Raley's

National Labor Relations Board - Board Decisions

Aug 26, 2011

357 N.L.R.B. 880 (N.L.R.B. 2011)

DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
357 NLRB No. 81
880
Raley’s and Independent Drug Clerks Assn.

Raley’s (United Wholesalers & Retailers Union, Party
to the Contract) and United Food and Commer-
cial Workers Union, Local 588, United Food and
Commercial Workers International Union

United Wholesalers & Retailers Union (Raley’s) and
Chris Zicarelli and United Food and Commer-
cial Workers Union, Local 588, United Food and
Commercial Workers International Union and
Thomas Moore. Cases 20–CA–024973, 20–CA–
025354, 20–CA–025649, 20–CA–026294, 20–CB–
009623, 20–CB–009742, and 20–CB–009932
August 26, 2011
SUPPLEMENTAL DECISION AND ORDER
BY CHAIRMAN LIEBMAN AND MEMBERS BECKER
AND HAYES
On October 10, 2007, Administrative Law Judge Wil-
liam L. Schmidt (the EAJA judge) issued the attached
supplemental decision. The Applicant, United Whole-
salers and Retailers Union (UWRU), filed exceptions and
a supporting brief, the General Counsel filed a brief in
response, and UWRU filed a reply.1
The National Labor Relations Board has delegated its
authority in this proceeding to a three-member panel.
The Board has considered the supplemental decision
and the record in light of the exceptions and briefs, and
has decided to affirm the judge’s findings and conclu-
sions only to the extent consistent with this Decision and
Order, for the reasons explained below. The judge denied
UWRU’s request for fees and expenses under the Equal
Access to Justice Act (EAJA), 5 U.S.C. § 504, finding
that the General Counsel’s overall position with respect
to UWRU in the underlying case, Raley’s, 348 NLRB
382 (2006), was substantially justified as an inclusive
whole. We agree with the judge that the General Coun-
sel’s position was substantially justified until he finished
presenting his case-in-chief at trial. At that point—as we
find, contrary to the judge—the General Counsel was no
longer substantially justified in pursuing the case against
UWRU. We therefore find that the Applicant is entitled
to an EAJA award for fees that it incurred after that
point, subject to further reduction by additional amounts
to be determined by the judge on remand.

1 The General Counsel filed a limited cross-exception pertaining to
the single allegation on which the judge found UWRU not to be the
prevailing party in the underlying case, contending in addition that the
allegation was substantially justified. On September 8, 2008, the Board
severed and granted the General Counsel’s other cross-exception
(which UWRU did not oppose) to include all the parties’ posthearing
briefs from the underlying case in the record.
The EAJA judge accurately set forth the factual back-
ground and procedural posture of the case in the attached
decision, and we shall assume familiarity with it. It suf-
fices to note that, in the underlying unfair labor practices
case, the Board, upholding the decision of Judge Timo-
thy D. Nelson, dismissed all of the complaint allegations
against UWRU and all but a few relatively minor allega-
tions against Raley’s. The relevant allegations are dis-
cussed below.
I.
Under EAJA and the Board’s implementing regula-
tions, the Board shall award to an eligible respondent
who prevailed in an adversarial proceeding the fees and
other expenses incurred by the respondent unless the
General Counsel’s position was “substantially justified”
or special circumstances make an award unjust. 5 U.S.C.
§ 504(a)(1); Section 102.144(a) of the Board’s Rules and
Regulations. For the purpose of deciding whether litiga-
tion was substantially justified, “EAJA . . . favors treat-
ing a case as an inclusive whole rather than as atomized
line-items.” Commissioner, INS v. Jean, 496 U.S. 154,
161–162 (1990); C. Factotum, 337 NLRB 1, 1 (2001).
Further, the Board must determine whether the allega-
tions involving UWRU in this case, as “an inclusive
whole,” were substantially justified at each phase of the
litigation. Glesby Wholesale, 340 NLRB 1059, 1060
(2003).
Under Pierce v. Underwood, 487 U.S. 552, 563–566
(1988), an agency’s position is “substantially justified”
where the evidence is “what a reasonable mind might
accept as adequate to support a conclusion”—i.e., where
it has a reasonable basis in fact and law. An agency’s
position is substantially justified when “reasonable peo-
ple could differ” on whether the action should go for-
ward. Id.; see also Teamsters Local 741 (A.B.F.
Freight), 321 NLRB 886, 889 (1996). The mere fact that
the General Counsel lost or advanced a position contrary
to prior precedent does not mean the litigation lacked
substantial justification. Alpha-Omega Electric, 312
NLRB 292, 293 (1993).
As the EAJA judge also noted, the applicable standard
is not intended to deter the General Counsel from bring-
ing forward close questions of fact or new theories of
law. Meaden Screw Products, Co., 336 NLRB 298, 300
(2001). Finally, the clarity of the governing legal princi-
ples, or lack thereof, must be taken into account. Abell
Engineering & Mfg., 340 NLRB 133, 133–134 (2003).
II.
As UWRU points out, the complaint allegations per-
taining to Raley’s’ interaction with the Independent Drug
Clerks Association (IDCA), UWRU’s predecessor—i.e.,
RALEY’S 881
those allegations originating before UWRU was found-
ed—should not be treated as part of the “inclusive
whole” for the purpose of UWRU’s EAJA application.
However, as the EAJA judge recognized, the 8(a)(1) and
(2) allegations that Raley’s unlawfully assisted and rec-
ognized UWRU placed UWRU’s status as the lawful
representative of Raley’s drug clerks directly at issue.
We therefore consider those allegations as part of the
inclusive whole as well as the 8(b) allegations pertaining
to postrecognition dues collection and the related late fee.
Although we agree with the EAJA judge that the com-
plaint allegations comprising the “inclusive whole” of
the case against UWRU should be divided into three cat-
egories for the purpose of analysis, we define those cate-
gories differently. In our view, the first and by far the
predominant category included the allegations that Ra-
ley’s unlawfully recognized and entered into a collective-
bargaining agreement with UWRU, based on the alleged
unlawful assistance it gave UWRU in gathering petition
signatures prior to the recognition. The second category
consists of the allegations that Raley’s unlawfully assist-
ed UWRU after granting it recognition by providing it
with legal representation through attorney Henry Tel-
feian. The third category consists of the allegations that
UWRU unlawfully attempted to enforce the union-
security clause in its collective-bargaining agreement
with Raley’s as well as the late fee in UWRU’s constitu-
tion to compel the payment of union dues by Raley’s
employees.
III.
Under the above-cited EAJA authority, in order to de-
termine whether the General Counsel’s case as a whole
was substantially justified, we must determine whether
he was substantially justified in pursuing each of these
categories of allegations. For the following reasons, we
agree with the EAJA judge that the General Counsel was
substantially justified in pursuing the case against
UWRU up to the point where he rested his case-in-chief.
Contrary to the EAJA judge, however, we find that,
thereafter, the General Counsel lacked a substantial justi-
fication for continuing to prosecute the case against
UWRU.
A.
On March 29, 1996, the complaint in the case was first
amended to allege that Raley’s’ recognition of UWRU
was unlawful and that Raley’s had unlawfully assisted
UWRU at its Benicia store. Additional charges were
filed and the investigation continued. By the opening of
the trial on August 19, 1996, the complaint alleged unit-
wide and specific misconduct at a large number of Ra-
ley’s stores in a 51-store unit and misconduct by Raley’s
over a period of more than 2 years, along with miscon-
duct by UWRU. The General Counsel’s investigation
was complicated and delayed by a number of discovery
disputes over UWRU’s majority showing and other is-
sues.2
When he took the case to trial, the General Counsel
had a reasonable basis in fact and law for pursuing the
complaint’s central allegation that Raley’s’ recognition
of the UWRU violated Section 8(a)(2) and 8(b)(1) of the
Act. His primary theory was that UWRU’s showing of
majority support was tainted by numerous instances of
unlawful assistance to UWRU. The alleged unlawful
assistance included disregarding Raley’s’ written rules
against nonbusiness use of its phones and fax machines
to permit supporters of UWRU to solicit coworkers to
sign petitions and to transmit those petitions. Additional-
ly, the alleged unlawful assistance included permitting
employees who supported UWRU to campaign on its
premises (in some instances during worktime) while ex-
cluding from Raley’s’ property nonemployees who
sought to campaign for Local 588.
At the outset of trial, it was clear that even if UWRU
had presented a majority of unit employee signatures to
Raley’s at the time it received recognition, this showing
could be undermined if the General Counsel prevailed in
some of his allegations relating to the count and unit size.
The total number of eligible employee signatures the
judge ultimately found to support UWRU’s majority was
355 out of a unit of 673. If 19 fewer signatures had been
found valid (or fewer than 19 if the bargaining unit had
been found to be larger), Raley’s’ recognition of UWRU
would have been unlawful under Ladies Garment Work-
ers (Bernhard-Altmann) v. NLRB, 366 U.S. 731 (1961).
And in fact, the General Counsel ultimately did prove
some acts of unlawful assistance to UWRU or interfer-
ence with employees’ support of Local 588.
In addition, while he ultimately failed to establish that
Raley’s unlawfully assisted and recognized UWRU, the
General Counsel had reasonable grounds for believing
that such misconduct could be established at trial. There
is no dispute that from the moment UWRU was formed
in the immediate wake of a prior union’s disclaimer of
interest, Raley’s repeatedly broadcast its preference that
UWRU, rather than its rival union (United Food and
Commercial Workers Union, Local 588, the charging
party), take over the representation of its drug clerks. In
fact, Raley’s had previously violated the Act in helping

2 On August 6, 1996, 2 weeks before the trial began, the General
Counsel moved to continue the trial date indefinitely for the purpose of
continuing his investigation. The Respondents, however, opposed the
motion and it was in concession to them that the trial began on August
19.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 882
the prior union resist an earlier attempt by Local 588 to
become the drug clerks’ representative. Raley’s, Inc.,
256 NLRB 946 (1981), enfd. in relevant part 728 F.2d
1274 (9th Cir. 1984) (en banc).3 There had been admit-
ted direct communication between UWRU’s leader, em-
ployee Edwin Wright, and Raley’s management the same
day UWRU was founded. Moreover, Wright and his
supporters had—within the space of the next 9 days—
founded a new union, prepared and carried out a unit-
wide campaign for signatures, and submitted an apparent
majority of over 350 signatures to Raley’s management
for a unit consisting of 51 separate stores spread across
northern California. This campaign was conducted using
Raley’s store phones and fax machines in violation of an
express prohibition on such personal use of store proper-
ty. Finally, immediately after Raley’s granted recogni-
tion to UWRU, a lawyer who had been representing the
employer began representing the union. This rapid suc-
cess in a large and dispersed unit, Raley’s’ history, its
express preference for UWRU, and UWRU’s highly un-
usual retention of the employer’s counsel, gave the Gen-
eral Counsel reason to suspect that unlawful conduct had
occurred again.4
The Board has never attempted to establish a bright-
line rule defining how far an employer may lawfully go
in supporting a union during an organizing campaign.
As with many issues under the Act, each case must be
assessed according to its particular facts. See, e.g.,
Duane Reade, Inc., 338 NLRB 943, 944 (2003), enfd. 99
Fed. Appx. 240 (D.C. Cir. 2004). As the judge noted,
quoting SMI of Worcester, 271 NLRB 1508, 1523
(1984), with respect to defining unlawful employer assis-
tance, “[t]he problem lies in determining that shadowy
point at which employer assistance goes ‘beyond legally
protected cooperation into the proscribed domain of in-
terference with the freedom of choice of the employ-
ees.’” See also Longchamps, Inc., 205 NLRB 1025,
1031 (1973) (“The quantum of employer cooperation
which surpasses the line and becomes unlawful support
is not susceptible to precise measurement.”).
Given the paucity of bright lines in this area of the law,
we find that the General Counsel posited a reasonable

3 As the judge here noted, the Board found in the earlier case that
“while an employer may lawfully state its preference between compet-
ing unions in a representation election [citation omitted], [Raley’s]
clearly went beyond indicating its preference by according the incum-
bent Union privileges and favored treatment so as to enhance that Un-
ion’s position to the detriment of the petitioning Union.” 256 NLRB at
fn. 2.
4 Although it is not determinative, we find it significant in this con-
nection that the judge who heard the evidence and who was sharply
critical of the General Counsel in his decision, substantially denied a
motion to dismiss at the close of the General Counsel’s case.
(though ultimately unmeritorious) legal theory when he
alleged that Raley’s’ disregard of its published rule pro-
hibiting nonbusiness use of phones and fax machines
constituted unlawful assistance to the UWRU, at least
where there was a rival union attempting to organize
Raley’s employees. While, ordinarily, an employer does
not unlawfully discriminate, for example, in granting
access to one union’s agents, but not another’s, unless
the disfavored union requests the privilege and is re-
fused,5 the General Counsel’s implicit theory plausibly
suggested that no such request should be required when
the alleged unlawful assistance was rendered in violation
of an express rule (when the rival would have no reason
to believe a request would be granted). In Duane Reade,
338 NLRB at 944, the Board held that an employer, in a
rival union situation, violated Section 8(a)(2) when it
disregarded its own no-solicitation policy and permitted
one of two rival unions to access its property, directed
employees to meet with union agents on paid worktime,
stated that that union was the only union with whom the
company was affiliated, and said the employees had to
sign authorizations cards and that they could not sign
with another union. Although the employer’s assistance
in Duane Reade was more extensive than Raley’s’ assis-
tance to UWRU, and although the Board’s decision there
issued after the hearing here, we think it supports a con-
clusion that the General Counsel acted reasonably,
though ultimately unsuccessfully, in pressing the claim
that Raley’s had provided unlawful assistance by disre-
garding its written rule in a rival union context where
Raley’s had expressed its preference for UWRU over
Local 588.
A significant number of complaint allegations con-
cerning unlawful assistance and disparate enforcement
had to be resolved by factual and credibility determina-
tions. The ultimate allegation of unlawful recognition
was based in large part on allegations of specific events
at particular stores. The judge found it necessary to
make many credibility determinations in the course of his
decision. These factors, too, support a finding that the
General Counsel’s position was substantially justified.6
In the view of our dissenting colleague, the General
Counsel should have established through his own inves-
tigation what the judge ultimately found: that Raley’s’
actual practice with respect to employee use of store fax

