Palace Club

National Labor Relations Board - Board Decisions

Jun 2, 1977

229 N.L.R.B. 1128 (N.L.R.B. 1977)

DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Finally, Inc. d/b/a Palace Club' and Hotel-Motel-
Restaurant Employees & Bartenders Union, Local
86, Hotel & Restaurant Employees & Bartenders
International Union, AFL-CIO. Cases 20-CA-
9803-2, 20-CA-9853-2, 20-CA-9869-2, 20-CA-
9897-2, and 20-CA-9905-2
June 2, 1977
DECISION AND ORDER
BY MEMBERS JENKINS, PENELLO, AND MURPHY
On August 19, 1976, Administrative Law Judge
Roger B. Holmes issued the attached Decision in this
proceeding. Thereafter, Respondent filed exceptions
and a supporting brief, the Charging Party filed a
brief in answer to Respondent's exceptions, and the
General Counsel filed a letter in opposition to
Respondent's exceptions and a brief in support of the
Administrative Law Judge's Decision. 2
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the
National Labor Relations Board has delegated its
authority in this proceeding to a three-member panel.
The Board has considered the record and the
attached Decision in light of the exceptions and
briefs and has decided to affirm the rulings,3
findings,4 and conclusions of the Administrative Law
Judge and to adopt his recommended Order.
1. For the reasons set forth in Tahoe Nugget, 5 we
agree with the Administrative Law Judge that the
presumption of majority status arising from Respon-
dent's voluntary recognition of the Union as the
exclusive collective-bargaining representative of its
employees continued after its withdrawal from the
multiemployer unit.
2. For the reasons stated in his Decision, we agree
with the Administrative Law Judge's finding that
Respondent failed to establish by a showing of
objective facts that it had a reasonable doubt as to
the Union's continuing majority status on December
20, 1974, when it withdrew recognition. Accordingly,
we shall adopt his recommended Order.
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor
Relations Board adopts as its Order the recommend-
ed Order of the Administrative Law Judge and
hereby orders that the Respondent, Finally, Inc.
d/b/a Palace Club, Reno, Nevada, its officers,
agents, successors, and assigns, shall take the action
set forth in the said recommended Order.
I The name of Respondent appears as amended at the hearing.
229 NLRB No. 169
2 Respondent's request for oral argument is hereby denied, as the record,
including the briefs, adequately presents the issues and the positions of the
parties.
3 In support of its alternative defense that the Union did not, in fact,
enjoy majority status on December 20, 1974, when recognition was
withdrawn, Respondent asserts in its brief that it should have been
permitted to adduce testimony from Business Representative Howard
Lawrence regarding the existence of union business records demonstrating
that as of that date the Union represented a majority of the employees
employed by Respondent. We find no merit in this contention, as it is well
established that particularly where, as here, union membership was
voluntary such records are irrelevant to a determination of whether a
majority of employees desired union representation. Retired Persons
Pharmacy v. N.LR.B., 519 F.2d 486, 491 (C.A. 2, 1975).
In further support of its alternative defense, Respondent asserts in its
brief that it should have been permitted to adduce testimony from Field
Examiner David Sargent of Region 20 concerning his alleged review of the
Union's business records. Respondent contends that it also sought to
question Field Examiner Sargent with respect to his alleged statement to
Respondent's counsel in May 1975 that the unfair labor practice charge
against Respondent would be dismissed. At the hearing, the Administrative
Law Judge revoked the subpena on Field Examiner Sargent after the
General Counsel had refused Respondent's request, which was made
pursuant to Sec. 102.118 of the National Labor Relations Board Rules and
Regulations, Series 8, as amended, for permission for Sargent to testify. The
General Counsel based his refusal on the ground that "the highly sensitive
and delicate role of the Board agent in investigating and resolving unfair
labor practice charges would be seriously impaired if a real likelihood
existed of the Board agent's becoming enmeshed as a material witness in
cases to which he has been assigned."
It is thus clear that the General Counsel sought to invoke the "limited
evidentiary privilege which protects the informal investigatonal and trial-
preparatory processes of regulatory agencies such as the NLRB." Stephens
Produce Co., Inc., and Temple Stephens Comnpany v. N. L R.B., 515 F.2d 1373,
1376 (C.A. 8, 1975). We are satisfied that the testimony sought by
Respondent fell within the privilege and that Respondent has shown no
substantial reason to disregard it. Indeed, union business records are wholly
irrelevant to the issue raised by Respondent's defense, Retired Persons,
supra, and, as the Administrative Law Judge stated on the record, any
remark Board Agent Sargent may have made to Respondent's counsel
concerning the anticipated dismissal of the instant unfair labor practice
charge is irrelevant to any issue in this proceeding because the General
Counsel did, in fact, issue a complaint. Accordingly, we conclude that the
Administrative Law Judge properly revoked the subpena on Field Examiner
Sargent.
4 For the reasons set forth in Nevada Lodge, 227 NLRB 368 (1976), we
find no merit in Respondent's contention that jurisdiction should not be
asserted herein.
5 Tahoe Nugget, Inc. d/b/a Jim Kelley's Tahoe Nugget, 227 NLRB 357
(1976).
DECISION
STATEMENT OF THE CASE
ROGER B. HOLMES, Administrative Law Judge: The
original charge in Case 20-CA-9803 was filed on Decem-
ber 16, 1974, by Hotel-Motel-Restaurant Employees &
Bartenders Union, Local 86, Hotel & Restaurant Employ-
ees & Bartenders International Union, AFL-CIO, herein
called the Union. That charge was amended seven times
thereafter by the Union on various dates, the last date
being June 2, 1975. The original charge in Case 20-CA-
9853 was filed on January 10, 1975, by the Union and a
first amended charge on June 17, 1975; the original charge
in Case 20-CA-9869 was filed on January 16, 1975, and a
first amended charge on June 17, 1975; the original charge
in Case 20-CA-9897 was filed on January 23, 1975, and a
first amended charge on June 17, 1975; and the original
charge in Case 20-CA-9905 was filed on January 27, 1975,
a first amended charge on May 7, 1975, and a second
amended charge on June 25, 1975.
