Downtown Motel Inn

National Labor Relations Board - Board Decisions

Jun 15, 1987

284 N.L.R.B. 238 (N.L.R.B. 1987)

238 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
Muskegon Motel Corporation d/b/a Downtown
Motel Inn and Local 235, Hotel, Restaurant
and Bartenders Union, AFL-CIO. Cases 7-
CA-21680 and 7-CA-22467
15 June 1987
DECISION AND ORDER
BY CHAIRMAN DOTSON AND MEMBERS
BABSON AND STEPHENS
Upon individual charges filed by the Union, on
25 January and 11 August 1983 respectively, the
General Counsel of the National Labor Relations
Board issued separate complaints against the Re-
spondent, on 28 February 1983 with respect to
Case 7-CA-21680 and on 27 September 1983 with
respect to Case 7-CA-22467. Each complaint al-
leged that the Respondent was in violation of Sec-
tion 8(a)(5) and (1) of the National Labor Relations
Act. 1 Although properly served copies of the
charges and complaints, the Respondent failed to
file an answer to either complaint.
Subsequently, the General Counsel filed two
Motions for Default Judgment with the Board, on
16 September 1983 with regard to Case 7-CA-
21680 and on 29 December 1983 with respect to
Case 7-CA-22467. Accordingly, the Board issued
separate orders transferring the cases to the Board
and Notices to Show Cause why the General
Counsel's motions should not be granted. The Re-
spondent did not respond to either notice.
On review of the General Counsel's motions and
supporting documents, the Board separately issued
Notices to Show Cause why the complaints should
not be dismissed for want of jurisdiction, on 23
February 1984 with respect to Case 7-CA-21680
and on 30 April 1984 concerning Case 7-CA-
22467. In each notice the Board pointed out that
while the complaint stated that the Respondent's
business involves "the providing of food and lodg-
ing," the General Counsel did not allege the
Board's jurisdiction pursuant to a discretionary
standard applicable to a restaurant/motel operation.
The General Counsel filed responses to the
Board's notices on 8 March and 8 May 1984, re-
spectively. No responses were filed by the Re-
spondent. In each response the General Counsel
contended that, pursuant to a contract with the
State of Michigan, the Respondent provides food
and lodging services to state prisoners; the General
Counsel characterized the Respondent's operation
1 The complaint in Case 7-CA-21680 alleged that the Respondent had
failed to remit to the Union the union dues and fees it had collected from
unit employees over a 3-month period In Case 7-CA-22467 it was al-
leged that the Respondent had failed to maintain insurance for its unit
employees, a requirement of the parties' collective-bargaining agreement.
as a "halfway house." He also contended that the
State of Michigan makes annual purchases of over
$50,000 in interstate commerce. He further asserted
that the contractual relationship between the Re-
spondent and the State establishes the Respondent's
services as indirect outflow and nonretail by
nature, and that the value of those services exceeds
$50,000 annually. Accordingly, the General Coun-
sel contended that the Board's assertion of jurisdic-
tion over the Respondent is proper under the non-
retail discretionary standard as alleged in each
complaint.
On 3 October 1984 a panel majority of the Board
(former Member Zimmerman dissenting) issued
separate, unpublished Orders with respect to the
General Counsel's motions. In each Order, the
Board asserted that the General Counsel still had
not pleaded a sufficient basis for the Board's discre-
tionary assertion of jurisdiction over the Respond-
ent. It was also noted that the General Counsel had
raised an issue of the Board's jurisdiction over the
Respondent in view of its relationship with the
State of Michigan, an exempt entity. Thus, the
Board denied the default motions and remanded
the cases to the Region for further appropriate
action.
On 19 November 1984 the General Counsel
issued an order consolidating Cases 7-CA-21680
and 7-CA-22467 and an amended complaint. The
amended complaint in general incorporates the alle-
gations of the two earlier complaints. It also com-
bines the jurisdictional averments of the two earlier
complaints with those contained in the General
Counsel's responses to the Board's Notices to
Show Cause of 23 February and 30 April 1984.
Further, it alleges that the value of the Respond-
ent's services resulting from its contractual rela-
tionship with the State is in excess of $140,000 an-
nually. The amended complaint also includes at-
tachments concerning the Respondent's business re-
lationship with the State. The General Counsel al-
leges that although the State has a contractual rela-
tionship with the Respondent, the State, an exempt
entity, exercises no appreciable control over the
terms and conditions of employment of the Re-
spondent's employees. The General Counsel also
avers that on 25 July 1984 the Respondent filed for
bankruptcy under Chapter 11 of the Bankruptcy
Code in the United States Bankruptcy Court for
the Western District of Michigan. Although prop-
erly served copies of the order consolidating the
cases and the amended complaint, the Respondent
failed to answer the amended complaint.
