Court Opinion

ID: 9470532
Source: CourtListenerOpinion
Date Created: 2023-08-05 03:08:17.185653+00
Date Added: 2024-06-11T17:41:56.946754
License: Public Domain

CHAMBERS, Circuit Judge:
The National Labor Relations Board (the Board) petitions for enforcement of its order issued December 18, 1980, requiring Sav-On Drugs, Inc. (Sav-On) to reinstate and pay back wages to approximately sixty employees it terminated, on the ground the terminations violated section 8(a)(3) and (1) of the National Labor Relations Act (the Act).
Sav-On operated a chain of retail drug stores in California, Texas and Nevada. In mid-1979, Sav-On operated approximately 123 stores in California, some three-quarters of which were covered by identical collective bargaining agreements with various locals of the United Food and Commercial Workers International Union, AFLCIO, formerly the Retail Clerks International Union (the Union). The contracts had an expiration date of June 30,1978, and covered all of the employees in these stores, including the pharmacists and pharmacist managers.
Beginning May 1, 1978, petitions were filed with the Board by the Guild for Professional Pharmacists (the Guild) seeking to represent all pharmacists employed by SavOn in its California stores. Eleven petitions were consolidated for a hearing after which, on September 26, 1978, the regional director issued a decision holding that the employees in the classification “pharmacist manager” were “supervisors” within the meaning of section 2(11) of the Act, and *1148that the Guild was dominated by pharmacist managers and therefore was not a labor organization within the meaning of section 2(5) of the Act. 29 U.S.C. § 152(5) and (11). The regional director simultaneously dismissed the Guild’s petition for representation. The Guild sought no stay of that dismissal.
On October 6 the Guild filed a timely request for review of the regional director’s decision and served Sav-On. On November 6 the Guild wrote Sav-On seeking wage increases for the pharmacists and threatened to strike if its demands were not met. Sav-On had, however, also received demands from the Union for the resumption of negotiations for a new agreement to replace the one that had expired on June 30,1978. Sav-On responded to the Guild by referring to the regional director’s decision and reporting that the Union was insisting on renewed negotiations.
On November 8, Sav-On and the Union entered into an agreement to extend the expired contract as to pharmacists who were not in a “supervisory” role. On the same day the Board granted the Guild’s request for a review.
Between November and January increased pressure was exerted by the Guild and active in the Guild activities were pharmacist managers Kunysz and Fogel. On January 5,1979, Sav-On discharged the two pharmacist managers because of their Guild activities. The Guild thereupon filed unfair labor practice charges against Sav-On, demanded that Kunysz and Fogel be reinstated, and threatened to strike if they were not. The two were not reinstated. Shortly thereafter, 59 pharmacists and pharmacist managers from both organized and unorganized stores engaged in a strike to protest the discharges. Sav-On responded by discharging the strikers. Since that time Sav-On has refused to reinstate the strikers or the two discharged managers, Kunysz and Fogel.
Six months after the discharges, and eight months after the regional director ruled in Sav-On’s favor on the representation case, the Board issued its decision on review reversing the regional director and finding that the Guild was a labor organization within the meaning of the Act and that the pharmacist managers were not supervisors under section 2(11) of the Act. It ordered an election in a statewide unit of Sav-On’s pharmacists and pharmacist managers.
In the unfair labor practice case, the Board found that Sav-On violated section 8(a)(3) and (1) of the Act by discharging pharmacist managers Kunysz and Fogel because of their union activities and by discharging the employees who struck to protest these discharges. The Board’s order required Sav-On to cease and desist from the unfair labor practices found, and ordered it to offer immediate reinstatement to all the discharged employees and to pay back wages.
Section 8(a)(1) makes it unlawful for an employer “to interfere with, restrain, or coerce employees” in the exercise of their right to organize. 29 U.S.C. § 158(a)(1). Under section 8(a)(3) of the Act, an employer may not discharge employees because of their union activities or sympathies. 29 U.S.C. § 158(a)(3); NLRB v. Fort Vancouver Plywood Co., 604 F.2d 596, 600 (9th Cir.1979), cert. denied, 445 U.S. 915, 100 S.Ct. 1275, 63 L.Ed.2d 599 (1980). An administrative law judge found that the firing of Kunysz and Fogel was an undisputed prima facie violation of these two sections. Relying on Sav-On’s stipulation that Kunysz and Fogel were discharged because of their activities on behalf of the Guild, and relying on the Board’s decision on review that the Guild was a labor organization, he concluded that the actions of the employees were union activities. Sav-On does not dispute that a prima facie ease of violation has been made out, but argues that it cannot fairly be held in violation of the Act because it was entitled to rely on the regional director’s decision under section 3(b) of the Act.
Prior to 1959, decisions on representation petitions were made by the Board itself. Congress then amended the Act to provide for the delegation of Board authority to *1149regional directors in representation cases. Section 3(b) provides in part:
The Board is also authorized to delegate to its regional directors its powers under section 159 of this title to determine the unit appropriate for the purpose of collective bargaining, to investigate and provide for hearings, and determine whether a question of representation exists ... except that upon the filing of a request therefor with the Board by any interested person, the Board may review any action of a regional director delegated to him under this paragraph, but such a review shall not, unless specifically ordered by the Board, operate as a stay of any action taken by the regional director.
