Frisch's Big Boy Ill-Mar, Inc.

National Labor Relations Board - Board Decisions

Jun 19, 1964

147 N.L.R.B. 551 (N.L.R.B. 1964)

FRISCH'S BIG 'BOY ILL-MAR, INC. '551
Frisch's Bib Boy Ill-Mar, ' Inc. and Hotel , Motel , Cafeteria &
Restaurant Employees '& Bartenders Union, Local No. 58,
AFL-CIO, affiliated with Hotel & Restaurant Employees and
Bartenders International Union , AFL-CIO, Petitioner. Case
No.- 25-RC=f2410. June 19, 1964
DECISION ON REVIEW
On July 17, 1963, the Regional Director for the Twenty-fifth Region
issued a Decision ;and Direction of Election in the above-entitled pro-
ceeding, directing an election in a unit of all regular and regular
part-time employees at the Employer's restaurant located at 51 North
Illinois Street, Indianapolis, Indiana. Thereafter, the Employer, in
accordance with Section 102.67 of the Board's Rules and Regulations,
Series 8 , as amended, filed with the Board a timely request for review
of such Decision and Direction of Election. The Petitioner filed a
brief in opposition to the request for review. On July 15, 1963, the
Board granted the request for review.
The Board has considered the entire record in this case with respect
to the Regional Director's determination under review, and makes the
following findings :
In its request for review the Employer contends that the single
restaurant unit sought by the Petitioner sand in which the .Regional
Director directed, an election is not appropriate for bargaining. It
asserts that.the only appropriate unit should include all 10 of, its
restaurants which it owns and operates in Indianapolis. We find no
merit in this position.
In Sav-On Drugs, Inc.,-138 NLRB 1032,,the Board reexamined its
unit policy in the retail•chain industry and decided, for stated reasons,
to abandon its prior general policy-of making unit determinations in
that industry coextensive with the employer's administrative division
or the involved geographic area. ' The Board there affirmatively stated
that it would apply to retail chain operations the same unit policy that
it applies to multiplant enterprises in general, that is, the Board will
determine the appropriateness, or want.thereof, of a proposed unit
1 We do not agree with our colleagues ' Interpretation of. the Board ' s decision in Sav-On
Drugs, supra, which they apparently construe as holding that. the Board . will presume.all
stores in an administrative division or geographical area to constitute an appropriate unit
unless grounds are shown for establishing a smaller appropriate unit. No such presump-
tion exists . Rather, the Board there abandoned the approach that a multistore unit alone
could be appropriate and adopted the view that the general unit criteria should apply to
retail store units. Under such criteria a.single-plant unit is presumptively appropriate
unless it be established that the single plant has been , effectively , merged into a more
comprehensive unit so as to -have lost its individual identity . Weis Markets, Inc., 142
NLRB 708, 710; Dixie Belle Mills , Inc.,.a Wholly-Owned Subsidiary of Bell Industries,
Inc.,, 139 NLRB 629, 631 . We find no compelling reasons to override the presumption that
the single -store unit sought is appropriate.
147 NLRB No. 61.
552 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
confined to one of two or more retail establishments in a chain, not by
any rigid yardstick, but in the light of all the relevant circumstances of
the particular case.
The Employer's operation includes 10 restaurants in Indianapolis
and an 11th in Muncie, which is about 60 miles from Indianapolis. All
restaurants are commonly owned, although separately incorporated,
and operated under franchises granted by Frisch's Big Boy, Inc., a
multistate corporation doing business in the States of Ohio, Kentucky,
Indiana, and Florida. The franchise agreement, among other things,
permits the Employer to use the name "Frisch's" in its business and
requires that menus, uniforms, marked paper goods, and some food
items bpurchased from a commissary operated by the franchising
company. Other food products-meat, bread, and produce-are pur-
chased directly from the supplier by each restaurant manager. The
receipts for these purchases are sent to the Employer's general office,
where payrolls, accounts, and other records are maintained separately
for each restaurant by two clerical employees.
There are 282 employees in the 10 restaurants located in Indianapolis,
varying from 12 employees at the smallest restaurant to 48 at the one
sought by the Petitioner. Although employees are temporarily trans-
ferred or loaned among the restaurants as business needs require, such
transfers appear to be minimal. The figures provided by the Employer
reflect that the transfers average approximately eight employees a
week, thus involving during a weekly period only about 3 percent
of the total number. The length of each such transfer is usually less
than a day.
Employees may also be permanently transferred at their request to
another restaurant, but it is within the discretion of the manager to
decide whether the transferred. employee will retain his seniority for
purposes of layoff, or for computing his vacation and Christmas bonus
benefits. If such an employee is not in the "good graces" of the Em-
ployer, he will be treated in effect as a newly hired employee.
