Hotel & Restaurant Employees Local 54 (Atlantis Casino)

National Labor Relations Board - Board Decisions

Nov 30, 1988

291 N.L.R.B. 989 (N.L.R.B. 1988)

HOTEL & RESTAURANT EMPLOYEES LOCAL 54 (ATLANTIS CASINO)
Local 54, Hotel Employees & Restaurant Employees
International Union , AFL-CIO (Atlantis Casino
Hotel) and Joseph Quaranta Case 4-CB-5551
November 30 1988
DECISION AND ORDER
BY CHAIRMAN STEPHENS AND MEMBERS
CRACRAFT AND HIGGINS
On August 8 1988 Administrative Law Judge
Joel A Harmatz issued the attached decision The
Respondent filed exceptions and a supporting
brief 1 the General Counsel filed cross exceptions
and a brief in support of the cross exceptions and
in answer to the Respondents exceptions 2 and the
Charging Party filed a brief in opposition to the
Respondent s exceptions
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 and
conclusions and to adopt the recommended Order
as modified
ORDER
The National Labor Relations Board adopts the
recommended Order of the administrative law
judge as modified below and orders that the Re
spondent Local 54 Hotel Employees and Restau
rant Employees International Union AFL-CIO
Atlantic City New Jersey its officers agents and
representatives shall take the action set forth in the
Order as modified
1 Insert the following as paragraph 2(b) and re
letter the subsequent paragraphs
(b) Notify in writing all employee members
who tendered resignations from full membership
that their resignations have been accepted as of the
date received
2 Substitute the following for new paragraph
2(c)
(c) Expunge from its records all references to
the aforedescribed charges and fines and notify all
' The Respondent also filed a motion for oral argument The motion is
denied as the record exceptions and briefs adequately present the issues
and the positions of the parties
2 The General Counsel has excepted only to the judge s failure to in
clude a provision in his recommended Order requiring the Respondent to
notify those employees who sought to resign from full membership in
writing that their resignations have been accepted We find merit in the
General Counsels exception and shall accordingly modify the judges
Order to include such remedial language Also the General Counsel cor
rectly asserts in the exceptions that par 2 (b) L 3 of the judge s recom
mended Order should read all employee members in the appropriate
collective bargaining unit the judge s recommended Order shall be cor
rected in this respect
989
employee members in the appropriate collective
bargaining unit that all fines have been rescinded
all records of charges expunged and that financial
core status henceforth shall be recognized as a per
missible form of union membership
3 Substitute the attached notice for that of the
administrative law judge
APPENDIX
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
Section 7 of the Act gives employees these
rights
To organize
To form join or assist any union
To bargain collectively through represents
tves 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 decline any request by an employ
ee that he or she wishes to resign from full union
membership and become financial core members
obligated only to tender periodic dues and uniform
ly applied fees
WE WILL NOT process internal union charges
against you or fine you for activities in which you
have engaged after becoming financial core mem
hers obligated only to tender periodic dues and uni
formly applied fees
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 rescind all charges and fines imposed
on employee members for conduct that occurred
after they became financial core members and WE
WILL refund any such fines that they have paid
plus interest
WE WILL remove all references to the unlawful
charges and fines from our records
WE WILL notify in writing those employees
who tendered their resignations from full member
ship that their resignations have been accepted as
of the date received
LOCAL 54 HOTEL EMPLOYEES &
RESTAURANT EMPLOYEES INTERNA
TIONAL UNION AFL-CIO
291 NLRB No 140
990 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
Dennis P Walsh Esq and Margaret McGovern Esq for
the General Counsel
Bernard N Katz Esq and Lynne P Fox Esq (Meranze &
Katz) of Philadelphia Pennsylvania for the Respond
ent
Howard R Flaxman Esq (Blank, Rome Comisky &
McCauley) of Philadelphia Pennsylvania for the
Charging Party
DECISION
STATEMENT OF THE CASE
JOEL A HARMATZ Administrative Law Judge This
proceeding was heard by me on May 24 1988 in Lin
wood New Jersey on an original unfair labor practice
charge filed on November 25 1987 and a consolidated
complaint issued on March 31 1988 1 The complaint al
leged that Respondent violated Section 8(b)(1)(A) of the
Act by refusing to accept membership resignations from
bargaining unit employees and by later invoking internal
disciplinary procedures against and fining certain of these
employees because they returned to work during a strike
