NOTICE: This
opinion is subject to formal revision before publication in the bound volumes
of NLRB decisions. Readers are requested
to notify the Executive Secretary, National Labor Relations Board,
Fresh Organics, Inc., d/b/a Real Foods Company, a
Wholly-Owned Subsidiary of Nutraceutical Corporation and Nutraceutical
Corporation and Adriel Ahern and Joshua Peach and Sarah Genlot-Joslyn and
United Food and Commercial Workers Union, Local 648, United Food and Commercial
Workers International Union. Cases
20–CA–31416–1, 20–CA–31449–1, 20–CA–31461–1, 20–CA–31664–1, and 20–CA–31953–1
July 24, 2007
DECISION AND ORDER
By Members Schaumber, Kirsanow, and Walsh
On November 18, 2005, Administrative Law Judge James M. Kennedy issued the attached decision. The Respondents, the General Counsel, and Charging Party Joshua Peach each filed exceptions and a supporting brief.[1] The Respondents filed answering briefs to the exceptions of both the General Counsel and Charging Party Peach. The General Counsel filed an answering brief to the Respondents’ exceptions, and the Respondents filed a reply brief.
The National Labor Relations Board has delegated its authority in this
proceeding to a three-member panel.
The Board has considered the decision and the record in light of the
exceptions and briefs and has decided to affirm the judge’s rulings,
findings,[2] and
conclusions only to the extent consistent with this Decision and Order, and to
adopt the recommended Order as modified and set forth in full below.
Briefly, this case involves a nascent union organizing
campaign at one of the Respondents’ four San Francisco–area organic grocery
stores, located at
The judge found all of the alleged 8(a)(3) violations and a violation of Section 8(a)(1) in the implementation of the service award program, but dismissed the allegations that the Respondents violated Section 8(a)(1) by threatening store closure and job loss.[3] Although it was not alleged, the judge also found that the Respondents violated Section 8(a)(1) by downgrading the annual evaluation of Sonja Knaphus. The Respondents excepted to each of the violations found; the General Counsel excepted to the 8(a)(1) dismissals; and the Respondents, the General Counsel, and Charging Party Joshua Peach all excepted to the judge’s proposed remedy.
We agree, for the reasons provided by the judge, that the
Respondents did not violate Section 8(a)(1) by making threats of store closure
or job loss,[4] and
that the Respondents violated Section 8(a)(3) by terminating Ahern and Genlot-Joslyn.[5] Although we agree with the judge that the
Respondents also violated Section 8(a)(3) by closing the
Service Award
Program
The organizing campaign began in April 2003,[7]
when Ahern, a cashier at the
Also in April, Respondent Nutraceutical, Real Foods’
corporate parent, authorized Remund to extend a length-of-service award to Real
Foods’ employees; Nutraceutical had given out the award to its employees since
at least 1997. On June 18, Remund held a
mandatory staff meeting at the
The judge found the service award program violated Section 8(a)(1) because of its “timing and announced annual nature” when the program in fact “disappeared the following year.” The Respondents contend that the service award program was an existing policy of Nutraceutical, that Nutraceutical decided to extend the award program to all of the Real Foods stores before the Respondents were aware of any union activity, and that the cancellation of the program the following year was a corporate-wide decision and not targeted at the 24th Street store.
Analysis
The granting of benefits to employees in the middle of union organizational activity “is not per se unlawful where the employer can show that its actions were governed by factors other than the pending election.” American Sunroof Corp., 248 NLRB 748, 748 (1980), modified on other grounds 667 F.2d 20 (6th Cir. 1981).[9] The General Counsel bears the burden of proving, by a preponderance of the evidence, “that employees would reasonably view the grant of benefits as an attempt to interfere with or coerce them in their choice on union representation.” Southgate Village Inc., 319 NLRB 916 (1995). If the General Counsel makes such a showing, the burden shifts to the employer to demonstrate a legitimate business reason for the timing of the benefit, such as by proving that the benefit was “part of an already established Company policy and the employer did not deviate from the policy upon the advent of the union.” American Sunroof, supra at 748; see also Dynacor Plastics and Textiles, 218 NLRB 1404, 1404–1405 (1975) (relying on the fact that the respondent granted an additional half-day holiday for Christmas to employees at all of its locations in finding the grant was lawful); Nalco Chemical Co., 163 NLRB 68, 70–71 (1967) (finding improvements to vacation and holiday benefits did not violate Sec. 8(a)(1) in part because improvements applied corporate wide). Contrary to the judge, we conclude that the General Counsel failed to meet his burden.
