Parkwood IGA

National Labor Relations Board - Board DecisionsFeb 16, 1973

201 N.L.R.B. 905 (N.L.R.B. 1973)

PARKWOOD IGA 905 Dorrance J. Benzchawel and Terrence D. Swingen, Copartners d/b/a Parkwood IGA and Retail Clerks Union Local No. 1401 , affiliated with Retail Clerks International Association, AFL-CIO S & 0 Inc., d/b/a Paul's IGA Foodliner and Retail Clerks Union Local No. 1401 , affiliated with the Retail Clerks International Association, AFL -CIO Zim's Foodliner Inc. d/b/a Zim's IGA Foodliner and Retail Clerks Union Local No. 1401 affiliated with the Retail Clerks International Association, AFL-CIO and Amalgamated Meat Cutters and Butcher Workmen of North America , Local 444, AFL-CIO. Cases 30-CA-1715, 30-CA-1722, 30-CA-1696, and 30-CA-1716 February 16, 1973 DECISION AND ORDER BY CHAIRMAN MILLER AND MEMBERS FANNING AND PENELLO On June 23, 1972, Administrative Law Judge' Benjamin B. Lipton issued the attached Decision in this proceeding.2 Thereafter Respondents Paul's and Zim's and General Counsel filed exceptions and supporting briefs. Subsequently Meat Cutters filed cross-exceptions and a supporting brief and also a brief in answer to Respondents' exceptions. The Respondents then filed an answering brief to Meat Cutters cross- exceptions. 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 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, Zim's Foodliner Inc., d/b/a Zim's IGA Foodliner, Monroe, Wiscon- sin, and S & 0 Inc., d/b/a Paul's IGA Foodliner, Edgerton, Wisconsin, their officers, agents , succes- sors, and assigns, shall take the action set forth in the said recommended Order. I The title of "Trial Examiner" was changed to "Administrative Law Judge" effective August 19, 1972. 2 The Administrative Law Judge subsequently issued an erratum to this Decision. TRIAL EXAMINER'S DECISION STATEMENT OF THE CASE BENJAMIN B. LIPTON, Trial Examiner : These consolidat- ed cases were tried before me on January 18 and 19 , 1972,1 In Madison , Wisconsin , upon separate complaints by the General Counsel against each of the above -named Respon- dents alleging certain violations of Section 8(a)(5) and (1) of the Act .2 Comprehensive briefs were filed by the General Counsel , Retail Clerks , Meat Cutters, and on behalf of the respective Respondents. On the entire record in the cases , and from my observation of the witnesses, I make the following: FINDINGS OF FACT 1. JURISDICTION In Case 30-CA-1715, the Respondent, herein called Respondent Parkwood , since July 26 has been engaged in the retail sale of groceries at a store located in Middleton, Wisconsin . In Case 30-CA-1722, the Respondent , herein called Respondent Paul's, since July 27 has operated a retail grocery store in Edgerton , Wisconsin . In Cases 30-CA-16963 and 30-CA-1716, the Respondent, herein called Respondent Zim's, since July 27 has operated a retail grocery store in Monroe, Wisconsin . Each Respon- dent admits that , on a projected basis, its annual gross sales will exceed $500,000, that it will have an indirect inflow of goods and materials in interstate commerce valued in excess of $50,000, and that , during the period of 4 months since it began operations , its gross sales have exceeded $200,000. It is admitted, and I find , that each Respondent is engaged in commerce within the meaning of the Act. II. THE LABOR ORGANIZATIONS INVOLVED Retail Clerks Union Local No. 1401, affiliated with the Retail Clerks International Association , AFL-CIO , herein called the Retail Clerks, and Amalgamated Meat Cutters & Butcher Workmen of North America, Local 444, AFL- CIO, herein called the Meat Cutters, are labor organiza - tions within the meaning of the Act. 111. THE UNFAIR LABOR PRACTICES A. Introductory Facts and Description of Issues In June 1971 , the Kroger Company, herein called Kroger, following its decision early that year to terminate all operations in Wisconsin , undertook to sell on a piece- meal basis all its 57 retail food supermarkets in the State. In existence were collective -bargaining agreements with various locals of the Retail Clerks and the Meat Cutters. The Monroe , Edgerton , and Middleton stores were part of All dates are in 1971, unless otherwise specified. 2 In Cases 30-CA-1715 and 30-CA-1722, the original charges were filed and served, respectively , on September 15 and 22 . In Cases 30-CA-1696 and 30-CA-1716, the original charges were filed and served , respectively, on August 27 and September 16 On December 23, separate complaints were issued in the former two cases, and a consolidated complaint in the latter two cases. On motion jointly by the Respondents herein , all the cases were consolidated for hearing by order dated January 4, 1972. 3 Changed by stipulation from Lowell D. Zimmer, d/b/a Zim's IGA Foodliner. The change does not affect the issues or the responsibility of this Respondent as to remedy. 201 NLRB No. 141 906 DECISIONS OF NATIONAL LABOR RELATIONS BOARD a multistore unit of grocery employees in the Madison area (about 11 stores ) 4 covered in a union-security agreement with the Retail Clerks . The Monroe store, solely involved in Case 30-CA-1716 , similarly under the contract with Kroger , was part of a multistore unit (about five stores) of meat department employees . Both contracts had terms extending into 1973 . On July 19, each Respondent executed with Kroger a purchase agreement to acquire the respective stores at Monroe , Edgerton , and Middleton. On July 24, Kroger ceased all operations at these stores. And on July 26, each Respondent completed the purchase from Kroger (by bill of sale) of certain tangible assets and was assigned the leasehold interest of their respective stores. Thereafter , within a brief interval , each Respondent hired certain of Kroger's employees formerly employed at the particular store and commenced operation of a grocery supermarket at this location-continuing to the present. Virtually all the issues are raised in the complaints under Section 8(a)(5) on the successorship principle. Each Respondent admits the factual allegations that , in each case , a single store unit as alleged in the complaint is appropriate for bargaining , and that , since July 26 or 27, it has refused the particular demands of the union involved for recognition and bargaining, and fulfillment of all obligations of the collective -bargaining contracts preexist- ing with Kroger as relates to the employees in the admitted unit or units at each store . The separate Respondents also specifically admit in answer to the complaints: 1. Cases 30-CA-1696 and 30-CA- 1716-Monroe store That, since on or about August 19, it refused to recognize and process grievances submitted by the Retail Clerks on behalf of the grocery unit employees. That, since on or about August 20, it unilaterally reduced the working hours in the unit of meat department employees. That, since on or about September 1, it unilaterally reduced the working hours in the unit of grocery employees. That, since early October 1971, it unilaterally reduced the wage rates of the grocery unit employees. That, since on or about October 1, it unilaterally discontinued the existing health insurance program for the employees in the grocery and meat department units.5 2. Case 30-CA-1722-Edgerton store That, since on or about July 27, it unilaterally reduced the wage rates and working hours , and discontinued the 4 Including Reedsburg , involved in another proceeding .'See In . 