National Labor Relations Board v. Action Automotive, Inc.
National Labor Relations Board v. Action Automotive, Inc.
Opinion of the Court
delivered the opinion of the Court.
We granted certiorari to decide whether the National Labor Relations Board may exclude from a collective-bargaining unit employees who are relatives of the owners of a closely held corporation that employs them, without a finding that the employees receive special job-related benefits.
I
Respondent Action Automotive, Inc., is a retail automobile parts and gasoline dealer with stores in a number of Michigan cities. Action Automotive is a closely held corporation owned equally by three brothers, Richard, Robert, and James Sabo. The Sabo brothers are actively involved in the
In March 1981, the Retail Store Employees Union, Local 40 (the Union), filed with the Board a petition requesting that a representation election be held among Action Automotive’s employees. Action Automotive and the Union agreed to elections in two bargaining units — one consisting of employees at the company’s nine retail stores, and the other comprising clerical employees at the company’s headquarters. The elections were held on May 29, 1981, and the Union received a plurality of votes in each unit;
Diane Sabo is the wife of Action Automotive’s president and one-third owner, Richard Sabo. She works as a general ledger clerk at the company’s headquarters in Flint, Michigan. She resides with her husband and both work at the same office. Unlike other clerical workers, she works part time and receives a salary. She also is allowed to take breaks when she pleases, and she often spends her break in her husband’s office.
Mildred Sabo is the mother of the three Sabo brothers who own and manage Action Automotive. She is employed as a full-time cashier at the company’s store in Barton, Michigan. Mildred Sabo lives with James Sabo, secretary-treasurer of the corporation, and she regularly sees or telephones her other sons and their families. She earns 25 cents per hour more than any other cashier, but she is also one of the company’s most experienced cashiers.
In light of these facts, the Board’s hearing officer concluded that Diane Sabo’s interests are different from those of other clerical employees in the company’s headquarters,
The Board adopted the hearing officer’s recommendations
The United States Court of Appeals for the Sixth Circuit denied enforcement of the Board’s order. 717 F. 2d 1033 (1983). The panel, apparently feeling bound by the Circuit’s prior decisions, see, e. g., NLRB v. Hubbard Co., 702 F. 2d 634 (1983), held that the Board had no authority under § 9(b) of the Act to exclude employees from a bargaining unit based solely on their close family relationship with those who own and operate the business. The court held that an employee’s family ties may be a factor justifying exclusion from a bargaining unit only “when the employee receive[s] job-related benefits or other favorable working conditions which flow from the relationship.” 717 F. 2d, at 1035. Under this standard, the court concluded that there was insufficient evidence that Diane and Mildred Sabo enjoy special job-related
The Sixth Circuit’s holding conflicts with the decisions of other Circuits
II
Section 9(b) of the Act vests in the Board authority to determine “the unit appropriate for the purposes of collective bargaining.” 61 Stat. 143, 29 U. S. C. § 159(b). The Board’s discretion in this area is broad, reflecting Congress’ recognition “of the need for flexibility in shaping the [bargaining] unit to the particular case.” NLRB v. Hearst Publications, Inc., 322 U. S. 111, 134 (1944). The Board does not exercise this authority aimlessly; in defining bargaining units, its focus is on whether the employees share a “community of interest.” See South Prairie Construction Co. v. Operating Engineers, 425 U. S. 800, 805 (1976) (per curiam); 15 NLRB Ann. Rep. 39 (1950). A cohesive unit— one relatively free of conflicts of interest — serves the Act’s purpose of effective collective bargaining, Pittsburgh Plate Glass Co. v. NLRB, 313 U. S. 146, 165 (1941), and prevents a minority interest group from being submerged in an overly large unit, Chemical Workers v. Pittsburgh Plate Glass Co., 404 U. S. 157, 172-173 (1971).
The Board has long hesitated to include the relatives of management in bargaining units because “their interests are sufficiently distinguished from those of the other employees.” Louis Weinberg Associates, Inc., 13 N. L. R. B. 66, 69 (1939). From the earliest days of the Wagner Act, ch. 372, 49 Stat. 449 et seq., until 1953, the Board automatically excluded close relatives of a manager or owner of a closely
For instance, a relevant consideration is whether the employee resides with or is financially dependent on a relative who owns or manages the business; such an employee is typically excluded from the unit. See, e. g., Pandick Press Midwest, Inc., 251 N. L. R. B. 473, 473-474 (1980). The greater the family involvement in the ownership and management of the company, the more likely the employee-relative will be viewed as aligned with management and hence excluded.
Our review is limited to whether the Board’s practice of excluding some close relatives who do not enjoy special
The Board’s policy regarding family members, although not defined by bright-line rules, is a reasonable application of its “community of interest” standard.
