Sara Lee Bakery v. NLRB , 296 F.3d 292 ( 2002 )

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
SARA LEE BAKERY GROUP, 
INCORPORATED, formerly known as
The Earthgrains Company,
Petitioner,
 No. 01-2067
v.
NATIONAL LABOR RELATIONS BOARD,
Respondent.

NATIONAL LABOR RELATIONS BOARD, 
Petitioner,
v.
SARA LEE BAKERY GROUP,  No. 01-2228
INCORPORATED, formerly known as
The Earthgrains Company,
Respondent.

On Petition for Review and Cross-Application
for Enforcement of an Order
of the National Labor Relations Board.
(26-CA-18630, 26-CA-18717)
Argued: February 27, 2002
Decided: July 15, 2002
Before NIEMEYER and LUTTIG, Circuit Judges, and
Henry M. HERLONG, Jr., United States District Judge
for the District of South Carolina, sitting by designation.
2 SARA LEE BAKERY GROUP v. NLRB
Petition for review granted in part and denied in part and cross-
application for enforcement granted in part and denied in part by pub-
lished opinion. Judge Niemeyer wrote the opinion, in which Judge
Herlong joined. Judge Luttig wrote an opinion concurring in part and
dissenting in part.
COUNSEL
ARGUED: Charles Preyer Roberts, III, CONSTANGY, BROOKS &
SMITH, L.L.C., Winston-Salem, North Carolina, for Sara Lee. David
S. Habenstreit, Supervisory Attorney, NATIONAL LABOR RELA-
TIONS BOARD, Washington, D.C., for Board. ON BRIEF: Arthur
F. Rosenfeld, General Counsel, John E. Higgins, Jr., Deputy General
Counsel, John H. Ferguson, Associate General Counsel, Aileen A.
Armstrong, Deputy Associate General Counsel, Anne Marie Lofaso,
NATIONAL LABOR RELATIONS BOARD, Washington, D.C., for
Board.
OPINION
NIEMEYER, Circuit Judge:
After The Earthgrains Company, Inc., a manufacturer of baked
goods, acquired CooperSmith, Inc., another manufacturer of baked
goods, and consolidated the facilities of the two companies in several
cities, the National Labor Relations Board (the "Board" or the
"NLRB") accreted CooperSmith’s employees, who had not been rep-
resented by a union, into Earthgrains’ existing bargaining units with-
out giving the CooperSmith employees a chance to vote on whether
they wished to be so represented. When Earthgrains refused to recog-
nize the union at four of its Mississippi facilities — Meridian, Laurel,
Hattiesburg, and Columbus — the Board found that Earthgrains com-
mitted unfair labor practices in violation of the National Labor Rela-
tions Act ("NLRA") and ordered Earthgrains to recognize the union
at the four sites.
On Earthgrains’ petition for review and the NLRB’s cross-
application for enforcement of its order, we conclude that at three of
SARA LEE BAKERY GROUP v. NLRB 3
the sites, the Board failed to apply its own precedents for accreting
employees, and accordingly, with respect to those sites, we grant
Earthgrains’ petition for review and deny the Board’s cross-
application for enforcement. At the remaining site, we deny Earth-
grains’ petition for review and grant the Board’s application for
enforcement. Finally, with respect to a Board finding that Thomas
Neal, an Earthgrains’ employee, was constructively discharged for
exercising statutory rights, we grant the Board’s application to
enforce as modified herein.
I
The Earthgrains Company, Inc. (now Sara Lee Bakery Group, Inc.)
("Earthgrains") manufacturers and distributes baked goods throughout
the United States through distribution facilities, some of which also
contain bakery stores. At many of these facilities, Earthgrains’
employees have elected to be represented by the Bakery, Confection-
ary, and Tobacco Workers International Union (the "Union"). Before
Earthgrains acquired CooperSmith, Inc., it had 19 distribution facili-
ties in Mississippi, which were divided into three bargaining units,
each of which had a collective bargaining agreement with Earth-
grains.
On January 16, 1998, Earthgrains acquired CooperSmith, a com-
peting distributor of baked goods, which also operated several facili-
ties in Mississippi. None of CooperSmith’s employees were
represented by a union.
In cities where Earthgrains ended up with multiple facilities as a
result of its acquisition of CooperSmith, Earthgrains consolidated the
CooperSmith and Earthgrains facilities, closing either a former Earth-
grains facility or a former CooperSmith facility and naming the new
facility according to which company had the more dominant market
share in the particular city. Earthgrains then associated union status
with the name of the facility, continuing its recognition of the Union
at facilities named Earthgrains and refusing to recognize the Union at
facilities named CooperSmith.
In Meridian, Laurel, and Hattiesburg, Mississippi, Earthgrains
closed its own former facilities and continued distribution using the
4 SARA LEE BAKERY GROUP v. NLRB
former CooperSmith facilities, transferring former Earthgrains
employees to the new CooperSmith facilities to work there with the
former CooperSmith employees.1 After the consolidation, 11 of the 13
employees at Meridian were former CooperSmith employees; 8 of 9
employees at Laurel were former CooperSmith employees; and 10 of
15 employees at Hattiesburg were former CooperSmith employees.
At Columbus, Earthgrains closed the CooperSmith facility and trans-
ferred the former CooperSmith employees to the Earthgrains facility.
The consolidated facility had 4 former Earthgrains employees and 3
former CooperSmith employees. But because the Columbus market
was dominated by the CooperSmith brand, Earthgrains renamed the
former Earthgrains facility CooperSmith.
After Earthgrains declined to recognize the Union at the four facili-
ties operating under the CooperSmith name, the NLRB’s General
Counsel charged Earthgrains with unfair labor practices in failing to
negotiate with the Union, in violation of §§ 8(a)(1) and 8(a)(5) of the
NLRA. In a split decision, the Board concluded that Earthgrains had
violated the NLRA by refusing to negotiate with the Union and by
making unilateral changes at these four facilities. In addition, the
Board found that Earthgrains had constructively discharged Thomas
Neal, an employee at Columbus, for exercising his rights under the
NLRA, in violation of § 8(a)(3) of the Act.