6, infra 5 At the hearing it was stipulated that, in mid -August , Respondent Zim's unilaterally reduced the wage rates for employees in the Retail Clerk's unit and reduced the hours of employees in both units , and that these rates and hours have since been maintained. 6 Similar issues are presented in Fred 's, Inc, d/b/a Fred's Foodliner, Case 30-CA- 1704, issued in my decision this day, involving the Reedsburg store purchased from Kroger under identical circumstances r N L R B v Burns International Security Services, 80 LRRM 2225. B The majority opinion states that resolution of the principal issues-the alleged refusal to bargain and to honor the pre-existing contract-" turns to a great extent on the precise facts involved here " This statement, made at existing health insurance program , affecting the grocery unit employees. 3. Case 30-CA-1715-Middleton store That, since on or about July 26, it unilaterally reduced the wage rates, and discontinued the existing health insurance program , affecting the grocery unit employees. Each Respondent denies the major allegation that it is the legal successor to Kroger at its particular store, and contends in effect that it is not bound to honor the Kroger contract, or to recognize and bargain with the union or unions previously representing certain of its employees. Each Respondent also contends that a terminal supple- ment , executed between Kroger and the respective unions herein, to settle all issues and claims between these immediate parties leaves no surviving contract or obliga- tion which would bind it as a successor .6 The complaint as to Respondent Zim's also alleges certain coercive conduct in violation of Section 8(aXl), which is denied in the answer of this Respondent. On May 15, 1972, the Supreme Court handed down its decision in the Burns case .? The clear and unanimous holding of the Court is that successor-employers are not bound by the substantive provisions of a collective- bargaining agreement negotiated by their predecessors but not agreed to or assumed by them. While the majority of the Court found that, in the particular circumstances,8 Burns was a successor-employer and obligated to recognize and bargain with the union established as the representa- tive of the predecessor's employees in the appropriate unit,9 the Court was unanimously agreed on the following further results, directly or in necessary effect : (a) With certain exceptions , the successor-employer "could not be said to have changed unilaterally any pre-existing term or condition of employment without bargaining when it had no previous relationship whatsoever to the bargaining unit...." The exceptions are, e .g., where it is perfectly clear that the new employer plans to retain all the employees in the unit and it is appropriate to have him initially consult with the union before he fixes the terms of employment as to these employees ; or where the new employer unilaterally changes the employment conditions he had offered to potential employees after his obligation to bargain with the union became apparent or matured. (80 LRRM at2233, 2234) (b) A new employer is not obligated to hire the employees of his predecessor, unless he effectively assumed such an obligation or is discriminatorily motivat- ed in his refusal to hire such employees. Thus, as I conclude , the Supreme Court in Burns has now settled and in effect eliminated all the issues herein based the outset of the Court's discussion , by no means indicates that the case is sut generts; various distinguishing fact situations are well defined throughout the detailed consideration of the issues 9 Burns was the successful bidder on a contract to supply plant guard services at a facility of an aircraft company , replacing Wackenhut Corporation , a Burns competitor, whose employees were represented under contract by a recently certified union . There was no issue before the Supreme Court as to the appropriate unit, which the Board had found to be the same unit in effect under Wackenhut . Burns hired 27 of Wackenhut's guards , who were found to constitute a majority of the 42 guards in the unit under Burns PARKWOOD IGA 907 on General Counsel's theory of successorship, excepting only the complaint allegations-that each Respondent generally refused to recognize and bargain with the unions involved; that it engaged in unilateral actions after having commenced operations and being cognizant of the union bargaining demands ; and that Respondent Zim's refused to process grievances and committed 8(a)(1) conduct. B. The Evidence The pertinent facts are substantially without dispute. As earlier described, there is no issue as to the appropriateness of the single store units at the Monroe, Edgerton, and Middleton stores in question. Until Kroger ceased opera- tions on July 24, it had an existing union-security contract with Retail Clerks covering the employees at these stores, and with the Meat Cutters covering the meat department employees at Monroe. Between June 16 and July 13, both unions and Kroger conducted negotiations and, on the latter date, executed identical supplements to each contract -"in consideration for the Employers' termination of the Employees . . . which resulted from the Employer's closing of its Wisconsin operation and this Agreement settles all issues and claims concerning said termination and closing." In substance, Kroger agreed to pay the health and welfare premiums for 2 months following the employees' termination and to make specified payments relating to pension, holidays, and vacations. In the terminal negotiations, Kroger in effect advised the unions involved that it would submit to all prospective purchasers a clause requiring the purchaser to assume the existing bargaining contract, but it would not require such contract assumption as a condition of the sale.10 Gateway Foods, Inc., herein called Gateway, had been the general supplier to Kroger of dry groceries for the Wisconsin stores excluding the Milwaukee area. In 1971, Gateway negotiated with Kroger for the purchase of a group of stores in central Wisconsin.'1 Ultimately, Gate- way did not buy any of the stores directly for itself, but was instrumental in assisting and financing the acquisition of particular stores by certain persons, including the Respon- dents herein.12 As noted, on July 26, each Respondent perfected the purchase 13 of their respective stores.14 The purchase agreements executed by each Respondent has no provision for the buyer's assumption of the union con- tract . 