In its duly filed answer the Respondent denied that any
unfair labor practices were committed Following close
of the hearing briefs were filed on behal4' of the General
Counsel the Charging Party and the Respondent
On the entire record in this proceeding including con
sideration of the posthearing briefs it is found as follows
I JURISDICTION
The Employer Elsinore Shore Associates t/a Atlantis
Casino Hotel is a New Jersey partnership engaged in the
operation of a hotel and casino in Atlantic City New
Jersey the sole facility involved in this proceeding In
the course of its operations the Employer during the cal
ennar year preceding issuance of the complaint a repre
sentative period derived gross revenues exceeding
$500 000 and purchased goods and materials valued in
excess of $50 000 directly from points outside the State
of New Jersey The complaint alleges the answer
admits and it is found that the Employer 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 THE LABOR ORGANIZATION INVOLVED
The complaint alleges the answer admits and it is
found that Local 54 Hotel Employees & Restaurant Em
ployees International Union AFL-CIO the Respondent
is now and has been at all times material a labor organs
zation within the meaning of Section 2(5) of the Act
III THE ALLEGED UNFAIR LABOR PRACTICES
This is another in a line of recent cases presenting the
issue of whether union members who wish to cross a
lawful picket line may do so without fear of union disci
1 The case number is amended to reflect that prior to the opening of
the hearing the Regional Director for Region 4 severed Case 4-CB-
5522 which had been consolidated with this case See G C Exh 1(p)
pline by themselves unlaterally changing their member
ship to financial core status
The facts are not in dispute The Respondent Union
admits that it rejected appeals by certain members for fi
nancial core status before they broke a strike and re
turned to work It is further conceded that internal disci
plinary charges were brought against many of these
members and many were fined for having crossed the
picket line The complaint challenges each of these ac
tions as violative of Section 8(b)(l)(A)
Specifically the Employer and the Union are parties
to a current collective bargaining agreement with a term
of September 15 1983 to September 15 1988 That
agreement included a wage reopener clause On Septem
ber 2 1987 a picket line was established to further the
Union s economic demands during the interim negotia
tions
The unexpired collective bargaining agreement re
mained in force throughout the strike According to the
complaint on various dates between September 29 1987
and February 1 1988 when the pickets were withdrawn
more than 100 bargaining unit employees dishonored the
picket line and returned to work Before doing so each
forwarded to the Union the following letter
I am an employee of Atlantis Casino Hotel in At
lantic City New Jersey This letter will serve as no
tification that I am changing my membership status
in Local 54 Hotel Employee and Restaurant Em
ployees (H E R E) International Union from that of
a full member to that of a financial core
member As a financial core member I will con
tinue to pay to the union all initiation fees and dues
uniformly required of all members of maintaining
membership I am not resigning from the union I
am only changing my membership status I will not
henceforth be subject to any obligations of mem
bership other than that of paying uniformly re
quired dues and initiation fees required of all Local
54 H E R E members
Before taking that step all were members of the Union
in good standing with no arrearages in their dues obliga
tion All were covered by the following union security
provision in the subsisting collective bargaining agree
ment
It shall be a condition of employment that all em
ployees covered by this agreement who are mem
bers in good standing in the Union on the effective
date of this Agreement shall remain members in
good standing and those who are not members on
the effective date of this Agreement become and
remain members in good standing in said Union In
the event that any employee fails to comply with
the requirements of this section the Employer shall
discharge said employee within seven (7) days of re
ceipt of written demand
After returning to work the strikebreakers continued to
satisfy their financial obligations to the Union
Neither the Union s constitution its bylaws nor the
collective bargaining agreement differentiates between
HOTEL & RESTAURANT EMPLOYEES LOCAL 54 (ATLANTIS CASINO) 991
the full membership and financial core membership
The documents neither mention nor authorize any limit
ed form of membership The timely payment of dues and
initiation fees constitutes the only condition for the privi
lege of full membership Consistently the Union re
sponded to most of those who sought financial core
status as follows
