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National Labor Relations Board v. Chicago Health & Tennis Clubs Inc.

decided: December 2, 1977.


On Application for Enforcement of Orders of the National Labor Relations Board.

Swygert and Bauer, Circuit Judges, and William J. Campbell, Senior District Judge.*fn1

Author: Swygert

SWYGERT, Circuit Judge.

In the two cases before us, the National Labor Relations Board ("the Board") petitions for enforcement of its orders directing each of the respondents to cease and desist from refusing to bargain collectively with the union which had been certified as the exclusive bargaining representative.*fn2 These two cases have been consolidated for this opinion because they present the identical legal issue: whether the Board abused its discretion in certifying a single retail store as an appropriate unit for collective bargaining where such store constitutes only one of a chain of stores owned and operated by the company in the Chicago metropolitan area. For the reasons set forth, we grant the petition in Chicago Health Clubs and deny enforcement in Saxon Paint.


(A) Parties

No. 77-1227. Chicago Health & Tennis Clubs is an Illinois corporation engaged in the sale of club memberships and providing services of exercise, tranining and weight loss counseling for its members. It operates sixteen clubs in the Chicago metropolitan area (Chicago and suburbs). Its central office is located in Chicago's central business district and all clubs are within a 28-mile radius of this office.

No. 77-1504. Saxon Paint & Home Care Centers is an Illinois corporation engaged in the retail sale of paint, wallpaper, and home decorating supplies. It owns and operates twenty-one stores in the Chicago metropolitan area (Cook County). In addition, Saxon has seven other stores in Illinois, Indiana, and Wisconsin. Although these seven stores are operated by separate corporate entities, they are owned in part by the same stockholders and are operated through a single managerial hierarchy. All of the Chicago metropolitan area stores are within a 30-mile radius of each other.

(B) Procedural History

The procedural history of the two cases is similar and therefore a single description suffices. The proceeding began when the Retail Clerks Union, Retail Clerks International Association, AFL-CIO-CLC*fn3 filed a petition for representation seeking a unit limited to the employees of a single store in the company's chain. The company opposed the petition, contending that the only appropriate unit could consist of all its employees working in all its chain stores in the Chicago metropolitan area. Following a hearing, the Regional Director found that a single store constituted an appropriate bargaining unit. The Board denied the company's request for a review of the Director's decision.*fn4

An election was held in which a majority of the employees designated the Retail Clerks Union as their collective bargaining agent. The Director certified the union as the exclusive bargaining representative and shortly thereafter the union requested the company to bargain. The company refused on the grounds that the unit found by the Board was inappropriate. The union then filed an unfair labor practice charge, alleging an unlawful refusal to bargain. Complaints issued and in its answer the company admitted its refusal to bargain, reasserting the inappropriateness of the designated unit.

The Board granted the General Counsel's motion for summary judgment,*fn5 finding that each company violated section 8(a) (1) and (a) (5) of the Act by refusing to recognize and bargain with the union.*fn6 On these two petitions for enforcement, each company reasserts its challenge to the unit determination. Since the companies defend solely on the grounds that the unit determinations were inappropriate, and since they concede that they refused to bargain, it is undisputed that the companies violated section 8(a) (1) and (a) (5) of the Act if the Board's unit determinations were correct. See NLRB v. Frisch's Big Boy Ill-Mar, Inc., 356 F.2d 895, 897 (7th Cir. 1966).


The primary responsibility for determining the appropriateness of a unit for collective bargaining rests with the Board. It is given broad discretion in determining bargaining units "to assure to employees the fullest freedom in exercising the rights guaranteed by [the Act]." 29 U.S.C. § 159(b). The Board is not required to select the most appropriate bargaining unit in a given factual situation; it need choose only an appropriate unit within the range of appropriate units. Wil-Kil Pest Control Co. v. NLRB, 440 F.2d 371, 375 (7th Cir. 1971). It follows that Board unit determinations are rarely to be disturbed. South Prairie Construction Co. v. Local No. 627, International Union, 425 U.S. 800, 805, 96 S. Ct. 1842, 48 L. Ed. 2d 382 (1976); Packard Motor Co. v. NLRB, 330 U.S. 485, 491, 91 L. Ed. 1040, 67 S. Ct. 789 (1947).

Although Board determinations are subject to limited review, they are not immune from judicial scrutiny. We must bear in mind that section 10(e) of the Act clothes the courts of appeals with authority to enter decrees "enforcing, modifying, and enforcing as so modified, or setting aside in whole or in part the order of the Board." 29 U.S.C. § 160(e). Indeed, the Supreme Court has held that we are not "'to stand aside and rubber-stamp' Board determinations that run contrary to the language or tenor of the Act." NLRB v. Weingarten, Inc., 420 U.S. 251, 256, 43 L. Ed. 2d 171, 95 S. Ct. 959 (1975); NLRB v. Brown, 380 U.S. 278, 291, 13 L. Ed. 2d 839, 85 S. Ct. 980 (1965). Accordingly, we have the responsibility of determining whether the Board's unit determinations were unreasonable, NLRB v. Krieger-Ragsdale & Co., 379 F.2d 517, 521 (7th Cir. 1967), cert. denied, 389 U.S. 1041, 19 L. Ed. 2d 831, 88 S. Ct. 780 (1968), arbitrarily or capriciously made, State Farm Mutual Automobile Insurance Co. v. NLRB, 411 F.2d 356, 358 (7th Cir.) (en banc), cert. denied, 396 U.S. 832, 90 S. Ct. 87, 24 L. Ed. 2d 83 (1969), or unsupported by substantial evidence, NLRB v. Pinkerton's Inc., 416 F.2d 627, 630 (7th Cir. 1969).

In making unit determinations, the Board must effect the policy of the Act to assure employees the fullest freedom in exercising their rights, yet at the same time "respect the interest of an integrated multi-unit employer in maintaining enterprise-wide labor relations." NLRB v. Solis Theatre Corp., 403 F.2d 381, 382 (2d Cir. 1968). See Szabo Food Services, Inc. v. NLRB, 550 F.2d 705, 709 (2d Cir. 1976); NLRB v. Pinkerton's Inc., 428 F.2d 479, 485 (6th Cir. 1970). In reaching its decision, the Board ...

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