Hershey Foods Corp.

National Labor Relations Board - Board Decisions

Jan 16, 1974

208 N.L.R.B. 452 (N.L.R.B. 1974)

452 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Hershey Foods Corporation and Harold Gibson.
H. B. Reese Candy Co., Inc . and Harold Gibson.
Bakery and Confectionery Workers ' International
Union of America, Chocolate Workers Local No.
464 (Hershey Foods Corporation and H . B. Reese
Candy Co., Inc.) and Harold Gibson. Cases
4-CA-6353, 4-CA-6354, and 4-CB-2097
January 16, 1974
DECISION AND ORDER
BY MEMBERS JENKINS, KENNEDY, AND
PENELLO
On October 31, 1973, Administrative Law Judge
Arthur Leff issued the attached Decision in this
proceeding. Thereafter, Respondent Union filed
exceptions and a supporting brief, and both the
General Counsel and the Respondent Employers
filed answering briefs.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the
National Labor Relations Board has delegated its
authority in this proceeding to a three-member panel.
The Board has considered the record and the
attached Decision in light of the exceptions and
briefs and has decided to affirm the rulings, findings,
and conclusions i of the Administrative Law Judge
and to adopt his recommended Order.
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor
Relations Board adopts as its Order the recommend-
ed Order of the Administrative Law Judge and
hereby orders that Respondents Hershey Foods
Corporation and H. B. Reese Candy Co., Inc.,
Hershey, Pennsylvania, their respective officers,
agents, successors, and assigns and Respondent
Bakery and Confectionery Workers International
Union of America, Chocolate Workers Local No.
464, Hershey, Pennsylvania, its officers, agent and
representatives, shall take the action set forth in said
recommended Order.
i Respondent Union's request for oral argument is hereby denied
inasmuch as the record , exceptions , and briefs adequately outline the issues
and the positions of the parties
DECISION
STATEMENT OF THE CASE
ARTHUR LEFF, Administrative Law Judge: Upon charges
by Harold Gibson filed on March 7, 1973, the General
Counsel of the National Labor Relations Board, by the
Regional Director of Region 4, on July 30, 1973, issued a
consolidated complaint in these cases against the above-
named Respondents, herein referred to respectively as
"Hershey," "Reese," and "Local No. 462" (or "Union"),
alleging that the Respondents had engaged in unfair labor
practices proscribed by the National Labor Relations Act,
the Respondent Companies within the meaning of Section
8(a)(I), (2), and (3), and the Respondent Union within the
meaning of Section 8(b)(l)(A) and (2), in the respects to
be stated below The Respondents filed answers denying
the commission of unfair labor practices. A hearing was
held on September 6, 1973, at Harrisburg, Pennsylvania.
At the hearing, the parties entered into a stipulation
wherein they agreed to waive the taking of testimony and
to submit the issues of this proceeding for disposition on a
record composed basically of (a) the pleadings in this
proceeding, (b) the transcript, exhibits, and award in an
arbitration proceeding conducted on December 7, 1972, by
Arbitrator Clair V Duff, and (c) certain additional
documents and agreed-upon facts referred to and/or
specified in the stipulation. At the hearing, the parties also
presented orally their respective contentions in this
proceeding. Briefs were filed by the General Counsel, by
the Respondent Companies, and by the Respondent Union
on October 9, 1973.
Upon the entire record in this case, I make the following:
FINDINGS OF FACT
1. THE BUSINESS OF THE COMPANIES
Hershey Foods Corporation (formerly known as Her-
shey Chocolate Company),' is a Delaware corporation,
engaged in manufacturing, processing, and selling choco-
late and other food products. It maintains a facility at
Hershey, Pennsylvania, for the production of chocolate.
During the past year it produced at that facility products
valued in excess of $50,000, which it shipped directly to
customers outside of Pennsylvania.
H. B. Reese Candy Co., Inc., a Delaware corporation,
and a wholly owned subsidiary of Hershey, is also engaged
in manufacturing and processing chocolate and other food
products at Hershey, Pennsylvania. During the past year,
Reese 's sales of products, produced at Hershey, Pennsylva-
nia, to customers located outside the State of Pennsylvania,
were in excess of $50,000 in value.
Hershey and Reese are employers engaged in commerce
within the meaning of Section 2(6) and (7) of the Act.
Ii. THE LABOR ORGANIZATION INVOLVED
Bakery and Confectionery Workers' International Union
of America, Chocolate Workers Local No. 464, is a labor
organization within the meaning of Section 2(6) and (7) of
the Act.
i The corporate name was changed in 1968
208 NLRB No. 70
HERSHEY FOODS CORP.
Ili. THE UNFAIR LABOR PRACTICES
A. The Questions Presented
Although framed in unfair labor practice terms, the basic
question in this case is whether the Board should honor the
award of Arbitrator Clair V. Duff, issued on February 14,
1973, in an arbitration proceeding initiated under the
Union's contract with Hershey. The award directed
Hershey to recognize the Umon as the representative of the
production and maintenance employees at the plant of its
subsidiary, Reese, and, subject to certain qualifications
therein provided, to apply the Union's contract with
Hershey, including the union-security provisions thereof,
to the Reese employees. The award was predicated upon
the arbitrator's determination that the Reese employees
had become accreted to the Hershey collective-bargaining
unit, and had thus become subject to the Union's contract
with Hershey covering that unit. After issuance of the
award, the Union and the Respondent Companies de-
clared their intention to apply the Hershey contract to
Reese employees as required by the arbitrator's award. The
arbitrator's award has not, however, been further imple-
mented to date because of the pendency of this proceeding.
