El San Juan Hotel

National Labor Relations Board - Board Decisions

Jul 29, 1988

289 N.L.R.B. 1453 (N.L.R.B. 1988)

EL SAN JUAN HOTEL
San Juan Hotel Corporation d/b/a El San Juan
Hotel and Union de Empleados de Casinos de
Puerto Rico and Federacion General de Traba-
jadores de Puerto Rico'
Federacion General de Trabajadores de Puerto Rico
and Union de Empleados de Casinos de Puerto
Rico . Cases 24-CA-4663, 24-CA-4667, 24-
CA-4676, and 24-CB-1179
July 29, 1988
DECISION AND ORDER
BY CHAIRMAN STEPHENS AND MEMBERS
JOHANSEN AND BABSON
On May 3, 1983, Administrative Law Judge
Thomas R. Wilks issued the attached decision. The
General Counsel filed exceptions and a supporting
brief, and the Federacion General de Trabajadores
de Puerto Rico (Federacion) filed exceptions and a
supporting 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 briefs and has
decided to affirm the judge's rulings, findings,2 and
conclusions only to the extent consistent with this
Decision and Order.
1. The judge found that unilateral changes in
wage rates and other terms and conditions of em-
ployment, which were implemented by Respondent
Hotel on March 9 and June 14, 1982, did not vio-
late Section 8(a)(5) and (1) of the Act and, there-
fore, that the Hotel did not violate Section 8(a)(3)
and (1) by conditioning continued employment of
unit employees on their explicit acceptance of
those changes. 3 In reaching these conclusions the
' The name of the Federacion appears as set forth in the complaint.
2 The General Counsel has excepted to some of the judge 's credibility
findings The Board's established policy is not to overrule an administra-
tive law judge's credibility resolutions unless the clear preponderance of
all the relevant evidence convinces us that they are incorrect Standard
Dry Wall Products, 91 NLRB 544 ( 1950), enfd 188 F.2d 362 (3d Cir
1951) We have carefully examined the record and find no basis for re-
versing the findings.
On August 18, 1983, the bankruptcy trustee for the Hotel filed a
motion requesting stay of proceedings, in which he noted that the Hotel's
Chapt I1 petition was converted to Chapt 7 on March 24, 1983. We
deny the trustee's motion on the grounds that the Board's proceedings
fall within the exceptions to the automatic stay provisions of the U.S
Bankruptcy Code See 11 U S.C § 362 (bX4), (bX5), Phoenix Co, 274
NLRB 995 (1985); J & B Smith Co., 280 NLRB 537 (1986).
In accordance with our decision in New Horizons for the Retarded, 283
NLRB 1173 (1987), interest on and after January 1, 1987, shall be com-
puted at the "short-term Federal rate " for the underpayment of taxes as
set out in the 1986 amendment to 26 U.S C. § 6621 . Interest on amounts
accrued pnor to January 1, 1987 (the effective date of the 1986 amend-
ment to 26 U S C § 6621), shall be computed in accordance with Florida
Steel Corp, 231 NLRB 651 (1977)
8 The March 9 unilateral changes included , inter alia, reduced pay
rates, shorter break periods, and discontinuance of deductions for union
1453
judge found that the General Counsel did not sus-
tain the burden of proving that the Hotel did not
bargain in good faith to impasse . The judge further
found that the Federacion had been presented with
sufficient opportunity to bargain about the changes,
but waived its bargaining rights by a lack of dili-
gence in demanding and pursuing bargaining.
Based on these findings, the judge did not find it
necessary to address whether, following the lawful
rejection in bankruptcy of a collective-bargaining
agreement , an employer must, on request, bargain
to impasse prior to implementing new terms and
conditions of employment.
We agree with the judge's conclusion that the
Hotel 's unilateral changes were lawful, but we do
so on the basis of the analysis set forth in NLRB v.
Bildisco & Bildisco, 465 U.S. 513 (1984), which
issued after the judge's decision. In Bildisco the Su-
preme Court held that from the filing of a petition
in bankruptcy until formal rejection, a collective-
bargaining agreement is not an enforceable con-
tract within the meaning of Section 8(d) of the
Act. The Court thus held that a debtor-in-posses-
sion does not commit an unfair labor practice by
unilaterally rejecting or modifying a collective-bar-
gaining agreement after the filing of a petition but
prior to court-approved rejection.4
In the instant case the Hotel and the Federacion
were parties to a collective-bargaining agreement
that was effective from May 1, 1977, until April 30,
1980. On May 20, 1980, the Hotel filed a petition
for reorganization under Chapter 11 of the United
States Bankruptcy Code. On June 23, 1980, the
parties agreed to extend the collective-bargaining
agreement to April 30, 1983. Thereafter, on Octo-
ber 5, 1981, the Hotel filed an application to reject
the collective-bargaining agreement ; on November
12, 1981, the bankruptcy court approved the rejec-
tion; and on March 8, 1982, the Hotel rejected the
agreement . Thus, the Hotel's unilateral changes of
March 9 and June 14, 1982, which occurred after
court-approved rejection of the collective-bargain-
ing agreement , were clearly implemented when the
agreement was no longer an enforceable contract
under Section 8(d). See Bildisco, above. According-
ly, we find that the unilateral changes were lawful
and, therefore, that it was not unlawful for the
dues and the pension plan The June 14 changes involved only a wage
reduction
4 We are mindful that the Bankruptcy Amendments and Federal
Judgeship Act of 1984, enacted by Congress on July 10 , 1984, modifies
Bildisco and governs a debtor-m-possession's rejection of a collective-bar-
gaining agreement . The statute does not apply, however, to cases such as
this in which the bankruptcy petition was filed prior to the enactment of
the statute Pub. L. 98-353 § 541, 98 Stat 333 , 390-391 (1984).
289 NLRB No. 164
1454 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
Hotel to condition continued employment on the
employees ' acceptance of those changes-5
2. The judge found that Respondent Hotel did
not violate Section 8(a)(3) and (1) by discharging
employee Maldonado in connection with a leaflet
that was distributed to employees and made avail-
able to hotel patrons on June 17, 1982. In this
regard, the judge, relying on the line of cases be-
ginning with NLRB v. Electrical Workers IBEW
Local 1229 (Jefferson Standard), 341 U.S. 694
(1953), found that the leaflet was unprotected
under the Act. The leaflet read as follows:
June 16, 1982
To All Employees of Hotel San Juan
Hereby we wish to invite all fellow workers
of all the departments of the hotel to attend an
informative protest picket, which will take
place on Monday, June 21, 1982, at 10:00 a.m.,
due to the irresponsible manner in which Mr.
Hector Rodriguez Estrada, trustee of the
hotel , is administering the same; and to make
publicly known the abuses that this individual
is committing against us employees who are
doing our best to keep this Hotel operating.
Fellow Workers: let us defend what is ours,
which we have obtained through 25 years of
work and sacrifice. Let's not allow this Dicta-
tor to close the Hotel. Which has been his
desire since he started to operate the same, this
has been said by the latter on different occa-
sions "that it is to his advantage to close to
[sic] Hotel rather than keep it open," inasmuch
as by selling it, he will earn 2% of the total
5 The Court in Bildisco made clear that a debtor-in-possession had a
continuing obligation to recognize and bargain with the employees' certi-
fied representative over the terms of a new contract pending rejection of
an existing contract or following formal approval of rejection by the
bankruptcy court In the instant case, it is clear that the March 9 changes
were inextricably tied to the March 8 rejection of the contract . We fur-
ther find that the Hotel 's unilateral changes of June 14 were lawful even
if implemented pursuant to negotiations for a new contract as to which
good-faith bargaining to impasse was required For the limited purpose of
this finding we adopt the judge 's conclusion that the Federacion had suf-
ficient opportunity to bargain about the changes, but waived its bargain-
ing rights by a lack of due diligence
The complaint was amended at the hearing to allege that the Hotel by-
passed the Federacion and dealt directly with its unit employees by
asking them to accept the unilateral changes in terms and conditions of
employment Generally, an employer's attempts to deal directly with em-
ployees rather than their designated bargaining representative concerning
terms and conditions of employment violates Sec 8(a)(5) Krolicki Whole-
sale Meats, 270 NLRB 941 (1984), enfd 763 F 2d 215 (6th Cir. 1985)
Here, however, we find that the Hotel 's direct dealing was an effort to
implement the lawful unilateral changes . We further find that by failing
to pursue its bargaining rights with due diligence the Federacion waived
its right to object on the basis of direct dealing. See Hzysota Fuel Co, 280
NLRB 763 (1986) (union waived right to object to direct dealing con-
cerning the employer's unilateral implementation of new terms under Bit-
disco, the employer had sought to bargain over those terms, but the union
refused to negotiate and the employer faced severe time constraints with
respect to resuming operations)
sale (price). This man has turned into the
Robin Hood of the Rich, taking the wages
away from the poor in order to pay a multi-
millionaire company.
Fellow workers: We'll see you on Monday,
June 21, 1982, at 10:00 a.m.
Specifically, the judge found that the leaflet in-
jured the trustee's personal status; dissuaded cus-
tomers from patronizing the Hotel by portraying it
as being mismanaged in order to justify closing it;
and contained assertions regarding the trustee's in-
tentions to sell the Hotel that were either deliber-
ately and maliciously false or made in reckless dis-
regard of the truth. The judge further found that
the Hotel had reasonable cause to believe that em-
ployee Maldonado authorized the leaflet or, at a
minimum, was responsible for its distribution. In
view of these findings, the judge concluded that
Maldonado's discharge for distributing the leaflet
was not unlawful. We find merit in the General
Counsel's exceptions in which she contends that
the judge improperly assessed the content of the
leaflet and that the leaflet was, in fact, protected.
The Supreme Court in Jefferson Standard, above,
held that employee conduct involving a disparage-
ment of an employer's product, rather than publi-
cizing a labor dispute, is not protected. As Jefferson
Standard and subsequent Board cases show, there is
sometimes a fine line between raising highly sensi-
tive issues that relate to terms and conditions of
employment and those that relate to disparaging an
employer's reputation. The leaflet found unprotect-
ed in Jefferson Standard was an employee handbill
that contained a "vitriolic" attack on the quality of
the employer's television broadcasts and manage-
ment policies. It made no reference to the pending
labor dispute between the parties or to wages,
hours, or working conditions; and it was not an
appeal for public sympathy or support. Employees
distributed the handbill on their picket line and on
public property. Similarly, in Sahara Datsun, 278
NLRB 1044 (1986), enfd. 811 F.2d 1317 (9th Cir.
1987), the Board found that an employee's state-
ments that the employer falsified customer credit
applications, which were made to the bank that
granted financing to the employer's customers,
were unprotected. The Board found that the state-
ments , although related to terms and conditions of
employment, were, nevertheless, unsubstantiated
assertions that could have ruined a longstanding
business relationship based on trust and fair deal-
ing. Sahara Datsun, above. On the other hand, the
Board in Veeder-Root Co., 237 NLRB 1175 (1978),
found that employee literature that was phrased in
general political terms but made particular refer-
EL SAN JUAN HOTEL
ence to the employer's activities regarding its em-
ployees and ended with the demand "FIGHT
WAGE CUTS AND SPEED-UP!" was sufficient-
ly related to wages, hours, and conditions of em-
ployment to be protected.
In Veeder-Root, the Board also acknowledged
that some cases approach the issue "from the view-
point of the innate propriety of the activity, even
though the activity is clearly related to wages,
hours, working conditions , or grievances arising
out of these conditions." 237 NLRB at 1177. For
example , although the Act protects statements that
are false , misleading , or inaccurate, as well as rhe-
torical hyperbole that is likely to be recognized for
what it is, the Act does not protect information
that is "deliberately or maliciously false," or made
with "reckless disregard for the truth." See Nation-
al Steel Corp., 236 NLRB 1033, 1035-1036 (1978),
enfd. 625 F.2d 131 (6th Cir. 1980). The Board's de-
cision in New York University Medical Center, 261
NLRB 822 (1982), provides an example of how the
Board applies this standard in an effort to balance
the right of employees to organize and the right of
employers to maintain discipline in their establish-
ments . In that case the Board found that the asser-
tion "[T]he NYU bosses have turned their security
guards into a fascist gestapo illegally searching
workers and firing them" was not deliberately or
maliciously false because it was based on employee
reports that the employer's guards were searching
black and Hispanic employees.
In the instant case we conclude that the leaflet
clearly is protected. We find initially that the leaf-
let does not involve an unlawful disparagement of
an employer's product; in this regard, the leaflet is
addressed "to all employees" rather than to cus-
tomers, and seeks not to damage the hotel's reputa-
tion but to prevent its closure. Cf. Jefferson Stand-
ard, above; Sahara Datsun, above. Further, the
leaflet concerns an ongoing labor dispute between
the parties and refers specifically to abuses "against
us employees" and to "wages." Yeeder-Root, above.
We further find that there is nothing "innately
improper" about the leaflet. It is factually accurate
that the trustee would earn a 2-percent commission
if the Hotel were sold and, as found by the judge,
the trustee did not explicitly deny Maldonado's tes-
timony that he had threatened to sell the Hotel if
pressured by demands from the Federacion. Under
the circumstances, we find that the leaflet' s asser-
tion that the trustee would benefit from the sale of
the Hotel is not deliberately false or misleading or
made in reckless disregard of the truth. New York
University Medical Center, above. We additionally
find that the leaflet's references to the trustee as a
"Dictator" and as "Robin Hood" are obvious rhe-
1455
torical hyperbole. Accordingly, we reverse the
judge and find that the leaflet was protected under
Section 7 of the Act and, therefore, that Maldona-
do's discharge in connection with the distribution
of the leaflet violated Section 8(a)(3) and (1) of the
Act.
3. The judge found that on June 17, 1982, the
Hotel's employees commenced a protected eco-
nomic strike. Specifically, the judge found that the
employees began the strike, which was not author-
ized by the Federacion, to protest both Maldona-
do's discharge and reductions in their contractual
benefits. Based on his prior findings that the dis-
charge and the Hotel 's unilateral changes were not
unlawful, the judge found that the strike did not
commence as an unfair labor practice strike but as
economic activity.
The judge then addressed the Hotel's contentions
that, as economic activity, the strike was unpro-
tected because it violated the no-strike clause of
the expired collective-bargaining agreement and
was in derogation of the unit employees' bargain-
ing relationship with the Federacion. Regarding
the alleged breach of the no-strike clause, the judge
initially found the rejected contract was terminated
in its entirety and, therefore, that the no-strike
clause did not survive by virtue of any partial sur-
vival of the contract itself. Addressing the issue of
postexpiration arbitrability, the judge then found,
citing Goya Foods, 238 NLRB 1465 (1978), that in
the "normal bargaining stance," postexpiration sur-
vival of the no-strike clause is coterminous with
survival of the obligation to arbitrate. The judge
questioned, however, whether the presumption of
postexpiration arbitrability set forth in Nolde Bros.
v. Bakery Workers Local 358, 430 U.S. 243 (1977), is
applicable when the contract expires not by its
own terms, but by the extraordinary event of
formal rejection in bankruptcy. In any event, on
the specific facts of this case, the judge found it un-
necessary to decide whether the no-strike clause
survived the contract's rejection. In particular, the
judge found that the nonarbitrable objects of the
strike, involving a protest against reductions in
salary and benefits, were so intertwined with what
he viewed as the arbitrable issue of Maldonado's
discharge that the dispute was not appropriate for
arbitration and, therefore, that the strike would not
breach the no-strike clause even if the clause had
survived. The judge further found that even if the
strikers-who constituted a large majority of the
unit employees-sought recognition of the Union
as their exclusive bargaining representative, the
strike, although not authorized by the Federacion,
was not in derogation of the exclusive bargaining
status of the Federacion. In this regard the judge
1456 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
found, citing Emporium Capwell Co. v. Western Ad-
dition Community Organization, 420 U.S. 50 (1975),
that the employees here did not seek parallel bar-
gaining, but a total replacement of their bargaining
agent during the period of contract negotiations.6
Although we agree with the judge's finding that
the strike was lawful, we fmd merit in the General
Counsel's contention that the employees com-
menced an unfair labor practice strike rather than
an economic strike.
The relevant facts are fully set forth in the
judge 's decision . In brief, as the Hotel attempted to
negotiate changes in its contract with the Federa-
cion to relieve its financial distress , the unit em-
ployees began to lose confidence in the Federacion
as their bargaining representative . In December
1981 they hired an attorney to advise them regard-
ing the formation of a new union . Employee Mal-
donado was a leader in this employee movement.'
As indicated above, on June 17, 1982, Maldonado
was discharged for distributing a leaflet alleging
mismanagement on the part of the trustee and
urging employees to attend an "informative protest
picket" on June 21. That evening, both the day-
and night-shift employees commenced a work stop-
page. On June 18, the day after Maldonado's dis-
charge, about 40 to 45 of the approximately 50 unit
employees began picketing with signs. Some of the
picket signs stated, "We Won't Enter Without
Miguel";8 the remaining signs reflected the lan-
guage and tone of the June 17 leaflets. The strike
was not authorized by the Federacion. An employ-
ee delegate told Federacion Agents Vega and
Nicot, who learned of the strike from the trustee,
that the employees were striking because of Mal-
donado's discharge.
As set forth above, we have found, contrary to
the judge, that Maldonado's discharge violated
Section 8(a)(3) and (1) of the Act. We further find
that the discharge was the immediate precipitating
cause of the strike. In so finding, we note that the
picketing occurred a full 3 days prior to the sched-
uled June 21 protest of the reduction in contractual
6 In Emporium Capwell, the Court held that the exclusivity principle of
Sec. 9(a) of the Act proscribes attempts by a minority of employees to
engage in separate bargaining with their employer
7 In early June 1982 the unit employees formed the Union de Emplea-
dos de Casinos de Puerto Rico (the Union) and elected Maldonado as
their president . The General Counsel stated in her opening argument that
the Union filed a representation petition on June 11, 1982. Thereafter on
October 1 , 1982, the Federation and the Hotel executed a new collective-
bargaining agreement that was submitted to the bankruptcy court for ap-
proval on October 4. We note that this collective-bargaining agreement
would not bar the Union's prior June 1982 petition . Therefore, we shall
delete from the judge 's recommended Order that provision precluding a
finding of contract bar on the grounds of the Federation 's unlawful con-
duct with respect to the discharge of the striking employees , as described
below.
8 It is undisputed that the signs referred to Miguel Maldonado.
wages, and employee statements to Vega and Nicot
indicated that the employees struck to protest the
discharge. Accordingly, we fmd that the Hotel's
employees commenced an unfair labor practice
strike on June 17, 1982.
