Holiday Inn Express

National Labor Relations Board - Administrative Judge Opinions

Aug 7, 2007

18-CA-018254 (N.L.R.B. Aug. 7, 2007)

JD–55–07
Rochester, MN
UNITED STATES OF AMERICA
BEFORE THE NATIONAL LABOR RELATIONS BOARD
DIVISION OF JUDGES
CMPJ ENTERPRISES d/b/a
HOLIDAY INN EXPRESS
and Case 18–CA–18254
HOTEL, HOSPITAL, RESTAURANT AND
TAVERN EMPLOYEES UNION, LOCAL 21
Florence I. Brammer, Esq., for the General Counsel
David Blanchard, for the Charging Party
Gregory J. Griffiths, Esq. and
Ryan T. Shannon, Esq., for the Respondent
DECISION
STATEMENT OF THE CASE
Jane Vandeventer, Administrative Law Judge. This case was tried on April 24
and 25, 2006, in Stewartville, Minnesota. The complaint alleges Respondent violated
Section 8(a)(3) of the Act by refusing to hire the employees of the predecessor
employer because they were represented by a union, and violated Section 8(a)(5) of the
Act by refusing to recognize and bargain with the Union as a successor employer. The
complaint also alleges Respondent violated Section 8(a)(1) of the Act by telling
employees that they were not being hired because they were union, and violated
Section 8(a)(5) of the Act by unilaterally implementing changed terms and conditions of
employment. The Respondent filed an answer denying the essential allegations in the
complaint. After the conclusion of the hearing, the parties filed briefs which I have read.
Based on the testimony of the witnesses, including particularly my observation of
their demeanor while testifying, the documentary evidence, and the entire record, I
make the following
FINDINGS OF FACT
I. JURISDICTION
Respondent is a limited liability corporation with an office and place of business
in Rochester, Minnesota, where it is engaged in the operation of a hotel. It is projected
that during a representative one-year period, Respondent will derive gross revenues in
excess of $500,000, and receive at its Rochester, Minnesota, facility goods valued in
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excess of $5,000 directly from points outside the State of Minnesota. Accordingly, I
find, as Respondent admits, that it is an employer engaged in commerce within the
meaning of Section 2(2), (6), and (7) of the Act.
The Charging Party (the Union) is a labor organization within the meaning of
Section 2(5) of the Act.
II. UNFAIR LABOR PRACTICES
A. The Facts
1. Background
Respondent is owned by C. D. Bhakta, who also owns other companies which
operate hotels in Texas and Louisiana. Respondent’s only purpose is to own and
operate the Holiday Inn Express (herein the hotel) in Rochester, Minnesota.
Respondent purchased the hotel in the late fall of 2006 from Sunstone Motel Investors.
A related company, Sunstone Hotel Properties (herein Sunstone or the predecessor),
managed and operated the hotel, along with several other hotel properties in the same
geographic area.
Sometime in November 2006,1 Respondent had learned of the availability of the
hotel, and on November 17, entered into a contract to purchase the hotel. Respondent
was represented in Rochester by Michael Bhakta, General Manager of the hotel for
Respondent, along with Ajay Patel, a son-in-law of C. D. Bhakta, and co-owner with C.
D. Bhakta of a hotel in Louisiana. M. Bhakta and Patel came to Rochester
approximately one week before December 20, the scheduled closing date for the sale of
the hotel. During this period, they had conversations with Bruce Fairchild, Regional
Director of Operations for Sunstone, familiarized themselves with the operation of the
hotel, and met and talked with Sunstone’s managers of the hotel, as more fully set forth
below. They remained in Rochester for some time after Respondent’s purchase of the
hotel, Patel for only a few weeks, and M. Bhakta for about six weeks. M. Bhakta hired a
general manager for the hotel at the end of January 2007. At the hearing, M. Bhakta
testified that he continues to spend approximately one-third to one-half his time at the
hotel, traveling from his home in Texas and staying a week or more at a time.
2. The Bargaining Unit and the Hotel Under the Predecessor
The Union, sometimes referred to in the record herein as a local union of UNITE
HERE!, has represented the employees at the hotel for many years. David Blanchard is
the financial secretary-treasurer and business manager of the Union. The collective
bargaining agreement between the Union and Sunstone was effective by its terms from
September 1, 2005, through August 31, 2010. The bargaining unit consisted of all
housekeeping and maintenance employees. The parties stipulated that there were
nineteen bargaining unit employees employed at the time of the sale of the hotel, three

1 All dates hereafter are in 2006, unless specified otherwise.
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maintenance employees and sixteen housekeeping employees. The hotel also
employed breakfast attendants, desk clerks, and an accountant, Diane Whiting, none of
whom were in the bargaining unit. Leonard Carlson was the chief engineer, and
supervised the maintenance employees. Robert Jorgenson was the manager of the
housekeeping department, and Lori Milene was his assistant. William Seitl was the
general manager of the hotel.
3. Conduct of Respondent Before Closing of the Sale
David Blanchard learned about the contemplated sale of the hotel from Bruce
Fairchild when the two accidentally met on December 15. The same day, he received a
letter from Sunstone informing the Union of the sale, and notifying the Union that the
sale was expected to close on December 20. The Union then requested effects
bargaining with Sunstone.
On December 18, Blanchard learned that representatives of the prospective
buyer, Respondent, were in Rochester and were at the hotel. He secured M. Bhakta’s
cell phone number from Fairchild, and telephoned M. Bhakta. There is no dispute as to
the conversation. Blanchard introduced himself as a Union representative and
confirmed that M. Bhakta had received a copy of the collective bargaining agreement
from Sunstone. Blanchard asked M. Bhakta if Respondent would sign the collective
bargaining agreement, and M. Bhakta said that first he would have to get an attorney to
look at it. Blanchard said that he was under the impression from Fairchild that
Respondent planned to keep things as they were, and to keep the current employees.