In ruling that the newly-acquired CooperSmith facilities should
have been included in preexisting Earthgrains bargaining units, the
Board concluded that the acquisition "did not affect the appropriate-
ness of the bargaining units or [Earthgrains’] obligation to recognize
the Union as representative of those units, as enlarged by the accre-
tion of CooperSmith employees." Chairman Peter Hurtgen dissented,
concluding that the majority had failed to identify the issue properly.
He stated that "the real issue is whether the newly acquired Cooper-
Smith employees are appropriately a part of the two respective units.
. . . The issue here is whether the new employees can be added to the
unit without a vote." Addressing that issue, Chairman Hurtgen con-
1
At Meridian, Earthgrains transferred only a portion of its employees
to the new CooperSmith facility, retaining bakery workers at the former
Earthgrains facility.
SARA LEE BAKERY GROUP v. NLRB 5
cluded that "accretion requires a finding of ‘overwhelming commu-
nity of interest,’" a finding which was not supported by the record.
From the Board’s order, Earthgrains filed this petition for review,
and the NLRB filed a cross-application for enforcement of its order.
II
The principal question on appeal is whether the Board applied its
long-standing principles for defining bargaining units and for accret-
ing employees to existing bargaining units when it held that Earth-
grains had an obligation to recognize bargaining units "as enlarged by
the accretion of CooperSmith employees." In deciding such questions,
the Board must apply its principles consistently. See, e.g., NLRB v.
Lundy Packing Co., 68 F.3d 1577, 1583 (4th Cir. 1995).
At the outset, we agree with Chairman Hurtgen that the particular
issue presented is whether the Board properly accreted the Cooper-
Smith employees to Earthgrains’ preexisting bargaining units — not
whether Earthgrains’ existing units remained "appropriate."2 Because
Earthgrains contends that it need not recognize union representation
of the newly acquired CooperSmith employees, who had never been
represented by a union or had the opportunity to vote for representa-
tion, the issue is whether accretion was justified and not whether the
2
Our colleague in dissent likewise focuses on the appropriateness of
Earthgrains’ existing bargaining units, articulating the issue of whether
former Earthgrains’ employees "must be treated as separate bargaining
units." (Emphasis added). Earthgrains, however, does not challenge the
appropriateness of its existing bargaining units. Rather it raises the ques-
tion of whether the Board could, in its discretion, recognize that the
CooperSmith employees, at their respective facilities, might be consti-
tuted as separate units. If they could be so constituted, Earthgrains con-
tends that the CooperSmith employees could not be accreted to the
existing Earthgrains’ units and thereby be denied the right to an election.
Chairman Hurtgen likewise recognized the actual issue raised by Earth-
grains, noting, "the real issue is whether the newly acquired Cooper-
Smith employees are appropriately a part of the two [Earthgrains] units."
He restated this issue as "whether the new employees can be added to the
unit without a vote."
6 SARA LEE BAKERY GROUP v. NLRB
existing units remained appropriate. The transactional facts relating to
this issue are not in dispute.
With respect to the CooperSmith employees at Meridian, Laurel,
and Hattiesburg, the former CooperSmith facilities remained open,
and the CooperSmith employees continued to work at those facilities.
While Earthgrains transferred a few of its own former employees to
each CooperSmith facility, the majority at each site remained former
CooperSmith employees, and those employees had never elected to be
represented by a union. With respect to the former CooperSmith
employees at Columbus, they were transferred to a former Earthgrains
facility where Earthgrains employees also worked. At that site, Earth-
grains’ employees, who were represented by the Union, remained in
the majority.
In determining that the former CooperSmith employees at all four
of these facilities should be accreted to two existing Earthgrains bar-
gaining units, the Board stated simply:
There is substantial record support for the [administrative
law] judge’s finding that [Earthgrains’] consolidation of its
existing operations with [CooperSmith] did not affect the
appropriateness of the bargaining units or [Earthgrains’]
obligation to recognize the Union as representative of those
units, as enlarged by the accretion of CooperSmith employ-
ees. Specifically, the record shows that: [Earthgrains] con-
tinues to produce and distribute bakery products without
substantial changes in operations; employees from the his-
torically represented units comprise a majority in each over-
all expanded unit; no other labor organization represented
the CooperSmith employees; and those employees share a
community of interests with the previously represented
employees in the consolidated operations.
(Emphasis added). The Board did not address whether a community
of interests existed between the employees of each of these separate
facilities and the bargaining unit or whether the employees at each
separate facility had a separate group identity sufficient to be consid-
ered a separate bargaining unit.
SARA LEE BAKERY GROUP v. NLRB 7
On appeal, Earthgrains argues that the Board "disregarded the
appropriate decisional line, made no effort to explain why it had dis-
regarded [its] precedent[s], and applied a completely inconsistent
analysis that was patently inapplicable." It argues that the Board
failed to take into account the fact that Earthgrains acquired new
facilities in distinct geographical locations, thus overlooking its case
law, which applies a presumption that a new facility has a separate
group identity sufficient to be considered a separate bargaining unit.
The NLRB regulates in the broad policy context that "[e]mployee
self-determination in the collective bargaining process is perhaps the
[NLRA’s] most fundamental promise." Baltimore Sun Co. v. NLRB,
257 F.3d 419, 426 (4th Cir. 2001). Specifically, § 7 of the NLRA
grants employees the right to choose equally between self organiza-
tion through representatives "of their own choosing" and the right "to
refrain" from any collective bargaining activity. 29 U.S.C. § 157; see
also Melbet Jewelry Co., 180 N.L.R.B. 107, 109 (1969).
