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June 8, 2005.

CELESTE J. MATTINA, Regional Director, Region 2, National Labor Relations Board, for and on Behalf of the NATIONAL LABOR RELATIONS BOARD, Petitioner,
DUANE READE, INC., Respondent.

The opinion of the court was delivered by: WILLIAM PAULEY, District Judge


The Regional Director of the National Labor Relations Board (the "Board") brings this proceeding against Duane Reade, Inc. ("Duane Reade" or the "Company") pursuant to Section 10(j) of the National Labor Relations Act (the "Act"), 29 U.S.C. § 160(j). The Regional Director petitions for a temporary injunction pending the final disposition of unfair labor practice charges currently before the Board. Specifically, the Regional Director seeks an interim bargaining order requiring Duane Reade to recognize and bargain in good faith with Allied Trades Council, Division of Local 338, RWDSU/UFCW, AFL-CIO ("ATC/Local 338"). The Regional Director also seeks to restrain Duane Reade from alleged unfair labor practices. For the reasons that follow, the Regional Director's petition is granted in part and denied in part.


  I. Relations Between Duane Reade and ATC

  Duane Reade operates approximately 245 retail drug stores in New York City and its surrounding suburbs. (NLRB General Counsel's ("G.C.") Ex. 58: List of Duane Reade Stores, dated Mar. 9, 2004.) For over forty years, Duane Reade recognized Allied Trades Council ("ATC") as the exclusive collective-bargaining representative for many of its employees. As of 2003, ATC represented over two thousand Duane Reade employees in 142 stores. (G.C. Ex. 58; Petition, dated Jan. 19, 2005 ("Pet.") ¶ 7(i).) ATC communicated with its bargaining unit employees primarily through store visits. (Affidavit of Reynaldo Rosado, dated Nov. 10, 2004 ("Rosado Aff.") ¶ 2; Transcript of Administrative Hearing ("ALJ Tr.") at 1027-30, 1410-11, 1803.)

  Duane Reade's last collective bargaining agreement (the "CBA") with ATC governed the three-year period beginning September 1, 1998. (G.C. Ex. 8.) In relevant part, the CBA allowed "authorized representatives of the Union . . . to enter [Duane Reade]'s place of business at any time for the adjustment of disputes, grievances or any other matters that may require their presence." (G.C. Ex. 8 at 2.)

  The parties were unable to negotiate a new collective bargaining agreement. As of September 1, 2001, Duane Reade ceased remitting dues to ATC. (ALJ Tr. at 2253.) On December 6, 2001, Duane Reade offered ATC its "Last, Best and Final Settlement Offer" ("LBFSO"). (ALJ Tr. at 91-92; G.C. Ex. 9.) The LBFSO restricted ATC's access to Duane Reade stores to a greater extent than the CBA. Specifically, the LBFSO required ATC to conduct in-store visits only through three named representatives and only "upon reasonable notice," provided that the visits did "not . . . interfere with the normal operations of the store." (G.C. Ex. 9 at 2.) ATC refused to accept the LBFSO at that time, and Duane Reade declared an impasse. (ALJ Tr. at 91-92.) Thus, Duane Reade implemented the provisions of the LBFSO. (ALJ Tr. at 92.) In response, ATC filed administrative charges against Duane Reade to challenge its unilateral implementation of the LBFSO. The Board concluded that "the parties had not reached a valid impasse when [Duane Reade] declared impasse [sic] and implemented its final offer." Duane Reade, Inc., 342 NLRB No. 104, 2004 WL 2096501, at *2 (N.L.R.B. Sept. 15, 2004).

  By early 2003, ATC had not bargained on behalf of or collected dues from Duane Reade employees for over a year. As a result, the union suffered financially and struggled to fend off efforts by another union to supplant it. (ALJ Tr. at 2252-54, 2371-74.) To maintain its viability as an effective representative, ATC's executive board decided to affiliate with another union, Local 338, RWDSU/UFCW, AFL-CIO ("Local 338"), subject to the vote of ATC's membership. (ALJ Tr. at 2252-54, 2371-74.)

  On April 16, 2003, Duane Reade's Director of Human Resources, Seymour Stein, sent an email to all district managers and managers of ATC stores. (G.C. Ex. 11.) The email directed store managers that if ATC representatives entered a store to speak with their union members about the proposed affiliation:
[Y]ou are to approach them and ask for I.D. When they present you with said I.D. you are to explain to them that if they are in your location to solicit your employees, they must leave. If more than one representative visits your location you may ask for one to leave. Allied may only be in your location regarding employee grievances.
(G.C. Ex. 11; see ALJ Tr. at 2589, 2729, 3041-42.) Stein's email represented it merely "reenforce[d] [sic] existing procedures already in place" and did not announce a new policy regarding ATC access. (G.C. Ex. 11.) Following Stein's email, Duane Reade store managers did not permit ATC representatives to speak with employees on-site unless they provided prior notice, were addressing employee grievances and only spoke to off-duty employees. (ALJ Tr. at 1032-56, 1345, 1413-71, 1508-29, 1805-19, 2820-22, 3042-45, 3201-02, 3356.) II. The Affiliation Elections