We agree with the judge, however, that the
strike was protected. The Hotel formally rejected
its collective -bargaining agreement in March 1982,
prior to the strike. Thereafter, contrary to the Fe-
deracion 's contentions in its exceptions , the agree-
ment ceased to exist in its entirety. See 2 Collier on
Bankruptcy, Chapt. 365.03 (15th ed. 1987) (an ex-
ecutory contract cannot be assumed in part and re-
jected in part).9 Therefore, as the judge found, the
no-strike clause in the parties' collective-bargaining
agreement did not survive by virtue of any partial
survival of the contract. 10
We also agree with the judge that even if the
employees were seeking recognition of the Union
as their exclusive bargaining representative, the
9 The Federation, although acknowledging this bankruptcy principle,
contends that here the testimony of the parties, the language of the con-
tract, and public policy warrant a finding that a part of the collective-
bargatning agreement survived rejection and, therefore , that the Federa-
cion remained the exclusive bargaining representative of the striking em-
ployees The Federation further contends that the Board should depart
from bankruptcy precedent and find that the agreement here was only
partially rejected in order to prevent its exclusive bargaining status from
being undermined for reasons unrelated to its performance as a labor or-
ganization . In this regard , the Federation maintains that the disruption of
established bargaining relationships caused by total rejection is especially
damaging in the context of an attempted reorganization under Chapter
11 The Federation's arguments do not persuade us to depart from estab-
lished bankruptcy precedent
10 Moreover, we agree with the judge's conclusion , although not all
his reasoning, that the strike would not breach the no-strike clause of the
expired agreement under an analysis of postexpiration arbitrability.
We have found that the employees commenced an unfair labor practice
strike . In Mastro Plastics Corp. v NLRB, 350 U.S 270 (1956), the Su-
preme Court held that a no-strike clause in a collective-bargaining agree-
ment does not waive the employees ' right to strike against an employer
for unfair labor practices In Arlan's Department Store, 133 NLRB 802
(1961), the Board limited the application of this rule to "serious" unfair
labor practices . See Studio 44, Inc., 284 NLRB 597 (1987), Goodie Brand
Packing Corp, 283 NLRB 673 (1987). In the instant case we do not have
to reach this precise issue . In this regard we find that even if Maldona-
do's discharge was not a "serious" unfair labor practice-or, alternative-
ly, even if the strike was economic activity-the strike did not breach the
no-strike clause of the expired collective-bargaining agreement In this
case there is no indication that the parties did not intend the arbitration
and no-strike clauses of the contract to have coterminous application. See
Goya Foods, above. Further, the Board recently has held that postexpira-
tion disputes concerning employee discharges, like that of Maldonado, do
not "apse under" the expired contract within the meaning of Nolde,
above, and are, therefore , not arbitrable Indiana & Michigan Electric Co,
284 NLRB 53 (1987), American Gypsum Co, 285 NLRB 100 (1987).
Thus, it follows under Goya Foods that the Hotel's employees were not
bound by an agreement not to strike regarding the nonarbitrable issue of
Maldonado's discharge Further, although we recognize that another un-
derlying cause of the strike, as indicated in the June 18 leaflets and on
picket signs, was employee concern with reduced wages and benefits, we
find in agreement with the judge that these matters also are not subject to
postexpiration arbitration and, therefore, not subject to a coterminous
duty not to strike.
Member Johansen finds it unnecessary to reach the issue of the duty to
arbitrate postexpiration grievances under Indiana & Michigan Electric,
above
EL SAN JUAN HOTEL
strike did not amount to the kind of demand for
"separate bargaining" found unprotected in Empo-
rium Capwell, above, 420 U.S. at 61, 66-70, i.e., a
demand by a discrete group of employees that an
employer deal with them regarding some particular
contractual grievance, notwithstanding that the
union which they acknowledge to be the unchal-
lenged unit representative takes a contrary position
on the matter. As the Supreme Court noted in Em-
porium Capwell, a union could not lawfully "bar-
gain away the employees' statutory right to choose
a new, or to have no, bargaining representative."
Id. at 64 fn. 14 citing NLRB v. Magnavox Co., 415
U.S. 322 (1974). Insofar as the employees here
sought recognition of the Union as their bargaining
representative, in place of the Federacion, this
could reasonably be viewed as merely an effort to
rebut the presumption of continuing majority status
that, pursuant to Bildisco, the Federacion enjoyed
following the collective-bargaining agreement's re-
jection in bankruptcy. We do not read Emporium
Capwell as insulating an incumbent union from such
employee efforts.' 1 Accordingly, we find that the
employees' unfair labor practice strike did not lose
its protection under the Act. 12
4. The judge found that Respondent Hotel vio-
lated Section 8(a)(1) of the Act by entering into an
agreement with the Federacion to condition rein-
statement of the striking employees on abandon-
ment of their strike activity and on continued rec-
ognition of the Federacion as their exclusive bar-
gaining agent , and violated Section 8(a)(3) and (1)
of the Act by discharging those employees who
failed to comply with the conditions. The judge
further found that Respondent Federacion violated
Section 8(b)(1)(A) and (2) of the Act by entering
into and enforcing the agreement, and violated
Section 8(b)(1)(A) by its June 19, 1982 letter to the
striking employees that threatened loss of employ-
ment if the strikers failed to comply with the con-
ditions. Although we have found that the employ-
ees commenced an unfair labor practice strike, we
11 For similar reasons this strike would not fall into the category of
strikes that are unprotected because they are unauthorized or "wildcat"
strikes in derogation of the authority of the acknowledged and unchal-
lenged bargaining unit representative regarding strike action See Buck
Brown Contracting Co, 283 NLRB 488 and fn . 7 (1987) Where, as here,
there is no collective -bargaining agreement in effect, it is inconsistent
with employee free choice to require that employees obtain authority
from the bargaining representative in order to engage in a strike that, in
part, expresses employees ' disclaimers of support for that representative
iz We note that the Board in Colonial Haven Nursing Home, 218
NLRB 1007 (1975), modified 542 F 2d 691 (7th Cir 1976), held that strik-
ing employees did not lose their status as unfair labor practice strikers-
and the attendant rights of reinstatement-because an object of the strike
may also have been to obtain recognition and, to carry out this purpose,
their picketing may have constituted a "technical" violation of Sec
8(b)(7)(C) See also Rapid Armored Truck Corp, 281 NLRB 371 (1986)
There is no allegation in this case that the employees' picketing violated
Sec 8(b)(7)(C)
1457
agree with the judge, for the reasons set forth by
him, that the conditions on reinstatement and the
discharge of the striking employees, because of
their refusal to comply with those conditions, were
unlawful. 13
ORDER
The National Labor Relations Board orders that
A. Respondent San Juan Hotel Corporation
d/b/a El San Juan Hotel, Carolina, Puerto Rico, its
officers, agents, successors, and assigns, shall
1. Cease and desist from
(a) Either individually or by agreement with Re-
spondent Federacion General de Trabajadores de
Puerto Rico, or any other labor organization, con-
ditioning the nondischarge of its employees on
their abandonment of a lawful unfair labor practice
strike or other concerted activity for their mutual
aid or protection or on any other unlawful condi-
tion.
(b) Discharging or otherwise discriminating
against employees because they have engaged in a
lawful unfair labor practice strike or other concert-
ed activity for their mutual aid or protection or be-
cause they refuse to accept any unlawful condition
on their continued employment.
(c) 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 designed
to effectuate the purposes and policies of the Act.
(a) Offer to Miguel A. Maldonado and to the
employees named in Appendix C, attached, full and
immediate reinstatement to their former jobs or, if
such jobs no longer exist, to substantially equiva-
lent positions, without prejudice to their seniority
and other rights and privileges, dismissing, if neces-
sary, any employees hired as replacements for the
positions. Respondent Hotel shall jointly and sever-
ally with Respondent Federacion General de Tra-
bajadores de Puerto Rico make them whole for
any loss of earnings they may have suffered by
reason of the discrimination against them in the
manner set forth in the remedy section of the
judge's decision.
(b) Remove from its files any reference to the
unlawful discharges and notify the employees in
13 We note that, even if the strike constituted economic activity, as
found by the judge, the unlawful inducements would have converted the
strike into an unfair labor practice strike See La Famosa Foods, 282
NLRB 316 (1986) Further, it is well settled that unfair labor practice
strikers are entitled to immediate reinstatement to their former positions
or, if such are not available, to substantially equivalent positions on their
unconditional offers to return, even when the employer must terminate
strike replacements to make positions available for them Workroom for
Designers, 274 NLRB 840, 856 (1985)
1458 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
writing that this has been done and that the dis-
charges will not be used against them in any way.
(c) 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.
(d) Post at its Carolina, Puerto Rico hotel copies
of the attached notice marked "Appendix A."14
Copies of the notice written in English and Span-
ish, on forms provided by the Regional Director
for Region 24, after being signed by Respondent
Hotel's authorized representative, shall be posted
by Respondent Hotel immediately upon receipt,
and be maintained for 60 consecutive days in con-
spicuous places including all places where notices
to employees are customarily posted. Reasonable
steps shall be taken by Respondent Hotel to insure
that the notices are not altered, defaced, or cov-
ered by any other material.
(e) On being furnished the same by the Regional
Director, post the notice marked "Appendix B" in
the same manner as "Appendix A."
(f) Notify the Regional Director in writing
within 20 days from the date of this Order what
steps the Respondent has taken to comply.
B. Respondent Federacion General de Trabaja-
dores de Puerto Rico, its officers, agents, and rep-
resentatives, shall
1. Cease and desist from
(a) Threatening employees with the loss of their
jobs by enforcement of an agreement with Re-
spondent Hotel which conditions their continued
employment on the abandonment of a lawful unfair
labor practice strike or other concerted activities
for their mutual aid or protection or on any other
unlawful condition.
(b) Entering into, maintaining, or enforcing an
agreement with Respondent Hotel whereby em-
ployees' continued employment is conditioned on
their abandonment of a lawful unfair labor practice
strike or other concerted activities for their mutual
aid or protection or on any other unlawful condi-
tion.
(c) In any like or related manner restraining or
coercing employees in the exercise of the rights
guaranteed them by Section 7 of the Act.
2. Take the following affirmative action designed
to effectuate the policies of the Act.
14 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 "
(a) Jointly and severally with Respondent Hotel
make whole Miguel A. Maldonado and the em-
ployees named in Appendix C, attached, for any
loss of earnings they may have suffered by reason
of the discrimination against them in the manner
set forth in the remedy section of the judge's deci-
sion.
(b) Post in its offices and meeting halls copies of
the attached notice marked "Appendix B"15 (in
English and Spanish). Copies of the notice, on
forms provided by the Regional Director for
Region 24, after being signed by Respondent Fe-
deracion's authorized representative, shall be
posted by Respondent Federacion immediately
upon receipt, and be maintained for 60 consecutive
days in conspicuous places including all places
where notices to members are customarily posted.
Reasonable steps shall be taken by Respondent Fe-
deracion and its agents to ensure that the notices
are not altered, defaced, or covered by any other
material.
(c) Forward to the Regional Director signed
copies of "Appendix B" for posting by Respondent
Hotel at its Carolina, Puerto Rico hotel for 60 con-
secutive days in places where notices to employees
are customarily posted.
(d) Notify the Regional Director in writing
within 20 days from the date of this Order what
steps the Respondent has taken to comply.
16 See In 14, above
APPENDIX A
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.
Section 7 of the Act gives employees these rights.
To organize
To form, join, or assist any union
To bargain collectively through representa-
tives of their own choice
To act together for other mutual aid or pro-
tection
To choose not to engage in any of these
protected concerted activities.
WE WILL NOT either individually or by agree-
ment with Federacion General de Trabajadores de
Puerto Rico, or any other labor organization, con-
EL SAN JUAN HOTEL 1459
dition the nondischarge of our employees on their
abandonment of a lawful unfair labor practice
strike or other concerted activity for their mutual
aid or protection or on any other unlawful condi-
tion.
WE WILL NOT discharge or otherwise discrimi-
nate against employees because they have engaged
in a lawful unfair labor practice strike or other
concerted activity for their mutual aid or protec-
tion or because they refuse to accept any other un-
lawful condition for their continued employment.
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 offer to Miguel A. Maldonado and to
the employees who were discharged on June 20,
1982, reinstatement to their former jobs or, if those
jobs no longer exist , to substantially equivalent po-
sitions, without prejudice to their seniority and
other rights and privileges , dismissing , if necessary,
anyone hired as a replacement, and WE WILL joint-
ly and severally with Federacion General de Tra-
bajadores de Puerto Rico make them whole, with
interest, for any loss of earnings they may have suf-
fered by reason of the discharges.
WE WILL notify each of them that we have re-
moved from our files any reference to his or her
discharge and that the discharge will not be used
against him or her in any way.
SAN JUAN HOTEL CORPORATION
D/B/A EL SAN JUAN HOTEL
APPENDIX B
NOTICE To MEMBERS
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.
WE WILL NOT threaten employees with the loss
of their jobs by enforcement of an agreement with
San Juan Hotel Corporation d/b/a El San Juan
Hotel that conditions their continued employment
on the abandonment of a lawful unfair labor prac-
tice strike or other concerted activities for their
mutual aid or protection or on any other unlawful
condition.
WE WILL NOT enter into, maintain , or enforce an
agreement with the above -named Employer where-
by employees' continued employment is condi-
tioned on their abandonment of a lawful unfair
labor practice strike or other concerted activities
for their mutual aid or protection or on any other
unlawful condition.
WE WILL NOT in any like or related manner re-
strain or coerce you in the exercise of the rights
guaranteed you by Section 7 of the Act.
WE WILL jointly and severally with the above-
named Employer make whole , with interest,
Miguel A . Maldonado and employees who were
discharged on June 20 , 1982 , for any loss of earn-
ings they may have suffered.
FEDERACION GENERAL DE TRABAJA-
DORES DE PUERTO RICO
APPENDIX C
Acosta, Ventura
Alicea, Benjamin
Aponte, Javier
Batista , Alfredo
Blanco, Jorge
Calderon, Jose
Cardona, Ricardo
Cartagena,
Benjamin
Casillas, Israel
Colon, Jose A.
Colon, Luis
Cruz, Roberto
Danuz, Angel
Diaz Castro, Jose
Dominguez, Cesar
Fernandez, David
Figueroa, Jose
Garcia, Carmelo
Garcia, Elionay
Gonzalez, Rene
Jaime, Filiberto
Linera, Rafael
Lopez, Leopoldo
Martinez,
Fortunato
Melendez , Casimiro
Miranda, Jose
Montilla, Jose
Morales , Etanislao
Navarro , Martin
Oliver, Joaquin
O'Mahoney, John
Ortiz, Carlos
Pagan, Herminio
Pagan, Tomas
Perez , Antonio
Ramos, Jose
Ripoll , Juan A.
Rivera, Angel
Rivera , Anselmo
Rivera, Hector
Rivera, Juan
Rodriguez, Jose
Rodriguez , Ventura
Rosado , Hector
Sanchez, Juan
Solis , Carlos
Vilella, Luis
Zambrana, Kemuel
Graciela J. Belaval, Esq., for the General Counsel.
Augustin Collago Mojica, Carlos Del Valle, and Angel
Munoz Noya, Esqs., of San Juan , Puerto Rico , for the
Respondent Employer.
Dennis Bechara, Esq., for Federacion General de Traba-
jadores de Puerto Rico.
Nicholas Delgado Figueroa, Esq, for Union de Empleados
de Casinos de Puerto Rico.
DECISION
STATEMENT OF THE CASE
THOMAS R. WILKS, Administrative Law Judge. The
trial in this case was held before me in Hato Rey, Puerto
1460 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
Rico, on October 19-22, 1982. On June 18 and 28, 1982,1
Union de Empleados de Casinos de Puerto Rico (the
Union) filed charges in Cases 24-CA-4463 and 24-CA-
4667, respectively, alleging that San Juan Hotel Corpora-
tion d/b/a'El San Juan Hotel (Respondent Hotel) com-
mitted unfair labor practices within the meaning of Sec-
tion 8(a)(1) and (3) of the Act. Thereafter, on July 21, a
consolidated complaint and notice of hearing issued al-
leging that Respondent Hotel violated Section 8(a)(1)
and (3) of the Act by threatening its employees with dis-
charge and other reprisals for having engaged in protect-
ed concerted activity, discharging an employee because
of his union or other protected concerted activity, condi-
tioning the reinstatement of its striking employees on
their reaffirmation of Federacion General de Trabaja-
dores de Puerto Rico (Respondent Federacion) as the ex-
clusive collective-bargaining representative of Respond-
ent's casino employees and, finally, discharging 48 em-
ployees because the employees participated in a strike
caused and prolonged by Respondent Hotel's unfair
labor practices.
On July 16, Respondent Federacion filed a charge in
Case 24-CA-4676 alleging, in essence , that Respondent
Hotel committed unfair labor practices within the mean-
ing of Section 8(a)(1) and (5) of the Act. On August 12,
an order further consolidating cases, complaint, and
notice of hearing issued consolidating Case 24-CA-4676
with the above-described case, alleging that Respondent
Hotel violated Section 8(a)(1) and (5) by unilaterally
changing, eliminating, reducing, or otherwise modifying
existing wage rates and other terms and conditions of
employment of its casino employees, and by threatening
employees with layoff or discharge if they did not accept
said unilateral changes.
Thereafter, on September 20, the Union filed a charge
in Case 24-CB-1179 alleging that Respondent Federa-
cion committed unfair labor practices within the meaning
of Section 8(b)(1)(A) and (2) of the Act. Pursuant to that
charge, an order further consolidating cases, complaint,
and notice of hearing issued on September 30 alleging, in
essence, that Respondent Federacion entered into an
agreement with Respondent Hotel to condition the rein-
statement of striking employees on the employees' reaf-
firmation of Respondent Federacion as the exclusive col-
lective-bargaining representative of the casino employees
and, as a result of that agreement, caused Respondent
Hotel to discharge its striking employees who refused to
comply with that requirement.
Thereafter, at the trial, pursuant to a notice of inten-
tion to amend complaints, the consolidated complaint
was further amended to allege that Respondent Hotel
bypassed the Union and dealt directly with its casino em-
ployees by requesting the casino employees to accept the
unilateral changes described above. The complaints were
further amended to reflect that Respondent Hotel's uni-
lateral changes in terms and conditions of employment of
its casino employees, in addition to the discharge of an
employee, were motivating factors that caused and pro-
longed the unfair labor practice strike.
' All dates herein are for the year 1982 unless otherwise noted
On August 2 and 23, Respondent Hotel and, on Octo-
ber 11, Respondent Federacion filed answers that denied
the commission of any unfair labor practices.
At the trial the parties were afforded full opportunity
to participate, to present relevant, material, and compe-
tently adduced evidence, and to argue orally. Briefs were
subsequently filed by the parties on or about January 14,
1983.
On the entire record in this case, including my obser-
vation of the demeanor of the witnesses, and in consider-
ation of all the briefs, I make the following
FINDINGS OF FACT
1. THE BUSINESS OF THE RESPONDENT HOTEL
Respondent Hotel, a corporation duly organized
under, and existing by virtue of, the laws of the Com-
monwealth of Puerto Rico , has maintained its principal
office and place of business at Isla Verde Road, Carolina,
Puerto Rico, where it is and has been at all times materi-
al continuously engaged in providing facilities for lodg-
ing, entertainment, food, beverage, and related services.
