Chateau Madrid

National Labor Relations Board - Board Decisions

Aug 21, 1984

271 N.L.R.B. 1075 (N.L.R.B. 1984)

CHATEAU MADRID
Alameda Room, Inc., d/b/a Chateau Madrid and
New York Hotel and Motel Trades Council,
AFL-CIO. Case 2-CA-18446
21 August 1984
DECISION AND ORDER
BY CHAIRMAN DOTSON AND MEMBERS
ZIMMERMAN AND DENNIS
On 22 November 1982 Administrative Law
Judge James F. Morton issued the attached deci-
sion. The Respondent filed exceptions and a sup-
porting brief.
The National Labor Relations Board has delegat-
ed 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 brief and has
decided to affirm the judge's rulings, findings,' and
conclusions and to adopt the recommended Order
as modified.2
WE WILL NOT renounce, during its term, any
collective-bargaining agreement we have with New
York Hotel and Motel Trades Council, AFL-CIO,
covering a unit composed of our waiters, busboys,
porters, bartenders, captains, kitchen employees,
and cashier.
WE WILL NOT in any like or related manner
interfere with, restrain, or coerce you in the exer-
cise of the rights guaranteed you by Section 7 of
the Act.
WE WILL mail a certified letter to the Trades
Council within 5 days of the Board's Order to
inform it that we will no longer repudiate, during
its term, any agreement we have with the Trades
Council, unless we have the Trades Council's con-
sent therefor.
ALAMEDA ROOM, INC. D/B/A CHA-
TEAU MADRID
DECISION
ORDER STATEMENT OF THE CASE
The National Labor Relations Board adopts the
recommended Order of the administrative law
judge as modified below and orders that the Re-
spondent, Alameda Room, Inc. d/b/a Chateau
Madrid, New York, New York, its officers, agents,
successors, and assigns, shall take the action set
forth in the Order as modified.
1. Delete paragraph 2(b) and reletter the subse-
quent paragraphs.
2. Substitute the attached notice for that of the
administrative law judge.
I At fn. 6 of his decision, the judge discussed the Respondent's claim
that its actions were justified on the basis of what the Respondent terms a
"most favored nations clause" of its contract with the Charging Party.
We disavow any implication that the clause might render lawful the Re-
spondent's repudiation of the collective-bargaining agreement.
2 We disavow the judge's speculative comments in the remedy section
of his decision concerning the legality, under the Act, of the Respond-
ent's court suits. See Bill Johnson's Restaurants v. NLRB, 113 LRRM
2647, 97 LC q 10,130 (1983).
We shall delete par. 2(b) of the judge's recommended Order because
the parties agree that the Respondent continued to comply with the
terms and conditions of the collective-bargaining agreement despite the
Respondent's repudiation of it.
APPENDIX
NOTICE To EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
The National Labor Relations Board has found
that we violated the National Labor Relations Act
and has ordered us to post and abide by this notice.
271 NLRB No. 169
JAMES F. MORTON, Administrative Law Judge. On
November 25, 1981,' New York Hotel and Motel Trades
Counsel, AFL-CIO (Trades Council) filed an unfair
labor practice charge with the regional office of the Na-
tional Labor Relations Board (the Board). The charge al-
leged that Alameda Room, Inc., d/b/a Chateau Madrid
(Respondent) violated Section 8(a)(l) and (5) of the Na-
tional Labor Relations Act (the Act). On January 8,
1982, the General Counsel of the Board, by the Regional
Director for the Board's New York office, issued the
complaint against Respondent in this case which alleged
that Respondent violated Section 8(a)(1) and (5) of the
Act by having, since June 5, renounced and repudiated
the terms of a collective-bargaining agreement then in
force between Respondent and the Trades Council. Re-
spondent's answer avers that it lawfully repudiated that
agreement. I heard this case on September 28, 1982, in
New York City.
On the entire record, and after due consideration of
the briefs filed by the General Counsel and by Respond-
ent, I make the following
FINDINGS OF FACT
I. THE PARTIES
The pleadings, as amended at the hearing, establish
and I find that Respondent is an employer engaged in
commerce within the meaning of Section 2(2), (6), and
(7) of the Act and that the Trades Council is a labor or-
ganization as defined in Section 2(5) of the Act.
