Club Cal-Neva

National Labor Relations Board - Board Decisions

Jul 29, 1977

231 N.L.R.B. 22 (N.L.R.B. 1977)

DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Sierra Development Company d/b/a Club Cal-Neva'
and Hotel-Motel-Restaurant Employees and Bar-
tenders Union, Local 86, Hotel and Restaurant
Employees and Bartenders International Union,
AFL-CIO. Cases 20-CA-9803-6, 9853-6, 9869-6,
9897-6, and 9905-6
July 29, 1977
DECISION AND ORDER
BY CHAIRMAN FANNING AND MEMBERS
PENELLO AND MURPHY
On March 15, 1977, Administrative Law Judge
Martin S. Bennett issued the attached Decision in
this proceeding. Thereafter, General Counsel and
Charging Party filed exceptions and a supporting
brief, and Respondent filed cross-exceptions and a
supporting brief.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the
National Labor Relations Board has delegated its
authority in this proceeding to a three-member panel.
The Board has considered the record and the
attached Decision in light of the exceptions and
briefs and has decided to affirm the rulings, find-
ings, 2 and conclusions of the Administrative Law
Judge only to the extent consistent herewith.
The Administrative Law Judge found, and we
agree, that Respondent violated Section 8(a)(1) and
(3) of the Act. However, he dismissed the refusal-to-
bargain allegation of the complaint on the ground
that since Respondent had changed from an individ-
ual employer unit to part of a multiemployer unit
and then back to an individual employer unit there is
no presumption of majority status. For the reasons
set forth below, we disagree with the Administrative
Law Judge.
The facts may be summarized as follows: Respon-
dent has operated a combined bar, restaurant, and
casino in Reno, Nevada, since 1962. In April 1962,
Respondent voluntarily recognized and signed a
contract with Bartenders Union Local 86, and
Culinary and Hotel Service Union, Local 45,3
covering its 77 bar and culinary employees. In 1964,
Respondent joined the Reno Employer's Council
and became a party to a series of multiemployer
I The name of Respondent appears as amended at the hearing.
- Respondent has excepted to certain credibility findings made by the
Administrative Law Judge. It is the Board's established policy not to
overrule an Administrative Law Judge's resolutions with respect to
credibility unless the clear preponderance of all oft the relevant evidence
cons inces us that the resolutions are incorrect Standard Dry Wall Products,
Ino.. 91 NLRB 544 (1950), enf'd. 188 F.2d 362 (C.A. 3, 1951). We have
carefully examined the record and find no basis for reversing his findings.
Respondent has excepted to the Board's asserting jurisdiction in this
proceeding. II argues that the Board's assertion of jurisdiction over the
231 NLRB No. 5
bargaining agreements between the Union and the
Council until 1975.
Respondent doubled in size in 1969, when it
expanded its restaurant, added to its bar, and
installed a snackbar. After this expansion, Respon-
dent employed approximately 175 bar and culinary
employees. In 1973, Respondent's snackbar and
restaurant were enlarged. This increased the comple-
ment of such employees to 240. In February 1975,
Respondent employed 202 bar and culinary employ-
ees.
On June 7, 1974, the Union was placed under
trusteeship of its International. During the summer
and fall of 1974, the Union's business agents actively
solicited Respondent's employees to become mem-
bers of the Union. During the last half of 1974, some
employees complained to their supervisors that they
did not want to join the Union because of the lack of
benefits. The supervisors reported these conversa-
tions to Respondent's president, Nightingale.
The Union, on November 15, 1974, notified
Respondent and the Council that it desired to reopen
the agreement and negotiate a new contract, as the
existing one was due to expire on February 15, 1975.
On December 10, Respondent informed the Union
that it had a genuine doubt as to the Union's
majority status, and that it would not bargain with
the Union until it had been certified as the
bargaining representative of Respondent's employ-
ees. On the same day, Respondent notified the
Council that it was withdrawing therefrom. On
December 13, 1974, the Union requested Respondent
to bargain with it.
In February 1975, Nightingale held two meetings
with the bar and culinary employees. He told them
that with the expiration of the existing contract
Respondent would no longer bargain with the
Union. Nightingale further announced that a new
group insurance plan, a cost-of-living wage plan, a
merit wage plan, and the formation of a grievance
committee would be initiated after the expiration of
the existing contract. Respondent later instituted the
benefits.
The Administrative Law Judge found that there is
no presumption that the Union has majority status
when Respondent, which voluntarily recognized the
Union, has changed from an individual employer
unit to an association unit and then back to an
gaming industry is arbitrary and capricious when compared to the Board's
refusal to assert jurisdiction over the horseracing and dogracing industries.
The Board has in previous cases considered and rejected arguments
identical to those now raised by the Respondent. Nevada Lodge, 227 NLRB
368 (1976); El Dorado Inc., d/b,,a El Dorado Club, et al, 151 NLRB 579
(1965).
:1 These two unions merged in 1968 to form the Hotel-Motel-Restaurant
Employees & Bartenders Union, Local 86, Hotel & Restaurant EmploNees
& Bartenders International Union. AFL CIO, hereinafter the Union.