1128
PALACE CLUB
An order consolidating cases, consolidated complaint
and notice of hearing was issued on August 27, 1975, on
behalf of the General Counsel of the National Labor
Relations Board, herein called the Board, by the Regional
Director for Region 20. That document, inter alia,
consolidated the foregoing charges and various other
charges, and on September 18, 1975, the said Regional
Director issued an order granting severance of respondents
as to certain named respondents. Thereafter, the Regional
Director issued on October 1, 1975, an amended consoli-
dated complaint and notice of hearing involving the
charges set forth above. This complaint alleges that
Finally, Inc., d/b/a Palace Club, herein called the
Respondent, has engaged in unfair labor practices within
the meaning of Section 8(aXl1) and (5) of the National
Labor Relations Act, as amended, herein called the Act.
The Respondent filed answers to the consolidated com-
plaint and the amended consolidated complaint and
denied, inter alia, the commission of the alleged unfair
labor practices.
The hearing was held before me on May 28 and June 1,
2, and 3, 1976, at Reno, Nevada. Briefs were timely filed by
August 10, 1976, by the General Counsel, by the Charging
Party, and by the Respondent and have been duly
considered.
This matter was heard on a calendar call basis with
another matter, Nevada Club, Inc., which was scheduled to
be the first case and which was heard immediately
preceding this hearing. Inasmuch as the Nevada Club
matter had the identical case numbers as this proceeding, I
advised the parties at the outset of that hearing that I was
adding a suffix I to the case numbers involving the Nevada
Club and adding a suffix 2 to the case numbers involving
the Respondent herein. This was done merely for purposes
of clarity since these are two separate proceedings
involving two separate respondents. The decision in
Nevada Club, Inc., issued on August 16, 1976 [229 NLRB
No. 165 (1977)] Some of the issues raised in this proceeding
are similar to some of the issues which were present in the
Nevada Club case and, therefore, reference has been made
several times herein to that decision.
Upon the entire record ' and based upon my observation
of the demeanor of the witnesses, I make the following:
FINDINGS OF FACT
I. JURISDICTION
The Respondent is a corporation engaged in the
operation of a restaurant, bar, and casino in Reno,
Nevada. During 1974, the Respondent received gross
revenues in excess of $500,000 and purchased and received
goods and materials valued in excess of $10,000 which
originated outside the State of Nevada.
While the Respondent admits the foregoing factual
allegations, it contends that the Board should not assert
jurisdiction over the Respondent and points to the state
regulation of the gaming industry in Nevada. A similar
issue is discussed in the Nevada Club decision and I am
following the same rationale and Board precedents here.
Based on the Board decisions in El Dorado Inc., d/b/a El
Dorado Club, 151 NLRB 579 (1965), and Grand Resorts,
Inc., 221 NLRB 539 (1975), and the foregoing facts
pertaining to this Respondent's business operations, I find
that the Respondent has been at all times material herein
an employer engaged in commerce within the meaning of
Section 2(6) and (7) of the Act.
II. THE LABOR ORGANIZATION INVOLVED
The parties stipulated that, at all times material herein,
the Union has existed for the purpose of representing
employees in collective bargaining with employers regard-
ing the terms and conditions of employment of those
employees and that, at all times material herein, the Union
has represented employees in collective bargaining with
employers for the terms and conditions of employment of
those employees. The parties additionally stipulated that
the Union has represented employees who are members of
the Union for purposes of collective bargaining with
employers over terms and conditions of employment of
those employee members of the Union.
After considering the foregoing stipulations by the
parties and after considering the entire record herein, I find
that the Union has been at all times material herein a labor
organization within the meaning of Section 2(5) of the Act.
III. THE ALLEGED UNFAIR LABOR PRACTICES
A. The Issues
The principal issues presented in this proceeding are:
1. Whether a rebuttable presumption of majority status
existed in favor of the Union in a single-employer unit of
the Respondent's employees, based on a multiemployer
contract, after the Respondent timely withdrew from the
multiemployer unit?
If the answer to the foregoing question is in the
affirmative, then we reach the second issue, which is:
2. Whether the Respondent violated Section 8(a)(1)
and (5) of the Act when it withdrew recognition from the
Union and refused to bargain with the Union on or about
December 20, 1974, or (a) whether the Respondent has
shown that it had a reasonably based doubt, based upon
objective considerations, of the Union's presumed majority
status at the time it withdrew recognition, so as to rebut the
presumption of the Union's majority status or (b) whether
the Respondent has established that the Union, in fact, did
not enjoy majority status at the time that the Respondent
withdrew recognition, so as to rebut the presumption of the
Union's majority status.
B. The Background
The following facts in this section are based on
admissions in the pleadings, stipulations of the parties, and
documentary evidence.
The Reno Employers Council, herein called the Council,
is a Nevada corporation with an office located in Reno,
Nevada, and at all times material herein has been a
I Errors in the transcript are hereby noted and corrected.
1129
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
voluntary association of employers engaged in the hotel,
casino, and restaurant industry and other industries. At all
times material herein, the Council has existed for the
purpose, inter alia, of representing its employer-members in
collective bargaining and negotiating and administering
collective-bargaining agreements in behalf of its employer-
members with various labor organizations, including the
Union herein. The Respondent joined the Council in or
about 1969 and since on or about that time the Respondent
has been represented for purposes of collective bargaining
by the Council.2
Since 1956, the Union and the Council, on behalf of its
employer-members, have been parties to a series of
multiemployer collective-bargaining agreements in a multi-
employer collective-bargaining unit, the most recent of
which agreements was effective from February 16, 1972,
through February 15, 1975. However, the Respondent was
not a party as a council member to a multiemployer
bargaining agreement or a member of the Council prior to
about 1969. On or about December 11, 1974, the Respon-
dent timely withdrew its membership from the Council.
The parties also stipulated that in 1968 the Bartenders
Union, Local 86, and the Culinary and Hotel Service
Union, Local 45, merged to form the Charging Party
herein.
All employees employed by the Respondent in its bar
and culinary operations at its Reno, Nevada, place of
business, excluding all other employees, guards, and
supervisors as defined in the Act, constitute a unit
appropriate for the purposes of collective bargaining within
the meaning of Section 9(b) of the Act.
Two collective-bargaining agreements between the
Council, for and on behalf of its employer-members, which
included the Respondent, and the Union were introduced
in evidence. Those two contracts have effective dates of
February 16, 1969, through February 15, 1972, and
February 16, 1972, through February 15, 1975. Four other
collective-bargaining agreements between the Council and
the Union were introduced in evidence, but those agree-
ments do not show the Respondent as being a party to the
agreements. Those contracts run consecutively from
August 15, 1956, through February 15, 1969.