5 See, e.g., Davis Supermarkets, 306 NLRB 426 (1992), affd. 2 F.3d
1162 (D.C. Cir. 1993), cert. denied 511 U.S. 1003 (1994).
6 UWRU is correct, however, that the complaint allegation that Ra-
ley’s imposed a discriminatory prohibition “around September 15” on
store campaign activity by Local 588 grocery clerks but not by UWRU
supporters was based on the terms of the September 15 memo to Ra-
ley’s store managers, not on credibility.
RALEY’S 883
and phone equipment for nonwork purposes was highly
permissive. However, there is no dispute that Raley’s’
published rules categorically forbade the personal use of
fax and phone equipment. With respect to fax machines,
the written prohibition in the rules had been reinforced
on at least two occasions with written, unit-wide remind-
ers to employees. The written prohibitions alone argua-
bly precluded an easy determination of the issue.7 More-
over, what the judge ultimately found—that Raley’s’
actual practice with respect to employees’ personal use
of store equipment was highly permissive—is highly
unusual.8 And although the judge ultimately found to the
contrary, it was not unreasonable for the General Coun-
sel to contend that Raley’s management’s knowledge and
approval of more-than-normal use of store equipment by
UWRU supporters could be reasonably inferred simply
from the extent of that unit-wide activity.
Finally, even assuming that Raley’s’ permissive prac-
tice with respect to the personal use of store equipment in
normal circumstances was clear to all employees, it
could not have been clear to all employees what Raley’s’
practice would be in the setting of a rival-union competi-
tion in which management was publicly preferring one
union over the other.
Nevertheless, the factual basis for the General Coun-
sel’s case collapsed at trial. The Respondents’ attorneys
cross-examined the General Counsel’s witnesses and
established conclusively that the written rule was a dead
letter and that Raley’s had an actual practice of permit-
ting employees to use its equipment for nonbusiness pur-
poses, provided they did not abuse the privilege. None
of those witnesses provided an evidentiary basis for in-
ferring that Raley’s changed that practice during
UWRU’s campaign. Under those circumstances, we are
unable to find that the General Counsel retained a sub-
stantial justification for pursuing his allegation of unlaw-
ful assistance with respect to the use of store equipment,
much less that such assistance tainted UWRU’s showing
of majority support.9 Nor did the General Counsel suc-

7 The Board has always recognized that written workplace rules have
a significant impact on employee activity. It is well established, for
example, that a written rule that impairs Sec. 7 rights constitutes an
independent violation of Sec. 8(a)(1), regardless of the employer’s
actual practices. E.g., Lafayette Park Hotel, 326 NLRB 824, 825
(1998), enfd. 203 F.3d 52 (D.C. Cir. 1999).
8 In fact, although the EAJA judge did not question this fact finding
in making his own analysis, he expressed clear skepticism that this
“remarkable practice” had in fact been Raley’s’ policy.
9 The General Counsel pursued a second, independent theory of lia-
bility until shortly before resting his case. That second theory was that,
regardless of any taint, UWRU had not garnered a numerical majority
of authentic signatures in the appropriate bargaining unit. That theory
was advanced, in part, because the General Counsel misplaced three
sheets of employee signatures. Shortly before resting his case, the
ceed in establishing, during his affirmative case, through
calling adverse witnesses from Raley’s management or
introduction of any documents, that Raley’s adopted a
corporate-wide strategy or any particular means of facili-
tating UWRU’s collection of petition signatures.
Further, contrary to the judge, we cannot find that the
General Counsel had a reasonable basis in law for alleg-
ing that Raley’s unlawfully assisted UWRU by permit-
ting Raley’s employees to organize for UWRU on com-
pany premises while at the same time preventing non-
employee union organizers from accessing its property to
campaign for Local 588.10 Under Lechmere, Inc., v.
NLRB, 502 U.S. 527 (1992), there is a clear distinction
between the respective rights of employees and nonem-
ployees to access an employer’s property. The General
Counsel advanced no authority or persuasive argument
for the proposition that the access rights of employees
and nonemployees change in a context where two unions
compete to represent the same group of workers. Once
he had failed to establish that Raley’s discriminated be-
tween its pro- and anti-UWRU employees with respect to
store access, the General Counsel lacked a substantial
justification for pursuing this unlawful assistance allega-
tion and pressing his claim that UWRU’s showing of
majority support was tainted by such assistance.11
Furthermore, we find that the General Counsel was not
substantially justified in continuing to pursue (after he
rested his case-in-chief) his theory that instances of al-
leged coercion or assistance by Raley’s at individual
stores tainted UWRU’s showing of majority support and
thereby rendered Raley’s’ extension of recognition un-
lawful. As explained in our underlying decision on the
merits of the unfair labor practices, some of the alleged

General Counsel conceded that, even accepting all of his arguments on
unit scope and signature validity, UWRU had obtained signatures from
a majority of unit employees. While the lack-of-numerical-majority
theory lacked a reasonable basis in fact, the critical point here is that the
General Counsel had another substantially justified basis for pursuing
his complaint allegation. Moreover, the General Counsel’s arguments
about the scope of the unit and the validity of certain signatures were
also relevant to his tainted-majority theory, because the resolution of
those issues in the General Counsel’s favor may have lessened the
extent of taint necessary to invalidate the majority showing.
10 As explained above, however, we treat this allegation as part of
the category of allegations supporting the charge that Raley’s unlawful-
ly recognized UWRU. We thus do not analyze it separately for purpos-
es of liability under EAJA.
11 In finding to the contrary, the EAJA judge incorrectly relied on
Ernst Home Centers, 308 NLRB 848 (1992), a case distinguishable on
the ground that it involved the access rights of an incumbent union with
a contractual right to enter the employer’s property. The Board there
found that the respondent violated Sec. 8(a)(5) and (1) by unilaterally
revoking the union’s contractual right of access while knowingly per-
mitting an employee leader of a decertification campaign extensive
access of its premises. Here, in contrast, Local 588 had no contractual
right to access the areas in which they sought to campaign.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 884
coercion occurred at stores at which UWRU did not
gather any signatures, 348 NLRB at 384–386, and the
General Counsel failed during his case-in-chief to adduce
evidence that would permit the judge to reasonably con-
clude that a determinative number of employees had
been coerced into signing the UWRU’s authorization
petition.
B.
We turn now to the second category of allegations,
which includes allegations that Raley’s unlawfully as-
sisted UWRU when Henry Telfeian, an attorney in pri-
vate practice, ceased representing Raley’s shortly after its
recognition of UWRU and immediately began represent-
ing UWRU. The evidence revealed that Telfeian, who
had represented Raley’s before and after the signature
drive, offered his services to UWRU and that he eventu-
ally provided services at a deeply discounted rate. Im-
portantly, UWRU and Telfeian refused to cooperate with
the General Counsel’s investigation of this allegation.
Until Telfeian testified at the hearing, the General Coun-
sel had evidence suggesting (erroneously) that Telfeian
had in fact simultaneously represented both Raley’s and
UWRU for some limited period and that he had provided
his legal services to UWRU at a deeply discounted hour-
ly rate. Given Telfeian’s unusual switching of sides, we
find substantial justification for pursuing this allegation
until the close of the General Counsel’s case. Important-
ly, Telfeian’s testimony at the hearing established that
Raley’s had in no way subsidized his services to UWRU
and that there had been no actual temporal overlap in
substantive legal representation of the two parties.
Hence, at the time his case concluded, the General Coun-
sel lacked a reasonable basis in fact and law for pursuing
the Telfeian allegations. Moreover, UWRU’s showing
of majority support could not have been tainted by Tel-
feian’s representation of UWRU because the showing
predated the representation.
C.
The final category of allegations includes the claims
that UWRU unlawfully sought to enforce the union-
security clause in its collective-bargaining agreement
with Raley’s as well as the late fee established in its con-
stitution. Whether UWRU could lawfully seek enforce-
ment of its union-security clause depended on whether
Raley’s’ recognition of UWRU was lawful. Because, as
we have found, a substantial justification existed for pur-
suing the recognition allegation only until the General
Counsel rested his case-in-chief, we conclude likewise
for the union-security allegation.
In contrast, we find that the General Counsel had a
substantial justification for prosecuting the late-fee alle-
gation through to Board adjudication. In particular, we
find that Great Atlantic & Pacific Tea Co. (Baker Work-
ers Local 12), 110 NLRB 918 (1954), a case that has
never been expressly overruled, provided plausible sup-
port for the General Counsel’s ultimately unavailing ar-
gument regarding the late fee. In Great Atlantic & Pacif-
ic Tea Co., the Board found that a union violated Section
8(b) by imposing a $1 “assessment” on members who
were late paying their monthly dues. The Board rea-
soned that the assessment was, by its nature, intermittent
and not periodic, and hence it did not constitute “periodic
dues,” the nonpayment of which can be a lawful basis for
discharge under the proviso to Section 8(a)(3). Id. at
922. We conclude that the General Counsel had a rea-
sonable basis for analogizing UWRU’s late fee to the
assessment found unlawful in that precedent.12
IV.
In sum, we have found that the General Counsel had a
reasonable basis in fact and law for pursuing most of the
relevant complaint allegations, including his central alle-
gation challenging the recognition, to the point where he
rested his case-in-chief, but not thereafter. Though he
continued to have a substantial justification in pursuing
the late-fee issue through to Board adjudication, that al-
legation was comparatively minor and must consequently
be given much less weight.
Accordingly, viewing the case as an inclusive whole,
we conclude that the General Counsel was not substan-
tially justified in litigating his case against UWRU after
he rested his case on March 10, 1997. UWRU is there-
fore entitled to an EAJA award for fees it accrued in de-
fending the case after that date.
Because the EAJA judge found that UWRU was not
entitled to an award, he declined to reach a number of
issues raised by the General Counsel specifically relating
to fee eligibility. UWRU did not respond on these issues
in its briefs. Given our grant of a partial award, it be-
comes necessary to resolve those issues, and we remand
the case to the EAJA judge for that purpose.13 This
award is without prejudice to the Applicant’s right to
submit additional or amended claims with respect to the
litigation of this proceeding.

12 We assume arguendo that the General Counsel was substantially
justified in pursuing his allegation that Raley’s unlawfully assisted
UWRU by allegedly making two payments to employee Wright. The
General Counsel withdrew that allegation during trial, and it was a
relatively minor allegation that does not affect our assessment of the
case as whole.
13 UWRU, in its application, petitions the Board to amend its rules to
raise the hourly rate of compensation for an EAJA award from $75 to
$125. As the current rate is established in a regulation, we do not be-
lieve it would be appropriate to amend it via adjudication.
RALEY’S 885
ORDER
IT IS ORDERED that this proceeding is remanded to
Administrative Law Judge William L. Schmidt for the
purpose of reopening the record and, if necessary, con-
ducting a hearing to receive further evidence and to re-
solve any material factual disputes relating to the
amounts to be excluded and deducted from the award of
fees and expenses under EAJA to which the Applicant,
United Wholesalers and Retailers Union, is entitled un-
der this decision.
IT IS FURTHER ORDERED that the judge prepare and
serve on the parties a second supplemental decision con-
taining any necessary credibility resolutions, findings of
fact upon the evidence received pursuant to the provi-
sions of this Order, conclusions of law, and recommen-
dations; and that, following service of the second sup-
plemental decision on the parties, the provisions of Sec-
tion 102.46 of the Board’s Rules and Regulations shall
be applicable.

MEMBER HAYES, concurring in part and dissenting in part.
I concur with the majority’s finding that the General
Counsel lacked a substantial basis for prosecuting his
case, taken as an inclusive whole, against UWRU and
that an award of fees and other expenses is appropriate
under EAJA. My colleagues limit the UWRU’s EAJA
award to the period after the General Counsel rested his
case-in-chief, reasoning that he was substantially justi-
fied in pursuing his case to that point in the litigation. In
my view, the award should run from the date on which
the General Counsel issued the second amended com-
plaint, when UWRU was added as a respondent in this
matter. From its inception, the General Counsel’s case
against UWRU lacked a reasonable basis in fact and law.
Anything short of a full award does a disservice to the
animating principles of EAJA and fails to deter the Gen-
eral Counsel from similarly misguided litigation in the
future.
In evaluating the General Counsel’s case, my col-
leagues have divided the relevant allegations into three
categories: the unlawful assistance and recognition alle-
gations, the Telfeian allegations, and the union-security
and late-fee allegations. As my colleagues recognize, the
first is the predominant category, and it contains the cen-
tral allegation that Raley’s unlawfully recognized the
UWRU as the exclusive collective-bargaining representa-
tive of nearly 700 drug clerks employed in 51 separate
Raley’s stores.
I disagree with my colleagues’ conclusion that there
was a reasonable basis, either in fact or law, for pursuing
the unlawful assistance and recognition category of
claims through to the close of the General Counsel’s
case-in-chief. First, as the majority recognizes, the Gen-
eral Counsel’s legal theory that Raley’s unlawfully as-
sisted UWRU and tainted its majority showing by per-
mitting Raley’s employees to access its property to cam-
paign for UWRU while excluding nonemployees who
wished to campaign for Local 588 conflicts with control-
ling Supreme Court precedent, Lechmere, Inc. v. NLRB,
502 U.S. 527 (1992), which was apparent from the out-
set.
Second, as to the General Counsel’s allegation that Ra-
ley’s’ disregard of its published rule prohibiting non-
business use of telephones and fax machines constituted
unlawful assistance to the UWRU, my colleagues con-
tend that the General Counsel was substantially justified
in pursuing this theory until, during cross-examination,
the Respondents’ attorneys elicited testimony that Ra-
ley’s had an actual practice of permitting nonbusiness
use of such equipment. I disagree. Any reasonably dili-
gent investigation by the General Counsel would have
entailed at least some pretrial inquiry into whether the
written policy on equipment use was ever enforced.1
Because the General Counsel did not bother to conduct
even a cursory factual investigation, I disagree that he
was substantially justified in prosecuting this allegation
at any phase. Cf. American Pacific Concrete Pipe Co.,
290 NLRB 134, 134 (1988) (the General Counsel’s fail-
ure to investigate was unreasonable and resulted in her
taking a position that was not substantially justified).
In reaching a contrary conclusion, my colleagues as-
sert that the General Counsel had reasons to “suspect”
that Raley’s had unlawfully assisted UWRU. Specifical-
ly, they note that Raley’s had expressed a preference for
UWRU over Local 588, that UWRU’s leader had com-
municated with Raley’s, that UWRU had been extremely
successful in quickly gathering signatures from employ-
ees working throughout Northern California, and that
Raley’s had unlawfully assisted UWRU’s predecessor
union over 30 years ago.2 None of those circumstances,