We have received your letter in which you
advise that you seek to alter your membership in
this Union to that of a financial core member
Under the constitution and By laws of this Union
there is no provision for financial core affiliation
The only level of affiliation which exists is that of a
full member based on the payment of required dues
and initiation fees In this regard you should note
that the question of whether the Constitution and
By laws of the Union should be altered or amended
to permit financial core membership has been con
sidered by the Executive Board and General Mem
bership and rejected
Accordingly please be advised that your request
for financial core status must be denied You are at
this juncture still deemed to be a full member of this
Union and accordingly bound by the terms and
conditions of its By laws and all obligations arising
thereunder If you have any questions concerning
this matter please do not hesitate to contact this
office
Thereafter most of the nonstrikers received notifica
tion that intraunion charges were being brought against
them because they crossed the picket line Additionally
after notice and hearing almost half were notified by the
Union that they had been guilty of the charges and fined
in amounts ranging from $50 to $1500 To date no fines
have been paid and the Respondent has not taken of
firmative steps to secure their collection 2
The proponents of the complaint argue that the Union
violated Section 8(b)(1)(A) of the Act by denying em
ployees the right to change their membership status and
by threatening to discipline and disciplining these em
ployees because they crossed the picket line and returned
to work Both the Charging Party and the General
Counsel insist that this result is dictated by settled Board
authority The Union would distinguish its precedent
and argues that the complaints underlying theory in
trudes on purely internal union matters and denies it the
fruits of collective bargaining by failing to observe differ
ences between union security and agency shop arrange
ments
As a general rule employees under the aegis of Sec
tion 7 of the Act are free to decide for themselves
whether they wish to support a strike or cross a picket
line and report to work The Act insulates them from in
timidation in making that determination At the same
time employees who elect to break a strike while retain
2 The complaint identifies by name numerous employees affected in
this regard Because others might have been involved the parties stipulat
ed that any remedy be extended to include all similarly situated employ
ees not identified by the pleadings It was agreed that this would be ac
complished through the compliance process
ing full union membership are within a narrow exception
to that guarantee Thus in NLRB v Allis Chalmers Mfg
Co 388 US 175 (1967) the Supreme Court held that
unions may legitimately enforce strike solidarity by fines
and explusion against members who dishonor a lawful
strike and return to work Discipline in those circum
stances was consistent with the 8(b)(1)(A) proviso that
exempts from regulation the right of a labor organization
to prescribe its own rules with respect to the acquisition
or retention of membership therein
Five years after its decision in Allis Chalmers the Su
preme Court clarified that a labor organizations preroga
tives in this respect are limited strictly to union members
Thus in NLRB v Textile Workers Local 1029 Granite
State Joint Board 409 U S 213 (1972) the Court held
that a labor organization could not lawfully discipline a
member who resigned prior to his crossing a picket line
Later the permissible reach of internal discipline was
narrowed further in Machinists Local 1414 (Neufeld
Porsche Audi) 270 NLRB 1330 (1984) in which the
Board held that union members have the unfettered right
to resign and that union restrictions on that process are a
nullity In 1985 this view was affirmed by the Supreme
Court in Pattern Makers League v NLRB 473 U S 95
(1985) In doing so the Court agreed that such restric
tions are invalid and do not justify imposing sanctions
on employees who have attempted to resign from the
Union Accordingly the Court concluded that Section
8(b)(1)(A) reasonably may be construed as prohibit
ing a union from fining members who have tendered res
ignations [even if] invalid under the union constitution
The Respondent argues that it acted within lawful pa
rameters and did nothing more than what Allis Chalmers
permits There can be no quarrel that under settled au
thority a labor organization may lawfully invoke inter
nal disciplinary machinery against full members who
remain in that capacity while violating internal rules
against strikebreaking The Respondent argues that no
more has occurred here because the employees involved
at no time resigned from union membership More
over the Respondent also observes that there is no evi
dence that there resignations were restricted by internal