1. THE ALLEGED UNFAIR l ABOR PRACTICES
Respondent operates a restaurant located on the prem-
ises of the Lexington Hotel in New York City. Respond-
All dates hereinafter are for 1981 unless specified otherwise
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DECISION-S OF NATIONAL LABOR RELATIONS BOARD
ent's waiters, busboys, porters, bartenders, captains,
kitchen employees, and its cashier are represented by the
Trades Council. The last collective-bargaining agreement
with Respondent covering those employees was effective
from June 1, 1978, to May 31, 1982. The terms of the
contract signed by Respondent and the Trades Council
are identical to those in the agreement between the Hotel
Association of New York City and the Trades Council.
Respondent, however, is not a member of that Associa-
tion.
As of the date of the hearing in this case, Respondent's
employees were on strike for a renewal contract. There
is no allegation before me respecting that strike. Rather,
the matters involved in the instant case all took place in
1981.
On January 2, Respondent's president wrote the
Trades Council concerning discussions then scheduled to
take place between the Hotel Association of New York
City and the Trades Council. Therein he stated, in sub-
stance, that Respondent's employees should not be cov-
ered by an industrywide contract, a reference to the one
then in effect which, as noted earlier, was identical to
the association contract. He noted that the agreement be-
tween the Association and the Trades Council refers to
many job classifications in which Respondent has no em-
ployees. He observed in that letter also that, even though
Respondent's restaurant is located inside a hotel, it is
merely a tenant and does not earn revenue from room
service. In sum, he stated that Respondent could not
afford another wage increase for its employees and he
referred to its "desparate" efforts to stay in business. He
then, in effect, called for the Trades Council to enter
into a less costly agreement with it.
The Trades Council did not respond to that letter. Re-
spondent's president wrote on April 10 to ask for a
reply. The Trades Council had other ideas.
B. The Alleged Unlawful Conduct by Respondent
During the first half of 1981, the Trades Council was
pressing Respondent to pay its employees a cost-of-living
adjustment (COLA) which the Trades Council contend-
ed was due them under the provisions of the 1978-1982
contract. Toward that end, the Trades Council notified
the "Impartial Chairman" under that contract of its claim
for a COLA and Respondent was notified by the office
of the Impartial Chairman that a hearing would be held
on the COLA claim on June 10.
On June 5, Respondent wrote the Trades Council as
follows:
Re: Renunciation of existing Collective Bargain-
ing Agreement under the terms thereof.
On January 2, 1981, we wrote to the Trades
Council to emphasize that the Hotel Association
could not and did not represent or speak for us in
reopening the existing Collective Bargaining Agree-
ment, to remind you of our prior talk about a sepa-
rate agreement, and to express our readiness to ne-
gotiate such a separate agreement.
There being no response, we addressed a further
letter on April 10, 1981, to both the Trades Council
and Local 6, to remind you that we were ready to
enter into bona fide negotiations for a new collec-
tive bargaining agreement, and we invited your at-
tention to our right under the existing collective
bargaining agreement to withdraw from such agree-
ment when more favorable collective bargaining
agreements (favorable to the restaurant, that is) are
found to exist between the Trades Council or any
affiliate, such as Local 6, and any other restaurant.
You have still not seen fit to respond to our let-
ters or our request for bona fide negotiation, except
to brusquely demand that we simply subscribe to
the new agreement lately made between the Trades
Council and the Hotel Association. And upon our
refusal to accede to your demand, you have filed a
complaint with the Impartial Chairman, alleging
that we have refused to grant a Cost-of-Living Ad-
justment to all our employees retroactive to January
1, 1981, under your interpretation of the existing
collective bargaining agreement.
We have now considered most carefully the fore-
going situation, as well as the circumstance that it is
now beyond question that Local 6 has in effect col-
lective bargaining agreements with various other
restaurants which are much more favorable to such
other restaurants than our collective bargaining
agreement (which was forced upon us, in any
event) is to us.
Upon such careful considerations, we now do
hereby renounce the Collective Bargaining Agree-
ment, made October 20, 1978, between the Trades
Council and the Hotel Association, and to which
we have previously been compelled to become a
signatory, and we do declare that we are no longer
bound thereby, all as permitted by such Collective
Bargaining Agreement; and we do hereby signify
our willingness and readiness to sign the existing
collective bargaining agreement between Local 6
and the Restaurant League of New York or any
such new agreement, or to sign the existing collec-
tive bargaining agreement between Local 6 and an
appropriate independent restaurant not a party to
the Hotel Association agreement or any such agree-
ment, or to sign such separate collective bargaining
agreement between Local 6 and ourselves as may
eventuate from free and bona fide negotiations.
To allay any fears in such respect which your
union members may have, we add that our renunci-
ation of the existing agreement does not mean that
we intend to reduce or eliminate any wages or ben-
efits already being paid or provided for our employ-
ees by us; we have no such intention at this time.