1 I note that the General Counsel routinely brings charges against
employers alleging that their actual practices differ from written poli-
cies. Indeed, perhaps nowhere are such allegations more common than
in cases involving charges of disparate access to company equipment
and bulletin boards. See, e.g., Bon Harbor Nursing & Rehabilitation
Center, 348 NLRB 1062, 1062 fn. 4 (2006) (employer with written rule
requiring management authorization before posting on bulletin board
violated Sec. 8(a)(1) by enforcing it against employees’ union postings
where employer had not enforced written policy before advent of union
campaign); Benteler Industries, 323 NLRB 712, 713–714 (1997) (em-
ployer with written policy restricting bulletin board postings to compa-
ny information violated Sec. 8(a)(1) by barring employees from posting
union literature because employer had actual practice permitting post-
ings unrelated to work).
2 See Raley’s, Inc., 256 NLRB 946 (1981), enfd. in relevant part 728
F.2d 1274 (9th Cir. 1984) (en banc).
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 886
whether considered alone or together, establish a sub-
stantial justification for the General Counsel’s litigation.
As my colleagues concede, there was nothing unlawful
in Raley’s’ expressions of preference for UWRU or in its
communications with UWRU leadership. Moreover,
neither UWRU’s success gathering signatures nor Ra-
ley’s 30-year-old violations provide a reasonable factual
basis for the specific allegations of unlawful assistance
here and are irrelevant to the General Counsel’s legal
theories. If the General Counsel’s suspicions were
raised, the proper course was to investigate further, not to
issue a complaint and proceed to trial.
Finally, the General Counsel’s alternative theory that,
regardless of taint, UWRU lacked a numerical majority
of signatures, was factually erroneous and premised on
his negligent mishandling of three pages of employee
signatures in his possession at the time he issued the se-
cond amended complaint. While, to his credit, the Gen-
eral Counsel subsequently disclaimed the lack-of-
numerical-majority theory after discovering the error in
the midst of trial, that does not change the fact that he
never had a reasonable basis for pursuing this allegation
in the first place. For these reasons, the major compo-
nents in the first category of complaint allegations were
never substantially justified.3
Regarding the second category of allegations, I agree
with my colleagues that the General Counsel was sub-
stantially justified in pressing to the close of his case, but
not thereafter, the comparatively narrow claims that Ra-
ley’s unlawfully assisted UWRU by allegedly providing
it with the legal services of attorney Telfeian.
As for the third category, I would find, as do my col-
leagues, that the allegation that UWRU violated Section
8(b)(1) by seeking to enforce its union-security clause
hinged on whether the recognition was lawful. As ex-
plained above, I would find that the recognition allega-
tion was unjustified from its inception. Hence, I would
reach the same conclusion as to the union-security alle-
gation. Finally, I assume arguendo that the General
Counsel had a reasonable basis in fact and law for press-
ing through to Board adjudication his relatively minor
claim that UWRU violated Section 8(b)(1) by seeking to
enforce the late-fee provision in its union constitution.
Thus, the bulk of the General Counsel’s case, includ-
ing his central allegations, lacked a substantial justifica-
tion from the start. Viewing the case as an inclusive
whole, as the Board must, leads to the conclusion that the

3 Though some of the minor allegations of unlawful assistance or co-
ercion at individual stores may have turned on credibility issues, the
General Counsel lacked a reasonable basis in fact and law for arguing
that any such alleged misconduct could possibly have invalidated
UWRU’s showing of majority support.
EAJA award should commence from the date on which
the second amended complaint issued. In this case, the
General Counsel brought the vast litigation resources of
the Federal Government to bear on a small organization
without having conducted a reasonably thorough investi-
gation or having formulated a reasonable legal theory
based on the results of such an investigation. EAJA was
enacted to deter precisely such conduct as well as to
make whole a respondent harmed by such unjustified
government prosecution. For these reasons, I concur in
part and dissent in part.

Paula R. Katz and Kathleen Schneider, Esqs., for the General
Counsel.
Henry F. Telfeian, Esq., for the Applicant.
SUPPLEMENTAL DECISION
STATEMENT OF THE CASE
WILLIAM L. SCHMIDT, Administrative Law Judge. On Sep-
tember 29, 2006, the National Labor Relations Board (the
Board) issued its decision in this matter affirming the findings
and conclusions of Administrative Law Judge Timothy D. Nel-
son (the ALJ), and adopting his recommended Order with mi-
nor modifications. After 63 days of hearing between August
19, 1996, to August 25, 1997, the ALJ concluded that Re-
spondent Raley’s violated the Act in a few minor respects,
comparatively speaking, and that Respondent United Wholesal-
ers & Retailers Union (the Union or UWRU) had not violated
the Act, as alleged, and had not benefited from any unlawful
assistance by Raley’s when it pursued recognition as the exclu-
sive collective-bargaining representative of Raley’s pharmacy
clerks throughout northern California in 1993.1
On October 26, 2006, UWRU filed a verified application for
attorney’s fees and costs under the Equal Access to Justice Act
(EAJA) and under the implementing portion of the Board’s
Rules and Regulations, §§ 102.143–102.155. It seeks reim-
bursement in the amount of “not less than $175,793.16” plus as
yet unknown amounts of added fees and expenses required to
prosecute the application. The General Counsel submitted an
answer to the application and the UWRU submitted a reply to
that answer. The application, the answer, and the reply have
been referred to me for consideration and ruling because the
ALJ retired shortly after his decision issued, and, therefore, is
unavailable within the meaning NLRB Rules and Regulations,
Section 102.26.
In pertinent part, EAJA provides: “An agency that conducts
an adversary adjudication shall award, to a prevailing party
other than the United States, fees and other expenses incurred
by that party in connection with that proceeding, unless the
adjudicative officer of the agency finds that the position of the
agency was substantially justified or that special circumstances
make an award unjust.” 5 U.S.C. § 504(a)(1).

1 The ALJ’s decision is a colossus. As originally formatted, it ran
approximately 300 single-spaced pages. As reformatted for attachment
to the Board’s decision, it is 174 pages long.
RALEY’S 887
The General Counsel concedes that the Applicant has estab-
lished that it meets the basic EAJA eligibility requirements, i.e.,
that it is an association with a net worth of less than $7 million,
and 500 or fewer employees. However, the General Counsel
avers that the Applicant does not qualify as a “prevailing party”
with respect to one allegation, and that its litigation of the re-
maining allegations was substantially justified. The General
Counsel also asserts that certain fees and costs are not reim-
bursable under EAJA. The General Counsel makes no claims
about special circumstances that would make an award “unjust”
within the meaning of EAJA.
The Applicant’s reply asserts that the General Counsel’s “le-
gal theories lacked substantial justification thereby making the
existence of ‘supporting facts’ irrelevant,” and that certain facts
relevant to “viable theories based on extant Board law, were
clearly legally insufficient to support the complaint and fail to
establish that the General Counsel was substantially justified.”
Based on my findings, analysis, and conclusions below, I
will recommend that the application be dismissed in its entirety.
FINDINGS OF FACT
A. Factual Overview
Raley’s, the Respondent-Employer in the underlying case,
operates 51 supermarkets with “Drug Centers” (pharmacies)
throughout northern California and maintains a headquarters in
Sacramento. United Food and Commercial Workers Local 588
(Local 588) represents the grocery employees at most of Ra-
ley’s supermarkets. However, Raley’s drug center employees
have historically been represented by unaffiliated labor organi-
zations. In the 30-year period before 1993, the Independent
Drug Clerks Association (IDCA) represented the drug center
employees in two separate units, one for the pharmacists and
the other for the drug clerks. The last collective-bargain
agreement applicable to the drug clerks expired in the latter part
of 1992.
Over the years, Raley’s maintained written rules barring em-
ployees from using its phone and fax equipment for any pur-
pose other than official company business except in emergency
situations. In addition, the Company also maintained written
rules barring solicitation and distribution during worktime.
However, local managers enforced the phone/fax systems rule
only when they felt an employee abused the systems by tying
up the transmission lines. And usually, the local managers
allowed on-duty employees to visit with off-duty, or even
offsite, employees either on the sales floor or in back room
areas, including the break rooms.
For the first 28 years of IDCA’s existence, Kay Sordillo
served as the IDCA’s chief executive. She and the IDCA offic-
ers aligned with her always viewed Local 588, the grocery
clerks’ representative, as a “representational rival.” Shortly
before October 1992, Gilbert (Gil) Eidam and a group of his
allies gained control of the IDCA executive offices and soon
aligned themselves with Local 588. Early on Eidam appointed
a few Local 588 officials to IDCA’s negotiating team when it
began bargaining with Raley’s for a new drug clerks’ agree-
ment. Eidam and his Local 588 allies set wage and benefit
parity with the grocery clerks as a high priority in these nego-
tiations. Later, Eidam appointed or “deputized” 30 or so Local
588 business agents to administer the IDCA’s day-to-day af-
fairs with Raley’s despite the fact that the IDCA had main-
tained a steward in virtually every drug center for years.
Raley’s strongly disapproved IDCA’s informal alliance with
Local 588 under Eidam’s leadership. Around the same time,
Raley’s became locked in a bitter dispute with Local 588 over
that union’s demands for card-check recognition of grocery
clerk units not already covered by Local 588’s multiemployer
agreement. On October 23, 1992, Raley’s chief labor negotia-
tor sent a memo to every drug center employee decrying the
emerging IDCA-Local 588 ties. He charged that the IDCA
executive committee had effectively turned the Association’s
reins over to Local 588. His memo alludes to the fact that
Eidam designated Local 588 business agents to serve as IDCA
agents in servicing the collective-bargaining agreement. The
memo declared that Raley’s would continue to deal with
IDCA’s store stewards but it would not allow the Local 588
agents to “interrupt your work or hold you hostage during store
hours.” until the Company received a satisfactory explanation
for their involvement in IDCA’s business.2
A series of confrontations between local managers and the
deputized Local 588 agents occurred when the latter began
visiting Raley’s drug centers insisting they had a right to visit
with the drug clerks, and to enter the employee break rooms to
look at work schedules and other similar documents typically
posted there. In a couple of instances the local managers
caused the arrest of business agents for an unlawful trespass.
These developments soon caused a rift within IDCA mem-
bership ranks. Edwin (Ed) Wright, a clerk at Raley’s Grass
Valley, California drug center, and others opposed to represen-
tation of any kind by Local 588 aggressively criticized the ac-
tions taken by the IDCA executives. This early opposition
reached its zenith in the spring of 1993 when the dissidents held
a 4-hour meeting on April 25 in Roseville, California, attended
by nearly 200 drug clerks including about 20 IDCA stewards.
The meeting produced two resolutions, one demanding that
Eidam appoint a new negotiating committee that excluded the
Local 588 executives, and the other demanding that he rescind
the letter purporting to appoint Local 588 agents to act as IDCA
representatives. Eidam declined to act on either demand.
Complaint paragraphs 9 through 17 allege conduct attributed
to Raley’s agents between October 1992 and May 1993, prior
to UDCEA’s existence. Similarly, paragraphs 31 (a May 1993
warning to Eidam) and 34 (involving IDCA’s use of Local 588
agents to service its agreement) have no direct bearing on this
application. For this reason, those events serve only to provide
a context for later events that are relevant.3
For whatever reason, active opposition to the Eidam regime
petered out for the next few months. In addition, Wright suf-

2 This memo was also posted at the drug centers and formed the ba-
sis of one complaint allegation that Raley’s violated Sec. 8(a)(1). The
Board and the ALJ found no merit to the memo allegation. However,
this matter occurred well before the United Drug Center Employees
Assn. (UDCEA) came into existence and, hence, it did not implicate
any interest of that organization.
3 Raley’s did not file an application. It size and scope undoubtedly
would preclude it from qualifying for a reimbursement under EAJA.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 888
fered a work-related injury (a herniated disk) and began a leave
of absence on May 13, 1993, that lasted for a year, well beyond
any of the critical events in this proceeding. Early in his disa-
bility period, however, Wright again became the outspoken
leader of a faction opposing the IDCA leadership. Ultimately,
his activities led to the formation of a new labor organization
initially called the United Drug Center Employees Association
(UDCEA) and later renamed the United Wholesalers & Retail-
ers Union (UWRU).4 As described more fully below, the
UDCEA/UWRU succeeded the IDCA as the representative of
Raley’s drug clerks and effectively thwarted the efforts by
Eidam and his allies to facilitate a successful organizing drive
among the drug clerks by Local 588.
By mid-July 1993 Raley’s and the IDCA still had not con-
cluded a new drug clerks’ agreement. Around this time, Ra-
ley’s presented its “best and final” offer to the IDCA negotia-
tors and, in anticipation of a ratification vote, its labor relations
chief explained its terms in a memo to the drug clerks. Follow-
ing the best and final offer, IDCA officials held a series of
meetings with the drug clerks around northern California to
describe the offer’s terms, and to conduct a ratification vote.
The IDCA officials recommended rejection of the best and final
offer.
After Wright and other like-minded clerks became aware of
the final-offer meetings, they began to attend them and actively
campaigned for acceptance of the offer. In one instance,
Wright and five of his coworker from the Grass Valley store
made a 100-mile trip to the meeting in Red Bluff, California,
where he argued for an affirmative vote on Raley’s offer. Fol-
lowing a lengthy and heated exchange at the Red Bluff meet-
ing, those in attendance voted and their ballots were mingled
with ballots cast at other similar meetings and counted. A nar-
row majority voted against accepting Raley’s best and final
offer.
Following its rejection in the IDCA-conducted polling, Ra-
ley’s implemented its best and final offer on September 1. Two
weeks later, on September 14, Eidam faxed a letter to Raley’s
management disclaiming IDCA’s interest in representing the
drug clerks’ unit effective immediately.5 Eidam also notified
the IDCA members in the clerks’ unit by letter that IDCA, in
effect, no longer represented them and explained his reasons for
taking this action. In effect, he charged that Raley’s had taken
advantage of the drug clerks over the years because the prior
IDCA leadership had been unwilling or too weak to confront
management for better contract terms. Eidam recommended
that the drug clerks look to Local 588 for future representation.
Eidam’s explanation caused the ALJ to conclude that Eidam
deliberately withdrew as the drug clerks’ representative so that
Local 588 could organize them.
While opposing Eidam’s IDCA regime during the earlier ne-
gotiation period, Wright built a network of Raley’s drug clerks
opposed to Local 588. When Wright became aware of IDCA’s