On 30 January 1985 the General Counsel filed
with the Board a Motion for Default Judgment
with respect to the consolidated cases. On 8 Febru-
284 NLRB No. 29
DOWNTOWN MOTEL INN 239
ary 1985 the Board issued a transfer order and
Notice to Show Cause why the General Counsel's
default motion should not be granted. The Re-
spondent did not respond to the notice.
The National Labor Relations Board has delegat-
ed its authority in this proceeding to a three-
member panel.
On the entire record in this proceeding the
Board makes the following
Ruling on the Motion for Default Judgment
We treat the General Counsel's present motion
as a renewal of the earlier motions for default judg-
ment. 2 On review of the motion and supporting
papers, we note the amended complaint's allega-
tions that under the Respondent's contractual rela-
tionship with the State of Michigan the Respondent
provided at all material times food and lodging
services to state prisoners valued in excess of
$140,000 annually. It is further alleged that the
State makes interstate purchases of goods and ma-
terials in excess of $50,000 annually. We find these
unanswered allegations of the amended complaint
adequate to establish discretionary jurisdiction over
the Respondent pursuant to the Board's nonretail
standard.
Section 102.20 of the Board's Rules and Regula-
tions provides that the allegations in the complaint
shall be deemed admitted if an answer is not filed
within 10 days from service of the complaint,
unless good cause is shown. The complaint states
that unless an answer is filed within 10 days of
service, "all of the allegations in the Complaint
shall be deemed to be admitted to be true and shall
be so found by the Board." 3 Further, the undis-
puted allegations in the Motion for Default Judg-
ment disclose that the Oeneral Counsel notified the
Respondent's attorney, by certified letter received
4 January 1985, that unless an answer was received
forthwith, a Motion for Default Judgment would
be filed.
In the absence of good cause being shown for
the failure to file a timely answer, the allegations of
the amended complaint are deemed admitted and
we so find, and we grant the General Counsel's
Motion for Default Judgment.
On the entire record the Board makes the fol-
lowing
2 We note the General Counsel's failure to make any reference to the
previous motions and the Board's determination of them in the current
motion papers.
3 Subsequent to the issuance of the complaint, the Board, effective 29
September 1986, revised Sec 102 20 of the Rules and Regulations to pro-
vide for the filing of an answer within 14 days of service of the com-
plaint.
FINDINGS OF FACT
I. JURISDICTION
The Respondent, a Michigan corporation, at its
facility in Muskegon, Michigan, is and has been at
all material times engaged in providing food and
lodging services to prisoners of the State of Michi-
gan pursuant to a contractual relationship with the
State. During 1982, a period representative of the
Respondent's operations at all material times, the
value of the Respondent's contractual services was
in excess of $50,000. The State of Michigan, to
which the services were rendered, annually pur-
chases goods and services in interstate commerce
valued in excess of $50,000. Accordingly we find
that the Respondent is an employer engaged in
commerce within the meaning of Section 2(6) and
(7) of the Act. The Union is a labor organization
within the meaning of Section 2(5) of the Act.
II. ALLEGED UNFAIR LABOR PRACTICES
At all material times in this proceeding, the
Union has been the exclusive collective-bargaining
representative of the Respondent's employees in
the following unit:
All lead maids, maids, porters, salad persons,
dishwashers, kitchen helpers, second cooks,
cooks, breakfast cooks, waiters, waitresses,
breakfast waitresses, bus boys, bartenders, hou-
semen, maintenance men, desk clerks and night
auditors employed by the Respondent at its
381 W. Muskegon Avenue, Muskegon, Michi-
gan facility; but excluding all professional em-
ployees, guards and supervisors as defined in
the Act.
The Respondent has recognized the Union as the
representative of the above employees; that recog-
nition has been embodied in a series of collective-
bargaining agreements, the term of the most recent
from 1 January through 31 December 1983. The
Union continues to be the exclusive representative
under Section 9(a) of the Act.
On or about 15 November and 15 December
1982 and 15 January 1983, the Respondent failed to
remit and continues to fail to remit to the Union
pursuant to the terms of the parties' collective-bar-
gaining agreement the monthly dues and fees it de-
ducted from the unit employees' pay.
On or about 28 February 1983 the Respondent
failed and refused, and continues to fail and refuse,
to maintain for its employees the insurance cover-
age required by the terms of the parties' collective-
bargaining agreement.
We find that by its conduct described above the
Respondent unilaterally changed the terms of the
240 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
parties' agreement and thus refused to bargain with
the Union in violation of Section 8(a)(5) and (1)
and Section 8(d) of the Act.