It seems to us that we are as much entitled as
you are, and that it would be in the best long-term
interests of all concerned, to have a collective bar-
gaining agreement suitable to our particular situa-
tion and that of our employees which has been ar-
rived at fairly and by bona fide negotiations, rather
than an agreement imposed unfairly and without the
slightest consideration of or concern for our needs
and means.
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CHATEAU MADRID
On June 9, Respondent secured from the Supreme
Court of New York a stay of the hearing before the Im-
partial Chairman, which as noted earlier was scheduled
to take place on June 10, respecting the COLA claim.
The Supreme Court stay is still in effect and that suit by
Responent against the Trades Council is in the discovery
stage. 2
In July, the Trades Council wrote Respondent that,
pursuant to a wage reopener clause of the 1978-1982
contract, it would have a three-member commission ap-
pointed to review the wages of the unit employees. It ap-
pears that, by this time, an industrywide wage adjust-
ment had been agreed upon between the Trades Council
and the Hotel Association. Apparently fearful that a
three- member commision would apply that wage adjust-
ment to its employees, Respondent on July 8, wrote the
Trades Council as follows:
We have your letter dated July 2, 1981, which
reached us yesterday; and we are somewhat puzzled
at the purpose of the same, inasmuch as it appears
to disregard entirely various events which have al-
ready taken place or are now underway.
If your letter has at its main purpose the actual
initiation of negotiations for a new collective bar-
gaining agreement with us, we must remind you
that we have been asking for such negotiations for
more than six months, as can be seen from our let-
ters to you of January 2, 1981, of April 10, 1981,
and of June 5, 1981, all seeking such negotiations,
and all without any meaningful results until now.
All we have encountered in response until now,
have been naked demands that we simply execute
the new agreement made between you and the
Hotel Association of New York City, Inc., "or
else." We do not consider such demands to consti-
tute negotiations in good faith or otherwise; particu-
larly since we had no participation whatsoever in
the making of such new agreement between you
and the Hotel Association, particularly since such
new agreement totally disregards our own needs
and financial circumstances (a detailed projection of
the wage increases provided by such new agree-
ment between you and the Hotel Association shows
that we would be required to pay some Three Hun-
dred Thousand Dollars in increases alone during the
three-year term of such agreement, obviously a
sheer impossibility !!!), and particularly since such
new agreement between you and the Hotel Associa-
tion would be fatal not only to our own existence
but also to the existence of each of the well-paying
jobs we now provide for union members.
However that may be, we are ready at any time,
as we have been right along, to enter into real ne-
gotiations for a new collective bargaining agree-
ment. (There is some question as to whether such
negotiations and any such new collective bargaining
agreement should properly be with you or rather
2 The General Counsel has observed that in the course of that lawsuit
Respondent restated its alleged unlawful renunciation of the 1978-1982
agreement.
with your constituent local union, Local 6; but this
can be considered more fully as part of the negotia-
tions).
As to your reference, however, to convening a
three-man commission under the collective bargain-
ing agreement of October 20, 1978, we call your at-
tention to the fact that, by our letter of June 5,
1981, hand delivered to you on June 9, 1981, we re-
nounced such collective bargaining agreement of
October 20, 1978, under the terms thereof, on the
specified ground that Local 6 has in effect collec-
tive bargaining agreements with various other res-
taurants which are more favorable to such other
restaurants than such collective bargaining agree-
ment was to us. (That we are no longer bound by
such collective bargaining agreement of October 20,
1978, is one of the principal grounds for our cur-
rently pending application to the New York State
Supreme Court, New York County, to permanently
stay arbitration under such collective bargaining
agreement).
In the event that you actually do seek to convene
such a three-man commission, we shall have no al-
ternative but to make a further application to the
New York Supreme Court to permanently enjoin
any such commission, on the same ground, i.e., that
we are no longer bound by the collective bargain-
ing of October 20, 1978, providing for such com-
mission.
Nonetheless, if there now exists a real intention
and desire on your part to enter into bona fide ne-
gotiations for a new collective bargaining agree-
ment, such attempt to convene a three-man commis-
sion and such further application to the New York
Supreme Court should be entirely unnecessary.
On October 14, the Trades Council filed a complaint
with the Impartial Chairman in order to arbitrate the
wage reopener dispute. Respondent has obtained a court
stay of that proceeding too.3
On December 11, Respondent gave notice to the
Trades Council, to the Federal Mediation and Concilia-
tion Service, and to the New York State Mediation
Board that it reaffirmed its position that it had lawfully
renounced the 1978-1982 contract and that, if that action
was not effective, it would "become finally and fully ef-
fective 60 days thereafter."