It can be argued that the Board’s policy is overbroad — that excluding from bargaining units only those family members who receive special job-related benefits adequately serves the Act’s objectives. However, we do not make labor policy under § 9(b); Congress vested that authority in the Board,
The Board’s decision to exclude some family members is not inconsistent with the fundamental structure or policies of the Act. Congress knows how to limit the Board’s discretion to define collective-bargaining units. For example, § 9(c)(5) of the Act states that “the extent to which the employees have organized shall not be controlling” in determining whether a unit is appropriate. 29 U. S. C. § 159(c)(5). By contrast, there is no express direction that the Board define bargaining units only by reference to job-related benefits such as wages and working conditions. We are not authorized to bind the Board in ways not mandated by Congress.
Action Automotive’s extensive reliance on § 2(3) of the Act is misplaced. Section 2(3) excludes from the Act’s definition of “employee” “any individual employed by his parent or spouse.”
Nor does the Board’s policy of excluding close relatives of management without a showing of special job-related benefits run afoul of the Act’s mandate that the Board remain “wholly neutral” as between the contending parties in representation elections, see NLRB v. Savair Mfg. Co., 414 U. S. 270, 278 (1973). Strictly speaking, the Board does not exclude a family member from a bargaining unit because he is likely to vote against the union. Rather the family member is excluded, if at all, because the Board determines on the basis of objective factors that he lacks common interests with fellow employees who are not so related. In some cases the Board’s policy may have the effect of favoring union representation; however, a disparate impact does not violate the principle of neutrality. Indeed, virtually every Board decision concerning an appropriate bargaining unit — e. g., the proper size of the unit — favors one side or the other.
The Board, in applying its general policy to the facts of this case, did not abuse its discretion. Diane Sabo resides with her husband, the president and one-third owner of Action Automotive; Mildred Sabo, the mother of the three owners, lives with one of her sons. All three owners are closely related and actively involved in running the business on a day-to-day basis. Diane Sabo works at the same office with her husband and occasionally takes her coffeebreaks in his office. Mildred Sabo has daily contacts with her sons. Certainly their participation in the collective-bargaining units would be viewed with suspicion by other employees. On these facts, the Board could reasonably conclude that Diane and Mildred Sabo’s interests are more likely to be aligned with the busi
We hold that the Board did not exceed its authority in excluding from collective-bargaining units close relatives of management, without a finding that the relatives enjoy special job-related privileges. The judgment of the Court of Appeals is
Reversed.
The vote in the unit consisting of retail store employees was 20-18; the vote in the clerical unit was 4-3.
The Board, disagreeing with the hearing officer, found that Diane Sabo does enjoy special job-related benefits. The Court of Appeals for the Sixth Circuit set aside this finding, and the Board, for purposes of review in this Court, no longer rests its decision on this ground.
See NLRB v. H. M. Patterson & Son, Inc., 636 F. 2d 1014 (CA5 1981); Linn Gear Co. v. NLRB, 608 F. 2d 791 (CA9 1979); NLRB v. Caravelle Wood Products, Inc., 504 F. 2d 1181 (CA7 1974).
The Board’s policy is not undermined by the fact that it has modified and refined its position; an agency’s day-to-day experience with problems is bound to lead to adjustments. See NLRB v. Bell Aerospace Co., 416 U. S. 267, 294-295 (1974).
Compare Parisoff Drive-In Market, Inc., 201 N. L. R. B. 813 (1973) (excluding children of corporation’s vice president and significant shareholder), with Pargas of Crescent City, Inc., 194 N. L. R. B. 616 (1971) (including wife of local manager with no ownership interest).
At least since International Metal Products Co., 107 N. L. R. B. 65 (1953), the Board has not excluded an employee simply because he was related to a member of management.
In the context of corporations, the Board has limited the § 2(3) exclusion to the children or spouses of an individual with at least a 50% ownership interest. See Cerni Motor Sales, Inc., 201 N. L. R. B. 918 (1973). The Board’s decision in this case, therefore, is not premised on the view that Diane and Mildred Sabo are not “employees” within the meaning of § 2(3).
The Court of Appeals implicitly recognized as much by noting that employee-relatives may be excluded from a unit if they receive job-related privileges.
Dissenting Opinion
dissenting.
In my opinion, bargaining unit determinations should be based on job characteristics and not on an employee’s opinion about unions. Antiunion sentiment may be based on religious views, political convictions, individual respect or hostility, or family considerations. If the characteristics of an employee’s job are the same as those of pro-union employees, that employee has the same right to membership in the bargaining unit as a union official or his wife.
The majority’s decision prevents the two employees involved in this litigation from participating in the decision to choose or reject representation solely because the extent of their family relations indicates that they are likely to be pro-management and hostile to union representation. In § 2(3) of the Act,
“Any procedure requiring a ‘fair’ election must honor the right of those who oppose a union as well as those who favor it. The Act is wholly neutral when it comes to that basic choice. By § 7 of the Act employees have the right not only to ‘form, join, or assist’ unions but also the right ‘to refrain from any or all of such activities.’ 29 U. S. C. § 157.” Id., at 278.