After the charges in this case were filed, both the Company
and the Union Respondents notified the Reese employees,
in effect, that the application to them of the Hershey
contract would be withheld pending final disposition of
this proceedmg.
Specifically. the complaint alleges with respect to the
Union that the Union violated Section 8(b)(1)(A) and (2)
on and after February 13, 1973, by attempting to apply to
the Reese employees, although the Union was not their
majority-designated representative. its bargaining contract
with Hershey, including the union-security provisions
thereof. With respect to the Respondent Companies, the
complaint alleges that Hershey and Reese violated Section
8(a)(1), (2), and (3) of the Act, by announcing to Reese
employees, on or about February 19 and 20, 1973, that
Reese would apply to them the Union's contract with
Hershey, including the union-security provisions thereof.
The Union defends its conduct complained of primarily
on the basis of the arbitrator's award, which it asserts
should be honored by the Board as a valid and binding
determination dispositive of the unfair labor practice issues
herein presented. It contends additionally that, aside from
the award, application to the facts in this case of the
Board's accretion principles requires a conclusion that the
Reese employees at the times material herein were part of
the Hershey bargaining unit, and therefore lawfully subject
to the requirements of the Union's contract with Hershey
covering that unit.
The Respondent Companies in their joint answer admit
the factual allegations of the complaint as it relates to
them, but affirmatively allege that the announcements to
Reese employees Fttributed to them in the complaint "were
made [by them] in good faith and pursuant to an
arbitrator's award with no intent to infringe upon the rights
2 The Union also represents the employees of Hershey Estates which
conducts various business enterpnses in and about the community of
Hershey, Pennsylvania The represented employees of Hershey Estates are
divided into a number of separate bargaming units, among them a unit of
453
of employees." The Company Respondents have made it
clear, however, that their true position in this case
coincides with that of the Charging Party and the General
Counsel-"and if that means," their counsel stated at the
hearing, "calling down the Labor Board upon us and in
effect saying we've committed a violation of the Act, so be
it.,,
The Respondent Companies join the proponents of the
complaint in contending that the arbitrator improperly
invaded the Board's province in passing on the question of
unit accretion. In any event, they contend further, the
arbitrator's award must on the facts of this case be found
to be so palpably at variance with the Board's established
principles relating to unit accretions as to require its
rejection as a valid defense to the alleged unfair labor
practices.
B. Sequence of Events
The Union is now, and has been since 1939, the
recognized exclusive bargaining agent of Hershey's em-
ployees in a unit composed of all production and
maintenance employees and teamsters at the Employer's
Hershey, Pennsylvania, plant and branch milking stations.2
The current collective-bargaining agreement between the
Union and Hershey for that unit contains a union-security
provision requiring employees after 30 days employment to
become, and thereafter to remain, members of the Union.
Hershey now has approximately 3,300 bargaining unit
employees.
In July 1963, Hershey acquired the ownership of Reese
by purchase of all its corporate stock, and since then has
operated Reese as a subsidiary of Hershey. Reese is a
candy manufacturer whose primary product, the Reese
Peanut Butter Cup, is marketed nationally under that
brand name.
Prior to its acquisition by Hershey, Reese had been in
business as an independent firm for some 40 years. In 1957,
it had moved to Hershey, Pennsylvania, where it had
constructed a candy manufacturing plant, about 100,000
square feet in size, later enlarged to 200,000 square feet, on
an industrial site in Hershey, located about 1.4 miles from
the Hershey plant. There, it had looked to Hershey as its
sole supplier of the chocolate coating it required for the
production of its peanut butter cups.
Following its acquisition by Hershey, Reese, as a
Hershey subsidiary, continued at its own plant and with its
own work force to engage in the manufacture of the same
products it had before. Its brand name on such products
was retained for marketing purposes. Its operations,
however, were integrated with those of Hershey's in certain
respects-later to be considered herein in detail-princi-
pally in areas related to the purchasing of raw materials
and supplies, and to the shipment and marketing of its
products, but not, in any major respect, to work processes
at the production and maintenance employee level.
Reese had about 350 production and maintenance
employees when it was acquired by Hershey. That work
about 97 employees employed at Hersheypark and Hersheypark Arena, a
unit of about 109 employees at Hotel Hershey . one of about 118 employed
at Hershey Motor Lodge, and a 376-employee uait in miscellaneous
categories
454 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
force has since grown to about 970 employees. At the time
of the arbitration hearing in December 1972, the Reese
plant was being physically expanded to double its present
size . It was anticipated that by the end of 1973 the plant
would have a complement of approximately 1,300 prod-
uction and maintenance employees. The expansion of the
plant and work force was designed, in part, to make room
for the production by Reese of a chocolate-covered wafer
product called Kit Kat. Kit Kat had previously been
distributed and marketed, but not produced, by Hershey
under a license from its manufacturer, a British company.
Hershey has now acquired a license from the British
company to produce as well as to distribute that product. It
has assigned the production license to Reese under a power
of assignment.
The Reese employees were not represented by any labor
organization when Hershey took over control of that
Company. During the Union's.contract negotiations with
Hershey that were held in the latter part of 1963, and again
in 1966, the Union made no claim that the Reese
employees were part of the bargaining unit it represented.
Instead, the Union, some time prior to 1966, initiated a
campaign to organize the Reese employees into a separate
bargaining unit. The campaign culminated in a union
demand on Reese . made in early 1966, for recognition as
the bargaining agent of Reese's production , maintenance,
and shipping employees. Reese expressed doubt of the
Union's majority and demanded an election. In the Board-
conducted election, held on April 19, 1966, the Reese
employees rejected the Union's bid for recognition by a
vote of 464 to 246.