He asked M. Bhakta if the employees would have jobs with Respondent. M. Bhakta
said was what he would like to figure out. Blanchard asked him what he was proposing,
and reiterated that he needed to know if the employees were going to be retained. M.
Bhakta said that he was in a meeting with Seitl and would call Blanchard back in “just a
few minutes.” He took down Blanchard’s phone number. M. Bhakta did not return
Blanchard’s call that day.
In the evening of that day, Blanchard met with the bargaining unit employees and
encouraged them to fill out applications for employment with Respondent. It is
undisputed that M. Bhakta had given blank applications forms to Seitl and that Seitl had
set them out for employees to use. There was a cardboard box at the front desk where
employees were to deposit completed applications. The record evidence shows that
this box of applications was at the front desk at least through the end of the day on
December 21.
The following day, December 19, Blanchard called M. Bhakta several times, but
never reached him. Blanchard left messages on M. Bhakta’s voice mail, but his calls
were not returned. Finally, Blanchard called M. Bhakta from a different phone, and M.
Bhakta answered the phone. Blanchard testified that not only did he call M. Bhakta’s
cell phone number – the same number he had called every other time – but he also
recognized M. Bhakta’s voice when he answered. In response to Blanchard’s greeting,
M. Bhakta stated that he was not M. Bhakta, and that it was a wrong number. He hung
up. Blanchard then talked with Fairchild about not being able to reach M. Bhakta.
Fairchild told Blanchard that he still believed Respondent intended to hire the current
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employees. M. Bhakta admitted in testimony that he was aware that the current
employees wanted to continue working at the hotel after Respondent completed the
purchase.
During the week or two before the closing of the sale, Patel and M. Bhakta met
with Jorgenson and Seitl repeatedly, getting a tour of the property from Seitl, discussing
vendors, suppliers and hotel procedures with both Seitl and Jorgenson. They used
Seitl’s office for that period of time, along with Seitl.
On December 15, Fairchild had met with hotel bargaining unit employees and
had informed them that the hotel was going to be sold as of December 20, but that he
assumed that the new owner would continue to employ the current employees.
Sometime between that day and the proposed closing day, December 20,
housekeeping employee Basma Abdulamin struck up conversations with M. Bhakta in
order to ask him about her job. She asked M. Bhakta whether she would be keeping
her job at the hotel after Respondent took over. M. Bhakta assured her that she would.
On the second occasion, Abdulamin was talking with M. Bhakta and Patel, and again
asked whether the housekeepers would be keeping their jobs. Patel said yes, but M.
Bhakta said that first he would have to negotiate with the Union. Abdulamin told M.
Bhakta that the housekeepers were all very worried about their jobs, and asked him to
talk with them. M. Bhakta declined to meet with the housekeepers, but told Abdulamin
that he would have Jorgenson tell them that they will be keeping their jobs. M. Bhakta
did not contradict any of Abdulamin’s testimony.
On about December 20, employee Janice Danielson approached M. Bhakta in
the hotel and asked him if she still had a job. M. Bhakta told her, “Yes.” M. Bhakta did
not contradict Danielson’s testimony. Except for these short conversations, M. Bhakta
never discussed future employment with any bargaining unit employees. It is
undisputed that neither he nor Patel had any formal meetings with bargaining unit
employees for this purpose.
4. Events of December 20
During the day on December 20, housekeeping manager Jorgenson talked with
M. Bhakta and asked him if he was going to keep the employees on after Respondent
took over the hotel. Jorgenson testified that he asked M. Bhakta this question
repeatedly during the four or five days before the closing on December 21, because he
was concerned about his employees, many of whom he had known and worked with for
years. Jorgenson testified that on December 20, M. Bhakta told him that Respondent
was not going to retain the union-represented employees, that Respondent “couldn’t
afford them,” there was too much paperwork, and too many fees. When Jorgenson
asked what Respondent would do for employees, M. Bhakta said Respondent would
hire temporary employees. Jorgenson then supplied M. Bhakta with the name of a local
temporary employment agency and M. Bhakta arranged the same day to hire six
temporary employees (five housekeepers and one maintenance employee) on an
“ongoing” basis.
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Also on December 19 or 20, M. Bhakta told Jorgenson that the management
team would be retained by Respondent after the sale, so he would continue to be
employed as the housekeeping manager.
Blanchard learned from Fairchild on December 20 that Respondent might be
interested in assuming the collective bargaining agreement, and so Blanchard prepared
an assumption agreement which he attempted to get to M. Bhakta during the day. He
went to the hotel several times to try to see M. Bhakta, but was told each time that M.
Bhakta was not able to see him. There is no dispute that M. Bhakta received a copy of
the assumption agreement and was present at the hotel, but, according to M. Bhakta,
was “too busy” to see Blanchard. Finally, at 7:30 p.m., Blanchard managed to get M.
Bhakta on his cell phone. Blanchard asked M. Bhakta if he would sign the assumption
agreement. M. Bhakta replied that he had no intention of signing it. Blanchard asked
him if he thought it was fair to buy a union hotel that the employees had put their heart
and soul into, and then not rehire them. M. Bhakta said that the employees would find
jobs. Blanchard asked M. Bhakta why he would not sign the assumption agreement,
and M. Bhakta replied that he didn’t want to be union. M. Bhakta told Blanchard that
Respondent couldn’t afford to be union. He said that Respondent had the option of
deciding whether or not to be union. Blanchard pressed M. Bhakta on the question of
whether the employees should show up to work the next day – whether Respondent
was going to hire them. M. Bhakta told Blanchard that he would call him back with the
answer to that.
Blanchard immediately called Fairchild and left a message stating that he didn’t
believe Respondent was going to hire the employees. He also wanted to know if
Fairchild had indeed told M. Bhakta that Respondent had the option to operate the hotel
union or non-union. Fairchild returned his call, and denied having told M. Bhakta that it
was Respondent’s option whether to operate the hotel union or non-union. In addition,
he informed Blanchard that the closing of the sale of the hotel had been rescheduled for
December 21 instead of that evening, so the hotel would be operating under the
auspices of Sunstone on December 21. Therefore, the employees should be at work,
and would still be working for Sunstone.