  On May 8, 2003, the American Arbitration Association (the "AAA") administered an affiliation election at various locations throughout New York City. Of ATC's 2,250 eligible members, 951 voted against affiliation and 635 voted in favor. (Affidavit of James Rizzo, dated Feb. 10, 2005 ("Rizzo Aff.") ¶ 4.) ATC believes that Duane Reade tainted the election by intimidating and improperly influencing its employees. (ALJ Tr. at 1064-76; G.C. Ex. 41: Minutes of the May 12, 2003 Meeting of the ATC Executive Board.) Prior to the vote, for example, store managers demanded that their employees disclose how they intended to vote, pressured them to vote against affiliation and circulated a petition on which employees could declare that they no longer wanted ATC representation. (ALJ Tr. at 177-79, 238-59, 353-69, 857-64, 444-51, 1249-54, 1745-47; G.C. Exs. 23, 25 & 28.) Store managers warned employees that their employment conditions would worsen and they could even lose their jobs if they voted for affiliation. (ALJ Tr. at 178, 243, 259, 354, 445, 453, 1745.) Store managers also promised salary raises and other rewards to employees who voted against affiliation. (ALJ Tr. at 1745.) When ATC representatives visited stores unannounced to encourage affiliation votes, store managers told them that were not allowed in the store or that they had to wait for an employee break. (ALJ Tr. at 1413-32.) Many of these store managers explained that they were acting on the instructions of corporate management. (ALJ Tr. at 1414, 1422-26, 1431.) On the day of the vote, store managers distributed "Vote No" buttons, accompanied employees to the polls and shielded Duane Reade employees from ATC representatives. (ALJ Tr. at 179-81, 360-64, 452-55, 857-62, 1745, 1840, 2882-87.)

  At ATC's direction, the AAA did not certify the election results. (Duane Reade ("D.R.") Ex. 53: Letter from John Morro to Jeff Zaino, dated May 14, 2003.) The AAA held a new affiliation vote that required each union member to telephone or mail a ballot by May 29, 2003. (ALJ Tr. at 1077, 2280-82, 2438-49; D.R. Ex. 52.) Following senior management's directive, store managers ejected ATC representatives who visited Duane Reade employees to campaign for affiliation. (ALJ Tr. at 1345, 1433-345, 1508-09, 1550, 1804-07.) The second election drew fewer voters and yielded a different result: 344 union members voted for affiliation and only 26 voted against. (G.C. Ex. 44: AAA Certification of Results, dated May 29, 2003; Rizzo Aff. ¶ 4.) The AAA immediately certified those results. (G.C. Ex. 44.) Thereafter, members of the ATC Executive Board assumed positions as Directors and Associate Directors of the newly affiliated union, ATC/Local 338, and became responsible for representing the employees previously under ATC's auspices. (ALJ Tr. at 1802-04, 1854, 2198-2204, 2361-64; D.R. Ex. 43: Affiliation Agreement, dated Apr. 7, 2003 at 3-4.) ATC transferred its treasury to Local 338, and ATC members were not required to pay an initiation fee to Local 338. (D.R. Ex. 43 at 2, 6.) ATC/Local 338 operates out of ATC's offices (ALJ Tr. at 2199, 2205, 2365-66), and its membership is approximately the same size as that of ATC (ALJ Tr. at 2215).

  III. Relations Between Duane Reade and ATC/Local 338

  Duane Reade did not officially recognize or bargain with the affiliated union, ATC/Local 338. (G.C. Ex. 15: Memorandum to Employees from Jim Rizzo, dated May 29, 2003 ("We shall only honor the May 8, 2003 "NO AFFILIATION" decision."); Pet. Ex. T: Letter from John R. Durso to Anthony Cuti, dated Oct. 11, 2004 (demanding that "Duane Reade bargain with [Local 338] as the exclusive representative of the employees in the appropriate units"); Pet. Ex. U: Letter from Anthony Cuti to State Senator Ada L. Smith, dated Nov. 5, 2004.) Thus, Duane Reade failed to provide ATC/Local 338 with the names, home addresses and telephone numbers of its bargaining unit employees. (ALJ Tr. at 1082-87; G.C. Ex. 21: Letter from James M. Rizzo to John Morro, dated Aug. 29, 2003; G.C. Exs. 45-47: Letters from John Morro to James Rizzo, dated Sept. 15, 2003, Oct. 20, 2003 & Dec. 12, 2003.) Moreover, in December 2003, the Company asked employees to encourage customers to sign petitions opposing the union affiliation. (ALJ Tr. at 141-44, 382-85, 458-62.)