To protect the employees’ right of self-determination, the Board is
given broad discretion to define appropriate collective bargaining
units. See 29 U.S.C. § 159(b); Lundy Packing, 68 F.3d at 1579-80.
Those units, in turn, vote on union representation, and, if the union
wins, the union may bargain collectively with the employer to reach
a collective bargaining agreement that will govern the unit for an
agreed term. During the term of the collective bargaining agreement,
new employees of the company where the bargaining unit exists are
routinely accreted into the unit to be bound by the agreement. See,
e.g., Auciello Iron Works, Inc. v. NLRB, 517 U.S. 781, 786 (1996)
(describing the union’s entitlement to a presumption of majority sta-
tus during the term of a collective bargaining agreement). But that
routine course of action assumes that the new employees have "little
or no separate group identity and thus cannot be considered to be a
separate appropriate unit." Baltimore Sun, 257 F.3d at 427 (citation
and internal quotation marks omitted).
In contrast, when an entire group of nonunion employees joins a
union company, accretion is rare and is reserved only for "cases in
which [the Board] could conclude with great certainty, based on the
circumstances, that the employees’ rights of self-determination would
not be thwarted." Baltimore Sun, 257 F.3d at 427. Specifically,
8 SARA LEE BAKERY GROUP v. NLRB
through its announced standard, the Board rejects accretion unless
two prerequisites have been satisfied: (1) the Board must find that the
new employees have "an insufficient group identity to function as a
separate unit"; and (2) it must find an "overwhelming community of
interest," such that the accreted employees have "interests [that] are
so closely aligned with those of the preexisting bargaining unit that
the Board can safely assume that the accreted employees would opt
into the unit if given the opportunity." Baltimore Sun, 257 F.3d at 427
(citing Safeway Stores, 256 N.L.R.B. 918, 918 (1981)).
When a company acquires new employees through the acquisition
of an entire facility, the Board has presumptively treated the employ-
ees at the new facility as a separate bargaining unit. See, e.g., ATS
Acquisition Corp., 321 N.L.R.B. 712, 712 (1996); Gitano Groups,
Inc., 308 N.L.R.B. 1172, 1175 (1992). And the Board generally does
not compel the employees at the new facility to be included in a pre-
existing bargaining unit "without allowing those employees the
opportunity of expressing their preference in a secret election."
Archer Daniels Midland Co., 333 N.L.R.B. No. 81, 2001 WL 303760,
at *6 (2001) (quoting Melbet Jewelry, 180 N.L.R.B. at 110); Kroger
Co., 155 N.L.R.B. 546, 548-49 (1965) (requiring new elections when
two plants "merge into an entirely new operation"); General Extru-
sion Co., 121 N.L.R.B. 1165 (1958) (refusing to apply the contract
bar doctrine where "changes have occurred in the nature as distin-
guished from the size of the operations . . . involving . . . a merger
of two or more operations"). But even if the Board fails to apply this
presumption, it will bypass elections and accrete the employees at the
separate facility into the existing bargaining unit only when it is clear
that a majority of the employees at the new facility acquired by the
company wishes to join the existing bargaining unit — i.e., only
where the Board "could conclude with great certainty . . . that the
employees’ rights of self-determination would not be thwarted." Bal-
timore Sun, 257 F.3d at 427.
At the three locations where Earthgrains acquired new facilities
and where it continued with CooperSmith employees — Meridian,
Laurel, and Hattiesburg — the Board failed to apply its presumption
that each new facility be regarded as a separate bargaining unit. See
ATS Acquisition, 321 N.L.R.B. at 712; Gitano Group, 308 N.L.R.B.
SARA LEE BAKERY GROUP v. NLRB 9
at 1175. For this reason alone, we decline to enforce the Board’s order
accreting the employees at those facilities.
But even without the presumption from ATS Acquisition and
Gitano Group, the Board failed to apply its long-standing principles
for accreting groups of new employees into existing bargaining units.
It did not, and could not, conclude that the employees at each Cooper-
Smith facility had an "insufficient group identity to function as a sep-
arate unit," Baltimore Sun, 257 F.3d at 427, and that the community
of interest between those employees and the employees in the existing
Earthgrains bargaining unit was "overwhelming," Safeway Stores,
256 N.L.R.B. at 918. To reach such a conclusion, the Board would
have had to find that the former CooperSmith employees, at each his-
torically nonunionized facility in a location geographically distinct
from employees in the Earthgrains bargaining unit, could not have a
group identity sufficient to form a bargaining unit. See Arcadian
Shores, Inc. v. NLRB, 580 F.2d 118, 120 (4th Cir. 1978). Given its
broad discretion to define bargaining units, the Board could not have
overcome that barrier. And without satisfying itself that the employ-
ees at each separate facility could not have a group identity, the Board
could not have accreted the CooperSmith employees to an existing
bargaining unit.
Moreover, the Board could not have satisfied the second step of its
Safeway Stores accretion standard — that the CooperSmith employ-
ees had an "overwhelming" community of interest with the Earth-
grains employees in the bargaining units. To decide that question, the
Board traditionally applies a 12-factor test, considering:
(1) similarity in the scale and manner of determining the
earnings; (2) similarity in employment benefits, hours of
work, and other terms and conditions of employment; (3)
similarity in the kind of work performed; (4) similarity in
the qualifications, skills, and training of the employees; (5)
frequency of contact or interchange among the employees;
(6) geographic proximity; (7) continuity or integration of
production processes; (8) common supervision and determi-
nation of labor-relations policy; (9) relationship to the
administrative organization of the employer; (10) history of
10 SARA LEE BAKERY GROUP v. NLRB
collective bargaining; (11) desires of the affected employ-
ees; (12) extent of union organization.
Lundy Packing, 680 F.3d at 1580. The Board did not conduct this
analysis. And if it had conducted the analysis, even the limited record
in this case demonstrates the Board could not have overcome this sec-
ond step.