22
CLUB CAL-NEVA
individual employer unit. He noted that the Board
found otherwise in Tahoe Nugget, Inc. d/b/a Jim
Kelley's Tahoe Nugget, 227 NLRB 357 (1976), but
indicated that he disagreed with the Board's deci-
sion.4 Accordingly, the Administrative Law Judge
dismissed the refusal-to-bargain allegation of the
complaint.
We find that the Union retained its presumption of
majority status. As we stated in Tahoe Nugget, supra,
a case involving the same Union and Employer's
Council as the present case, "the presumption of
majority arising from Respondent's voluntary recog-
nition of a labor organization as the exclusive
collective-bargaining representative of its employees
continued after its withdrawal from a multiemployer
unit and reversion to its original status." We see no
reason to deviate from that principle here. 5
Having determined that the principle applies, we
next turn to Respondent's contention that it had an
objective basis for doubting the Union's continued
majority status. The Board has consistently held that
in order to rebut the presumption of majority status,
an employer must either show that the union in fact
no longer enjoys majority status, or that its refusal to
bargain was based on a reasonably grounded doubt
as to the union's majority status. 6 As to a reasonably
grounded doubt, the doubt must be based on
objective considerations 7 and such doubt must be
raised in a context free of unfair labor practices.8
Respondent stated in its December 10, 1974, letter
that it had a genuine doubt as to the Union's
majority status. It relies on the following as a basis
for those doubts: (1) it was never shown any
evidence that the Union represented a majority of
employees when it first signed the contract in 1962,
and it signed the contract only to accommodate the
Union; (2) no election has ever been conducted by
the Board; (3) the club has expanded since 1962, and
the number of employees in the bar and culinary
departments has tripled; (4) the turnover of employ-
ees each year during the term of the last agreement
has been approximately 500 percent; (5) the Union
was placed in trusteeship by its International because
of its poor financial condition; (6) Union Trustee
The Administrative Law Judge erroneously relies on N. L RB. v. Walter
E. Herman, d b a Stanwood Thrifrmart, 541 F.2d 796, 800 (C.A. 9. 1976).
The case is legally and factually distinguishable from the present case. The
court stated. "Majority representation is not the issue in this case." The issue
was what effect the district court's rescission of a contract has on the
Board's finding a presumption of majority representation based on that
contract. The portion of the decision cited by the Administrative Law Judge
to the effect that there was not a fair opportunity to rebut the presumption is
not applicable to the facts in the present case. Respondent had an
opportunity to rebut the presumption by showing a reasonably grounded
doubt as to the Union's continued majonty status, infra.
: 227 NLRB 357 (1976). Nevada Lodge, 227 NLRB 368 (1976); Barney'r
Club, Incs orporated, 227 NLRB 414 (1976): Carda Motels, Inc., d ,'ba Holiday
Hotel & Casino, 228 NLRB 926 (1977). The Administrative Law Judge's
failure to find the presumption of majority status is a fundamental error.
Bramlett publicly announced that less than 20
percent of the employees in the Reno-Lake Tahoe
area were members of the Union; (7) the Union was
attempting to organize employees at the Club; (8) a
majority of the employees had reported to various
supervisors that they had no interest in the Union;
(9) Respondent had never called the Union to refer
employees; (10) the Union filed but one grievance
between 1962 and 1974, although during this period
Respondent had employed 10,000 employees; (II1)
Respondent had withdrawn from a multiemployer
bargaining unit and is now a single-employer unit;
(12) Nevada is a right-to-work State and there was no
union-security clause or dues-checkoff provision in
the agreement.
Most of the items cited by Respondent, even if
true, cannot be legitimately relied on by it as
objective considerations forming part of the basis for
its doubt as to the Union's majority status. Thus, the
fact that Respondent was never shown any evidence
that the Union represented a majority when Respon-
dent first signed a contract, its assertion that it signed
the contract only to accommodate the Union, and
the absence of an election cannot be considered in
establishing a reasonably grounded doubt as to
majority status. As we stated in Tahoe Nugget, "a
respondent may not defend against a refusal-to-
bargain allegation on the ground that original
recognition, occurring more than 6 months before
charges had been filed in the proceeding raising the
issue, was unlawful." Also, the fact that an election
has never been held is not a basis for doubting the
Union's majority.9 Nor is the fact that Respondent
had withdrawn from a multiemployer unit a basis for
such doubt. As we found, supra, the fact that
Respondent withdrew from a multiemployer unit
does not affect the Union's presumption of majority
status.
Similarly, it would be sheer speculation to make an
evaluation of employee support of the Union based
on the fact that the Union was placed in trusteeship
by its International because of its poor financial
condition.' 0 Further, Trustee Bramlett's public an-
nouncement that less than 20 percent of the
Under the Board's consistent policy it is the Administrative Law Judge's
duty to apply established Board precedent which the Board or the Supreme
Court has not reversed. Iowa Beef Packers, Inc., 144 NLRB 615. 616( 1963):
Novak Logging Company, 119 NLRB 1573, 1575 76 (1958); Insuranct
Agents' Internatrional Union, AFL-CIO (The Prudential Insurance Compans
ofAmerica), 119 NLRB 768, 773 (1957).