M. Bhakta then called Blanchard back and told him that Respondent had decided
not to hire any of the bargaining unit employees, and that Blanchard could call them and
tell them not to show up the following day. Blanchard told M. Bhakta that the
employees would be working for Sunstone on the following day, according to Fairchild.
During some additional phone conversations, Fairchild confirmed with everyone,
including Seitl, that the employees were to be at work the following day, and would still
be working for Sunstone. M. Bhakta denied talking with Fairchild on that evening about
the employees reporting to work the next day.
5. Events of December 21
Sometime during the day on December 21, Amy Blenker, who was at that time a
member of the Rochester City Council, called M. Bhakta on the phone. Blenker testified
that she had been asked by someone in the Union to talk with M. Bhakta and
encourage him to retain the current employees at the hotel. Blenker introduced herself
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and thanked M. Bhakta for doing business in Rochester. She asked him to consider
keeping the current employees employed at the hotel. M. Bhakta told Blenker that he
didn’t know anything about the employees, and that the corporate office was handling
that matter. After a short digression to another subject, Blenker again asked M. Bhakta
about the employees. M. Bhakta said the employees would be free to apply for work
once Respondent had taken over the hotel. Blenker asked M. Bhakta why he wouldn’t
keep the employees on. M. Bhakta replied, because they are union. M. Bhakta went
on to say that he wasn’t obligated to continue the collective bargaining agreement, and
that he didn’t want the Union. Blenker asked that he consider keeping the employees,
again thanked him for doing business in the city, and ended the conversation.2
At the hotel, Jorgenson spoke with M. Bhakta and Patel at some point during the
morning. Jorgenson testified that Seitl was also present, but Seitl had no recollection of
the event. Jorgenson testified that M. Bhakta stated that Respondent was not going to
continue the employment of the bargaining unit employees. Meanwhile, the employees
worked all day, then gathered at the end of the work day, about 4 or 4:30 pm, for a
meeting with Seitl and Jorgenson. From the testimony of various Respondent
witnesses, it appears the sale of the hotel closed at about 4:00 to 4:30 pm, but neither
M. Bhakta nor Patel came to meet with employees after the closing. According to the
testimony of Jorgenson, Diane Whiting, and approximately ten employees, Seitl
addressed the employees, and told them that they no longer had jobs. At least six of
these witnesses also testified that Seitl told the employees the new owners didn’t want
to hire them because they didn’t want the Union in the hotel.3 All the witnesses agreed
that employees at the meeting were upset or crying and were very unhappy about being
terminated. Jorgenson told the employees that they needed to clean out their lockers,
and take home their personal belongings. Jorgenson also told them that they were not
to report to work the following day. One maintenance employee stated that if he was
not going to be employed, he did not want Respondent to have the confidential
information on his employment application, such as his social security number. He
asked that his application be shredded. A few more employees made the same
request, but the evidence appears to be that not all of the employees requested that

2 Blenker is a neutral disinterested witness. Her testimony was clear, detailed, and
convincing. Her demeanor was appropriate and impressive. In addition, M. Bhakta did not
contradict her testimony. I credit Blenker’s testimony in its entirety.
3 Seitl claimed that it was Jorgenson, not he, who told the employees they were not going to
be employed by the new owners, but in view of the number of witnesses who testified that he
did speak to the employees, I do not credit Seitl on this point. Seitl’s testimony was given
reluctantly, woodenly, uncertainly, with an almost robotic demeanor. Seitl did not appear to be
doing his best to answer questions clearly and completely. At times he displayed a poor
memory, was evasive or contradicted himself. He was an extremely unimpressive witness, and
I do not credit him where, as here, his testimony conflicts with that of other witnesses. I
specifically credit Jorgenson and the employee witnesses as to the events at the December 21
meeting. Even Diane Whiting, Respondent’s bookkeeper, testified consistently with the
employees, and in contradiction of Seitl, that Seitl “told employees that we had not heard
whether the Union contract was going to be in force or not, and at that point, he felt that they
didn’t have a job at that point.” With regard to the morning conversation, I credit Jorgenson,
including his testimony that Seitl was present.
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their applications be shredded. Jorgenson said he would shred the applications. After
the meeting, he shredded the applications of all the bargaining unit employees,
including those who had made no request that their applications be shredded.
After the meeting at the hotel, bargaining unit employees went to the Union hall
for a meeting. Blanchard testified the employees told him that Seitl had informed them
they were not being retained by Respondent because they were union employees.
Blanchard had the employees sign individual statements addressed to M. Bhakta
stating that they would accept jobs with Respondent if offered. Employee Sue Messner
delivered a large manila envelope addressed to M. Bhakta and containing these signed
statements to the front desk at the hotel. M. Bhakta, although conceding that he
commonly receives mail delivered in this manner, denied ever receiving the statements
from employees. For the reasons set forth below, I do not credit M. Bhakta’s denial.
Instead, I find that Respondent received the statements from employees stating that
they wanted to work for Respondent and would accept jobs at whatever wage was
offered.
6. Respondent’s Operation of the Hotel
On the morning of December 22, the approximately five non-unit employees who
had worked at the hotel under Sunstone continued their employment at the hotel. They
were the breakfast attendants, the front desk clerks, and the bookkeeper. There is no
record evidence as to when or how the breakfast attendants and the desk clerks were
informed that they would be retained by Respondent, but Diane Whiting testified that
she simply showed up for work. Three of the management staff, Jorgenson, Lori
Milene, and Leonard Carlson, also continued their employment at the hotel. Six
temporary employees also arrived to work in housekeeping. At a meeting at the start of
the day, M. Bhakta told the managers and employees that everything would stay the
same at the hotel.