Notwithstanding the similarity between CooperSmith’s and Earth-
grains’ operations, the CooperSmith employees worked at separate
facilities in geographical locations distinct from the areas in which
employees in Earthgrains’ bargaining units worked. In addition,
CooperSmith employees worked under conditions that developed
over years of working for CooperSmith before it was acquired by
Earthgrains. And the employees at the CooperSmith facilities had
never been unionized or subject to a collective bargaining agreement.
Finally, even after a few Earthgrains employees were transferred to
each of the former CooperSmith facilities, the CooperSmith employ-
ees continued to outnumber the Earthgrains employees by substantial
margins — 11 to 2 at Meridian; 8 to 1 at Laurel; and 10 to 5 at Hat-
tiesburg. These data alone suggest that the former CooperSmith
employees might successfully assert their historically separate inter-
ests through a vote, if given the chance. Certainly, the Board could
not "safely assume that the accreted [CooperSmith] employees would
opt into [the relevant Earthgrains] unit if given the opportunity." Bal-
timore Sun, 257 F.3d at 427. As we observed in Baltimore Sun:
Because the accretion doctrine is in considerable tension
with the statute’s guarantee of employee self-determination,
the Board has historically favored employee elections,
reserving accretion orders for those rare cases in which it
could conclude with great certainty, based on the circum-
stances, that the employees’ rights of self-determination
would not be thwarted.
Id.Accordingly, we conclude that the Board, in accreting the Cooper-
Smith employees at the Meridian, Laurel, and Hattiesburg facilities
into two Earthgrains bargaining units, failed to follow its own stan-
SARA LEE BAKERY GROUP v. NLRB 11
dards for doing so. Therefore, we decline to enforce the Board’s order
directing Earthgrains to recognize that those employees are repre-
sented by the Union.
At the Columbus facility, however, the circumstances are suffi-
ciently different to justify a different result. Even after its acquisition
of CooperSmith, Earthgrains continued the operation of its own for-
mer facility in Columbus, even though it changed the name of that
facility to CooperSmith, and it transferred the former CooperSmith
employees to the former Earthgrains facility. Also, after the Cooper-
Smith employees were transferred to the former Earthgrains facility,
the Earthgrains employees continued to outnumber the CooperSmith
employees, four to three. Because the former CooperSmith employees
were moved into the Earthgrains facility and worked there under the
conditions historically established through a collective bargaining
agreement, the presumption of ATS Acquisition and Gitano Group
would not apply. Moreover, when we apply the traditional standards
for accreting employees, the outcome becomes a much closer ques-
tion, and we cannot conclude that the Board violated its own stan-
dards. Accordingly, we will grant the Board’s cross-application to
enforce its order insofar as it applies to the Columbus facility.3
III
Earthgrains also challenges the Board’s finding that Earthgrains
violated § 8(a)(3) of the NLRA by "constructively discharging"
Thomas Neal for exercising his statutory rights.
Neal was hired in November 1996 as a route salesman at Earth-
grains’ Columbus facility. A few months later, in February 1997, his
3
We reject Earthgrains’ additional argument for refusing to recognize
the Union at Columbus. Earthgrains argues that because the local union
was placed in trusteeship by reason of financial deficiencies and defalca-
tions, it was unable to represent Earthgrains’ employees adequately. But
we can find nothing in the record to suggest that the interests of the
employees were ever compromised. To the contrary, since September
1998, when the trusteeship began, the trustee has continued to meet and
negotiate with Earthgrains to the extent that Earthgrains was willing to
bargain.
12 SARA LEE BAKERY GROUP v. NLRB
route was eliminated, and Neal was laid off. Shortly thereafter, how-
ever, Neal was recalled as a depot loader. He was told upon his return
that he could return to his route salesman position if a route came
open.
Following Earthgrains’ acquisition of CooperSmith in January
1998, sales routes were restructured and reassigned. When Neal was
not given one of the routes, he filed a grievance through the Union,
which was rejected. Subsequently, when a route salesman was fired
and another route came open, Neal requested that route. He was told,
however, that he would get the route only if Willie Williams, another
employee, turned it down. When Neal asked why Williams had prior-
ity for the position, Neal claims that he was told by David Willis, his
supervisor, "If I had kept my nose — if I’d keep my nose clean and
leave the union mess alone, I could get a route." Neal was left with
the belief that he "would have got a route" but for his union participa-
tion.
Neal nevertheless continued to work as a depot loader for approxi-
mately another month and a half. He then resigned, giving the follow-
ing explanation for his resignation:
I had heard that they were going to try to do away with my
job regardless, because they was going to try to work where
there wouldn’t be a depot loader, and I figured I better get
out of there before they laid me off, so I turned in a week’s
notice the first part of June and worked it out.
Neal’s fear of losing his job was based on an informal conversation
with a Meridian supervisor about rumors from which Neal drew infer-
ences. But Neal was never told by the company, or even formally by
anyone, that his job would be eliminated. Nor was he told that, in the
event of the elimination of his job, he would lose his job rather than
being transferred to a new position. And as it turned out, the rumors
on which Neal acted were inaccurate. Neal’s depot loader position
was never eliminated.
We conclude that substantial evidence supports the Board’s finding
that Earthgrains, by refusing to promote Neal to route sales represen-
tative, violated § 8(a)(3) of the NLRA. Neal’s testimony, which was
SARA LEE BAKERY GROUP v. NLRB 13
not rebutted, supports the Board’s conclusion that Neal was not given
the route salesman position because of his union participation.
Accordingly, we affirm the Board’s finding that an illegal animus
contributed to Earthgrains’ decision to deny Neal a position as route
sales representative.
But on the Board’s finding that Earthgrains violated § 8(a)(3) by
"constructively discharging" Neal from his job as depot loader, we
conclude that the Board had no substantial evidence to support its
finding.
