recommended actions.
Nor does the fact that the executive director talks daily
with the respective program managers under his con-
trol, including the program managers for each of the
China Lake contracts, overcome this evidentiary void.
Because the executive director works out of the Ar-
lington. Virginia office, and because he has to oversee
10 contracts at 7 different locations, it would appear
that of necessity he must rely substantially on the rec-
ommendations of the program managers reponing lo
him." Consequently, we find it reasonable to infer that
the program managers have significant input into mat-
ters involving the employment status of the employees
under their immediate supervision.'^
In light of the foregoing factors demonstrating a sep-
arate community of interest among the Echo Range
employees, and the absence of any bargaining history
at the Employer's China Lake operations or a labor or-
ganization seeking a broader unit there, the Employer's
centralized administrative control and uniform em-
ployee benefits and personnel policies are insufficient
to establish that a merger of employment interests of
the Echo Range employees with the Range Support
Services employees has occurred so a« to require find-
ing that the former employees have lost their separate
community of interest. Although centralized adminis-
tration and common benefits and personnel policies
may well support a finding that a broader uniL if
sought, also would be an appropriate unit, it is up to
the Employer to establish that the petitioned-for nar-
rower unit IS inappropriate. NLRB v. Living
ing Centers, supra at 213; Omni International Hotel,
283 NLRB 475. 476 (1987). This the Employer has
not done for the reasons explained above.
We find no merit in the Employer's reliance on New
England Telephone Co.. 280 NLRB 162 (1986). to
support its contention that a systemwide or multi-
facility unit is the appropriate unit in service-oriented
industries. The Board's holding in that case that a sys-
temwide unit IS optimal in the public utility industry
rested largely on the high degree of interdependence of
the various segments of a public utility. No such inter-
dependence has been shown here." Indeed, the evi-
:6a NtJtB SSO. S51 (19«4) Thai Ik •
As descnbcd above, none of ihew raciort ar« presem here.
The EmeloyCT < rehoncs on 0*." Siuu Ueu' Ai.-i . M9 NUIB 594 (1978).
.» timib/ly nixplatcJ There Ihe peiiiioner toofhl ro rep
iMl nonpfofesMonol employee! tn all Ihe employer'! ofTtcM The employer
ploycr's inUifiJiul offices. The Board found the peii(ioned-for efflployervide
150
dencc indicates that the Echo Range and Range Sup-
Services contracts do not constitute a separate ad-
listrative or operational grouping of the Employer,
js these two contracts are but 2 of the 10 adminis-
ed by the executive director involved in this case.
Id the two contract groups at China Lake do not
ork together, notwithstanding that they may perform
/ork on the same naval mission at that site.
In sum we find that under either the presumption re-
lied on by the Acting Regional Director or under a
community-of-interest analysis, the record here shows
that the petitioned-for unit of Echo Range employees
constitutes a unit appropriate for the purposes of col-
lective bargaining. We, therefore, affirm the Acting
Regional Director's unit determination and remand this
proceeding to the Regional Director for Region 31 for
further appropriate action.
ORDER
The Board orders this case be remanded to the Re-
gional Director for Region 31 for the purpose of open-
ing and counting the ballots impounded after the elec-
tion held on September 8, 1988, and for further appro-
priate action.
151
urn
Gould Board's Proposed One-Mile Rule: Judgement by Odometer
For many years, the National Labor Relations Board has presumed that employees at
one facility should vote separately from employees at other facilities of the same company on
whether to be represented by a union. Yet, with the prevalence of fax machines, modems,
beepers, cellular phones, and voice mail, the importance of geography has diminished. It is
not uncommon for an employee to have a closer working relationship with an employee who
works a continent away than with one who works two doors down in the same building.
Rather than questioning the continued relevance of this rule, the Board under the leadership
of William B. Gould IV, on September 28, 1995, proposed mming the presumption into a
conclusive determination unless the employees are physically located withm one mile of
another facility.
Determining Who Votes on Union Representation When a union seeks to
organize a workforce, one of the most critical issues the NLRB must resolve is which group
of employees will vote on whether to be represented by the union. If the union wins the
election, this group of employees will become the "bargaining unit." This issue is generally
resolved by determining which employees share a "community of interest" in their
employment situation. This decision determines for whom the union will speak and which
employees will be bound by the terms of the collective bargaining agreement. The NLRB
has historically avoided mechanical rules for determining bargaining units and instead has
approached the issue on a case-by-ca,se basis because, as the Kermedy Board noted in 1962,
"if the unit determination fails to relate to the facmal situation with which the parties must
deal, efficient and stable collective bargaining is undermined rather than fostered."
Union Preference — Small Units Unions generally prefer to organize smaller units
in order to establish a beachhead from which to ultimately draw more employees into the
union. Employers generally prefer maintaining the uniformity of compensation schemes,
benefits, seniority systems and other personnel policies throughout the company.