4 UDCEA’s formation occurred in mid-September 1993. Its name
change to UWRU occurred a month later after Local 588 asserted own-
ership of the UDCEA name, threatened to sue Wright for using it, and
demanded that Raley’s cease dealing with him on behalf of UDCEA.
5 However, IDCA continued to represent the pharmacists’ unit.
disclaimer on September 15, he promptly consulted with sever-
al allies and, together, they agreed to organize a new independ-
ent clerks’ union, the UDCEA. Almost immediately, Wright
telephoned Raley’s new labor relations manager, Daniel Abfal-
ter, to advise that his group intended to organize the drug clerks
and would be forwarding signed petitions to the Company.
Meanwhile, James Teel, the cochair of Raley’s board of di-
rectors, replied to Eidam’s disclaimer in a memo dated Sep-
tember 15. Teel arranged for a copy of his memo to be sent to
each drug center and to the drug clerks individually. His memo
acknowledged Eidam’s disclaimer, criticized Local 588’s re-
cent involvement in IDCA’s affairs, and accused Eidam of
attempting to turn IDCA over to Local 588. He also assured
the clerks that their recent pay increases would remain secure.
In addition, Teel informed the clerks that they might be solicit-
ed to sign a petition for a new independent union organized by
a group of their “fellow employees.” Teel assured employees
that the Company would recognize “any union that you wish”
but that a union seeking recognition “must prove to us that over
50 percent of you want them.”
The next day, Abfalter addressed the fallout from the dis-
claimer and the clerk’s lack of representation in two memos to
the drug center managers. The first memo directed the manag-
ers to bar IDCA officers from using company time for union
business. It also advised that the “Grocery Clerks Local #588
members and agents” had no right “to interfere” with drug cen-
ter employees while on duty. Further, Abfalter’s first memo
stated that that Local 588 business agents and organizers “have
no right to visit with our Drug Center employees” and that they
had “no right of access to our break rooms or back room.” The
memo then turned to the Wright’s home-grown organizing
effort. About this subject, Abfalter’s memo reported that the
company had been approached “by a group of Raley’s Drug
employees who want to represent the Drug Center employees in
their own union.” It added that this group had “the right to
demand recognition from Raley’s” but the Company would
have to be convinced that they represented a majority of the
Drug Center employees before we recognize them.” In conclu-
sion, the memo advised the drug center managers that “[a]s you
are presented with someone claiming that they have cards or a
petition to present to you, IMMEDIATELY CALL YOUR
SUPERVISOR OR DAN ABFALTER . . . for instructions on
what to do.”
In his second memo of the day to the drug center managers,
Abfalter directed them to post Eidam’s disclaimer letter and
Teel’s reply. It also instructed managers to reassure clerks that
the processing of retroactive pay continued and “[t]he October
(pay) increase will happen.”6
Brenda Peterson, a clerk at the Rancho Cordova drug center
and a Local 588 supporter, claimed that she saw the first Abfal-
ter memo posted in the break room at her store. Based on that,
the General Counsel argued the restrictions detailed in the
memo against potential organizing activities by Local 588, their

6 Raley’s best and final offer to the IDCA included a retroactive pay
component conditioned upon an affirmative ratification vote. However,
when it implemented the offer, Raley’s included the retroactive feature
despite the rejection by the IDCA members.
RALEY’S 889
grocery-clerk members, and their other supporters when cou-
pled with the failure to state similar restrictions for UDCEA
organizers and supporters conveyed a coercive message com-
pany executives planned to assist the unaffiliated organization.
However, the ALJ discredited Peterson’s recollection about the
posting of Abfalter’s memo (and nearly everything else), and
rejected inferences sought by the General Counsel grounded on
employee knowledge of Abfalter’s key directions to the local
managers.7 Regardless, the ALJ and the Board found that Ra-
ley’s expressed a strong preference for an in-house union, if
any at all.
The Board, apparently thinking that the ALJ had concluded
that the reference “Grocery Clerks Local #588 members and
agents” did not include Raley’s employees, adopted that con-
clusion and agreed that Abfalter’s memo did not convey an
unlawful instruction to assist the UDCEA organizing drive.
Actually, the ALJ explicitly acknowledged that the phrase “Lo-
cal #588 members and agents” in Abfalter’s memo would in-
clude Raley’s employees. Thus, he stated: “And insofar as the
memo obliquely addressed what Local 588’s ‘grocery’-
employee ‘members’ could do, it stated only that they could not
“interfere with drug clerks while on duty.” 348 NLRB 382,
357 (2006). Regardless, for many other reasons the ALJ clear-
ly concluded (as the Board found) that Abfalter’s memo limit-
ing the activities of Raley’s grocery employees failed to estab-
lish that Raley’s coerced employees or unlawfully assisted
UDCEA/ UWRU.
Between September 15 and 23, 1993, Wright and his allies
engaged in “intensive activity” seeking to obtain majority sup-
port for the UDCEA in the clerks’ unit. As the Board found,
much of this activity “occurred at Raley’s stores, including
those in Grass Valley (Wright’s home store when actively em-
ployed), Benicia, Fair Oaks, and Placerville.” The Board fur-
ther found that the UDCEA’s “campaign activity involved in-
store visits, telephone calls to other stores, and the faxing of
copies of the petition to employee supporters, often using Ra-
ley’s telephones and fax machines,” much of which occurred
during worktime. The ALJ found that Wright, in the period
between September 16 and 21, actively solicited support for
UDCEA, often speaking to employees on the floor during their
worktime, in the employee break rooms, and in other areas
inaccessible to the general public during personal visits to
widely-scattered stores, including those at Auburn, Benicia,
Citrus Heights, Folsom, Granite Bay, El Dorado Hills, West
Sacramento, Windsor, and Rohnert Park.
Several complaint allegations pertinent to this EAJA applica-
tion grew out of the UDCEA’s organizing drive that occurred
from September 15 through 23 and Raley’s conduct toward
Local 588’s officials and supporters during this period. In these
allegations, the General Counsel asserted that unlawful conduct
by Raley’s local managers and supervisors coerced employees,
and unlawfully assisted the UDCEA organizing effort. One
allegation alleged that Raley’s provided legal assistance for the

7 The judge found Peterson to be “passionate” in her support of Lo-
cal 588. For this and other reasons he also rejected her testimony as to
much more damning matters involving conduct at the Rancho Cordova
store.
new independent union in the postrecognition period and that
Raley’s and the new drug clerks representative sought to en-
force an unlawful fee under the a contractual union-security
provision. Below, I have summarized the disposition of the
allegations that pertain to the application.

 Condoning the use of company fax machines and tel-
ephone system at several locations to circulate its or-
ganizing petitions and to submit them to the head-
quarters’ office. (Complaint ¶18) The Board largely
adopted The ALJ’s conclusions that this allegation
lacked merit because it amounted to little other than
“ministerial aid” inasmuch as the evidence estab-
lished employees commonly used of the company’s
communications for personal purposes contrary to of-
ficial written policies limiting their use to official
business purposes and that discipline occurred only
on a rare occasion when an employee was deemed to
have abused the privilege established by practice.8
The ALJ repeatedly noted that Eidam transmitted the
IDCA’s disclaimer letter over company equipment.
Even so, the ALJ concluded that the use of company
fax machines to transmit UDCEA petitions and its
demand for recognition amounted to an official use
sanctioned by the company’s formal policy. The
Board declined to adopt this latter finding because it
implicated an outcome in other pending cases.
 Allowed Wright to solicit support for the UDCEA
during a lengthy meeting he conducted with employ-
ees during their work time in a company office at
Benicia and a supervisor instructed an employee to
speak with Wright during work time. (Complaint
¶19) Benicia supervisor Wallis told employee Her-
nandez during his work time that Wright wanted to
talk to him in an upstairs office about a union and to
take as much time as needed. The Board adopted the
ALJ’s dismissal of this allegation because Wright, as
a Raley’s employee, enjoyed a Section 7 right of ac-
cess to the Benicia store because the evidence estab-
lished that Raley’s had always tolerated visits by off-
duty, offsite employees with on-duty employees in
both work and non-work areas. Likewise, the judge
inferred from the credited evidence that Wallis had

8 Wright frequently used the equipment at the Grass Valley store
where he worked and the nearby Yuba City store to transmit organizing
materials and talk with his allies. A Grass Valley supervisor gave
Wright a verbal warning for using store equipment on September 18
and the Grass Valley store manager gave him a written warning on
September 21 for using the telephone in his office to campaign. On
September 23, Wright transmitted his demand for recognition from the
fax machine in the store manager’s office at Grass Valley. At the very
least, the headquarters staff paid little attention to the source of the
UDCEA’s transmissions. In any event, the ALJ viewed the fax headers
as hearsay. 348 NLRB at 442. However, the prevailing view treats fax
headers as nonhearsay because they do not qualify as a “statement”
under Rule 801(a) of the Federal Rules of Evidence since they amount
to data generated by a machine rather than assertions or nonverbal
conduct of a “person.” U.S. v. Khorozian, 333 F.3d 498, 506 (3d Cir.
2003), and the treatise cited there.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 890
spoken as a friend rather than as a supervisor when he
told Hernandez that a union guy (Wright) wanted to
speak with him upstairs and that he could take all the
time he needed.
 Denied store access to Local 588 officials seeking to
visit with the drug clerks at Fairfield, Fair Oaks, and
Rohnert Park during periods when the UDCEA wide-
spread store access to solicit employee support.
(Complaint ¶20 and ¶23) This allegation is based on
the efforts of Local 588 officials to gain access to cer-
tain stores immediately after Wright’s visit to the
Benicia store. Raley’s managers uniformly barred
their access to the drug centers in order to solicit the
support of the drug clerks. Relying on Lechmere,
Inc. v. NLRB, 502 U.S. 527 (1992), the ALJ dis-
missed these allegations on the ground that the em-
ployer could lawfully bar nonemployee organizers
while permitting employees access for similar organ-
izing purposes. The Board found that the ALJ cor-
rectly distinguished between off-duty employees’
right of access to their workplace to engage in Sec-
tion 7 activity and nonemployee union supporters’
more limited rights of access. 348 NLRB [at 386].
In addition, the Board concluded that Lechmere’s ex-
ception based on a discriminatory access practice did
not apply here because all of “UDCEA’s active sup-
porters were Raley’s employees.” 348 NLRB at 387.
 Told employees that they could not talk to Local 588
agents on company time or in the store (Rohnert
Park); and told employees they should not talk to Lo-
cal 588 agents (South Lake Tahoe). (Complaint ¶23
and ¶25) The ALJ dismissed the allegation pertain-
ing to the conduct of the Rohnert Park manager. In
doing so, he discredited the account of Cindy
Shephard, the General Counsel’s employee witness,
supporting the allegation, and credited the testimony
of store manager Kiehlmeier and two other employee
witnesses, all of whom claimed that the store manag-
er only said that he preferred they not talk to repre-
sentatives of either union during work time.

The ALJ also dismissed the South Lake Tahoe allega-
tions after discrediting the account provided by two
employee witnesses called by the General Counsel to
support them. He found their testimony too unrelia-
ble “to support any feature of paragraph 25.” Af-
firmatively, the ALJ, based on the credited testimony
of Raley’s manager Forkner found that the store
management had not encouraged employee support
for UDCEA.

 Interrogated a employee, created the impression
among the employees that their union activities were
under surveillance, and told an employee that Local
588 representatives would be barred from the Ukiah
store even though Raley’s granted access to UDCEA
agents. (Complaint ¶24) The ALJ dismissed the
Ukiah allegations. As to the allegation that manager
Graves told employees that he would escort Local
588 agents from the store, the ALJ concluded the
statement, if made, would have been lawful. But in
any event, the ALJ credited Graves’ denial that he
ever told employees as much. As to the surveillance
and interrogation allegations, the ALJ discredited the
testimony of the General Counsel’s witnesses that the
alleged interrogation which implied surveillance oc-
curred three days before Raley’s recognized the
UDCEA. The ALJ found the testimony of employees
Jack and Harmon unreliable in face of Graves’ denial
of the statements they attributed to him. The ALJ
concluded that the so-called Local 588 “pizza meet-
ing” (Jack and Harmon keyed their claims about
Graves’ questioning from this meeting) occurred a
few days after Raley’s recognized the UDCEA rather
than before as the two employees claimed.
 Removed Local 588 authorization cards and a button
left at the store by a Fair Oaks employee; told an em-
ployee to cease wearing a Local 588 button; and en-
couraged employees to sign the UWRU petition so
they would get raises sooner. (Complaint ¶21) In the
absence of exceptions, the Board affirmed the ALJ’s
finding the Raley’s violated Section 8(a)(1) when
Fair Oaks manager Haring admittedly told employee
Lee to remove a button that signified his support for
Local 588 and when he admittedly removed Local
588 authorization cards from a break room bulletin
board. However, the Board rejected the General
Counsel’s exceptions seeking a finding that this same
conduct violated Section 8(a)(2) and tainted
UDCEA/UWRU’s majority.9 The Board concluded
that the evidence failed to establish that employees at
other locations knew about this “isolated” conduct.
The ALJ largely discredited Lee’s testimony about
the events found unlawful and other Lee testimony
elicited to show that Haring also directed employees
to sign the UDCEA/URWU petition, interrogated
employees as to whether they had done so, and ex-
plained a rival union petition he left posted on the
ground that “only memoranda supported by . . . Ra-
ley’s belonged on the bulletin board.”
 Permitted employees to circulate pro-UDCEA peti-
tions at the Rancho Cordova store during work time
and told employees after the organizing drive that
Raley’s executives instructed managers to be actively
involved with the UDCEA organizing. (Complaint
¶22) The ALJ found that some unknown individual
faxed a UDCEA petition to the Rancho Cordova
pharmacy where employee Brenda Peterson (a vocal
Local 588 supporter) received it, gave it to supervisor
Renfree, and made a fuss over UDCEA’s use of the
company’s fax machines to organize. Shortly after-
ward, Peterson discovered the petition on the break
room table and confronted Renfree again. She insist-
ed that he call headquarters (she says Abfalter; he

