Ohio Inns, Inc.

National Labor Relations Board - Board Decisions

Aug 13, 1973

205 N.L.R.B. 528 (N.L.R.B. 1973)

528 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Ohio Inns, Inc. and Hotel, Motel, Restaurant Employ-
ees & Bartenders Local 505, AFL-CIO, Petitioner.
Case 9-RC-10035
August 13, 1973
DECISION AND ORDER
Upon a petition t duly filed under Section 9(c) of
the National Labor Relations Act, as amended, a
hearing was held before Hearing Officer James P.
Murphy. Following the hearing , and pursuant to Sec-
tion 102.67 of the National Labor Relations Board
Rules and Regulations and Statement of Procedures,
Series 8, as amended , the case was transferred to the
Board for decision . Briefs were filed by Ohio Inns,
Inc., and Hotel , Motel, Restaurant Employees & Bar-
tenders Local 505, AFL-CIO.
The Board has reviewed the Hearing Officer's rul-
ings made at the hearing and finds that they are free
from prejudicial error . They are hereby affirmed.
Upon the entire record in this case the Board makes
the following findings:
The Petitioner seeks to represent certain employees
of Ohio Inns, Inc., employed at Burr Oak Lodge
(herein called the Lodge ) in Glouster , Ohio. Ohio
Inns, Inc., herein referred to as the Employer, urged
the Board to dismiss the petition on jurisdictional
grounds.2
Burr Oak State Park consists of approximately
5,000 acres of land owned by the State of Ohio. The
Lodge which opened in April 1967 is located in the
park , consists of a 60 -room vacation lodge, 30 two-
bedroom cabins , a dining room , a coffee shop, a gift
shop , meeting rooms, an indoor -outdoor pool, a pub-
lic beach , and numerous recreational facilities. The
Lodge , as well as all buildings , equipment , and fur-
nishings , is owned by the State.
The Employer operates the Lodge under a conces-
sion contract with the Department of Natural Re-
sources of the State of Ohio. The Lodge's purpose as
set by the Ohio Revised Code is to furnish recreation-
al opportunities to the public of the highest quality
obtainable and at the least cost.
The State of Ohio through its contract with the
Employer has ultimate control over the operation of
the Lodge . The State must approve the amounts to be
charged for and the terms of admittance to the cabins
and guestrooms and the prices for food , beverages,
entertainment , and amusement . It must approve the
1 A second petition relating to this unit is now pending in the Regional
Office (Case 9-RM-696)
2 The Employer has by telegram dated July 16, 1973, withdrawn from its
position of opposing the petition on jurisdictional grounds and now requests
that the Board assert jurisdiction and direct an election in the case at issue
Employer's hours of operation and all phases of pro-
motion and publicity, as well as the customary use of
all equipment at the Lodge. The manner and form of
records and accounting used by the Employer are
those directed or approved by the State. The Compa-
ny is required to furnish daily, monthly, and annual
reports on profits, losses, and occupancy. Pursuant to
the contract, the State has the right to enter on the
preinises, which it does with frequency, to determine
if the Company is operating the property in compli-
ance with the terms of the concession agreement. If
the Employer does not follow the State's directives to
correct deficiencies, or if the Employer fails to meet
its obligation under the contract, the State may con-
sider the Employer in default and the contract as
terminated.
State control over labor relations is extensive. The
contract gives the State of Ohio the authority to ap-
prove or disapprove labor policies (including wage
rates). The State has in the contract retained the pow-
er to force the discharge of any employee that it deems
to be incompetent, disorderly, or unsatisfactory. In
similar lodges operated by the Employer, training
programs were designed and staffed by state person-
nel to instruct lodge employees on how to efficiently
serve customers in the dining room. It was during one
of these programs that a state official forced the dis-
charge of a hostess who in his estimate did not ade-
quately respond to directions given. This same state
employee on one occasion called a meeting of the
employees for the purpose of discussing employee
grievances. At the beginning of the 1972 season the
State, concerned about lodge operations, threatened
using its power to terminate its contract with the Em-
ployer covering Salt Fork Lodge, with the result that
certain operational deficiencies were corrected at that
time. The State's control was also evident when the
State requested the reinstatement of two employees
the Employer had discharged as undependable and
the Employer complied.