When Employees are Geographically Separate When employees work in
facilities that are separated by some geographic distance, the NLRB has assumed that the
distance factor alone decreases the likelihood of a community of interest. Thus, the NLRB
historically has presumed that employees at a single facility form a separate unit, but the
presumption can be rebutted on a case-by-case basis by such factors as: centralized control
over operations and personnel relations by the employer with little autonomy at each facility;
similarity of skills and working conditions among the facilities; significant employee
interchange between facilities; and the distance between the locations.
Labor Policy Association, Inc. • 1015 FiHeenth Street. NW • Washington. DC 20005 • Telephone 202-789-8670 • Fax 202-7890064
152
LPA Fact Sheet Page 2
Gould Board Proposal The proposed rule would automatically establish that
employees at a single location would be the bargaining unit as long as:
• no other facility is within one mile,
• there are 15 or more employees in the requested unit at the
location, and
• there is at least one supervisor at the facility.
All other factors described above would be discarded. The Gould Board would only allow
multi-facility units where there are "extraordinary circumstances." These circumstances are
not defined by the proposal, except that it provides an example of 10 percent or more of the
employees transferring temporarily among the facilities in a year. Further, the rule does not
apply to ocean-going vessels, utilities or construction industries.
Union-Friendly Rule The new rule would only apply if it is invoked by the union.
If a union seeks to organize multiple facilities, the employer is precluded from using the rule
to limit the organizing to a single facility. Similarly, the rule could not be invoked in an
attempt to decertify the union at a single facility where the employees are represented in a
multifacility bargaining unit even if there is strong employee support at the facility for
getting rid of the union
No Administrative Burden Under Current Rules Sometimes, federal agencies
attempt to substitute mechanical rules for discretion in an attempt to better manage their
workload. Yet, the Board admits that its actions are not .spurred by an unmanageable
caseload of single-facility cases. Indeed, a National Council of Chain Restaurants study has
shown that, during the past 15 years, the Board has averaged only four cases per year
involving this issue, with only two cases per year in the past four years. In the preamble to
the regulations, the Gould Board candidly acknowledges that, in some cases, "the enhanced
individual justice of adjudication" will be sacrificed in the interests of "the clarity and
predictability of a rule." Thus, the Board as much as admits that some cases will be decided
incorrectly in the interests of what former NLRB Chairman James Stephens calls "marginal
economies of process."
Who Benefits? In view of the scarcity of single-facility cases, one must question
who the Board thinks would benefit from a remodelling of the law in a way that critical
issues, such as who has to share a union with whom, would be resolved, in the words of
NLRB Chairman Gould himself, with "a calculator and an odometer."
Copyright • I99J by the Labor Policy Associi
153
NACDS
National Association of Chain Drug Stores
David L. Maher
Chairman of Che Board
Ronald L Zicgler
President & CEO
Comments Submitted by
The National Association of Chain Drug Stores
National Labor Relations Board's (NLRB)
Proposed Rule on Single Location Bargaining Units
Committee on Small Business
Subcommittee on Regulation and Paperwork
U.S. House of Representatives
March 7, 1996
413 North Uc Street, P O. Box 1417 D49, Alexandria Virginia 22313 1480 Phone; 703-549-3001 FAX: 703-836-4869
154
Statement of the
National Association of Chain Drug Stores
to the Subcommittee on Regulation and Paperwork
U.S. House of Representatives
March 7, 1996
This statement is filed for the hearing record on behalf of the National Association of
Chain Drug Stores (NACDS). It conveys the NACDS' concerns related to the National
Labor Relations Board's (NLRB) proposed rule on single location bargaining units.
A copy of NACDS' formal comments to the NLRB is attached for the hearing record.
Founded in 1933, NACDS includes more than 135 chain companies in an industry that
operates over 30,000 retail conraiunity pharmacies. Providing practice settings for over
66,000 pharmacists, chain pharmacies comprise the largest component of pharmacy
practice. Chain drug stores employ over 600,000 workers nationwide. Forty-six of the
nation's largest drug store chains are members, and over two-thirds of NACDS
membership consists of chains with fewer than 50 stores.
The proposed rule would require, except in "extraordinary circumstances" that workers
at a single location unit would be eligible to engage in collective bargaining if certain
factors are met: (1) the unit has 15 or more employees; (2) no other unit of the
employer is located within one mile; and (3) a supervisor is present on a regular and
substantial basis.
The Board maintains the rule is necessary to set forth "decisive factors" and to avoid
confusion "inherent" in case-by-case adjudication. The Board further contends that the
rule is necessary to reduce litigation costs and to ensure management and employees
better understand the law to improve negotiations.
NACDS believes the proposed rule is neither necessary nor appropriate and, in fact, may
lead to more litigation if its misguided provisions become fmal.