Leonard Carlson testified that he had no employees for the first few days, and
had to work around the clock himself. Jorgenson testified that he and the temporary
employees struggled to get the work done. During the first week of Respondent’s
operation, Jorgenson several times asked M. Bhakta whether he could hire some of the
former employees, because they knew the work, and had many years of experience
doing the work. Jorgenson told M. Bhakta that the former employees wanted to work
for Respondent. On each occasion, M. Bhakta told Jorgenson that Respondent would
not hire back the former employees because Respondent did not want the Union at the
hotel. M. Bhakta would not permit Jorgenson to hire any union-represented employees.
On one occasion, M. Bhakta told Jorgenson that if there were a lot of formerly union-
represented employees at the hotel, “they’re going to want to become union again; we
don’t want the Union in here.” When Jorgenson did hire Carissa Madden, an employee
who had been employed by Sunstone for a short period of time before December 22, M.
Bhakta asked him whether she wasn’t a union employee? Jorgenson told M. Bhakta
that she had not been employed with Sunstone past her probationary period, and so
she had not been in the Union. M. Bhakta denied that he told Jorgenson that the Union
was the reason Respondent would not hire the former employees. His credibility is
dealt with below.
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After a week of working for Respondent, Jorgenson resigned, giving Respondent
a week’s notice of his resignation. Three days before the resignation was to be
effective, M. Bhakta called Jorgenson at home and told him not to report for his last
three days of work. Jorgenson testified that he decided to resign because of the way
Respondent was treating the former housekeeping and maintenance employees.
Respondent continued to hire employees to staff the housekeeping and
maintenance departments. Respondent ran newspaper ads for employees, and hired
some of the temporary agency employees as Respondent’s own employees. In the four
months from its purchase of the hotel until the trial herein, Respondent hired a total of
65 employees for the jobs formerly done by the nineteen bargaining unit employees.
It is undisputed that at least two bargaining unit employees submitted
applications to Respondent after December 22, Basma Abdulamin (three years
experience with the hotel) on December 28, and Mary Ehlenfelt (twenty-four years
experience with the hotel) on January 22, 2007. Both applications remained in
Respondent’s files. Respondent advanced no reason for not hiring these two
employees among the 65 employees whom it hired over the four months after beginning
operation of the hotel. A third bargaining unit employee, Sue Messner, delivered at
application to the front desk of the hotel but was literally waved away by the front desk
clerk, who said, “He doesn’t want union in here.” A fourth employee, Janice Danielson
(15 years experience in the hotel), testified that she took an application to the hotel after
December 22, but was never contacted about it. I credit Danielson.
Regarding applications, M. Bhakta testified that he had never looked at the
bargaining unit employees’ applications which were in the box at the front desk through
December 21. He further testified that had the bargaining unit employees arrived at
work on the morning of December 22, they would have been permitted to work as usual,
paid, and would have been employees from that time on, admittedly without the
necessity of filling out applications.
7. Other Events During the First Four Months of 2007
It is undisputed that in the weeks and months following Respondent’s purchase
of the hotel, the Union and the former bargaining unit employees picketed and passed
out handbills at the hotel protesting Respondent’s failure to hire them, and urging
Respondent to hire the former employees. M. Bhakta admitted that he was aware of
the picketing and the handbills.
The Union’s state organizing director, Martin Goff, telephoned M. Bhakta some
time after December 22 and urged him to re-employ the bargaining unit employees. M.
Bhakta told Goff “they” wouldn’t let him. He denied being the owner of Respondent and
told Goff the bargaining unit employees were “too expensive.” Goff said the Union
could negotiate lower wages with Respondent. M. Bhakta then said, “No, no union.”
There was some more conversation, during which Goff mentioned Franklin D.
Roosevelt saying something to the effect that if you couldn’t afford to pay a man a
decent wage, then maybe you ought not to be in business. M. Bhakta recalled receiving
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the call from Goff, but did not recall much else about the call except for Goff mentioning
Franklin D. Roosevelt. While M. Bhakta’s credibility in general is dealt with below, I
specifically credit Goff regarding his telephone conversation with M. Bhakta about hiring
the bargaining unit employees. Goff’s recollection was detailed, while M. Bhakta
recalled practically nothing about the conversation.
At the time of the hearing, Respondent employed twenty employees in formerly
bargaining unit positions, i.e., housekeeping and maintenance positions. Respondent
experienced extremely high employee turnover. The record reveals that during the four-
month period between December 22 and the hearing, Respondent hired a total of 65
employees in order to keep those positions staffed. By contrast, many of the bargaining
unit employees had been employed for years, in some cases over 20 years.
M. Bhakta testified that he never looked at the bargaining unit employees’
applications before or on December 21. He also testified that he expected them to
appear for work on December 22, although he admitted that he had never told them to
do so, or that they were being retained in employment. As for the period after
December 22, he stated that the only reason he didn’t consider the bargaining unit
employees for employment was that he did not have applications from them. M. Bhakta
offered no explanation at all for Respondent’s failure to hire the three bargaining unit
employees whose applications had been given to Respondent.
B. Credibility
M. Bhakta’s testimony differs from that of other witnesses in several instances
noted above. His testimony contained many failures of recollection, much hesitancy,
and numerous contradictions. In several episodes recounted in the testimony of other
witnesses which M. Bhakta did not deny, his conduct indicated the unreliability of his
statements. For example, he stalled and avoided Union representative Blanchard on
several occasions, and one time attempted to deceive him by blatantly lying about his
identity. He lied to city council member Blenker by saying that he had no control over
which employees were hired. He lied in a similar manner to Goff. He lied to at least
three employees who asked if they were going to be hired by Respondent to work at the
hotel. All these facts, added to the generally unreliable nature of his memory and his
testimony, and his unimpressive demeanor, contribute to my finding that M. Bhakta’s
testimony is not reliable. Wherever his testimony is contradicted by other credited
witnesses, I discredit M. Bhakta.