  There has been a substantial turnover of employees in ATC/Local 338's bargaining unit since 2003. (Affidavit of Nelson Resto, dated Nov. 4, 2004 ("Resto Aff.") ¶ 2; Rizzo Aff. ¶ 5.) Of the 2,253 employees eligible to vote in the May 29, 2003 affiliation election, only 1,055 were Duane Reade employees as of February 5, 2005. (Rizzo Aff. ¶ 5.) The employee turnover contributes to a lack of awareness of union representation. Reynaldo Rosado, an ATC/Local 338 representative, testified that when he visited an ATC/Local 338 store on January 14, 2005, a "male cashier said that he did not know that the employees had a union there." (Reply Affidavit of Reynaldo Rosado, dated Feb. 16, 2005 ("Rosado Reply Aff.") ¶ 3.) At another store in Brooklyn that same month, a pharmacist told Rosado that he was unaware of the union. (Rosado Reply Aff. ¶ 6.) Rosado encountered two other employees who claimed to have been told falsely by their managers that there was no union in their stores. (Rosado Aff. ¶ 7; Rosado Reply Aff. ¶ 9.)

  Since the May 29, 2003 affiliation election, Duane Reade has permitted ATC/Local 338 representatives to speak with employees only if they were complying with the terms of the LBFSO's store access clause and were visiting an employee in response to a specific grievance. (ALJ Tr. at 3042; Resto Aff. ¶ 3.) However, many union representatives did not give advance notice prior to store visitations and attempted to talk to employees while they were on duty. (ALJ Tr. at 1450-51, 1537-46, 1803, 1856-58.) In response, managers threatened union representatives with police action if they failed to leave voluntarily and, in some instances, ejected them in front of employees. (ALJ Tr. at 1037-56, 1448-71, 1511-31, 1537-47, 1805-19, 1856-58, 2820-22, 2997-3000, 3200-02, 3356; Reply Affidavit of Nelson Resto, dated Feb. 17, 2005 ¶¶ 7-8; Rosado Reply Aff. ¶¶ 2-6.) In June 2004, Duane Reade wrote to ATC/Local 338 to express its concern that the union's "unannounced visits" violated the LBSFO. (Pet. Ex. Q: Letter from Michelle D. Bergman to John Morro, dated June 4, 2004 ("[Y]ou are required to provide reasonable notice prior to visiting any store and such visits `are not to interfere with the normal operations of the store.'").)

  Despite its communication difficulties, the union continued to process grievances and attempted to bargain on behalf of Duane Reade employees. (Affidavit of Henry Hamburger, dated Oct. 26, 2004 ¶¶ 2-4, 7-12; Resto Aff. ¶ 3; Rizzo Aff. ¶ 3; Rosado Aff. ¶¶ 5-6; Affidavit of Seymour Stein, dated Feb. 10, 2005 ("Stein Aff.") ¶ 3(B)-(D).) Duane Reade cooperated with ATC/Local 338 representatives on various employee issues. (Rizzo Aff. ¶¶ 3, 6; Stein Aff. ¶¶ 2-4, 6.) For example, in September 2004, Duane Reade acceded to a union request and participated in a meeting to discuss Duane Reade's proposed incentive plan for pharmacists. (Rizzo Aff. ¶ 3(A); Stein Aff. ¶ 8.) While refusing to bargain with ATC/Local 338 over specific terms of that plan, Duane Reade agreed not to implement it if the union objected. (Resto Aff. ¶ 3.) Stein, Duane Reade's Director of Human Resources, returned 171 calls to ATC/Local 338 representatives about employee grievances between June 2003 and December 2004. (Stein Aff. ¶ 3(B)-(C).) Throughout 2003 and 2004, Duane Reade resolved over forty such grievances with ATC/Local 338. (Rizzo Aff. ¶ 3(B).) The Company also participated in twelve employee grievance arbitrations during that time. (Rizzo Aff. ¶ 3(B); Stein Aff. ¶ 6.) IV. The Administrative Proceedings

  Beginning in April 2003, ATC filed four separate unfair labor practice charges and an amended charge with the Board. (Pet. ¶ 3 & Exs. A-E.) In July 2003, the Regional Director consolidated the charges and issued a consolidated complaint. (Pet. Ex. F.) The Regional Director amended the consolidated complaint in October 2003 and again in February 2004. (Pet. ¶ 4(a) & Exs. G-H.) In her most recent filing, the Regional Director alleges that beginning in April 2003, Duane Reade violated the Act by interfering with the affiliation elections; interrogating and conducting surveillance of employees with respect to union activities; refusing to recognize and bargain in good faith with ATC/Local 338; refusing ATC/Local 338 representatives access to its stores; and refusing to provide the union with the ...

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