The NLRB justifies its proposed rule by maintaining it will reduce litigation; preserve
NLRB's resources; and clarify public confusion related to single unit bargaining units.
Yet, in each instance, examination of the evidence fails to demonstrate a need for the
rule.
The NLRB's own record disputes its arguments related to caseload and dwindling
resources. In 1981, the number of Regional Director decisions was 1837. By 1994, that
number had declined by 41 percent to 758. In 1994, the Board issued 45 decisions
related to representation, down from 70 cases in 1991. Thus, the NLRB clearly is not
overwhehned with cases demanding attention or resources.
155
Page Two
March 7. 1996
The Board maintains that the new rule will establish "decisive factors" that will reduce
the time and cost of litigation to decide specific cases. Yet, standardization and
efficiency should not become the Board's goal at the expense of fairness.
We believe tliat representation decisions should be based on the facts unique to the case
and not be produced on an assembly line. There is no need for the creation of a rigid
formula for resolving these issues, especially since the proposed methods have little
demonstrated grounding in case law. We believe that good public policy should be based
upon evolving precedents that recognize that businesses operate in a dynamic - not static
~ environment.
We believe that the Board should continue to recognize the importance of "community
of interest" factors which would be ignored under the proposed rule. By eliminating
functional integration, centralized control over operations, permanent transfers, and
bargaining history from consideration, the Board rejects elements that could be vital to
sound decisions.
The Board ignores advances in communications and technology that make it possible for
company headquarters to assert clear and decisive control over even the most remote
single unit. As we stated in our comments to the NLRB, its indifference to these
advances
"... as a material way in which employees interact with supervision and with each
other over time and distance threatens to make the PR (proposed rule) a quaint
oddity rather than a relevant tool in labor-management relations".
We also contend that the arbitrary establishment of the "one mile" rule of separation of
units cannot be supported. It disregards the Board's own precedents in which geographic
separation has been of little significance.
In our formal comments to the NLRB, we raised several other issues that contribute to
our opposition to the rule. These points reflect inconsistencies in the NLRB's position
and its abandonment of long-standing precedents and traditional findings.
The rule is unwise and unnecessary. The rationale offered in its support cannot
withstand close examination. And its bias in favor of union organization is obvious.
In conclusion, NACDS, representing the major portion of the Nation's chain drug store
industry and a significant component of its retail businesses, believes current law
provides a satisfactory framework for single unit determinations. We oppose the NLRB's
proposed rule and urge the Board to withdraw it.
156
Jackson. Lewis. Schnitzler & Krupman
WoooBOBT RoAO • Suite A02 • Wooobust. New York M 797
(516) 36d040-»
FAX 1 '5161 36'.0466
fAx 2 5161 36-i-04ea
MOOCM 1516) 364-0499
o»rANoo"'ry
P.TTSBuAi-. »
EPRESENTING MANAGEMENT EXCLUSIVELY IN LABOR.
PLOYMENT & BENEFITS LAW AND RELATED LITIGATION
STAMroSO. CT
Febmary 6, 1996
VIA FEDERAL EXPRESS
National Labor Relations Board
Office of the Executive Secretary
1099 14th Street. Room 11600
Washington, D.C. 20570
Re: Response of the National Association of Chain Drug Stores
("NACDS") to Notice of Proposed Rulemaking -
Appropriateness of Requested Single Location Bargaining Units
In Representation Cases (29 CFR Part 103)
Dear Sirs:
This statement is submitted on behalf of the National Association of Chain Drug
Stores ("NACDS") in response to the National Labor Relations Board's Notice of Proposed
Rulemaking ("NPR"), dated September 22, 1995, entitled, "Appropriateness of requested single
location bargaining units in representation cases." For the reasons discussed below, NACDS
believes the proposal is ill-considered. The present law, generally based on a presumption of
single-location appropriateness, but allowing multi-location units upon a proper showing in a
particular case, long has provided a satisfactory framework for the Board in which to make unit
determinations in representation cases. The proposed rule would substitute a rigid formula
(despite an appearance of flexibility) for individualized determinations, using a number of
criteria which appear to have no real support in Board caselaw. The Board, moreover, has not
demonstrated any compelling need to engage in this regulatory advennire.
157
National Labor Relations Board February 6, 1996
Page -2-
The NLRB should withdraw the proposed rule as improvidently issued.
The Nature of NACDS and its Interest in the Proposed Rule
NACDS is a not-for-profit international organization, headquartered in
Alexandria, Virginia, engaged in promoting and preserving the general welfare of chain drug
stores, their employees and their consumers. In furtherance of this mission, NACDS
monitors the legislative and regulatory activities on the federal and state levels affecting its
constituents, provides information and comment on such matters, and initiates action which,
in its view, best serves the general welfare of chain drug stores and their employees.