6 Tahoe Nugget, supra; James W. WhitJield, d b'a Curten Supermarket,
220 NLRB 507, 508 (1975); Terrell Machine Company, 173 NLRB 1480
(1969). enfd. 427 F.2d 1088 (C.A. 4, 1970). cert. denied 398 U.S. 929.
7 N.L. R. B. v. Gulfmont Hotel Company, 362 F.2d 588(C.A. 5, 1966), enfg
147 NLRB 997 (1964).
s Nu-Southern Dyeing & Finishing, Inc., and Henderson Combining Co..
179 NLRB 573 (1969), enfd. in part 444 F.2d I I (C.A. 4. 1971).
9 White Castle System, Inc., 224 NLRB 1089 (1976).
tO Nevada Lodge, supra.
23
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
employees in the area were union members and that
the Union was attempting to organize the employees
at the Club does not indicate that the Union no
longer had majority status nor is it revealing of how
many of Respondent's employees were or were not
members of the Union. Indeed, even if a majority of
Respondent's employees were not members, it does
not establish that they did not desire union represen-
tation, since there is a distinction between union
membership and union support." The union organi-
zational activity merely demonstrates a normal desire
for more members,' 2 and in fact tends to refute one
of the other items (union inactivity) relied on by
Respondent.
The failure of Respondent to seek referrals from
the Union has no bearing on the issue since that is a
matter solely within Respondent's control, there is no
indication that the Union would have refused to
make such referrals, and, in any case, there is no
provision in the contract calling for such referrals.
Nor does the absence of a union-security clause have
a bearing, especially since this is a right-to-work
State. The relatively small expansion of a bargaining
unit since the last contract does not indicate anything
with respect to the status of the Union.
Union inactivity in representing the employees
would have been a valid consideration if it in fact
had been established. However, union agents were
on Respondent's premises regularly from 1972 to
1975 and were actually engaged in organizing
employees. The failure to file grievances does not
establish union inactivity in the absence of any
showing that substantial numbers of employee
grievances were being ignored.
Two items cited by Respondent have some factual
support and do bear on the issue of whether there
exists a basis for doubting the Union's majority.
However, we have considered these items and have
concluded they are insufficient to provide an
objective basis for doubting the Union's majority.
Thus, approximately 29 employees had reported to
various supervisors that they were dissatisfied with
the Union by stating that they did not want to join
the Union, that there was a lack of benefits, or that
the union dues were too high. Such statements fail to
distinguish between wanting to be a union member
and desiring to have union representation. But, even
assuming that the statements constitute expressions
of rejection of the bargaining agent, 29 employees
out of a unit of 202 employees (far less than the
majority claimed by Respondent) is insufficient to
" Tahoe Nugget, supra, Terrell Machine Company, supra.
12 Washington Manor, Inc., dh/ba Washington Manor Nursing Center
(North), 21 I1 NLRB 324 (1974), enfd. 519 F.2d 750 (C.A. 6. 1975).
I:3 Kentucky News, Incorporated, 165 NLRB 777, 779(1967).
14 Tahoe Nugget, supra,; Strange and Lindsey Beverages, Inc., and Dr.
Pepper Bottling Co.. Inc., Joint Emplo)ers d/b/a Pepsi-Cola-Dr. Pepper
Bottling Co., 219 NLRB 1200(1975).
establish a reasonably based doubt as to the Union's
majority status.' 3 The high turnover rate is a
circumstance that is to be considered in determining
whether a respondent has a reasonably grounded
doubt. Here Respondent experienced a turnover rate
of 500 percent during the term of the last agreement.
The highest rate was among the busboys and
waitresses. The Board has found that high turnover is
one circumstance among others that must be
considered, but that employee turnover in itself is not
sufficient to establish a reasonable doubt as to the
Union's majority status. New employees are pre-
sumed to support the Union in the same ratio as
those they replace.' 4
At most, Respondent had only a minimal number
of expressions of dissatisfaction with the Union
together with a high turnover rate on which to base
its asserted doubt as to the Union's majority status.
These items, even considered together, do not
constitute a basis for withdrawal of recognition.
Thus, we find that the presumption of continued
majority representation has not been rebutted either
by a showing that the Union, in fact, no longer
enjoys majority status or that Respondent had a
sufficient objective basis for reasonably doubting the
Union's continued majority status. Accordingly, we
find that Respondent violated Section 8(a)(5) and (1)
of the Act.
As we have found that Respondent unlawfully
withdrew recognition of the Union, it had a duty to
bargain with the Union upon the expiration of the
contract. Respondent by unilaterally, without prior
notice to or consultation with the Union, granting a
new group insurance plan, a cost-of-living wage plan,
and a merit raise system and by forming a grievance
committee after the expiration of the contract
violated Section 8(a)(5) and (1) of the Act.' 5
AMENDED REMEDY
Having found that Respondent has engaged in
unfair labor practices, we shall order it to cease and
desist therefrom and to take certain affirmative
action designed to effectuate the policies of the Act.