15 Before the purchases of these stores were effected, Gateway and each of the Respondents were fully aware of the existence of the union contracts covering the Monroe, Edgerton, and Middleton stores. On July 14, effective as of July 26, an "Operating and Security Agreement" was entered into between each Respondent and Gateway. It states, as consideration for 10 Some of the purchasers did agree in this manner to assume the union contract 11 When Kroger decided to go out of business in Wisconsin , Gateway brought suit to prevent it , based on its claimed right of first refusal to purchase all the stores. 12 Respondent Paul's, for example , indicated that it relied on Gateway's recommendations to purchase the store 13 The purchase price for the Monroe store was $50,000, for Edgerton, $35,000, and for Middleton, $65,000 , covering equipment. furniture, and fixtures , the merchandise inventory was paid for separately on the basis of a specified price formula. such agreement, that the particular store is being pur- chased with Gateway 's "direct financial assistance," as evidenced by a certain "guarantee of promissory note" to a bank. The comprehensive document provides, in part, that the "Debtor" (i.e., each Respondent): shall cooperate and participate fully with any IGA franchise program now offered or hereafter offered by Gateway Foods but not limited to, advertising, com- plete accounting, and accounts payable service and blank check purchases plan. . . . shall make at least 60 percent purchases of all merchantable products, trad- ing stamps , if given , and supplies based on retail sales from Gateway to the extent Gateway makes the same available either directly or indirectly, through its accredited suppliers. If Debtor make[s] any of [its] purchases from other than Gateway or its authorized outside suppliers, [it] shall immediately pay to Gateway two percent (2 percent) of the cost of such unauthor- ized purchases, or shall make such purchases through the Gateway Central Billing System. [Sec. 1 ] shall conduct [it]s said business . . . in accordance with the standards set forth in any Retailer Franchise and Cooperative Merchandising Plan, and in accordance with any instructions or regulations thereto which Gateway may subsequently promulgate. The store shall bear the identification of IGA. . . . Debtor agree[s] to cooperate with the entire IGA program . . . as administered by Gateway, including . . . advertising programs, merchandising methods , promotional plans, group insurance programs , store engineering plans and procedures , retailing accounting services and training programs . [Sec. 5 ] grant[s] to Gateway the first option to purchase said retail business at any time while this Agreement remains in force and effect . (Sec. 7) Section 4. In the event Debtor should default on the payment of any sum to be paid hereunder or fail to perform at the time and in the manner herein specified any term or covenant in this Agreement . . . Gateway may terminate this entire agreement including the lease, if any, of premises . . . [and] shall have full and complete authority and right to immediately enter upon the premises and conduct the business thereon.16 Section 8. Termination of Agreement. This Operating Agreement . . . shall remain in full force and effect so long as said Debtor continue[s] to own or operate said retail business , or any part thereof . . . unless Gateway consents in writing to its termination. . . . Provided, however, that Section 1 of this Operating Agreement shall cease to be of any force and effect upon the Debtor satisfying in full all financial obligations to Gateway or its subsidiaries. 14 On July 24, Kroger assigned to Gateway its leases to each of the stores in question. and Gateway , on July 26, subleased to each of the Respondents. 15 The purchase agreement contains a clause , in substance , that the buyer assumes no liabilities or obligations of Kroger , and that Kroger agrees to indemnify and hold the buyer harmless against all liabilities, claims, and costs arising out of any event or transaction prior to July 25, 1971 ie In the Security Agreement, Gateway was granted a continuing interest and mortgage respecting virtually all tangible and intangible assets of the store. 908 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Testimony on the part of the respective Respondents appears to take the position that the purchasing, advertis- ing, merchandising, and other specified policies of Gate- way and IGA have not been strictly followed or are not intended to be binding. The essential fact is that these Respondents are bound by their agreement, the terms of which can be enforced by Gateway at its will, even assuming that aspects of the agreement were not fully pursued by Gateway during the early stages of Respon- dents' operation of their stores. The Monroe store was purchased by Lowell Zimmer as an individual and was later incorporated. Zimmer previ- ously held various supervisory positions with Kroger, including that of store manager of certain stores other than Monroe, and zone manager of the stores covered in the Madison area contract, which embraced Monroe. Zimmer, as owner, actively engages in the management of the store. When he opened the store on July 27, he employed the entire Monroe complement of Kroger. Marcus Pink, the former store manager , was retained by Zimmer in the same position, with similar responsibilities. Also employed were Kroger's 16 grocery employees and 3 meat department employees.17 The Edgerton store, operated by Respondent Paul's, is 75 percent owned by Paul Sanderson, and the balance by Fred Oreel.18 Previously, Sanderson was a store manager at another Kroger store in the general area for 19 years. Kroger's store manager at Edgerton, James Wedeward, was continued in the same position with this Respondent. At the closing, Kroger had 14 employees in this store represented by the Retail Clerks. Of these, nine were hired by Respondent, comprising with the addition of Sander- son's wife, son, and daughter, the entire grocery work force. 19 The Middleton store, operated by Respondent Park- wood, is owned by Dorance J. Benzschawal and Terrence Swingen, as co-partners. Theretofore, Benzschawal had been the store manager and Swingen the head meatcutter at a Kroger store in Madison. At the closing, Kroger had 12 employees at this store, under the contract with the Retail Clerks. Respondent Parkwood hired only one of these employees , Vernon Lewerenz, in its total grocery complement of five employees, excluding the owners and their immediate families. Of the others, one employee, Bill Sebert, had no prior employment with Kroger. Another, Janet Rusu, had worked for Kroger at a store in Madison, but only until November 1970. Jerome Bentzler and IT In November , one of the meat department employees, being dissatisfied with his reduced hours , voluntarily quit, and has not since been replaced There is no issue as to constructive termination. 