NACDS currently represents 160 national and international chain drug
corporation members, including 135 in the United States operating nearly 30,000 community
pharmacies. Forty-six of the largest drug store chains in this country are members, including
all the chains with over 250 stores. Members include supermarket and general merchandise
retail chains which have pharmacies in their stores, as well as conventional drug store chains.
Over two-thirds of NACDS's membership consists of chains with fewer than 50 stores.
Chain drug stores including NACDS members, employ over 600,000 people
nation-wide. They also employ approximately 65,000 pharmacists, or about 58% of the
J.ACKSox. Lewis. Schnitzler & KRUP>rAN
23-316 96-6
158
National Labor Relations Board February 6, 1996
Page -3-
113,000 that practice in retail pharmacy settings. Employees of some members are
represented by unions, while employees of others are unrepresented. In some instances,
chains are completely or largely organized; in others, only a few locations have collective
bargaining representatives. Chain drug stores have frequently been parties to NLRB
representation cases. Since the proposed rule could seriously affect the labor and
employment relations of many NACDS members (including companies only some of whose
stores are unionized) by disrupting their multi-location administration of employment policies
and practices, NACDS has availed itself of this opportunity to respond to the NPR.
II.
The Proposed Rule
The proposed rule applies to all employers over which the NLRB asserts
jurisdiction, except public utilities, employers engaged primarily in the construction industry,
and employers in the maritime industry in regard to their ocean-going vessels. Proposed Rule
["PR"], 29 CFR § 103.40 (subd. (a)). It would require, except in "extraordinary
circumstances" (not defined, although one example, discussed below, is provided in the PR),
that an unrepresented single location unit be found appropriate for collective bargaining,
provided: (1) that 15 or more employees in the requested unit are employed at that location;
(2) that no other location of the employer is located within one mile of the requested
location; and, (3) that a supervisor within the meaning of Section 2(11) of the National Labor
Jacksox. Lewis, Schnitzler & Krupman
159
National Labor Relations Board February 6, 1996
Page -4-
Relations Act ("NLRA") is present at the requested location for a regular and substantial
period. Id., at subd. (b)(l)-(3). Whenever a party, first through an offer of proof and then
by supporting evidence, establishes that an extraordinary circumstance exists or where an
employer falls outside the rule in this section, the Board shall determine the matter through
adjudication. Id. at subd. (c). Finally, the PR describes only one kind of "extraordinary
circumstance": if 10 percent or more of the unit employees have been temporarily transferred
to other facilities of the employer for at least 10 percent of their time during the 12 month
period preceding the filing of a petition for an election or, where no such petition has been
filed, during the 12-month period preceding either the demand for recognition or the time
when a bargaining obligation would arise. Id. at subd. (d).
According to the Board majority, the PR is necessary to set forth more clearly
the "decisive factors" in most single location cases and to avoid the "confusion and
uncertainty inherent in the current approach" of case-by-case adjudication. NPR
Supplementary Information Sec. II. C. It would eliminate litigation costs and time currently
and unnecessarily expended which, the Board says, is often driven by the parties' attempts to
persuade the Board that facts and factors exist in support of a particular result or by the
mistaken belief as to which facts or factors are critical for a finding of single unit
appropriateness. The Board posits that the PR would also lead to more stipulated election
agreements, because parties would better understand this area of the law and be in a better
position to negotiate agreements. Id.
.T.\CKSox. Lewis. Schxitzler & Krupman
160
National Labor Relations Board February 6, 1996
Page -5-
NACDS disagrees that a rule is needed. The Board has not made a clear
showing that a departure from its present case-by-case approach to unit determinations is
necessary or appropriate, or that the PR would cure the perceived ills of the present
approach. Indeed, it is likely to open new vistas of contentiousness and litigation.
m.
The Proposed Rule Is Neither Necessary Nor Appropriate
The Board argues that its proposed rule furthers the Agency's goal of reducing
"extensive litigation" with "voluminous transcripts" detailing "a myriad of facts" which
consume the Board's "limited and declining resources" in deciding routine single location
cases. NPR at Sec. II.A.l. The Board's own statistics, however, suggest that this concern
may be overdramatized.
A. Representation Cases Do Not Pose An Undue Burden of NLRB Resources .
The number of representation cases resulting in Regional Director decisions
has declined markedly since early in the last decade. In FY1981, 1837 Regional Director
decisions were issued in representation and deauthorization cases. 56th Ann. Rep. of the
NLRB for FY 1991, at 19 (Chart 13)(1994). By FY 1994, this number had plummeted to
758, or a little more than 41% of what it had been thirteen years earlier. 59th Ann. Rep. of
Jacksox. Lewis, Schnitzler & Krupman
161
National Labor Relations Board February 6, 1996
Page -6-
the NLRB for FY 1994, at 19 (Chart 13)(1995).