During a period representative of its annual operations
generally, Respondent, in the course and conduct of its
operations, derived gross revenues therefrom in excess of
$500,000 and purchased and caused to be transported and
delivered to its place of business, foodstuffs, beverages,
and other goods and materials valued in excess of
$50,000 that were transported and delivered to its place
of business in interstate commerce directly from places
located outside the Commonwealth of Puerto Rico.
It is admitted, and I find, that Respondent is, and has
been at all times material, an employer engaged in com-
merce within the meaning of Section 2(2), (6), and (7) of
the Act.
II. LABOR ORGANIZATIONS
It is admitted , and I find, that the Federacion is, and
has been at all times material , a labor organization within
the meaning of Section 2(5) of the Act.
In the complaint issued on July 21 , 1982, in Cases 24-
CA-4663 and 24-CA-4667, the Union is also alleged to
have been at all material times a labor organization
within the meaning of the Act. However , Respondent's
subsequent answer denied that allegation . Based on un-
contradicted evidence in the record , I find that the
Union at all times material is a labor organization within
the meaning of Section 2(5) of the Act.
III. THE ALLEGED UNFAIR LABOR PRACTICES
A. Facts
1. Unilateral changes
Respondent Hotel has for many years operated as one
of the San Juan area's prominent resort hotels . There is
no dispute that by 1980 it had entered into a situation of
financial distress , and that thereafter its conduct that is
alleged to be violative of Section 8(a)(5) of the Act was
motivated not by unlawful discrimination , but rather that
EL SAN JUAN HOTEL 1461
it was motivated by economic considerations, i.e., busi-
ness survival.
A petition for reorganization under Chapter XI of the
U.S. Bankruptcy Act was filed with the U.S. Bankruptcy
Court by the Respondent on May 20, 1980. On July 10,
1980, the court appointed as operating trustee of Re-
spondent Hotel, Hector Rodriguez Estrada, who is a
member of the trustee board of the U.S. Bankruptcy
Court. His function was directed to the operation and fi-
nancial rehabilitation of the hotel. After having studied
the hotel's operations, the trustee commenced on a
course of instituting various cost-saving stratagems in-
volving, e.g., the elimination of executive and managerial
positions and unprofitable shops, restaurants, bars, etc.
The trustee then returned his attention to all nonmana-
gerial positions. He became aware that the hotel's em-
ployees were represented by labor organizations in sepa-
rate units and covered by existing separate collective-
bargaining agreements. The trustee discovered that one
of these contracts was with Local 610 of the Gastro-
nomical Workers Union, and was the subject of a peti-
tion for rejection filed by Respondent with the bankrupt-
cy court the day preceding the trustee's own appoint-
ment. The trustee arranged to meet with Local 610 lead-
ers in order to avoid the need for court rejection of their
labor contracts. In October 1980, after negotiations, an
agreement was reached with that labor organization,
whereunder economic concessions were granted. The
new agreement was approved by the bankruptcy court.
In addition to Local 610, the Federacion also repre-
sented certain employees of Respondent Hotel. In 1974,
it had been certified by the Board as exclusive collective-
bargaining agent for two separate units. In unit 1 were
included all croupiers employed by Respondent at its
hotel casino or gaming room, but excluding: all other
employees, employees in the service and maintenance
unit, casino cashiers, runners, waiters and doorman,
guards, and supervisors as defined in the Act. In unit 2
were included all casino cashiers and runners employed
by the Respondent at its hotel casino or gaming room,
but excluding all other employees, guards, and supervi-
sors as defined in the Act. The Respondent and the Fe-
deracion had entered into a collective-bargaining agree-
ment effective from May 1977 until April 30, 1980, the
terms of which covered the following unit:
Included: all croupiers, cashiers and runners em-
ployed by the Casino of Hotel San Juan, in Isla
Verde, Puerto Rico.
Excluded: all other employees, office clerical em-
ployees, guards and supervisors as defined in the
National Labor Relations Act.
On June 23, 1980, the Respondent had, by written
agreement, extended the terms of its Federacion contract
to April 1983.
Having received economic relief from Local 610, the
trustee sought to discover other areas of effectuating ec-
onomics. He had received information that the croupiers
were opposed to economic reductions. However, the
casino managers had agreed to certain concessions, and
job vacancies were left unfilled. The outset of the 1980-
1981 winter tourist season was at hand, and the trustee
decided to evaluate the results of that season before
acting further. March 1981 marked the end of the tourist
season that proved to be financially disappointing. The
trustee testified without contradiction that he next com-
municated with Federacion leaders and expressed the ne-
cessity for economic relief from its collective-bargaining
obligations, to assure a continuation of operations and
employment for all hotel employees.
According to the trustee's uncontradicted testimony,
after a series of meetings concerning contractual conces-
sions between the trustee and the union leaders, i.e.,
President Luis G. Nicot; Secretary-Treasurer Marcos
Vega Robles; and employee delegates Miguel A. Mal-
donado Freites, Alfredo Battista, and Jorge Blanco. On
September 24, 1981, the Respondent distributed to the
unit employees a memorandum addressed to them that,
inter alia, set forth its claim of financial distress, and
stated further:
At this time we are asking you, the Casino Union
members, who earn more than twice as much as
other hotel employees, and who are among the
higher paid workers in Puerto Rico to also make
sacrifices, to help keep your jobs as well as the jobs
of the other hotel employees.
Union Reply
This situation was explained to your Union leader
and delegates . The Union leader said he would not
negotiate any changes in the contract. When it was
suggested that the union members should have the
opportunity to decide if they preferred to have the
present contract, but no jobs, or have jobs with a
modified contract , a delegate replied that they
would make the decision for you.
Next Steps
During the week of September 28th, the Compa-
ny will file a motion in Court to reject the contract,
effective October 5, 1981. On Monday, October 5th
the changes we have proposed will become effec-
tive. When you report to work, it will be under the
new conditions.
We are of course willing to negotiate with your
union. However, their refusal to negotiate leaves us
no choice, but to proceed as we are doing . This is
in your interest as well as ours, as this is the only
way we can save your jobs.
The memorandum referred to the existing contract as a
"classic example of featherbedding" and entered specific
areas of alleged "abuse."
On October 5, 1981, an application for rejection of
collective-bargaining agreement was filed by Respondent
with the Honorable Antonio I. Hernandez Rodriguez,
judge of bankruptcy court. The petition set forth a claim
that the Federacion contract would be onerous and detri-
mental to the estate and in particular it enumerated as
such 15 specific areas of performance:
1462 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
1. The restrictive scheduling of hours.
2. The lunch period duration.
3. Sick pay in excess of regular pay rates.
4. Vacation pay in excess of regular pay rates.
5. An increase in the number of paid vacation
days.
6. A seniority proviso alleged to result in the in-
appropriate utilization of personnel.
7. A guarantee of a rotation of days off alleged to
result in excessive overtime payment.
8. The institution of two work shifts allegedly ne-
cessitating excessive personnel.
9. The closing of the Casino on certain holidays
when business would appear to be most profitable.
10. A guarantee of a Christmas bonus of 7 days'
pay.
11. An increase of the number of sick days from
15 to 21.
12. A guarantee of employment to a minimum of
60 employees.
13. Guaranteed salaries to senior croupiers.
14. Paid holidays for Fathers Day and the em-
ployees' birthday or double pay for work required
on those dates.
15. Severance pay in excess of that required by
law.
On October 7, 1981, trustee Rodriguez distributed a
memorandum to all croupiers , cashiers , and runners
wherein he alluded to the collective-bargaining agree-
ment as burdensome and onerous to the bankruptcy
estate and subject to necessary change . He further stated:
"we have tried to renegotiate the labor contract with the
Union, but they refused to negotiate," and he notified
them that a petition to reject the contract had been filed.
He also announced the immediate implementation of uni-
lateral contractual modifications concerning:
1. A limitation of vacation and sick leave.
2. Elimination of Fathers Day and employee
birthday as paid holidays.
3. The opening of the Casino on New Year's
Eve, Christmas and Holy Thursday.
4. Reduction of Christmas bonuses to that
amount granted to other employees.
5. The setting of shift starting times in accord
with business needs.
6. The programming of rotation of days off ac-
cording to business needs.
7. Task and shift assignment in accord with busi-
ness needs.
8. Layoff policy to conform with that of other
nonunit employees.
9. The elimination of severance pay for tempo-
rary layoffs.
10. The determination that a workday consists of
an 8-hour shift.
Trustee Rodriguez concluded:
Also, we are studying other measures that will
help the company in achieving additional savings in
order to retain our rehabilitation program.
We hope that you will continue cooperating with
the Hotel, as usual . We are still willing to meet with
your Union to discuss the above changes and any
future changes. If you do not wish to work under
these new conditions, please notify the Casino Man-
ager.
Rodriguez testified, without contradiction, that prior
to the hearing on the rejection petition he had met with
the Federacion representatives in order to obtain conces-
sions from the contractual obligations and thus avoid a
court-ordered rejection of the contract, as he had done
with Local 610, but that in negotiations the Federacion
did not agree to change the contract. He conceded that
he had effectuated the modifications prior to any court-
approved contract rejection, but that he had done so on
a temporary basis subject to negotiations with the Feder-
acion.
The bankruptcy court hearing on the rejection petition
was held on November 2, 1981. Prior to that date the
Federacion, through its attorney, was given access to
Respondent Hotel's business records. The Federacion
was represented at the hearing . At one point during the
hearing , the parties were provided an opportunity during
a recess to negotiate further. It is Rodriguez' uncontra-
dicted testimony that he was advised by the Federacion
attorney that although the Federacion officers were will-
ing to negotiate, the delegates were opposed to negotia-
tions for the purpose of reducing contractual benefits and
that the leaders therefore preferred to have a ruling by
the court that would obligate them to negotiate. On No-
vember 12, 1981, Bankruptcy Judge Hernandez-Rodri-
guez issued an opinion and order in which he authorized
the trustee "to reject the contract," and stated therein:
In the case before us at this time, the trustee did
bring forth evidence to the effect that the collective
bargaining agreement was burdensome and onerous
to debtor's estate . The union failed to refuse this evi-
dence. This court was convinced that should the
agreement remain in effect, it would thwart debtor's
efforts to rehabilitate itself and that it could be
forced to default in its payments to the secured
creditors and to the taxing agency ... .
The case of Brotherhood v. Rea Express Inc. (523
F.2d 164) also pre-Code, went even further than
Kevin (519 F.2d 698), in requiring a showing that
"unless the agreement is rejected, the debtor will
collapse and the employees will no longer have
their jobs." Although we are not willing to say that
this showing will be required in all cases where we
are presented with a similar controversy as to au-
thorization to reject a collective bargaining agree-
ment, we can safely say that the trustee in this case
came forward and met this more stringent test.
Moreover, the "Federacion" failed to present any
evidence whatsoever to the contrary.
Trustee Rodriguez testified further without contradic-
tion that after November 12, and prior to the opening of
the tourist season on December 1, 1981 , he met again
several times with the leaders of the Federacion, i.e.,
EL SAN JUAN HOTEL 1463
Nicot and Vega, and with delegates Maldonado, Battista,
and Blanco. The last of that series of meetings was held
on or about November 24. The subject of these meetings
was the changes already effected as well as other addi-
tional new concessions, including a reduction in salary.
At one point, according to Rodriguez' uncontradicted
testimony, the union leaders came to an agreement on
these concessions, subject to membership approval. On
such submission , however, the membership rejected the
tentative agreement. Several more meetings were held
between Rodriguez and the Federacion negotiators in
late November and early December 1981. Rodriguez tes-
tified (without contradiction):
Yes, I met with them during that same period and
we agreed to leave things pending to see what
would happen during the winter season that was
coming, to see if there was a need for any economic
modification in the collective-bargaining contract.
Vegas testified that the Federacion bargaining repre-
sentatives met with the trustee "more or less" toward the
end of November and early December 1981, that a full
agreement was reached but rejected in part with respect
to the salary reduction; that after further negotiations an
agreement on salary reduction was again reached with
the Federacion leaders over the objection of the dele-
gates . That agreement on salary reduction was thereaf-
ter, in accordance with the delegates' objection, rejected
by the members.
On December 8, 1981, Nicholas Delgado Figueroa,
who now represents the Union, drafted a motion request-
ing permission to intervene, which was signed by Mal-
donado as "union representative," and filed by him with
the bankruptcy court.
In that motion, Maldonado asserted, inter alia, that he
represents the croupiers as union delegate, and that the
trustee relying on the court's November 12 contract re-
jection authorization had informed the croupiers of his
authority to reduce all salaries , that the trustee "shows
complete disregard for the clauses of the Bargaining
Agreement that has no economic impact," and that he
and the croupiers have proposed "several ideas" to the
trustee to save money. On December 16, the court
denied that motion on the grounds that the court had
before it "nothing pending in this matter to resolve."
Maldonado testified that he filed that motion "based on
the fact that I was leader of the group." On direct exam-
ination , he evaded a question whether he had made any
effort to communicate with the Federacion. On cross-ex-
amination , he conceded that he was not authorized by
the Federacion leaders to file that motion. He testified
that prior to the filing of that motion there had been un-
successful negotiations between the trustee and the Fe-
deracion, although he conceded that agreement had been
reached in negotiations in November or December 1981
that was subsequently rejected by the members of the
bargaining unit.
On December 15, Respondent, by its attorney, filed a
report with the bankruptcy court in which it stated that
although the court had issued its prior contract rejection
authorization, the Respondent would continue to comply
with the terms and conditions of the contract until such
time as an agreement with the Union would occur or
become unfeasible.2 By letter dated December 22, ad-
dressed to trustee Rodriguez, signed by Maldonado, a re-
quest was made to meet , pursuant to the December 15
bankruptcy court report, on January 4, 1982. Rodriguez
testified that he hoped that economic conditions would
improve, and he was therefore receptive to the idea of
meeting . He testified, without explicit contradiction and
in large part corroborated by Vega, that he communicat-
ed with the Federacion leaders to confirm the meeting
date but was advised that Maldonado was not authorized
to arrange for meetings and that he ought "to forget
about the meeting."
The 1981-1982 tourist season turned out to be eco-
nomically dissatrous , and the Respondent Hotel 's situa-
tion deteriorated from that of the previous year. It is Ro-
driquez' uncontradicted testimony that he had individual
conversations on unrecalled dates that winter with Vega
and Nicot in which he told them that although he was
awaiting the final outcome of the tourist season, he insist-
ed to them that the casino employees were the only em-
ployees not to have made some sacrifcies and that they
ought to "start thinking about the possibility to renegoti-
ate economic clauses," and further he testified that it was
understood that the collective-bargaining agreement con-
tinued to be in effect until 1983.3 Vega testified that he
was supplied with a copy of the December 15 report, but
did nothing immediately thereafter. He did not contra-
dict Rodriquez. He could not recall whether he had indi-
vidual conversations with Rodriquez that winter and did
not deny them. He did not deny that there had been a
mutual agreement to postpone further meetings pending
the outcome of the tourist season . Rodriquez' testimony
is therefore unchallenged and I credit him. Vega cor-
roborated Rodriquez with respect to the existence of a
mutal "understanding" that the unchanged remainder of
collective-bargaining agreement remained in effect and
that Respondent continued to abide by the unchanged
clauses . He testified that Rodriquez had been "mention-
ing that from way back, that he was going to make
changes," i.e., more changes.
On February 11, 1982, Maldonado by letter dated and
addressed to Respondent's counsel alluded to the De-
cember 15 trustee report, expressed doubts concerning
that report and the doubts concerning rights of the em-
ployees, and further requested a meeting . There had been
no change with respect to Maldonado's lack of authority
to schedule meetings . Maldonado did not clarify in that
letter whether he was acting as spokesman for the Feder-
acion or as spokesman for employees in an unofficial ca-
pacity. He conceded that he was not in fact authorized
by the leaders to write the letter. He received an ac-
knowledgment of receipt but not further contact. In any
event, a meeting was arranged to be held between the
trustee and the Federacion bargaining committee, i.e.,
Nicot, Vega, and delegates, on March 3. It is not clear
2 There is no evidence that Respondent had rescinded any of the earli-
er unilateral changes.
2 His testimony is unclear whether he explicitly stated this "under-
standing "
1464 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
who initiated that arrangement. That meeting was subse-
quently aborted, according to the trustee and Vega be-
cause of Maldonado 's unauthorized intervention and indi-
vidual misrepresentations to Vega and Rodriguez. I
credit the testimony of Rodriguez and Vega in this
regard which I fmd more certain and convincing than
that of Maldonado whom I found to be a far less respon-
sive and a highly evasive witness.4
Vega testified that on March 4, he became aware of
Maldonado's conduct, and that the March 3 meeting was
not canceled by the Respondent. Vega testified on direct
examination without context and without detail that a
meeting was arranged a week prior to March 9, to hold
a negotiation meeting on that date at 2 p.m. at the hotel.
On cross-examination, he affirmed the truth of his pre-
trial affidavit in which he recounted a March 8 midnight
conversation with Rodriguez that "ended on the promise
that we would meet at 2 p.m. on the following date,"
Rodriguez testified, without explicit and clear contra-
dictions, that on March 8, Federacion delegates Maldon-
ado, Battista, Blanco, and Attorney Delgado appeared at
his office and requested that he bargain with them as
representatives of the Federacion. Maldonado testified
hesitantly and uncertainly that he did not recall whether
he had met with the trustee subsequent to his letter of
February 11 to Respondent's counsel. I credit Rodriguez'
more certain and detailed testimony as to the occurrence
of such a meeting and what transpired. At that encoun-
ter, Rodriguez who had never negotiated with the Fe-
deracion in the absence of Vega or Nicot, and who had
always dealt with another attorney as a legal representa-
tive of the Federacion, deferred to the request to bargain
and suggested that when they presented to him written
authorization of their status he would thereupon bargain.