The General Counsel’s case relies principally on the
timing of the benefit. However, the
record establishes that the benefit stemmed from Nutraceutical’s decision in
the spring of 2003, before it was on notice of the organizing activity, to
extend its existing service award benefit to all Real Foods stores in the
following quarter.[10] The General Counsel’s case is further weakened
by the fact that the Respondents only gave two awards (including one to a
department manager) at the
Closure of the
In acquiring the four grocery stores during the spring of 2002,
Nutraceutical sought to evaluate the viability of a business that offered organic
foods as well as vitamins and supplements.
To that end, Nutraceutical allowed the stores to operate as they had
while its personnel learned the organic grocery business. Beginning in mid-2002, Sergio Diaz,
Nutraceutical’s director of marketing and sales, was chiefly responsible for
developing a new “concept store,” which would involve remodeling one existing
store to serve as a prototype. The
remodeling was estimated to take 6 months to complete—3 months for demolition,
planning, and obtaining permits, and 3 months for construction. On April 22, Diaz completed a demographic
study of the neighborhoods served by the four stores, undertaken in order to
decide which store to remodel. The
Respondents had initially considered their
The Respondents learned of the organizing drive at the
On August 25, Real Foods’ two directors, Remund and
Nutraceutical chief financial officer Leslie Brown, met with Diaz and a
Nutraceutical counsel and approved a motion to close and remodel the
Two days later, Diaz spoke with Dave Kloski, the manager of another of the Respondents’ stores. Kloski asked if the closure was “killing two birds with one stone.” Diaz responded, “yes, the timing is good for that.” Kloski also asked about the terminated employees, to which Diaz responded, “f__k ‘em.”
The judge found that the Respondents violated Section
8(a)(3) by the August closure of the
The Respondents assert that the judge’s conclusion was based
on erroneous findings. They maintain
that their behavior was motivated by legitimate business concerns and
consistent with industry practice, and that their financial statements indicate
the decision to close was well timed. In
particular, the Respondents stress that the evidence shows that union activity
played no role in the decision because Remund and Diaz allegedly decided in
April to remodel the
Analysis
Although we reach the same conclusion as the judge, we do so for the following reasons. Rather than looking to the variety of business considerations discussed by the judge (and countered by the Respondents in their exceptions), we instead focus on the timing and manner of the closure in relation to the employees’ union activity.
We apply the Board’s Wright
Line test[16] to
determine if the Respondents’ decision to close the
We agree that the General Counsel met his burden. There is no dispute that employees were
engaged in a union campaign and that the Respondents were aware of their activity
as early as May 2. We also find that the
General Counsel established animus. The
judge credited evidence that Remund told two different supervisors that
Nutraceutical’s CEO would close a store if it unionized. That evidence, considered together with the
timing of the closure in relation to Burkett’s and Knaphus’ conduct on August 7
as well as the other contemporaneous violations of Section 8(a)(3) in the
discharges of Ahern (July 23) and Genlot-Joslyn (June 26), is sufficient to
establish animus. Thus, the burden
shifts to the Respondents to show that they would have closed the
The Respondents produced a great deal of evidence (including expert testimony and an accompanying report) in an effort to establish that the selection, timing, and manner of the closure were backed by legitimate business concerns and consistent with industry practices.[18] The Respondents also introduced evidence in an effort to rebut many of the reasons the judge relied on in his decision.[19] Although we do not second-guess an employer’s business decisions, we find that the Respondents have not met their burden.