C. Discussion and Analysis
1. Agency Issues and 8(a)(1) Allegation
Three individuals employed by the predecessor employer as of December 21 are
alleged as agents of Respondent: Bill Seitl, Rob Jorgenson, and Diane Whiting. The
record evidence reveals that two of these individuals, Jorgenson and Whiting, were
employed by Respondent immediately upon its purchase of the hotel. Jorgenson
testified that he was told by M. Bhakta that he would continue as the manager of the
housekeeping department a day or two before the closing. Whiting testified that she did
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not receive an offer of employment from Respondent before December 22, but simply
showed up and began work for Respondent. Seitl testified that Whiting had told him at
least as of December 21 that she had been told by Respondent that she would continue
in her position as bookkeeper of the hotel under Respondent’s ownership. With regard
to this discrepancy, I credit Seitl over Whiting. It is far more plausible for an individual to
arrive and begin work when they know they have a job than to do so without knowing
one way or the other whether they have a job. In the absence of an understanding
about her continued employment, Whiting’s conduct would have made little sense. I
find that Whiting had been offered continued employment with Respondent by
December 21.
Whiting testified that she has authority effectively to recommend employees for
employment to Respondent. Before Respondent took over at the hotel, Whiting
collected the completed applications from employees and placed them in the box at the
front desk on behalf of Respondent. I find that Whiting was an agent of Respondent
during this period for the limited purpose of collecting and delivering to Respondent
employment applications. From December 22, I find that Whiting was a supervisor and
agent of Respondent. Albertson’s, Inc., 344 NLRB No. 141 (2005), sl. op. at 1-2.
Jorgenson was offered continued employment with Respondent, and had
numerous discussions with M. Bhakta in the days before December 22 about the
housekeeping department and how it would be staffed by Respondent. Another
indication of Jorgenson’s status as an agent for Respondent was M. Bhakta’s statement
to employee Abdulamin that he would have Jorgenson assure the housekeepers that
they would be keeping their jobs. This occurred prior to December 22. I find that by
virtue of these facts, his status as the current supervisor of Sunstone and the
prospective supervisor of Respondent, Jorgenson had the status of an agent of
Respondent, certainly with regard to staffing the housekeeping department, on
December 21. Jorgenson’s statement to employees on December 21 that they should
clean out their lockers also is attributable to Respondent. I find that it implied to
employees that they no longer had jobs, and so should collect their personal belongings
and remove them from the hotel. See, e.g., Facchina Construction Co., 343 NLRB
886, 886-87 (2004).
Seitl testified that he had not been offered a job, whereas M. Bhakta stated that
he had asked Seitl to stay on as manager of the hotel. Seitl did not continue to be
employed at the hotel. In any event, for approximately a week before December 22,
Seitl had shared his office with M. Bhakta and Patel, had taken them on tours around
the hotel, and had been in their company for many hours each day. Employees in the
hotel could see Seitl as he toured the hotel with Respondent’s two representatives. The
two representatives were openly stationed in Seitl’s office. In addition, Seitl acted as
Respondent’s representative in providing applications to employees for employment
with Respondent. It is clear from the record evidence that the employees in the
December 21 meeting reasonably believed Seitl was acting on behalf of Respondent in
telling them they would not be retained in their jobs. I find that Seitl was an agent of
Respondent for the purpose of employment issues, based on his actual empowerment
to act as Respondent’s agent for distribution and collection of employment applications.
I further find that he had apparent authority, by virtue of his constant association with M.
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Bhakta and Patel during the week preceding the sale of the hotel, to act for
Respondent. Facchina Construction Co., above; Lamay Caring Center, 280 NLRB
60, 66-67 (1986), enfd. mem. sub. nom. Dasal Caring Centers v. NLRB, 815 F.2d 711
(8th Cir. 1987).
Seitl’s announcement to employees on December 21 that Respondent would not
be hiring them because of their Union association was therefore attributable to
Respondent, and violates Section 8(a)(1) of the Act. See, e.g., Kessel Food Markets,
Inc., 287 NLRB 426, 427 (1987), enfd. 868 F.2d 881 (6th Cir. 1989), cert. denied 493
U.S. 820 (1989).
2. Respondent’s Hiring Decisions
Like allegations of unlawful discharge, allegations of failure or refusal to hire are
properly analyzed under Wright Line, 251 NLRB 1083 (1980), enfd. 662 F.2d 899 (1st
Cir. 1981), cert denied 455 U.S. 989 (1982). Planned Bldg. Services, 347 NLRB No.
64, sl. op. at 4 (2006); Precision Industries, 320 NLRB 661, 662 (1996), enfd. sub.
nom. Pace Industries, Inc. v. NLRB, 118 F.3d 585, 593-94 (8th Cir. 1997), cert. denied
523 U.S. 1020 (1998); The General Counsel must prove that an employee had union
activities, that an employer had knowledge of that activity and also possessed anti-
union animus, that the employer discharged or did not hire the employee, and that there
is a nexus between the anti-union sentiment and the decision to discharge or not to hire
the employee. An employer may defend by proving that it would have taken the same
action in the absence of any union activity by the employee. If an employer carries this
burden, the General Counsel must then prove that the asserted defense is pretextual in
order to prove a violation of the Act.
The elements of union activity and employer knowledge thereof are not in dispute
in this record. M. Bhakta admits that he was informed some time in advance of closing
on the hotel that the Union represented the housekeeping and maintenance employees.
M. Bhakta was even provided with a copy of the collective bargaining agreement a day
or two before the closing. Likewise it is not disputed that Respondent hired none of the
bargaining unit employees, whereas it hired all the non-unit employees and all the
supervisors and managers except for Seitl. Instead, M. Bhakta secured six temporary
employees to perform the usual work of the bargaining unit employees. While an
inference of discrimination against the bargaining unit employees might be drawn from
these facts, the analysis in this case does not depend on inference.