9 No employees from Fair Oaks or Placerville (where 8(a)(1) con-
duct also occurred) signed a UDCEA petition.
RALEY’S 891
says he could not remember who he ultimately
called) to report a violation of company policy.
When he did so, Renfree received an instruction to
secure the petition in the store manager’s desk which
he did. Meanwhile, Ruthie Gordon, a pro-UDCEA
employee and a former IDCA steward, confronted
Renfree concerning the whereabouts of the petition.
Renfree told her that it had been secured in the man-
ager’s “office.” Three or four days later, Peterson
saw the petition in Gordon’s possession with two sig-
natures, including Gordon’s. Peterson asserted that
both Gordon and Renfree admitted to her that Ren-
free gave the quarantined petition to Gordon. How-
ever, the ALJ, crediting Gordon’s testimony that em-
ployee Eddie Pine (who died before the hearing) sur-
reptitiously retrieved the petition from the manager’s
office over Peterson’s testimony, rejected the allega-
tion that the company aided Gordon’s solicitation ef-
fort. The ALJ also credited claims by store supervi-
sors that they lacked knowledge of Gordon’s solicita-
tion activities, and found no evidence that Gordon so-
licited signatures for the UDCEA petition during
work time.
 Questioned a Placerville employee as to whether he
or other employees had signed the UDCEA petition
or a Local 588 authorization card. (Complaint ¶26)
The ALJ found the Placerville manager Beard unlaw-
fully interrogated employee Miser in violation of Sec-
tion 8(a)(1) when she called him to her office during
his lunch break and “wondered aloud” in an irritated
manner why no one had signed the UDCEA petition
on the break room table. When Beard added that it
was in the employees’ own “best interests” to be rep-
resented by a union, Miser disagreed and left her of-
fice. But the ALJ further held that the General Coun-
sel failed to show that Beard unlawfully assisted the
UDCEA in violation of § 8(a)(2) because of uncer-
tainty as to whether this conversation occurred after
Local 588 started an active campaign.10 The Board
concurred at least in the result and went further. It
found that the divergent enforcement practices of the
local managers relating to Raley’s rules about solici-
tation and distribution during work time, derived
largely from accumulated evidence about the IDCA

10 Seemingly, the ALJ thought that, for purposes of Sec. 8(a)(2), the
General Counsel’s burden included the elimination of all evidentiary
ambiguity as to whether the Beard/Miser confrontation occurred after
Local 588 started active campaigning. Obviously, he declined to infer
the existence of a rival union situation, with all its attendant implica-
tions, based on Teel’s September 15 memo and Abfalter’s two direc-
tives the following day which Beard presumably received and read.
And elsewhere, the ALJ found that Local 588 mailed literature with
enclosed authorization cards to unit employees on September 17 and
directed its organizers on September 20 to visit Raley’s stores, distrib-
ute authorization cards, and mobilize support among employees. Final-
ly, the ALJ found that from the time of Eidam’s September 14 dis-
claimer until September 23, a number of Raley’s drug clerks engaged in
concerted activity on behalf of Local 588 and against the UDCEA.
years, precluded finding a pattern of disparate en-
forcement. For that reason, the Board concluded that
the contrasting managerial conduct at Placerville
(leaving UCDEA petition in the break room) and at
Fair Oaks (removing Local 588 cards from the break
room) insufficient to establish disparate enforcement
company rules. 348 NLRB at 386 fn. 19.
 Provided legal assistance to UWRU beginning in Oc-
tober 1993 at a time when its attorney performed
work for Raley’s or was being paid to represent Ra-
ley’s and provided financial assistance to Wright in
the form of two payments unrelated to his wages, dis-
ability, or benefits. (Third and Fourth Amended
Consolidated Complaints ¶27) Following Wright’s
testimony denying, in essence, that he received pay-
ments from Raley’s to aid in organizing the UDCEA,
the General Counsel effectively withdrew this allega-
tion by issuing the Fourth Amended Consolidated
Complaint that contains no reference to the allegation
about Wright found in ¶27(b) of the Third Amended
Consolidated Complaint.

However, the General Counsel continued to press the
legal assistance allegation in Complaint ¶27(a). The
ALJ dismissed this after concluding from his factual
analysis that attorney Henry Telfeian had actually
concluded his services for Raley’s prior offering to
represent the UDCEA and the lack of evidence that
Raley’s retained Telfeian further. The Board af-
firmed the ALJ’s conclusion. It said the ALJ had
found that: (1) Telfeian ceased representing Raley’s
in September 1993; (2) Telfeian acted on his own
acted on his initiative in seeking the UDCEA work;
(3) Raley’s expressed disapproval of his action but
had no authority to stop him; (4) even if a conflict ex-
isted, it would not have implicated Raley’s; (5) no
simultaneous representation occurred; and (6) the
services Telfeian performed for the UDCEA were
confined to matters in which Raley’s had no interest
or involvement. 348 NLRB at 387 fn. 24.

The ALJ, by contrast, found that Telfeian concluded
his work on behalf of Raley’s on October 15 when he
finished drafting a letter to Local 588 related to the
UDCEA name dispute. Due to administrative proce-
dures at Keck, Mahn, and Cate (the law firm that en-
gaged Telfeian as a substitute when its partner, Pat-
rick Jordan, Raley’s regular labor relations attorney,
left for an extended vacation in mid-September), the
letter was dated and mailed on October 18. On Octo-
ber 15, after completing the Raley’s UDCEA letter,
Telfeian attempted unsuccessfully to reach Wright to
offer his legal services to the UDCEA, purportedly
motivated his contempt Local 588’s hounding of the
UDCEA over the name issue. A few days later
Wright returned Telfeian’s call and the two entered
into an arrangement for Telfeian to represent
UDCEA. During the first week of October, Telfeian
disclosed his intentions to Jordan but the ALJ found
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 892
that Telfeian’s first direct disclosure to any Raley’s
official occurred when he sent a letter to Teel on No-
vember 10, supposedly about two weeks after Wright
and Telfeian struck a deal.11 In his letter to Teel, Tel-
feian asked Teel to advise if he objected to his ar-
rangement with the UWRU. Teel never responded.
 Recognized the UDCEA and entered into a collective
bargaining agreement with it (by then renamed the
UWRU) with a union security clause at a time when
that union did not represent a majority or an unco-
erced majority in the drug clerks unit. (Complaint
¶29 and ¶30) Throughout the period from September
16 through 23, Wright and his allies faxed signed
UDCEA petitions to Raley’s headquarters. On Sep-
tember 23 Wright faxed a letter to Abfalter claiming
that UDCEA represented a majority of the drug
clerks and demanding recognition. In the early even-
ing, Raley’s sent a letter to Wright recognizing
UDCEA as the new bargaining agent for the drug
clerks. On October 24, the UWRU and Raley’s en-
tered into a 3-year contract, retroactive to October 3,
containing a union-security clause.

During the hearing, the General Counsel abandoned
its allegation that the UDCEA never acquired a nu-
merical majority after conceding the Regional Office
made an error calculating the number of signed peti-
tions the UDCEA submitted to Raley’s. However,
the General Counsel continued to advance the parallel
claim that the UDCEA never represented an unco-
erced majority and, hence, the recognition, and the
subsequent execution and maintenance of the UWRU
contract were unlawful.

The ALJ concluded that Raley’s lawfully recognized
the UDCEA and that the parties entered into a valid
contract.12 In the process, he resolved numerous con-
tentions about the unit scope, employee eligibility,
and signature authenticity that permitted him to find
ultimately that the UDCEA submitted petitions to Ra-
ley’s containing 355 valid signatures in a unit of 673
employees, or 18 more signatures than necessary for
a majority. Further, he found, in effect, Raley’s
8(a)(1) conduct during the organizing campaign in-
sufficient to taint the UDCEA’s showing of a majori-
ty because its support came from stores where no un-
lawful conduct occurred, and because the violations

11 Although not explained, the Board’s finding that Raley’s ex-
pressed disapproval of Telfeian’s plan to offer his services to the
UDCEA appears to be based on a lunch conversation between Jordan
and Telfeian before the latter finished performing work for Raley’s in
which Jordan strongly advised Telfeian against doing so. Presumably,
the Board treated Jordan as Raley’s agent for purposes of this disclo-
sure even though, at the time, both worked for the same law firm per-
forming services for Raley’s.
12 Raley’s attorney told the General Counsel that “negotiations with
UDCEA/UWRU were held on September 27 and 30, and October 8 and
13, and that a “wrap-up meeting was held on or about October 28.” GC
Answer: 53.
found were too isolated and unknown at other loca-
tions.
 Written threats by the UWRU to certain employees
during the period from March through August 1994
that it would seek their discharge by Raley’s and sub-
sequent requests that the employer to do so because
the employees refused to pay a reinstatement fee
(a/k/a late fee) the union charged habitually delin-
quent dues payers. Written threats by Raley’s to dis-
charge these employees for failing to pay “period
dues and uniformly required initiation fees.” (Com-
plaint ¶32, ¶33, and ¶36.) These allegations stem
from the UWRU’s efforts to enforce its internal late
fee rule through the contractual union-security clause
in 1994 and 1995. At that time, the late fee amounted
to a dues or initiation fee surcharge of five dollars for
every month of delinquency.13 The Board affirmed
the ALJ’s conclusion that the late fee constituted an
integral part of the UWRU’s established dues struc-
ture. The ALJ found the late fee analogous schemes
found in to cases where the Board concluded that ar-
rangements providing for discounts upon the timely
or early payment of dues were lawful. Both rejected
the argument that the late fee amounted to a penalty
or a fine as found in early cases never overruled by
the Board. Hence, both concluded that collection of
the fee under the union-security contract was lawful.
B. Analysis and Conclusions
1. Complaint paragraph 27(b): The prevailing party question
The Applicant claims prevailing party status as to all 8(a)(2)
allegations that would affect its status as the lawfully recog-
nized employee representative. Counsel for the General Coun-
sel asserts that the Applicant does not qualify as a prevailing
party under EAJA as to complaint paragraph 27(b) (alleging
employer payments to assist Wright’s organizing campaign)
because the Regional Director voluntarily withdrew the allega-
tion before the hearing closed.
To be a “prevailing party” under Federal fee-shifting stat-
utes, an applicant must have achieved a judicially-sanctioned
“material alteration of the legal relationship of the parties.”
Buckhannon Board & Care Home, Inc. v. West Virginia De-
partment of Health & Human Resources, 532 U.S. 598 (2001).
Buckhannon holds that Federal fee-shifting statutes require a
disposition by means of a judicially enforceable order or a set-
tlement agreement enforceable through a consent decree. Id. at
604. However, an applicant will not be considered a prevailing
party under a Federal fee-shifting statute if the “material altera-
tion” resulted from the Government’s voluntary action. Id. at
605.
Although Buckhannon did not arise out of an EAJA claim
(the appendix in Marek v. Chesny, 473 U.S. 1, 49 (1985),
shows more than 100 Federal fee-shifting statutes), several
courts have concluded the majority’s sweeping language makes
clear that it applies to all such statutes using the phrase “pre-

13 Later, the UWRU modified this fee provision in its bylaws but the
revised provision was not challenged in this case.
RALEY’S 893
vailing party.” The Ninth Circuit, where this dispute arose, has
specifically applied the Buckhannon rule to EAJA. Carbonell
v. I.N.S., 429 F.3d 894 (9th Cir. 2005); Perez-Arellano v. Smith,
279 F.3d 791 (9th Cir. 2002). And in Morillo-Cedron v. Dis-
trict Director for the US Citizenship & Immigration Services,
452 F.3d 1254 (11th Cir. 2006), the court noted all Federal
appellate courts that have considered the question to date have
applied the Buckhannon rule to EAJA.
Seemingly, however, no case involving the impact of Buck-
hannon on the prevailing-party rule utilized by the Board has
been decided. In the past, the Board treated EAJA applicants as
the prevailing party even as to significant allegations voluntari-
ly withdrawn by the General Counsel prior to a decision by an
ALJ or the Board. For example, in Shrewsbury Motors, 281
NLRB 486, 487–488 (1986), the Board found an applicant
qualified as a prevailing party under EAJA where the Regional
Director withdrew a complaint in two stages, the last just days
before the scheduled hearing. Later, in K & I Transfer & Stor-
age, 295 NLRB 853 (1989), the Board, relying on Shrewsbury,
found an applicant qualified as a prevailing party as to a John-
nie’s Poultry allegation withdrawn by the Regional Director so
the hearing could proceed without delay.
In Shrewsbury, the ALJ relied on his reading of the legisla-
tive history and several Federal cases finding applicants to be
prevailing parties on matters not actually decided following
litigation. In effect, the ALJ adopted the “catalyst” theory as
applied by various courts of appeals at the time. That theory
treated an applicant as a prevailing party in an administrative
proceeding if it achieved a desired result even though brought
about by the agency’s voluntarily-implemented change. In fact,
two of the cases cited by the judge explicitly applied the cata-
lyst theory14 and the others unmistakably applied it without
using the precise terminology. When Shrewsbury came before
the Board, it adopted the ALJ’s rationale without comment.
The Buckhannon majority emphatically rejected the catalyst
theory in favor of the combined judicially-sanctioned, material-
alteration concept. For that reason, continued application of
Shrewsbury and its progeny would be at odds with the Supreme
Court’s interpretation of a “prevailing party” under Federal fee-
shifting statutes.
To the extent that the ALJ here in any way approved the
withdrawal of complaint paragraph 27(b), I find his involve-
ment amounted only to a procedural, housekeeping step.15
Standing alone, the voluntarily withdrawal of complaint par-
graph 27(b) lacks any character of a settlement between the
parties. Undoubtedly, a withdrawal of a complaint allegation
induced by consideration that serves as a remedy for some al-
leged violation of the Act might qualify as a judicially-
sanctioned, material alteration within the meaning of Buckhan-
non but that plainly is not the case here. Accordingly, I find
that the Applicant is not a prevailing party as to complaint par-