On occasion the state park manager has given the
Employer specific directions on how to instruct em-
ployees in their job performance in the areas of out-
side maintenance of building and grounds, policing of
grounds, operation of the swimming pool, and proper
food service.
Finally, the broad powers retained in the contract
by the State and the supporting evidence at the hear-
ing indicate that any collective-bargaining agreement
would have to be approved by the State before it
could be effective.
This degree of control by the State of Ohio over the
operations and labor relations of the Employer dem-
onstrates that the State is at least a joint employer
here. Since the State is exempt from the Board's juris-
205 NLRB No. 102
OHIO INNS, INC. 529
diction under Section 2 (2) of the Act, we find that it
would not effectuate the policies of the Act to assert
jurisdiction herein .' Accordingly, we shall dismiss the
petition.
ORDER
It is hereby ordered that the petition be, and it
hereby is, dismissed.
3 Servomation Mathias Pa, Inc, 200 NLRB No 136, Slater Corporation,
197 NLRB 1282
In arguing that we should assert jurisdiction over the Employer, our dis-
senting colleagues conclude that by the terms of the concession agreement
the State and the Employer intended the status of the latter to be that of a
concessionaire rather than an agent, co -partner , or joint venturer Whatever
the parties intended respecting limiting the State 's potential liabilities under
partnership, agency, or joint venture statutes or precedents , the evidence
shows that the State retains substantial control over the operations and labor
relations of the facility involved, and is therefore clearly a joint employer of
the employees of the Employer, thus warranting denial of jurisdiction
The dissent also seems to attach some significance to the fact that both
parties, and also the State of Ohio, now are willing and anxious to have us
take jurisdiction It is, of course, axioma tic that the parties cannot effectively
stipulate jurisdiction No matter what the parties' desires may be, it is our
duty to examine the underlying facts in order to determine whether or not
jursidiction lies, and whether it would effectuate the policies of the Act to
assert jurisdiction
Nor can we be bound by the ruling of the Attorney General of the State
of Ohio that for certain purposes of Ohio law the lodge employees are not
"public employees " Our inquiry must be as to whether the State by its
agreement has retained substantial effective control over labor relations poli-
cy affecting the concessionaire and its employees
The reason for this inquiry has practical, as well as legal, roots. When
parties are subject to our jurisdiction, certain rights and obligations attach,
and we must have the authority to enforce those rights and obligations For
example, when parties negotiate to the point of agreement , we have the
authority to require that they reduce their agreement to writing , execute it,
and thenceforward implement it But when , as here , the State of Ohio has
the power to disapprove of any collective agreement , any attempt on our part
to enforce our law , in the event of such a disapproval, would create an
irresolvable confrontation between Federal and state authority The same
kind of confrontation could arise if we were to require the reinstatement of
any employee in an 8 (a)(I) or 8 (a)(3) proceeding, only to find that the State
of Ohio could frustrate such an order if it were to declare such an employee
"unsatisfactory "
Nor is this problem solved by the provision of the contract relied upon by
our dissenting colleagues Section 25-a general admonition to the Ohio Inns
to comply with laws, regulations , and decrees- is of little assistance in de-
termining who has control over labor relations policies. Whether Section 25
was in the agreement or not, we assume Ohio Inns would wish to be law
abiding But what we do not wish to do is to create a dilemma wherein an
attempt by Ohio Inns to obey the law-including one of our orders-can be
frustrated by the State's exercise of its contractual right to control labor
relations No provision of the agreement or of our law or of Ohio law requires
the State to accede to regulation by this Agency, and therein lies the hard
problem to which we have addressed ourselves and which our dissenting
colleagues seem not fully to appreciate
If the State and the parties are, as the dissent urges , eager to have us resolve
the representation issue , they must recognize that we can do so only if we
are in a position effectively to require full compliance , now and in the future,
with all requirements of our statute There is more to that than our merely
being empowered by consent to act as a convenient election-conducting
service for the parties The State can , if it wishes, eliminate from its agree-
ments with concessionaires , its powers of effective control over labor rela-
tions matters , and thus remove the legal and practical obstacles to our
asserting jurisdiction But it cannot, by a mere declaration that it does not
regard the concessionaire's work force as "public employees," vest jurisdic-
tion in us which could later be frustrated by a subsequent exercise of its
carefully reserved labor relations control
MEMBERS FANNING AND PENELLO, dissenting:
We do not agree that the Board should refrain from
exercising jurisdiction in this case. The impact and the
implications of the majority decision here go far be-
yond the facts and issues involved in this particular
proceeding.
