Chicago Dining Room Employees

National Labor Relations Board - Board Decisions

Mar 21, 1980

248 N.L.R.B. 604 (N.L.R.B. 1980)

604 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Chicago Dining Room Employees, Cooks & Bartend-
ers Union, Local 42 and Clubmen, Inc., d/b/a
Gaslight Club, Palmer House and Palmer
House Company; Ambassador East Hotel; Am-
bassador West Hotel; Arlington Park Hilton;
Astor Tower Hotel; Bismarck Hotel; Blackstone
Hotel; Conrad Hilton Hotel; Continental Plaza;
Drake Hotel; Executive House; Holiday Inn
Chicago-City Center; Holiday Inn Chicago-
Downtown; Holiday Inn Chicago-Lake Shore
Drive; Holiday Inn Chicago-Mart Plaza; Hyatt
Regency Chicago; Hyatt Regency O'Hare; Lin-
colnwood Hyatt House; Midland Hotel; Oak
Brook Hyatt House; O'Hare Hilton; Pick-Con-
gress Hotel; Playboy Towers; Ramada, The
O'Hare Inn; Ritz-Carlton Hotel; Rodeway Inn-
Chicago; Radisson-Chicago Hotel; Sheraton
Oak Brook Motor Hotel; Sheraton Plaza;
Water Tower Hyatt House; Whitehall Hotel;
Chicago Joint Executive Board, Hotel and Res-
taurant Employees, and Bartenders Internation-
al Union, AFL-CIO; Hotel, Motel, Club, Cafe-
teria, Restaurant Employees and Bartenders
Union, Local 450; Hotel-Motel Service Work-
ers, Drug Store, Sports Events, Industrial Ca-
tering and Miscellaneous Employees Union,
Local 593, Parties to the Contract and Greater
Chicago Hotel and Motel Association, Party in
Interest. Case 13-CE-60
March 21, 1980
DECISION AND ORDER
BY CHAIRMAN FANNING AND MEMBERS
PENELLO AND TRUESDALE
Upon charges filed by Clubmen, Inc., d/b/a
Gaslight Club, Palmer House, the Regional Direc-
tor for Region 13 of the National Labor Relations
Board, acting on behalf of the General Counsel of
the Board, on November 21, 1978, issued a com-
plaint alleging that Respondent Union, Chicago
Dining Room Employees, Cooks & Bartenders
Union, Local 42, violated Section 8(e) of the Na-
tional Labor Relations Act, as amended. Respon-
dent thereafter filed an answer to the complaint
wherein it denied having committed any unfair
labor practices.
On July 16, 1979, the General Counsel, the
Charging Party and Respondent entered into a stip-
ulation in which they agreed to certain facts rel-
evant to this proceeding and also agreed to the in-
troduction of other documents. They also joined in
filing a motion to the Board to transfer these pro-
ceedings directly to the Board. As part of the
motion, the parties agreed to waive a hearing
before an administrative law judge, the issuance of
an administrative law judge's decision, and the pre-
sentation of any evidence other than that contained
in the stipulation and the exhibits attached thereto.
248 NLRB No. 83
By order dated October 19, 1979, the Board ap-
proved the stipulation and transferred the proceed-
ing to the Board. Thereafter, the Charging Party
filed a brief.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the Na-
tional Labor Relations Board has delegated its au-
thority in this proceeding to a three-member panel.
The Board has considered the entire record in
this case, including the Charging Party's brief, and
makes the following findings:
I. THE BUSINESS OF THE EMPLOYER
The Charging Party, Clubmen, Inc., d/b/a Gas-
light Club, Palmer House, is an Illinois corporation
and a wholly owned subsidiary of Gaslight Club,
Inc. At all times material herein the Charging
Party has maintained an office and place of busi-
ness at 17 East Monroe Street, Chicago, Illinois,
where it is engaged in the operation of a restaurant,
lounge, and key club. During the calendar year
1978, a representative period, the Charging Party,
in the course and conduct of the business operation
described above, had a gross volume of business in
excess of $500,000 and has purchased and received
goods and products valued in excess of $50,000 di-
rectly from points located outside the State of Illi-
nois.