1s Oreel is the full owner of the Reedsburg store, similarly purchased from Kroger . See In. 6. 19 Sanderson stated there were 20 to 25 applicants , of whom he hired 9 employees , all previously with Kroger at this store I cannot accept his testimony that he only knew that four of these employees were previously with Kroger and that he was unaware of Kroger 's contract with the Retail Clerks His 25-percent partner , Oreel , admittedly knew of the contract; and stipulations cover the point of awareness 20 He began employment at Middleton on July 26 , and the date he applied for a withdrawal card is not shown. 21 E g , Respondents operate a friendlier store, spend less money than Kroger for advertising ; purchase and sell more local products , generally have a lower pricing structure ; do not use the Kroger label on certain products , but have the IGA label on certain products ; sell a smaller variety Ronald Kummerow were previously employed by Kroger at a Madison store within the Retail Clerks coverage. Kummerow withdrew his union membership effective as of August 1.20 Other facts are substantially the same as to all three stores . Only the owners and store managers possess and exercise supervisory authority. Grocery, produce, and meat comprise the three departments in the store. In each of these departments , Kroger had nonsupervisory department heads and various classifications of employees. Under the Respondents , the employees have no specific titles or classifications , but they perform essentially the same primary job functions as they did with Kroger. The basic supermarket operation, consisting of stocking merchan- dise, customer self-service , and the use of checkout counters for bagging and payment, remains unchanged. Relating to the successorship issue , the Respondents adduced evidence and argue that the organizational structure and operating methods of their respective stores are materially different from those in effect under Kroger. Certain of these distinctions are, in my opinion, not of major consequence respecting this issue , and need not be fully detailed.21 The more significant differences stem from the conversion of each store in question from a division of Kroger's nationwide supermarket chain to an individually owned and operated store . Thus, Kroger's merchandising, pricing, promotion, traffic , and the like were centrally controlled for groups of stores . While the store managers could, for example, reduce prices on damaged merchandise and make recommendations on purchases and other matters, general policy required them to adhere to Kroger's established programs . With the Respondents , basically, all decisions are made by the owners or store managers, albeit with long-term commitments to Gateway22 and IGA concerning major aspects of their operations , comparable in many respects to the external control formerly exercised by Kroger.23 All personnel matters are handled by Respondents on the local scene24 Under Kroger, the wages, hours, and conditions of employees were essentially fixed in the union contracts. Certain broad policies affecting the employees emanated from a regional office and were implemented by the zone and store managers. Hiring, discharge, and disciplinary matters were conducted at the store level , and submitted by recommendation to Kroger's personnel department for final approval or of precut meat products, thus requiring more cutting in the store ; do not use trading stamps as did Kroger; remain open 7 days a week for longer hours, compared to 6 days under Kroger; obtain some of their merchandise from suppliers other than those previously used by Kroger , whereas Kroger had its own meat plant and bakery , and manufactured some of its own grocery products , all of which were supplied to its stores in the area . (Each of these factors does not necessarily apply to all the Respondents.) 22 I.e., the Operating and Security Agreement, as set forth in part, supra 23 It is also noted , for example , that Kroger had purchased for the individual stores about 75 percent of its grocery items from Gateway, while each Respondent was required to purchase from Gateway at least 60 percent of all merchantable products 21 Note , however , that sec. 5 of the Operating and Security Agreement, supra, requires that the Respondents cooperate with the entire IGA program, as administered by Gateway, including group insurance and training programs. PARKWOOD IGA 909 disapproval. It does not appear that grievances were a frequent problem with Kroger or with the Respondents.25 On July 23, the Retail Clerks wrote its first letter to each Respondent demanding assumption of all the obligations of the contract with Kroger, a copy of which was enclosed. It requested immediate advice "if there are any special circumstances ," and offered to discuss such matters in a meeting. Further letters by Retail Clerks were sent to Respondent Zim's on and subsequent to August 13; to Respondent Paul's on and subsequent to July 27; and to Respondent Parkwood on September 16 and 27. On July 25 and in mid-August, the Meat Cutters verbally requested Respondent Zim's to discuss the existing contract covering the Monroe store, and by letter on August 20, it described its demands for recognition, bargaining , and adoption of the Kroger contract. Answering each of the complaints, the respective Respondents specifically admit that, since July 26 or 27, they have refused and continue to refuse to bargain in good faith with the Retail Clerks and the Meat Cutters as exclusive representatives in the admitted appropriate units of the single stores.26 As already shown, when the stores were first opened for business , the separate units of the Retail Clerks and the Meat Cutters at the Monroe store, and the Retail Clerks unit at the Edgerton store, consisted entirely of former Kroger employees from each of these stores-or an obvious majority in each of such units 27 As relates to the Middleton store, the majority question will be treated infra. Concerning the alleged 8(a)(1) violations by Respondent Zim's, the testimony of three grocery employees is uncontradicted that, in mid-August and about August 23, Zimmer told each of them he could not afford to pay the wages provided in the Retail Clerks contract and would go out of business if the employees voted for the Retail Clerks as their bargaining representative. C. Conclusions The appropriate bargaining unit alleged in each of the complaints involving the Retail Clerks, and admitted by the respective Respondents , as to the single stores at Monroe, Edgerton, and Middleton, Wisconsin, consists of the following: All employees of the Respondent at the particular store locations, excluding the store manager, co-manager, meat department employees, stock auditors, specialty men and demonstrators employed by vendors, guards and supervisors as defined in the Act. 25 E.g ., testimony of Sanderson as to his experience 26 There were discussions extending over a period of time between the Retail Clerks and Respondent Paul's, and between the Meat Cutters and Respondent Zim's, concerning adoption of the Kroger contracts . Ultimately these Respondents rejected the overtures. There are no complaint allegations as to either Respondent that recognition was actually extended and new contracts finally negotiated , which they then refused to sign. 27 The immediate families of the owners at Edgerton and Middleton would not be properly included in the unit. Sec. 2(3) of the Act. 28 There is no evidence of interchange of employees between the Kroger stores. 