Article I of the most recent collective-bargaining agree-
ment between the Council and the Union reads as follows:
ARTICLE I
JURISDICTION
The Employer agrees that at all times during the
period this contract is in full force and effect, to
recognize the Union as the sole collective bargaining
agency for the employees who are working under the
Union's jurisdiction in the classifications listed herein.
This contract shall cover all working conditions, wages
and hours of the employees and shall be binding upon
both the employees and the Employers of all establish-
ments hereinafter mentioned.
2 Silvio Petricciani, president of the Respondent, however, said at one
point in his testimon) that the Respondent joined the Council in 1965, and
at another point in 1968.
C. The Correspondence
On November 15, 1974, a letter was sent from the Union
to the Council in which the Union gave notice of its desire
to change and modify the terms and conditions of the
collective-bargaining agreement for the period following
February 16, 1975. The letter asked that the Council
communicate with Al Bramlet, International trustee, to
arrange for collective-bargaining negotiations. On the same
date, a separate letter was sent from the Union to the
Respondent and in substance conveyed the same informa-
tion to the Respondent.
On December 11, 1974, the Respondent sent a letter to
the Council in which the Respondent withdrew its
authorization from the Council, and from Clinton G. Knoll
as general manager of the Council, to represent the
Respondent in connection with collective bargaining or
labor relations matters. The letter also states that a copy of
that communication was being sent to the Union. On the
same date, the Respondent also sent a letter to the Union
in which the Respondent said that it was enclosing a copy
of its letter to the Council and also gave notice by the
Respondent of termination of the collective-bargaining
agreement as of the end of its term.
On December 12, 1974, the Council sent a letter to the
Union in which the Council acknowledged receipt of the
Union's letter dated November 15, 1974, and in which the
Council advised that the Council was not authorized to
represent any of the signators to the agreement for
collective-bargaining purposes. The letter expressed the
understanding that all of the signators to the agreement
had already advised the Union of that fact.
On December 12, 1974, the Council also sent a letter to
the Union and gave notice of the termination of the
collective-bargaining agreement as of the end of the day on
February 15, 1975.
On December 13, 1974, the attorney for the Union sent a
letter to the Council in which the Union said that no
response had been received to the Union's letter dated
November 15, 1974, and advised that refusal-to-bargain
charges would be filed with the Board without further
notice unless the Council immediately contacted Bramlet.
On the same date, the attorney for the Union sent a
separate letter to the Respondent and conveyed to the
Respondent the substance of the contents of its letter to the
Council.
On December 17, 1974, the attorney for the Union sent a
letter to the Council with carbon copies to certain
employers, including the Respondent in this case. The
letter asserted that the Council and its clients were notified
on November 15 of the Union's reopener demand and that
the contract termination notice from the Council was,
therefore, meaningless. The Union advised that the Union
had filed unfair labor practice charges with the Board
alleging a refusal to bargain, and advised that, contrary to
the Council's letter of December 12, certain establishments,
including the Respondent, had not individually notified the
Union of their withdrawal of authorization from the
Council.
1130
PALACE CLUB
On December 20, 1974, the attorney for the Respondent
and certain other employers sent the following letter to the
Union:
This is in reply to the recent letter from your
attorney to the following whom we represent:
Nevada Club
Palace Club
Ponderosa
Reno Nugget
Silver Spur
Sparks Nugget
As you are aware from letters recently sent you from
each of them and from the Reno Employers Council,
each of our clients has timely withdrawn from the
multi-employer group and each is handling its own
collective bargaining. The bargaining unit, therefore, is
entirely different as far as each of our clients is
concerned.
Although it is not clear from your attorney's letters
as to what unit you are claiming or whether you claim
to represent a majority of each of our clients' employees
in an appropriate unit, we will treat his letter as though
he has on your behalf requested bargaining in a unit
consisting of culinary and bartender employees in each
of the named establishments.
Pursuant to instructions from each of our clients, on
behalf of each of them individually, we hereby inform
you that each individually has a genuine doubt that
your Local continues to represent an uncoerced
majority of their respective employees in an appropri-
ate unit. If following a validly conducted election in an
appropriate unit under the aegis of the National Labor
Relations Board, your Local should be selected as the
bargaining agent, our clients individually will at such
time fulfill whatever legal obligation they may individu-
ally then have.
Should your Local file a petition with the Board for
an election, each of our clients, individually, will
cooperate looking toward an election under the Labor
Management Relations Act, 1947, as amended and the
Board's applicable Rules and Regulations.
D. The Factors Relied Upon by Silvio Petricciani
for Withdrawing Recognition From the Union
Silvio Petricciani has been president of the Respondent
since the business was incorporated on April 1, 1964. The
Respondent leased the Palace Club premises from the
Palace Corporation which owned the building and began
1 Marie Tidwell, who has been business agent of the Union since 1966,
was asked whether the Respondent was an independent party to a
collective-bargaining agreement. Ms. Tidwell candidly answered: "I am not
sure if they were multi or independent. Ijust know they had a contract. I am
not sure if the) were multi or not." Dan Basta, who was secretary of the
Union from 1962 until 1969, testified that the Union had an independent
contract with the Respondent which had been signed either by Petricciani or
by Sam Delich. who is the brother-in-law of Petricciani and was secretary-
treasurer of the Respondent in June 1964. A letter from Basta to the
Independent Restaurant and Tavern Insurance Fund dated June 18, 1964.
was received in evidence. It lists two companies as having "signed
agreements," but does not describe what the agreements were. Howard
Lawrence, who is presently the business representative, assistant to the
International trustee and chief executive officer of the Union, searched the
Union's files. but he could not locate any contract with the Respondent.
However, he located a xerox copy of a list of the names of 50 employers, one
operation of the club on June 10, 1964. The club had been
operated from 1943 to June 10, 1964, by a partnership in
which Petricciani had no interest. At the time that the
Respondent began operation of the club, it assumed the
collective-bargaining agreement which had been in effect
when the partnership operated the club. The collective-
bargaining agreement was between the Independent
Tavern Owners Association of Northern Nevada on behalf
of its employer-members and the predecessors to the
Charging Party. Petricciani testified that he had never
signed since June 10, 1964, a contract with the Union on an
individual employer basis. 3 He said that the Respondent
joined the Reno Employers Council in 1965 at one point in
his testimony and in 1968 at another point.