To prove constructive discharge, the General Counsel would have
to establish "that the employer [intentionally] made the employee’s
working conditions intolerable" and "that the employer did so because
of the employee’s union activities." NLRB v. Grand Canyon Mining
Co., 116 F.3d 1039, 1049 (4th Cir. 1997). The Board has held that
constructive discharge may also be proved with evidence that the
employee faced a "Hobson’s Choice" between continued employment
and "abandon[ing] his or her [statutory] rights." Intercon I (Zercom),
333 N.L.R.B. No. 30, 2001 WL 408748 *1 (2001).
In this case the Board found that Neal "quit after being confronted
with a [Hobson’s] choice between resignation or continued employ-
ment conditioned on relinquishment of statutory rights." The evidence
in the record, however, does not support this conclusion.4 Despite the
suggestion to Neal that he would be promoted to route salesman only
if he "would leave the union alone," there was never any suggestion
that Neal’s continued employment as a depot loader was conditioned
on relinquishment of his statutory rights. No one from Earthgrains
management ever threatened Neal with discharge or intimated that
Neal’s job as a depot loader was in danger because of his union activ-
ities. To the contrary, Neal’s own testimony supports only the conclu-
sion that he resigned because of rumors that his job would be
eliminated due to some further restructuring. He has made no sugges-
tion that the rumors about the elimination of his job were in any way
4
Because we conclude that the record evidence does not support a find-
ing that Neal faced an unlawful "Hobson’s Choice," we need not reach
the issue, raised by Earthgrains, of whether the Board’s "Hobson’s
Choice" precedent is consistent with the NLRA.
14 SARA LEE BAKERY GROUP v. NLRB
directed at him or, indeed, that the rumors were even circulated by
management. In short, there is simply no basis for finding that Neal
faced a Hobson’s Choice of quitting his depot loader job or relin-
quishing his statutory rights.
Thus, while we refuse to enforce any remedy based on a finding
that Neal was constructively discharged, we conclude that Neal never-
theless is entitled to a remedy by reason of Earthgrains’ refusal to pro-
mote him to the route salesman position. Accordingly, we will grant
the Board’s application to enforce its order insofar as it requires
Earthgrains to offer Neal the position of route salesman or a "substan-
tially equivalent position" if that position no longer exists. Any back-
pay remedy would accordingly pay Neal the difference between what
he would have made as a route sales representative and what he actu-
ally made as a depot loader and at whatever jobs he held after his res-
ignation, covering a period commencing with the date he was first
denied a route and ending with the date of offer of reinstatement.
Finally, the "Notice to Employees" provided for in the Board’s order
would have to be modified to read: "We will offer immediate and full
reinstatement to Thomas Neal to a route sales representative job, and
we will make Neal whole for all losses because of our unlawful
refusal to grant his request for a route sales representative job."
IV
In sum, we grant Earthgrains’ petition for review insofar as it
relates to the Board’s accretion of former CooperSmith employees at
Meridian, Laurel, and Hattiesburg. We also grant its petition insofar
as it challenges the Board’s finding that Earthgrains constructively
discharged Neal. In all other respects, we deny Earthgrains’ petition.
Correspondingly, we grant the Board’s cross-application for enforce-
ment of its order as it applies at Columbus, and we grant its cross-
application for enforcement of its order with respect to Earthgrains’s
denial of Neal’s promotion to a route sales representative. In all other
respects, we deny enforcement of the Board’s order.
IT IS SO ORDERED
LUTTIG, Circuit Judge, concurring in part and dissenting in part:
The majority concludes that the Board failed to properly apply its
precedents regarding whether a company’s employees at a "new facil-
SARA LEE BAKERY GROUP v. NLRB 15
ity" must be regarded as a separate bargaining unit, and, "for this rea-
son alone," it denies enforcement to the Board’s finding that
Earthgrains committed an unfair labor practice by refusing to recog-
nize the union at the consolidated facilities in Meridian, Laurel, and
Hattiesburg. See ante at 8. I believe that this conclusion is based on
a misreading of the Board’s previous decisions and a misunderstand-
ing of this court’s authority to review decisions of the Board. Futher-
more, I cannot agree with the majority’s holding that the Board
"could not" have concluded that the former CooperSmith employees
at these three consolidated facilities satisfied the Board’s standard
announced in Safeway Stores, 256 N.L.R.B. 918 (1981), for accretion
into union-represented bargaining units. The majority’s analysis blurs
together and confuses two distinct issues presented in this case: first,
whether the former Earthgrains employees in the consolidated units
must be treated as separate bargaining units, apart from the unionized
multi-facility bargaining units that had been established pre-
consolidation, and second, whether the former CooperSmith employ-
ees in those consolidated facilities may be accreted to those bargain-
ing units. For these reasons, I dissent from Part II of the majority’s
opinion, and would enforce the portion of the Board’s order requiring
Earthgrains to recognize the union at all four of the consolidated facil-
ities.
I.
The majority does not accurately describe the bargaining units and
labor situation at Earthgrains. Before its acquisition of CooperSmith,
Earthgrains was a party to four different collective bargaining agree-
ments with the Bakery, Confectionary, and Tobacco Workers Interna-
tional Union, Local 149 ("the Union"), each covering a separate
"bargaining unit" of Earthgrains employees. One of these collective
bargaining agreements covered all production employees at Earth-
grains’ bakery in Meridian, Mississippi. The other three agreements
covered delivery and sales employees, who worked among Earth-
grains’ nineteen different distribution facilities throughout the state.
These three agreements were known as the "Meridian agreement," the
"Gulfport agreement," and "Jackson agreement."1
1
The Meridian bargaining unit comprised sales employees in: Meridian
(7), Columbus (5), Tupelo (4), Forest (5), Greenville (2), Kosciusko (5),
16 SARA LEE BAKERY GROUP v. NLRB
After the acquisition of CooperSmith, a non-union competitor,2
Earthgrains consolidated operations in each city that had both an
Earthgrains and CooperSmith distribution facility. One facility would
be closed, and the remaining facility was viewed as either an "Earth-
grains" or a "CooperSmith" operation, depending on which company
had been dominant pre-consolidation in the relevant geographic area.