As we agree with the Administrative Law Judge's
finding that Respondent violated Section 8(a)(3) and
(1) by discriminatorily reducing the hours of work
and classification of employee Schwartz, we shall
order Respondent to make him whole for any loss of
earnings he may have suffered as a result of the
discrimination against him, by payment of a sum of
15 Having found that Respondent violated Sec. 8(aX5) and (1) by
unilaterally instituting employee benefits, we find it unnecessary to pass on
the Administrative Law Judge's finding that Respondent independently
violated Sec. 8(aXI) by granting improved working conditions.
24
CLUB CAL-NEVA
money equal to that he would have earned from the
date of his demotion to the date of his resignation,
with backpay and interest thereon to be computed in
the manner prescribed in F. W. Woolworth Company,
90 NLRB 289 (1950), and Isis Plumbing & Heating
Co., 138 NLRB 716 (1962).
Having found that Respondent violated Section
8(a)(5) and (1) of the Act by unlawfully withdrawing
recognition from the Union and by refusing to
bargain with the Union on December 13, 1975, and
thereafter, and by making unilateral changes, we
shall order Respondent to recognize and, upon
request, bargain in good faith with the Union. We
shall also order Respondent to return to the status
quo ante by rescinding the grievance committee
procedure. However, nothing herein shall be con-
strued as requiring that Respondent rescind benefits
granted to its employees.
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor
Relations Board hereby orders that the Respondent,
Sierra Development Company d/b/a Club Cal-
Neva, Reno, Nevada, its officers, agents, successors,
and assigns, shall:
I. Cease and desist from:
(a) Telling employees that an employee was being
terminated because of wearing a union button;
reducing the hours of work of, and demoting, any
employee for wearing a union button; imposing a
rule forbidding solicitation of employees for union
membership on the premises during nonworking
time.
(b) Unilaterally, without prior notice to or consul-
tation with the Union, granting improved working
conditions, such as a new group insurance plan, cost-
of-living increases, and a merit increase system to
forestall union activity. However, nothing in this
Order shall be construed as requiring Respondent to
rescind any of the benefits granted its employees.
(c) Unilaterally, without prior notice to or consul-
tation with the Union, establishing and maintaining
a grievance committee.
(d) Refusing to recognize and bargain collectively
in good faith with Hotel-Motel-Restaurant Employ-
ees and Bartenders Union, Local 86, Hotel and
Restaurant Employees and Bartenders International
Union, AFL-CIO, as the exclusive representative of
its employees in the following bargaining unit:
All employees employed by the Respondent in
its bar and culinary operations at its Reno,
" In the event that 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 National Lahor Relations Board" shall read "Posted Pursuant to a
Nevada, place of business, excluding all other
employees, guards and supervisors as defined in
the Act.
(e) In any other manner interfering with, restrain-
ing, or coercing employees in the exercise of their
right to self-organization, to join or assist Hotel-
Motel-Restaurant Employees and Bartenders Union,
Local 86, Hotel and Restaurant Employees and
Bartenders International Union, AFL-CIO, or any
other labor organization, to bargain collectively
through representatives of their own choosing, or to
engage in concerted activities for the purposes of
collective bargaining or other mutual aid or protec-
tion.
2. Take the following affirmative action which is
deemed necessary to effectuate the policies of the
Act:
(a) Make whole Philip Schwartz for any loss of pay
or other benefits suffered by reason of the discrimi-
nation against him, by payment of a sum of money
equal to what he would have earned from the date of
his demotion to the date of his resignation, with
backpay and interest thereon to be computed in the
manner set forth in the Remedy section here.
(b) Recognize and, upon request, bargain in good
faith with Hotel-Motel-Restaurant Employees and
Bartenders Union, Local 86, Hotel and Restaurant
Employees and Bartenders International Union,
AFL-CIO, as the exclusive representative of all
employees in the aforesaid appropriate unit.
(c) Rescind the grievance committee procedure.
(d) Post at its premises in Reno, Nevada, copies of
the attached notice marked "Appendix." 16 Copies of
said notice, on forms provided by the Regional
Director for Region 20, after being duly signed by an
authorized representative of Respondent, shall be
posted by it immediately upon receipt thereof, and
maintained by it for a period of 60 consecutive days
thereafter, in conspicuous places, including all places
where notices to employees are customarily posted.
Reasonable steps shall be taken by Respondent to
insure that said notices are not altered, defaced, or
covered by any other material.
(e) Preserve and, upon request, make available to
the National Labor Relations Board or its agents, for
examination and copying, all payroll records, social
security payment records, timecards, personnel
records and reports, and all other records necessary
to determine the amount of backpay due under the
terms of this Order.
(f) Notify the Regional Director for Region 20, in
writing, within 20 days from the date of this Order,
Judgment of the United States Court of Appeals Enforcing an Order of the
National Labor Relations Board."
25
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
what steps Respondent has taken to comply here-
with.