rules nor does it appear that the Union would have re
jested these resignations if duly tendered In essence Re
spondent claims that its sole vice was the refusal to rec
ognize financial core membership and hence its action
against those who sought to return to work under this
umbrella was inoffensive to the Court s ruling in Pattern
Makers supra
The holding in Allis Chalmers supra did not address
this question There the members involved made no at
tempt to alter their association with the Union before re
turning to their strike bound jobs The Court in that case
did reconcile the conflict between the Section 7 right to
refrain from strike action on the one hand and the fact
that the sponsor of Section 8(b)(1)(A) never intended
for that provision to interfere with the internal affairs
of unions 388 US at 187 However as the Su
preme Court would later recognize the crux of [that]
holding was the distinction between internal and exter
nal enforcement of union rules See Pattern Makers
992 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
League supra In Scofield v NLRB 394 U S 423 (1969)
the Supreme Court again held that those who remained
members while violating union regulations are vulnerable
to legitimate discipline However that decision would
later prove to be the touchstone for a judicially ap
proved concept of voluntansm whereby employees
are given broad personal discretion to alter their mem
bership and neutralize internal union restrictions Thus
the Court at 394 U S 430 adopted three conditions for
lawful enforcement of an internal union regulation stat
ing Section 8(b)(1) leaves a union free to enforce a
properly adopted rule which reflects a legitimate union
interest impairs no policy Congress has embedded in the
labor laws and is reasonably enforced against union
members who are free to leave the union and escape the
rule (emphasis supplied) Consistent with this escape re
quirement the Court in NLRB v Textile Workers supra
commented that the vitality of Section 7 requires that a
member be free in November from the action endorsed
in May 409 U S at 217-218 Again 13 years later in
Pattern Makers supra the Court condemned union re
strictions on the right to resign [as] inconsistent with the
policy of voluntary unionism
The General Counsel and Charging Party carry volun
tansm one step further They point to precedent that em
ployees who remain members but declare financial core
status thereafter also are exempt from union prohibi
tions The Board declared that to be the case in Carpen
ters Local 470 (Tacoma Boatbuilding) 277 NLRB 513
(1985) and Carpenters Local 470 (Gordon Construction)
277 NLRB 530 (1985) In each 8(b)(1)(A) violations
were predicated on enforcement of strike solidarity rules
against union members who before crossing the picket
line clearly communicated their intent to become finan
cial core members As here at least in Tacoma Boatbuild
ing the employees notified the Union that they were not
resigning from membership but as a financial core
member they would not henceforth be subject to any
obligations of membership other than that of paying uni
formly required dues and initiation fees because
the Board held that such a letter was sufficient to estab
lish financial core status and further that these members
could not lawfully be subjected to union discipline these
decisions at least facially appear to be dispositive
Nonetheless the Respondent would distinguish them
because they involve situations where there was no col
lective bargaining agreement in effect This argument is
offered without articulation of just how this should alter
the result On the contrary if financial core members are
immune from discipline when their offensive conduct re
lates to renegotiation of an expired contract surely that
protection is not lost when the strike is pursuant to a
midterm reopener The coercive impact of union disci
pline on Section 7 rights is the same in either case 3
3 In its postheanng brief the Respondent asserts that the union in
Tacoma supra contended that the strike breaking employees were
not union members While it is inconceivable that the union would have
advanced that view from my reading of Tacoma I am convinced that
the union argued there as here that the financial core letters were inef
fective to support resignation and hence those who crossed the picket
line remained members subject to lawful application of internal union
rules 277 NLRB at 527-528
Along this same line the Respondent argues that the
existence of a viable presently enforceable union shop
agreement tips the scales in its favor It would seem
however that such an agreement heightens the case for
financial core immunity The problem was addressed in
Tacoma supra as follows
[w]hen there is a union security clause in effect
an employee must retain financial core status as a
conditon for employment To then say however
that a financial core member is subject to the same