After losing the 1966 election, the Union took another
approach in its effort to gain recognition as bargaining
agent for the Reese employees. It made the claim, for the
first time , that the Reese employees were covered by its
existing collective-bargaining agreement with Hershey.
And when that claim was rejected and arbitration of the
question was resisted by Hershey, the Union, on Novem-
ber 4, 1966, filed suit in the United States district court to
compel arbitration. The Union was ultimately unsuccessful
in that shit, the court ruling that under the terms of the
contract's arbitration provisions, as then written, the
dispute was not an arbitrable one.
On January 7, 1969, before its suit to compel arbitration
was finally concluded,3 the Union filed with the Board an
"R" petition, in Case 4-RC-8106, for another election in a
bargaining unit composed of Reese's production and
maintenance employees, truckdrivers, and receiving and
shipping employees .4 About the same time a like petition
for an election was filed by Teamsters Local 776 in Case
4-RC-8116. In the Board-conducted election held pur-
suant to these petitions on February 20, 1969, the Reese
employees again voted against union representation. The
tally of ballots showed only 16 votes for the Union, 142 for
the Teamsters Local, and 251 for neither labor organiza-
tion.
On May 27, 1971, the Board, on the petition of
3 The district court denied the Union's motion for judgment on the
pleadings on April 13, 1967: a hearing was held on September 1969, and
final judgment against the Union was entered on December 30, 1969.
4 The Union advised Hershey when it filed this "R" petition, that it was
doing so without prejudice to the position it was taking in the court case
Teamsters Local 776, in Case 4-RC-9120, conducted a
third representation election among the Reese employees.
The Union (Local 464) chose not to appear on the ballot in
this election .5 Once again the Reese employees rejected
union representation. The tally: 182 votes for, and 381
against representation by the Teamsters Local.
In the meantime, the Union in negotiating a collective-
bargaining contract with Hershey for the 2-year term
beginning January 1, 1970, succeeded in obtaining a
broadened grievance-arbitration provision that permitted
arbitration of "any dispute [that] shall arise between the
Employer and the Union." Fortified by this revised
provision, the Union, in August 1971, filed with Hershey a
grievance asserting , inter alia, that the operational interre-
lationship which had evolved over the course of years
between the Hershey and Reese plants had resulted in an
accretion of the Reese plant to the Hershey bargaining
unit, and that Hershey was now violating the union
recognition and union-security provisions of its contract
with the Union by failing to apply that contract to the
Reese plant. When Hershey rejected this grievance, the
Union demanded arbitration. An arbitration hearing was
held on December 7, 1972, before Arbitrator Clair V. Duff.
At the hearing, Hershey opposed the position of the Union,
contending that the grievance was not arbitrable under the
contract and that, in any event, the grievance was without
validity on its merits. With respect to the merits of the
grievance, Hershey insisted that the contract was never
intended to cover the Reese operation; that no unit
accretion had in fact taken place; and that the Reese
employees were entitled under applicable law to be left free
to select their bargaining agent. The issues presented to the
arbitrator were fully litigated. Although, the Reese employ-
ees were not independently represented at the arbitration
proceeding, the position of the charging party in this
proceeding appears to have been adequately and vigorous-
ly presented by Hershey in contesting the Union's position.
On February 14, 1973, Arbitrator Duff issued his opinion
and award. The arbitrator in his opinion expressed his view
of the case before him as one that involved a "problem of
Contract interpretation" that was "superimposed and
dependent upon the factual question as to whether an
accretion had occurred." Accordingly, after rejecting
Hershey's contention that the dispute before him was not
arbitrable under the contract, the arbitrator, as his opinion
reflects, treated the substantive issue before him as one
essentially concerned with the question of unit accretion,
requiring application of the "guidelines established by
NLRB standards." Based upon his analysis of the record
facts and on what he stated to be his application of the
Board's accretion standards, he concluded in his opinion
that an accretion had occurred; that "the employees at the
Reese facility properly belong within the same bargaining
unit as those at the Hershey Chocolate Plant"; and that it
followed from this that the Union's collective-bargaining
agreement covering production and maintenance employ-
requesting arbitration
5 Prior to that election, the Union filed with the Board a UC petition,
seeking clarification of its Hershey bargaining unit to have the Reese
employees included in it. but at the hearing in that proceeding requested
withdrawal of its petition.
HERSHEY FOODS CORP.
ees at the Hershey plant also embraced like employees at
Hershey's "nearby Reese satehte."
Accordingly, the arbitrator in his award sustained the
Union's grievance demanding application of its Hershey
contract to Reese employees, and directed Hershey to
recognize the Union as the representative of all production
and maintenance employees at the Reese plant. He
qualified his award, however, in the following two respects:
(1) Employees of Reese who were on its payroll during the
period ending April 30, 1971, (the voting eligibility date of
the last Board-conducted election at the Reese plant) were
to be exempted from any contractual requirement for
membership in the Union, not only during the term of the
existing contract, but "so long as a contractual relation-
ship" continued to exist between Hershey and the Union.
This exemption was to be lost only if any such employee
accepted a job at the Hershey plant or voluntarily joined
the Union while remaining at Reese.6 (2) The Company
was to maintain separate seniority lists for Reese and for
Hershey employees with no cross-overjob bumping rights,
nor were Hershey and Reese employees to be integrated
for job posting and bidding purposes; the employees at one
plant might bid for jobs posting in the other plant only if
the posted vacancy could not be filled within the plant for
which it was posted.