Several factors lead us to that conclusion. First, the Respondents offer no credible explanation for the 4-month lag between the alleged decisionmaking in April and the formalization of that decision in August. We also agree with the judge concerning the significance of the fact that the formal decision was made and announced within weeks of when Burkett and Knaphus began “acting like a union” and presented the Respondents with a list of demands. On this point, we find that the preponderance of the evidence establishes that the Respondents engaged in a series of escalating events responding to the employees’ organizing campaign and evidencing unlawful motive, beginning with the Respondents’ awareness of the union campaign and employee meetings (no later than May 2), the unlawful discharges of Genlot-Joslyn and Ahern (June 26 and July 23, respectively), the demands presented by Burkett and Knaphus (August 7), and the closure of the store (August 28). Finally, the “two birds with one stone” conversation between Kloski and Diaz that took place shortly after the closure strongly suggests that the Respondents were motivated by their employees’ union activity, rather than legitimate business reasons, when they chose to precipitously close the 24th Street store. This inference is supported by the credited evidence that Remund told two supervisors on separate occasions that Nutraceutical’s CEO would close a store if it unionized. In light of all those considerations, we find that the Respondents have failed to establish that they would have made the same decision within the same timeframe in the absence of the employees’ union activity.
Knaphus’ Evaluation
Soon after Knaphus and Burkett interrupted the management meeting on August 7, announced support for unionization, and presented Remund a list of demands, Wilmot gave Knaphus a performance review in which he rated Knaphus as “poor” on interpersonal skills; Wilmot explained that the rating was based on Knaphus’ disruption of the August 7 meeting. Although the Respondents’ evaluation of Knaphus was not alleged as an independent violation of Section 8(a)(1), the judge concluded that the allegation was fully litigated and found the violation based on evidence elicited in connection with the store closure allegation. The Respondents argue that the judge erred in this regard, as the General Counsel only introduced limited evidence and did not move to amend the complaint.
Analysis
“It is well settled that the Board may find
and remedy a violation even in the absence of a specific allegation in the
complaint if the issue is closely connected to the subject matter of the
complaint and has been fully litigated.” Pergament
United Sales, Inc., 296 NLRB 333, 334 (1989), enfd. 920 F.2d 130 (2d Cir. 1990).
The “determination of whether a matter has been fully litigated rests in
part on whether . . . the respondent would have altered the conduct of its case
at the hearing, had a specific allegation been made.”
Failure to Rehire Rohrbach
On May 6, 2004,[20]
Rohrbach answered the Respondents’ online employment advertisement. Prior to her termination when the
Although employed, she applied for a retail associate position with Real Foods, sending her resume and a cover letter by email to Kloski. Her cover letter acknowledged her “vocal opposition to Nutraceutical’s conduct in the whole 24th St affair,” she also stated that she felt “given certain conditions, even [Remund, Diaz, and Nutraceutical’s CEO Bill Gay] are capable of acting in a responsible fashion,” and that Remund and Diaz were not able to “destroy her appreciation for [her former] job.” On May 25, Rohrbach was interviewed by Remund and Kloski. Rohrbach wore a union T-shirt and a union button, and she was characterized as “prickly” during her interview. Remund informed Rohrbach on June 22 that the Respondents would keep her resume on file, but she was not rehired. In late June, the Respondents began hiring new employees through a contract labor supplier, Aerotek Commercial Staffing, purportedly to mitigate their workers’ compensation risk. However, Kloski testified that, when he asked Remund if the Respondents were using Aerotek as a way to keep Rohrbach out of the stores, Remund responded that Rohrbach had “something to do with it.”