discipline as a full member is to render meaningless
the third part of the Scofield test namely that a
member is free to leave the union and escape the
rule [277 NLRB at 514 ]
In Gordon Construction 277 NLRB at 531 the Board
added
[F]inancial core membership permits an employee
to maintain a dues paying association with the union
that will protect him against the threat of discharge
under Section 8(a)(3) of the Act when the collec
tive bargaining agreement contains a union security
provision If the designation of financial core
or dues paying only membership is to impart any
significance then it must be recognized that it does
not rise to the level of full membership for all pur
poses but rather is a limited affiliation which ex
cludes the employee from certain rights accorded to
full members and also removes him from the reach
of the union fines
More specifically the union security argument is also
rejected because irreconcilable with other well settled
statutory considerations If sustained Respondents view
in this regard would broaden the enforceable scope of
the union shop clause by approving it as an instrumen
tality for the indirect enforcement of nonfinancial union
regulations Thus under the Respondents contention
the union shop arrangement would limit the unwitting
member to two choices i e support the strike or resign
from full membership and risk discharge Obviously the
spectre of job loss inherent under the union shop ar
rangement would offer a forceful medium or compelling
obedience See e g NLRB v Plumbers Local 120 719
F 2d 178 (6th Cir 1983) If striking members enjoy a
statutorily protected right to change their minds and
return to work after communicating their resignations
that choice should be exercisable free of constraints
Indeed the Act specifies that legitimate enforceability of
union security agreements is confined to the failure of
the employee to tender the periodic dues and the initi
ation fees uniformly required as a condition of acquiring
or retaining membership The financial core alternative
adopted by the Board in Tacoma and Gordon supra has
the salutary effect of both preserving the Section 7 rights
of union members and precluding utilization of the union
HOTEL & RESTAURANT EMPLOYEES LOCAL 54 (ATLANTIS CASINO) 993
shop as a standing mechanism for assuring obedience to
internal union rules4
The Respondent further argues that the theory of the
instant complaint inteferes with the process of collective
bargaining In this respect the Union contends that
Tacoma Boatbuildmg obliterates the distinction between
union shop and agency shop agreements thus diminish
ing the choices available in collective bargaining while
rendering meaningless the Union s successful negotiation
of a union shop clause a mandatory bargaining subject 5
This contention overlooks the fact that in this context
the distinction between agency and union shop is more
technical than real Neither sanctions the legitimate en
forcement of nonfinancial union regulations At the same
time the concept of financial core status does not preju
dice the union shop s utility as a means of exacting finan
cial obligations of all members in the covered collective
bargaining unit The Respondent may not expect more
Thus as stated by the Supreme Court in Pattern Makers
supra at fn 16
Under § 8(a)(3) the only aspect of union mem
bership that can be required pursuant to a union
shop agreement is the payment of dues (union
security agreements cannot be used for any pur
pose other than to compel payment of union dues
and fees Membership as a condition of em
ployment is whittled down to its financial
core (under the Railway Labor Act employ
ees in a union shop cannot be compelled to pay
dues to support certain union activities) Therefore
an employee required by a union security agree
ment to assume financial membership is not sub
ject to union discipline Such an employee is a
member of the union only in the most limited
sense
In sum the Union has offered no material basis for
concluding on this record that internal union interests
should take precedence over the Section 7 right of em
ployees to refrain from strike action Accordingly on au
thonty of Tacoma Boatbutlding supra and Gordon Con
struction supra it is concluded that Respondent violated
Section 8(b)(1)(A) of the Act by rejecting resignations
from full membership 6 by processing charges against
those who previously had declared unequivocally their
intention to become financial core members and by
fining employees for conduct occurring after they had
4 The Respondent observes that financial core status rests on a theory
where individuals may readily reap all of the benefits of Union member
ship and collective bargaining and at the same time avoid all the respon
sibihties This observation though valid offers no basis for distinguish
ing Tacoma The administrative law judge dismissed that case describing