29 Solomon Johnsky d/b/a Avenue Meat Center, 184 NLRB No. 94; Ranch-Way, Inc, 183 NLRB No 116, enfd . 445 F 2d 625 (C.A. 8) 30 Burns,,supra, i80LRRM at 2228, fn. 4, citing with approval thellower opinion 441 F 2d 911 , 915 (C.A. 2) See also N.L R B v. Interstate 65 Corp, The admitted appropriate unit involving the Meat Cutters consists of All meat and delicatessen employees of Respondent Zim's at its Monroe , Wisconsin, retail store, excluding all other employees , and guards and supervisors as defined in the Act. The various contracts in evidence separately mention and deal with each of the stores,28 particularly as to the different schedules of wage rates applicable to specific stores . It sufficiently appears that the separate identities of the Monroe , Edgerton , and Middleton stores were substan- tially recognized in the historical bargaining agreements.29 As described supra, Respondents Zim's and Paul's, upon taking over the Monroe and Edgerton stores, respectively, hired essentially for their complete work force former Kroger employees at each of these stores represented under the union-security contracts . This factor that the Respon- dents commenced operation of their individual stores, with virtually no hiatus , having its predecessor 's employees as a majority of the work force , is a "most significant" consideration on the issue at hand .30 Various other elements in the evidence , amply discussed supra, weigh in determining whether these two Respondents are successors which continued as the same employing industry 31 of their employees in the particular stores . Kroger and each Respondent operated at the same location , with substan- tially the same physical plant and equipment ; both sought and served the same customers with the same type of products; and the employees of both had the same primary job functions, immediate supervision , and working condi- tions, with only minor modifications . While each Respon- dent's control of the enterprise and the employees is more localized , this difference is not of such magnitude as to be given controlling effect 32 Vis-a-vis the employees in light of their statutory bargaining rights, it cannot be held that the nature of the employing industry in each case-that of a retail grocery supermarket-has basically changed.33 On all these factors, and the entire record , I find that the single-store units at Monroe and Edgerton , as alleged in the complaints, are appropriate for the purposes of collective bargaining under Section 9(a) of the Act 34 Concerning the Middleton store , it cannot be found that Respondent Parkwood employed in its total work force a majority of its predecessor's employees as would constitute it a successor within the meaning of the Burns case , supra. As stated by the Board, the "key test in determining whether a change in the employing industry has occurred is whether it may reasonably be assumed that , as a result of doing business as Continental Inn, 79 LRRM 2122, 2125 (C.A. 6). And cf., Lincoln Private Police, Inc, etc., 189 NLRB No. 103 , Tallakson Fort( Inc, 171 NLRB 503, and Thomas Cadillac, Inc., 170 NLRB 884 (where less than a majority of the new employer 's work force consisted of the predecessor's employees). Si See , e.g., G T & E. Data Services Corporation, 194 NLRB No. 102, Ranch -Way, Inc, supra. 32 Ranch -Way, Inc, supra 33 N.L.R.B v. Zayre Corp, 424 F.2d 1159, 1162 (C.A. 2); Tam-A -Hawk Transit, Inc v . N.L.R.B, 419 F.2d 1025, 1026-27 (C.A. 7)-cases cited with approval in Burns, supra , 80 LRRM at 2228. 3+ See, e.g., Ranch -Way, Inc., supra (where the unit found appropriate as to the successor was substantially smaller than the contract unit of the predecessor). 910 DECISIONS OF NATIONAL LABOR RELATIONS BOARD transitional changes, the employees' desires concerning unionization have likely changed." 35 And the Supreme Court in Burns indicated the cnteria-whether it is reasonable to conclude that the union still represented a majority in the appropriate unit, and whether the new employer could reasonably entertain a good-faith doubt about that fact.36 This majority factor, as previously noted, is most significant in determining the overall issue of successorship. The specific evidence is that, of the five eligible grocery employees in its working complement, only one was hired from this store when last operated by Kroger. Two employees came from another Kroger store covered in the Madison area contract of the Retail Clerks. In the circumstances of this case, it may not be reasonably assumed that the desires of these two employees concern- ing unionization have not altered as a result of the transition, or that Respondent Parkwood could not reasonably entertain a good-faith doubt that the Retail Clerks represented a majority at its Middleton store. In any event, I find that Lewerenz' withdrawal from membership, made effective 5 days after he commenced employment with this Respondent, dissipates any reasonable assump- tion that the Retail Clerks in fact represented a majority in the admitted single-store appropriate unit . Accordingly, I conclude that General Counsel has failed to sustain the allegations in the complaint against Respondent Park- wood.37 Respondents Zim's and Paul's, in each case, employed a clear majority of Kroger's former employees in the respective units at the Monroe and Edgerton stores, and were fully aware that these employees had most recently been represented by the Retail Clerks under a union- security provision. Each such Respondent admits that it has failed and refused to recognize and bargain with the particular union involved, following the separate bargain- ing demands. Neither Respondent has based its refusal to bargain upon a good-faith doubt that the demanding union represented a majority of the employees in the appropriate unit.38 I conclude, therefore, that Respondents Zim's and Paul's at each store stand as the legal successor to Kroger,39 and that each violated "the express mandates of Sections 8(a)(5) and (9)(a)" of the Act40 by its refusal to recognize and bargain with the