APPENDIX
NOTICE To EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
WE WILL NOT threaten employees with dis-
charge for wearing union buttons in support of
Hotel-Motel-Restaurant Employees and Bartend-
ers Union, Local 86, Hotel and Restaurant
Employees and Bartenders International Union,
AFL-CIO, demote an employee and reduce his
hours of work because the employee wore such a
union button or promulgate and maintain a rule
forbidding union activities on company premises
during nonworking time.
WE WILL NOT unilaterally, without prior notice
to or consultation with the Union, grant improved
working conditions, such as a new group insur-
ance plan, cost-of-living increases, and a merit
increase system to forestall union activity. How-
ever, the Board has not ordered us to withdraw
any of the benefits we have given you.
WE WILL NOT unilaterally, without prior notice
to or consultation with the Union, establish or
maintain a grievance committee.
WE WILL NOT refuse to recognize and bargain
collectively in good faith with Hotel-Motel-Res-
taurant Employees and Bartenders Union, Local
86, Hotel and Restaurant Employees and Bar-
tenders International Union, AFL-CIO, as the
exclusive representative of our employees in the
following bargaining unit:
All employees employed by the Respon-
dent in its bar and culinary operations at its
Reno, Nevada, place of business, excluding
all other employees, guards and supervisors
as defined in the Act.
WE WILL NOT in any other manner interfere
with, restrain, or coerce our employees in the
exercise of their right to self-organization, to join
or assist the above-named or any other labor
organization, to bargain collectively through
representatives of their own choosing, or to
engage in concerted activities for the purposes of
collective bargaining or other mutual aid or
protection.
WE WILL make Philip Schwartz whole for any
loss of wages or other benefits suffered as a result
of our discrimination against him, with interest at
6 percent per annum.
WE WILL recognize and, upon request, bargain
in good faith with Hotel-Motel-Restaurant Em-
ployees and Bartenders Union, Local 86, Hotel
and Restaurant Employees and Bartenders Inter-
national Union, AFL-CIO, as the exclusive
representative of all employees in the aforesaid
unit.
WE WILL rescind the grievance committee
procedure.
All our employees are free to become or remain, or
refrain from becoming or remaining, members of the
above-named or any other labor organization.
SIERRA DEVELOPMENT
COMPANY D/B/A CLUB
CAL-NEVA
DECISION
STATEMENT OF THE CASE
MARTIN S. BENNETT, Administrative Law Judge: This
matter was heard at Reno, Nevada on July 14, 15, 16, and
23, 1976. The amended consolidated complaint issued
September 22, 1975, and is based upon numerous charges
filed between December 16, 1974, and June 25, 1975, by
Hotel-Motel-Restaurant Employees & Bartenders Union
Local 86, Hotel & Restaurant Employees & Bartenders
International Union, AFL-CIO, herein the Union.' The
complaint alleges that on various dates after December
1974, specifically including June 1975, the Respondent,
Sierra Development Company d/b/a Club Cal-Neva, has
engaged in unfair labor practices within the meaning of
Section 8(aX5), (3), and (1) of the Act. Most able briefs
have been submitted by the parties.
Upon the entire record in the case, and from my
observation of the witnesses, I make the following:
FINDINGs OF FACT
I. JURISDICTIONAL FINDINGS
Sierra Development Company d/b/a Club Cal-Neva is a
corporation which is engaged in the operation of a
restaurant, bar, and gambling casino in Reno, Nevada. It
enjoys annual gross revenues in excess of $500,000 and also
purchases and receives goods and materials valued in
excess of $10,000 which originate outside the State of
Nevada.
Respondent has argued with considerable logic that the
nature of the gaming industry, when viewed against the
refusal of the Board to assert jurisdiction over the
horseracing industry, constitutes an arbitrary and capri-
cious decision, citing, e.g., Centennial Turf Club, Inc., 192
NLRB 698 (1971).
Respondent extended recognition in April 1962 to Bartenders Union
Local 86 and to Culinary and Hotel Service Union, Local 45. The Union, as
presently named, was formed in 1968 by a merger of Local 45 into Local 86.
There has never been a Board election.
26
CLUB CAL-NEVA
I personally have some difficulty in assigning less weight
to this transfer of racehorses among 29 States and racing
dogs among 8 States, with attending personnel, and this is
not disputed, from the present situation where bettors
primarily from California perforce travel a much shorter
distance to Nevada in order to wager bets on various
games of chance including bets on horseraces at horserace
parlors, as I have personally observed. But I am con-
strained to abide by the decision of the Board in this area. I
therefore conclude that the operations of Respondent
affect commerce within the meaning of Section 2(6) and (7)
of the Act and that it would effectuate the purposes of the
Act to assert jurisdiction over these gaming operations, as
contrasted with a contrary position as to horseracing and
dogracing operations conducted in a much larger area of
the United States, as is readily apparent.
II. THE LABOR ORGANIZATION INVOLVED
Hotel-Motel-Restaurant Employees & Bartenders Union
Local 86, Hotel & Restaurant Employees & Bartenders
International Union, AFL-CIO, is a labor organization
within the meaning of Section 2(5) of the Act.