Trustee Rodriguez testified that on departure of Mal-
donado's committee, he telephoned Vega about 2 or 3
p.m. on March 8 and informed him of his earlier encoun-
ter with Attorney Delgado and the delegates and offered
to meet with them and call them the next day if Vega
could confirm their authority to represent the Federa-
cion. Rodriguez testified further that Vega responded
that he should take no such action because they did not
represent the Federacion for contract concession bar-
gaining . According to Rodriguez, he then informed Vega
that he had newly acquired information about further de-
terioration of the financial position of the Respondent
Hotel that indicated that operations under the economic
burdens of the collective-bargaining agreement could not
continue and that "since there was an impasse in the ne-
gotiations" that he would have to take "economic meas-
ures in order to guarantee" continued employment for
the employees, and further that he was then in process of
consulting his accountant and "economic counselors"
with the objective of preparing "modifications" to the
collective-bargaining agreement. Rodriguez testified that
he told Vega that he would call him to talk about those
4 Maldonado telephoned the trustee and informed him that Vega and
Nicot could not meet that day but desired to meet on March 4 On
March 4, the trustee was prepared to meet , but Vega and Nicot were out
of the city in Mayaguez Vega testified that the Federacion did not
cancel the March 3 meeting, and further were not advised of the substi-
tute date of March 4.
modifications as soon as he had finished compiling them
that day and that Vega told him to telephone him at
midnight.5
That same day Rodriguez distributed a written notice
of meeting to all unit employees to be held exclusively
with employees on March 9 at 11 a .m. in the Dolce Vita
Room of the hotel. Simultaneously, Rodriguez issued the
following letter of March 8 to the Federacion:
More than 5 months ago, we started talking with
you about changes in the Union contract that are
needed in order for the hotel to continue operating
and for your members to continue working. Your
main interest appears to be in "keeping the Union
benefits, we have worked so hard for." The fact
that these benefits will be worth nothing if your
members are unemployed, seems to be something
that you do not wish to accept.
As you know, we went to Court to request per-
mission to end the Union contract. The Court
granted us permission, and pointed out that it was
necessary for the hotel to survive, and for your
members to keep their jobs. Still, you have not been
willing to make any major concessions.
Accordingly, as of March 8, 1982, by the author-
ity granted us by the Bankruptcy Court, we are ter-
minating our contract with your Union.
According to Rodriguez, he called Vega about midnight
and read to him a draft of intended modifications and the
following conversation transpired. Vega stated that he
understood the economic problems of the hotel and that
although "he was not rejecting them he could not say
either that he was accepting them because he had not
consulted [concerning] them with the members." Rodri-
guez asked Vega to meet with the delegates that night
and that it would be discussed at the 2 p.m. meeting that
had previously been tentatively arranged on March 4 for
March 9. Vega responded:
Look, there is no doubt we have reached an im-
passe . It's not worth [it] for me to submit these
changes to the members because I don't think they
will approve them. I am tired of wasting my time.
Rodriguez testified that he informed Vega of a request
by Maldonado that the checkoff of Federacion dues
cease and that in light of the overall economic problems
of the members, he agreed to waive further dues check-
off by stating that he would not "fight it."' Rodriguez
testified that he was then faced with two alternatives,
"either to continue negotiating and close the hotel and
continue negotiating afterwards, or not to close the hotel
and make the necessary economic changes, and then con-
6 Rodriguez testified without contradiction that Vega had on past oc-
casions met with delegates at the casino late at night Vega did not deny
that he suggested the midnight call.
6 Maldonado, in cross-examination , after an evasion , denied that he had
ever asked the payroll master to cease Federacion's dues checkoff I
credit the more convincing and certain testimony of Payroll Master
Ramon Perez Agosto that Maldonado came to his office about noon
March 8 and made such request and that he subsequently advised Rodri-
guez
EL SAN JUAN HOTEL
tinue negotiating." However, he testified that he found
himself at that state of events where he and the leader-
ship of the Federacion had come to agreement on eco-
nomic concessions, but where the Federacion members
"would not arrive at anything or reach agreement." Ac-
cordingly, he proceeded to implement economic modifi-
cations on March 9.
Vega testified to one conversation with Rodriguez at
midnight on March 8, in which reference was made to
the delegate committee visit with Attorney Delgado that
Vega assured him was unauthorized, and also in which
Rodriguez announced an intention of making further
changes in the collective -bargaining agreement to which
Vega responded: "We have a meeting tomorrow at 2:00,
not to do anything . . . we're going to negotiate tomor-
row." According to Vega, the trustee then stated, "I'm
going to do what I'm going to do and that's it," and then
Vega said: "Well, it's 12:00 at night, I can't do anything
now, we're going to be there tomorrow at 2:00 so I sug-
gest you wait until 2:00 tomorrow." He testified that Ro-
driguez ended the conversation by saying, "Well, I'll see
you tomorrow at 2:00, you come tomorrow at 2:00 but
I'm going to do what I'm going to do. I've got my deci-
sions made."
Vega denied that any specific changes were stated in
the foregoing conversation, but when asked whether a
specific reduction in wages was stated, he answered "not
that I recall." On cross-examination he recalled that Ro-
driguez did make reference to a request by Maldonado
to cease the dues checkoff and testified, "I was disgust-
ed, and I knew that couldn't be done because of Maldon-
ado's saying that." He could not recall further details.
When pressed further to make an effort to recall, he tes-
tified with a furtive grin and abashed manner, "Frankly,
it was 12:00 midnight, I can only tell you what I remem-
ber because I had a nice night that night." His testimony
concerning his response to Rodriguez became more
cryptic and was given grudgingly as follows : "I told him
not to do it." He was thereafter confronted with his pre-
trial affidavit in which he delineated the conversation in
somewhat more detail by recounting that Rodriguez
made reference to the results of the fall-winter season
that were such as to render the collective-bargaining
agreement unaffordable, and that the trustee also referred
to the paralysis of negotiations and conflict among union
members, all of that necessitated that he must proceed to
modify the bargaining contract. In that affidavit, which
he testified was "basically" true, he stated, "I informed
the Trustee that he could do whatever he pleased, but
the union would then decide whether to accept the
changes or not." In that affidavit he also stated, in re-
sponse to the trustee's reference to the dues-checkoff re-
quest by Maldonado, that Vega "would not make an
issue of it."
The affidavit statement concludes the conversation "on
the promise we would meet at 2:00 p.m., on the follow-
ing day." The affidavit does not recite a clearcut demand
for negotiations prior to any change; nor does it recite
that Vega disagreed with the accusation of an internal
union conflict nor that he disagreed with the contention
that negotiations were at an impasse. In any event, I
credit the testimony of Rodriguez as far more certain,
1465
detailed, spontaneous, responsive, and convincing than
Vega who was markedly hesitant and uncertain about
the events of March 8. I therefore conclude that Rodri-
guez had two conversations with Vega on March 8,
which transpired as testified to by Rodriguez.
The Dolce Vita Room meeting between the trustee
and unit employees was held as announced at 11 a.m. on
March 9 . At that meeting Rodriguez read a memoran-
dum that was addressed to and distributed to the assem-
bled employees. The memorandum commenced by stat-
ing that on March 8, Respondent Hotel had "ended [the]
contract with the [Federacion]," and attached thereto a
copy of the March 8 letter to the Federacion. The
memorandum set forth, inter alia, changes in the follow-
ing:
1. Hours of work-8 hour day, 30 minute rest pe-
riods, 1 hour lunch, etc., resulting in shorter break
periods.
2. Fringe Benefits-continuation of contractual
health plan, discontinuation of pension plan, and
"all other benefits will be as prescribed by law."
3. Pay Grades-reductions in salary for Croupi-
ers, Cashiers, and Runners, by setting new maxi-
mum rates and the effectuation of future promotions
by merit exclusive of seniority.
4. Union Dues-checkoff deductions from pay
checks discontinued.
Vega became aware of the meeting by chance conver-
sation with Maldonado. He arrived at the hotel and en-
tered the meeting at the outset. He was advised by the
trustee that the meeting was exclusively with employees
but he was invited to stay as an observer. Vega elected
to leave and proceeded to wait in the lobby where for
the first time he received a copy of the March 8 letter of
contract rejection and the March 9 memorandum to em-
ployees, from one of the unit members as they departed
from the Dolce Vita Room.
It had been arranged that Vega and Nicot and the Fe-
deracion attorney were to have been accompanied to the
2 p.m. March 9 meeting by delegates Maldonado, Bat-
tista, Blanco, Aponte, and Fortunato Martinez. However,
the delegates refused to attend. The Federacion leaders
met with Rodriguez without the delegates. Nicot, in ref-
erence to the trustee's announcements of changes, ac-
cused him of acting precipitously and stated that he
should have waited for the scheduled meeting at 2 p.m.
Rodriguez protested that he had earlier communicated
with Vega. Vega insisted that he told Rodriguez not to
make any changes. Rodriguez again recited the reasons
he acted, inter alia, past failure to reach agreement, and
the rapid economic deterioration of the hotel that re-
quired immediate action to forestall closing, and the in-
ternal conflict within the Federacion as evidenced by
Maldonado's individual actions that were unauthorized
and even unknown by the Federacion, and that tended to
have a disruptive effect on negotiations. Rodriguez pro-
posed that further negotiations be continued by commit-
tees of four persons on each committee to be nominated
by each party, and that his representatives would be
named in a subsequent letter. The subject of the changes
1466 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
announced on March 9 was not raised. With respect to
the collective-bargaining agreement benefits not explicit-
ly referred to in the March 8 and 9 written communica-
tions, Rodriguez made explicit reference only to the
medical plan that he stated would remain unchanged.
With respect to the March 9 meeting, there is no evi-
dence that the Federacion representatives challenged the
assertions of Rodriguez as to a past impasse , nor the ac-
curacy of his position that the economic situation de-
manded immediate action . Nor is there evidence that the
Federacion demanded that Rodriguez forestall further
implementation of the changes , nor that they submitted
any proposals to him, nor that it on March 9 expressed
any desire to submit economic proposals nor that it made
any demand to bargain about these changes or the effects
of these changes at that meeting or at a later meeting. Fi-
nally, there is no evidence that the Federacion made any
response to the trustee 's assertions regarding the conflict
within the ranks of the association. It thus appears that
the Federacion , except for accusing the trustee of acting
precipitously, stood mute and unresponsive.
As to the subject of the continued negotiations thereaf-
ter, such is clearly revealed by Rodriguez' letter of
March 9 addressed to the Federacion that states:
Even though we have terminated our contract
with your Union, we still recognize you as the bar-
gaining agent for the Casino Croupiers, Cashiers
and Runners. We are willing to meet with you and
carry out negotiations, possibly leading to a new
contract.
To accomplish this we have designated a Com-
mittee, composed of the following management per-
sonnel.
Melba Curet Brugueras
Miguel D'Angel
Marshall J. Kagan
Samuel Schweitzer
This committee will be pleased to meet with your
representatives (we would suggest about 4). When
you have selected your representatives, and wish to
have a meeting , please let me know, and we will ar-
range it at a time convenient to both parties.
On March 9, Respondent Hotel's payroll master re-
ceived a memorandum from Rodriguez, which stated:
As a result of our cancellation of the Casino
Union contract, the following changes will go into
effect immediately.
1. No deduction of Union dues.
2. Vacation & sick pay accruals at rate prescribed
by law.
3. No pension plan deduction or contributions.
4. Working day will be 8 hours. Sick pay and va-
cation pay per day will be equal to a regular day's
pay.
5. Holidays will be as follows (five holidays set
forth).
6. New pay rates become effective March 9,
1982.
On March 11, Casino Manager Rafael Diaz presented
Maldonado with a memorandum acknowledgement of
acceptance of the reduction in wages to be executed by
Maldonado and all unit employees . Diaz stated that any
employee who refused to execute the document would
be laid off pursuant to the explicit terms of that docu-
ment.
No response was made by the Federacion to the trust-
ee's March 9 invitation to negotiate a new contract until
on April 26 it forwarded to Rodriguez a letter signed by
Nicot which stated that it was "most willing to sit down
and bargain concerning the collective Bargaining Agree-
ment." In that letter the Federacion suggested that Ro-
driguez set the date , time , and place for negotiation at
the trustee's "best convenience." The union negotiating
committee was named to consist of Nicot, Vega, Blanco,
and Maldonado.'
On May 3, Rodriguez acknowledged the April 26 Fe-
deracion letter and suggested a meeting date of May 11
at the Dolce Vita Room. A meeting was held on that
date between the Federacion committee, and a commit-
tee of Respondent Hotel representatives headed by Sam
Schweitzer, former president of the hotel and counsel to
the trustee, who was not to participate at that meeting.
After he had presented an oral report to the Federacion
of the hotel's economic crises, Schweitzer asked if the
Federacion had brought any proposals to further reduce
the hotel's expenditures. Vega responded that the Feder-
acion proposal was the unchanged collective-bargaining
agreement , but that the Federacion was willing to nego-
tiate from that contract, clause by clause, to determine
where reductions might be made and that a mutally
agreeable resolution might be effectuated. Schweitzer
stated that he was authorized by the trustee to negotiate
only from the status of the already effectuated economic
changes for further economic concessions. Vega protest-
ed that the unilateral changes previously effected had
never been accepted by the Federacion despite Respond-
ent's assumption of such acceptance. Vega announced
that the Federacion committee was leaving because
Schweitzer did not have authority to negotiate from the
status quo , before the unilateral changes, i.e., October
1981 and March 9, 1982. Vega suggested that Respond-
ent Hotel obtain Rodriguez for another meeting because
only he had authority to negotiate from the premise
sought by the Union. Schweitzer said he would notify
the Federacion, and the meeting of 20 minutes' duration
ended, as Vega said the Federacion was available at "any
time."
At the beginning of May , Rodriguez received an audit
report that reflected a loss of $1.6 million for the eco-
nomic year of May 1981-1982, due to the cancellation of
a British tourist contract.
On June 4, the Federacion by letter from Nicot to Ro-
driguez, referred to the agreement to negotiate an
"agreement concerning the Casino 's collective Bargain-
ing Agreement," by the reduced committee format, and
On April 14 , the bankruptcy court conducted a hearing pursuant to a
motion filed by Delgado On that date the bankruptcy court ordered the
Federacion and Respondent Hotel to meet and attempt to enter into a
collective-bargaining agreement
EL SAN JUAN HOTEL 1467
noted its request at the last meeting to enlarge the com-
mittee to six persons. The letter gave notice of the addi-
tion of two persons "for the next morning." No request
to bargain at any specific time set forth, nor were there
any proposals submitted by the Federacion, nor was
there any indication that the Federacion was willing to
moderate its position that any negotiations must com-
mence from the point of status quo ante, and the old
contract.
At the beginning of June, Maldonado engaged in the
leadership role of initiating the existence of a new union.
He met with unit employees in the croupiers' restroom at
the hotel. Thirty-eight croupiers were present. Attorney
Delgado addressed them.8 In consequence, the Union
was formed and its executive board was named by the
employees . Maldonado was elected president and Blanco
was elected vice president. Eliont Garcia was elected
secretary-treasurer. Other positions were created and of-
ficers elected. The purpose of the organization was to
negotiate a collective-bargaining agreement, resolve
grievances on behalf of employees, and negotiate better
working conditions with Respondent Hotel. Thereafter,
bylaws and a constitution were devised. Within 2 days
the Union filed a representation petition seeking certifica-
tion of its status with the Board.
On June 10, trustee Rodriguez sent by messenger the
following letter to Nicot:
We appreciate your patience in waiting to resume
negotiations.
The obligation that prevented us from meeting
are now reduced and we can meet with you next
week. We suggest Tuesday, June 15, 1982, at 10
A.M., in La Dolce Vita Room at the hotel. If this is
not convenient, please call and we will arrange a
meeting for another date and time.
Enclosed is a notice to the Casino employees re-
garding a reduction in salary that will go into effect
Monday, June 14, 1982. We will explain in detail
the economic problems that make this necessary.
The attached notice to employees was dated June 10,
and set forth further salary reductions, to be effective
June 14, with the explanation that recent worsening eco-
nomic conditions necessitated these reductions in order
to keep the hotel operational.
Vega testified on direct examination that the June 15
meeting was postponed at the request of the Federa-
cion.9 Vega testified that there had been no other meet-
ing held or scheduled, and no discussions concerning the
subject of the June 10 notification, receipt of which he
admitted on June 10. Clearly then, the Federacion made
no demand to bargain about these additional reductions,
nor did it make a request to postpone the effectuation of
these reductions in order to bargain about the subject.
Rodriguez testified that he had private, individual con-
8 Maldonado testified that Delgado had been retained as early as De-
cember for the purpose of organizing the Union
9 Vega was confused whether the meeting was scheduled for June 17
or 21 Rodriguez testified credibly that a meeting was set for June 17 at
11 &i n, and that the Respondent Hotel bargaining committee waited in
vain for Federacion negotiators who failed to appear.
versations with the Federacion' s leaders (i.e., Vega and
Nicot) about further salary reductions. His testimony as
to these conversations was generalized and conclusion-
ary, but to the effect that the Federacion leaders (Vega
and Nicot) stated that they understood the inevitability
of these reductions and that negotiations were a waste of
time . Rodriguez testified that nevertheless they did
decide to meet formally and he therefore invited discus-
sions about salary reductions thereafter in the June 10
letter. In cross-examination Vega conceded that during
May and June he and Nicot individually and separately
talked to the trustee by telephone on an indeterminate
number of times. Vega could not recall the substance of
the conversations except that part of it related to setting
a date for meeting "for June 10 or 15th, those dates." He
admitted that these conversations were not routine. He
was asked the following:
(By Mr. Del Valle) During these conversations
(of May and June) did (the Trustee) ever tell you
that the need to make the change was a question of
jobs or salary, between one of the two?
He probably mentioned that, but that was normal
for him to mention that. He's been mentioning that
from way back, that he was going to make changes,
that he was going to make the changes. And like I
stated, he said, I'm going to make some changes.
We did not agree we did not accept them.
Vega did not categorically deny that he told Rodriguez
during these May-June individual conversations that he
understood the need for further salary reductions and
that negotiations were a waste of time. Although he in-
sisted that the Federacion never affirmatively agreed to
these reductions, he admitted in cross-examination that
even after the receipt of the June 10 letter the Federa-
cion made no request to meet with Rodriguez prior to
the effectuation date. Nicot did not testify. Thus the tes-
timony of Rodriguez concerning these May-June conver-
sations, although generalized and conclusionary, stands
virtually uncontradicted. Furthermore, there is no evi-
dence that the June 10 announcement was irrevocable,
or that a request to postpone the effective date and nego-
tiate would have been futile.
On June 11, Maldonado and Blanco visited Rodriguez
and personally delivered to him and signed by Maldon-
ado as president of the Union, the following letter:
Hereby we wish to inform you that at a meeting
held the 8th of June 1982 at 8:00 in the evening, all
the croupiers of the Hotel made the decision to
form a labor organization independent from any
labor union in the country.
Our organization adopted the name of Union de
Empleados de Casinos de Puerto Rico, Inc.
A provisional board of directors was chosen con-
sisting of the following: Miguel Maldonado, presi-
dent, Jorge Blanco , Vice-President, Elionary
Garcia, Secretary-Treasurer, Javier Aponte,
Records Secretary and four members-at-large. We
also approve a Constitution and Bylaws.
1468 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
It was agreed that upon advising you about the
organization that will represent us in all labor-man-
agement matters , we request your voluntary recog-
nitions of our organization and that we set a date to
commence negotiations.
Due to the anxiety reigning among our member-
ship and the need for us to adequately prepare our-
selves before the new tourist season commences, we
wish to meet with you on Tuesday, June 15 of this
year, at 3 in the afternoon to commence said negoti-
ations.