As president of the corporation, Petricciani said that he
worked 7 days a week for 9 or 10 hours each day at the
club and took I week off from work about every 3 months.
Petricciani made the decision to withdraw recognition
from the Union, which withdrawal took place on Decem-
ber 20, 1974, when the Respondent's attorney wrote a letter
to the Union to that effect. Petricciani gave the following
factors as reasons why he decided to withdraw recognition
from the Union:
Number one, we had newspaper articles which gave
me the insight of the fact that ten percent of the people
that were organizing in the Reno, Sparks, Lake Tahoe
area; number two, there was a concentrated drive to
organize in the area; number three, the fact that Mr.
Bramlet had been appointed the trustee for Reno Local
86; number four, we had no check-off list; number five,
there was no indication whatsoever in the contract that
we had to employ union people; number six, after
reading the newspaper articles, it came to my attention
that with all of this turnover, which I also became
concerned about because of the unemployment com-
pensation contributions, that there were no grievances
filed whatsoever in my establishment.
Mr. Bramlet alleged in his newspaper articles that
here we have archaic working conditions, people
dissatisfied with the way they are treated, and so forth,
and that in all my tenure at the Palace Club, we have
never had a grievance filed as to those conditions.
Then we go onto the fact that there has never been
an NLRB election with the Palace Club, so consequent-
ly, this led me to believe, plus the fact that it is a right to
work state, that the Union did not represent a majority
of my people.
of which is the Respondent listed under "agreements signed with
independent owners."
In view of the fact that no one could produce a signed contract with the
Respondent for the period prior to 1969, 1 have examined the secondary
evidence on this issue and conclude that it does not establish the fact that
the Respondent had an individual contract with the Union. Petncciani
testified positively and definitely that he assumed the collective-bargaining
agreement then existing between the former partnership and the Union at
the time that the Respondent took over operation of the club. In contrast,
Basta was attempting to recall a document which he says was signed 12
years ago and which he had not seen for at least 8 years. The document, if
there was ever one in existence, would not have had any particular
significance to Basta 12 years ago so that it would remain in his memory--at
least he did not make such a claim. The other secondary evidence does not
overcome Petricciani's positive testimony on this point.
1131
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
J *
Another thing that effected my decision were the
reports that I got back from Mr. Stevens and Mr.
Quilici and some of the other employees who had come
to me voluntarily and talked to me about Local 86.
The first three factors mentioned by Petricciani have
reference to two newspaper articles which appeared in the
Nevada State Journal newspaper in Reno and which were
read by Petricciani. The first of the two articles appeared
on August 20, 1974. It reads as follows:
Culinary Employees' Working Conditions Called
Undesirable
Culinary employees' working conditions in Northern
Nevada are hardly desirable. Al Bramlet, secretary-
treasurer for Culinary Local 226 in Las Vegas, charges
in this month's edition of "Topics," the local's maga-
zine.
Bramlet was appointed several months ago as
international trustee of Local 86 in Reno to organize
the general Reno and Lake Tahoe areas.
Culinary employees in Northern Nevada are work-
ing under conditions their Southern Nevada counter-
parts "suffered under 20 years ago." Bramlet claims in
the magazine article.
He could not be reached Monday for further
comment.
The article says:
"Employees are working six days at straight time. No
overtime. A team of two maids at one downtown Reno
hotel is assigned to prepare 65 rooms per day, plus
washing the windows. For this staggering work load,
they receive $16 per shift."
The culinary local does not cover all casino person-
nel. It represents maids, employees in other cleanup
capacities, bartenders, cocktail waitresses, restaurant
personnel, change girls and booth cashiers.
"Most important and most pathetic is the fact that
our co-workers in Reno and Lake Tahoe are scared."
Bramlet said, "They're afraid to report violations of the
state's labor laws, afraid to demand overtime, afraid to
do anything but blindly obey orders from the boss."
Les Kofoed, director of the Gaming Industry
Association of Nevada, declined to comment Monday
in response to Bramlet's remarks.
In the article, Bramlet also said employees in
Northern Nevada were fired at the discretion of their
employer with no avenues for grievance or redress.
He claimed many employees don't receive the two
10-minute work breaks required by state law and that
change girls cannot accept tokes under the threat of
being fired.
"Almost without exception, the first plea from each
worker was forjob protection," Bramlet said. "Frankly,
I am amazed at what exists in Northern Nevada. It is
almost another world for the people in our industry."
Bramlet is scheduled to be in the Reno and Lake
Tahoe areas Aug. 22 and 23 to discuss problems with
local employee groups.
Clinton Knoll, representative for the Reno Employ-
ers' Council, could not be reached for comment
Monday.
The article in the Nevada State Journal newspaper for
August 22, 1974, reads as follows:
Union Leader Cites Growth, Calls Reno
Conditions 'Archaic'
Southern Nevada labor leader Al Bramlett said
Wednesday membership in Northern Nevada's Culi-
nary Union has doubled in 2-1/2 months as part of a
full-scale campaign to organize Reno and Lake Tahoe
food and beverage workers.
Bramlett, recently named international trustee for
Local 86, which serves the Reno-Tahoe area, said dues
paying members have grown from about 900 to more
than 1,800 since May.
He said he was sent north because the conditions in
the Reno-Tahoe area are "archaic" compared with Las
Vegas.
He said Reno food and beverage workers have no
job security, no benefits, no seniority provisions and
often make more than $10 a shift less than their Las
Vegas counterparts.
The union serves bartenders, cooks, any position
dealing with the preparation and serving of food and
beverages, as well as housekeeping positions, change
girls and cashiers.
"Our ultimate objective is to bring to Reno-Tahoe
the benefits of a union contract which we enjoy in
Southern Nevada," Bramlett said.
"The major obstacle is the resistance of the industry
itself, but we are here to stay," he said.
He said, for example, a Reno fry cook who gets
$24.17 a shift would get $36.20 in Las Vegas and a
bartender making $25.82 in Reno would receive $34.20
in the south.
He said similar disparity exists in many of the jobs
covered by the Culinary Workers Union.
Bramlett said the big difference is that Las Vegas is
98 per cent unionized while Reno-Tahoe is less than 20
per cent.