111. THE ALLEGED UNFAIR LABOR PRACTICES
A. Introduction, the Issues
The basic issue in this matter is whether Respondent has
violated Section 8(a)(5) and (1) of the Act by refusing to
bargain with the Union. It is conceded that, on or about
December 11, 1974, Respondent timely withdrew from
multiemployer association bargaining.
B. Sequence of Events
In April 1962, Respondent voluntarily extended recogni-
tion to the Union and signed a contract with same. In 1964,
Respondent joined the Reno Employer's Council, herein
the Council, and then became a party to a multiemployer
contract between the Council and a group of gambling
casinos. A number of similar contracts covering bar and
culinary employees with unchanged job classifications
have followed since 1964, with changes in the composition
of the members. The last of these duly expired on or about
February 15, 1975.
All this stemmed from timely notice by the Union to
both Respondent and the Council on or about November
15, 1974, that it desired to reopen the agreement and
negotiate a new contract; conceivably, this case would not
have come about absent such action. On or about
December 10, 1974, Respondent responded to a communi-
cation from the Union stating that it had a serious doubt as
to its majority status and declined to bargain with it on an
individual basis until due certification by the Board. At the
same time, Respondent notified the Council that it was
withdrawing from same. It would seem that other members
of the Council took similar action. Other alleged unfair
labor practices are treated below.
2 I am aware that Nevada is a right-to-work State. but the evidence
presented before me tends to gloss over and not distinguish between union
membership and union representation.
C. The Alleged Refusal To Bargain
This case is apparently one of a series generated by the
breakdown in bargaining between the Union and the
members of the Council. In one of these, Tahoe Nugget,
Inc., d/b/a Jim Kelley's Tahoe Nugget, 227 NLRB 351
(1976), the Board recently indicated its initial approach to
the matter.
The Board held, Member Walther dissenting, that unless
a majority of an employer's employees desired union
representation an employer could not force representation
upon them by joining a multiemployer bargaining unit. But
the Board there went on to state that in light of Local Lodge
No. 1424, International Association of Machinists, AFL-CIO
[Bryan Manufacturing Co.] v. N.LR.B., 362 U.S. 411
(1960), recognition of a labor organization more than 6
months prior to the filing of an unfair labor practice charge
could not be attacked.
The Board in effect there stated that recognition of the
Union on an associationwide basis perforce precluded an
attack on the individual majority status of a withdrawn
individual employer, a matter not specifically treated in
Bryan, as I read it.
Needless to say, a voluntarily recognized labor organiza-
tion continues to enjoy its representative status. But does
this presumption continue when there has been a drastic
change in the unit from an individual employer unit to an
association unit and then back to an individual employer
unit? As a hypothetical example, in a unit of 15 employees,
a union might enjoy 100 percent representation as to 14 of
them and might have none with respect to the I employee.2
The Board stated in the above case that an employer
may show that the labor organization no longer enjoys
majority status. But the General Counsel herein flatly
opposed any evidence to this effect, except evidence
predicated upon a reasonably grounded doubt as to
continued majority status. I have considerable difficulty in
appreciating this distinction.
The simple answer is that a multiemployer unit has been
changed to single-employer units and I do not grasp this
broad jump, stated simply, after many years of bargaining.
Stated otherwise, there has been no attempt to ascertain the
sentiments or the views of the employees of Respondent in
this area. In my judgment, Bryan does not treat with the
basic issue herein.
I deem it significant and a matter of urgent consideration
to treat with a recent cogent view by the Ninth Circuit
Court of Appeals in this area. The court, in whose
jurisdiction this case falls, stated in N.L RB. v. Walter E.
Heyman, d/b/a Stanwood Thriftmart, 541 F.2d 796 (1976):
As a statute creating a presumption which operates to
deny a fair opportunity to rebut would not afford due
process, Heiner v. Donnan, 285 U.S. 312 (1932); Vlandis
v. Kline, 412 U.S. 441 (1973); a Labor Board presump-
tion to the same effect would also suffer shortcomings.
In the absence of a valid contract, by virtue of the
district court judgment of rescission, repudiation and
27
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
refusal to negotiate could not constitute unfair labor
practices. Thus we decline to enforce the order.
In my judgment, the logic of the court is unassailable
herein. See also The Evening News Association, Owner and
Publisher of "The Detroit News," 154 NLRB 1494, 1499
(1965), enfd. 372 F.2d 569 (C.A. 6, 1967).
While I realize that the Board has viewed this issue
otherwise in related contexts, I am constrained to agree
with the position of Respondent that a presumption of
majority status herein cannot stand and that the complaint
should not be sustained in this area.
I therefore deem it unnecessary and highly superfluous to
fully treat with the plethora of evidence introduced
concerning Respondent's good-faith doubt of majority
representation and the various factors relied upon. How-
ever, I cannot avoid noting that the Board has traditionally
assumed in the cases of turnover that new hires will desire
union representation in similar percentages, but in cases as
these it may rely upon turnover as one of the reasons
properly relied upon by a respondent in presenting a good-
faith doubt as to union majority. I therefore recommend
the dismissal of the refusal-to-bargain allegation of the
complaint.3
While not treating with the mass of evidence adduced by
Respondent in support of its good-faith doubt defense, I
note that it basically consists of the following.