The operation of hotel and restaurant facilities in
government-owned parks and recreation areas under
concession agreements is a widespread and growing
business. The State of Ohio, itself, as shown by this
record, maintains approximately 59 parks in the State,
and the Employer involved in this petition for repre-
sentation operates lodges and food facilities in 4 of
these parks. At the location herein, the Employer em-
ploys approximately 100 persons at the peak season.
We are very reluctant, indeed, to withhold the rights
guaranteed by the Act and to disenfranchise these
employees and thousands of others in this State and
throughout the Country on the record of this proceed-
ing.
In our opinion the parties, i.e., the State of Ohio
Department of Natural Resources and the Employer,
intended the status of the Employer to be that of a
lessee , a concessionaire operating under the conces-
sion agreement, and not an agent, copartner, or joint
venturer. In fact, the last paragraph of section 14 of
the concession agreement provides that:
It is further understood and agreed by and be-
tween the parties that nothing herein contained
shall constitute or be construed to be a co-part-
nership or joint venture between the Department,
its successors or assigns, on the one part, and the
Concessionaire, its successors or assigns, on the
other part.
A more direct and forceful statement of an intention
to separate the State's overall responsibility for the
parks from the actual operation of the facilities in-
volved in this proceeding would be exceedingly diffi-
cult to draft.
With respect to the Employer's authority and res-
ponsibility to operate the facility and employ and
direct the workers, the concession agreement has spe-
cific provisions:
(14) CONCESSIONAIRE'S AUTHORITY:
The Concessionaire shall, subject to the approval
of the Director and all of the terms and provi-
sions hereof , and except as herein otherwise pro-
vided , have control and discretion in the
operation of the properties, including use of the
premises for all customary purposes , the charges
to be made for and the terms of admittance to the
cabins and guest rooms, for commercial space,
530 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
for privileges of entertainment and amusement,
for food and beverages, except as herein other-
wise limited, and the labor policies (including
wage rates) and the hiring and discharge of em-
ployees and all phases of promotion and publici-
ty, all except as otherwise herein expressly
limited or provided.
(16) CONCESSIONAIRE'S EMPLOYEES:
Concessionaire will employ only competent and
orderly employees who will keep themselves neat
and clean and accord courteous and competent
treatment and service to all guests and patrons.
Whenever the Department notifies Concessio-
naire or its manager of the properties that any
employee is deemed by it to be incompetent, dis-
orderly, or unsatisfactory, Concessionaire will
discharge such person within twenty-four hours
unless such person be in a managerial or supervi-
sory position and provided, however, that such
discharge is not in violation with any outstanding
union contracts or other Ohio or Federal em-
ployment regulations, in which event such dis-
charge shall take place and be effective within
one week of the date of such notification. In the
case of employment of supervisory personnel or
manager , both will be subject to approval by the
Director; however, Concessionaire will have thir-
ty (30) days to replace supervisory personnel and
sixty (60) days to replace the manager. Any per-
son so discharged will not be reemployed except
with the written consent of the Director.