Rodriguez declined recognition of the Union until
such time as the Federacion was decertified and the
Union was certified as exclusive bargaining agent by the
Board . He also stated that the bargaining date they
sought was precisely the same that had been set for
meeting with the Federacion. As of the filing date of the
Union's representation petition with the Board on or
about June 11, the Federacion had not as yet filed any
unfair labor practices against the Respondent with re-
spect to the alleged breach of bargaining obligations.
At undisclosed dates prior to this hearing, the Federa-
cion and Respondent Hotel met and , in consequence, ne-
gotiated and excuted on October 1, 1982, a new collec-
tive-bargaining agreement , which was submitted on Oc-
tober 4 for approval to the bankruptcy court.
On October 7, Respondent Hotel submitted for ap-
proval of the bankruptcy court a settlement agreement
purportedly remedying some but not all allegations of
violations in this case . On October 15, the Regional Di-
rector for Region 24 of the Board filed an opposing
motion with that court wherein he argued that the
remedy provided was inadequate, and further requested
that the bankruptcy court refrain from adjudicating an
unfair labor practice. On October 15, the Regional Di-
rector by letter informed Respondent Hotel of his own
refusal to approve that settlement agreement, and set
forth therein a recitation of the inadequacies of the settle-
ment . At the hearing herein, Respondent submitted to
me for approval the same document . I also refused to ap-
prove that agreement for the same reasons recited by the
Regional Director, i.e., it does not provide for a full
remedy or substantially full remedy for the violations al-
leged.
2. The 8(a)(3) allegations-discharge-strike
The hotel casino operated on the following shift basis.
On the day shift, one group of employees worked from
12 noon to 7 p.m., and another group worked from 1
until 8 p.m. On the night shift, one group worked from 8
p.m. until 3 a.m., and the other group worked from 9
p.m. until 4 a.m.
On June 17, Maldonado was scheduled for the 12 noon
to 7 p.m. shift . From 11 a.m. until noon, Rodriguez and
his negotiatiors waited for the Federacion representatives
who did not appear.
Sometime between 11:15 to 11 :45 a.m ., Hotel Resident
Manager Charles Garcia was in the office of Hotel Gen-
eral Manager Stewart Waters with Waters and Chief
Maintenance Engineer Marcos Acquino Rochette, who
was there discussing a maintenance problem concerning
the hotel pool. The reservation manager, Miriam Vidal
Dominguez , entered with a handful of leaflets that she
displayed to Garcia and Waters and informed them of
their distribution in the lobby where they were being
handed out. The unsigned leaflet, the distribution of
which ultimately led to Maldonado 's discharge , stated as
follows:
June 16, 1982
To All Employees of Hotel San Juan
Hereby we wish to invite all fellow workers of
all the departments of the hotel to attend an inform-
ative protest picket, which will take place on
Monday, June 21, 1982, at 10:00 a.m., due to the ir-
responsible manner in which Mr. Hector Rodriguez
Estrada, trustee of the hotel, is administering the
same; and to make publicly known the abuses that
this individual is committing against us employees
who are doing our best to keep this Hotel operat-
ing.
Fellow Workers: let us defend what is ours,
which we have obtained through 25 years of work
and sacrifice. Let's not allow this Dictator to close
the Hotel. Which has been his desire since he start-
ed to operate the same , this has been said by the
latter on different occasions "that it is to his advan-
tage to close to Hotel rather than keep it open, inas-
much as by selling it, he will earn 2% of the total
sale (price). This man has turned into the Robin
Hood of the Rich, taking the wages away from the
poor in order to pay a multimillionaire company.
Fellow workers: well see you on Monday, June
21, 1982, at 10:00 a.m.
Acquino had about 11 a.m. observed some hotel maids
with leaflets but had not read them and had said nothing
when Vidal presented the leaflets. In fact, Acquino paid
little attention to the leaflet conversation. Waters and
Garcia then delivered the leaflets to Rodriguez who
became effronted and directed Garcia to investigate and
discover the distributor. Garcia proceeded to the hotel
lobby and noticed many of the same leaflets on a table
provided for the use of hotel patrons then attending a
convention. He failed to discover who placed those leaf-
lets. Meanwhile, Acquino had left the meeting in Waters'
office, proceeded to the engineering office that is located
in the back basement area of the hotel along with the
housekeeping and hotel security officers.1° At his office,
Acquino observed a group of employees reading the leaf-
lets. He read the leaflet and shortly thereafter he pro-
ceeded to Waters' office where he carried one of the
leaflets . On his way to Waters' office he observed a
casino worker, distinctive in appearance because of his
uniform, walking in the engineering office area. Casino
workers do not normally frequent that area. Acquino ob-
served nothing else, i.e., he did not observe that casino
worker distributing nor carrying leaflets . At trial he
'0 Maldonado who had worked at the hotel since 1965 testified that he
did not know the location of the engineering department , but quickly
added that he was aware that it was "somewhere " in the basement.
EL SAN JUAN HOTEL
identified that worker as Maldonado. In Waters' office
he told Garcia that he had seen a casino worker walking
in the engineering area , and that he had seen employees
in the area who were reading that leaflet. Garcia asked
whether he knew the identity of the worker. He an-
swered negatively."' Both Acquino and Garcia place
this about 11:45 a.m.
Garcia immediately proceeded to the casino without
Acquino and encountered Assistant Casino Manager
Adalberto Rivera who was engaged in preparations for
opening the casino at noon. Garcia asked him to assist in
identification of the leaflet distributor. As Rivera was
busy, he assigned his assistant , Arroyo, to Garcia. At
that moment, according to Rivera and Garcia, Maldon-
ado appeared in the casino from the croupiers ' resting
area, and the following conversation took place. Rivera
confronted him and asked if he had knowledge of the
distribution of leaflets by any of the casino employees to
which Maldonado stated : "It is impossible , the leaflets
are in my locker and that is impossible that anybody is
handing out the leaflets." Maldonado and Garcia with
Arroyo departed in different directions. Rivera had not
yet read a copy of the leaflet that Garcia had given him.
Garcia and Arroyo proceeded to the outside of the
hotel. As they did so, while passing through the casino,
Garcia noticed numerous employees reading leaflets.
Having discovered nothing outside, they reported to Ro-
driguez and thereafter proceeded to question the hotel
security guard, Angel Rivera. According to Angel Ri-
vera's testimony , as he returned from lunch sometime
after 11:30 a.m. on June 17, in the hotel security area he
was given a leaflet by Maldonado, whom he did not
know by name. Maldonado told him that the leaflet was
for all hotel employees regardless of their particular
union representation. Thereafter when Garcia questioned
Angel Rivera about 1:30 p.m., he was told what oc-
curred earlier and given a description of the leaflet dis-
tributor.
Garcia returned to Acquino, from whom he also ob-
tained a physical description of the casino employee
which, he concluded, matched that given by Angel
Rivera. Garcia took Acquino to the hotel personnel
office where, from a file of photographs, he selected
Maldonado's photograph and thus identified him. Garcia
did not arrange for the same procedure with Angel
Rivera until 2 p.m. of the next day, when Rivera similar-
ly identified Maldonado. On the afternoon of June 17,
Garcia reported the results of his investigation of that
day to Rodriguez.
Manager Adalberto Rivera testified that shortly after
the noon conversation with Garcia and Maldonado, he
proceeded to the casino employee rest area, and while
Maldonado was speaking on the telephone, he read the
flyer that was posted on the employee bulletin board and
then removed it. Maldonado finished his telephone con-
versation and reproved Garcia for removing the leaflet
II Contrary to Acquino, whom I credit as the more certain in his
recollection , Garcia on direct examination testified that Acqumo told him
that he had observed a casino employee distributing leaflets downstairs in
the back basement area . On cross-examination his testimony is in accord
with Acquino
1469
from the employee bulletin board . Rivera apologized and
replaced it.
Maldonado testified that he was unaware of who pre-
pared, delivered, or distributed the leaflets on June 17
and also unaware of who sponsored the picketing or was
behind the leaflet. 12 He testified that he arrived "at
work" on June 17 at 12 noon. He also testified that he
discovered about 25 leaflets on the table in the rest area
on his entrance there . After reading one of them and be-
cause he did not "see anything incorrect" thereon, he
proceeded to put a copy on the employee bulletin
board. 13 According to Maldonado , at that moment Man-
ager Rivera entered , proceeded toward the bulletin
board, and removed the leaflet.14 Maldonado told him
he had no right to do so and Rivera apologized and re-
ported it, although manifesting a demeanor of displeas-
ure. Maldonado testified that he then immediately tele-
phoned Delgado and reported these events. t 5 He next
proceeded to his assigned post at one of the gaming
tables but was called aside to the manager's desk in the
room by Manager Rivera. Maldonado summoned an-
other employee as a witness. It is Maldonado 's uncontra-
dicted testimony that Rivera told him that "disciplinary
measures were going to be taken against the persons who
distributed this leaflet," and that his response was that if
Respondent Hotel had proof of the identity of that
person and if they understood discipline was justified, it
should proceed according to its "best judgment." 16
Maldonado left the manager's desk and summoned the
shop stewards to the casino. When they arrived, he in-
formed them of these events and they remained until
4:30 p.m., at which time they were dispatched home by
Maldonado inasmuch as nothing had occurred. However,
at 4:45 p.m. Maldonado was directed to report to the
office of Personnel Director Melba Brugeras . He did so
and there was confronted by Brugeras and Garcia. Bru-
geras presented Maldonado with a letter of discharge to
which were attached two documents; one of which was
addressed to the Federacion and which withdrew recog-
nition of Maldonado as a Federacion steward ; and the
other was an order to Maldonado to leave the premises
immediately. The letter of discharge signed by Personnel
Director Brugeras states the reason for discharge as the
distribution of the June 17 leaflet "which injures the
12 He asserted further that total ignorance as of the time of the trial.
After some evasion, he conceded to have given affidavit testimony prior
to this trial, to the effect that after the discharge he had received infor-
mation that Blanco had brought the leaflets to the hotel
13 On cross-examination, he testified that the only reference he found
untrue was the characterization "dictator "
14 On cross-examination , he testified that he discovered the leaflets in
the rest area shortly before noon and that he proceeded to the gaming
room at noon
15 He did not contradict Manager Rivera 's testimony as to the con-
frontation in the gaming room that preceded this event I therefore credit
Rivera. Maldonado explained that he called Delgado because of the "at-
mosphere" in the hotel , i.e., a "worried state" of supervisors and employ-
ees
Is On cross-examination , Maldonado attempted to explain how he had
time to have become aware of the worried state of employees to have
prompted a call to Delgado while in the rest area He then testified that
the ascertainment of the worried state was concurrent with the Rivera
warning However, this contradicts his direct examination that placed it
at a subsequent time
1470 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
moral integrity of persons composing the Hotel's man-
agement and is deterimental to the good functioning of
this business establishment ." In the letter to the Federa-
cion executed by Rodriguez, it is stated as follows:
During the course of today, June 17, 1982, Mr.
Miguel Madonaldo Freites, Union steward, distrib-
uted among the guests , employees and everyone
who was at the Hotel, the enclosed leaflet. He also
posted the same on the Casino's bulletin board.
Mr. Maldonado's conduct shows that he has gone
way beyond what is required by a steward's func-
tion. He has charged this Hotel' s Management with
ulterior intentions contrary to the genuine interests
of the company, which charge entails an idea of im-
morality and is insulting to the persons who are
members of Management . Furthermore, the written
statements made with the intention that they be
read by the guests of the Hotel, and which have
been read, have the intention of preventing said
guests from continuing to use the facilities of the
Hotel.
For the above-stated reasons, we shall not contin-
ue to recognize Mr. Maldonado as a steward or oth-
erwise a representaive of Federacion General de
Trabajadores de P.R.
Trustee Rodriguez testified that the motivation for his
decision to discharge Maldonado rested solely on his
conclusion based on the reports of the investigation that
Maldonado distributed the June 17 leaflet. Rodriguez tes-
tified most vividly and convincingly that he found that
memo to be personally offensive and insulting . He also
testified that he viewed the leaflet as an act of disloyalty
to the hotel. He testified correctly that the Bankruptcy
Code imposed an obligation on the trustee to seek the re-
habilitation of the hotel. Although he conceded that the
leaflet accurately reflects that he had the authority to sell
the assets and that it accurately states the rate of com-
mission he denied that he was motivated in his manage-
ment decision by a desire to run down the hotel so as to
be put into a position of justifying the sale as was clearly
implied in the leaflet and denied that the alleged quota-
tion within the leaflet was truthful. Such a motivation,
he claimed, was deterimental to him professionally as it
was to the business of the hotel. However, Rodriguez
did not explicitly deny Maldonado's generalized testimo-
ny that the trustee stated during several informal con-
frontations over grievances in the lobby and in the office
that he would convert the hotel from a Chapter XI
Bankruptcy to a Chapter VII Bankruptcy and close the
hotel if he were to be subjected to further "pressures,"
i.e., presumably by Maldonado and/or the Federacion.
Maldonado gave no details nor any context for these
confrontations. It is therefore unclear whether Rodriguez
was referring to the Federacion's economic position or
to grievance filing relating to other matters.
After the receipt of the discharge notice, Maldonado
testified that he left the hotel and waited on the street for
the stewards to arrive. He also testified on cross-exami-
nation that in his pretrial affidavit he testified that he did
not leave the hotel immediately but that he first went to
the casino to speak with the other croupiers about his
discharge. He also testified on cross-examination that he
telephoned the Federacion for assistance.17
According to Maldonado, after he left the hotel about
5:15 p.m., he proceeded to wait at an ice cream restau-
rant across the street from the hotel pursuant to the in-
structions of Battista, one of the two delegates who had
left at 4:30 p.m. and who had returned and talked to
Maldonado as he was being escorted by Garcia.18 Mal-
donado testified that Battista told him as he was escorted
out to wait outside while "we decide your problems."
According to Maldonado, he waited outside the hotel at
the ice cream restaurant from 5:15 until 10 p.m., without
further communication with other employees.
After an unsuccessful effort by the stewards (dele-
gates) to obtain rescission of the discharge, they spoke
with Maldonado at the ice cream restaurant, and in-
formed him that all the unit employees had stopped
work in protest of his discharge. At 10 p.m., the day-
shift unit employees appeared and joined the night-shift
employees out on the sidewalk and formed a united
work stoppage. According to Maldonado, as the employ-
ees appeared they told Maldonado that they were strik-
ing because of his discharge.
Maldonado testified that he informed the employees
that they could not erect a picket line because of the
lack of picket signs. Thereafter, Maldonado and Battista
constructed picket signs, and picketing with placards
commenced, at 10 a.m. on June 18, by about 40-45 unit
employees."' The picket signs bore the following leg-
ends that in part reflect the language and tone of the
June 17 leaflets:
1. We Won't Enter Without Miguel.
2. Trustee's poor judgement Closing the Hotel.
3. Do You Want To Gamble-Go to The Palace.
4. 23 Years of Conquests In Fight [illegible] Fed-
eral Trustee.
5. Trustee Is Treating Us Abusively.
6. Trustee Protects Interests of Conneticut [sic]
Life.
7. Working hours are Increased and Salary Re-
duced.
8. Fellow Worker (Cooperate) and (Don't) Cross
the Picket Line.
9. Croupiers of The Casino of Hotel San Juan are
on strike.
10. Casino Employees Hotel San Juan Almost On
The Street.
Neither Vega nor Nicot had authorized the strike. On
the morning of June 18, the trustee accused Vega of call-
17 At one point he testified on cross-examination that he did not know
the telephone number of the Federacion When asked whether in 9 years
of representation he had never called the Federacion, he explained that
he did not memorize the number He conceded that he knew the location
of the Federacion's headquarters In a pretrial affidavit he testified that
he did not know whether the Federacion had an office, a telephone, or
employees other than Vega and Nicot
is Maldonado explained that he had telephoned Battista from the per-
sonnel office He did not explain the logistics of these confusing events
's From Rodriguez' testimony, I conclude there were about 50 em-
ployees in the unit represented by the Federacion
EL SAN JUAN HOTEL
ing a strike . Vega denied having authorized a strike. He
immediately proceeded to the hotel. He encountered Bat-
tista and asked why the employees were on strike. Ac-
cording to Vega's uncontradicted testimony, Battista told
him that the employees were on strike because of Mal-
donado's discharge. Vega spoke to Maldonado and dis-
covered that he had already filed an unfair labor practice
charge with the Board with the assistance of Attorney
Delgado.
Subsequently on June 18, Nicot and Vega met with
delegates Aponte and Battista to discuss the reason for
the strike, i.e., Maldonado's discharge. Vega reproved
them for acting without informing him. He reminded
them that just a few weeks earlier a discharged employee
by the name of Calderon had been reinstated pursuant to
a grievance filed by the Union. According to his testimo-
ny, Vega advised the delegates that they should not have
walked out because the collective -bargaining agreement
does not expire until April 1983 and that it contains a no-
strike clause, and that according to the internal Federa-
cion rules only Nicot, the president, can authorize a
strike. He told them that all their jobs were now in jeop-
ardy.20 Vega testified that Battista acknowledged he had
erred in calling a strike and Aponte conceded that they
now were faced with a "big problem." To that, Nicot
stated that he and Vega were scheduled to meet with
Rodriguez that afternoon and perhaps they could resolve
the situation. Vega then told them that the strike was not
a Federacion strike but an "illegal strike" in violation of
the no-strike clause of the old contract, but that the Fe-
deracion would in any event seek to assist them.
In the afternoon of June 18, Nicot and Vega met with
Estrada at the hotel coffeeshop. They asked why Mal-
donado was discharged and, according to Vega, the
trustee responded that Maldonado had distributed a leaf-
let that denigrated the hotel. The Federacion officers
asked whether he had proof, and Rodriguez stated that
he had witnesses who had observed it. Thereafter, Ro-
driguez agreed to reinstate the strikers without repri-
mands with the exception of Maldonado, whose dis-
charge would be resolved through some appropriate
forum such as the Board. It was agreed that the hotel
could operate without them throughout the weekend,
i.e., Father's Day weekend, but that they would have to
return by Monday, June 21. Acceptance of that offer and
a cessation of picketing was given a deadline of 8 p.m.,
June 18.
20 Vega testified without contradiction that on May 11, poor to meet-
ing with Schweitzer , he had engaged in a discussion , in the hotel lobby,
with Aponte , Battista , Martinez, Blanco, and Maldonado , while all were
seated around a table , wherein Nicot told them, in answer to a question,
that "the agreement we were going to make with the hotel" was to be for
the duration of the old contract . In that same conversation Nicot spoke
in conciliatory terms of the attempt to obtain representation by an inde-
pendent union , their loss of faith in the Federacion, and requested under-
standing of the difficulities of negotiating with a bankrupt employer that
made unilateral changes that the Federacion had not "accepted " Nicot
also told them that they would have to wait for the expiration date of the
older contract , i e, another year, before they could seek other representa-
tion There is no other evidence, except for the documentary evidence, of
representations to employees of the status of the old contract.