President Nightingale of Respondent allegedly based his
doubt of the Union's majority status on the following
objective condsiderations, although as I have indicated
above, I deem it unnecessary to reach these. (I) He was
never shown any evidence that the Union represented a
majority of employees when Respondent first signed a
contract in 1962 and no such claim was ever made; (2) no
election has ever been conducted by the Board; (3)
Respondent first signed a contract only to accommodate
the Union and there is evidence to support this position;
(4) the club had expanded since 1962 and the number of
employees in the bar and culinary departments has tripled;
(5) the turnover of employees each year during the term of
the last agreement was approximately 500 percent; (6) the
Union was placed in trusteeship by its International
because of its poor financial condition; (7) Trustee
Bramlett had publicly announced that less than 20 percent
of the employees in the Reno-Lake Tahoe area were
members of the Union; (8) the Union was attempting to
organize employees at the club, allegedly because of
noninterest in representation; (9) a majority of the
employees had reported to various supervisors that they
had no interest in the Union; (10) Respondent had never
called the Union to refer employees; (11) the Union had
filed but one grievance between 1962 and 1974, although
during this period the club had employed approximately
10,000 employees; (12) Respondent had timely withdrawn
from a multiemployer unit, was now a single unit, and it
may be noted that it was the Union that instituted the
termination of the last contract with the Association,
probably an untimely move, as I view it; and (13) Nevada
:' I am not unaware that the Board has distinguished two decisions by the
Sixth Circuit Court of Appeals in this area; namely, Downtown Bakery Corp.,
139 NLRB 1352 (1962). enforcement denied in part 330 F.2d 921 (C.A. 6,
1964), and Richard W. Kaase Company, 141 NLRB 245 (1963), enforcement
denied in part 346 F.2d 24 (C.A. 6. 1965).
is a right-to-work state, there was no union-security clause
in the agreement, and no dues checkoff. As indicated
above, the evidence presented before me tended to gloss
over and not distinguish between union membership and
union representation. Cf. Star Mfg. Co., Div. of Star Forge
Inc. v. N.LR.B., 536 F.2d 1192 (C.A. 7, 1976).
D. Other Allegations
(1) The General Counsel relies upon testimony by former
employee Douglas Swift, a fry cook, and Philip Schwartz, a
dinner cook and later a fry cook, a position of less prestige,
attributing conduct to Juan Casteel, a sous-chef who did
not testify herein. As I read the record, Casteel was at best
a straw boss or leadman and not a supervisor under the
Act. I base no adverse findings thereon.
(2) Respondent concedes that Alvin Khan was head chef
and a supervisor. Swift testified that on or about January
21, 1975, this one of several talks, Khan said in the
presence of the witness, cook Jerry Chmela, and Schwartz,
that Chmela was being terminated. Swift asked why this
was so and Khan replied that it was because of that "damn
button." This was the last day Chmela worked. Schwartz
described this as an openly displayed small union button
approximately 3/4 of an inch in diameter.4
According to Swift, he was in the presence of Khan
about 30 minutes later. He asked if he also would be
discharged as he was wearing an identical button. Khan
replied that he had orders to fire the two but that Swift
knew his job so well that he, Khan, would try to keep him
on.
Khan also allegedly stated that he had been instructed to
drop Schwartz from 6 to 5 days and reduce him from a
dinner cook to "the line," because he wore a union button,
this a less prestigious position which carried a lower rate of
pay. He also advised Schwartz to look for other work as life
would be miserable for him at this installation. Schwartz
left voluntarily in April, but ceased wearing his union
button during the last 2 months of his employment which
would have been shortly after this last conversation. Khan,
no longer with Respondent, was questioned solely about
other aspects of the case.
There is no evidence that Respondent's business or
employee discipline was affected by the recent wearing of
these small buttons because mere contact with customers is
manifestly not a sufficient reason for such a restriction.
Thus, to discipline or discharge employees for initially
wearing simple buttons, absent a prior well-established
policy to the contrary, is clearly a violation of Section
8(a)(1) of the Act, and I so find. See Glenlynn, Inc. d/b/a
McDonald's Drive-in Restaurant, 204 NLRB 299 (1973).
Moreover, this was a newly implemented policy and not
furtherance of an older one. Cf. N.L.R.B. v. Harrah's Club,
337 F.2d 177 (C.A. 9, 1964), distinguishing N.LR.B. v.
Floridan Hotel of Tampa, Inc., 318 F.2d 1545 (C.A. 5, 1963).
I find that this was perforce violative of Section 8(a)(1).
There is evidence, undenied by Khan, that Schwartz was,
in fact, demoted from dinner cook to fry cook and his
4 The General Counsel specifically disavowed any claim that this
termination was violative of the Act; perforce no adverse findings are made
thereon.