He also said some employers in Northern Nevada
have warned their employees to stay out of discussions
with union men. He said his business representatives
have been watched, followed and harassed.
He said, however, union strength is growing fast in
the north and that the real test will come in November
when the northern local contract expires at Lake
Tahoe. He said the Reno contracts expire in February
and that, by then, he hopes to have many more culinary
workers in the area unionized.
Petricciani described the newspaper articles as being the
most important factor in his decision. He said that when he
read that Bramlet was appointed trustee of the Union it
gave him cause for thought. Petricciani explained:
Number one, being a businessman, when it is either
in a will or a business that is faltering or a business that
1132
PALACE CLUB
has gone broke then a trustee is appointed to adminis-
ter the affairs of this business.
So, consequently, I enlisted the knowledge of my
personal attorney here in Reno, Mr. William O'Mara,
and I also called Mr. Nathan Berke and I said, "What
does this mean, for a trustee to be appointed for a
Union?"
Mr. Berke and Mr. O'Mara both indicated to me
that the Union was in trouble and if the Union was in
trouble, specifically, if it was in trouble financially. So,
consequently, I said, "If this is the case, they probably
do not represent my employees or a majority of my
employees."
Petricciani also said that the articles caused him to
wonder "why all of a sudden there is a big influx of
organizational activity" when prior to that time there had
not been any such activity. He also said that he wondered
if any of his employees belonged to the Union after he
concluded from the figures in the newspaper article that the
Union had less than 10 percent of the people organized in
the entire Reno-Lake Tahoe area. He explained that the
article indicated that the Union had grown to 1,800 since
May and that the Union had less than 20 percent of the
employees organized. If the Union had only 900 employees
organized prior to that time, he concluded that the Union
had less than 10 percent of the employees organized
previously.
Although the newspaper articles indicated Bramlet's
opinion that the working conditions in the area were
"undesirable" and "archaic," Petricciani said that no
grievances were filed against the Respondent on those
grounds after the newspaper articles had appeared. He
stated that two or three, possibly four, grievances had been
filed earlier between 1972 and the early summer of 1974. 4
The fact that there had been no NLRB election in the
unit, that Nevada is a right-to-work state, that there was no
union-security clause in the prior contract, and that there
was no union dues-checkoff provision in the prior contract
are not in dispute.
The reference to the turnover of employees by Petricciani
concerns the study of payroll records which was undertak-
en during the period after the newspaper articles appeared
in August 1974 and into December 1974. Irma Shumate,
the payroll clerk, was asked to prepare the information for
the years 1972, 1973, and 1974, but Petricciani said that he
personally reviewed the payroll documents. His conclusion
was that the turnover among his bar and culinary
employees was over 100 percent and a little less than 300
percent. He said that there were about 86 culinary
employees and about 24 bar employees in the fall of 1974
for a total of about 110 employees. While he said that he
did not know how many of the bar and culinary employees
were members of the Union in the fall of 1974, he stated
4 Two letters from Clinton G. Knoll, general manager of the Reno
Employers Council, to an attorney for the Union were received in evidence.
One letter is dated January 29, 1973, and refers to a meeting between the
two persons on January 16 relating to the issue of holiday overtime pay. The
letter indicates that checks for four employees of the Respondent who were
underpaid were enclosed. The second letter is dated June 14, 1973, and
concerns "a number of grievances" involving five employers. One of the
that at no time did he believe that the Union represented a
majority of his bar and culinary employees.
With regard to the restaurant employees of the Respon-
dent, the records show that there were 86 such employees
as of February 15, 1972. Of those 86 restaurant employees,
the following number were still employed by the Respon-
dent on the dates indicated:
February 15, 1973
February 15, 1974
December 20, 1974
25 employees
15 employees
13 employees
With regard to the bar employees of the Respondent, the
records show that there were 24 such employees as of
February 15, 1972. Of those 24 bar employees, the
following number were still employed by the Respondent
on the dates indicated:
February 15, 1973
December 20. 1974
17 employees
10 employees
In addition to the foregoing factors, Petricciani also
testified that he relied on certain conversations which he
had with management persons and with some employees.
One of the management persons was William Stevens who
was manager of the restaurant at the time. Petricciani
estimated that he had about 20 conversations with Stevens
regarding the Union between August 20, 1974, and
December 11, 1974, and that the substance of the
conversations did not differ. Petricciani testified:
We were discussing as to whether Local 86 really
represented any majority of our employees and he
indicated to me that it was his feeling that it did not
and that our employees were satisfied to be working
with us and for us and didn't feel that they needed any
third party to represent them. They thought they had
an open-door policy in the Palace Club and could come
to him or to me anytime they wanted and state any of
their problems be they personal or working problems.
Petricciani said that Stevens told him that he was basing
his opinion concerning the status of the Union on
employees who had talked to him and on conversations
which Stevens had overheard.5
Another management person with whom Petricciani
spoke about the Union was Pete Quilici who was the bar
manager. These conversations also took place during the
same time period as specified for the conversations with
Stevens. Petricciani said that he had about the same
number of conversations with Quilici. Petricciani testified:
Yes, I asked him if in his meanderings again around
the bar and the cocktail waitresses what impression he
got as to the status of Local 86 with the employees.
employers listed is the Respondent and the letter indicates that a check is
enclosed for one employee for overtime pay on 2 days.
5 Stevens, who was not employed by the Respondent at the time of the
hearing, also testified with regard to these conversations. His testimony is
not substantially different from the testimony given by Petricciani, but I
accept Petncciani's version.
1133
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
He indicated to me that he didn't feel that the
employees were too interested in it.
Petricciani said that Quilici told him that he based his
impressions on conversations which Quilici had overheard
between his bartenders and cocktail waitresses. 6
Another person with whom Petricciani spoke was Harold
Hollinger who was a bartender for the Respondent until
sometime during the payroll period which ended on
September 15, 1974. The conversation about the Union
took place in October 1974. Petricciani described his
conversation with Hollinger as follows:
Sometime in October, he was at the bar as a
customer and he said, "Mr. Petricciani, I left here of my
own volition, my own free will, and I want you to know
that all the time I worked for you I enjoyed working for
you. The conditions were good and if you ever have
any problems in so far as the Union organization or
stuff I will be glad to testify for you."
* * *
Other than he didn't think the Union was doing its
job in representing the people, the bartenders commu-
nity and, he again thought he didn't need them to guard
for him in any way, shape, or form.