On February 19 and 20, 1973, Reese vice president,
George D. McClees, announced to the employees at the
Reese plant that the Company would apply to them the
Hershey contract, including the union-security provisions
thereof, in accordance with the terms of the arbitrator's
award.? On February 21, 1973, however, McClees in a
posted notice to the Reese employees advised them that in
the event they filed charges with the Board attacking the
legality of the action the Company was taking pursuant to
the award, the Hershey contract "will not be applied to this
plant unless and until the NLRB states it should be."
McClees assured the employees of management's desire to
keep the plant nonunion. The charges in this proceeding
were filed on March 7, 1973. On the following day,
McClees posted a further notice to employees assuring
them that as a charge had now been filed, no employee of
the Company would lose his job for failure to pay union
dues pending the Board's final disposition of the matter.
Meanwhile, the Union had also informed the Reese
employees of the arbitration award and had indicated that
it would expect compliance by them, as well as by
6 The arbitrator in his opinion explained that exemption as follows:
The NLRB, and the Federal Courts as well, have zealously protected
the rights of employees to freely select their bargaining agents Though
we find that by December, 1972, the bargaining unit had experienced a
process of expansion or accretion , we are nevertheless cognizant that at
a time when perhaps no such accretion had yet occurred, some original
employees voted to reject any Union representation Solicitude for that
freedom of choice will be demonstrated by an award precluding the
application of [the contract 's union security provisions to Reese
employees who were] eligible to vote during the last representational
election, held on May 27, 1971. Although this Union did not participate
in that election , we have concluded that Federal Law and equitable
principles alike will be scrupulously observed by permitting this special
group of employees to retain the choice of declining membership in the
Union if that is their pleasure
T The complaint attributes to Hershey as well as to Reese responsibility
for McClees' announcement The Respondent Companies have admitted
455
management, with the provisions of the award. The Union
persisted in that position until July 24, 1973, when,
following the General Counsel's reversal on appeal of the
Regional Director's refusal to issue a complaint on the
charges, the Union also advised the Reese employees, in
effect, that it would withhold any further action to apply
the Hershey contract to the Reese plant pending Board
decision. And this is where the matter now rests.
C. Additional Facts Bearing on the Issue of
Accretion S
At the top management level, Reese 's operations are
completely controlled by Hershey. Hershey's president is
also the president of Reese and all members of Reese's
board of directors are also on the Hershey board. In
Hershey's overall corporate structure, Reese, although a
separate corporate entity with its own books of account, is
considered for administrative purpose to be part of
Hershey's Chocolate and Confectionery Division .9 That
division includes, in addition to the Hershey Chocolate
and Reese plants in Hershey, two other candy plants, one
in California and the other in Canada.io
The Reese plant limits its production to Reese brand
name products, acquiring from Hershey all the chocolate
ingredients which it needs for its products, just as it did
before it became a Hershey subsidiary. With one excep-
tion, Hershey manufactures no Reese-brand products at its
Hershey chocolate plant.ii The exception is the Reese
peanut butter egg. That specific product has never been
produced by Reese. Hershey placed it on the market, along
with a coconut egg under its own brand name , sometime
after it acquired Reese. Both of these products are
produced with the same equipment in Hershey's confec-
tionery department. Hershey obtains from Reese the
peanut butter compound required for the "egg," coats it
with its own chocolate, places it in Reese's wrapper, and
markets it under Reese's brand name. This product,
designed for the Easter season, is produced during 6
months of the year.
In certain respects , Reese 's operations are now function-
ally integrated with those of Hershey. Thus, it appears that
all Reese products are now sold, advertised, and marketed,
along with Hershey products, by Hershey personnel. The
products manufactured at the Reese plant are not normally
shipped directly to customers, but are transported by truck
to the Hershey Chocolate plant where they are stored and
this allegation of the complaint.
s the factual findings in this subsection are based on the record made
before the arbitrator , as supplemented in small part by the additional facts
stipulated in this proceeding Though not presented in the same form and
with the same emphasis as in the arbitrator's opinion, the basic evidentiary
facts found herein, as distinguished from the conclusions drawn therefrom,
are not inconsistent with those stated by the arbitrator.
" Hershey also has various other corporate subsidiaries, including several
diversified food producers , which it has placed under the administrative
direction of another division
iu The California plant is a branch plant of Hershey The Canada plant
is operated by another corporate subsidiary of Hershey The production and
maintenance employees at the California and at the Canada plants are
organized into separate bargaining units, represented in each case by a labor
organization other than Local 464
ii The Reese peanut butter cup is, however, produced by Hershey at its
California branch plant.
456 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
later shipped from there to customers. Reese products at
times are sold in variety packages that also include
Hershey products: in such instances the packaging into the
variety containers is done at the Hershey plant. Hershey
also does most of the purchasing for Reese. Reese limits its
direct purchases to peanuts, some of which it also buys for
Hershey. All other raw materials used by Reese for the
production of its products are handled through the
Hershey purchasing department. In addition, Hershey
provides Reese with various other services, some of which
it also furnishes its other corporate subsidiaries. Included
are data processing services; laboratory services for
research and the development of new production tech-
niques; quality control services; engineering services for
the design and installation of machinery; and the like.
Hershey computer equipment is used to prepare the
paychecks of Reese employees: these, however, are drawn
in Reese 's name. The cost of all materials, equipment, and
supplies purchased by Hershey for Reese, as well as the
value of all selling, shipping, and administrative services
which Hershey furnishes Reese, are charged to Reese,
Reese maintains separate books of account, which are
maintained along with Hershey's overall books of account
at Hershey's general offices.
Such operational integration as has taken place has not,
however, led to any intermingling of job functions at the
production and maintenance employee level, nor has it
otherwise destroyed the identity of the Reese employees at
that level as a self-contained homogeneous group, separate
and distinct from the Hershey bargaining unit employees.