28
CLUB CAL-NEVA
workweek reduced because he wore a union button, in this
same context. I find that this was violative of Section
8(a)(3) and (I) of the Act because it was obviously designed
to penalize him for his union activities.5
(3) The complaint alleges and the record supports the
position of the General Counsel that Respondent imposed
an unlawful no-solicitation rule. According to the testimo-
ny of former Bartender Douglas Goedert, Respondent
previously had no rule regarding employee solicitation on
the premises prior to February 1975; as noted, the last
Association contract expired on or about February 15,
1975. And the record does demonstrate that both General
Manager John Brevick and President Leon Nightingale
were aware that the Union was soliciting the employees
from 1974 on to become members of the Union. Close to
the date of the expiration of the contract, Respondent
distributed to employees a document containing, inter alia,
the following language:
The Club Cal-Neva ABSOLUTELY FORBIDS any
soliciting for any purpose on the premises.
A copy of this was posted at the work station behind
each bar and also on a bulletin board next to the timeclock.
This evidence was not controverted by any representative
of management, including Bar Manager John Blalock. I
find that this rule was prima facie invalid as it prohibits
employee solicitation upon the premises on nonworking
time. Essex International, Inc., 211 NLRB 749 (1974).
(4) In February 1975, Nightingale announced to assem-
bled bar and culinary workers that Respondent would no
longer bargain with the Union and that, upon the
expiration of the current contract that month, new and
increased benefits would be granted. He arranged for an
insurance representative, Smith, to explain to the assem-
blage a new group insurance plan that was to be installed.
This plan contained increased coverage for employees and
their dependents with no cost to the employees. He also
told them a cost-of-living wage increase would be granted.
Employee Swift testified that Nightingale styled this
increase as a cost-of-living increase; this was denied by
Nightingale. However, Brevick testified that the employees
were told that they would continue to receive wage
increases consistent with past practice under the contract.
It seems clear that Respondent announced to the assem-
blage that they would be receiving a wage increase, this in
the context of a union organizational campaign.
Respondent also announced on this occasion the
institution of a merit increase system. Merit increases had
been granted in the past, but there was no written policy of
which the employees were aware. It was stated that the
institution of these merit wage increases would result in
some employees being paid at a higher rate than others,
here again in the face of organizational activity.
Respondent finally announced the institution of a
grievance committee to be composed of employees from
each department. Nightingale first admitted making such
an announcement but later denied it. The testimony of Lisa
Swift is credited in this area. I rely on the fact that Swift left
I As stated, employee Schwartz. later quit and the only issue with respect
to him is that of hackpay, as the General Counsel in effect has conceded.
the employment of Respondent in April 1975; the
grievance committee was actually instituted in August 1975
and therefore Swift had no way of learning about this
committee other than from being advised thereof at this
meeting, again in an organizational context.
After the expiration of the contract, I find, Respondent
unilaterally instituted, without notification to or consulta-
tion with the Union, a new group insurance plan, a cost-of-
living wage plan, a merit wage plan, and the formation of a
grievance committee. I find that the foregoing granting of
new benefits, in the present context, constituted a violation
of Section 8(aX)(1) of the Act. This is so because the
employees were promised initial benefits in the absence of
the Union and then were granted them.
Upon the basis of the foregoing findings of fact, and
upon the entire record in the case, I make the following:
CONCLUSIONS OF LAW
I. Sierra Development Company d/b/a Club Cal-Neva
is an employer within the meaning of Section 2(2) of the
Act.
2. Hotel-Motel-Restaurant Employees & Bartenders
Union, Local 86, Hotel & Restaurant Employees &
Bartenders International Union, AFL-CIO, is a labor
organization within the meaning of Section 2(5) of the Act.
3. By threatening employees with discharge for wearing
union buttons, by demoting an employee and reducing his
hours of work because he wore a union button, by newly
promulgating and maintaining an unlawful no-solicitation
rule, by installing a new group insurance plan, by
announcing a cost-of-living wage increase, by setting up a
formal merit wage increase program, and by instituting a
grievance committee, Respondent has engaged in unfair
labor practices within the meaning of Section 8(a)(3) and
( I) of the Act.
4. The aforesaid unfair labor practices are unfair labor
practices affecting commerce within the meaning of
Section 2(6) and (7) of the Act.
5. Respondent has not otherwise engaged in unfair
labor practices.
THE REMEDY
Having found that Respondent has engaged in certain
unfair labor practices, I shall recommend that it cease and
desist therefrom and take certain affirmative action
designed to effectuate the policies of the Act.
It has been found that Respondent discriminatorily
reduced the hours of work and classification of employee
Schwartz, who subsequently resigned. I shall, therefore,
recommend that Respondent make him whole for any loss
of earnings he may have suffered as a result of the
discrimination against him, by payment of a sum of money
equal to that he would have earned up to the date of his
resignation, with backpay and interest thereon to be
29
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
computed in the manner prescribed by the Board in F. W.
Woolworth Company, 90 NLRB 289 (1950) and Isis
Plumbing & Heating Co., 138 NLRB 716 (1962). Nothing
hereinafter is intended to require Respondent to vary
existing conditions of employment.
[Recommended Order omitted from publication.]
30