The Employer's president prescribes the general overall policies
for the entire operation, but delegates to four supervisors the re-
-sponsibility of making periodic rounds of the restaurants. The res-
taurant managers, however, are responsible for the day-to=day opera-
tion of their establishments. And, in 'addition to purchasing food
items, they also have the authority to hire, fire, and discipline
employees.
There is no history of bargaining for any of the restaurants and no
labor organization is seeking the overall operation.
It may well be that the optimum unit for collective bargaining
would be citywide in scope, but this does not preclude the Petitioner
from seeking representation in a smaller unit if, as we find here, the
FRISCII'S BIG BOY -ILL-MAR, INC. 553,
smaller unit, standing alone, is under all the circumstances also appro-
priate for the purposes of collective bargaining.'
Upon consideration of the entire record, including particularly
the substantial degree of autonomy that exists at each restaurant, re-
flected in the control each manager exercises in the day-to-day opera-
tion of his establishment; I the minimal interchange of employees; the
absence of any bargaining history; and the fact that no labor organiza-'
tion is seeking a larger unit, we are satisfied that the requested single-
restaurant unit constitutes an appropriate unit which will "assure to.
employees the fullest freedom in exercising the rights guaranteed
by the Act." We find nothing in this record to support the evaluation
by our dissenting colleagues of the impact upon employees at the other-
restaurants of contract terms secured by a union selected by employees
of a single restaurant. That a striking union might picket any or all
locations is of no consequence; such a situation might arise in any
multiplant operation. Nor do we find in this record such evidence a&'
convinces us that the employees have sufficient interests in common, let
alone the complete ideintity'of interests that our dissenting colleagues
infer, to require finding only the broader unit appropriate. Accord
ingly, we agree with the Regional Director that the unit requested by
the Petitioner is appropriate.
In view of the above, the case is hereby remanded to'the Regional.
Director for the Twenty-fifth Region for the purpose of holding an
election pursuant to his Decision and Direction of Election, except.
that the eligibility date shall be the payroll period immediately pre-
ceding the date above.
MEMBERS LEEDOM and JENKINS, dissenting :
The Employer operates a chain of 10 restaurants in Indianapolis,.
Indiana.4 Each of these restaurants operates under the name of
"Frisch's Big Boy"; they all sell the same food from the same menu
and operate in essentially the same manner; and, as described more
2 Dixie Belle Mills, Inc., supra.
8 Contrary to the implication of the dissenting opinion, the record does not establish such
close daily control of all phases of the operations as to indicate total merging of all the
Employer's restaurants in the city. Instead, it appears that basic policy is established
and general procedures and rules adopted for all stores , but the day-to-day application is
left to each manager . Further, the fact that each manager is required to make purchases
from a central commissary operated by the franchising company-a condition imposed by
the franchising company, not the Employer, and relied on heavily by our dissenting col-
leagues-does not require that a multistore unit be found appropriate. Rather this re-
quirement, which was a condition of granting the franchise and presumably applies to all
franchise holders, would more logically lead to the conclusion that all Frisch's restaurants
in the four-State area must be held a single unit for bargaining purposes , regardless of the
fact that they have no ownership or control in common.
4 The Employer also operates a restaurant in Muncie , Indiana, 60 miles from Indianapo-
lis. However , this restaurant is not directly involved in this proceeding and the Employer
agrees that the employees working there may possibly constitute a separate appropriate
unit.
554 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
fully below, each restaurant manager's authority is limited, and there
is a significant amount of interchange among the employees in all the
restaurants, and these employees have identical terms and conditions of
employment. The Petitioner seeks to represent a unit limited to the
employees of one of these restaurants. Unlike the majority, we be-
lieve that the single unit.is inappropriate,. and we would therefore
dismiss the. petition.
The Board has traditionally held in cases involving. retail chain-
store operations that, absent unusual circumstances, the appropriate'
unit should embrace employees working at all stores located within
an employer's administrative division or.geographical area5 In Sav-
On Drugs, Inc.,' the Board modified this rule to the extent of finding
that "whether a proposed unit which is confined to one of two or more
retail establishments making up an employer's retail chain is appro-
priate will be determined in the light of all the circumstances of the
case." [Emphasis supplied.]'- In the course of finding in that case
that a separate unit of employees of the employer's Edison, New
Jersey, store was appropriate, the Board made clear that it was relying
particularly on the geographical separation of the Edison store from
other stores in the chain, 'the substantial -authority of the store man-
ager, and the minimum interchange of employees between the Edison
store and other stores. We believe that those very factors .relied on
by the Board in Sav-On require the conclusion here that the, single-
restaurant unit is inappropriate. -
As to the geographical separation, all 10 of the Employer's 11
restaurants are located within a few blocks of one another. These facts
are in marked contrast to Sav-On, where seven of the stores were lo-
cated in separate communities in' northern New Jersey, two were
located in 'Staten Island, New York, and the various stores were sepa-
rated by distances ranging from approximately 5 to 65 miles.