The work of the Reese employees, now no less than during
the preacquisition period, continues to be confined to the
production of specific candy products that are different,
though of a comparable class, from those produced at the
Hershey plant. The work of the Reese employees is still
performed in a plant that is physically separated from
Hershey's plant by a distance of over a mile. Each plant
has its own separate seniority lists for tenure and
promotional purpose, and also its separate job posting and
bidding systems. Each plant has its own work rules which,
although not substantially dissimilar in content, are
separately published. The production and maintenance
employees at each plant have entirely separate supervision
up through the plant manager level. Each plant does its
own hiring through its own separate personnel office.12
Among production employees, there has never been any
interchange between those employed at the Hershey plant
and those employed at the Reese plant. It does appear that
some of Reese's "tradesmen" (i.e., machinists, electricians,
mechanics) were trained, apparently after being hired by
Reese, at the Hershey plant, the cost of such training
having been charged to Reese. But there is nothing in this
record to indicate that these "tradesmen," or any other
maintenance employees of Reese, have ever been assigned
to work tasks at the Hershey plant. The record does show
that employees of Hershey's sanitation department have
12 Although Reese uses Hershey physicians for the medical examinations
of newly hired employees, the physicians perform their examinations at the
medical office in Reese's plant, and Reese is charged in the corporate books
for the use of such physicians' services.
13 Reese has no employees of its own who perform their work. Hershey
employees who do this work spend less than a month a year at the Reese
been sent to Reese to sand floors and to fumigate that
plant;13 that there have been occasions when bins or
related equipment have been built at Hershey and sent to
Reese for use there, and that there may also have been
some infrequent occasions when Hershey carpenters were
assigned to the Reese plant for brief periods to build tables
or to repair floors. However, except for the floor sanding
and fumigation work by sanitation department employees,
which appears to be done on a regular basis, the use of
Hershey employees for Reese maintenance work appears
to be an uncommon practice.
The record does not reveal the extent to which the
specific job tasks performed by Reese employees parallel
those performed by Hershey's, or call for the exercise of
the same skills. It is reasonable to assume, however, that
they are basically similar, as the arbitrator found. It is also
reasonable to assume, since the same Hershey management
representative developed the job evaluations for both the
Hershey and the Reese employees, that where job
classifications at the two plants are similar, so too are the
pay rates.
With respect to wages and benefits, management has
pursued a policy of conformity at the two plants. The same
retirement and group insurance plans, with the same level
of benefits, are applicable at both plants.14 Vacation
arrangements at both plants are also virtually identical. As
a matter of practice, whenever Hershey bargaining unit
employees have obtained any wage or fringe benefit
increases as a result of bargaining by the Union, manage-
ment has simultaneously-unless prevented or delayed by
wage control restrictions-granted the same increases to
Reese production and maintenance employees. The Reese
employees have thus been de facto beneficiaries of the
Union's bargaining for the unit in which the Union now
seeks to accrete them. The free ride they have thus been
able to obtain may well account for the reluctance of at
least some of them to join the Union; understandably this
has been a cause of union resentment.
D. Analysis and Concluding Findings
The ultimate unfair labor practice issue to be decided is
whether the Respondents violated the Act by extending the
Hershey union collective-bargaining agreement , including
the union-security provisions thereof, to cover Reese
employees . The law is clear that unless unit accretion is
established, an employer and a union may not, without the
majority consent of the employees to he added thereto,
expand an established bargaining unit to take in a new or
added facility. See, e.g., Combustion Engineering, Inc., 195
NLRB 909; Melbet Jewelry, 180 NLRB 107. As the Reese
employees had not separately designated the Union as
their majority representative , the disposition of the unfair
labor practice allegations of this complaint must turn on
whether or not a finding is warranted that these employees
prior to the contract extension had become merged
plant
1/ It is noted, however. that the master policies applicable to the group
insurance plan, as well as the trust fund for the retirement plan, are not
confined in their coverage to Hershey 's bargaining unit employees and
Reese's production and maintenance employees, but extend as well to all
employees of Hershey and its various subsidiaries
HERSHEY FOODS CORP.
through accretion in the Hershey collective-bargaining
unit.
A preliminary question is raised by the Union' s conten-
tion that the Board should apply its policy favoring
arbitration , as expressed in Collyer15 and Spielberg,16 and
like cases , and honor the arbitration opinion and award of
Arbitrator Duff as a final and binding determination of
that issue . The short answer to that contention is that to do
so would be contrary to controlling Board precedent. The
Board has already declared itself in a number of cases on
that subject, holding that where union accretion is in issue,
it will not eschew its statutory obligation to decide that
issue itself . The Board's most recent ruling on that precise
point is to be found in Combustion Engineering, supra, a
case decided after Collyer. In that case, the alleged unfair
labor practices were virtually identical to those alleged
against the Respondent Companies in the case at hand.
There, too, the respondent contended that the Board
should give effect to Collyer and Spielberg by honoring the
decision of an arbitrator who in his award had ruled that
the employees of an employer 's newly opened plant were
covered by the same collective-bargaining agreement that
governed the operations of its older plant. The arbitrator in
that case , like the arbitrator in the instant case, had
grounded his determination of contract coverage largely on
his finding that there was a unit accretion . The Administra-
tive Law Judge rejected the Collyer-Spielberg contention,
and, contrary to the arbitrator and on the basis of his own
consideration and evaluation of the evidence , held that in
fact there had been no accretion . The Board affirmed his
holding . Addressing itself to the contention that the Board
should respect the arbitrator 's award , the Board stated:
With respect to the award of the arbitrator, the
question of whether the existing contract was intended,
or can be construed, to cover those employees of [the
newly acquired plant] who were hired after its effective
date is a question for the arbitrator, but his conclusion
on that issue does not govern or guide the Board in its
disposition of the issue presented here . For, though the
arbitrator answered the question in the affirmative, it is
nevertheless the obligation of the Board to determine
whether the employees at [the newly acquired plant]
constituted an accretion to the existing unit. On the
facts before us , we agree with the Trial Examiner that
such a finding is not warranted here.