Four of the consolidated facilities, located in Meridian, Laurel, Hat-
tiesburg, and Columbus, were deemed continuing CooperSmith oper-
ations, because CooperSmith had the dominant market share in those
localities.3 In Meridian, Laurel, and Hattiesburg, the former Earth-
grains facility was physically closed and the CooperSmith facility was
used. In Columbus, the old Earthgrains facility was used and the
CooperSmith facility closed. These consolidated facilities employed
both former CooperSmith (non-union) employees and former Earth-
grains (union) employees.4
Vicksburg (1), Philadelphia (5), Grenada (2), Jackson (12), Magee (2),
and Yazoo City (1). The Gulfport bargaining unit covered workers in:
Laurel (4), Hattiesburg (6), Brookhaven (2), Picayune (1), Lucedale (1),
Gulfport (11), and Pascagoula (5). Finally, the Jackson bargaining unit
covered a portion of the sales employees in Jackson, who previously
worked for Hardins Bakery. When Earthgrains acquired Hardins Bakery
in 1986, the former Hardins Bakery workers continued working for
Earthgrains under their extant collective bargaining agreement (now
known as the "Jackson agreement"), which Earthgrains assumed, while
Earthgrains’ other employees at the Jackson facility were covered by the
"Meridian agreement."
2
All of CooperSmith’s employees, at the time of acquisition, were non-
union. J.A. 714.
3
The other three consolidated facilities (in Jackson, Philadelphia, and
Forest) were viewed as continuing Earthgrains operations, because
Earthgrains had been dominant in those geographic regions. Earthgrains
continued to apply the existing collective bargaining agreements to the
workers in those facilities, including the former CooperSmith employees
who transferred in.
4
Of the Meridian facility’s thirteen consolidated sales and delivery
employees, eleven were former CooperSmith employees and two were
from Earthgrains. In Laurel, eight came from CooperSmith and one from
Earthgrains. In Hattiesburg, ten previously worked for CooperSmith and
five for Earthgrains. In Columbus, three were from CooperSmith and
four from Earthgrains.
SARA LEE BAKERY GROUP v. NLRB 17
Earthgrains did not recognize the union of the former Earthgrains
employees at the consolidated facilities in Meridian, Laurel, Hatties-
burg, and Columbus, even though these employees, while they worked
in the former Earthgrains facility, had been covered by either the
Meridian or Gulfport collective bargaining agreement.5 The National
Labor Relations Board found this to be an unfair labor practice, ruling
that all of the employees at the consolidated facilities in Meridian and
Columbus were included in the Meridian collective bargaining agree-
ment, and that the Laurel and Hattiesburg employees were covered by
the Gulfport agreement. J.A. 478; 485.
II.
The Board rejected Earthgrains’ argument that the workers at the
consolidated facilities in Meridian, Laurel, and Hattiesburg should be
regarded as separate bargaining units, outside the scope of the Merid-
ian and Gulfport collective bargaining agreements, holding that Earth-
grains bore the burden of proving that the consolidation with
CooperSmith altered the existing bargaining units to the point that
they were no longer appropriate, and that Earthgrains failed to show
that the consolidation had affected the appropriateness of the existing
bargaining units.6 J.A. 478; 485. Nowhere does the majority claim
that the Board’s refusal to regard the consolidated facilities at Merid-
ian, Laurel, and Hattiesburg as separate bargaining units is contrary
to, or an unreasonable interpretation of, the National Labor Relations
Act. Rather, the only apparent basis for the majority’s decision to
deny enforcement to this portion of the Board’s order is that the
Board violated the Administrative Procedure Act by failing "to apply
5
Earthgrains’ workers in the Meridian and Columbus facilities had
been covered by the Meridian agreement; Earthgrains’ workers in the
Laurel and Hattiesburg facilities had been covered by the Gulfport agree-
ment.
6
The Board specifically relied on the findings in the record that Earth-
grains "continues to produce and distribute bakery products without sub-
stantial changes in operations; employees from the historically
represented units comprise a majority in each overall expanded unit; no
other labor organizations represented the CooperSmith employees; and
those employees share a community of interests with the previously rep-
resented employees in the consolidated operations." J.A. 478.
18 SARA LEE BAKERY GROUP v. NLRB
in fact the clearly understood legal standards that it enunciates in prin-
ciple." Allentown Mack v. NLRB, 522 U.S. 359, 376 (1998). The
majority characterizes the Board’s decisions in ATS Acquisition, 321
N.L.R.B. 712 (1996), and Gitano Groups, Inc., 308 N.L.R.B. 1172(1992), as establishing a "presumption" that "employees at [a] new
facility" are treated as a separate bargaining unit.
Those cases hold no such thing, and the Board has not violated
principles of reasoned decisionmaking by arbitrarily declining to
apply its previously-announced standards. In Gitano, the Board held
that when an employer "transfers a portion of its employees at one
location to a new location," the unit at the new facility is presump-
tively a separate unit. Id. at 1175 (emphasis added). If that presump-
tion is not rebutted, a majority test determines whether the employer
must recognize the union at the new facility. See id. at 1175 ("If a
majority of the employees in the unit at the new facility are transfer-
ees from the original bargaining unit, we will presume that those
employees continue to support the union and find that the employer
is obligated to recognize and bargain with the union . . ."). The major-
ity appears to believe (although it does not explain why) that the
Gitano presumption should apply because the union employees in
Meridian, Laurel, and Hattiesburg were physically relocated to the
established CooperSmith facilities. When Earthgrains consolidated
operations in Meridian, Laurel, and Hattiesburg, however, it did not
"transfer a portion of its employees at one location to a new loca-
tion," rather, it relocated and consolidated an entire facility, transfer-
ring all (not a portion) of its remaining employees at that old facility
to the new location. Although the transferred employees were a "por-
tion" of their overall bargaining unit (the Gulfport bargaining unit for
the Laurel and Hattiesburg employees, and the Meridian bargaining
unit for the workers in Meridian), they did not constitute a "portion"
of Earthgrains’ employees at their original locations in Meridian,
Laurel, or Hattiesburg, as required for the Gitano presumption to
apply.