The judge found that the Respondents began working with Aerotek shortly after the interview in order to “keep Rohrbach out of the store,” that the Respondents provided shifting and additional reasons why Rohrbach was not rehired, and that the Respondents had a policy of denying rehire to former employees of the 24th Street store because “it didn’t want union activists in its system.” Based on those findings, the judge ultimately found that the Respondents violated Section 8(a)(3) by failing to rehire Rohrbach, finding that the Respondents had not met their rebuttal burden of establishing that they would not have rehired Rohrbach even in the absence of her union activity. The Respondents argue that they did not rehire Rohrbach because she made disloyal and maliciously untrue statements about the Respondents and their executives before she submitted her application for rehire; she was not suited to the position; and she made it clear through her insulting cover letter and her manner in her interview that she did not have any genuine interest in the position.
Analysis
We reverse the judge’s finding of an 8(a)(3) violation. The finding is based primarily on his reasoning that the “Respondents’ policy against unionization overrides any of [its] given reasons” for not rehiring Rohrbach, and therefore “all [ the Respondents’] reasons” for not rehiring Rohrbach, “whether factually accurate or not, simply have no bearing” on the case. In this, the judge was clearly in error. An employer is privileged to refuse to hire a disrespectful applicant. Exterior Systems, Inc., 338 NLRB 677, 678 (2002). “There is no provision in the Act or in the law developed by the Board that would require an employer to . . . [be] subjected to rude or intimidating conduct.” Heiliger Electric Corp., 325 NLRB 966, 968 (1998). The record evidence—Rohrbach’s cover letter, in particular—clearly demonstrates rude and disrespectful behavior in a job applicant and does not show that the Respondents seized on such behavior as a pretext for not rehiring Rohrbach. On this limited basis, we find that Rohrbach’s protected union activity was not the basis for the Respondents’ refusal to rehire her, and we reverse the judge’s finding.[21]
Remedial Exceptions
The Respondents excepted to the judge’s Order requiring that they rehire the discharged employees directly, rather than through a contract labor supplier. The Board’s usual remedy for an unlawful discharge is restoration of the employee to the position he would have occupied had it not been for the respondent’s unlawful action. In this case, such restoration means employment with the Respondents, not with a contract labor supplier, in the absence of a showing to the contrary by the Respondent during the compliance process.
The Respondents also sought to limit the notice-posting to
the Respondents’ retail stores in
The General
Counsel sought modification of the Order to clarify that the Respondents are
required to mail notices to all employees who were discharged as a result of
the
The General Counsel also sought to have the Respondents
ordered to displace, if necessary, less senior employees to accommodate the 29
employees who were discharged as a result of the
Charging Party Joshua Peach also filed several exceptions to the judge’s recommended Order, seeking various extraordinary remedies as well as a bargaining order. We find no merit in these exceptions, as the Board’s traditional remedies are sufficient to address the unfair labor practices found.
Amended Conclusions of Law
1. Delete the judge’s Conclusion of Law 5, 6, and 10 and renumber the remaining paragraphs accordingly.
ORDER
The National Labor Relations Board orders that the
Respondents, Fresh Organics, Inc. d/b/a Real Foods Company,
1. Cease and desist from
(a) Discharging
or otherwise discriminating against any employee for supporting United Food and
Commercial Workers Union Local 648, United Food and Commercial Workers
International Union, or any other labor organization.
(b) Closing a part of their business, such as one of their retail stores, in a manner that has the necessary and foreseeable effect of interfering with, restraining or coercing their employees from freely exercising their rights under Section 7 of the Act.
(c) In any other manner interfering with, restraining, or coercing employees in the exercise of the rights guaranteed them by Section 7 of the Act.
2. Take the
following affirmative action necessary to effectuate the policies of the Act.