To the same general effect , although in representation
case contexts , are the holdings of the Board in Pullman
Industries, Inc., 159 NLRB 580 ; Beacon Photo Service, Inc.,
163 NLRB 706; Textron, 173 NLRB 129; and Woolwich,
Inc., 185 NLRB 783.
In Beacon, where the Board in a contract-bar context
declined to await a then pending arbitration on the issue of
accretion , holding that the determination of that issue was
not one within the competence of an arbitrator , the Board
stated:
There are two issues presented in this case: (1) whether
the multi-employer collective-bargaining contract re-
457
lied upon by the Union was intended to cover the
subsequently established-plant , and (2) whether,
assuming the first question is answered in the affirma-
tive , the contracting parties could so extend the
contract to the [subsequently established plant] without
the consent of the latter 's employees . The first question
can be answered by the arbitrator, but the second
question is only for the Board.
Similar statements appear in Textron and Woolwich.
Raley's Inc. d/b/a Raley's Supermarkets, 143 NLRB 256,
upon which Respondent largely relies , may not properly be
viewed as precedent to the contrary . The precise issue in
that case was whether a retail stores multiemployer
contract, asserted as a contract bar, was intended to
include janitors and bottle workers who were not in the
Employer's employ at the time the contract was made. As a
careful reading of that decision discloses , the Board treated
the issue before it as involving only a question of contract
interpretation . The only reference in the decision to
accretion appears in the Board 's closing comment that it
could perceive nothing in the arbitrator's decision relating
to contract coverage that was opposed to statutory policy,
since in similar circumstances the Board had itself held like
employees to be an accretion to the contract unit and
therefore covered by the contract . In cases decided after
Raley's, the Board expressly limited the scope of that
decision to situations where the sole and dispositive issue
before the Board is one of contract interpretation. See
Hotel Employers Association of San Francisco, 159 NLRB
143, 147-148; Holbrook Knitwear, Inc., 169 NLRB 768,
771. It is further noted that Raley's preceded the line of
cases cited above in which the Board has declined to defer
to arbitral awards where accretion is in issue . The later
cases must thus be deemed to supersede Raley's even if
regarded as inconsistent therewith.
As prevailing Board law does not warrant deferral to the
arbitrator's award on this issue, the Respondent Union's
claim of accretion must be examined on its merits. For the
reasons that will appear below, I find that claim to be
without merit.
To support its accretion claim , the Union relies, as did
the arbitrator , essentially upon the following considera-
tions: ( 1) the geographical proximity of the Hershey and
Reese plants and the similarity in the products they
produce; (2) the similarity in the type of work performed
and employee skills required ; (3) the uniformity in wages
paid and benefits accorded employees at both plants, as
well as the practice of putting into effect simultaneously for
Reese employees increased wages and benefits negotiated
by the Union for Hershey employees ; (4) the common top-
level managerial control over the operations of both plants,
and the centralized administration that exists with respect
to such functions as purchasing , advertising, sales, pro-
duction planning , research , engineering services , bookeep-
ing, and accounting ; (5) the functional integration of plant
operations to the degree evidenced by Reese 's use of
Hershey chocolate, Hershey's storage and shipment of
Reese's products , Hershey's production of the Reese
15 Collyerlnnulated Wire, 192 NLRB 837.
16 Spielberg Manufacturing Co, 112 NLRB 1080.
458 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
peanut butter egg with the use of peanut butter produced
by Reese, and Hershey's packaging of Reese butter cups
when they are included in variety packages: and (6)
Hershey's action in placing the Kit Kat production
operation in the Reese facility.i7
The foregoing considerations appear to be material
mainly to the question of whether a combined unit of
Hershey and Reese employees would be appropriate for
the purposes of collective bargaining: The question of the
appropriateness of the enlarged unit that will result from
an accretion is, of course, always involved where accretion
is in issue. But an affirmative answer given to that question
cannot dispose entirely of the issue. Also involved is
whether a finding of accretion would result in an undue
and reasonably avoidable impairment of employees'
freedom of choice. Relevant to this is the separate unit
appropriateness of the employee group that would be
added to the established unit without a voice in the matter
if accretion is sanctioned. It is to a consideration of this
aspect of the case that I now turn.
There can of course be no doubt whatever that the Reese
production and maintenance employees, though unorgan-
ized, formed an appropriate bargaining unit prior to
Hershey's acquisition of Reese. After the acquisition,
Hershey continued to maintain Reese as a separate
corporate entity, with its plant organized as an autono-
mous operation, having its own personnel office, separately
published work rules, etc. And, as found above, Reese's
production and maintenance employees retained their
previous identity as a self-contained homogeneous group
of employees, separate and distinct from the Hershey
bargaining unit employees. The Reese employees, now as
before, perform their work in a separate plant, have
entirely separate supervision through the plant manage-
ment level, and have a separate seniority system. There has
never been any transfer or interchange of production
employees between the Hershey and Reese plants. Nor,
with the relatively insignificant exceptions that have
previously been noted, has there been any involving
maintenance employees.