An employee named Ann Sarlo, who was a waitress at
the time, had a conversation with Petricciani in the latter
part of August or the first part of September 1974 before
the Labor Day holiday. He gave this description of their
conversation:
Yes, she said, "Sil-," once again we are on a first
name basis.
She said, "I know you are concerned about what is
happening around the town, the Union stuff."
She says, "I want you to know you really don't have
anything to worry about. All of your employees are
loyal to you and they feel that they can come to you
with any grievances they may have."
An employee named Robert Casanava, who was a waiter
at the time, also had a conversation about the Union with
Petricciani during the period between August 20, 1974, and
December 11, 1974, which Petricciani also relied upon.
Petricciani stated:
He said-of course again we are on a first name
basis in the club.
He said, "Sil, I would like to have a talk with you."
I said, "Okay, what is your problem, Bob?"
Bob has come to me many times with his personal
problems.
I said, "What can I do to help you?"
He said, "Nothing, maybe I can help you."
I said, "In what way, Bob?"
He said, "Well, this concentrated drive is going on
with the Union and so on and so forth and I have been
6 Quilici also testified at the hearing with regard to these conversations
and his testimony is not significantly different from the testimony of
Petricciani, but I accept Petricciani's version.
to several of the meetings and my position in the Palace
Club here, I don't see where they can help me in any
way, shape or form. I am happy with my job. I am
happy to be working here and I want you to know
that."
Petricciani also stated that Casanava told him that: "His
feeling was that the rest of the employees felt the same
way."
Still another employee named Bill Kidder spoke with
Petricciani about the Union in September 1974. Kidder
was a cook at the time of the conversation and later
became manager of the restaurant for the Respondent after
Stevens left the Respondent's employ. Petricciani stated:
Bill came to me and he said, "Myself and a couple of
cooks have been going to the Union meeting down
there just to hear what they have to say."
I said, "Down where?"
He said, "At the place on South Virginia Street."
I said, "Fine."
He said, "We have listened to see if they had
anything to offer or not and as far as I am concerned
we figured it is a bunch of garbage and we never went
back."
In weighing the credibility of Petricciani's testimony, I
have considered the testimony of Stevens and Quilici, and
where there are any differences, I find that the testimony of
Petricciani is the complete and accurate account of these
events.7 I have also considered the fact that Petricciani did
not mention some of the foregoing factors in an affidavit
which he gave on January 30, 1975, which was about 6 or 7
weeks after the Respondent withdrew recognition from the
Union. However, Petricciani gave an explanation for those
omissions from his affidavit which was taken based on
questions from his attorney and sworn to before Ms.
Shumate as a notary public. Petricciani gave this explana-
tion:
I would have to read the document to see if it
contained all the reasons. I would say it contained the
majority of the reasons.
At the time that document was prepared, Mr. Wertz
came into Reno and I was busy in the Club and trying
to give him my affidavit, and there may be many things
that we left out of it that I didn't remember.
He would call me on the telephone and I'd have to
go upstairs and come back down again. It was a rather
hectic day. If I recall, it was right around the New
Years or just after.
Just a moment. I just told you that the date that
affidavit was prepared, there were many things in that
document that weren't in there that I would like in
there. Like I said, it was a very hectic day. I had Mr.
Wertz waiting in my office and he would come back,
and this and that and the other thing, and it really
Hollinger, Sarlo, Casanava, and Kidder were not called as witnesses by
any party.
1134
PALACE CLUB
wasn't a day that we could sit down and talk. He was
there on short notice, he grabbed me on short notice.
There are a lot of things that weren't discussed in that
document.
Maybe we discussed them and Mr. Wertz didn't put
them down. I don't know.
Petricciani acknowledged that he did not mention the
following factors for withdrawing recognition from the
Union in his affidavit of January 30, 1975: his examination
of the payroll records; the conversation which he had with
Quilici; the conversations which he had with the employ-
ees; and the lack of grievances filed by the Union against
the Respondent. Notwithstanding those omissions from his
affidavit, I do not believe that Petricciani fabricated them
as additional factors to form a basis for withdrawing
recognition from the Union. He has given a plausible
explanation why those factors are not in his affidavit. I
accept Petricciani's testimony at the hearing with regard to
the factors which he said that he relied on in his decision to
withdraw recognition from the Union.
E. The Respondent's Second Defense
In addition to its defense that the Respondent had a
reasonably based doubt of the Union's majority status, the
Respondent urged as another defense that the Union did
not, in fact, represent a majority of the Respondent's bar
and culinary employees on December 20, 1974, when it
withdrew recognition from the Union. In connection with
that contention, the Respondent called Howard Lawrence
as a witness during the presentation of the Respondent's
defense. The Respondent sought to elicit the same
information from Lawrence in this proceeding as it
attempted to do in the Nevada Club, Inc., proceeding which
has been previously referred to. In order to understand the
positions of the parties on this issue, it is necessary to
recount what took place in the Nevada Club case since
those positions of the parties and legal arguments were
adopted by the parties in this proceeding, but not reiterated
in detail on this record.
Lawrence is the business representative, assistant to the
International trustee, and chief executive officer of the
Union. He began working for the local Union on June 14
or 15, 1974, which was shortly after the local Union was
placed in trusteeship on June 7, 1974. As the chief
executive officer of the local Union, Lawrence is the
principal custodian of the Union's records. Lawrence
testified that the Union maintained membership records on
an alphabetical basis. The Respondent's attorney asked
Lawrence in the Nevada Club proceeding whether there
were any other records that the Union had in existence at
the time between August 20 and December 20, 1974, which
would disclose that the Union represented a majority of the
employees employed by the Respondent. A lengthy
discussion then ensued which is completely reflected in the
Nevada Club transcript, but it was not necessary to repeat
that discussion on the record in this case. In the Nevada
Club case, I indicated that I would overrule the objections
to a modification of the question by the Respondent's
R The discussion which follows with regard to this first issue is
substantially the same as the discussion in the Nevada Club., Inc., decision
previously referred to.
attorney. At page 585 of the transcript in the Nevada Club
proceeding, I said: "In other words, I will sustain and rule
proper your question for union records, whether the Union
has records to show union majority support as of
December 20, 1974." The Respondent's attorney then
stated: "Then I will adopt that particular statement by the
Administrative Law Judge as my question directed to the
witness." Counsel for the General Counsel in the Nevada
Club case inquired whether the term "union majority
support" indicated union membership alone. I responded
"no"; whereupon counsel for the General Counsel asked:
"Your Honor is then indicating any records showing union
members, non-members, adherence, non-adherence, those
in favor, those against? Any records showing the totality of
the unit, rather than the mere question of whether or not
there is members, union members existing." In response I
replied in the affirmative and pointed out that majority
support does not mean just members of the Union.