(a) Within 14
days from the date of this Order, offer Sarah Genlot-Joslyn, Adriel Ahern, and
the 29 discriminatees named below full reinstatement to their former jobs or,
if those jobs no longer exist, to substantially equivalent positions, without
prejudice to their seniority or any other rights or privileges previously
enjoyed. Unless and until positions are
available at the
|
Dorothy R. Adams |
Sonja (Simon) Knaphus |
|
Sean B. Andrews |
Diana H. Kuemmel |
|
Jonathan H. Burkett |
Colin R. Lapuyade |
|
Kelly M. Cronin |
Greg M. Lashaw |
|
Sharna D. Fey |
Michael A. Lopez |
|
Christina D. Fisher |
Rita J. Morris |
|
Zoe Friedman-Cohen |
Shawn M. Mowell |
|
Charles A. Glover |
Ryan P. Newton |
|
Wendy L. Granger |
Joshua L. Peach |
|
Shaun M. Hannan |
Adam L. Rabinovitz |
|
Adrian J. Hernandez |
Kimberly M. Rohrbach |
|
Kristin D. Hornstra |
George W. Schulz |
|
Sarianne Huyett |
Brian J. Schumacher |
|
Shauna L. Katz |
Jennifer A. Stone |
|
|
|
(b) Make Sarah
Genlot-Joslyn, Adriel Ahern, and the 29 other discriminatees named above whole
for any loss of earnings and other benefits suffered as a result of the
discrimination against them, in the
manner set forth in F. W. Woolworth Co., 90 NLRB 289 (1950), with interest as
prescribed in New
Horizons
for the Retarded, 283 NLRB 1172 (1987).
(c) Within 14 days from the date of this Order, remove from their files any reference to the unlawful discharges of Sarah Genlot-Joslyn, Adriel Ahern, and the 29 other discriminatees named above, and within 3 days thereafter notify the discriminatees in writing that this has been done and that these unlawful discharges will not be used against them in any way.
(d) Preserve and, within 14 days of a request, or such additional time as the Regional Director may allow for good cause shown, provide at a reasonable place designated by the Board or its agents, all payroll records, social security payment records, timecards, personnel records and reports, and all other records, including an electronic copy of such records if stored in electronic form, necessary to analyze the amount of backpay due under the terms of this Order.
(e) Within 14
days after service by the Region, post at their stores in
(f) Within 14
days after service by the Region, duplicate and mail, at their own expense,
copies of the attached notice marked “Appendix B”[25]
to all current employees and former employees employed by the Respondents at
their
(g) Within 21 days after service by the Region, file with the Regional Director a sworn certification of a responsible official on a form provided by the Region attesting to the steps that the Respondents have taken to comply.
Dated,
![]()
Peter C. Schaumber, Member
![]()
Peter N. Kirsanow Member
![]()
Dennis P. Walsh, Member
(seal) National
Labor Relations Board
APPENDIX A
Notice To Employees
Posted by Order
of the
National Labor Relations
Board
An Agency of the
The National Labor Relations Board has found that we violated Federal labor law and has ordered us to post and obey this notice.
federal law gives you the right to
Form, join, or assist a union
Choose representatives to bargain with us on your behalf
Act together with other employees for your benefit and protection
Choose not to engage in any of these protected activities.
We will not discharge or otherwise discriminate against any of you for supporting United Food and Commercial Workers Union Local 648, United Food and Commercial Workers International Union, or any other labor organization.
We
will not close a part of our
business, such as one of our retail stores, in a manner that has the necessary
and foreseeable effect of interfering with, restraining, or coercing our
employees from freely exercising the rights set forth above.
We will not in any other manner interfere with, restrain, or coerce you in the exercise of the rights set forth above.
We
will, within 14 days from the date of the Board’s Order, offer Sarah
Genlot-Joslyn, Adriel Ahern, and the 29 employees named below full
reinstatement to their former jobs or, if those jobs no longer exist, to substantially
equivalent positions, without prejudice to their seniority or any other rights
or privileges previously enjoyed. Unless
and until positions are available at the
|
Dorothy R. Adams |
Sonja (Simon) Knaphus |
|
Sean B. Andrews |
Diana H. Kuemmel |
|
Jonathan H. Burkett |
Colin R. Lapuyade |
|
Kelly M. Cronin |
Greg M. Lashaw |
|
Sharna D. Fey |