14 See Dawson v. Pastrick, 600 F.2d 70, 79 (7th Cir. 1979); William-
son v. HUD Secretary, 533 F.Supp. 542, 544 (E.D.N.Y. 1982).
15 From the time the hearing opens until the case is transferred to the
Board, the ALJ rules on all motions. NLRB Rules and Regulations,
Secs. 102.25 and 102.47.
agraph 27(b) of the third amended complaint. Buckhannon,
supra.
2. The General Counsel’s substantial
justification defenses
The General Counsel invokes EAJA’s “substantial justifica-
tion” defense for the remaining complaint allegations affecting
the Applicant. Those allegations involved the Applicant’s or-
ganizing drive in mid-September 1993, its status as the collec-
tive-bargaining representative of Raley’s drug clerks, its collec-
tive-bargaining agreement with Raley’s, and its effort to en-
force the union-security provision in that collective-bargaining
agreement.
Preliminarily, the substantial justification requirement of the
EAJA establishes a clear threshold an agency must meet to
defeat a prevailing party’s eligibility for fees. It properly fo-
cuses on the governmental misconduct giving rise to the litiga-
tion. Commissioner, INS v. Jean, 496 U.S. 154, 165 (1990).
The mere fact that the General Counsel lost or advanced a posi-
tion contrary to prior precedent does not mean the litigation
lacked substantial justification within the meaning of EAJA.
Wyandotte Savings Bank v. NLRB, 682 F.2d (6th Cir. 1982).
Under EAJA, the litigation does not require justification “to
a high degree” but it does require a rationalization beyond
“merely undeserving of sanctions for frivolousness.”16 Pierce
v. Underwood, 487 U.S. 552, 565–566 (1988). In Pierce, the
Supreme Court selected between two, “almost contrary” conno-
tations suggested by the word “substantially” as used in the
Federal fee-shifting statutes. On the one hand, the Court noted,
the word refers to large or considerable in amount or value as in
the statement, “He won the election by a substantial majority.”
On the other hand, the word connotes the essence of something,
or, based on the dictionary the Court cited, “such in substance
or in the main” as in the statement, “What he said was substan-
tially true.” The Pierce opinion rationalizes the Court’s judg-
ment that the word “substantially” as used in EAJA derives its
meaning from the latter connotation, that EAJA requires justifi-
cation only to “a degree that would satisfy a reasonable per-
son.” Accordingly, the Court concluded EAJA requires gov-

16 The Board rejected arguments by the Applicant and Raley’s seek-
ing attorney-fee awards from the General Counsel under Tiidee Prod-
ucts, 194 NLRB 1234 (1972), enfd. 502 F.2d 349 (D.C. Cir. 1974). In
Tiidee, the Board sanctioned the respondent employer for engaging in
frivolous litigation by ordering the reimbursement of the charging party
union for its attorney fees. The Applicant and Raley’s claimed that the
General Counsel, in essence, abused the trial process by conducting a
postcomplaint investigation and by pursuing frivolous theories of liabil-
ity. The Board rejected this claim on the ground that sovereign immun-
ity precluded the application of Tiidee sanctions against the General
Counsel and on the further ground that the record would not justify
such sanctions even if Tiidee applied. The General Counsel’s answer
frequently refers to the Board’s characterizations about the complexity
of this litigation. The Applicant correctly argues that the justification
required by EAJA differs significantly from the Tiidee test and, there-
fore, little or no consideration should be accorded to the Board’s com-
plex-litigation dicta. Although I recognize that the Pierce and Tiidee
standards differ quantitatively, the Board’s observations about the
complexity of this litigation have some relevance to the questions pre-
sented here and have been considered.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 894
ernment agency litigation to have a reasonable basis in both law
and fact in order to satisfy the “substantially justified” standard
under EAJA. 487 U.S. at 564–465.
The General Counsel has the burden of proving that fees
should not be awarded. Timms v. US, 742 F.2d 489, 492 (9th
Cir. 1984), Meaden Screw Products Co., 336 NLRB 298, 299–
300 (2001). See also NLRB Rules and Regulations, Section
102.144(a). Where the General Counsel presents evidence
which, if credited by the fact finder, would constitute a prima
facie case of unlawful conduct, then the General Counsel satis-
fies EAJA’s “substantially justified” standard. Auto Workers
Local 2333 (B. F. Goodrich Co.), 343 NLRB 281 (2004), and
the cases cited there. If it is possible to draw a set of inferences
from the circumstances present in a case that would have sup-
ported the General Counsel’s position, then the Board treats the
General Counsel’s arguments as substantially justified. Euro-
plast, Ltd., 311 NLRB 1089 (1993), affd. 33 F.3d 16 (7th Cir.
1994). Reasonable differences of opinion about witness credi-
bility, the weight accorded various aspects of the evidence, and
the inferences permissible from a given set of events influence
the outcome of litigation and bear heavily on the question of
substantial justification under EAJA. Mathews-Carlsen Body
Works, 327 NLRB 1167, 1168. (1999). Similarly, where the
General Counsel’s position is substantially justified if he pos-
sesses evidence at the time a complaint issues that could rea-
sonably lead an administrative law judge to find a violation and
does not possess evidence that clearly would defeat the allega-
tion. Lion Uniform, 285 NLRB 249, 253–254 (1987).
In addition to the foregoing principles, the appellate court in
Martinez v. Secretary of Health & Human Services, 815 F.2d
1381, 1383 (10th Cir. 1987), confronted the problem that arises
when the existing law lacks clarity. The court, quoting dicta
from a prior case and citing its antithesis in a later case, con-
cluded that the clarity of the governing legal principles, or lack
thereof, must be taken into account when assessing substantial
justification under EAJA. Thus, the court stated:

“For purposes of the EAJA, the more clearly established are
the governing norms, and the more clearly they dictate a result
in favor to the private litigant, the less ‘justified’ it is for the
government to pursue or persist in litigation.” Spencer v.
NLRB, 712 F.2d 539, 559 (D.C. Cir. 1983), cert. denied 466
U.S. 936 (1984). Conversely, if the governing law is unclear
or in flux, it is more likely that the government’s position will
be substantially justified. See Washington v. Heckler, 756
F.2d 959, 961–962 (3d Cir. 1985).

EAJA “aims to penalize unreasonable behavior on the part of
the Government without impairing the vigor and flexibility of
its litigating position. Pullen v. Bowen, 820 F.2d 105 (4th Cir.
1987). But EAJA is not intended to deter the Government from
bringing forward close questions. Abell Engineering & Mfg.,
Inc., 340 NLRB 133 (2003).
a. The coercion and assistance allegations unrelated
to store access and late fee issues
Complaint paragraph 28 alleges that Raley’s assisted and
supported the UWRU in violation of Section 8(a)(2) by the
conduct alleged in complaint paragraphs 18 through 27, includ-
ing various subparagraphs. An employer commits unfair labor
practice under Section 8(a)(2) if it dominates or interferes with
the formation or administration of a labor organization or by
contributing financial or other support to a union seeking to
represent its employees. “[T]he difference between unlawful
assistance and unlawful domination is one of degree, as is the
difference between permissible cooperation and unlawful assis-
tance.” Homemaker Shops, 261 NLRB 441, 442 (1982).
Complaint paragraph 37 alleges that Raley’s independently
violated Section 8(a)(1) by the conduct described in complaint
paragraphs 9 though 17, and 19(a)(1), 21(a)(4), 24(c), 25(a),
and 26(a). An employer engages in an unfair labor practice
within the meaning of Section 8(a)(1) if it interferes with, re-
strains, or coerces employees for exercising their Section 7
rights. The conduct alleged in complaint paragraphs 9 though
17 predates the formation of UDCEA/UWRU and has no rela-
tionship to this Application. The remaining independent
8(a)(1) allegations in complaint paragraph 37 bear on the alle-
gation only to the extent that conduct found unlawful also was
found to violate Section 8(a)(2) or otherwise affected the Ap-
plicant’s majority standing.
Six of the unlawful assistance allegations grew out of the
disparate access issues that will be discussed separately in the
next section. Fifteen other allegations charge that Raley’s co-
erced employees and interfered with or assisted with the for-
mation of the UDCEA during the September 1993 organizing
campaign. The Board adopted the ALJ’s conclusion that the
General Counsel sustained the burden of proof as to two coer-
cion allegations but rejected argument that the same conduct
also constituted unlawful assistance. As both infractions oc-
curred at stores where the UDCEA failed to secure support
anyway, the ALJ also found these allegations insufficient to
taint any petition signatures that union relied on to show its
majority status or to taint the entire process.
The ALJ resolved the remaining 13 allegations (that also
claimed interference and assistance) against the General Coun-
sel largely on the basis of his credibility resolutions, the infer-
ences he drew, and the weight he accorded various aspects of
conflicting evidence offered in support of, and to rebut, the
allegations. Had that ALJ resolved credibility and made infer-
ences favorable to the General Counsel, a basis would have
existed for the Board to find that Raley’s managers and super-
visors:

 Informed employees around September 15 that ICDA
officials and the Local 588 grocery clerks would not
be allowed to engage in Section 7 activities on work
time while permitting UDCEA supporters to circulate
its petitions on work time.
 Condoned the use of its facsimile system to circulate
the UDCEA petitions even in face of protests from
employee Peterson at Rancho Cordova who support-
ed rival Local 588 and notwithstanding Raley’s writ-
ten rule limiting the use of that system to official
company business.
 Directed an employee at Benicia to use work time to
visit with Wright about the UDCEA.
RALEY’S 895
 Encouraged employees at the South Lake Tahoe store
to support the UDCEA while discouraging them from
talking with Local 588 organizers.
 Interrogated Ukiah employees about their activities
on behalf of Local 588 and created the impression
their activities were under surveillance.
 Told employees at Fair Oaks to sign the UDCEA’s
petition, interrogated employees as to whether they
had done so, and told employees that the UDCEA’s
petition had been left on the bulletin board because
Raley’s supported that union.
 Assisted the UDCEA at the Rancho Cordova store by
providing the UDCEA petition quarantined to the
manager’s desk drawer by headquarters management
to a UDCEA sympathizer for the purpose of circulat-
ing it without limitation as to time.

The General Counsel initially challenged the mathematical
basis for UDCEA’s majority status claim but abandoned that
theory during the litigation. Thereafter, the General Counsel
relied on a theory, or theories, that Respondent’s various acts of
assistance and interference tainted the UDCEA’s majority sta-
tus.
In Dairyland USA Corp., 347 NLRB 310 (2006), the Board
summarized the legal standards applied to 8(a)(2) cases over
the years where the General Counsel alleges that the employ-
er’s pattern of unlawful assistance tainted a union’s majority
standing. That case states:

An employer violates Section 8(a)(2) of the Act when
it extends recognition to a union that does not represent an
uncoerced majority of employees. Ladies Garment Work-
ers v. NLRB, 366 U.S. 731 (1961). The General Counsel
does not need to show, with mathematical precision, that
the union lacks the support of an uncoerced majority of
employees. SMI of Worcester, Inc., 271 NLRB 1508, 1520
(1984); Clement Bros. Co., 165 NLRB 698, 699 (1967)
(holding that coercion of 7 employees out of 129 who
signed authorization cards in a unit of approximately the
same size was sufficient to infer a larger pattern of coer-
cion amid other violations), enf’d. 407 F.2d 1027 (5th Cir.
1969). Rather, “‘[a] pattern of company assistance can be
sufficient to invalidate all cards.’” Famous Castings
Corp., 301 NLRB 404, 408 (1991) (quoting Amalgamated
Local 355 v. NLRB, 481 F.2d 996, 1002 fn. 8 (2d Cir.
1973)). In determining whether a pattern of unlawful assis-
tance exists, the Board examines the totality of the circum-
stances, including conduct occurring both before and after
recognition of the union. Farmers Energy Corp., 266
NLRB 722, 722–723 (1983) (determination of whether
employer’s pre- and post-recognition unlawful acts tainted
majority status depends on the entire “‘general contempo-
raneous current of which they were integral parts’”) (quot-
ing Machinists Lodge 35 v. NLRB, 110 F.2d 29, 35 (D.C.
Cir. 1939), affd. 311 U.S. 72 (1940)), enfd. 730 F.2d 1098
(7th Cir. 1984); Windsor Castle Health Care Facilities,
310 NLRB 579, 592 (1993) (finding that “circumstances
occurring after the execution of the collective-bargaining
agreement further manifest[ed] a pattern of assistance”),
enfd. in relevant part 13 F.3d 619 (2d Cir. 1994).

When the General Counsel’s coercion and assistance allega-
tions collapsed under the ALJ’s credibility determinations and
unfavorable inferences, the basis for the General Counsel’s
allegations about UDCEA’s tainted majority (complaint par.
29), its recognition (also complaint par. 29), and its union-
security clause (complaint par. 30) also collapsed.
The Applicant argues that the ALJ’s credibility resolutions
were unnecessary as that the General Counsel’s case could have
been cast aside with a motion to dismiss at the end of the hear-
ing. However, I find that contention to be largely ipse dixit; at
least the reply makes no attempt to support it with any cohesive
argument. It is abundantly obvious that the ALJ rejected a
similar argument when the Applicant made to him. Plainly, the
ALJ’s credibility resolutions and inferences largely determined
the overall result in this case. Indeed, in its decision the Board
makes four separate references to its reliance on the “credited
record.”
Examples abound demonstrating the effect of the ALJ’s
credibility determinations. Thus, Wright’s visit to the Benicia
store constituted a key component of the General Counsel’s
case relating to conduct during the Applicant’s organizing
drive. As to the specific coercion and assistance allegations
arising from that mid-September visit, the inference made by
the ALJ that Willis’ statement to Hernandez amounted to noth-
ing more than one friend talking to another was critical to re-
solving this allegation. By stark contrast, the Board affirmed
an ALJ’s conclusion in Famous Castings Corp., 301 NLRB
404 (1991), that an employer “blatantly” assisted a labor organ-
ization in violation of Section 8(a)(1) and (2) where its supervi-
sor told an employee to go “upstairs” to talk to the union repre-
sentatives and later gave the employee union cards. The ALJ’s
conclusions about this tell-tale incident, shaped largely from his
subjective inference about the degree of Hernandez’ personal
relationship with Wallis (who did not testify), had an important
impact on this critical issue.
Likewise, the ALJ’s wholesale rejection of Brenda Peter-
son’s testimony except where corroborated by a supervisor or
an employee aligned with the UDCEA also proved significant.
It precluded a finding that Abfalter’s first memo to the store
managers had been publicized to employees and that the Ran-
cho Cordova store manager provided the quarantined UDCEA
petition to Ruth Gordon for circulation among the employees.
I also find the General Counsel substantially justified with
respect to the allegation in complaint paragraph 27(a). Again,
the credibility determinations and inferences made by the ALJ
and the Board had a significant impact on the outcome of this
issue. Wright provided the General Counsel with an affidavit
in January 1994 that substantially contradicted the credited
testimony he and Telfeian provided at the hearing on which the
findings about these allegations rest. Thus Wright, whose hear-
ing testimony the ALJ credited on virtually every contradicted
point, told the General Counsel in that affidavit that:

Sometime in the middle of October, I received a call from Mr.
Henry Telfeian. He said he had heard that I was running a
new labor organization. He then told me about himself. He
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 896
told me he was a retired labor attorney who was interested in
a new approach to labor. He told me that if [I] was interested
in representation by him, I should call him. He gave me his
number. I asked him where he had heard about us. He said
that, in the past, he had had ties with Raley’s counsel, Pat Jor-
dan. That’s about all I can recall to the conversation. I did
not decide to hire Mr. Telfeian at that time.

