Court Opinion

ID: 9460549
Source: CourtListenerOpinion
Date Created: 2023-08-04 21:53:55.161044+00
Date Added: 2024-06-11T17:36:40.506765
License: Public Domain

PELL, Circuit Judge
(dissenting).
Judge Hastings, in writing the majority opinion, has addressed the issues in a scholarly, tightly-reasoned fashion. However, it appears to me, notwithstanding the persuasiveness of the opinion, that it extends the law of successor-ship in the federal labor law area be*1145yond proper limits. I therefore respectfully dissent.
Because of the drastic differences between the operational structures and practices of Kroger, on the one hand, and the sole proprietorship, non-chain grocery stores, on the other, the “wholly different case” adverted to in NLRB v. Burns Int’l Security Services, 406 U.S. 272, 280, 92 S.Ct. 1571, 32 L.Ed.2d 61 (1972), is presented here. Clearly, the Kroger bargaining unit of 11 stores was no longer an appropriate unit.
While the administrative law judge did not find all of the differences of major consequence, we need look only at his decision to be aware of the vast scope of the changes subsequent to the purchase from Kroger. Each store was converted from a division of a nationwide supermarket chain to an individually owned and operated store. Kroger’s merchandising, pricing, promotion, traffic and the like were centrally controlled. Kroger store managers had extremely limited discretion as they were required to adhere to Kroger’s established programs. After the sale, basically, all decisions were made by the store owners or managers.1 All personnel matters are handled by the new owners on the local scene. In Kroger’s system, the wages, hours, and conditions of employees were essentially fixed in the master union contracts, in which no store was individually treated.2 Hiring, discharge and disciplinary matters, while formerly conducted at the store level, were submitted by recommendation to Kroger’s personnel department for final approval or disapproval.
Other differences noted by the administrative law judge but apparently given little weight by him were as follows:
“Respondents operate a friendlier store; spend less money than Kroger for advertising; purchase and sell more local products; generally have a lower pricing structure; do not use the Kroger label on certain products, but have the IGA label on certain products; sell a smaller variety of preeut meat products, thus requiring more cutting in the store; do not use trading stamps as did Kroger; remain open 7 days a week for longer hours, compared to 6 days under Kroger; obtain some of their merchandise from suppliers other than those previously used by Kroger, whereas Kroger had its own meat plant and bakery, and manufactured some of its own grocery products, all of which were supplied to its stores in the area.”
The certification status of the unions is lost in ancient history. There is nothing in the record to indicate that any employee of either store presently desired the particular union representation. The employees were members of the union but they had to be under the union shop provisions of the master contract. Both Zim’s and Paul’s hired employees from no greater than one-eleventh of the Retail Clerks Union unit, i. e., roughly 9% or less of the predecessor’s employees in the eleven-store unit. Zim’s hired meat cutters from only one-fifth of the Meat Cutters Union unit. I fail to see any basis for the existence of a continuing presumption of majority status after such a material fragmentation of the bargaining units.
The majority opinion cites pertinent authority, which I believe should be controlling here, for the proposition that a change in the size and operational methods of the employer has relevance. Included among these cases is NLRB v. *1146Alamo White Truck Service, Inc., 273 F.2d 238 (5th Cir. 1959). The majority opinion, however, then states that the changes relied on are similar to those found insufficient to defeat successorship in NLRB v. Zayre Corp., 424 F.2d 1159 (5th Cir. 1970), and NLRB v. Interstate 65 Corp., 453 F.2d 269 (6th Cir. 1971).
I find little support in these cases for the extension of the suecessorship rule accomplished in the majority opinion. In Interstate there were changes but the acquisition was of a motel which constituted a single bargaining unit. In that case the following principle 'of law is enunciated which I think should be dis-positive of the present case:
“If respondent’s ‘succession’ brought with it a change in the ‘essential nature of the [employing] enterprise,’ then respondent had no duty to bargain. Tom-A-Hawk Transit, Inc. v. N.L.R.B., 419 F.2d 1025, 1027 (7th Cir. 1969).” 453 F.2d at 272.
In Zayre, the claimed successor relied upon Alamo White, supra. The Fifth Circuit found the reliance misplaced and made the following observation, particularly pertinent to the present case.
“It is true that in Alamo White this Court held that a change from a large national employer to a small local one prevented the small transferee from being bound as a successor by the prior bargaining obligations of the transferor. We do not believe, however that Alamo White compels a rejection of the Board’s conclusion here.
To begin with the change in Alamo White was from a large national organization to a small business with direct owner participation. The total number of employees was reduced— only eight of the previously employed 12 mechanics were re-employed — and with the discontinuation of the parts department, a substantial portion of the prior operation was eliminated. Here there was only a change in the type of internal organization. Both Masters and Zayre were large national companies. Moreover, the number of employees and the basic size of the operation stayed the same.” 424 F.2d at 1163. (Footnotes eliminated and emphasis added.)
Of course, there were other differences. There usually are factual differences in cases. However, it appears to me that Alamo White, in its basic large-to-small situation, presents a more significant parallel guideline than does the Zayre large-to-large transfer.
In sum, I think the new owners in the situation here involved took free and clear of any duty to bargain based upon a suecessorship premise. If the employees did desire union representation the matter could have been very easily determined by a resort to election procedures rather than by reliance upon a doubtful presumption which cannot be factually supported on this record.

. The administrative law judge did find some external control in the contracts of the new owners with Gateway/IG-A. Gateway Foods, Inc., was a wholesale distributor and the stores would participate in cooperative programs of the Independent Grocers Alliance. Comparability between this loose relationship and the tight control exercised by Kroger is not supported by the record and, I note, it apparently plays no part in the majority decision of this court.

. The Retail Clerks Union contract did separately deal with the cities covered by the contract in the wage schedules which divided the Kroger’s stores into two groups.