Thereafter in the Nevada Club proceeding, the Charging
Party exercised its right under the Board's Rules and
Regulations to file a request for special permission to
appeal that ruling. The General Counsel filed a memoran-
dum in support of the Charging Party's interim appeal, and
the Respondent filed a memorandum in opposition. The
Board granted the appeal and reversed the ruling. I
introduced all of the foregoing documents into the record
in the Nevada Club proceeding and also in the record in this
proceeding as Administrative Law Judge's Exhibits I
through 5 for purposes of clarity and to preserve the
positions taken by all parties, as well as to show the Board's
ruling on this matter.
F. Analysis and Conclusion
The threshold question to be determined is whether a
rebuttable presumption of majority status existed in favor
of the Union in a single-employer unit of the Respondent's
employees, based on a multiemployer contract, after the
Respondent timely withdrew from the multiemployer unit.8
In Terrell Machine Company, 173 NLRB 1480 (1969),
enfd. 427 F.2d 1088 (C.A. 4, 1970), the Board stated:
It is well settled that a certified union, upon
expiration of the first year following its certification,
enjoys a rebuttable presumption that its majority
representative status continues.' This presumption is
designed to promote stability in collective-bargaining
relationships, without impairing the free choice of
employee.2 Accordingly, once the presumption is
shown to be operative, a primafacie case is established
that an employer is obligated to bargain and that its
refusal to do so would be unlawful.
Celanese Corporation ofA mrnerica, 95 NLRB 664,671 672.
2Id.
In the present case the Union has not been certified by
the Board as the bargaining representative in either the
multiemployer unit or the single-employer unit. Neverthe-
less, the Board has applied the principles set forth in the
1135
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Terrell Machine case whether the union has been certified
by the Board or recognized as the bargaining representa-
tive. In Bartenders, Hotel, Motel and Restaurant Employers
Bargaining Association of Pocatello, Idaho and its Employer-
Members, 213 NLRB 651 (1974), the Board stated:
The above principles set out in Terrell are equally
applicable whether the union has been certified by the
Board, or, as here, recognized as the bargaining
representative of the employees by Respondent without
Board certification.s In the latter situation, the exis-
tence of a prior contract, lawful on its face, raises a dual
presumption of majority-a presumption that the
union was the majority representative at the time the
contract was executed, and a presumption that its
majority continued at least through the life of the
contract.4 Following the expiration of the contract, as
here, the presumption continues and, though rebutta-
ble, the burden of rebutting it rests on the party who
would do so,5 here Respondent.
3 See Emerson Manufacturing Company, Inc., 200 NLRB 148 (1972);
Cantor Bros., Inc., 203 NLRB 774(1973).
4 Shamrock Dairy, Inc., et al., 119 NLRB 998 (1957), and 124 NLRB
494 (1959), enfd. 280 F.2d 665 (C.A.D.C.), cert. denied 364 U.S. 892
(1960).
Barrington Plaza and Tragniew, Inc., 185 NLRB 962 (1970),
enforcement denied on other grounds sub nom. N.L.R.B. v. Tragniew,
Inc., and Consolidated Hotels of California, 470 F.2d 669 (C.A. 9, 1972).
In the instant case, the Union for a number of years has
been the recognized collective-bargaining representative of
all of the employees in the multiemployer unit, which has
included the bar and culinary employees of the Respon-
dent. The Union has also been a party to a series of
consecutive collective-bargaining agreements beginning in
1969 which have covered the bar and culinary employees
of the Respondent, together with the employees similarly
classified who were employed by other employer-members
of the Reno Employers Council. Thus, for the period from
1969, through February 15, 1975, the successive contracts
negotiated by the Union and the Council, on behalf of the
Respondent and the other employer-members of the
Council, have been applicable to the bar and culinary
employees of the Respondent.
Under the Celanese, Terrell Machine, and Bartenders
cases referred to above, the Union has enjoyed a "dual
presumption of majority." That is, under the Board
precedents, the Union is presumed to have been the
majority representative of the employees covered by the
contract at the time that the contract was executed and,
further, the Union is presumed to have continued its
majority status at least through the life of the contract.
Even after the expiration of the contract, the rebuttable
presumption of majority status continues in favor of the
Union under Board law. Thus, the legal presumption of the
majority status of the Union was operative in the
multiemployer unit at the times material herein, and I
conclude that the legal presumption also operates in favor
of the Union's majority status among the bar and culinary
I The Board has remarked on stability in industnal relations in United
Supermarkets, Inc., 214 NLRB 958, 959, (1974):
Moreover, to require the incumbent union to reestablish its majority
employees of the Respondent who were a part of that
larger unit. To hold otherwise would conflict with the
Board's policy as stated in Terrell Machine: "to promote
stability in collective-bargaining relationships, without
impairing the free choice of employees."9 If each time an
employer withdrew from a multiemployer unit, the pre-
sumption of majority status ceased to be operative, then a
question concerning representation would automatically
arise and stability in collective bargaining would not be
achieved.
However, finding that the legal presumption of majority
status flowing from the multiemployer collective-bargain-
ing agreement remains operative among the bar and
culinary employees of the Respondent who were a part of
that unit is not a conclusive determination of majority
status. It is just a legal presumption and nothing more. The
presumption is rebuttable and may be overcome in either
one of the two ways described by the Board in Terrell
Machine.
I am not unmindful of the Board's comment made in a
different context that, when an employer or a union
withdraws from a multiemployer unit, the union involved
may be faced with the possibility of demonstrating its
majority status in the individual employer unit. In its
landmark decision, The Evening News Association, Owner
and Publisher of "The Detroit News," 154 NLRB 1494
(1965), enfd. 372 F.2d 569 (1967), the Board held that the
previously existing rules governing employer withdrawal
from multiemployer units should be applied on an equal
basis to union withdrawal from such units. In its rationale,
the Board stated at 1499:
In either case, the withdrawing party forces the other to
forego bargaining in the established multiemployer
unit, and in either case, the union may be faced with
the possibility of having to demonstrate that it has been
designated by a majority of the employees in the
individual employer units resulting from the breakup of
the multiemployer unit, if it is to retain its status as the
bargaining representative of such employees.