In Gitano, as well as in the Board cases relied upon by Earthgrains
in which the Board applied the Gitano presumption, a portion of
unionized employees remained at the original facility while another
portion were transferred to a new location. See U.S. Tsubaki, 331
NLRB No. 47 (2000); ATS Acquisition Corp., Inc., 321 NLRB 712SARA LEE BAKERY GROUP v. NLRB 19
(1996); Ryder Truck Rental, Inc., 318 NLRB 1092; Armco Steel Co.,
312 NLRB 257 (1993). The Board has never applied the Gitano pre-
sumption when an entire facility is relocated or consolidated, and the
language of Gitano does not require such a result. Accordingly, it was
permissible for the Board to hold that the employees at the consoli-
dated facilities who were transferred from former Earthgrains facili-
ties remained part of the established bargaining units and retained
their rights to union representation.
Oddly enough, the majority’s opinion, while faulting the Board for
failing to presume that all the employees at the consolidated facilities,
whether former Earthgrains or former CooperSmith employees, are
separate from the existing Earthgrains bargaining units, only denies
union representation to the former CooperSmith employees at those
facilities. See ante at 10-11 ("[W]e conclude that the Board, in accret-
ing the CooperSmith employees at the Meridian, Laurel, and Hatties-
burg facilities into two Earthgrains bargaining units, failed to follow
its own standards for doing so. Therefore, we decline to enforce the
Board’s order directing Earthgrains to recognize that those employees
are represented by the Union." (emphasis added)). The majority opin-
ion apparently leaves intact the Board’s order requiring Earthgrains
to recognize the union as the representative of the former Earthgrains
employees at the three consolidated units. No election has been held
among these employees, however, so the only basis for continued
union representation is if these employees are somehow still part of
the existing, multi-facility, union-represented Earthgrains bargaining
units. But such would be inconsistent with the majority’s insistence
that the Board should have applied Gitano’s presumption of separate
bargaining units. Perhaps the majority assumes that the union success-
fully rebutted the Gitano presumption with respect to these former
Earthgrains employees at the consolidated facilities, but there cer-
tainly is no discussion of this. And it would be most inappropriate for
the majority to make such a tacit assumption without citing to any
evidence in the record and without giving Earthgrains an opportunity
to show, on remand to the Board, that the Gitano presumption has not
been rebutted. So it appears that the outcome reached by the majority,
which allows the former Earthgrains employees in the consolidated
facilities to retain their union representation, is irreconcilable with its
discussion of Gitano (but consistent with my view about the scope of
Gitano, which, for the reasons I discussed above, does not apply to
20 SARA LEE BAKERY GROUP v. NLRB
this case). I have no quarrel with the majority’s ultimate conclusion
that the union still represents the employees who were transferred
from the former Earthgrains facilities in Meridian, Laurel, and Hat-
tiesburg, but I cannot understand its rationale.
III.
As to the former CooperSmith employees now working in the con-
solidated facilities, the issue is whether they can properly be accreted
to the bargaining units consisting of unionized Earthgrains employ-
ees. Board precedent permits employees to be accreted to a preexist-
ing bargaining unit when the employees have "little or no separate
group identity and thus cannot be considered to be a separate appro-
priate unit" and the community of interest between the employees and
the existing unit is "overwhelming." Safeway Stores, 256 NLRB at
918. See also Staten Island University Hospital v. National Labor
Relations Board, 24 F.3d 450, 455 (2d Cir. 1994) ("Accretion
requires an overwhelming community of interests between a smaller
group of employees and a larger unit . . . [and] applies only if one
group of employees has no identity distinct from the other.").
In making its finding of accretion, the Board stated, in conclusory
fashion, that the consolidated CooperSmith employees "share a com-
munity of interests" with the unionized Earthgrains employees. J.A.
478. As the majority notes, the Board did not address whether this
community of interests was "overwhelming," nor did it discuss the
"little or no separate group identity" requirement of the Safeway
Stores test. Although I agree with the majority that the Board should
have more carefully applied its announced accretion standards to the
facts of this case, rather than glossing over the accretion issue as it
did,7 I do not think it appropriate to deny enforcement of this part of
7
This is especially true in light of our court’s observation that "courts
have been particularly vigilant in assuring that the Board observes in
practice the strict standards it has adopted for accretion orders." Balti-
more Sun Co. v. NLRB, 257 F.3d 419, 430 (4th Cir. 2001) (refusing to
enforce an accretion order by the Board when it failed to consider the
"little or no separate group identity" prong of the Safeway Stores stan-
dard). See also Universal Security Investments, Inc. v. National Labor
Relations Board, 649 F.2d 247, 253 (4th Cir. 1981) ("In making its
SARA LEE BAKERY GROUP v. NLRB 21
order because the record in this case contains substantial evidence that
would have allowed the Board to find that the accreted CooperSmith
employees have "little or no separate group identity" from, as well as
an "overwhelming community of interest" with, the unionized Earth-
grains employees.
The majority gives four reasons to support its conclusion that the
Board’s accretion order fails the Safeway Stores test. None is persua-
sive and only one is even relevant. The majority is mistaken to rely
on the pre-consolidation attributes of the former CooperSmith
employees, such as their distinct geographical employment locations
and unique working conditions. These have no bearing on whether the
proper subjects of the accretion inquiry — whether, post-
consolidation, these employees have "little or no separate group iden-
tity" from, as well as an "overwhelming community of interest" with,
the unionized Earthgrains employees. The majority’s desire to ignore
the post-consolidation characteristics of the former CooperSmith
employees is understandable, because none of them could possibly
support its refusal to enforce the Board’s accretion order. The record
reveals that the former CooperSmith employees are in no way cor-
doned off from the unionized Earthgrains employees; quite the con-
trary, they are working side by side, in the same facilities, performing
the same tasks in delivering baked goods.