The parties stipulated and we find that the
Charging Party is, and has been at all times materi-
al herein, an employer engaged in commerce
within the meaning of Section 2(6) and (7) of the
Act.
It. THE LABOR ORGANIZATION INVOLVED
The parties stipulated and we find that Respon-
dent is a labor organization with the meaning of
Section 2(5) of the Act.
1II. THE ALLEGED UNFAIR LABOR PRACTICES
A. The Relevant Stipulated Facts
The Palmer House Company (hereinafter re-
ferred to as Palmer House) operates a multi-story
commercial hotel facility at 17 East Monroe Street
in Chicago, Illinois. From about 1955 to the pre-
sent it has been a member of the Greater Chicago
Hotel and Motel Association (hereinafter referred
to as the Association). On behalf of its members,
including Palmer House and the approximately 30
other hotels named in the caption herein, the Asso-
ciation negotiates collective-barganing agreements
with the Chicago Joint Executive Board, Hotel and
Restaurant Employees and Bartenders International
Union, AFL-CIO (hereinafter referred to as Joint
Board). In such negotiations, the Joint Board is the
CHICAGO DINING ROOM EMPLOYEES 605
exclusive collective-bargaining agent for the Re-
spondent Union and the two other labor organiza-
tions who are Parties to the Contract named in the
caption.
In April 1977, the Association and the Joint
Board negotiated a collective-bargaining agreement
that is effective until March 31, 1981. That agree-
ment contains the following provision:
Section 4-Change of Identity
(d) If a portion of any Employer's facility is
sold, leased, transferred or otherwise disposed
of through contractual arrangement where
members of the bargaining unit are employed
at the time of such sale, lease, transfer or con-
tractual arrangement, such purchaser-lessee or
transferee shall as a condition precedent to
such transaction execute this Agreement, pro-
viding such purchaser-lessee or transferee em-
ploys employees working in job classifications
covered by this Agreement.
The Charging Party herein is not a member of
and is not affiliated in any manner with the Associ-
ation, nor is it a party or a signatory to any collec-
tive-bargaining agreement with Respondent. Re-
spondent does not represent any employees of the
Charging Party. The unit of employees covered by
the collective-bargaining agreement between the
Association and the Joint Board includes only em-
ployees of Palmer House and other members of the
Association and does not include any employees of
the Charging Party.
At all times material herein, Palmer House has
had a lease agreement with the Charging Party
whereby the Charging Party leases and occupies
space for its business operations, including a restau-
rant, lounge, and key club. The lease agreement
provides that commencing on January 1, 1978, and
extending until December 31, 1982, the Charging
Party/lessee will occupy specified clubroom space
on the fifth floor of the Palmer House/lessor's fa-
cility. The lease provides renewal options for two
additional 5-year terms. It requires that the Charg-
ing Party pay Palmer House both a fixed rent and
an additional sum if and when the Charging Party's
gross sales exceed a specified amount. Said lease
agreement requires the Charging Party to comply
with all applicable laws and provides that the
Charging Party cannot make alterations or addi-
tions to the premises without Palmer House's ad-
vance written consent.
The lease does not reserve to Palmer House any
control over hiring, firing, and/or terms and condi-
tions of employment of the Charging Party's em-
ployees. The lease contains no reference to the col-
lective-bargaining agreement described above or its
terms.
Prior to the Charging Party's occupancy of the
fifth-floor premises of Palmer House, the same
premises, with the exception of an adjacent dining
room, were occupied and leased by the Traffic
Club. The adjacent dining room, now leased and
occupied by the Charging Party, was used periodi-
cally by Palmer House prior to the Charging
Party's occupancy. About November 1977, the
Traffic Club moved its operation intact to leased
second-floor space of the Palmer House facility
where it has remained ever since.