It does not appear that FMCS or the NYSMB took
any action thereon.
There is one remaining factual matter to be set out.
Respondent relies on the following "most favored na-
tions" clause in the 1978-1982 contract as a basis upon
which it could lawfully renounce that agreement. That
clause reads:
In consideration of your execution of the agree-
ment (hereinafter referred to as the Hotel Associa-
tion contract) between Hotel Association of New
3 Its suit was removed to the Federal court which has pended the
matter until the state court action involving the COLA dispute, discussed
above, is resolved.
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DECISIONS OF NATIONAL LABOR RELATIONS BOARD
York City, Inc., New York Hotel and Motel Trades
Council and various members of the Hotel Associa-
tion, it is understood and agreed that if New York
Hotel and Motel Trades Council and/or any of its
affiliates shall make an agreement or other arrange-
ment with another hotel association and/or with an
individual hotel owner in the City of New York
which does not include the union shop and/or
check-off or which contains provisions and terms
which you may consider more favorable than the
terms of the Hotel Association contract, whether or
not such terms and provisions would be construed
by the Impartial Chairman as benefits or aids within
the meaning of Paragraph 18 of said contract, then,
in such event, you shall have the right to be re-
leased from the Hotel Association contract upon
signing such other agreement.
Respondent asserts that one of the Trades Council's
constituent locals, Local 6, has a more favorable contract
with the Restaurant League of New York.
C. Analysis
The General Counsel and the Trades Council assert
that the evidence is unequivocal that Respondent repudi-
ated a valid collective-bargaining agreement in direct
violation of the requirements of good-faith bargaining set
out in Section 8(d) of the Act.
Respondent first asserts that the Board cannot,
through the procedures under the Act, assert jurisdiction
to review the actions of the Supreme Court of New
York on the COLA claim or of the U.S. District Court
on the wage-reopener matter. I view that statement as a
contention that the Board must defer to whatever deter-
minations those courts may make as to the merits of Re-
spondent's assertion that it lawfully renounced the 1978-
1982 contract. That contention lacks merit as it is now
clear that the Board has primary jurisdiction in deciding
alleged unfair labor practices under the Act.4
Alternatively, Respondent asserts that it lawfully ter-
minated the contract by reason of its December 11 letter
to FMCS and the NYSMB. I reject that assertion be-
cause Section 8(d) makes clear that a party cannot, in
midterm, unilaterally rescind a collective-bargaining
agreement. 5
As a further alternative, Respondent contends that it
was entitled by reason of the "most favored nations"
clause in the 1978-1982 contract to renounce that agree-
ment. There is no evidence however that there exists a
more favorable agreement with another hotel association
or hotel owner or that Respondent has signed any alleg-
edly more favorable contract. 6
4 Kaiser Steel Corp. v. Mullins, 102 S.Ct. 851 (1982).
5 Teamsters Local 574, 259 NLRB 344 (1981); C & S Industries, 158
NLRB 454, 457 (1966).
5 Respondent has asserted that it was willing to sign the contract that
Local 6 (one of the Trades Council's members) has with the Respondent
League of New York. It thus contends that the "most favored nations"
clause of the 1978-1982 contract in this case exonerated its repudiation of
that very contract. At best, that is an argument it might make in an arbi-
tration proceeding to defeat the Trades Council's COLA claim or its ef-
forts to reopen the wage portion of the contract. I find that Respondent's
willingness to be covered by the Restaurant League contract does not
Respondent's letter of June 5 to the Trades Council
and its subsequent efforts to frustrate the arbitration pro-
visions of the 1978-1982 contract by seeking to void that
very contract strike at the statutory rights of its employ-
ees' bargaining representative and constitute an unlawful
repudiation of that contract.7
CONCLUSIONS OF LAW
1. Respondent is an employer engaged in commerce
within the meaning of Section 2(2), (6), and (7) of the
Act.
2. The Trades Council is a labor organization as de-
fined in Section 2(5) of the Act.
3. Respondent has, since June 5, 1981, failed and re-
fused to bargain collectively with the Trades Council as
the exclusive representative of the employees in the unit
described in paragraph 4 below in that Respondent, on
and since that date, unilaterally renounced the 1978-1982
agreement then in force between it and the Trades Coun-
cil which covered those employees and Respondent
thereby violated Section 8(a)(l) and (5) of the Act.