It thus clearly appears that the Reese production and
maintenance employees constituted an appropriate bar-
gaining unit at the times material herein, even though a
combined unit of Hershey and Reese employees might also
have been appropriate. Indeed, the Union acknowledged
as much in the two representation petitions it filed with the
Board seeking representation of the Reese employees on a
separate unit basis. It was not until after the Union lost the
first of the two elections in which it participated that the
Union made the claim for the first time that the Reese
employees came within the scope of its Hershey contract.i8
'r The Union in its brief stresses the last item as the "most revealing"
factor indicating accretion Why this is so evades me It is clear from the
record that Kit Kai was never produced at the Hershey plant The
placement of its production in the Reese plant will not involve the transfer
of any Hershey employees to the Reese plant nor reduce the work
performed at Hershey
1N Although the Union now asserts that the accretion resulted from a
gradual "evolution" which "had not been culminated by the date of the last
election ." held in 1969, there is nothing in the record to show any further
"evolution" after that date, except for the assignment to Reese of the Kit
Kat operation , discussed above.
19 Respondents ' reliance upon an arbitrators award does not , of course.
No such claim had, however, been made by the Union
during the negotiations for the two contracts covering the
Hershey bargaining unit that were negotiated between the
date of acquisition and the date of the first election.
It is well settled that the doctnne of accretion will not be
applied where the employee group sought to be added to
an established bargaining unit is so composed that it may
separately constitute an appropriate bargaining unit.
N.L.R.B. v. Masters-Lake Success, Inc., 287 F.2d 35 (C.A.
2, 1961); Smith Management Corp., 197 NLRB 1156;
Melbet Jewelry Co., supra, at 109. Nor will it be applied by
the Board in situations where the employee group, though
in existence at the time, was excluded from previously
negotiated collective-bargaining contracts covering the
bargaining unit to which its accretion is claimed. Gould-
National Batteries, Inc., 157 NLRB 679, 681. As a
prerequisite to the addition of any such employee group to
an established unit, the law requires the majority consent
of those to be added, expressed either in a self-determina-
tion election or by some other lawfully acceptable method.
Ibid. As no such majority consent was given by the Reese
employees, there was no lawful justification for extending
the Hershey contract to the Reese plant under the guise of
accretion. The attempt to impose on the 1,000 Reese
employees a union they did not select is in this case
particularly offensive to statutory policies because the
Reese employees by overwhelming margins had twice
rejected representation by the Union, and in a third
election had again indicated a desire to remain unrepre-
sented by rebuffing another labor organization's bid for
recognition.
It follows, and I find, as alleged in the complaint, that
the Union, by attempting to apply its collective-bargaining
contract with Hershey, including the union-security provi-
sions thereof to Reese plant employees, violated Section
8(b)(1)(A) and (2) of the Act, and that the Respondent
Companies, by announcing to employees of Reese that
Reese would apply the Hershey contract to them, violated
Section 8(a)(1), (2), and (3) of the Act. See Combustion
Engineering, supra; Melbet Jewelry Co., supra; N.L.R.B. v.
Martins Lake Success, Inc., supra. 19
CONCLUSIONS OF LAW
1. By attempting to apply its collective-bargaining
contract with Hershey, including the union-security provi-
sions thereof, to employees of Reese , the Respondent
Union violated Section 8(b)(1)(A) and (2) of the Act.
2. By announcing to employees of Reese that Reese
would apply the Union's collective-bargaining agreement
with Hershey, including the union-security provisions
provide a defense for their unlawful conduct. Combwrron Engineering,
supra Nor are Respondents ' unfair labor practices excused by their
announcements to Reese employees after the charges were filed that the
contract would not be applied pending disposition of this proceeding See
Combustion Engineering, supra, pp. 910,913
Though I have decided this case on a different basis, it may be
appropriate to note here that had I considered the Spielberg doctrine
otherwise applicable to this case. I would have rejected the arbitrator's
award as a defense for failing to meet one of the Spielberg'r tests, i.e , that an
award. if it is to be honored by the Board, must "not [bel clearly repugnant
to the purposes and policies of the Act "
HERSHEY FOODS CORP.
thereof, to employees of Reese. the Respondent Companies
violated Section 8(a)(1), (2), and (3) of the Act.
3. The aforesaid unfair labor practices are unfair labor
practices affecting commerce within the meaning of
Section 2(6) and (7) of the Act.
THE REMEDY
Having found that the Respondents have engaged in
certain unfair labor practices, I shall recommend that they
be ordered to cease and desist therefrom, and from like
and related unfair labor practices. and that they take
certain affirmative action found necessary to effectuate the
policies of the Act.
Upon the foregoing findings of fact, conclusions of law,
and the entire record, and pursuant to Section 10(c) of the
Act, I hereby issue the following recommended:
ORDER 20
A. Respondents Hershey Foods Corporation and H. B.
Reese Candy Co., Inc., their respective officers, agents,
successors, and assigns, shall:
1. Cease and desist from:
(a) Requiring as a condition of employment that
employees at the Hershey, Pennsylvania, plant of Respon-
dent Reese become or remain members of Respondent
Union pursuant to the collective-bargaining agreement
between Respondent Union and Respondent Hershey, or
otherwise extending or applying any of the provisions of
said contract, or any modification, extension or renewal
thereof, to such Reese employees, unless and until the
Union has been certified by the Board as the representative
of such employees in a bargaining unit covered by such
contract.
(b) In any like or related manner, interfering with,
restraining, or coercing its employees in the exercise of
their rights under Section 7 of the Act.
2. Take the following affirmative action, which is
deemed necessary to effectuate the policies of the Act:
(a) Post at the Hershey, Pennsylvania, plant of H. B.