At all times during the Traffic Club's occupancy
of the fifth floor and at all times thereafter, Palmer
House, as part of its lessor obligation to the Traffic
Club, operated the food and beverage service of
the Traffic Club, which has been staffed by ap-
proximately 15 Palmer House employees. These
employees are members of Respondent Union.
None of the 15 Palmer House employees lost their
jobs as a result of the Traffic Club's move from the
fifth floor to the second floor of the hotel.
The Charging Party at all material times has em-
ployed approximately 100 employees in the Palmer
House, including waiters and waitresses, busper-
sons, cashiers, bartenders, cooks, and other kitchen
staff. The Charging Party does not employ, and has
not employed, at its leased space in the Palmer
House, any employees previously employed by
Palmer House, including any employees serving
the Traffic Club operations.
The Charging Party hires its own employees by
means of transfer of employees from other clubs
operated by Gaslight Club, Inc., newspaper adver-
tisments, or unsolicited "walk-ins." It trains its own
employees and operates its own food and beverage
service with no assistance from Palmer House. The
Charging Party exercises exclusive control over
the hiring, firing, and terms and conditions of em-
ployment of its employees employed in its restau-
rant, lounge, and key club in the Palmer House.
Although Respondent Union has requested that
the Charging Party execute the collective-bargain-
ing agreement in effect between Respondent and
Palmer House, the Charging Party refused and
continues to refuse to execute said collective-bar-
gaining agreement.
On or about June 8, 1978, Respondent Union
filed a lawsuit in United States District Court for
the Northern District of Illinois, Eastern Division,
Civil Action No. 78-C-2315, against the Palmer
House, alleging that the Charging Party refused to
execute said collective-bargaining agreement, and
seeking further to enjoin Palmer House from con-
tinuing to lease space to the Charging Party at its
606 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Monroe Street facility. The Charging Party inter-
vened in that lawsuit.
On March 1, 1979, a United States District Court
judge entered an "Order Granting Preliminary In-
junction" in Civil Action No. 78 C 4637, enjoining
Respondent Union from engaging in conduct al-
leged to be violative of the Act in Case 13-CE-60,
pending final disposition of said case by the Board.
The order further stayed all proceedings in Civil
Action No. 78 C 2315 pending final disposition of
Case 13-CE-60. All parties to the proceedings in
Civil Action No. 78 C 4637 and in Civil Action
No. 78 C 2315 consented to the entry of the order.
B. Contentions of the Parties
The General Counsel alleges in the complaint
that section 4(d) of the collective-bargaining agree-
ment between Respondent and Palmer House vio-
lates Section 8(e) of the Act because its restrictions
are encompassed within the "cease doing business
with any other person" language of Section 8(e).
The Charging Party contends that section 4(d) is
a facially unlawful union signatory clause because
its effect is to require that Palmer House lease only
to a lessee signatory or to a lessee willing to be
bound by the collective-bargaining agreement bind-
ing upon Respondent and Palmer House. It further
contends that section 4(d) has only unlawful sec-
ondary purposes and makes no pretense of attempt-
ing to protect members of the bargaining unit. Fi-
nally, the Charging Party contends that the Re-
spondent Union's attempt to void the lease in court
is a unilateral reaffirmation sufficient to constitute
an "entering into" the unlawful agreement within
the time limits of Section 10(b) of the Act.
Respondent in its answer to the complaint denies
that it has committed any unfair labor practices.
C. Discussion and Conclusions
The threshold issue in this case is whether some
action or conduct has been taken by Respondent
during the 6-month limitation period provided in
Section 10(b) which constitutes an "entering into"
within the meaning of Section 8(e) of the Act.
The clause at issue herein is contained in an
agreement between Respondent and Palmer House
in its capacity as a member of the Association.
That agreement became effective April 11, 1977, a
date more than 6 months prior to the filing of the
charge in the instant case on June 27, 1978. On
June 8, 1978, a date within the 6-month period
prior to the filing of the charge, Respondent filed a
lawsuit seeking to compel compliance with the re-
strictions on leasing contained therein.