the authors of the financial core letters as effectively seeking both
to have their cake and eat it too 277 NLRB at 527 Thus the Board in
reversing the judge was fully aware of this consequence
5 NLRB v General Motors Corp 373 U S 734 (1963)
6 Dick s Restaurant 287 NLRB 1180 (1988) Tacoma and Gordon
supra in effect hold that the exercise of the employee s right to become a
financial core member does not turn on authorization or recognition of
that status in a labor organizations constitution or bylaws As in the case
of full resignation the option is reposed in the member and the union
may not limit that election by silence any more than it could forbid such
a change in status by adoption of a formal rule
declared their intention to become financial core mem
bers
CONCLUSIONS OF LAW
1 Elsinore Shore Associates t/a Atlantis Casino Hotel
is an employer engaged in commerce within the meaning
of Section 2(2) (6) and (7) of the Act
2 The Respondent Union is a labor organization
within the meaning of Section 2 (5) of the Act
3 By refusing to accept employee declarations that
they intend to become financial core members by proc
essing internal union charges against employees for con
duct after these declarations and by fining the financial
core members for subsequently crossing its picket line
and returning to work the Respondent Union violated
Section 8(b)(1)(A) of the Act
4 The unfair labor practices are unfair labor practices
having an effect on commerce within the meaning of
Section 2(6) and (7) of the Act
THE REMEDY
Having found that the Respondent Union has engaged
in and is engaging in certain unfair labor practices
within the meaning of Section 8(b)(1)(A) of the Act it
shall be recommended that it be ordered to cease and
desist and to take certain affirmative action necessary to
effectuate the policies of the Act
It shall be recommeded further that the Respondent
Union be ordered to notify all employees in the collec
tive bargaining unit in writing that it recognizes finan
cial core membership and that the internal disciplinary
charges filed and the fines imposed against those who
had declared such status have been rescinded It shall be
recommended further that any fines subsequently paid
shall be refunded with interset as computed in New Ho
rizons 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 recommend
ed7
ORDER
The Respondent Local 54 Hotel Employees & Res
taurant Employees International Union AFL-CIO At
lantic City New Jersey its officers agents and repre
sentatives shall
1 Cease and desist from
(a) Rejecting requests by members that they be placed
on financial core status
(b) Processing internal disciplinary charges against
members for activities in which they engaged after their
request for financial core membership
(c) Imposing fines against members for activities in
which they engaged as financial core members
7 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 pur
poses
994 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
(d) In any like or related manner restraining or coerc
ing employees in the exercise of the rights guaranteed
them by Section 7 of the Act
2 Take the following affirmative action necessary to
effectuate the policies of the Act
(a) Rescind all charges and fines imposed on employ
ees for activities in which they engaged after their re
quest for financial core membership and refund to them
any sums they might have paid in consequence of Re
spondent s imposition of these fines as set forth in the
remedy section of this decision
(b) Remove from its records all references to the
charges and fines and notify all employee members in the
appropriate collective bargaining agreement that all fines
have been rescinded all records of charges expunged
and that financial core status shall be recognized as a
permissable form of union membership
(c) Post at its business and meeting halls copies of the
attached notice marked Appendix 7 Copies of the
7 If no exceptions are filed as provided by Sec 102 46 of the Board s
Rules and Regulations the findings conclusions and recommended
notice on forms provided by the Regional Director for
Region 4 after being signed by the Respondents author
ized representative shall be posted by the Respondent
immediately upon receipt and maintained for 60 consecu
tive days in conspicuous places including all places
where notices to members are customarily posted Rea
sonable steps shall be taken by the Respondent to ensure
that the notices are not altered defaced or covered by
any other material
(d) Sign and return to the Regional Director sufficient
copies of the notices for posting by Elsinore Shore Asso
ciates t/a Atlantis Casino Hotel if willing at places
where employee notices are customarily posted
(e) Notify the Regional Director in writing within 20
days from the date of this Order what steps the Re
spondent has taken to comply
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 pur
poses