Retail Clerks or the Meat Cutters, as the case may be,41 on and after July 26 as to the Edgerton store, and July 27 as to the Monroe store.42 35 36 37 38 1028 Ranch -Way, Inc, supra, 183 NLRB No 116. Burns, supra, 80 LRRM at 2227 E g, Tallakson Ford Inc., supra E.g., Tom-A-Hawk Transit, Inc, v N LR B, supra , 419 F.2d at 39 It is of some significance to note that the dissenting opinion of four Justices in the Burns case , supra, repeatedly emphasized a distinction that Burns did not purchase the business or assets of Wackenhut but instead was in direct competition with it, and that only "a naked transfer of employees" was involved (80 LRRM at 2235, 2238 ) Here , of course, the Respondents did acquire the physical assets and the lease of their respective stores from Kroger 40 Burns, supra, 80 LRRM at 2228 11 Jbid See also Solomon Johnsky d/b/a Avenue Meat Center, 184 NLRB No 94, In. 4, where the Board found an independent violation of Sec. 8(a)(5), in D. The Alleged Unilateral Changes In the terminal supplement to the contracts , described above, the existing health insurance programs for the employees in the grocery units under the Retail Clerks, and in the meat department unit (at Monroe) under the Meat Cutters, were continued for 2 months following the employees' termination by Kroger on July 24, with Kroger paying the necessary premiums . As the Respondents themselves did not accept or participate in the insurance programs , they could not be said to have changed unilaterally any preexisting term or condition of employ- ment without bargaining .43 These allegations against each of the Respondents are therefore dismissed. Although Respondent Zim's admits that , since August 19, it refused to process grievances submitted by the Retail Clerks, there is no substantive basis for finding an independent violation on this allegation as it is premised entirely upon the contention , already rejected under the Burns case, that Zim's was obligated to assume preexisting contract. The grievances were related essentially to Zim's unilateral actions after commencing operation, and such conduct, as well as the general refusal to bargain, has been covered in separate findings. Respondent Paul's at the Edgerton store commenced operation on July 26 by instituting wage rates and working hours which were less than those provided in the contract under Kroger. Similarly, this Respondent cannot be held to have made unlawful unilateral changes when it had no "previous relationship whatsoever to the bargaining unit."44 These allegations are dismissed. However, further violations of Section 8(aX5) are found as to Respondent Zim's at the Monroe store on the basis of its admissions that, since mid-August, it unilaterally reduced the wages of the grocery unit employees, and reduced the hours of employees in the grocery and meat department units . These were clearly unilateral changes in existing employment conditions made after this Respon- dent's obligation to bargain with the Retail Clerks and the Meat Cutters had matured and was apparent.45 E. The Independent Coercive Conduct It is found that Respondent Zim's violated Section 8(a)(1), as alleged, by telling three of its grocery employees that it would go out of business if the employees "voted addition to the violations stemming from the failure to honor the contract, "when Respondent refused to recognize the Union as the representative of Respondent's employees ." The Board directly cited the evidence that, when approached , the Respondent refused to have anything to do with the union, stating "who needs you " 42 Respondents' contention relating to the terminal supplement to the contracts executed by each of the unions and Kroger is rejected. Such an agreement between the two contracting parties resolving all claims as between themselves can in no event invest the instant Respondents with an extraordinary privilege to refuse to bargain where normally required, or operate to deny the employees their statutory rights . See Will Coach Lines, Inc, 175 NLRB 518, 533. 43 Burns, supra, 80 LRRM at 2233. 44 Ibid 45 Id, 80 LRRM at 2234. PARKWOOD IGA for" (i.e., adhered to) the Retail Clerks as their bargaining representative 46 IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The activities of Respondents Zim's and Paul's, set forth in section III, above, occurring in connection with their operations described in section I, above, have a close, intimate , and substantial relation to trade, traffic, and commerce among the several States and tend to lead to labor disputes burdening and obstructing commerce and the free flow of commerce. V. THE REMEDY Having found that Respondents Zim's and Paul's have each engaged in unfair labor practices, I shall recommend that they cease and desist therefrom and take certain affirmative action designed to effectuate the policies of the Act.47 It has been found that Respondent Zim's , since July 27, has unlawfully refused to recognize and bargain with the Retail Clerks and the Meat Cutters in their respective appropriate units of employees at the Monroe store. It has also been found that Respondent Paul's, since July 26, has unlawfully refused to recognize and bargain with the Retail Clerks concerning the unit of grocery employees at the Edgerton store. It will therefore be recommended that each of these Respondents, upon request, bargain collectively with the specific union aforementioned, as the exclusive representative of its employees in the applicable appropri- ate unit, and embody in a signed agreement any under- standing reached. As to Respondent Zim's, it has further been found that, in violation of Section 8(a)(5), it unilaterally reduced the wages of employees in the Retail Clerks' unit, and reduced the hours of employees in the units of the Retail Clerks and the Meat Cutters. It will therefore be recommended, in order to restore the status quo ante, that Respondent Zim's make whole the employ- ees in both such units for the losses caused by these unilateral changes since mid-August 48 Backpay and interest shall be computed under the established formulae of the Board 49 Upon the foregoing findings of fact, and upon the entire record in the consolidated cases,50 I make the following: 46 E g , N L R B v. Interstate 65 Corp, doing business as Continental Inn, 79 LRRM 2122.2126 (C.A. 6); NLRB v Gissel Packing Co, 395 U.S. 575, 618. 