Reese Candy Co., inc., copies of the attached notice
marked "Appendix A."2221 Copies of said notice, on forms
to be provided by the Regional Director of Region 4, shall,
after being duly signed by its representative, be posted by it
immediately upon receipt thereof, and maintained by it for
a period of at least 60 consecutive days thereafter, in
conspicuous places, including all places where notices to
employees are usually posted. Reasonable steps shall be
taken by them to insure that such notices are not altered,
defaced, or coverer by any other material.
(b) Notify the Regional Director for Region 4, in writing,
within 20 days from date of the receipt of this Order, what
steps they have taken to comply herewith.
B. Respondent Bakery and Confectionery Workers
International Union of America, Chocolate Workers Local
No. 464, its officers, representatives, agents, and assigns,
shall:
1. Cease and desist from:
(a) Extending or applying, or causing or attempting to
cause the Respondent Companies, or either of them, to
extend or apply, to the employees at the Hershey,
459
Pennsylvania. plant of Respondent Reese, any of the
provisions, including the union-security provisions, of the
collective-bargaining contract between the Union and
Respondent Hershey, or any renewal, modification, or
extension thereof, unless and until Respondent Union has
been certified by the Board as the representative of such
employees in a bargaining unit covered by said contract.
(b) In any like or related manner, restraining or coercing
Reese employees in the exercise of their rights under
Section 7 of the Act.
2. Take the following affirmative action, which is
deemed necessary to effectuate the policies of the Act:
(a) Post in conspicuous places at its business office,
meeting halls, and places where notices to its members are
customarily posted, copies of the attached notice marked
"Appendix B."22 Copies of said notice to be furnished by
the Regional Director for Region 4, shall, after being duly
signed by an authorized representative of the Respondent
Union, be posted immediately upon receipt thereof, and be
maintained by it for a period of 60 days thereafter.
Reasonable steps shall be taken by Respondent Union to
insure that said notices are not altered, defaced, or covered
by any material.
(b) Furnish to the Regional Director signed copies of the
aforesaid notice for posting by Respondent Companies at
the Reese plant where notices to employees are customarily
posted. Copies of the said notice to be furnished by the
Regional Director, shall, after being signed by Respondent
Union as indicated, be forthwith returned to the Regional
Director for posting by him.
(c) Notify the Regional Director, in writing, within 10
days from the date of this Decision, what steps Respondent
Union has taken to comply herewith.
20 In the event no exceptions are filed as provided by Sec 102.46 of the
Rules and Regulations of the National Labor Relations Board, the findings.
conclusions, and recommended Order herein shall, as provided in Sec.
102 48 of the Rules and Regulations . be adopted by the Board and become
its findings , conclusions , and order, and all objections thereto shall be
deemed waived for all purposes.
21 In the event that the Board's Order is enforced by a Judgment of a
United States Court of Appeals. the words in the notice reading "Posted by
Order of the National Labor Relations Board" shall he changed to read
"Posted Pursuant to a Judgment of the United States Court of Appeals
Enforcing an Order of the National Labor Relations Board."
22 See fn. 21. supra
APPENDIX A
NOTICE To EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
WE WILL NOT require as a condition of employment
that any of the employees of H. B. Reese Candy Co.,
Inc., become or remain members of Bakery and
Confectionery Workers International Union of Ameri-
ca, Chocolate Workers, Local No. 464, pursuant to the
collective-bargaining contract between that Union and
Hershey Foods Corporation.
WE WILL NOT otherwise extend or apply any of the
provisions of the aforesaid contract, or any extension,
modification, or renewal thereof, to the Reese employ-
460 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
ees, unless and until the Union has been certified by
the Board as the representative of such employees in a
bargaining unit covered by said contract.
WE WILL NOT in any like or related manner interfere
with the rights of our employees guaranteed by Section
7 of the Act.
H. B. REESE CANDY
COMPANY
(Employer)
Dated By
(Representative ) (Title)
HERSHEY FOODS
CORPORATION
(Employer)
Dated By
(Representative) (Title)
This is an official notice and must not be defaced by
anyone.
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. Any questions concern-
ing this notice or compliance with its provisions may be
directed to the Board 's Office , Suite 4400 William J. Green,
Jr., Federal Building, 600 Arch Street , Philadelphia,
Pennsylvania 19106, Telephone 215-597-7601.
APPENDIX B
NOTICE To EMPLOYEES AND MEMBERS
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
WE WILL NOT extend or apply, or cause or attempt to
cause H . B. Reese Candy Co., Inc . or Hershey Foods
Corporation to extend or apply , to Reese employees
any of the provisions , including the union secunty
provisions , of our collective -bargaining contract with
Hershey Foods Corp., or any renewal , modification or
extension of that contract , unless and until we have
been certified by the Board as the bargaining represent-
ative of the Reese employees in a bargaining unit
covered by said contract.
WE WILL NOT in any like or related manner restrain
or coerce employees of H. B . Reese Candy Co. in their
right to self-organization , to form , join , or to refrain
from forming or joining unions, and to bargain
collectively through representatives of their own choos-
ing.
Dated By
BAKERY AND
CONFECTIONERY WORKERS
INTERNATIONAL UNION OF
AMERICA, CHOCOLATE
WORKERS LOCAL No. 464
(Labor Organization)
(Representative) (Title)
This is an official notice and must not be defaced by
anyone.
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 . Any questions concern-
ing this notice or compliance with its provisions may be
directed to the Board 's Office, Suite 4400 William J . Green,
Jr. Federal Building , 600 Arch Street , Philadelphia,
Pennsylvania 19106, Telephone 215-597-7601.