1471
Both Vega and Rodriguez testified that those were the
only conditions discussed and agreed on for ending the
strike.
Vega testified that during this conversation, in Rodri-
guez' presence, he stated to Nicot that the employees
were talking "about this independent union, etc.," and
Nicot stated as follows:
Well, they're going back to work, they know
there's a contract, the contract has got an expired
date which is for 1983, so this union, they can't
have an election now, or anything like that, they'll
go by our union, we'll throw the people out, but we
got a contract. I'll explain to them (that in order) to
have another union come in they will have to wait
60, 90 day period before the expiration of the con-
tract they'll come back to work and they have a
new contract for the last two years, and they know
it* like that, we'll explain to them.
Vega testified that they told Rodriguez that they would
"explain" the foregoing to the strikers. Nicot and Vega
promised to notify Rodriguez of the results of their ef-
forts at 8 p.m. Thereupon, Vega and Nicot departed for
the picket line about 4 p.m.
Vega testified that the foregoing described agreement
was conveyed to the picketing strikers that afternoon
and that they were urged to comply. He also told them
that, with respect to an outside union, because of the du-
ration term of the old contract, they would have to wait
for the expiration date before they could organize and
file a petition. Some strikers refused to discuss it without
Blanco and Maldonado, who were not present. Others
became boisterous. Vega testified that he decided that it
was not feasible to meet there on the street, and request-
ed that Aponte convey to Maldonado the agreement and
that he and Nicot would await their decision at the
union hall. They waited until 10 p.m., but no one called.
Vega notified Rodriguez of the nonresponse and it was
agreed between them that the Union would publish leaf-
lets explaining the settlement to the strikers and the
deadline for acceptance of the agreement and concurrent
withdrawal of pickets would be extended to 6 p.m. Sat-
urday. Consent was given to Rodriguez to distribute his
own leaflet reflecting the agreements.
On Saturday, June 19, the Union distributed to the
striking employees the following leaflet, a copy of which
was provided to Rodriguez at 3 p.m.:
Yesterday afternoon, June 18 , 1982, we met with
Mr. Hector Rodriguez Estrada (Hotel San Juan
Trustee) to attempt to resolve the problem of the
strike called by yourselves.
This strike was not authorized by our Union. This
strike is illegal . Now all our efforts are aimed at
trying to resolve the problem which is no other but
to protect all of our jobs.
The agreements reached between Mr. Rodriguez
and this Union were the following:
1-That you remove the pickets that same afternoon
at or before 8 p.m., and advise the Union as to re-
1472 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
turning to work on Monday , June 21, 1982 , except
Mr. Miguel Maldonado.
2-That Mr. Miguel Maldonado's case be handled
through the Hon. Federal Labor Relations Board.
3-To ratify Federacion General de Trabajadores de
P. R. as the only Union representing the casino
employees of Hotel San Juan.
Although these conditions were notified to you
verbally yesterday and you were given a deadline
until 8 p.m. yesterday to remove the pickets, our
Union can get said deadline extended until 6 p.m.
today, Saturday , June 19, 1982.
Anyone interested in returning to work under
these conditions please get in touch immediately, at
or before 6 p.m. today, personally with our offices
where we shall be waiting for you until that time.
Colleagues , our only interest now is to protect
your jobs . It is your turn to speak now.
Vega remained at the picket line but heard only one
thing for 45 minutes, i.e., the repeated chant: "Without
Miguel, No!" Vega returned to the Federacion headquar-
ters where he stayed until 9 p .m., but received no ac-
ceptance of the offer by any striker.
Trustee Rodriguez, pursuant to prior consent of Nicot
and Vega during their earlier telephone conversation,
concurrently drafted and caused to be delivered to the
strikers at a time not clearly established in the record the
following leaflet that he testified contained the only con-
ditions agreed to with the Federacion . That leaflet states:
Yesterday afternoon I had the pleasure of meet-
ing with the Messrs. Luis G. Nicot and Marcos A.
Vega, for the purpose of together seeking a solution
to the problems that have motivated your strike.
Although the strike called by you was not au-
thorized by the Union that represents you and the
same has been branded as illegal by said Union, we
have agreed to allow you to desist from the picket-
ing and to return to your usual duties on your re-
spective shifts next Monday, June 21, 1982. This
was subject to the pickets being removed yesterday,
Friday, at or before 8:00 in the evening, which was
notified to you by the Messrs . Nicot and Vega.
Today, Saturday, June 20, 1982, early in the
morning , we have met again in order to extend to
you the same invitation that was made to you yes-
terday, conditioned upon your removing the pickets
this afternoon at or before 6:00 p.m.
I urge you to please desist from your attitude and
today, at or before 6:00 p.m., to remove the pickets
and accept our invitation to go back to your jobs
next Monday as usual on your respective shifts.
Rodriguez received a copy of the Federacion leaflet
about 3 p.m. on June 19, and immediately drafted and
sent a responding letter of acknowledgment . That letter
is translated in the record as follows:
Receipt is acknowledged of the copy you sent
me of the circular letter addressed to all the croupi-
ers at the Hotel San Juan's Casino, dated June 19,
1982.
The agreements entered upon yesterday between
your distinguished Union and us are enumerated21
in said circular letter. You also invite our fellow
croupiers to desist from their attitude of maintaining
pickets in front of the Hotel and warn them that
"this strike was not authorized by your union" and
that "the strike is illegal."
You continue to invite them to rectify their posi-
tions and urge them to return to their duties under
the conditions we agreed upon and which you ver-
bally informed them about yesterday , indicating to
them that you could succeed in having the time
limit they were given yesterday extended until
today at 6:00 p.m.
I am pleased to inform you that if agreements en-
tered upon between us yesterday are complied with
by the croupiers, we are most willing to extend the
above-mentioned period until today, Saturday, June
19, 1982, at six in the evening (6:00 PM).
If the above is achieved , you must inform me
about it on or before six in the evening today (6:00
PM). Otherwise we will regretfully be forced to un-
derstand that those represented by you have perma-
nently abandoned their duties in our Casino and
will have to be immediately replaced. We hope that
God will enlighten them in making their decision.
Rodriguez testified that he, Nicot, and Vega discussed
only two conditions for the reinstatement of strikers, i.e.,
return to work and resolution of Maldonado's case by an
appropriate forum.
Vega testified that there was no discussion between
them relating to the pledging of loyalty to or ratification
of the Federacion as exclusive bargaining agent a condi-
tion of the employees' reinstatement . Vega testified that
the use of the word "ratify" was not intended to be un-
derstood as a pledge of loyalty by the strikers to the Fe-
deracion, but instead was intended to relate to the strik-
ers the Federacion's understanding with the Respondent
that it had a collective-bargaining agreement and that
under Board rules no question of representation could be
raised nor any representation election conducted during
the term of that contract. He conceded that the leaflet,
as phrased, did actually set forth three conditions to be
accepted by the strikers precedent to their employment.
No other communications were delivered to the em-
ployees nor were any received from them. On June 20,
Respondent Hotel sent the following letter to each of the
striking unit employees:
Last Thursday evening some of you abandoned
your jobs and others failed to report to their corre-
sponding shifts the next day. Subsequently, up to
this date, June 20, 1982, none of you have reported
to your jobs on your corresponding shifts.
Y1 Respondent Hotel argues correctly that the Spanish verb actually
used , "detallan ," should be more accurately translated as "detailed" or
"particularized," whereas "to enumerate" is usually reserved for the
Spanish phonetic twin "enumerar ," citing New Revised Valezquez Span-
ish and English Dictionary , Follett Publishing Co (1967).
EL SAN JUAN HOTEL 1473
Although both the Hotel's Management as well
as Federacion General de Trabajadores de Puerto
Rico has invited you to return to your jobs, we
have not achieved our purpose . We understand and
accept as a fact that you have resigned from your
jobs and therefore we are proceeding to replace
you permanently.
On Friday , June 25 , the following letter executed by
Jorge Blanco as vice president of the Union was sent to
and received by Trustee Rodriguez:
We, the employees of the San Juan Hotel casino,
received, on June 21, 1982 , a written notification in
the form of a certified letter where we are informed
the following:
1. That we have been replaced in our employ-
ment due to the fact that we abandoned our work.
2. That the Hotel extended an invitation to us for
us to return to work so that you could later sit
down with representatives of the Federacion Gen-
eral de Trabajadores to discuss the differences that
existed.
We wish to inform you about the points we
object to:
First : That, as you allege, we abandoned our
work because you, with your anti -labor action,
were the one who provoked this situation. You
fired our leader, Mr. Miguel Maldonado . We could
not allow you to continue acting , when faced with
our claims , in such a negative manner.
Second: You lowered our salary on two consecu-
tive occasions ; all this in an arbitrary manner.
Third: The Union dues checkoff was discontinued
as per your orders.
Fourth : You owe us vacations and other working
conditions that had already been agreed to; in other
words , you yourself eliminated Federacion General
de Trabajadores as our labor representative and
now you are the one who are contradicting yourself
and you want that the Union that you rejected be
the one to represent us and we do not want that
Union.
Fifth: We have organized ourselves into an inde-
pendent union and asked you to recognize us and
you also rejected that and, to top it all , you now
discharge our leader without having any arguments
or proof of your allegations against him.
Sixth : You refuse to bargain concerning employ-
ment conditions.
Therefore, all of us are willing to work right
now, if you change your attitude.
We are hereby requesting that Mr. Miguel Mal-
donado be reinstated in his employment and that
the Union that we have voluntarily chosen, UNION
DE EMPLEADOS DE CASINO DE P.R ., INC.,
be recognized for us.
It is your turn now, Mr. Rodriguez.
The hotel and casino continued to operate and virtual-
ly all the croupiers remained on strike , i.e., they contin-
ued to picket. The record is not clear whether the cash-
iers and runners joined in the strike . It is clear , however,
that the vast preponderance of bargaining unit engaged
in the strike. It is also unclear when any permanent re-
placement employees were hired.
On June 19, 1982, the Union filed an unfair labor prac-
tice charge against Respondent Hotel in Case 24-CA-
4663 alleging that the Employer terminated the employ-
ment of Miguel A. Maldonado because of his member-
ship in and activities on behalf of the Union. On June 28,
1982, the Union filed a charge against Respondent Hotel
in Case 24-CA-4667 alleging that Employer terminated
the employment of 46 casino employees because of their
membership in and activities on behalf of the Union and
because they engaged in protected concerted activities
on behalf of themselves. On July 8, 1982, this charge was
amended by the inclusion of two additional casino em-
ployees. On July 16, 1982, the Federacion filed a charge
against Respondent Hotel in Case 14-CA-4676, alleging
that Respondent Hotel refused to bargain in good faith
with it. On September 20, 1982, the Union filed a charge
in Case 24-CB-1179 alleging, as amended on October 5,
as an unfair labor practice the entering into, enforcement
of, threat to enforce, and maintenance of the June 19
agreement with Respondent Hotel insofar as it conditions
reinstatement of striking employees on their reaffirmation
of Respondent Federacion as the exclusive bargaining
representative of casino employees; and that Respondent
Hotel on June 20 discharged striking employees because
of their refusal to comply with that condition.
On September 23, Respondent Federacion, by Presi-
dent Nicot, sent a letter to the trustee, and copies to all
unit employees, in which it stated:
We refer to the several meetings which we have
had with you as Operating Trustee of El San Juan
Hotel and us as representatives of the Casino em-
ployees involved in a labor dispute with the Hotel.
We also refer to a leaflet dated June 19, 1982 from
myself and Marcos Vega, Secretary-Treasurer of
the Union, issued to the striking employees of the
Casino.
We wish to advise you and we are advising those
employees that it was never a condition for them to
return to work that they reaffirm our Union as their
representative. That was never the agreement with
you. At the same token, we reaffirm to you and to
them what we advised them at that time, namely,
that in our opinion the strike was illegal because it
was in violation of the no-strike clause of the agree-
ment. We made all the efforts to settle the strike,
but the employees did not accept the settlement bar-
gained by us. For this reason, we are not liable for
any damages that the strike may cause the Hotel.
The strike, i.e., picketing, has continued and there has
been no evidence of further communications between the
strikers and either of the Respondents.
B. Conclusions
1. The 8(a)(5) allegations
Section 8(d) of the Act provides that "to bargain col-
lectively is the performance of the mutal obligation of
1474 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
the employer and the representative of the employees to
meet at reasonable times and confer in good faith with
respect to wages, hours, and other terms and conditions
of employement."
Section 8(a)(5) and (1) of the Act obliges an employer
to notify and bargain with the designated exclusive bar-
gaining agent concerning changes in wages , hours, and
other terms and conditions of employment. NLRB v.
Katz, 369 U.S. 736 (1962). On notice of such proposed
change, the employees' bargaining agent must timely re-
quest and diligently pursue bargaining if it wants to pre-
serve its right to bargain on that subject. Otherwise it
may be deemed to have waived its right to bargaining.
Emporium, 221 NLRB 1211 (1975); City Hospital of East
Liverpool, Ohio, 234 NLRB 58 (1978); Citizens National
Bank of Wilmar, 245 NLRB 196 (1979); Salem College,
261 NLRB 327 (1982).
However, when the proposed change concerning
wages, hours, or other terms and conditions of employ-
ment encompasses a change or modification of an exist-
ing collective-bargaining agreement , a stricter obligation
is imposed on the employer. It is well settled law that
modification of a clear and unambiguous term of con-
tract of fixed duration, regardless of economic motiva-
tion or necessity must be obtained pursuant to a positive
affirmance by the employees' bargaining agent, otherwise
the requirements of Section 8(d) of the Act are not met
and a violation of Section 8(a)(5) results. C & S Indus-
tries, 158 NLRB 454, 456-457 (1966); Oak Cliff-Golman
Baking Co., 207 NLRB 1063 (1973); Struthers Wells
Corp., 245 NLRB 1170 (1979). Thus contractual modifi-
cation concerning wages, hours, or other terms and con-
ditions of employment cannot be effectuated by merely
providing to the bargaining agent an opportunity for ne-
gotiation.
The General Counsel, in this case, concedes that the
Respondent Hotel acted lawfully by rejecting the collec-
tive-bargaining agreement as authorized by the bankrupt-
cy court. The complaint alleges, and the General Coun-
sel argues, that the Respondent violated the Act by re-
fusing and failing to bargain with the Union with respect
to unilateral changes in conditions of employment after it
had lawfully rejected the contract.
The General Counsel argues that once having lawfully
rejected the collective-bargaining agreement the Re-
spondent was nevertheless obliged to notify and provide
the Federacion with an opportunity to bargain and on
demand to bargain in good faith on demand to agree-
ment or to impasse prior to implementing new terms and
conditions of employment. The General Counsel cites in
support of its position Iron Workers Local 455 v. Kevin
Steel, 519 F.2d 698 (2d Cir. 1975); Century Printing Co.,
242 NLRB 659, 669 (1979); Airport Limousine Service, 231
NLRB 932 (1977); Jersey Juniors, Inc., 230 NLRB 329
(1977); Bell Co., 225 NLRB 474 (1976).
Respondent Hotel argues that it fulfilled its bargaining
obligations prior to implementing changes in terms and
conditions of employment. It further argues that its posi-
tion under a Chapter XI bankruptcy entitled it to unilat-
erally implement changes in terms and conditions of em-
ployment, citing NLRB v. Bildisco & Bildisco, 682 F.2d
272 (3d Cir. 1982), cert. granted 459 U.S. 1145 (1982).
It is unnecessary to discuss the conflicts between the
aforecited decisions of the Second and Third Circuit
Courts of Appeals, inasmuch as I conclude that the Gen-
eral Counsel did not sustain the burden of proving that
Respondent did not bargain in good faith to impasse, and
that the record establishes that the Federacion had been
presented with sufficient opportunity to bargain about
the changes but waived its bargaining rights by the lack
of diligence in demanding and pursuing bargaining.
The first alleged changes in employment, which is al-
leged in the complaint to be violative of the Act, oc-
curred on March 9. These changes were preceded by a
longstanding demand of many months that the Federa-
cion agree to economic changes and notification that
changes were inevitable because of economic necessity.
The Federacion was told of the trustee's intention to ef-
fectuate economic retrenchment from the contractual
salary and fringe benefits. Some changes were made in
October 1981. The Federacion at no time challenged the
trustee's assertions of economic crises and a continuing
deterioration in the hotel's financial status.
Thus the Federacion entered the fall of 1981 against a
background that put it on notice that economic changes
were going to be made by Respondent Hotel. During the
negotiations immediately preceding the December 1
commencement of the tourist seasons, Respondent Hotel
and the Federacion negotiators twice agreed on salary
and other economic benefits reductions but were twice
frustrated by the Federacion members whose opposition
to salary concessions were aligned with the position of
the delegates of whom Maldonado was the leader. The
parties agreed to suspend negotiations in the hope that
the new season might provide economic relief. It proved
otherwise. Respondent Hotel's economic position dete-
riorated from what it had been when the members had
rejected the negotiated changes in salary and benefits.
Clearly Respondent Hotel's position changed to that of
requiring additional concessions. The Federacion leaders
were warned during that disastrous winter season to pre-
pare to negotiate concessions, i.e., there was no econom-
ic relief to cause a change in Respondent Hotel's posi-
tion.
The trustee was presented with no demands to negoti-
ate by the Federacion and given no intimation that the
Federacion was willing to moderate its earlier adamancy
imposed by the will of the members and delegates. Con-
currently, the trustee witnessed the actions of Maldonado
that reasonably indicated to him that there was a grow-
ing internal conflict within the Fedracion. Thus the earli-
er division between the leaders and delegates appeared to
be worsening.
On March 8, the trustee received more information
about the growing economic crises and acted quickly. I
do not find the speed with which he put the Federacion
on notice of further changes to be unreasonable. There is
no challenge to his testimony that the economic situation
was desperate. His past experience in negotiations with
the Federacion and his exposure to a growing internal
conflict in the Federacion led him to conclude that fur-
ther bargaining would be futile. His sudden notification
to Vega served as a prod to action to Federacion lead-
EL SAN JUAN HOTEL 1475
ers, one of whom gave some testimony as to not accept-
ing changes but no testimony of having proposed any-
thing to negotiate . Vega was clearly one of two responsi-
ble Federation leaders . Had he on March 8 and during
the midnight conversation protested to the trustee and
demanded prior negotiations before the salary reduction
became effective, the trustee's good faith would have
been put to the test . As the evidence indicates, he did
not do so but , at most, merely withheld affirmative
agreement. Moreover , he agreed with the trustee that
impasse had been reached , and that further negotiations
would be futile, as the members had not moved from
their opposition to salary concessions . Even during the
meeting of March 9, the Federacion manifested a con-
tinuing internal conflict by appearing to meet with the
trustee in the absence of the delegates who did not wish
to attend . The Federacion leaders' conduct described
herein amounted to little more than mild objections to
the speed of implementation and constituted , in effect,
acquiecence to the trustee 's assertion that past impasse
and internal Federacion conflict portended futility to fur-
ther negotiations.