As to the authority of the restaurant manager, the Employer's en-
tire operation is under the general supervision of the president who
determines overall policy for the restaurant chain, including person-
nel policies. There is also a supervisor of cleanliness who directs
8 See, for example , Robert Hall'Clothes, Inc., 118 NLRB 1096. This rule has also been
applied to restaurant chains. See Frank G . Shattuck , 106 NLRB. 838.
6 Sav-On Drugs , Inc., 138 NLRB 1032.
7 The majority incorrectly reads the Board's decision in Say -On Drugs, supra, as hold-
ing that single-store units are presumptively appropriate . In this connection , we point to
footnote 4 of that decision in which the Board clearly says that it had "simply added the
possibility-as in manufacturing and other multiplant enterprises-that a single ' location
or a grouping other than an administrative division or geographical area may be appro-
priate." [Emphasis supplied .] Our interpretation is further borne out by the Board's
decision in Weis Markets, Inc., supra , cited by the majority, where the Board, quoting
the above language from Sav -On Drugs, Inc ., supra, said : "It has long been the policy of
the Board to find that the appropriate bargaining unit in retail chain operations should,
embrace the employees of all stores within an employer's administrative or geographical
area. The Employer 's contention that the Board's decision in Sav - On Drugs, Inc., supra,
abandoned .that rule is without merit." [Footnctes omitted.]
FRISCH'S BIG BOY ILL-MAR, INC. 556
sanitary activities for all 11 restaurants, and 3 area supervisors, each
of whom is responsible for supervising the operations of 3 or 4 restau-
rants. Each, of, these area supervisors has the right to hire. and dis-
charge employees. While each of the restaurant managers may hire.
employees, they do so only within the minimum and maximum hiring
rates established by the president and any deviation from these rates
must be approved by the area supervisors. Further, before an ap-
plicant can be hired, the restaurant manager must check his name
against the list of "untouchables," that is, those employees who were
unsatisfactory at another of the Employer's restaurants. And, al-
though the restaurant manager is authorized to make purchases of
certain products, he is required to purchase menus, uniforms, marked
paper goods, and some food products from the commissary operated
by the franchising company in Cincinnati. Here again, these facts
are markedly different from those in Sav-On. ,Thus, the managers
in that case had complete hiring authority with respect to part-time
employees, hired full-time employees, subject only to the approval of
the division manager; made all purchases of merchandise for their own
stores from a list of companies approved by the division manager; and
generally decided what and how to advertise. Finally, unlike the in-
stant case, there was no central warehouse for the Sav-On chain.
As to interchange of employees, the record shows that they are
loaned on a temporary basis from one restaurant to another because
of employee absenteeism or seasonal business fluctuations; that, in two
1-month periods during the past year, out of: a total employee com-
plement of approximately 300 employees, there were 83 loans from one
restaurant to another for periods ranging from 4 to 16 hours; and that
employees, at their own request, may be permanently transferred'
to another restaurant. These facts again emphasize the difference be-
tween'this case and Sav-On, where the Board held that transfers be-
tween stores were "infrequent, mainly for relief work and emer-
gencies." Indeed, in Sav-On, the greatest interchange of 'employees
occurred in 1961, when during the entire year, 26 employees were trans-
ferred temporarily to assist in the opening of 2 new stores.
The unitary nature of all 10 stores is further demonstrated by the
record. Thus, employees at all restaurants are paid according to-the
same pay levels and receive the same fringe benefits; the two classi-
fications of helpers and waiters exist at all restaurants and, at all but'
three restaurants, which do not have drive-in service, an additional
classification of carhop exists; all employees work in 8-hour shifts for
a maximum of 6 days a week; the Employer has 'a central office in
Indianapolis, where the records, books, and payrolls of each restaurant
are maintained; the two clericals and a comptroller who are employed
at this office perform work relating to all the restaurants; the restau-
rant managers forward sales receipts directly to the central office and
556 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
send invoices there for payment; and a warehouse is located adjacent
to the central office, where one maintenance man is employed who,
makes rounds of the restaurants to maintain equipment or to bring it
to the warehouse for repairs.
This case presents us with what is, in fact, a single establishment.