4. The following employees comprise an appropriate
bargaining unit:
All waiters, busboys, porters, bartenders, cap-
tains, kitchen employees and the cashier employed
by Respondent at its restaurant in the Hotel Lexing-
ton in New York City excluding all other employ-
ees and all supervisors as defined in the Act.
REMEDY
In his posthearing brief, counsel for the General Coun-
sel stated that the General Counsel does not seek an
order requiring Respondent to withdraw its suits in the
state court, one of which has been removed to a Federal
court. I must infer from that statement that there is no
reasonable prospect that those suits will adversely affect
the Board's order although it appears obvious that, were
Respondent to continue to press those actions, it would
thereby be continuing to repudiate the obligations of the
1978-1982 contract in contravention of the remedial
order provided below. I will defer to General Counsel's
position. As noted above, the employees of Respondent
were on strike, as of the date of the hearing, for a renew-
al contract. As it is questionable whether the Trades
Council is desirous of having Respondent continue in
force the terms of the contract it renounced on June 5,
1981, I shall provide that Respondent shall be required
to do so only upon request therefor by the Trades Coun-
cil.
Respondent asserts in its brief that no remedial order
would be warranted as the 1978-1982 contract has ex-
pired. I reject that contention as a remedial order vindi-
give it the right to unilaterally repudiate the 1978-1982 contract as there
is no evidence before me that the Trades Council had ever agreed that
Respondent had such a right. The Board does not readily infer the
waiver of contractual rights.
I See Hiney Printing Co., 262 NLRB 157 (1982), where the Board
adopted a finding that a refusal to pay a COLA increase amounted to a
renunciation of the principles of collective bargaining. That rationale
clearly applies to Respondent's refusal to even arbitrate the COLA claim.
1078
CHATEAU MADRID
cates the public interest and is aimed at preventing a re-
currence of the unlawful conduct. s
Lastly, I shall not provide a make-whole remedy as it
is not clear if the unit employees were entitled to a
COLA increase and as the amount of any such increases
has not yet been determined. For the same reasons, I
shall not order Respondent to make the unit employees
whole for increases sought by the Trades Council under
the wage-reopener clause.
On these findings of fact and conclusions of law and
on the entire record, I issue the following recommend-
ed 9
ORDER
The Respondent, Alameda Room Inc., d/b/a Chateau
Madrid, New York, New York, its officers, agents, suc-
cessors, and assigns, shall
I. Cease and desist from
(a) Renouncing, during its term, any collective-bar-
gaining agreement it has with New York Hotel and
Motel Trades Council, AFL-CIO covering its employees
in the unit described in Conclusions of Law.
(b) In any like or related manner interfering with, re-
straining, or coercing its employees as to their rights to
be represented by a union of their own choice or as to
any other rights they have under Section 7 of the Act.
8 Boyer Ford Trucks, 254 NLRB 1389, 1394 (1981).
Q If no exceptions are filed as provided by Sec. 102.46 of the Board's
Rules and Regulations, the findings, conclusions, and recommended
Order shall, as provided in Sec. 102.48 of the Rules, be adopted by the
Board and all objections to them shall be deemed waived for all pur-
poses.
2. Take the following affirmative action.
(a) Mail a certified letter to the Trades Council within
5 days of this Order to inform it that Respondent will no
longer repudiate, during the terms of any agreement it
has with the Trades Council, that agreement unless it has
the Trades Council consent therefor.
(b) Upon request of the Trades Council, reinstate and
comply with the provision of the contract it unlawfully
rennounced on June 5, 1981.
(c) Post at its restaurant in the Hotel Lexington (and,
if its employees are still on strike, mail to them at their
home address via certified mail) copies of the attached
notice marked "Appendix."' ° Copies of the notice, on
forms provided by the Regional Director for Region 2,
after being signed by the Respondent's authorized repre-
sentative, shall be posted by the Respondent immediately
upon receipt and maintained for 60 consecutive days in
conspicuous places including all places where notices to
employees are customarily posted. Reasonable steps shall
be taken by the Respondent to ensure that the notices
are not altered, defaced, or covered by any other materi-
al.
(d) Notify the Regional Director in writing within 20
days from the date of this Order what steps Respondent
has taken to comply.
'o If this Order is enforced by a Judgment of a United States Court of
Appeals, the words in the notice reading "Posted by Order of the Na-
tional Labor Relations Board" shall read "Posted Pursuant to a Judgment
of the United States Court of Appeals Enforcing an Order of the Nation-
al Labor Relations Board."
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