To be sure, the majority purports to rely on “objective factors” in determining whether the relative “lacks common interests with fellow employees who are not so related,” ante, at 8, but in practice such persons will not “be identifiable by any standard other than probable opposition to the union at election time.” NLRB v. Caravelle Wood Products, Inc., 504 F. 2d 1181, 1189 (CA7 1974) (Stevens, J., concurring). The community of interests standard ordinarily applied by the Board to bargaining unit determinations is directed to the nature of the employee’s job and the existing terms and conditions of his employment.
If the Board’s bargaining unit determinations are not to be made on the basis of ill-concealed indicators of the employee’s views on the virtues of union representation,
I respectfully dissent.
“The term ‘employee’. .. shall not include . . . any individual employed by his parent or spouse . . . .” 29 U. S. C. § 152(3).
Construing § 2(3), the Board has held that such persons are not “employees” covered by the Act. Cerni Motor Sales, Inc., 201 N. L. R. B. 918 (1973); Foam Rubber City #2 of Florida, Inc., 167 N. L. R. B. 623, 623-624 (1967).
Section 9(b) of the Wagner Act provided that the Board, in making unit determinations should “insure to employees the full benefit of their right to self-organization and to collective bargaining.” National Labor Relations Act § 9(b), 49 Stat. 453. The Board interpreted this language as a mandate to promote union organization: “Wherever possible, it is obviously desirable that, in a determination of the appropriate unit, we render collective bargaining of the Company’s employees an immediate possibility.” Botany Worsted Mills, 27 N. L. R. B. 687, 690 (1940). See NLRB v. Metropolitan Life Insurance Co., 380 U. S. 438, 441 (1965). During this same period, the Board adopted a regular policy of automatically excluding family members from bargaining units. See, e. g., Louis Weinberg Associates, Inc., 13 N. L. R. B. 66, 69 (1939) (“son and daughter of the president and vice president of the Company” excluded from bargaining unit “where, as here, the only union involved desires their exclusion”).
Labor Management Relations Act, 1947, § 101, 61 Stat. 136.
“Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection, and shall also have the right to refrain from any or all of such activities . . . .” 29 U. S. C. § 157 (emphasis added).
See Chemical Workers v. Pittsburgh Plate Glass Co., 404 U. S. 157, 172-173 (1971); Kalamazoo Paper Box Corp., 136 N. L. R. B. 134, 137 (1962). See generally R. Gorman, Labor Law 68-74 (1976).
Cf. NLRB v. Yeshiva University, 444 U. S. 672, 682 (1980) (“judicially implied exclusion [from the Act] for ‘managerial employees’ who are involved in developing and enforcing employer policy”). Moreover, the explicit instructions of Congress in § 2(3) limit the authority of the Court and the Board to imply additional exclusions in this context. See nn. 1 and 2, supra; NLRB v. Sexton, 203 F. 2d 940 (CA6 1953) (per curiam).
NLRB v. Caravelle Wood Products, Inc., 504 F. 2d 1181, 1187 (CA7 1974).
“Frequently, [unit] determinations, like the drawing of election districts in other contexts, have been the decisive factor in determining whether there would be any collective bargaining at all in a plant or enterprise. Unions and employers have sought to gerrymander accordingly.” B. Meltzer, Labor Law 811 (2d ed. 1977). In this context, “virtually every Board decision . . . favors one side or the other,” ante, at 498, and the Board must be especially circumspect to avoid reliance on illegitimate factors in determining the size of the election unit. In at least one ease, an Administrative Law Judge explicitly relied on relatives’ pro-union sentiments to include them in the bargaining unit over the employer’s objection. Trash Removers, Inc., 257 N. L. R. B. 945, 946 (1981) (“The basic theory underlying those decisions in which the Board has excluded relatives of the boss is that they are shown, by the record, to be aligned with management, as distinguished from being antimanagement or prounion. That is why it is always the union that requests their exclusion”), order adopted by the Board, id., at 945. See also Pet. for Cert. 11 (relatives’ access to management “lessens the likelihood that they would vote in favor of union representation”).
See International Metal Products Co., 107 N. L. R. B. 65, 67 (1953) (“We are convinced that the mere coincidence of a family relationship between an employee and his employer does not negate the mutuality of employment interest which an individual shares with fellow employees, absent evidence that because of such relationship he enjoys a special status which allies his interests with those of management”), overruled in Foam Rubber City #2 of Florida, Inc., 167 N. L. R. B., at 624, n. 10. See also NLRB v. Hubbard Co., 702 F. 2d 634, 636 (CA6 1983); Cherrin Corp. v. NLRB, 349 F. 2d 1001, 1004 (CA61965), cert. denied, 382 U. S. 981 (1966); NLRB v. Sexton, 203 F. 2d, at 940.
Reference
- Cited By
- 66 cases
- Status
- Published