47 Consideration has been given to the request of the Meat Cutters to remedy its losses for litigation , reorganization costs, and reasonable attorney fees, to require that Respondent Zim's supply the names and addresses of the unit employees , and to have the Board seek injunctive relief under Sec. 10(j) of the Act Such request , in whole or part , has not been made by the General Counsel or the Retail Clerks in connection with any of the four cases involved herein I find that the conduct in question and defenses raised on the part of all the separate Respondents presented truly arguable issues , essentially of law , based on the then existing Board and court precedents , and were in no manner frivolous See Tudee Products, Inc, 194 NLRB No 198, John Singer, Inc, 197 NLRB No. 7 (May 25, 1972) 414 Ranch -Way, Inc., supra, Valleydale Packers, Inc., 162 NLRB 1486. CONCLUSIONS OF LAW 911 1. Each Respondent herein is engaged in commerce within the meaning of Section 2(6) and (7) of the Act. 2. The Retail Clerks and the Meat Cutters are each labor organizations within the meaning of Section 2(5) of the Act. 3. The appropriate units for the purposes of collective bargaining within the meaning of Section 9(b), excluding guards and supervisors as defined in the Act, consist of the following: (a) All employees of Respondent Zim's at its Monroe, Wisconsin , store , excluding the store -manag- er, meat department employees , stock auditors , special- ty men and demonstrators employed by vendors. (b) All meat and delicatessen employees of Respon- dent Zim's at its Monroe , Wisconsin, store, excluding all other employees. (c) All employees of Respondent Paul's at its Edgerton, Wisconsin , store, excluding the store manag- er, co-manager , meat department employees, stock auditors, specialty men and demonstrators employed by vendors. 4. Since July 27, the Retail Clerks has been and is now the exclusive representative of all employees of Respon- dent Zim's in the appropriate unit, described in paragraph 3(a) above, within the meaning of Section 9(a) of the Act. 5. Since July 27, the Meat Cutters has been and is now the exclusive representative of all employees of Respon- dent Zim's in the appropriate unit, described in paragraph 3(b) above, within the meaning of Section 9(a) of the Act. 6. Since July 26, the Retail Clerks has been and is now the exclusive representative of all employees of Respon- dent Paul's in the appropriate unit, described in paragraph 3(c) above, within the meaning of Section 9(a) of the Act. 7. By failing and refusing, at all times since July 27, to bargain collectively with the Retail Clerks as the exclusive representative of the employees in the applicable appropri- ate unit, Respondent Zim's has engaged in and is engaging in unfair labor practices within the meaning of Section 8(a)(5) of the Act. 8. By failing and refusing , at all times since July 27, to bargain collectively with the Meat Cutters as the represent- ative of the employees in the applicable appropriate unit, Respondent Zim's has engaged in and is engaging in unfair labor practices within the meaning of Section 8(a)(5) of the Act. 9. By failing and refusing , at all times since July 26, to bargain collectively with the Retail Clerks as the exclusive 49 F. W. Woolworth Company, 90 NLRB 289; Isis Plumbing & Heating Co, 138 NLRB 716. 50 Motion is made by the Meat Cutters , in its brief , to remand these consolidated proceedings for a renewed hearing on alleged grounds that the Trial Examiner unduly restricted its participation in the trial of the cases. As evident , the interest of the Meat Cutters is limited to a unit of two employees at the Monroe store, concerning which there are "no significant issues of fact," as indeed stated in its own brief . It is unnecessary to describe all the rulings in question and the related conduct of the Meat Cutters counsel throughout the hearing. It was and is my opinion that this attorney was litigious to an extraordinary degree, tending to hamper and prolong the proceedings , for reasons and purposes which in large part were frivolous. Furthermore, the pertinent rulings were within the sound discretion of the Trial Examiner and in no event prejudicial to the Meat Cutters. The motion is denied . See, e .g., Spector Freight System, Inc., 141 NLRB 1110. 912 DECISIONS OF NATIONAL LABOR RELATIONS BOARD representative of the employees in the applicable appropri- ate unit , Respondent Paul's has engaged in and is engaging in unfair labor practices within the meaning of Section 8(a)(5) of the Act. 10. In mid-August , and at all times since, by unilateral- ly changing the wage rates and working hours of employees in the appropriate unit, described in paragraph 3(a) above, Respondent Zim's has engaged in and is engaging in unfair labor practices within the meaning of Section 8(a)(5) of the Act. 11. In mid-August , and at all times since , by unilateral- ly changing the working hours of employees in the appropriate unit , described in paragraph 3(b) above, Respondent Zim's has engaged in and is engaging in unfair labor practices within the meaning of Section 8 (a)(5) of the Act. 12. By the foregoing , and by other acts and conduct, Respondent Zim's has engaged in and is engaging in unfair labor practices within the meaning of Section 8(a)(1) of the Act. 13. By the foregoing, Respondent Paul's has engaged in and is engaging in unfair labor practices within the meaning of Section 8 (a)(1) of the Act. 14. The aforesaid unfair labor practices are unfair labor practices affecting commerce within the meaning of Section 2(6) and (7) of the Act. 15. Respondent Parkwood has not engaged in the unfair labor practices alleged in Case 30-CA-1715 (the Middleton store). Upon the above findings of fact , conclusions of law, and the entire record in the consolidated cases , and pursuant to Section 10(c) of the Act, I hereby issue the following recommended: ORDER A. Respondent, Zim's Foodliner, Inc., d/b/a Zim's IGA Foodliner, Monroe, Wisconsin, its officers, agents, successors , and assigns , shall: 1. Cease and desist from: (a) Refusing to bargain collectively, upon request, with the Retail Clerks as the exclusive representative of its employees in the appropriate unit described above. (b) Refusing to bargain collectively, upon request, with the Meat Cutters as the exclusive representative of its employees in the appropriate unit described above. (c) Unilaterally changing the wages , hours , or other terms or conditions of employment of employees in the appropriate unit described above, without bargaining in good faith with the Retail Clerks. (d) By unilaterally changing the working hours or other terms or conditions of employment of employees of the appropriate unit described above, without bargaining in good faith with the Meat Cutters. 