These provisions not only anticipate the possible
existence of a collective-bargaining contract but they
also persuade us that the parties to this agreement
intended that the Employer in fact operate the Lodge
and control the activities related and necessary to
such operation. By making such activities subject to
its approval, the State merely retained the right to
assure that the Employer would live up to its obliga-
tions and responsibilities under the agreement. It
would seem obligatory upon the State to provide for
some regulatory control over its concessionaires. Such
right of review, however, does not relieve the Employ-
er of its obligations for the efficient operations of the
concession; it does not convert the Employer into the
State's agent or the Employer's employees into em-
ployees of the State; nor does it act to divest the
Employer of broad control over the labor policies and
working conditions.
The majority opinion sets forth certain actions of
the State upon the basis of which it declines to exer-
cise jurisdiction. We are not convinced that this re-
cord shows a purpose by the parties to the concession
agreement to set aside the responsibility of the Em-
ployer to function as a private entrepreneur in the
day-to-day operation of the facilities in this park and
to accept state control as a necessary requirement for
it to be an efficient operator. We do not believe that
such direction by the State as is evidenced by the
record with respect to Salt Fork Lodge was contemp-
lated by the agreement or was intended to be more
than a temporary relationship between the State and
the Employer.
Specific evidence of the State's interference with
the Employer's labor policies concerned the opening
of Salt Fork Lodge in May 1972, a lodge not here
involved. Salt Fork Lodge was at the time a new facili-
ty and understandably the State was particularly con-
cerned that it get off to a correct start, that it be
opened promptly at the beginning of the season, that
it be properly staffed, and that it be operating effi-
ciently as soon as possible. The chief of food conces-
sionaire supervisors, who presumably has statewide
responsibilities, was the state official primarily con-
cerned in overseeing the opening of the new facility.
His involvement in this matter occurred mainly
around opening time . In addition at Salt Fork Lodge
this Employer welcomed, if it did not request, some
intervention, particularly with respect to the state de-
signed and staffed training program.
There is no evidence that the State interference at
Salt Fork Lodge, limited as it was, is indicative of
State interference or control over the labor relations
at Burr Oak Lodge, the long-established facility here
at issue . In fact comparable evidence concerning Burr
Oak is lacking in this record.
The Employer has now withdrawn its opposition to
the Board's asserting jurisdiction and requests that we
direct an election as a first step to an early resolution
of the matter. Thus the parties are in agreement that
a Board-conducted election is desirable, a fact which
our colleagues seem to ignore in favor of a restrictive
interpretation of the concession agreement . It also
appears from material which the Employer sought to
have included in the record, including copies of opin-
ions by state officers with respect to this controversy,
that the State does not consider these employees to be
"public" employees exempt from the National Labor
Relations Act, and apparently has urged its Depart-
ment of Natural Resources to persuade the concessio-
naire to use the Board's processes in resolving the
representation matter. Contrary to the position of the
majority, we do not view section 14 of the Employer's
contract with the State as a potential source of conflict
between state and Federal law. While that section
provides for control of the properties by the Employ-
er, subject to approval by the director, such approval
OHIO INNS, INC.
is itself made dependent upon the application of other
"terms and provisions" of the contract. In this respect
section 25 of the contract directs the Employer to
keep itself informed of and to comply with all "future
laws, ordinances, regulations, orders and decrees
. .. " of tribunals, such as the board, having jursidic-
tion over its operations. It seems clear to us on this
record, including the above contract, that the State
has not reserved to itself the right to interpose its
531
authority as against a lawful order of the Board either
with respect to the reinstatement of a discharged em-
ployee or the execution of a contract in compliance
with Board law.
We would follow the principles and precedent set
forth in Sis-Q Flying Service, Inc., 197 NLRB 195,
Yosemite Park and Curry Co., 172 NLRB 1740, and
American Smelting and Refining Company, 92 NLRB
1451, and would exercise jurisdiction in this case.