Local 274 Hotel Workers

National Labor Relations Board - Board Decisions

Sep 21, 1998

326 N.L.R.B. 1058 (N.L.R.B. 1998)

DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1058
Hotel Employees and Restaurant Employees Interna-
tional Union, Local 274, AFL–CIO and CHC
Hotel & Resorts, Inc. d/b/a Sheraton University
City Hotel. Case 4–CE–106
September 21, 1998
DECISION AND ORDER
BY MEMBERS FOX, LIEBMAN, AND HURTGEN
On September 17, 1996, Administrative Law Judge
James L. Rose issued the attached decision. The Re-
spondent filed exceptions and a supporting brief. The
General Counsel filed an answering brief. The Employer
filed an answering brief that adopted and incorporated
the General Counsel’s answering brief.
The National Labor Relations Board has delegated 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 conclusions1 and
to adopt the recommended Order.
ORDER
The National Labor Relations Board adopts the rec-
ommended Order of the administrative law judge and
orders that the Respondent, Hotel Employees and Res-
taurant Employees International Union Local 274, AFL–
CIO, its officers, agents, and representatives, shall take
the action set forth in the Order.

William E. Slack Jr., Esq., for the General Counsel.
Deborah A. Krull, Esq., of Philadelphia, Pennsylvania, for the
Respondent.
Robert A. Indeglia Jr., Esq., of Providence, Rhode Island, for
the Charging Party.
DECISION
STATEMENT OF THE CASE
JAMES ROSE, Administrative Law Judge. This matter was
tried before me at Philadelphia, Pennsylvania, on July 23, 1996,
upon the General Counsel’s complaint which alleged that the
Respondent entered into and maintained an agreement which
violated Section 8(e) of the National Labor Relations Act.
The Respondent generally denied that it committed any vio-
lations of the Act and affirmatively contends that the contract
article in question was a lawful attempt to preserve bargaining
unit work.
On the record as a whole, including my observation of the
witnesses, briefs and arguments of counsel, I hereby make the
following findings of fact, conclusions of law and recom-
mended Order.
I. JURISDICTION
The Charging Party, CHC Hotel & Resorts, Inc., d/b/a Shera-
ton University City Hotel, (the Hotel) is a Pennsylvania corpo-
ration engaged in the operation of a hotel and restaurant in
Philadelphia, Pennsylvania. In the conduct of this business, the
Hotel annually has gross revenues in excess of $500,000 and
annually purchases and receives goods directly from outside the
Commonwealth of Pennsylvania valued in excess of $50,000.
It is admitted, and I find, that the Hotel is an employer engaged
in interstate commerce within the meaning of Section 2(2), (6),
and (7) of the Act.

1 In adopting the judge's finding of a violation, Member Hurtgen
notes that the issue of whether the sale or transfer of a business consti-
tutes “doing business” within the meaning of Sec. 8(e) is not presented
in this case.
II. THE LABOR ORGANIZATION INVOLVED
Hotel Employees and Restaurant Employees International
Union, Local 274, AFL–CIO (the Union) is admitted to be, and
I find is, a labor organization within the meaning of Section
2(5) of the Act.
III. THE ALLEGED UNFAIR LABOR PRACTICES
A. The Facts
For many years the Union has represented a unit of the Ho-
tel’s employees and has entered into successive collective-
bargaining agreements with the Hotel. The agreement effective
from August 1, 1991, to September 30, 1995, contained the
following clause:

ARTICLE III. SUCCESSORS
This Agreement’s terms and provisions shall be applicable to
and binding upon any successor, assignee, lessee or conces-
sionaire of Employer, provided that the sale, transfer or lease
of premises is to one who operates the same business as did
the Employer and shall include the leasing of part of the pres-
ently operating establishment.