The record evidence amply demonstrates Respondent’s considerable anti-Union
animus. M. Bhakta told city council member Blenker on December 21 that he did not
intend to retain the bargaining unit employees because he did not want the Union. He
told Jorgenson the same thing on several occasions both before and after December
22. M. Bhakta told Martin Goff after December 22 that he did not want the Union or the
bargaining unit employees. He had informed Blanchard on the evening of December 20
that he had decided not to employ any of the bargaining unit employees, and also told
Blanchard that he had no intention of agreeing to an assumption of the collective
bargaining agreement. Finally, as found above, both Seitl and Jorgenson, acting as
agents of Respondent, told the employees that they did not have jobs with Respondent.
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Seitl also told employees that it was because of the Union that they were not going to
be hired.
All these facts demonstrate profound anti-union sentiment by Respondent, and a
clear connection between the union-represented status of the employees and
Respondent’s decision not to hire them. I find that the General Counsel has proven a
prima facie case that Respondent violated Section 8(a)(3) of the Act by refusing to hire
the bargaining unit employees.
Respondent has asserted as defenses two facts: first, that after about five p.m.
on December 21, Respondent had no employment applications from the bargaining unit
employees, and second that they did not show up for work on December 22. Both
these asserted defenses fail to take into account the overwhelming evidence showing
that Respondent had made the decision not to hire the bargaining unit employees
before either of these facts occurred. M. Bhakta told Blanchard on the evening of
December 20 that he had decided not to hire the bargaining unit employees, and the
next morning he repeated this decision to city councilor Blenker as well as to
Jorgenson. Respondent had also made arrangements to have temporary employees
take the places of bargaining unit employees. I specifically discredit M. Bhakta’s
assertion that his advance arrangement for temporary employees was merely a “back-
up” plan in case the bargaining unit employees did not appear for work on December
22. Therefore, neither the absence of employment applications nor the absence of the
employees on December 22 could have had anything to do with Respondent’s decision
not to hire the employees, as both these things happened after the decision not to hire
the bargaining unit employees. It is crystal clear from the evidence, and I find, that
Respondent had made the decision not to hire the union-represented employees as of
the evening of December 20.
In addition, counsel for the General Counsel, in her brief, pointed out the
inconsistency between the two asserted defenses. If, as M. Bhakta admitted in cross-
examination, he would have hired the bargaining unit employees if they had shown up
for work on the morning of December 22, he would do so without the necessity for
applications, as those had been shredded the night before. He admitted that he would
not have required employment applications from the employees before permitting them
to begin work. Furthermore, on December 20, after telling the employees’ union
representative that Respondent would not be hiring the employees, and that Blanchard
should tell the employees so, it would have been absurd to expect employees to show
up for work. Respondent likewise told the supervisor of sixteen of the employees
(Jorgenson) the same thing. Respondent would have had an expectation that
Jorgenson would communicate that fact to the employees, as, in fact, was done in the
meeting at the end of the day on December 21. M. Bhakta had also told Blanchard on
December 20 to communicate to the employees that they were not going to be hired,
and so they should not show up to work for Respondent the next day. The fact that
Respondent’s takeover was delayed for one day does not change the fact that M.
Bhakta made this request of Blanchard. Apparently M. Bhakta preferred that someone
other than he give the bargaining unit employees the bad news that they were not going
to be hired.
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From the point of view of Respondent’s apparent position, there was never a time
that employees could successfully apply for employment. The employees had filed
employment applications by December 21, but M. Bhakta testified that he had not
looked at them, so apparently that was too early to apply. Employees were then told
they would not be hired at all and understandably did not show up for jobs they had just
been told they did not have. But from Respondent’s point of view, from December 22
on, it was too late to apply successfully for employment. None of the employees’
statements saying they would accept a job at any wage offered, the three filed second
applications, nor the picketing and flyers secured jobs for the bargaining unit
employees, either. Respondent’s asserted scenario presents a classic catch-22
situation. It is clear from the record evidence that Respondent’s decision not to hire the
employees was made on December 20, and that nothing the employees did thereafter
had any effect on that decision. I find, therefore, that Respondent’s asserted defenses
are completely unpersuasive, and do not rebut the General Counsel’s prima facie case.4
M. Bhakta, in testimony, appeared to claim that he was unaware that the
bargaining unit employees had any desire to be employed by Respondent. In view of
the credited and documentary evidence that Respondent did know that the employees
wanted to be employed, I find this claim of ignorance disingenuous, and I do not credit
it. From the original applications, which Respondent, through its agents Seitl, Whiting,
and Jorgenson, knew about, to the statements delivered to Respondent by Sue
Messner, to the call from the city councilor, to the call from Martin Goff, to the second
applications submitted by three employees, to the picketing and flyers, it would be
impossible on this record to find that Respondent was unaware that the bargaining unit
employees desired to be employed by Respondent. In view of the fact that Respondent
had extremely high turnover among its employees during the four months between
December 22 and the trial herein, there was ample opportunity to hire the former very
experienced employees into those positions. Respondent gave no explanation for its
failure to hire any of the three employees who turned in second applications. This fact
undercuts its asserted defenses even further.
In sum, I find that Respondent refused to hire the nineteen bargaining unit
employees because of their status as union-represented employees, and in order to
avoid a bargaining obligation, in violation of Section 8(a)(3) of the Act. Planned Bldg.
Services, above, sl. op. at 4; Love’s Barbeque Restaurant No. 62, 245 NLRB 78, 82
(1979), enfd. sub nom. Kallman v. NLRB in relevant part 640 F.2d 1094 (9th Cir. 1981).
3. Successor Status of Respondent
Beginning on December 22, Respondent continued operation of the hotel in the

4 As Respondent has not carried its burden of proving that it would not have hired the
bargaining unit employees even in the absence of any union activities, it is unnecessary for
General Counsel to rebut the asserted defenses. I find, however, that had Respondent
succeeded in carrying its burden, the facts analyzed in the preceding three paragraphs,
considered along with the facts shown in the prima facie case, would effectively rebut
Respondent’s asserted defenses, and reveal them as pretextual.
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same manner it had been operated by the predecessor employer. Respondent retained
Jorgenson and Lori Milene, the housekeeping manager and assistant, retained the
same bookkeeper, and attempted to retain the hotel manager, according to M. Bhakta.