. . . .

After discussing the matter with four other representatives, the
UWRU decided to hire Mr. Telfeian. We hired Mr. Telfeian
sometime in mid-October, prior to October 18.

In labor relations law, counsel switching sides is virtually an
unheard of occurrence. If Wright’s affidavit statements are
credible, this switch would have been all the more abnormal
because it occurred in the midst of collective-bargaining nego-
tiations with a misleading disclosure to the new client and a
very belated disclosure to the old client. Where the overall
context included Raley’s enthusiastic embrace of the UDCEA’s
organizing effort, I find a substantial basis existed for reaching
inferences quite contrary to those ultimately made as to this
allegation particularly in view of the timing of the move.
Even the allegation about the use of Raley’s telephone and
fax systems (complaint par. 18) for UDCEA organizing pur-
poses shows the complex, litigation judgments the General
Counsel faced. Although the ALJ appears to have relied pri-
marily on the testimony that emerged on cross-examination of
the General Counsel’s witnesses to resolve this issue, the ALJ
obviously chose to accord much less weight to other evidence
favorable to the General Counsel. Thus, Raley’s unquestiona-
bly maintained a written policy limiting the use of its telephone
and fax systems to official company business except in case of
emergencies. As with other policies, rule enforcement was
obviously left to the whim of local managers and supervisors, a
situation entirely susceptible of an opposite conclusion, i.e.,
that their claims about these subjects amounted largely to self-
serving declarations. Clearly, Abfalter’s first memo following
the IDCA disclaimer reinforced the Company’s expectations
about the enforcement of existing policies. And the directions
given Supervisor Renfree by Abfalter or some other headquar-
ters’ official to quarantine the UDCEA petition in the store
manager’s desk after it had been faxed the Rancho Cordova
pharmacy and intercepted by Brenda Peterson provides a spe-
cific example that would lend support to a conclusion that the
company intentionally provided Wright and his allies wide-
spread access to the Raley’s phone and fax equipment during
their organizing effort.
Accordingly, I have concluded that the dismissal of virtually
all of the General Counsel’s case discussed in this section re-
sulted from the inferences and credibility resolutions made by
the ALJ and affirmed by the Board. Had the ALJ’s credibility
determinations and inferences been more favorable to the Gen-
eral Counsel, I find an ample basis would have existed for con-
cluding that Raley’s conduct tainted UDCEA’s majority stand-
ing. Such a finding, of course, would have vitiated the collec-
tive-bargaining relationship, including the collective-bargaining
agreement with its union-security clause. For these reasons, I
find the General Counsel met the burden of proving the allega-
tions addressed in this section were reasonable and substantial-
ly justified within the meaning of EAJA.
b. The access issues
Relying on Lechmere, supra, and the fact the all of the
UDCEA organizers were Raley’s employees, the Board and the
ALJ resolved disparate access claims against the General
Counsel. To be sure, Lechmere plainly justifies an employer’s
denial of access to nonemployee union organizers such as the
Local 588 agents because, as that case reiterates, nonemployee
organizers enjoy only a derivative Section 7 right of access to
an employer’s private property that applies only in rare circum-
stances where the employees are deemed inaccessible by other
reasonable means. Although Lechmere distinguishes the rights
of nonemployees from employees, its holding applies to
nonemployees only.
The six access allegations at issue claim, in essence, that Ra-
ley’s local managers denied Local 588 nonemployee organizers
access to its stores while it permitting Wright access to whatev-
er store he wanted to visit in order to solicit on behalf of
UDCEA during the critical mid-September 1993 period. The
General Counsel’s answer characterizes these allegations as
“novel.” I find little novelty in them at all. Wright’s off-duty
status during the organizing campaign presented an issue that
has had a contentious history.
Based on Wright’s employee status, the Board and the ALJ
concluded that Section 7 protected his right to visit various
Raley’s stores where, as here, local Raley’s managers purport-
edly made no little or no effort to control access by off-duty or
offsite employees, a remarkable practice considering the large
quantities of pharmaceuticals presumably present in and around
the areas outside employees were supposedly permitted to
freely visit.17
The Board rejected the General Counsel’s contention that
Raley’s “gave discriminatory campaign access to UDCEA.” In
the Board’s view, the fact that “all of UDCEA’s active support-
ers were Raley’s employees” precluded the application of
Lechmere’s exception relating to disparate access in rival union
situations. In addition, the Board adopted the ALJ’s finding
that local store managers “could not continuously monitor all of
their store areas for [union] activity, and when pro-UDCEA
employees from other stores came to solicit local employees for
signatures, local managers did not immediately become aware
of their presence or their activity.”18 But with respect to the
critical Benicia situation, the same supervisor who told Her-
nandez to speak with Wright in an upstairs office intercepted
and ejected the Local 588 agent who appeared at the store only
a day or 2 later.
Regardless, I find that the General Counsel was substantially
justified in bringing the disparate access allegations. In my

17 In addition, the process by which a local management distin-
guishes an offsite employee dressed in street clothes from an ordinary
shopper is not at all apparent.
18 As there is an absence of a clear finding by the Board or the ALJ
identifying any other employee who solicited at a store other than their
own during the UDCEA’s organizing effort, I find the words “pro-
UDCEA employees” is a euphemistic reference to Wright and Wright
alone.
RALEY’S 897
judgment, the existing case law provided an ample basis for the
General Counsel to prosecute this issue. Thus, in Duane
Reade, Inc., 338 NLRB 943 (2003), the Board held that an
employer violates Section 8(a)(2) by permitting the nonem-
ployee organizers access to its premises during an organizing
campaign while excluding a rival union’s nonemployee organ-
izers. And in Ernst Home Centers, Inc., 308 NLRB 848, 849–
850 (1992), a case remarkably similar to this, the Board found
that an employer violated Section 8 (a)(1) by denying a nonem-
ployee union agent access to employees on its sales floor while
permitting an employee promoting a decertification petition
wide ranging access to the sales floors at several store loca-
tions.
In addition, even though Wright clearly was an employee
throughout the mid-September campaign period, he was on a
medical leave of absence and, hence off duty on a full-time
basis. For reasons detailed below, the developing Board and
court precedent applicable to the access by off-duty and offsite
employees fully warranted the General Counsel’s litigation that
implicated Raley’s unusually permissive attitude toward
Wright’s access to its stores while on leave. The General
Counsel use of disparate treatment language in casting the
complaint’s access allegations called for a rational analysis of
the legal basis for Raley’s denial of access to the Local 588
agents and, separately, a reasoned analysis for granting access
to Wright.
As noted, Lechmere certainly would explain the conclusions
reached by the Board and the ALJ as to the Local 588 agents
but the legal basis for Wright’s widespread access to the sales
floors and other areas at several stores while in a leave status is
much murkier. As illustrated below the basis for, and degree
of, access by off-duty and offsite employees, to an employer’s
property has a long and turbulent history. If in the final analy-
sis, the Board and the ALJ been determined that basis for
Wright’s access was grounded on Raley’s permissive attitude
toward him and his activities rather than on solid Section 7
grounds, then far different conclusions about the access allega-
tions and the entire case would have been compelled.19
The contentious history concerning access by off-duty em-
ployees to which I refer began with GTE Lenkurt, Inc., 204
NLRB 921 (1973). There, the Board (Members Fanning and
Jenkins dissenting) reversed an ALJ’s holding that the employ-
er violated Section 8(a)(1) by maintaining a rule barring access
to its premises by off-duty employees. The Lenkurt majority
alluded to the distinction between employees and nonemploy-
ees for purposes of engaging in union solicitation on an em-
ployer’s premises and concluded that the “status (of an off-duty
employee) is more nearly analogous to that of a nonemployee,
and he is subject to the principles applicable to nonemployees.”
(Emphasis added.) Going further, the majority described both

19 Even so, the Board and the ALJ found that store managers and su-
pervisors often lacked knowledge about the activities of Wright and his
supporters at the stores. But where the evidence shows they promptly
intercepted Local 588 organizers when they entered stores, these find-
ings implicitly involve credibility judgments favorable to Raley’s and
the UDCEA.
as “invitees” so that “one is no more entitled than the other to
admission.” 204 NLRB at 922.
But the following year in Bulova Watch Co., 208 NLRB 798
(1974), the Board began to limit Lenkurt. It held that an em-
ployer violates the Act by denying employees access to areas
outside the plant for handbilling purposes during periods short-
ly before their work shifts. Two years later, the Board conclud-
ed in Tri-County Medical Center, 222 NLRB 1089 (1976), that
Lenkurt must be narrowly construed to prevent undue interfer-
ence with the rights of employees under Section 7 to freely
communicate their interest in union activity to those who work
on different shifts, Id. Separately, Chairman Murphy specifi-
cally disagreed with the Lenkurt majority’s view that off-duty
employees are analogous to nonemployees for purposes of
restricting their access to parking lots and adjacent roadways.
222 NLRB at 1098 fn. 4.
Following the Lechmere, the Board again confronted the
Lenkurt majority’s comparison between off-duty employees
and nonemployees. In Nashville Plastic Products, 313 NLRB
462 (1993), the respondent-employer appealed the ALJ’s con-
clusion that it violated the Act by barring off-duty employees
from handbilling on its premises in areas outside the plant. The
Board rejected the employer’s contention “that the access rights
of off-duty employees equate to those of nonemployees.” Alt-
hough the Board acknowledged the Lenkurt majority made a
similar analogy, it said that it would continue to adhere to Tri-
County’s narrow construction of Lenkurt. The Board specifi-
cally rejected the employer’s contention that Lechmere applied
to off-duty employees. Lechmere, the Board asserted, only
distinguished the access rights of nonemployees from the rights
of employees as originally established in seminal case of NLRB
v. Babcock & Wilcox Co., 351 U.S. 105 (1956). As in Tri-
County, the Board upheld the ALJ’s conclusion because the
employer had barred the off-duty employees from distributing
union literature in outside areas of the employer’s plant.
More recently, the Board, in ITT Industries, 331 NLRB 4
(2000), found that an employer violated Section 8(a)(1) by
barring offsite employees from distributing union literature in
the parking lot at a sister plant not too distant from the plant
where they worked. Relying on Tri-County, the ALJ found a
violation and the Board adopted the ALJ’s decision without
comment.
When the D.C. Circuit initially reviewed the Board’s deci-
sion, it refused to enforce the ITT Industries order because of
the Board’s failure address the tresspassory character of offsite
employees entering their employer’s property at locations other
than where they worked. ITT Industries v. NLRB, 251 F.3d 995
(D.C. Cir. 2001). Accordingly, the court remanded the case to
the Board with an instruction to “consider and craft” a decision
in light of the various concerns the court noted throughout its
lengthy review of Federal access cases. The court summed up
its concerns as follows at 251 F.3d at 1004:

[T]he Board failed even to acknowledge that the question of
off-site employee access rights was an open one, i.e., that . . .
§ 7 and the [Supreme] Court’s cases are silent on the issue.
Rather, the Board decided sub silentio that § 7 guarantees all
off-site employees, whether members of the same bargaining
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 898
unit or not, some measure of free-standing, nonderivative ac-
cess rights. . . . Indeed, by applying the Tri-County balancing
test, the Board decided without analysis that trespassing off-
site employees possess access rights equivalent to those en-
joyed by on-site employee invitees. Because it is by no
means obvious that § 7 extends nonderivative access rights to
off-site employees, particularly given the considerations set
forth in the [Supreme] Court’s access cases, the Board was
obliged to engage in considered analysis and explain its cho-
sen interpretation.

During the period that this case (Raley’s) was pending on
exceptions, the Board specifically decided the issue posed by
the ITT Industries court but in another case. Hillhaven High-
land House, 336 NLRB 646 (2001), enfd. 344 F.3d 523 (6th
Cir. 2003). In Hillhaven, the Board concluded:

(1) under Section 7 of the Act, offsite employees (in contrast
to nonemployee union organizers) have a nonderivative ac-
cess right, for organizational purposes, to their employer’s fa-
cilities; (2) that an employer may well have heightened pri-
vate property-right concerns when offsite (as opposed to on-
site) employees seek access to its property to exercise their
Section 7 rights; but (3) that, on balance, the Section 7 organi-
zational rights of offsite employees entitle them to access to
the outside, nonworking areas of the employer’s property, ex-
cept where justified by business reasons, which may involve
considerations not applicable to access by off-duty, onsite
employees. To this extent, the test for determining the right to
access for offsite visiting employees differs, at least in practi-
cal effect, from the Tri-County test for off-duty, onsite em-
ployees. [336 NLRB at 648.]