Decisions of the regional director are not merely advisory opinions or recommendations entitled to no meaningful weight. See Transportation Enterprises, Inc. v. NLRB, 630 F.2d 421, 425-27 (5th Cir.1980). The legislative history of section 3(b) confirms the breadth of the intended delegation: “[This new provision is] designed to expedite final disposition of cases by the Board, by turning over part of its caseload to its regional directors for final determination." 105 Cong.Rec. 19770 (1959) (emphasis added). The regulations of the Board state that the decision of the regional director shall be final, provided, however, that any party may seek review within ten days after service of the decision. 29 C.F.R. § 102.67(b). Section 101.21(a) of the regulations explicitly states that a regional director’s decision is final “subject to the review procedure set forth” in the regulations. Thus, it has been held that decisions rendered by regional directors which are not reviewed by the Board are entitled to the same weight and deference as Board decisions. Transportation Enterprises, Inc. v. NLRB, supra, 630 F.2d at 426; NLRB v. Gold Spot Dairy, Inc., 432 F.2d 125, 127 (10th Cir.1970).
It is clear from the Act and the regulations that once review has been granted by the Board under section 3(b), the regional director’s findings are subject to modification or reversal. Indeed, given that review by the Board is discretionary and that the grounds for review listed in the regulations are quite limited (see Magnesium Casting Co. v. NLRB, 401 U.S. 137, 142, 91 S.Ct. 599, 601-602, 27 L.Ed.2d 735 (1971); Transportation Enterprises, Inc. v. NLRB, supra, 630 F.2d at 425-26) it can fairly be said that all of the parties are on notice that the decision of the regional director should not be fully relied upon until completion of the Board’s review.
Sav-On argues that it was entitled to rely on the regional director’s decision in the absence of a stay, saying that his decision remains final and action taken in reasonable reliance upon it should remain insulated from any later action of the Board on review. Section 3(b) of the Act does appear to be consistent with the rule of this Circuit that an appeal will not affect the validity of the judgment or order during the pendency of an appeal, absent a stay or supersedeas. Matter of Combined Metals Reduction Co., 557 F.2d 179, 190 (9th Cir.1977).
The Guild counters with an argument that there was nothing to stay. There are, of course, other situations where stays are more obviously useful, e.g. a stay of an order calling for an election. In this case the regional director did not order an election. He ruled against the Guild in its representation claims and he then went a further step; he dismissed its representation petition. Yet the Guild made no attempt to obtain a stay of that dismissal. We must inquire whether application for a stay would have served the purposes of the Act.
Stays are commonly used to maintain the status quo during an appeal and the status quo very obviously should have been maintained in this case. The purposes of the Act are best served when, in a situation such as this, all parties attempt to preserve the status quo. The Board has held that it was Sav-On’s duty to refrain from bargaining with either of the unions until the question of representation was finally resolved by the Board on review. But the case demands an inquiry into the forces that generated the disruption of the status quo and *1150placed Sav-On in the situation where it had to decide to act or refrain from acting.
Had the Guild set the tone for the attitudes of the parties during the review period, by confronting the Board with the necessity to exercise its power to stay the regional director’s dismissal of its representation petition, and to exercise its power thereafter to assure maintenance of the status quo, the unfortunate events that occurred here might well have been avoided. Instead, the Guild took no action to obtain a stay and, acting as if the review gave it carte blanche to proceed unilaterally in its self-interest, it made wage demands and threatened strike activity if its demands were not met.
The Union, encouraged by the regional director’s ruling against the Guild, contributed to the disorder by demanding a resumption of the negotiations that had been halted during the Guild’s representation efforts. We cannot say how the Union would have responded if the Guild had sought a stay.
Sav-On found itself confronted by the demands of the two contesting unions and the provocative activities of two pharmacist managers (held by the regional director to be part of the management force) as they labored adversarily for the Guild. As the confrontation gathered momentum Sav-On would have to anticipate greater economic loss and greater administrative turmoil. Caught in the crossfire, it chose to resume negotiations with the incumbent Union assuring, as it did so, to restrict the Union’s representation to nonsupervisory employees within the definitions made by the regional director. Sav-On might better have refrained from dealing with either of the contesting unions, but the basic question is that of assessing where the disruption of the status quo began and who was responsible for it. It was the employees through their unions, acting unilaterally and in utter disregard of their duty to maintain the status quo, who placed Sav-On in the position where it found itself. It was the employees, through their unions, who had the initial ability to assure preservation of the status quo during the review period, but who instead set in motion a chain of events that led to their eventual dismissal.
The purposes of the Act are not served by disregarding settled principles of equity and ignoring the provocative activity of parties who claim a right to relief. Our decision is not so much an affirmation of Sav-On’s activities as it is a condemnation of the unions’ activities in disturbing the status quo during the period of the review.
On these facts we decline to enforce the Board’s order.