Respondent retained all the front desk employees and the breakfast preparation
employees. Respondent honored the reservations customers had made with the hotel
prior to the sale. Respondent even used the same linen supplier. There was no hiatus
in operation of the hotel. M. Bhakta testified that his goal was a seamless transition
from the former owner to Respondent. The only difference in the operation was the
complete change in the bargaining unit employees. That has been dealt with above.
For purposes of the successor analysis, I find that if there had been no unlawful
discrimination, a majority of the bargaining unit employees would have been hired by
Respondent.
In light of this continuity of operations, I find that Respondent is a successor
employer under NLRB v. Burns International Security Services, Inc., 406 U.S. 272
(1972). Under that case, it is clear that Respondent had an obligation to recognize and
bargain with the Union. It is undisputed that Respondent did neither. I find that
Respondent violated Section 8(a)(5) of the Act by failing and refusing to recognize and
bargain with the Union.
4. Respondent’s Changes in Terms and
Conditions of Employment
It is undisputed that Respondent implemented different wages, and other terms
and conditions of employment beginning on December 22, at least for the housekeeping
and maintenance employees who constitute the bargaining unit. According to Board
law, where a successor employer discriminates against employees in hiring in order to
avoid a bargaining obligation, that employer loses the right to set initial terms and
conditions of employment. Furthermore, it is undisputed that Respondent did not
provide the Union with notice of the changes in wages, or terms and conditions of
employment, and did not provide the Union with an opportunity to bargain about them.
Howard Johnson Co., Inc. v. Detroit Local Joint Executive Board, 417 U.S. 249
(1974); Planned Bldg. Services, above, sl. op. at 5; Smoke House Restaurant, 347
NLRB No. 16 (2006); Precision Industries, above; Love’s Barbeque Restaurant No.
62, above, 245 at 82.
I find that by changing the terms and conditions of employment, Respondent
violated Section 8(a)(5) of the Act.
CONCLUSIONS OF LAW
1. By telling employees they were not being hired by the successor employer
because they were represented by the Union at the predecessor employer, Respondent
has violated Section 8(a)(1) of the Act.
2. By failing and refusing to consider for hire and to hire employees because
they were represented by the Union, Respondent has violated Section 8(a)(3) and (1) of
the Act.
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3. By failing and refusing to recognize and bargain with the Union as the
representative of the employees in the following unit, Respondent has violated Section
8(a)(5) and (1) of the Act:
All full-time and regular part-time housekeeping and maintenance department
employees, employed by Respondent at its 220 South Broadway, Rochester,
Minnesota, facility; excluding office clerical employees, managerial employees
and guards and supervisors as defined in the Act, as amended.
4. By changing the terms and conditions of employment from those which
existed at the time of its purchase of the Holiday Inn Express, Rochester, Minnesota,
without notice to the Union or affording the Union an opportunity to bargain about the
changes, Respondent has violated Section 8(a)(5) and (1) of the Act.
5. The violations set forth above are unfair labor practices affecting
commerce within the meaning of the Act.
THE REMEDY
Having found that Respondent has engaged in certain unfair labor practices, I
shall recommend that it be required to cease and desist therefrom and to take certain
affirmative action necessary to effectuate the policies of the Act.
I shall recommend that Respondent be required to restore the terms and
conditions of employment in effect at the time it unlawfully repudiated the collective
bargaining agreement and to maintain those terms and conditions in effect unless and
until changed through bargaining with the Union. I shall also recommend that
Respondent be ordered to remove from the employment records of employees any
notations relating to the unlawful refusals to hire them and to make them whole for any
loss of earnings or benefits they may have suffered due to the unlawful refusals to hire
them, in accordance with F. W. Woolworth Co., 90 NLRB 289 (1950), plus interest as
computed in accordance with New Horizons for the Retarded, 283 NLRB 1173 (1987).
On these findings of fact and conclusions of law and on the entire record, I issue
the following recommended5
ORDER
The Respondent, CMPJ Enterprises d/b/a Holiday Inn Express, its officers,
agents, successors, and assigns, shall

5 If no exceptions are filed as provided by Sec. 102.46 of the Board’s Rules and
Regulations, the findings, conclusions, and recommended Order shall, as provided in Sec.
102.48 of the Rules, be adopted by the Board and all objections to them shall be deemed
waived for all purposes.
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1. Cease and desist from
(a) Failing and refusing to consider for hire and/or to hire employees because
they were represented by the Union, thereby intentionally limiting its hiring of bargaining
unit employees in order to avoid employing a majority of represented employees.
(b) Telling employees that they are not being hired because they were
represented by the Union.
(c) Failing and refusing to negotiate and bargain with the Union as the
collective bargaining representative of the employees in the bargaining unit described
above.
(d) Changing the wages and other initial terms and conditions of employment
when, as a successor employer with an obligation to recognize and bargain with the
Union, such changes were made unilaterally.
(e) In any like or related manner interfering with, restraining, or coercing
employees in the exercise of rights guaranteed them by Section 7 of the Act.
2. Take the following affirmative action necessary to effectuate the policies of
the Act.
(a) Recognize and, upon request, bargain collectively with the Union in the
unit described above.
(b) Restore the terms and conditions of employment in effect as of the date of
its purchase of the Holiday Inn Express, Rochester, Minnesota, and continue those
terms and conditions in effect unless and until changed through collective bargaining
with the Union.
(c) Within 14 days from the date of this Order, offer employment to their
former jobs or, if those jobs no longer exist, to substantially equivalent positions, without
prejudice to their seniority or any other rights or privileges previously enjoyed, to the
following employees:
Asha Abdi Phyllis Johnson Syvella Richey
Basma B. Abdulamin Carissa P. Madden Lee O. Rinehart
Laura Burrichter Susan Messner Gerald Seitz
Janice Danielson David E. Miller Roxanne Swarthout
Dick Darst Alicejean Murphy Michael L. Weatherly
Mary Ehlenfeldt Mako Hassan Osoble Dwight Wolfgram
Ashley Freeman
(d) Make the above-named employees whole for any loss of earnings and
other benefits suffered as a result of the discrimination against them, in the manner set
forth in the remedy section of this decision.