After the March 9 changes in employment conditions,
and the rejection of the old contract, the trustee invited
the Federacion to negotiate for a "new contract." The
Federacion was notably lax in pursuing further negotia-
tions. When a meeting was finally held on May 3, the
Federacion was again confronted with a report of con-
tinuing economic crises and a request for further eco-
nomic reductions to be incorporated in the new contract.
The Federacion thereupon attempted to do, what in the
past it had been presented with the opportunity of doing,
but which it had wasted, i.e., to bargain about the March
9 economic changes . The Federacion insisted that it
would only bargain from a status quo ante, i.e., the origi-
nal contract conditions . Respondent Hotel was equally
insistent that economic conditions necessitated not only
retention of old concessions , but also the addition of new
concessions . The meeting broke off as Vega stated that
the Federacion would not meet until Respondent Hotel
was represented by negotiators with authority to agree
to negotiate from the status quo ante.
As the Respondent's economic situation is conceded to
have been in dire straits, I cannot conclude that it acted
unreasonably on insisting on retention of the lawfully im-
plemented March 9 changes . This meeting, in any event,
is not alleged to have constituted bad-faith bargaining.
The Federacion permitted matters to drift thereafter.
It made no demands to bargain , no demands to meet,
made no request for information, made no challenge to
the trustee 's claims of poverty, and gave no indication
that it would be willing to modify its past position of op-
position to salary reductions . Meanwhile , the trustee con-
tinued to encounter economic losses for the year ending
May 1982. In early June , Maldonado accelerated his dis-
sident activity by spearheading the formulation of the
Union. Concurrently in May and early June , the trustee
held individual conversations with the Federacion lead-
ers that reinforced his conclusions that negotiations
about further salary reductions would be futile. On June
10, by letter, he announced the changes to be effective
June 14 and suggested a meeting with the Federation for
June 15 for further new contract negotiations . Again, the
good faith of the trustee could have been put to the test
by a vigilant Federacion . Instead, no bargaining demands
were made and no requests to defer implementation were
demanded. The Federacion 's conduct was in accord with
the individual conversations between its leaders and the
trustee, i.e., that of quiescence . The only movement from
the Federacion was a request to postpone the next con-
tract bargaining session even later than proposed by the
trustee! Shortly after his letter of intent to reduce salary
further, the internal conflict blossomed in full, with a
demand to be recognized by the Union . The June salary
reductions proceeded into effect on June 14 , with hardly
a sign of protest by the Federacion . Subsequently, Mal-
donado was discharged on June 17 , virtually all employ-
ees went on strike, and the meeting of June 17 was post-
poned at the Federacion's request to June 21 and appar-
ently not held.
I therefore conclude that in view of the foregoing fac-
tual conclusions that the General Counsel has failed to
prove its allegations with respect to violations of Section
8(aX5) of the Act regarding the unilateral charges of
terms and conditions of employement. Inasmuch as I
conclude that the March 9 and June 14 changes were not
proven to be unlawfully implemented, I do not find un-
lawful Respondent's conduct in conditioning employ-
ment of unit employees on their explicit acceptance of
those changed conditions of employment.
2. The 8(aX3) allegations
a. Discharge of Maldonado
Respondent Hotel contends that it had reasonable
cause to believe that Maldonado had ultimate responsibil-
ity for the publication of the June 17 leaflet and that he
was identified as the distributor of the leaflet . The Gen-
eral Counsel argues that Maldonado had not been identi-
fied as the distributor of the leaflet until June 18 and Re-
spondent Hotel "either assumed his complicity because
of his prior protected activities or seized upon the leaf-
lets as a pretext for ridding itself of a nettlesome, activist
employee."
I conclude that the record contains substantial evi-
dence to support the position of Respondent Hotel.
There is insufficient evidence that Respondent was so
hostile to Maldonado's activities on behalf of either the
Federacion or the Union that it seized on the leaflet inci-
dent as a pretext for discharge . As will be further ex-
plored, the leaflet publication and distribution is a serious
matter that cannot be dismissed as so frivolous as to ne-
cessitate an inference of other unlawful motivation, as
the General Counsel suggests. However , I agree that the
Respondent probably relied on its knowledge of Maldon-
ado's concerted and union activities in forming its belief
of his culpability . Indeed, Maldonado was the leader of
the croupiers, and the spearhead of the formation of the
Union . The leaflet was in accord with his past conduct
and the objective of the new challenging Union and pa-
tently not a product of the less aggresive incumbent Fe-
deracion leaders . Such knowledge reinforced Respondent
Hotel's conclusions , but that is not to say that it was mo-
1476 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
tivated by the subject of that knowledge , i.e., union or
other protected activities.
That Respondent 's assumptions were reasonable is sup-
ported by the evidence . Maldonado admitted to Garcia
and Rivera that he had the leaflets in his locker and, by
such statement , implied that he had authority and re-
sponsibility for their distribution . He personally posted a
copy on the employee bulletin board and possessively in-
tervened when a manager attempted to remove it. By the
reports of Garcia based on a combination of interviews
with both Angel Rivera and Acquino, Respondent Hotel
had identified Maldonado as a distributor of the leaflet to
employees in the basement area . Although no one identi-
fied Maldonado as having placed the leaflets in the
public area on the table provided for the convention pa-
trons, I conclude that under the factual circumstances
Respondent Hotel reasonably concluded that Maldonado
either placed the leaflets or caused them to be placed
there for access by the public and was responsible for
their distribution throughout the hotel.
Maldonado was the leader of the delegates, the presi-
dent and leader of the new Union , and, as he described
himself, "the leader of the group," i.e., all unit employ-
ees. He was responsible for the composition and con-
struction of picket signs of which necessity he reminded
the strikers . The contents of those signs are strikingly
similar, in part, to the language of the leaflet . I find that
Respondent 's conclusions regarding Maldonado 's respon-
sibility for the June 17 leaflet was not shown to have
been unsupported by facts to the contrary , as I discredit
the denials of Maldonado whom I do not find to be a
persuasive, forthright, or candid witness.22
The Respondent contends that Maldonado 's conduct
with respect to the June 17 leaflet distributions is not
protected by the Act because : (1) the leaflet disloyally
disparages the operations of the hotel to employees and
to the public ; 23 and (2) the leaflet distribution was activi-
ty in derogation of the Federacion as the duly designated
exclusive bargaining agent.24
The General Counsel argues that the June 17 leaflet is
distinguishable from the Jefferson Standard case and its
progeny because unlike those cases the employees in its
communications to the public omitted reference to a
labor dispute with the employer and engaged in an
attack on the employer 's product or services . The Gen-
eral Counsel argues that the leaflet contained truthful as-
sertions as to the receipt of commission by the trustee in
the event of a sale and was not so disloyal , opprobrious,
or defamatory as to be removed from the protection of
the Act.25
22 Good-faith belief of misconduct engaged in during the course of
known concerted, protected activities is no defense if it is proven that
such misconduct had in fact not been engaged in. NLRB Y. Burnup &
Sims, 379 U.S. 21, 23 ( 1964); General Motors Corp., 218 NLRB 472 (1975).
22 Citing NLRB Y. Electrical Workers IBEW Local 1229, 346 U.S 464
(1953), American Arbitration Assn., 233 NLRB 71 (1977); Southwestern Bell
Telephone Co, 200 NLRB 667 (1972), and similar related cases.
24 Citing Emporium Capwell Co Y. Western Addition Community Orga-
nization , 420 U.S. 50 (1975)
25 Citing and referring to Veeder-Root Co., 237 NLRB 1175, 1177
(1978), National Steel Corp, 236 NLRB 1033, 1035-1037 (1978), enfd 625
F.2d 131 (6th Cir. 1980); Southwestern Bell Telephone Co, 200 NLRB 667
(1972)
The General Counsel further argues that the charac-
terization of the trustee as a "Dictator" or "Robin
Hood" constitutes "rhetorical hyperbole" found by the
Board to be protected in other similar circumstances. 26
The General Counsel argues that there is no evidence
herein on which to conclude that the leaflet contained
deliberate or malicious falsehoods , and that similar at-
tacks on management have been held protected.27
Respondent Hotel contends that the leaflet is part of
Maldonado 's activities that formed an attempt to under-
mine the incumbent Federacion and to cause Respondent
Hotel to recognize and bargain with the Union as a new
bargaining agent and as such is unprotected . However,
without deciding at this point whether his other conduct
with respect to the status of the Federacion is or is not
protected , it is clear that that leaflet distribution is a dis-
crete and separate action having a meaning and existence
of itself, i.e., it constitutes an appeal to fellow workers to
join in public protest of an alleged disagreeable working
condition and to protest again the loss of negotiated ben-
efits . This leaflet is not an appeal for the support of the
Union nor a call for separate negotiations . The leaflet's
purpose is in accord with that of the leaders of the Fe-
deracion who told its members that at no point had it as-
sented to contract concessions . Thus the leaflet rein-
forced the official public Federacion position. Cf. East
Chicago Rehabilitation Center, 259 NLRB 996 (1982).
Even if this activity was more of a spur to the Federa-
cion to take more aggressive action rather than a rein-
forcement of what the Federacion was already doing,
such conduct still would not lose its protected nature.
Pacemaker Yacht Co ., 253 NLRB 828, 831 fn. 8 (1980);
Armco Steel Corp., 232 NLRB 696 (1977). The leaflet also
constituted a way of presenting a grievance to the Re-
spondent Hotel and alerting it to what the employees
considered disagreeable working conditions . The Empori-
um case does not permit the discharge of employees for
presenting grievances . Richardson Paint Co . v. NLRB,
574 F . 2d 1195 (5th Cir . 1978).
As to the June 17 leaflet, the question arises as to
whether it constituted such egregious conduct as to for-
feit the protection of the Act. With respect to engaging
in protected activities, it has been held:
[Offensive], vulgar, defamatory or opprobrious re-
marks uttered during the course of protected activi-
ties will not remove activities from the Act's pro-
tection unless they are so flagrant , violent, or ex-
treme as to render the individual unfit for further
service.28
In situations where vulgar or obscene epithets were ut-
tered in the heat of argument arising during a protected
21 Boaz Spinning Co, 165 NLRB 1019 (1967); National Steel Corp,
supra , New York University Medical Center , 261 NLRB 822 (1982), enfd
702 F.2d 284 (2d Cir . 1983).
27 Citing Hamlet Steak House, 197 NLRB 632 (1972); Crown Central
Petroleum Corp , 177 NLRB 322 (1969), enfd 430 F .2d 724 (5th Cir
1970), Blue Bell, Inc, 107 NLRB 514 (1953), enf denied 219 F.2d 796
(5th Cir 1955).
28 Jacobs Transfer, 201 NLRB 210 (1973 ), as cited in Drets & Krump
Mfg, 221 NLRB 309, 315 ( 1975), enfd. 544 F .2d 320 (7th Cir 1976)
EL SAN JUAN HOTEL 1477
employer-employee confrontation, the Board has excused
such conduct particularly where provoked by the con-
duct of the employer.29
However, the Board has taken particular care to
evaluate , inter alia, the place of the confrontation. 8O
In Hawthorne Mazda , 251 NLRB 313 (1980), insulting
epithets concerning managerial competency , uttered
during an employee-employee office confrontation were
held protected, but the Board took care to note that such
conduct was not made on the shop floor where it could
have negatively affected the (general manager 's) status in
the eyes of other employees . The Board also noted there-
in that the protection of the Act is afforded to misstate-
ments made during the course of protected activities
unless they are "deliberately or maliciously false."31
Without consideration of the impact on the public, the
addressee of the leaflet was not only the unit employee,
but employees of the entire hotel . The language of the
leaflet was not the result of some intemperate personal
outburst. It was drafted, printed , and distributed and
tended to disparage the authoritative status of the trustee.
It cannot therefore be excused as part of the give and
take to be expected in the heat of grievance presentation
or similar protested activities. 32 Nonetheless, concerted
activity in the form of leafleting has similarly been held
to be protected . Thus, in Great Lakes Steel, supra, a leaf-
let with references to "murder" was excused as rhetori-
cal hyperbole used to bring about improvements in medi-
cal and ambulance practices of the employer and clearly
not intended to be literally interpreted as accusations of
criminal conduct . In Veeder Root Co., supra, sidewalk
leaflets of employer-employee relations but that were not
true. However, there was no evidence that the misstate-
ments contained therein were deliberately false. In New
York University Medical Center, supra, it was found that
leafleting was protected where there was a failure of
proof that the author knew that its accusations were false
or that he acted in a reckless disregard of the truth. The
author-distributor, in that case , had, in good faith, relied
on reports of other persons and based his accusations
that Respondent's guard had engaged in unlawful
searches on those reports. 3 s
as Thor Power Tool Co., 148 NLRB 1379 ( 1964), enfd. 351 F.2d 584
(7th Cie. 1965); Crown Central Petroleum Corp., 177 NLRB 322 (1969),
enfd. 430 F .2d 724, 731 (5th Cir . 1970); Webster Men's Wear, 222 NLRB
1262 (1976); Coors Container Co., 238 NLRB 1312 (1978), enfd. 628 F 2d
1283 (10th Cir 11980); Postal Service, 250 NLRB 4 (19809; Sullair P.T.O.,
Inc., 250 NLRB 614 (1980), at denied 641 F .2d 500 (7th Cie. 1981 ); Illi-
nois Bell Telephone Co., 259 NLRB 1240 (1981), Southwestern Bell Tele-
phone Co., 260 NLRB 237 (1982).
s° Atlantic Steel Co., 245 NLRB 814 (1979); Leshner Corp , 260 NLRB
157 (1982), the Board held to be not protected unprovoked obscene re-
marks made to the supervisor on the production floor in the hearing of
other workers and following an office confrontation.
s' Citing Jacobs Transfer, supra, and NLRB v. Cement Transport, 490
F.2d 1024, 1029-1030 (6th Cit . 1974).
ss Compare Boaz Spinning Co., supra (confrontation during a speech);
Hamlet Steak House, supra (complaint raised in a private conference);
Central Petroleum Corp., supra (grievance meeting).
as Citing Linn v. Plant Guards Local 114, 383 U.S. 53, 63 (1966), in
which the Supreme Court observed in similar circumstances that "the
most repulsive speech enjoys immunity provided it falls short of a delib-
erate or reckless untruth."
With respect to the presentation of the leaflet to the
public , the Board has stated:
[An] employee may properly engage in communica-
tion with a third party in an effort to obtain the
third party's assistance in circumstances where the
communication was related to a legitimate, ongoing
labor dispute between the employees and their em-
ployer, and where the communication did not con-
stitute a disparagement or vilification of the em-
ployer's product or its reputation.$"
Either viewed as a communication to fellow employ-
ees above, or viewed as a communication also to the
public, I conclude that the distribution of the June 17
leaflet does not fall within the protection of the Act. I
agree with the General Counsel that insofar as the leaflet
refers to the trustee as a "dictator " and a "robin hood,"
it merely engages in "rhetorical hyperbole." But I find
that the leaflet exceeds that point and attacks the ethics
and integrity of the trustee by attributing to him a moti-
vation and plan of action that conflicts with his primary
obligations as a bankruptcy court trustee. Such an attack
injures the trustee's professional status. Insofar as it was
presented to the hotel guests, it portrays to the public
that Respondent Hotel is being so mismanaged as to jus-
tify closure . Clearly, a prospective customer expects high
caliber service and accommpdations from a resort hotel
and will be dissuaded from patronage by the knowledge
that the management is motivated by a desire to purpose-
ly run down the business.
As severe as the disparagement is, I find that the egre-
giousness of the accusations is compounded by the clear
assertion that the trustee has stated "on different occa-
sions" that it was his desire from the onset of his trustee-
ship to close down the hotel in order to reap a commis-
sion on the sale of assets. I credit the trustee that his pri-
mary intention was in accord with his duty as trustee to
rehabilitate the hotel, and that he on no occasion stated
his purpose to close the hotel for the sake of a personal
commission.
Respondent had reasonable cause to believe that Mal-
donado authored the leaflet . The evidence reveals that
he, at the very minimum, adopted it and was responsible
for its distribution . His vague testimony, even if credited,
as to grievance confrontations relate to references to clo-
sure statements made in an entirely different context.
Maldonado testified to no basis whatsoever to support
the accusations of the leaflet as to the trustee 's intent and
motivations. No evidence was adduced to support a con-
tention that the leaflet was premised on reports , hearsay,
rumor, or any basis to support a colorable good-faith
belief in its truthfulness.
It is too long a leap to conclude that because the trust-
ee obtains a commission on sale of assets, that the trustee
actually intended to run down the hotel for personal
profit, and that he in fact announced such intentions. I
therefore conclude that the assertions made in that leaflet
'4 Allied Aviation Service Co. of New Jersey, 248 NLRB 229, 230 ( 1980),
enfd. 636 F.2d 1210 (3d Cu. 1980), cases cited and discussed therein by
the Board and the administrative law judge.
1478 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
were deliberately and maliciously false or were made in
such reckless disregard of the truth as to fall beyond the
protected reach of the Act. I therefore conclude that Re-
spondent Hotel did not discharge Maldonado because of
any activities protected by the Act.
b. The nature of the strike
The factual findings herein necessarily lead me to con-
clude that the employees engaged in the June 17 strike to
protest the discharge of Maldonado and to seek his rein-
statement and to protect reductions in their contractual
benefits. Both the discharge of Maldonado and the effec-
tuation of salary and other benefit changes have not been
proven to constitute unfair labor practices. Accordingly,
I conclude that the strike that commenced on June 17
did not commence as an unfair labor practice strike. A
further question to be resolved is whether the strike as
an economic strike was protected activity whereby the
employees could be permanently replaced, but not un-
lawfully discharged, as is alleged by the General Coun-
sel, or whether their strike constituted unprotected activ-
ity under the rationale of the Emporium case, supra, or in
breach of the no-strike clause of the rejected contract as
is argued by Respondent Hotel . It is contended by Re-
spondent Hotel that the strikers were not in fact dis-
charged but that they refused an unconditional offer to
return to work. The General Counsel argues that the
offer of reinstatement to the strikers was premised on
their acceptance of an unlawful condition, i.e., reaffir-
mance of the incumbent Federacion as exclusive bargain-
ing agent , and that the strikers were in fact discharged
prior to replacement and that they were discharged be-
cause of their support of the Union.
The Respondents correctly contend that the strike of
June 17 was unathorized by the Federacion and argue
that it was therefore conduct in breach of article XII,
section 2 (no-strike clause) of the collective-bargaining
agreement . Respondents argue that despite the rejection
of the collective-bargaining agreement that those por-
tions of the collective-bargaining agreement covering
conditions of employment unchanged by Respondent
Hotel 's unilateral actions survived despite the bankruptcy
law principle that an executory contract cannot be re-
jected in part and assumed in part .35 Respondents cite
the "understandings" of the trustee and Federacion lead-
ers, and the fact that Respondent complied with the con-
tract in all respects. I conclude to the contrary.