All 10 restaurants are located in Indianapolis and are elements' of the
Employer's single administrative operation. All 10 restaurants op-
erate under the same name, sell the same foods from the same menu,.
and interchange employees among themselves. All employees come•
from the Indianapolis area labor market. Every managerial decision,
must be taken with the greatest regard for the peculiarities of that
locality's economic situation. A uniform policy for all restaurants
is essential to the employer's pricing and competitive considerations.,
For this Employer, these individual units in the chain constitute but a
single economic unit. Indeed, to the patrons of the chain and to the
entire community, one store is much like another since they all op-
erate under the same name, in the same manner, and perform the same
functions. In sum, therefore, the cluster of stores in one geographic
area is most comparable to the single-plant unit and should, by the
same token, be presumptively appropriate.
The same is true for the employees involved. Their wages, hours,
and working conditions are identical now and collective bargaining by
a small portion of them cannot but affect the others. As a result of to-
day's decision, the latter group is denied the choice of an agent through
which they may discuss and agree upon solutions and grievances which
they find important.
Although the majority agrees that the "optimum" unit for collective
bargaining would, in this case, be citywide in scope, it finds the single-
restaurant unit appropriate essentially on the ground that the Peti-
tioner seeks to represent only the employees in the smaller unit.' But
since, as we have shown, no other factors support the appropriateness
of the single restaurant, this determination rests solely on the Peti-
tioner's extent of organization, a result which is specifically forbidden
by Section 9(c) (5) of the Acts In this connection, it should be em-
phasized that this case is unlike such cases as P. Ballantine cC Sons, 141
NLRB 1103,9 where the Board found the smaller unit appropriate on
the ground that to require employees to organize only in the employer's
"vast multistate operations" would effectively deny them the statutory
rights of- self-organization and bargaining. Here, however, all of
8 Section 9 ( c) (5) provides : "In determining whether a unit is appropriate for the pur-
poses specified in subsection (b) the extent to which the employees have organized shall
not be controlling ." See Metropolitan Life Insurance Co. v. N.L.R.B., 327 F. 2d 906
('C.A. 1), and Singer Sewing Machine Company v . N.L.R.B ., 329 F. 2d 200 (C.A. 4).
9 See also Joseph E. Seagram & Sons, Inc., 101 NLRB 101.
FRISCH 'S BIG BOY ILL-MAR, INC. .557
the Employer's stores are within a single city. It obviously would not
be unreasonable to require the Union to undertake representation of
the employees in the more comprehensive unit.
The majority argues that the result it reaches will "assure to em-
ployees the fullest freedom in exercising the rights guaranteed by the
Act." We believe that the majority decision will have precisely the
opposite effect. As noted, the president sets the wages and makes
all personnel decisions for all employees in the chain and they all have
identical terms and conditions of employment. It is apparent, there-
fore, that for the purposes of collective bargaining, there is a com-
plete identity of interest among the employees in all the restaurants.
In consequence, the contract terms with the union selected by the em-.
ployees in the single-restaurant unit will undoubtedly have a potent
impact on the terms and conditions of employment of all other em-
ployees in the chain.10 Further, under the Board's decision in
Alexander Warehouse f Sales Company, 128 NLRB 916, if the em-
ployees in the single-restaurant unit have -a dispute with the Employer
.and go on strike, they may lawfully picket any of the restaurants in
the chain, even though the union does not represent employees in such
other unit. In other words, under the majority decision, although
the employees in the single-restaurant unit alone are entitled.to vote
as to whether the Petitioner should represent them, this vote will be
an effective determinant in the labor relations pattern for other em-
ployees in the chain who have had no voice in deciding whether or
not they wished to be represented by the Petitioner.
Today a majority of the Board, under the rubric of providing em-
ployees with the "fullest freedom" in exercising the rights guaranteed
by the Act, in fact prevents an overwhelming majority of employees
from exercising the rights which Congress has bestowed upon them.
In this decision the Board withholds what it professes to give. The
principle of "fullest freedom" for all employees is not well translated
when the desires of a small minority are permitted to control the in-
terests of the affected majority.
We are persuaded that the only basis for granting the unit sought
is the extent of Petitioner's organization. Accordingly, we would
dismiss the petition herein.
10 The majority states that there is no record testimony supporting this conclusion. But
we think it apparent on the basis of economic realities that wage rates of employees of
• one restaurant will have an "impact" on those of employees working in other restaurants
in the same chain and located in the same city. Nor can we understand the majority's
singular lack of concern with the fact that picketing by the Union of any restaurant in
the chain - would serve to further disrupt the business activity of the Employer, cause
economic hardship to employees whom it does not represent , and interfere with the right
of the public to patronize these other restaurants . Nor does the fact that the same situa-
tion may arise in a multiplant context serve to lessen our concern here.