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National Labor Relations Board v. Community Shops Inc.

April 5, 1962


Author: Swygert

Before HASTINGS, Chief Judge, KNOCH and SWYGERT, Circuit Judges.


The National Labor Relations Board seeks enforcement of an order against Community Shops, Inc., based on a decision in which it found that Community violated Section 8(a)(3) and (1) of the National Labor Relations Act, as amended, 29 U.S.C. ยงยง 158(a)(3) and (1),*fn1 by adopting a rehire formula in 1959 which unlawfully discriminated against certain employees who had engaged in an economic strike during the previous year.

Community has engaged in the business of baking fruit cakes since 1942. Originally the fruit cake business was a side line to Community's operation of a number of retail bakery stores in Chicago but in 1959 the retail stores were sold and Community has since engaged exclusively in the baking of fruit cakes. The business is seasonal, commencing between May and July and terminating in December.

In 1958, when sufficient orders had accumulated, the fruit cake business was established as a separate operation at Community's Western Avenue plant. A majority of the fruit cake production employees were unskilled, hired "off the street," and at the close of the season all but a few of these employees, who were needed for clean-up and repair, were discharged.

In mid-July, 1958, as in prior years, Community made no effort to contact employees who had previously worked for it on a seasonal basis although, as the president of Community testified, it was "more receptive to hiring a good former employee . . . than a person off of the street without any experience." In fact approximately thirty per cent of the employees hired in 1958 had worked for Community in former years.

In the fall of 1958 two labor unions, Local 2*fn2 and slocal 15,*fn3 began to compete for the right to represent the production and maintenance employees of the Western Avenue plant.

On September 20, 1958, Local 15 called a strike, characterized by the Board as an "economic strike." Approximately fifty employees joined the strike. By hiring replacement employees, however, Community was able to operate without interruption. When the strike ended November 11, 1958, all strikers who applied were reinstated.

The Board conducted an election in December, 1958 to determine which of the rival unions should represent the employees. Local 15 charged that Community interfered with the election by assisting Local 2. The charge resulted in the election being set aside pursuant to an agreement between Community and the Board. The Board ordered a new election held during the 1959 season.

The second election in August, 1959 was won by Local 2. Local 15 then filed objections to the second election based in part on Community's alleged discriminatory rehire formula for the 1959 season.

The attacked rehire formula which Community adopted in April, 1959 was, as to it, novel. The Trial Examiner for the Board made the following finding concerning the formula:

"The Respondent had not established any seniority system prior to the end of the 1958 season. In April, 1959, certain Community officials met to decide on a method for hiring employees for the 1959 season. They first considered rehiring past employees on the basis of merit. This was discarded because, as the Respondent kept no permanent records pertaining to performance, there was no point of reference other than memory. Therefore, it was felt that such a system might give rise to numerous objections from individual employees of the two competing Unions. The next suggested method of hire was to rehire old employees in order of their first date of hire. This also was rejected on the grounds that 'there had been too much intermittent working' and that it 'could lead to . . . greater problems than perhaps some other methods might bring about.' The criteria finally adopted for determining hiring for the 1959 season were as follows: Former employees who had worked for the Respondent prior to 1958 were given preference over those who had worked for the Respondent only during the 1958 season. Those who had worked only during the 1958 season were to be selected for rehire in order of their length of 'actual working experience' during the 1958 season. In determining the length of 'actual working experience,' only time actually worked was to be considered, regardless of the reason for absence. Thus, time during which an employee did not work because he was on strike, was ill, was laid off, or was absent for any other cause was to be disregarded."

In accordance with this new rehire formula Community gave no credit to the striking employees for the weeks they were on strike in 1958 when considering their priority to being rehired in 1959. The Board found that "15 strikers lost from one week to six months of employment during the 1959 season solely because the Respondent on the basis of its newly created seniority formula either refused to rehire or delayed in rehiring these employees."

The Trial Examiner sustained the charge that Community had engaged in an unfair labor practice within the meaning of Section 8(a)(1) and (3), supra, on the basis that its 1959 rehire formula was per se discriminatory to the striking employees. ...

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