The evidence, particularly the documentary evidence,
reveals that the old contract was terminated in its entire-
ty and that bargaining took place for the purpose of
agreement on a new succeeding contract. Merely be-
cause the terms of an expired contract are complied with
in the sense that no further unilateral changes are effec-
tuated in the established terms and conditions of employ-
ment in no manner effectuates the continued life, in
shrunken form, of the rejected and thus expired agree-
ment . Surely, if Respondent Hotel desired to alter fur-
ther conditions of employment covered by that rejected
contract, it would not have been required to apply to the
bankruptcy court for another rejection authorization, nor
would it need to announce again that the contract is re-
jected. Instead, it would merely provide sufficient notice,
opportunity to bargain, and on request bargain with the
Federacion to agreement or to impasse before instituting
the desired changes. Once having fulfilled that obliga-
tion, it would not require the positive affirmance of the
Union in order to make a midterm change in the terms
and conditions of employment covered by the rejected
contract, as it would if the remaining contract were in
effect.
The allegations to "understanding" of contract partial
survival of Vega and Rodriguez are based on vague,
generalized , subjective, and conclusionary testimony, un-
worthy of credence or probative value. Far more credi-
ble is the documentary evidence that clearly indicates
that the contract had been expired by force of its total
rejection. The only other evidence to the contrary is the
ambiguous references by Vega to the trustee and to the
employees on May 11 and after the strike, to the effect
that the duration clause of the rejected contract preclud-
ed the raising of a question concerning representation.
Such testimony does not rebut the weight of the evi-
dence. I therefore find that what the Respondents had
understood and had acted on was the "understanding"
that the remaining terms and conditions covered by the
rejected contract would not be altered unilaterally with-
out bargaining and that a new written contract would be
negotiated. Accordingly, I conclude that the no-strike
clause of the contract did not survive by virtue of the
survival of the contract itself.
The Respondent contends that the motivating factor
for the strike was the discharge of Maldonado, which, as
a disciplinary matter, was arbitrable under the terms of
the rejected contract, and that even if the contract had
expired by force of bankruptcy court rejection the duty
to arbitrate survived the March 8 rejection. Article
XVII, grievance procedure, states:
A. A grievance within the meaning of the Collec-
tive Bargaining Agreement shall be a dispute or dif-
ference of opinion arising and the express provisions
thereof during the life of this Collective Bargaining
Agreement.
B. If any issue, dispute, conflict or any discrepan-
cy or differences in interpretation should arise be-
tween the Union and the Company involving the
meaning or the application of the express provisions
of this agreement or should any issue arise between
the Union and the Company in regard to discipli-
nary measures imposed by the Company, said issue
shall be compulsively resolved by following the
procedure set forth below.
Respondent further argues that the survival of the no-
strike clause was necessarily coterminous with the sur-
vival of the obligation to arbitrate. Accordingly, it is
argued that the strike was therefore unprotected as a
breach of that surviving concomitant obligation to
submit to the surviving mandatory arbitration provi-
sion.9 6
35 8 Collier , Bankruptcy, § 3.16(7) (1978). 36 Citing Goya Foods, 238 NLRB 1465 (1978)
EL SAN JUAN HOTEL 1479
Respondent Hotel contends that the record evidence
affirmatively establishes a recognition by Maldonado and
the Federacion that the grievance and arbitration process
survived. I do not agree . At most, the evidence indicates
that with respect to the discharge of employee Calderon
on or about March 17 , the Federacion presented a griev-
ance that was resolved at some preliminary stage in the
grievance process in the office of the trustee . There is no
evidence that the Respondent understood and explicitly
recognized or agreed to the survival of the compulsory
arbitration proviso . It has long been a basic principle that
employees lose their rights to engage in protected activi-
ties only on the effectuation of a clear waiver , but in the
Goya case relied on by Respondent , the Board construing
decisions by the Supreme Court , stated:
In sum the Court in Nolde [Bras. v. Bakery Work-
ers Local 358, 430 U .S. 243 (1977)] found that the
duty to arbitrate extended beyond the contract term
if over a matter covered or created by the contract
and in [Teamsters Local 174 v.] Lucas Flour [Co., 369
U.S. 95 (1962)] and Gateway Coal [Ca v. Mine
Workers, 414 U .S. 368 (1974)] found that, absent ex-
press negation, the contractual duty to arbitrate
over a particular issue implied a duty not to strike
over the same issue.
Goya Foods, supra at 1467 . The Board therefore found
that employees were bound by the no-strike clause of an
expired contract in the absence of an "an express nega-
tion that the duty to strike should continue with the duty
to arbitrate."97
The Board and the Courts, however, were in the fore-
going cases construing the relationship of the parties in a
normal bargaining stance and certain presumptions of
intent of the parties were made as to the survivability of
arbitrability in that context . The instant case involves ex-
piration of the contract by the extraordinary event of
bankruptcy court intervention . A doubt therefore arises
whether the Court and Board would have made the
same presumptions in this context.as
It is unnecessary to decide whether the no-strike
clause survived the contract's rejection because I con-
clude that even had it survived , the subject dispute that
motivated the strikers did not consist of a simple arbitra-
ble issue of discipline , but rather concerned matters not
subject to the arbitration process.
Although the facts demonstrate that the discharge of
the strike was precipitated by the discharge of Maldon-
ado, it also constituted a protest against the economic
policies of Respondent Hotel that the employees viewed
as regressive and arbitrary. Maldonado, the leader of the
delegates who were backed by the membership , opposed
salary reductions . The very conduct for which he was
discharged constituted a protest against reductions of
salary and benefits.
87 The Board found that the words " during the life of this Agreement"
contained in the no-strike clause did not constitute "express negation."
as The General Counsel contends that sec. 362 of the Bankruptcy
The Respondent Hotel itself implicitly recognizes that
the strike motivation cannot be viewed as a simple
matter of one employee 's discharge inasmuch as it argues
that the strike was not protected because it formed part
of an effort to obtain bargaining with an outside union,
which it argues is unprotected activity in derogation of
the incumbent Union, with which it is obliged to bargain
exclusively . 39 Respondent argues that the June 25 letter
from Union Vice President Blanco is evidence of the
strikers' intent. There is no evidence to support the con-
clusion that all or a majority of the striking employees
desired representation by the Union, or recognition and
bargaining with it by Respondent Hotel on June 17. The
letter itself constitutes a self-serving claim by a union of-
ficial of majority status , but there is no evidence that a
majority of unit employees or strikers authorized that
letter . The evidence clearly establishes that the majority
of unit employees engaged in a strike in support of oppo-
sition to further loss of salary and benefits. It can readily
be inferred that they endorsed Maldonado 's leadership
role in opposing attrition of their pay and benefits, but
there is insufficient evidence to support the conclusion
that on June 17 they commenced striking for the purpose
of obtaining Respondent Hotel 's recognition of and bar-
gaining with the Union. I do find that the nonarbitrable
objects of the strike were so entwined with the discipli-
nary issue , that the dispute was not appropriate for the
arbitration process, and therefore the strike was not a
breach of the no-strike clause, even if it and the arbitra-
tion clause survived ` the expiration of the contract. I
therefore conclude that the strikers on June 17 com-
menced a lawful economic strike.
Although I cannot conclude that as of June 17 the
strikers, i.e., the majority of unit employees, sought the
recognition of the Union as their exclusive bargaining
agent, as Respondent Hotel seems to suggest, I could
not, in any event, conclude that such objective would
have rendered their strike as nonprotected as an act in
derogation of the exclusive bargaining status of the Fe-
deracion . The Emporium case and its progeny dealt with
situations in which a dissident or minority faction of em-
ployees sought parallel bargaining that conflicted with
the position of the designated , exclusive bargaining
agent. In RCA Del Caribe, Inc., supra, the employer was
engaged in negotiations with an incumbent union and
was found not to have violated the Act by negotiating
and executing a contract with the incumbent union after
an outside union filed a representation petition with the
Board . The Board recognized the special status of an in-
cumbent union and decided that it would effect an undue
hardship to suspend negotiations because of the filing of
a petition , and that continued bargaining with an incum-
bent union "is the better way to approximate employer
neutrality." However, the Board made clear that it did
not intend its decision "to have the effect of insulating
incumbent unions from a legitimate outside challenge."
Clearly then, the Board did not intend to render as un-
protected the activities of employees in support of a total
Code automatically stays Respondent Hotel 's obligation to arbitrate prt- 39 Citing RCA Del Coribe. Inc., 262 NLRB 963 (1982} and the Empo-
vale rights. rium case, supra.
1480 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
replacement of their bargaining agent , during the con-
tract renegotiation period . In a subsequent decision the
Board found it violative of the Act for an employer to
have negotiated and entered into a renewal contract with
an incumbent union when it possessed affirmative knowl-
edge that a majority of its employees no longer desired
representation by that union . Type Rite Ribbon Mfg. Co.,
264 NLRB 650 (1982).
Respondent finally argues that the Board should, as a
matter of policy, view the position of bankrupt employer
and incumbent union as occupying a special status and in
order to provide a breathing spell and to insulate the in-
cumbent from outside challenges and enable it to negoti-
ate a renewal contract without having the outside chal-
lenger reaping the benefits of disenchantment of employ-
ees, by finding that the unchanged part of the contract,
the no-strike clause, and recognition clauses of the con-
tract survived the rejection of that contract. Whatever
the merits may be for a prospective construction of em-
ployer and incumbent union rights and obligations differ-
ently during a bankruptcy situation , I find no precedent
to enable me to find that the employees here were vul-
nerable to discharge because they engaged in activity
that under longstanding Board precedent should be
deemed protected. Therefore, I find that the employees
on June 17 commenced and continued a lawful, protect-
ed economic strike.
c. The discharge of strikers
The Respondents in combination issued letters to the
striker's soliciting the return to work. The June 19 Fe-
deracion letter was read by the trustee and never explic-
itly disavowed to the strikers. The trustee acknowledge
to the Federacion the receipt of the June 19 letter and
although some quibble may be engaged in whether he
characterized the letter as "enumerating" or "detailing"
the understandings between parties, nowhere did he
assert that the understandings were mistated or improp-
erly augmented . Regardless of what was explicitly dis-
cussed at the meeting among Vega, Nicot , and Rodri-
guez, the trustee by inaction and by confirming letter
adopted the condition of reinstatement as set forth in the
Federacion letter to employees . 40 Furthermore, by its
own letter to the strikers he confirmed to them that
agreements were reached with the Federacion and by ex-
plicit reference to notification to them by the Federacion
he suggested to them that he was aware of the Federa-
cion's communications to them and the substance there-
of. Although Rodriguez did not recite in his own letter
condition three, as set forth in the Federacion letter, if
Rodriguez did not agree to such condition it was incum-
bent on him to have explicitly disavowed such condition
in his own letter, for otherwise the reader would neces-
sarily have concluded that Respondent Hotel was in
agreement with the Federacion's representations as to
the conditions presented to the strikers.
40 It should be recalled that according to Vega, Nicot did discuss with
the trustee the incumbency status of the Federacion and its presumed
protected status during the duration term of the rejected contract. Fur-
thermore , when Vega orally sohcited the strikers ' return, he told them
that they could seek outside union representation during that period of
time
I therefore conclude that the strikers were on June 19
presented with three conditions to which they were re-
quired to accept in order for them to avoid the loss of
their jobs. The Federacion letter set forth the phrases "to
protect your jobs," and Vega orally told the strikers that
their jobs were in jeopardy. Clearly then, the strikers
were informed by the Federacion and implicitly by Re-
spondent Hotel that they would be discharged if they
did not at a set time and date abandon their strike, which
I find was economic and protected.
The final and third condition set forth in the Federa-
cion letter was that the strikers must satisfy , i.e., accept
Respondent Hotel 's recognition of the Federacion as
their exclusive bargaining agent . The meaning of such
condition within the context of what was told to them
was that the strikers were obliged to forgo their rights to
seek representation by any other union .41 As I have con-
cluded above that such activity was protected by the
Act, I must necessarily conclude that the Respondents
jointly imposed on the strikers an unlawful condition as a
condition precedent to not being discharged. Further-
more, the Respondents also threatened the loss of jobs,
i.e., discharge for economic strikers who refused to aban-
don their protected activities by a specified time and
date.
In his June 20 letter to the strikers, Trustee Rodriguez
discharged all the strikers who had up to that time re-
fused to abandon the economic strike. That is the clear
meaning of his words:
We understand and accept as a fact that you have
resigned from your jobs and therefore we are pro-
ceeding to replace you immediately.
By such conduct Respondent Hotel construed the status
of the strikers not as economic strikers who may be re-
placed but whose employment relationship remains to
the extent that they are entitled to reinstatement privi-
leges . Laidlaw Corp., 171 NLRB 1366 (1968). Rather, the
Respondent construed to be and informed the strikers
that were in fact terminated and severed from their jobs,
i.e., discharged . Regarding similar conduct the Board re-
cently observed in Cooperative de Credito y Ahorro Vega-
bajena, 261 NLRB 1098, 1099 (1982):
[It] is well established that an employer lawfully
may replace economic strikers but that it violates
the Act by discharging them prior to replacement.
NLRB v. International Van Lines, 409 U.S. 48
(1972). Thus, even assuming , arguendo, the strike
was an economic strike at its inception , Respond-
ent's discharge of all the strikers violated Section
8(aX3) and (1) since all were terminated prior to
being replaced.
I conclude that Respondent Hotel and Respondent Fe-
deracion jointly agreed to the termination of economic
strikers who failed to abandon their protected activities
by a certain deadline, and also jointly agreed to the ter-
41 The meaning is the same whether the reading is that the strikers
must ratify the Federacion or that the strikers must accept Respondent
Hotel 's agreement to ratify the Federacion as exclusive bargaining agent
EL SAN JUAN HOTEL
mination of strikers who refused to accept the continued
recognition of the Federacion as their exclusive bargain-
ing agent . I further conclude that pursuant to their
agreement, Respondent Hotel on June 20 discharged its
striking employees who failed to comply with those con-
ditions, i.e., the abandonment of lawful protected activi-
ty, an- economic strike , and the continued acceptance of
the Federacion as their exclusive bargaining agent.42 I
further find that subsequent to June 20 Respondent
Hotel has since failed and refused to rescind the June 20
discharge .43 I conclude that by the foregoing conduct
Respondent Hotel has violated Section 8(aXl) and (3) of
the Act as alleged in the complaint, and that Respondent
Federacion has violated Section 8(bXI)(A) and (2) as al-
leged in the complaint . I further find that Respondent
Federacion violated Section 8(bX1XA) of the Act as al-
leged in the complaint by the June 18 letter that threat-
ened economic strikers with a loss of their employment if
they failed to comply with conditions set forth therein,
i.e., abandonment of the strike and acceptance of the Fe-
deracion as exclusive bargaining agent.
CONCLUSIONS OF LAW
1. Respondent San Juan Hotel Corporation d/b/a El
San Juan Hotel is an employer within the meaning of
Section 2(2) of the Act and is engaged in commerce
within the meaning of Section 2 (6) and (7) of the Act.
2. Respondent Federacion General de Trabajadores de
Puerto Rico is a labor organization within the meaning
of Section 2(5) of the Act.
3. Union de Empleados de Casinos de Puerto Rico is a
labor organization within the meaning of Section 2(5) of
the Act.
4. Respondent Hotel, in agreement with Respondent
Federacion, conditioned the nondischarge of its employ-
ees on their abandonment of a lawful strike, and on their
acceptance or ratification of Respondent Hotel's recogni-
tion of Respondent Federacion as their exclusive bar-
gaining agent, and thereby violated Section 8(aXl) of the
Act.
5. Respondent Federacion threatened employees with
discharge by enforcement of the agreement with Re-
spondent Hotel described in paragraph 4, above, and
thus violated Section 8(bX1XA) of the Act.
6. On June 20, Respondent Hotel , pursuant to the
agreement with Respondent Federacion described in
paragraph 4, above, discharged the employees named in
Appendix C attached to this decision because the em-
ployees refused to abandon a lawful economic strike,
42 Although there is evidence that Respondent Federation publicly re-
nounced its agreement with respect to conditioning the nondischarge of
strikers on their continued acceptance of it as exclusive bargaining agent,
it is impossible for it to undo the concurrent unlawful condition, Le,
abandonment of a strike by a date past.
43 Those discharged are named in App. C attached to this decision
1481
and/or because they refused to ratify or accept Respond-
ent Hotel's continued recognition of Respondent Federa-
tion as their exclusive bargaining agent, and thereby Re-
spondent Hotel violated Section 8(aXl) and (3) of the
Act.
7. By having entered into the agreement described
above in paragraph 4 and by virtue of the enforcement
of the agreement whereby Respondent Hotel engaged in
the conduct described above in paragraph 6, Respondent
Federacion violated Section 8(b)(1XA) and (2) of the
Act.
8. The above unfair labor practices occurring in con-
nection with Respondent Hotel 's business have a close,
intimate, and substantial relationship to trade, traffic, and
commerce among the several States and among the
States and the Commonwealth of Puerto Rico and tend
to lead to labor disputes burdening and obstructing com-
merce and the free flow of commerce.
THE REMEDY
Having found that the Respondents violated Section
8(aXl) and (3) and Section 8(b)(2) and (1)(A) of the Act,
I shall recommend that they cease and desist therefrom
and take certain affirmative action designed to effectuate
the policies of the Act.
Board precedent requires that unlawfully discharged
economic strikers are entitled to an offer of reinstatement
and backpay even in the absence of an unconditional
offer by them to return to work. Abilities & Goodwill, 241
NLRB 27 (1979), enf. denied on other grounds 621 F.2d
6 (1st Cir. 1979); Tamara Foods, 258 NLRB 1307 (1981),
enfd. 692 F.2d 1171 (8th Cir. 1982); Serendippity-Un-Ltd
& Tigerr, Inc., 263 NLRB 768 (1982). Having found that
Respondent Hotel discharged striking employees in vio-
lation of Section 8(aXl ) and (3) of the Act pursuant to an
agreement enforced by Respondent Federacion in viola-
tion of Section 8(a)(1XA) and (2) of the Act, it will be
ordered that Respondent Hotel be required to offer them
reinstatement to their former positions of employment or
to substantially equivalent positions, without prejudice to
their seniority or other rights and privileges and to
remove from its files any references to their discharge
and notify them in writing that this has been done and
that evidence of these unlawful discharges will not used
as a basis for future personnel actions against any of
them . I shall also recommend that Respondent Hotel and
Respondent Union jointly and severally be required to
make them whole for any loss of pay they may have suf-
fered because of the discrimination against them with in-
terest calculated in the manner set forth in F. W. Wool-
worth Co., 90 NLRB 289 (1950), and Florida Steel Corp.,
231 NLRB 651 (1977).44
[Recommended Order omitted from publication.]
44 See generally Isis Plumbing Co., 138 NLRB 716 (1962).