51 As to the notice marked Appendix B , as well as that marked Appendix A, above, 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 read "Posted Pursuant to a Judgment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board " 52 As to Respondent Paul's, as well as to Respondent Zim's above, in the event that this recommended Order is adopted by the Board, after (e) Threatening to go out of business , or to take other reprisal, to discourage the employees' membership in, or support of, the Retail Clerks or the Meat Cutters. (f) In any like or related manner interfering with, restraining , or coercing employees in the exercise of their rights guaranteed in Section 7 of the Act. 2. Take the following affirmative action designed to effectuate the policies of the Act: (a) Upon request, bargain with the Retail Clerks as the exclusive representative of its employees in the appropriate unit described above , and embody in a signed agreement to any understanding reached. (b) Upon request, bargain with the Meat Cutters as the exclusive representative of its employees in the appropriate unit described above, and embody in a signed agreement to any understanding reached. (c) Make whole all the employees employed in the appropriate units described above for any losses they may have suffered as a result of Respondent 's unilateral changes, in the manner set forth in "Me Remedy" section of the Trial Examiner's Decision. (d) Post at its store in Monroe, Wisconsin , copies of the attached notice marked "Appendix A." 51 Copies of the notice on forms provided by the Regional Director for Region 30, shall , after being duly signed by Respondent, be posted immediately upon receipt thereof , in conspicuous places, and be maintained for 60 consecutive days. Reasonable steps shall be taken to insure that said notices are not altered , defaced , or covered by any other material. (e) Notify the Regional Director for Region 30, in writing, within 20 days from the date of this Decision, what steps the Respondent has taken to comply herewith. B. Respondent , S & 0, Inc. d/b/a Paul's IGA Foodliner , Edgerton , Wisconsin , its officers , agents, suc- cessors, and assigns, shall: 1. Cease and desist from: (a) Refusing to bargain collectively, upon request, with the Retail Clerks as the exclusive representative of its employees in the appropriate unit described above. (b) Post at its store in Edgerton , Wisconsin, copies of the attached notice marked "Appendix B.1151 Copies of said notice , on forms provided by the Regional Director for Region 30, shall, after being duly signed by Respondent be posted immediately upon receipt thereof in conspicuous places, and be maintained for 60 consecutive days. Reasonable steps shall be taken to insure that said notice is not altered, defaced , or covered by any other material. (c) Notify the Regional Director for Region 30, in writing, within 20 days from the date of this Decision, what steps Respondent has taken to comply herewith.52 IT IS HEREBY RECOMMENDED that the complaint in Case 30-CA- 1715 against Respondent Parkwood at the Middle- ton, Wisconsin , store, be dismissed in its entirety.53 exceptions have been filed , this provision shall be modified to read - "Notify the Regional Director for Region 30, in writing , within 20 days from the date of this Order, what steps Respondent has taken to comply herewith " 51 As to the recommended Orders affecting each Respondent herein, 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, conclu- sions, recommendations and recommended Order herein shall, as provided in Sec 102 48 of the Rules and Regulations , be adopted by the Board and PARKWOOD IGA IT IS RECOMMENDED FURTHER that the consolidated complaints be dismissed insofar as they allege violations not specifically found herein. become its findings , conclusions , and Order, and all objections thereto shall be deemed waived for all purposes. APPENDIX A NOTICE TO EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government WE WILL NOT refuse to bargain collectively with Retail Clerks Union, Local No. 1401, affiliated with the Retail Clerks International Association, AFL-CIO. WE WILL NOT refuse to bargain collectively with Amalgamated Meat Cutters & Butcher Workmen of North America, Local 444, AFL-CIO. WE WILL NOT, without bargaining collectively in good faith with the Retail Clerks, make changes in your wage rates , working hours , or other terms and condi- tions of employment , of the employees in the appropri- ate unit described below. WE WILL NOT, without bargaining collectively in good faith with the Meat Cutters, change the working hours or other terms or conditions of employment, of the employees of the appropriate unit described below. WE WILL NOT threaten to go out of business, or to take any other reprisal, to discourage your membership in, or support of, the Retail Clerks or the Meat Cutters. WE WILL NOT in any like or related manner interfere with , restrain, or coerce you in the exercise of the rights guaranteed employees in the National Labor Relations Act. WE WILL make whole all persons employed in the appropriate units described below for any loss of pay or other benefits they may have suffered as a result of unilateral changes in wage rates and working hours from mid-August 1971 to the present, plus 6-percent interest. WE WILL upon request, bargain collectively with the Retail Clerks, as the exclusive representative of our employees in the appropriate unit described below, and put into a signed agreement any understanding reached . The appropriate unit is: All employees at the Monroe, Wisconsin, store, excluding the manager , co-manager , meat depart- ment employees, stock auditors, specialty men and demonstrators employed by vendors, guards and supervisors as defined in the Act. WE WILL upon request, bargain collectively with the Meat Cutters , as the exclusive representative of our employees in the appropriate unit, and put into a signed agreement any understanding reached. The appropriate unit is: All meat and delicatessen employees at the Monroe, Wisconsin, store, excluding all other employees, guards and supervisors as defined in the Act. Dated By 913 ZIM's FOODLINBR, INC., D/B/A Zn s's IGA FOODLINER (Employer) (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, Commerce Building, Second Floor, 744 North Fourth Street , Milwaukee, Wisconsin 53203, Telephone 414-224-3861. APPENDIX B NOTICE TO EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government WE WILL NOT refuse to bargain collectively with Retail Clerks Union , Local No. 1401, affiliated with the Retail Clerks International Association , AFL--CIO. WE WILL NOT in any like or related manner interfere with , restrain, or coerce you in the exercise of the rights guaranteed employees in the National Labor Relations Act. WE WILL upon request, bargain collectively with Retail Clerks Union, Local No. 1401, affiliated with the Retail Clerks International Association , AFL-CIO, as the exclusive representative of our employees in the appropriate unit, and put into a signed agreement any understanding reached . The appropriate unit is: All employees at the Edgerton , Wisconsin, store, excluding the manager , co-manager, meat depart- ment employees , stock auditors , specialty men and demonstrators employed by vendors, guards and supervisors as defined in the Act. S & 0, INC., D/B/A PAUL'S IGA FOODLINER (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, Commerce Building, Second Floor, 744 North Fourth Street, Milwaukee , Wisconsin 53203, Telephone 414-224-3861.