During negotiations for the successor agreement, counsel for
the Hotel offered the opinion that this clause violates Section
8(e) and should therefore not be included in the new contract.
The Union disagreed and ultimately prevailed. The new
agreement, effective October 1, 1995, through September 30,
1998, contains article III without change.
B. Analysis and Concluding Findings
Section 8(e) proscribes agreements between employers and
unions whereby the employer agrees to cease doing business
with any other person. Early on, however, the Supreme Court
held that Section 8(e) would not prohibit agreements whose
primary objective was the preservation of bargaining unit work,
as distinct from a secondary objective of advancing the union’s
interests elsewhere. National Woodwork Mfrs. Assn. v. NLRB,
386 U.S. 612 (1967). Further, “doing business” within the
meaning of Section 8(e) does not include the sale or transfer of
an entire business. E.g., Mine Workers of America (Lone Star
Steel Co.), 231 NLRB 573 (1977).
The General Counsel argues that article III requires any les-
see or concessionaire of the Hotel to be bound by the terms of
the agreement. Such therefore amounts to a union-signatory
clause and is unlawful, citing inter alia, Chicago Dining Room
Employees Local 42, 248 NLRB 604 (1980) and Hotel & Res-
taurant Employees Local 531 (Verdugo Hills Bowl), 237 NLRB
1204 (1978), enfd. 623 F.2d 61 (9th Cir. 1980).
The Respondent maintains that the clause does not require a
lessee or concessionaire to become a party to the contract, that
nothing in the clause would permit the Union to force the Hotel
to put pressure on a lessee or concessionaire, and finally, repre-
sentatives of the Union testified that they did not intend to en-
326 NLRB No. 95
HOTEL & RESTAURANT EMPLOYEES LOCAL 274 (SHERATON UNIVERSITY HOTEL) 1059
force the clause unlawfully. I disagree and conclude that article
III is unlawful on its face as to lessees and concessionaires.
In these types of cases, the Board has distinguished be-
tween the sale or transfer of an enterprise, which is generally
considered not an 8(e) business transaction, e.g. Machinists
District 71 (Harris Truck & Trailer ), 224 NLRB 100 (1976),
and a lease, which is a form of “doing business” within the
meaning of Section 8(e), e.g., Vedurgo Hills Bowl, supra.
Since the terms of the agreement would be binding on any
lessee or concessionaire, in effect the Hotel would be prohib-
ited from doing business with such potential lessee or conces-
sionaire who refused to be bound by that agreement. There-
fore, as the Board found, in considering a similar clause in Chi-
cago Dinning Room Employees, supra., such was a typical “un-
ion signatory clause,” not limited in its effect simply to preserv-
ing bargaining unit jobs.
Counsel for the Respondent agrees that a clause requiring a
future lessee to sign a contract is violative of Section 8(e), but
argues that here article III merely requires a future lessee or
concessionaire comply with its terms. I reject the argument that
such a distinction makes a substantive difference. I simarily
reject the argument that counsel for the Respondent stated in
negotiations that they would not attempt to enforce the clause
to achieve an unlawful result. Since I find article III unambi-
guous, such evidence of intent is not controlling. I conclude
that on its face article III is violative of Section 8(e) as to les-
sees and concessionaires, notwithstanding that in part it tends to
protect bargaining unit work.
IV. REMEDY
The General Counsel argues that the appropriate remedy
here should not require voiding of article III in its entirety, but
rather that the Union should be ordered to cease from entering
into or enforcing only those portions of article III which require
a lessee or concessionaire to be bound by the agreement. I
conclude that such would be the appropriate remedy here.
Teamsters Local 291 (Lone Star Industries), 291 NLRB 581
(1988).
On these findings of fact and conclusions of law and on the
entire record, I issue the following recommended2
ORDER
The Respondent, Hotel Employees and Restaurant Employ-
ees International Union Local 274, AFL–CIO, its officers,
agents, and representatives, shall
1. Cease and desist from
(a) Entering into, maintaining, enforcing, or giving effect to
those portions of article III of its collective-bargaining agree-
ment with CHC Hotel and Resorts, Inc., d/b/a Sheraton Univer-

2 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.
sity City Hotel which provide that the agreement shall be appli-
cable to and binding on any lessee or concessionaire.
(b) In any like or related manner restraining or coercing em-
ployees in the exercise of the rights guaranteed them by Section
7 of the Act.
2. Take the following affirmative action necessary to effec-
tuate the policies of the Act.
(a) Within 14 days after service by the Region, post at its
union office copies of the attached notice marked “Appendix.”3
Copies of the notice, on forms provided by the Regional Direc-
tor for Region 4, after being signed by the Respondent's author-
ized representative, shall be posted by the Respondent and
maintained for 60 consecutive days in conspicuous places in-
cluding all places where notices to members, 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.
(b) Sign and return to the Regional Director sufficient cop-
ies of the notice for posting by CHC Hotel and Resorts, Inc.
d/b/a Sheraton University City Hotel, if willing, at all places
where notices to employees are customarily posted.
(c) 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.
APPENDIX
NOTICE TO EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government

The National Labor Relations Board has found that we violated
the National Labor Relations Act and has ordered us to post and
abide by this notice.

WE WILL NOT enter into, maintain, enforce, or give effect to
those portions of article III of our collective-bargaining agree-
ment with CHC Hotel and Resorts, Inc., d/b/a Sheraton Univer-
sity City Hotel, which require any lessee or concessionaire to
be bound by that agreement.
WE WILL NOT in any like or related manner restrain or coerce
you in the exercise of the rights guaranteed you by Section 7 of
the Act.
HOTEL EMPLOYEES AND RESTAURANT EMPLOYEES
INTERNATIONAL UNION, LOCAL 274, AFL–CIO
3 If this Order is enforced by a Judgment of the United States Court
of Appeals, the words in the notice reading “Posted by Order of the
National Labor Relations Board” shall read “Pursuant To A Judgment
Of The United States Court Of Appeals Enforcing An Order Of The
National Labor Relations Board.”