Section 8(e) forbids only the "entering into" of
an agreement whereby the employer agrees to
cease doing business with another person. The
Board has found that the maintenance, enforce-
ment, and reaffirmation of such an agreement
within the 10(b) period constitutes an "entering
into" within the meaning of Section 8(e).1 In order
to find an "entering into" based on reaffirmation, it
is not necessary that there be compliance as well as
a demand for compliance. 2 We find that Respon-
dent in the instant case, by demanding compliance
with the agreement and instituting suit in order to
compel compliance, reaffirmed the agreement and
maintained the enforceability of the clause.
Section 8(e) of the Act makes it an unfair labor
practice for an employer and a union to enter into
an agreement, express or implied, to cease doing
business with another person. The lawfulness of the
clause herein depends upon whether the "Union's
objective was preservation of work for . . . em-
ployees, or whether the agreements . . . were tac-
tically calculated to satisfy union objectives else-
where.... The touchstone is whether the agree-
ment or its maintenance is addressed to the labor
relations of the contacting employer vis-a-vis his
own employees." 3
It is well settled that contract clauses which pur-
port to limit leasing 4 or subcontracting to employ-
ers who are signatories to union contracts, so-
called union signatory clauses, are proscribed by
Section 8(e). Such clauses are viewed as not being
designed to protect the wages and job opportuni-
ties of unit employees, but as being directed at fur-
thering general union objectives and undertaking to
regulate the labor policies of other employers.
I Bricklayers and Stone Masons Union. Local No. 2, etc. (Gunnar I John-
son & Son, Inc.), 224 NLRB 1021 (1976); International Organization of
Masters, Mates and Pilots, AFL-CIO (Seatrain Lines, Inc.), 220 NLRB 164
(1975).
2 Hotel and Restaurant Employees and Bartenders' Union, Local 531
(Angelus Auto Parks, Inc. and Elnic Corporation d/b/a Verdugo Hills
Bowl), 237 NLRB No. 190 (1978); Bricklayers and Stone Masons Union,
Local No. 2 (Associated General Contractors of Minnesota), supra; Dan
McKinney Co., 137 NLRB 649 (1962).
a National Woodwork Manufacturers Association, et al. v. NL.R.B., 386
U.S. 612, 644-645 (1967).
4The Board has repeatedly held that the sale or transfer of an enter-
prise is generally to be viewed not as a business transaction within the
scope of Sec. 8(e), but as a substitution of one entity for another while
the conduct of business continues, without interruption. International
Union of Operating Engineers, Local No. 701, AFL-CIO (Cascade Employ-
ers Association, Inc., etc), 221 NLRB 751 (1975); District No. 71, Interna-
tional Association of Machinists and Aerospace Workers, AFL-CIO (Harris
Truck and Trailer Sales, Inc.), 224 NLRB 100 (1976). A lease, however, is
generally not comparable to a sale, for no permanent transfer takes place
where one entity is substituted for another. Such is the case with the
lease herein. The Palmer House retained an interest in the property and
placed conditions on its use in the terms of the lease. Accordingly, we
find that the lease here is sufficiently distinguished from a sale to consti-
tute a form of "doing business" within the meaning of Sec. 8(e) Hotel
and Restaurant Employees, etc., Local 531 Verdugo Hills Bowl), supra;
Retail Clerks Union Local 324, Retail Clerks International Association,
AFL-CIO (Federated Department Stores, Inc., d/b/a Ralphs Grocery Com-
pany), 235 NLRB 711 (1978).