The Board reasoned in Hillhaven that offsite employees were
different in important respects from persons who have no em-
ployment relationship with the employer involved such as
nonemployee union organizers. Offsite employees, the Board
noted, are “not only ‘employees’ within the broad scope of
Section 2(3) of the Act, they are ‘employees’ in the narrow
sense: ‘employees of a particular employer’ (in the Act’s
words), that is, employees of the employer who would exclude
them from its property.” Consequently, the Section 7 rights
implicated involve employees who work for the same employ-
er, rather than simply a shared interest resulting from belonging
to the working class generally or because they work in the same
industry or community. As nothing in the Act or in the Su-
preme Court’s prior access cases suggest that, as against their
own employer, the rights of offsite employees were “somehow
derivative of other employees’ rights, when they are exercised
at a location other than the customary site of employment,”
employees who seek to encourage the organization of “similar-
ly situated” employees at another employer facility seek to
further their own welfare through the strength of numbers.
Even though employees who work for the same employer may
work at different locations, they often have common, albeit not
always identical, interests and concerns related to wages, bene-
fits and other workplace issues that may be addressed through
concerted action. For these reasons the Board found that “the
Section 7 rights of offsite employees are “nonderivative and
substantial.” 336 NLRB at 648–649.
But Hillhaven also recognized that access accorded to offsite
employees could also involve distinct considerations when
accommodating the tension between employee Section 7 rights
and their employer’s property rights. Even though the Board
recognized that offsite employees might be strangers in one
sense, the existence of the employment relationship distin-
guishes them from persons who are complete strangers. Be-
cause of that relationship, the Board felt that it is easier for an
employer to regulate the employee’s conduct than it would be
to regulate a complete stranger’s conduct. But problems none-
theless abound because the employer’s control of the disputed
premises often implicates security, traffic control, personnel,
and like issues that do not arise with access by onsite employ-
ees. 336 NLRB at 649–650.
Therefore, in balancing the employees Section 7 rights with
the employer’s property interests, the Hillhaven Board con-
cluded that offsite employees should be permitted access to
outside, nonworking areas of the employer’s property, except
where justified by business reasons. But having reached that
conclusion, the Board cautioned that it would take into account
an employer’s predictably heightened property concerns and
might in certain cases limit or bar access where “the influx of
offsite employees might raise security problems, traffic control
problems, or other difficulties.” 336 NLRB at 650.
In Hillhaven, the Board’s acknowledged that an employer is
“arguably” free to define the terms of its invitation to employ-
ees so that “any employee engaged in activity to which the
employer objects on its property might be deemed a trespasser,
not an invitee.” Therefore, the balance struck by the Board’s in
Hillhaven represented its effort to heed the Court’s admonish-
ment in Babcock & Wilcox that it reconcile employees’ Section
7 rights and an employers’ property rights “with as little de-
struction of one as is consistent with the maintenance of the
other.” 351 U.S. at 112.
When a Board panel turned to the remanded ITT Industries
case, it applied the Hillhaven rationale and found those offsite
employees enjoyed a substantial “nonderivative right of access”
especially where, as there, they sought to organize a three-plant
unit. ITT Industries, 341 NLRB 937 (2004). This latter fact
caused the Board panel to conclude that the employees in ITT
Industries shared common concerns even greater than those
which existed in Hillhaven. The Board then balanced the em-
ployer’s property concerns, grounded on security and past in-
stances of vandalism, against the offsite employees’ access
rights and concluded (with Chairman Battista dissenting) that
the employer’s concerns did not justify its total ban on their
handbilling in the plant parking lot. Subsequently, the D.C.
Circuit enforced the Board’s order based on its supplemental
decision. ITT Industries v. NLRB, 413 F.3d 64 (2005).
Arguably, Wright’s wide ranging access in mid-September
1993 to store interiors and nonpublic areas cannot by explained
by the rationale in ITT Industries and Hillhaven. Despite the
unique circumstances arising from his lengthy leave during that
period, the Board and the ALJ appear to have treated him virtu-
ally as an on-duty employee throughout that period. Of course
had it been concluded that the degree of access accorded him
did not flow from some basis grounded in Section 7 but rather
from the employer’s leniency toward him because it favored his
RALEY’S 899
activities, the outcome would necessarily have favored the
General Counsel. However, the Board seemingly lumped
Wright with all other employees and concluded on the basis of
the type of access previously accorded them in other contexts,
they enjoyed a Section 7 right of access to Raley’s sales floors
and back area anywhere, anytime even though it strictly con-
trolled access by the Local 588 organizers, Local 588 grocery
clerks, and former IDCA officers. Regardless, considering the
General Counsel’s important role as the gatekeeper in the de-
velopment of national labor policy, I find he was substantially
justified in litigating the access issues presented by these pecu-
liar facts.
c. The late fee issue
The General Counsel argues that these allegations presented
a “close question.” involving “difficult legal issue which neces-
sitated a protracted analysis by the judge.” The Respondent
argues that the cases relied upon by the General Counsel had
been “superseded.” The ALJ candidly stated that the resolution
of the question presented by the late fee allegations was “par-
ticularly murky” and “may depend on which cases you read.”
The General Counsel’s principal theory underlying the alle-
gations that the UWRU (f/n UDCEA) and Raley’s violated the
law when they threatened to enforce the contractual union-
security provision in 1994 (complaint pars. 32 and 33) col-
lapsed with the dismissal of the allegations about coercion and
assistance during the mid-September organizing drive. The
ALJ specifically found these allegations fell because:

I have earlier concluded, in substance, that the General
Counsel failed to rebut that presumption, i.e., failed to es-
tablish any credible factual or legal basis for finding that
UDCEA’s majority-showing on which the recognition was
based was the “tainted” product of “coercion” or any other
form of unlawful “assistance” by Raley’s. Thus, the
recognition was lawful, and it created a lawful 9(a) rela-
tionship between Raley’s and the new union, one in which
the parties were legally free to enter into a labor agreement
containing a union-security clause, and to “maintain” and
“enforce” the clause. Accordingly, all counts are dismissed
which allege either unlawful “maintenance” of a union-
security agreement by the respondent parties, or which
suppose that routine acts of enforcement of the agreement
were unlawful because Raley’s and UWRU had no right to
enter into or maintain the agreement in the first place.
[Raley’s, 348 NLRB 382, 539 (2006).]

But even assuming the lawfulness of the union-security pro-
vision, the General Counsel also claimed that the UWRU’s
effort to collect the late fee using that mechanism was unlawful.
On this point, the analytical focus by the Board and the ALJ
centered the language in Section 8(a)(3) that exempts union-
security agreements from the general union-based discrimina-
tion prohibition. That exemption is made up of two provisos.
The second proviso was at the core of this allegation. It effec-
tively prohibits the discharge of an employee under a union-
security contract if the employer has reasonable grounds for
believing that (the employee’s union) membership was termi-
nated for reasons other than the failure of the employee “to
tender the periodic dues and initiation fees uniformly required
as a condition of acquiring or retaining membership.” Where
all of the statutory criteria are met and the union meets its fidu-
ciary obligations to the employee, then it may enforce the pay-
ment of the requisite dues and fees required by demanding that
the employer terminate the dues-delinquent employee. If the
fine or assessment lacks the uniform and periodic character
required by the statute, then the union is usually left to collect
that type of membership obligation elsewhere, typically in the
state courts. Operating Engineers Local 542C (Ransome Lift),
303 NLRB 1001, 1003 (1991).
The UWRU justified its reinstatement surcharge or late fee
on the ground that it always had been an integral and uniform
part of its periodic dues structure. Its function, as distinguished
from its form, the UWRU argued, was no different from that
served by certain dues-discount programs previously approved
by the Board. The ALJ agreed and concluded that the
UWRU’s late fee, uniformly assessed against all employees
who failed to pay their dues on time, was analogous to the dues
discount provisions upheld in previous Board cases.
The Board adopted the ALJ’s result with an overt reference
to the discount analogy. Instead it simply found that the late
fee was not a penalty or an assessment but rather a legitimate
component of “periodic dues” within the meaning of Section
8(a)(3). Because the Board felt that the amount of the late fee
($5 per month) was “not disproportionate to the cost the
(UWRU) incurred in collecting late dues and was not an arbi-
trary, excessive, or irregular,” it did not fall outside the protec-
tion of Section 8(a)(3).
The Board cited three cases for its conclusion. In one, Retail
Clerks Local 322 (Ramey Supermarkets), 226 NLRB 80 (1976)
(the Local 322 case), the Board adopted without comment the
ALJ’s conclusion that the union could lawfully threaten to seek
the discharge of a “financial-core” employee under a union-
security agreement where the employee refused to pay a $50
“reinitiation fee” uniformly charged all unit employees who
failed to pay dues for 3 months or longer. Even the ALJ stated
that “[t]he legal situation with respect to the reinitiation fee is
not so clear” where, as in that case, the fee would not be an
incident to acquiring membership or the benefits of member-
ship. But ultimately the ALJ found that efforts to collect the
reinitiation fee lawful even as to nonmembers because it was a
charge the union “uniformily” levied on everyone after they
became 3 months delinquent in their dues payments. 226
NLRB at 91. Although the ALJ cited precedent for the propo-
sition that a union could lawfully charge a union member a fee
to regain lost membership, he cited no precedent for applying a
similar result to financial-core employees.
The Board also cited Teamsters Local 959 (RCA Service
Co.), 167 NLRB 1042 (1967) (the Teamsters Local 959 case)
and Machinists Lodge 1345 (Cobak Tool), 157 NLRB 1020
(1966) (the Machinists Lodge 1345 case), both discount cases.
In the Teamsters Local 959 case, the Board held that the un-
ion’s scheme discounting regular dues by 30 percent if paid 15
days early to be lawful; in the Machinists Lodge 1345 case, the
Board affirmed a trial examiner’s conclusion that a 6-percent
discount for prompt dues payment did not amount to an unlaw-
ful penalty against those who failed to qualify for the discount.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 900
Obviously, the Board and the ALJ rejected the General
Counsel’s contention that Raley’s and the UWRU violated the
Act by using the union-security clause to compel payment of
the UWRU’s late fee because it failed to meet the statutory
definition of “periodic dues and initiation fees uniformly re-
quired.” But I find the General Counsel reliance on the Board’s
decision in the Great Atlantic & Pacific Tea Co., 110 NLRB
918 (1954) (the A & P case) to be reasonable and justified.
Despite Respondent’s claim that the case has been superseded,
it has never been overruled.
A & P held that the use of the union-security clause to collect
a $1 surcharge against members who did not pay their dues for
more than a month unlawful. The Board found the added
charge, mandated by the union’s constitution, was not periodic
by nature because it was intermittently imposed, i.e., whenever
an employee failed to pay dues on time.20 For that reason, the
Board concluded that the surcharge amounted to a “punishment
for the nonpayment of dues on time.” Arguably the $5-per-
month charge here is indistinguishable from the A & P sur-
charge, save for an inflation adjustment. In fact, even the ALJ,
in adopting the UWRU’s argument stated that “both dues-
discount programs and delinquency surcharge programs com-
monly serve a twofold function, both as an incentive to timely
payment and as a disincentive to delinquency.”
But the final result in a subsequent, related case, Bakery
Workers Local 12, 115 NLRB 1542 (1956), enfd. denied 245
F.2d 211 (3d Cir. 1957) (the Local 12 case) found the technical
difference between a discount and a surcharge to be controlling.
The Local 12 case involved the same union that appeared in the
A & P case. By the time the second case came along, Local 12
had increased its standard dues by $1and added a provision
granting members a $1 discount for the timely payment of dues.
But the Board (Members Murdock and Peterson dissenting)
reached the same result as it had in the A & P case. The ma-
jority reasoned that the union’s discount scheme essentially
included the problematic assessment or fine found in the earlier
case as a part of its regular dues structure.
The court of appeals refused to enforce the Board’s order in
the Local 12. It distinguished the discount case from the sur-
charge case (A & P) on the ground that the discount scheme
met the “technical requirements” of Section 8(b)(2) whereas, by
implication, the surcharge case did not. The court’s opinion
finds no fault whatever with the Board’s decision in the A & P
case. Rather, it went to some length to explain that the Board
simply added a surcharge for failure to pay dues in a timely
manner to a growing list of other intermittent assessments that
cannot be collected through the “medium of an existing union-

20 The union’s constitution in that case required members to pay
their dues by the end of the month or be subject to a $1 assessment.
The constitution also provided that members who failed to pay the
delinquent dues plus the assessment by the middle of the following
month “will then be removed from their jobs.” The case arose when A
& P terminated an employee that Local 12 reported as 2 months delin-
quent in the payment of dues and the added assessment.
security contract,” i.e., fines for engaging in dual unionism,
fines for failing to attend union meetings, and fines for refusing
to picket. Accordingly, I find the General Counsel could quite
reasonably and very logically to read the court’s opinion as
saying essentially this: surcharges for the failure to pay dues on
time do not meet the “technical requirements” of Section
8(a)(3) and 8(b)(2); a discount for paying dues on time does
meet those “technical requirements.”
No doubt the UWRU’s contention, which the ALJ and the
Board effectively adopted, that its surcharge serves the same
purpose as the approved discounts has a certain practical ap-
peal. But this argument is not without shortcomings, not the
least of which is that the surcharge uniformity is grounded on
the fact that it is written into the union’s governing documents.
Arguably, according significant weight to that factor poses a
clear threat to the continued vitality of the second union-
security proviso in Section 8(a)(3) as it would mean that unions
could avoid the consequences of that proviso by simply writing
a designated fine directed at unwanted behavior into their by-
laws and restrain employees at will. And no one should be
surprised if lexicologists scorned the discount/surcharge analo-
gy as comparable to a straight line/twisted pretzel analogy.
Regardless, using the scale established by the Martinez
court, I find the clarity of guiding precedent would rank quite
low. For that reason and the fact that A & P has never been
overruled, I have concluded that the General Counsel’s prose-
cution of the reinstatement or late fee issue to have been sub-
stantially justified under EAJA.
3. Summary of findings
To summarize, the Applicant is not a prevailing party as to
the allegation in paragraph 27(b) of the third amended consoli-
dated complaint. In addition, the General Counsel was substan-
tially justified in bringing the other allegations that pertained
directly to the Applicant or that sought to affect the status or
interests of the Applicant. Therefore, I conclude that the appli-
cation should be dismissed in its entirety. Having reached these
conclusions, consideration of the parties’ contentions about
specific fees or costs submitted with the verified application is
unnecessary.
CONCLUSIONS OF LAW
1. The Applicant is a labor organization within the meaning
of Section 2(5) of the Act.
2. The Applicant is a association qualified as a “party” un-
der 5 U.S.C. § 504(b)(1)(B)(ii).
3. The Applicant is not a prevailing party within the mean-
ing of 5 U.S.C. § 504(c)(1) as to paragraph 27(b) of the third
amended consolidated complaint issued in this proceeding.
4. The General Counsel’s allegations in the fourth consoli-
dated amended complaint, insofar as they pertained to the Ap-
plicant or sought to affect the Applicant’s status under Section
9(a) of the Act or its other interests, were substantially justified
within the meaning of 5 U.S.C. § 504(c)(1).
RALEY’S 901
Based on the foregoing findings of fact and conclusions of
law, I issue the following recommended21

21 Pursuant to NLRB Rules and Regulations Sec. 102.48(a) the
Board will adopt these findings, conclusions, and recommended Order
absent the filing of timely and proper exceptions as provided under
NLRB Rules and Regulations Sec. 102.154, and all objections and
exceptions to them will be deemed waived for all purposes.
ORDER
The application for allowable fees and costs under the Equal
Access to Justice Act filed by the United Wholesalers and Re-
tailers Union is dismissed in its entirety.