(e) Within 14 days from the date of this Order, remove from its files any
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reference to the unlawful refusals to hire the above-named employees, and within 3
days thereafter notify the employees in writing that this has been done and that the
refusals to hire them will not be used against them in any way.
(f) Preserve and, within 14 days of a request, or such additional time as the
Regional Director may allow for good cause shown, provide at a reasonable place
designated by the Board or its agents, all payroll records, social security payment
records, timecards, personnel records and reports, and all other records, including an
electronic copy of such records if stored in electronic form, necessary to analyze the
amount of backpay due under the terms of this Order.
(g) Within 14 days after service by the Region, post at its Rochester,
Minnesota, location copies of the attached notice marked “Appendix.” Copies of the
notice, on forms provided by the Regional Director for Region 18, after being signed by
the Respondent’s authorized representative, shall be posted by the Respondent and
maintained for 60 consecutive days in conspicuous places including all places where
notices to employees are customarily posted. Reasonable steps shall be taken by the
Respondent to ensure that the notices are not altered, defaced, or covered by any other
material. In the event that, during the pendency of these proceedings, the Respondent
has gone out of business or closed the facility involved in these proceedings, the
Respondent shall duplicate and mail, at its own expense, a copy of the notice to all
current employees and former employees employed by the Respondent at any time
since December 21, 2006.
(h) Within 21 days after service by the Region, file with the Regional Director
a sworn certification of a responsible official on a form provided by the Region attesting
to the steps that the Respondent has taken to comply.
Dated, Washington, D.C., August 7, 2007.
____________________
Jane Vandeventer
Administrative Law Judge
JD–55–07
Rochester, MN
APPENDIX
NOTICE TO EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
The National Labor Relations Board has found that we violated Federal labor law and
has ordered us to post and obey this notice.
FEDERAL LAW GIVES YOU THE RIGHT TO
Form, join, or assist a union
Choose representatives to bargain with us on your behalf
Act together with other employees for your benefit and protection
Choose not to engage in any of these protected activities
WE WILL NOT fail or refuse to bargain collectively with the Hotel, Hospital, Restaurant
and Tavern Employees Union, Local 21, as the exclusive collective bargaining
representative of the employees in the following appropriate unit:
All full-time and regular part-time housekeeping and maintenance department
employees, employed by us at our 220 South Broadway, Rochester, Minnesota,
facility; excluding office clerical employees, managerial employees and guards
and supervisors as defined in the Act, as amended.
WE WILL NOT discriminate against you by refusing to consider you for hire or refusing
to hire you to avoid a successor collective bargaining obligation.
WE WILL NOT tell employees that we will refuse to retain employees who had been
represented by the Union and that we do not want Union employees.
WE WILL NOT set initial terms and conditions of employment different from those in
effect under the predecessor employer, Sunstone Properties, when we are not entitled
to do so because of our unfair labor practices.
WE WILL NOT in any like or related manner interfere with, restrain or coerce you in the
exercise of the rights guaranteed you by Section 7 of the Act.
WE WILL offer employment to all the former Local 21-represented bargaining unit
employees of Sunstone Properties who were employed at the Holiday Inn Express as of
December 21, 2006, in their former positions, without prejudice to their seniority or other
rights and privileges previously enjoyed, discharging if necessary any employees hired
in their place. The former employees to whom we will offer employment are:
Asha Abdi Phyllis Johnson Syvella Richey
Basma B. Abdulamin Carissa P. Madden Lee O. Rinehart
Laura Burrichter Susan Messner Gerald Seitz
Janice Danielson David E. Miller Roxanne Swarthout
Dick Darst Alicejean Murphy Michael L. Weatherly
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Mary Ehlenfeldt Mako Hassan Osoble Dwight Wolfgram
Ashley Freeman
WE WILL make the above employees whole for any loss of earnings and other benefits
they may have suffered as a result of the unlawful discrimination against them.
WE WILL make whole all housekeepers, maintenance employees and
housemen/housewomen employed by CMPJ Enterprises, Inc. at the Holiday Inn
Express at any time on or after December 21, 2006.
WE WILL recognize and, on request, bargain collectively in good faith with Local 21 as
the exclusive representative of our employees in the above-described unit with respect
to wages, hours, and other terms and conditions of employment.
WE WILL, at the request of Local 21, rescind any changes from terms and conditions of
employment that existed prior to our commencing operations at the above location, and
implement the terms and conditions of employment in effect on December 21, 2006.
CMPJ ENTERPRISES d/b/a
HOLIDAY INN EXPRESS
(Employer)
Dated By
(Representative) (Title)
The National Labor Relations Board is an independent Federal agency created in 1935 to enforce the National Labor
Relations Act. It conducts secret-ballot elections to determine whether employees want union representation and it
investigates and remedies unfair labor practices by employers and unions. To find out more about your rights under
the Act and how to file a charge or election petition, you may speak confidentially to any agent with the Board’s
Regional Office set forth below. You may also obtain information from the Board’s website: www.nlrb.gov.
330 South Second Avenue, Towle Building, Suite 790
Minneapolis, Minnesota 55401-2221
Hours: 8 a.m. to 4:30 p.m.
612-348-1757.
THIS IS AN OFFICIAL NOTICE AND MUST NOT BE DEFACED BY ANYONE
THIS NOTICE MUST REMAIN POSTED FOR 60 CONSECUTIVE DAYS FROM THE DATE OF POSTING AND MUST
NOT BE ALTERED, DEFACED, OR COVERED BY ANY OTHER MATERIAL. ANY QUESTIONS CONCERNING THIS
NOTICE OR COMPLIANCE WITH ITS PROVISIONS MAY BE DIRECTED TO THE ABOVE REGIONAL OFFICE’S
COMPLIANCE OFFICER, 612-348-1770.