CHICAGO DINING ROOM EMPLOYEES 607
We find, for the reasons stated below, that sec-
tion 4(d) of the contract has the effect of a union
signatory clause and, as such, is unlawful under
Section 8(e) of the Act. 5
Section 4(d) of the contract requires that, in the
event that the employer leases any portion of its
premises where bargaining unit members are em-
ployed at the time of the lease, and if the lessee
employs any employees in job classifications cov-
ered by the agreement, then the lessee must ex-
ecute the collective-bargaining agreement or agree
to be bound by its terms as a condition precedent
to the lease transaction. The effect of this language
is that Palmer House is prohibited from conducting
such transactions with persons who do not recog-
nize and become bound to the observance of Re-
spondent's agreement; hence it is a typical "union
signatory clause." The clause does not in any way
limit its effect to the preservation of the jobs of any
unit employees that are employed in the leased
portion of the hotel. Rather, it requires the lessee
to become bound to the contract regardless of
whether or not those unit employees lose their
jobs. Thus, the provisions of section 4(d) exceed
the legitimate primary purpose of protecting unit
work and are directed at the secondary purpose of
furthering general union objectives, in violation of
Section 8(e). 6
IV. THE EFFECT OF THE UNFAIR LABOR
PRACTICES UPON COMMERCE
The activities of Respondent as set forth above
occurring in connection with the Employer's oper-
ations have a close, intimate, and substantial rela-
tionship to trade, traffic, and commerce among the
several States and tend to lead to labor disputes
burdening and obstructing commerce and the free
flow of commerce.
CONCLUSIONS OF LAW
I. Clubmen, Inc., d/b/a Gaslight Club, Palmer
House, is an employer engaged in commerce
within the meaning of Section 2(6) and (7) of the
Act.
2. Respondent is a labor organization within the
meaning of Section 2(5) of the Act.
3. By entering into, enforcing, and giving effect
to the leasing clause of section 4(d) of its collec-
tive-bargaining agreement with the Palmer House
Company, Respondent has entered into an agree-
ment in violation of Section 8(e) of the Act.
I Hotel and Restaurant Employees, etc. Local 531 (erdugo Hills Bowls),
supra.
eHotel and Restaurant Employees, etc., Local 531 (erdugo Hills Bowl),.
supra.
THE REMEDY
Having found that Respondent has engaged in a
violation of Section 8(e) of the Act, we shall order
that it cease and desist therefrom and take
certain affirmative action in order to effectuate the
policies of the Act.
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor Re-
lations Board hereby orders that the Respondent,
Chicago Dining Room Employees, Cooks & Bar-
tenders Union, Local 42, Chicago, Illinois, its offi-
cers, agents, and representatives, shall:
1. Cease and desist from entering into, enforcing,
or giving effect to the leasing clause of section 4(d)
of its collective-bargaining agreement with the
Palmer House Company, in the manner herein
found unlawful.
2. Take the following affirmative action:
(a) Post at its business offices and meeting halls
copies of the attached notice marked "Appendix."'
Copies of said notice, on forms provided by the
Regional Director for Region 13, after being duly
signed by Respondent's representative, shall be
posted by Respondent immediately upon receipt
thereof, and be maintained by it for 60 consecutive
days thereafter, in conspicuous places, including all
places where notices to members are customarily
posted. Reasonable steps shall be taken by Respon-
dent to insure that said notices are not altered, de-
faced, or covered by any other material.
(b) Furnish the Regional Director for Region 13
with signed copies of the aforesaid notice for post-
ing at Palmer House, should it be willing, at all
places where notices to its employees are customar-
ily posted.
(c) Notify the Regional Director for Region 13,
in writing, within 20 days from the date of this
Order, what steps the Respondent has taken to
comply herewith.
' In the event that this Order is enforced by a Judgment of a United
States Court of Appeals, the words n the notice reading "Posted by
Order of the National Labor Relations Board" shall read "Posted Pursu-
ant to a Judgment of the United States Court of Appeals Enforcing an
Order of the National Labor Relations Board"
APPENDIX
NOTICE TO MEMBERS
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
WE WILL NOT maintain, enforce, or give
effect to the leasing clause of section 4(d) of
608 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
our agreement with the Palmer House Compa-
ny in the manner found by the National Labor
Relations Board to violate Section 8(e) of the
National Labor Relations Act, as amended.
CHICAGO DINING ROOM EMPLOYEES,
COOKS & BARTENDERS UNION,
LOCAL 42