The majority also makes much of the fact that former CooperSmith
employees outnumber the unionized Earthgrains employees at the
three consolidated facilities in dispute, and claims that "[t]hese data
alone suggest that the former CooperSmith employees might success-
fully assert their historically separate interests through a vote, if given
the chance." Ante at 10. The Board’s order, however, accretes the for-
mer CooperSmith employees to bargaining units that encompass mul-
tiple Earthgrains facilities, and the former CooperSmith employees do
[accretion] determination the Board must closely analyze whether the
new and old employees truly share a ‘community of interest.’") (empha-
sis added). Because accretion forecloses the accreted employees’ basic
right to select their bargaining representative, the Board should not
lightly impose a union on employees who have never indicated a prefer-
ence for such representation.
22 SARA LEE BAKERY GROUP v. NLRB
not constitute such a sizable portion of the Meridian or Gulfport bar-
gaining units as to cast doubt on the union’s majority status among
the accreted units. Moreover, the high ratio of former CooperSmith
employees to unionized Earthgrains employees does not, without fur-
ther analysis, have any direct relevance to the two prongs of the
Safeway Stores test. Large numbers of non-union employees may
nevertheless have "little or no separate group identity" from, as well
as an "overwhelming community of interest" with, a small number of
unionized employees.
The majority does point to one relevant factor that bears on
whether the "overwhelming community of interest" prong has been
satisfied, and that is the lack of prior union representation among the
accreted CooperSmith employees. See National Labor Relations
Board v. Lundy Packing, 68 F.3d 1577, 1580 (4th Cir. 1995) (listing
the "history of collective bargaining," "desires of the affected employ-
ees" and "extent of union organization" among the twelve factors the
Board has traditionally applied when applying the "community of
interest" test). However, many other factors traditionally considered
by the Board in making "community of interest" determinations cut
in the opposite direction and support the Board’s finding of accretion,
especially such factors as the "similarity in the kind of work per-
formed," "similarity in the qualifications, skills, and training of the
employees," "geographic proximity," and "continuity or integration of
production processes." Id. Given the facts of this case, the majority’s
ruling that the Board’s standard for accretion could not possibly be
satisfied, without even remanding to give the Board an opportunity to
apply the Safeway Stores standard in the first instance, is indefensible.
In sum, it is clear from the record that the employees in the consoli-
dated facilities, whether originally from CooperSmith or Earthgrains,
are working as part of a unified operation, and that the Board’s accre-
tion order was proper, notwithstanding its failure to apply the Safeway
Stores standard. Although I conclude that remanding to the Board to
apply the Safeway Stores standard, given the facts of this case, would
be a needless formality, the majority should at least, if it disagrees,
remand with instructions to the Board to allow it an opportunity to
apply the proper legal standard.
SARA LEE BAKERY GROUP v. NLRB 23
IV.
I concur with the majority that the Board’s finding of constructive
discharge regarding Thomas Neal is not supported by substantial evi-
dence, although, like the majority, I am satisfied that substantial evi-
dence supports the Board’s finding that Earthgrains violated section
8(a)(1) and (3) of the National Labor Relations Act by refusing to
promote Neal to route sales representative and by telling him that his
filing of a grievance kept him from getting that promotion.
Earthgrains argues that the Board’s "Hobson’s Choice" theory of
constructive discharge is an "arbitrary and irrational" interpretation of
the NLRA. I think it important to emphasize, however, that we need
not reach the issue of whether the Board’s use of the "Hobson’s
Choice" theory of constructive discharge is permissible under the
National Labor Relations Act, because the record lacks substantial
evidence to support a finding that Earthgrains constructively dis-
charged Neal, even if we assume, arguendo, that the Board’s articu-
lated "Hobson’s choice" standard is a permissible interpretation of the
statute.
Willis’ suggestion to Neal that he would have received a promotion
had he not filed a grievance through the union did not condition
Neal’s continued employment as a depot loader on the relinquish-
ment of statutory rights. Rather, Willis’ statement, at most, condi-
tioned Neal’s advancement within the company on his abandonment
of protected activity. An employer’s mere conditioning of some bene-
fit or condition of employment on the relinquishment of statutory
rights is not enough, under the Hobson’s choice theory, to create a
"constructive discharge" if the employee later resigns. If it were,
every violation of section 8(a)(3), which prohibits "discrimination in
regard to . . . any term or condition of employment to encourage or
discourage membership in any labor organization" would present a
"Hobson’s choice" to employees that would allow them to quit and
later claim reinstatement and backpay. The Board has never held that
the doctrine of "constructive discharge" is this broad and did not so
hold in this case.8
8
We need not decide, in this case, whether the NLRA would permit the
Board to explicitly adopt, in its caselaw, a policy that treats any
24 SARA LEE BAKERY GROUP v. NLRB
With these observations, I concur in Parts I and III and dissent
from Part II of the majority’s opinion.
employee resignation in response to a section 8(a)(3) unfair labor prac-
tice as a constructive discharge that would entitle the employee to rein-
statement and backpay. It should be noted, however, that the Board’s
remedial powers are confined to make-whole remedies, not punitive
sanctions, see NLRB v. Pepsi Cola Bottling Co. of Fayetteville, Inc., 258
F.3d 305, 314 (4th Cir. 2001), and that backpay awards are contingent
upon reasonable efforts by the victims of unfair labor practices to miti-
gate their damages, see Coronet Foods, Inc. v. National Labor Relations
Board, 158 F.3d 782, 800 (4th Cir. 1998). Any theory of constructive
discharge adopted by the Board must comport with these principles.