CONCLUSIONS OF LAW
By failing, on or about 15 November and 15 De-
cember 1982 and 15 January 1983, to remit to the
Union the monthly dues and fees it deducted from
the unit employees' wages, as required under the
parties' collective-bargaining agreement; and by
failing, on or about 28 February 1983 and thereaf-
ter, to maintain insurance for its unit employees,
again as required under the collective-bargaining
agreement; the Respondent has engaged in unfair
labor practices affecting commerce within the
meaning of Section 8(a)(5) and (1), Section 8(d),
and Section 2(6) and (7) of the Act.
REMEDY
Having found that the Respondent has engaged
in certain unfair labor practices, we shall order it
to cease and desist and to take certain affirmative
action necessary to effectuate the policies of the
Act.
To remedy the Respondent's unlawful failure to
remit union dues and fees to the Union, we shall
order it to remit to the Union the funds unlawfully
withheld, plus interest as computed in New Hori-
zons for the Retarded. 4 To remedy the Respond-
ent's unlawful failure to maintain contractually re-
quired insurance for its employees, we shall order
it to reinstate immediately such insurance coverage,
and to reimburse its employees for any losses or ex-
penses incurred because of its unlawful failure to
maintain such insurance, with interest as computed
in New Horizons for the Retarded, above.5
ORDER
The National Labor Relations Board orders that
the Respondent, Muskegon Motel Corporation
d/b/a Downtown Motel Inn, Muskegon, Michigan,
its officers, agents, successors, and assigns, shall.
1. Cease and desist from
(a) Refusing to bargain by failing and refusing to
remit union dues and fees to Local 235, Hotel, Res-
taurant Employees and Bartenders International
4 In accordance with our decision in New Horizons for the Retarded,
283 NLRB 1173 (1987), interest will be computed at the "short-term Fed-
eral rate" for the underpayment of taxes as set out in the 1986 amend-
ment to 26 U S.0 § 6621
5 In the amended complaint's prayer for relief, the General Counsel,
notmg that the Respondent had filed for bankruptcy under Chapter 11,
requested a limited remedy for the unfair labor practices alleged, appar-
ently in view of the Supreme Court's decision in NLRB v Bddisco &
disco, 465 U S 513 (1984) We find Bildiseo inapplicable to this case since
the Respondent filed for bankruptcy on 25 July 1984, after the enactment
and effective date of the Bankruptcy Amendments and Federal Judgeship
Act of 1984 See, e g, Phoenix Co., 274 NLRB 995 (1985)
Union, AFL-CIO and by failing and refusing to
maintain contractually required insurance for its
unit employees.
(b) In any like or related manner interfering
with, restraining, or coercing employees in the ex-
ercise of the rights guaranteed them by Section 7
of the Act.
2. Take the following affirmative action neces-
sary to effectuate the policies of the Act.
(a) Remit to the Union the dues and fees it has
unlawfully withheld, reinstate contractually re-
quired insurance coverage for its unit employees,
and reimburse its employees for any losses or ex-
penses incurred because of its unlawful failure to
maintain such insurance, all in the manner set forth
in the remedy section of this decision.
(b) Preserve and, on request, make available to
the Board or its agents for examination and copy-
ing, all payroll records, social security payment
records, timecards, personnel records and reports,
and all other records necessary to analyze the
amount of backpay due under the terms of this
Order.
(c) Post at it facility in Muskegon, Michigan,
copies of the attached notice marked "Appendix."
Copies of the notice, on forms provided by the Re-
gional Director for Region 7, after being signed by
the Respondent's authorized representative, shall be
posted by the Respondent immediately upon re-
ceipt and maintained for 60 consecutive days in
conspicuous places including all places where no-
tices to employees are customarily posted. Reason-
able steps shall be taken by the Respondent to
ensure that the notices are not altered, defaced, or
covered by any other material.
(d) Notify the Regional Director in writing
within 20 days from the date of this Order what
steps the Respondent has taken to comply.
5 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 Nation-
al Labor Relations Board" shall read "Posted Pursuant to a Judgment of
the United States Court of Appeals Enforcing an Order of the National
Labor Relations Board."
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.
DOWNTOWN MOTEL INN 241
WE WILL NOT refuse to bargain by failing and
refusing to remit union dues and fees to Local 235,
Hotel, Restaurant Employees and Bartenders Inter-
national Union, AFL-CIO and by failing and refus-
ing to maintain contractually required insurance for
you.
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 remit to the Union the dues and fees
we have withheld, WE WILL reinstate contractually
required insurance coverage for you, and WE WILL
reimburse you for any losses or expenses incurred
because of our failure to maintain such insurance,
plus interest.
MUSKEGON MOTEL CORPORATION
D/B/A DOWNTOWN MOTEL INN