National Labor Relations Board v. Chicago Health & Tennis Clubs, Inc.

Chicago Health & Tennis Clubs, Inc. (CHC) (defendant) was a Chicago-based chain with 16 clubs. Saxon Paint & Home Care Centers (Saxon) (defendant) was a Chicago-based chain with 21 stores in Chicago and seven in neighboring states. The Saxon stores were virtually identical, while CHC operated three formats with differing facilities. Both chains had integrated, centralized management hierarchies with area supervisors. However, CHC’s operations and labor procedures were not as highly centralized as Saxon’s. Saxon store-level managers had limited involvement in labor-relations and personnel matters, with no authority to make employment decisions. Saxon’s upper management conducted all interviews, hiring, and training at central offices. In contrast, each CHC club manager had considerable authority over personnel and labor matters, including disciplinary authority and control over employment terms and conditions. Saxon frequently moved employees between locations, while CHC rarely did. Finally, only Saxon had a prior history of collective bargaining, including a previous attempt by the Retail Clerks Union (the union) to represent all Chicago metropolitan Saxon stores as a single unit. In response to petitions from the union, the National Labor Relations Board (the board) (plaintiff) certified an employee bargaining unit at a single CHC club and another at a single Saxon store. The union won elections to represent these units. However, CHC and Saxon both refused to bargain, claiming these single-store units were inappropriate. The union filed unfair-labor-practice charges with the board. The board found both employers had violated the National Labor Relations Act and ordered them to bargain, but they still refused. The board petitioned the United States Court of Appeals for the Seventh Circuit to enforce the board’s bargaining orders.