The use of the words "may" and "possibility" by the
Board in the portion of the decision quoted above suggests
that the Board meant that a union would not be required to
demonstrate its majority status in the individual employer
unit in every case, but that it may face the possibility of
having to do so. An example of such a possibility might be
where an employer timely filed an RM petition for an
election and that petition was properly supported by the
"objective considerations" required by the Board's decision
in United States Gypsum Company, 157 NLRB 652 (1966).
Another example might be where another labor organiza-
tion timely filed an RC petition for an election and that
petition was properly supported by at least 30 percent of
the employees in the individual employer unit. Still another
example might be where an RD petition for an election was
timely filed and was properly supported by at least 30
percent of the unit employees. In those circumstances, a
support upon demand would necessarily disrupt bargaining relation-
ships, and we have repeatedly emphasized that stabilization in
industrial relations is the ultimate objective of all provisions in the Act.
1136
PALACE CLUB
union might face the possibility of having to demonstrate
its majority status in the individual employer unit.
After considering all of the foregoing, the arguments and
briefs by the parties, the entire record and the Board law, I
conclude that a rebuttable presumption of majority status
did exist in favor of the Union on December 20, 1974, in
the single-employer unit of the Respondent's bar and
culinary employees.
Having made a determination with regard to the first
issue, it is now necessary to determine whether the
Respondent violated Section 8(a)(l) and (5) of the Act
when it withdrew recognition from the Union and refused
to bargain with the Union on or about December 20, 1974.
To answer that question, we must decide whether the
Respondent has shown that it had a reasonably based
doubt, which was based upon objective considerations, of
the Union's majority status at the time it withdrew
recognition, so as to rebut the presumption of the Union's
majority status. Secondly, we must also decide whether the
Respondent has established that the Union, in fact, did not
enjoy majority status at the time that the Respondent
withdrew recognition, so as to rebut the presumption of the
Union's majority status.
At the outset, it should be noted that the withdrawal of
recognition in this case took place in a context which was
free of any other alleged unfair labor practices.
I have accepted Petricciani's testimony as to the factors
on which he said he relied in making his decision to
withdraw recognition from the Union. While I shall discuss
the factors individually, I have considered them collective-
ly in reaching the ultimate conclusion of whether the
Respondent has rebutted the General Counsel'sprimafacie
case of the Union's presumed majority status. The Board
has made it clear that the Union's presumption of majority
status in such circumstances is a rebuttable presumption.
The Board has recently reiterated this view in Burns
International Security Services, Inc., 225 NLRB 271 (1976).
The two newspaper articles which appeared in the
Nevada State Journal on August 20 and 22, 1974, were
cited by Petricciani as being the most important factor in
his decision. While it is clear that Petricciani was correct in
his arithmetic regarding the percentages of employees
organized by the Union, it must be remembered that the
article had reference to a wide area of employees which
included both the Reno and Lake Tahoe areas. The figures,
of course, were not limited to just the Respondent's club,
but would include an area of many employers and
employees.
The appointment of a trustee for the Union indicated
financial trouble to Petricciani and this belief was con-
firmed by his two attorneys. Of course, financial difficulty
could be attributable to several factors insofar as a labor
organization is concerned, but it is not illogical to believe
that a decline in members paying dues could cause
financial difficulty for a union insofar as revenues are
concerned. However, once again, even if the Union was in
financial trouble, it does not necessarily mean a loss of
members at the Respondent's club since the Union covered
both the Reno and Lake Tahoe areas.
Although the newspaper articles referred to Bramlet's
opinion that working conditions in Reno and Lake Tahoe
were "archaic" and "undesirable," Petricciani correctly
pointed out that no grievances were filed against the
Respondent during the period after the articles appeared in
the newspaper. Nevertheless, the articles did not refer to
working conditions specifically at the Respondent's club,
but were expressed in general terms. The newspaper
articles do not establish that the working conditions at the
Respondent's club were either "archaic" or "undesirable,"
or that the Respondent had any type of working conditions
which would warrant the filing of a grievance. In North
American Manufacturing Company, 224 NLRB 1252 (1976),
the Board adopted the findings and conclusions of the
Administrative Law Judge in that case who stated at 1258:
And Respondent's showing regarding grievance activi-
ty here likewise has no persuasive force insofar as the
question of the Union's continued representative status
is concerned. Among other things, Respondent has not
demonstrated that grievances existed and were unpro-
cessed by the Union, nor even that the Union was lax
in carrying out its obligations in this regard.
In A. W. Thompson, Inc., 216 NLRB 710 (1975), the
Board adopted the findings and conclusions of the
Administrative Law Judge in that case who stated at 712:
As a second affirmative defense, the Respondent
argues that, notwithstanding that article III of the
Working Agreement provides for grievance procedure,
no grievances were ever processed with the Respondent
by Local 826 or any representative of Local 826.
This fact, also, is unrefuted, the evidence reflecting
that during the contract period no grievances were filed
and, accordingly, none was processed. It also appears
that nothing of any moment occurred giving rise to the
use of the grievance machinery, for, as Thompson
testified, he could recall nothing happening which
would have caused employees to be dissatisfied with
their working conditions, that nothing came to his
attention concerning problems with employees register-
ing complaints.
I find that the foregoing findings adopted by the Board
to be applicable in this case.
Another factor given by Petricciani was that there had
been no NLRB election. The Board in White Castle
System, Inc., 224 NLRB 1089 (1976), adopted the findings
and conclusions of the Administrative Law Judge in that
case who said at 1090: "I agree with General Counsel that
the fact that no election had ever been held is not a valid
consideration on which to predicate a doubt of majority
status. It must be presumed that when recognition was
granted Respondent acted lawfully and recognized a
majority union."
Petricciani also cited as factors in his decision that the
State of Nevada has a right-to-work law, that there was no
union-security clause in the prior contract, and that there
was no dues-checkoff provision in the prior contract. None
of these facts were contradicted. However, the legal effect
of those facts has been considered by the Board. In Wald
Transfer & Storage Co. and Westheimer Transfer & Storage
Co., Inc., 218 NLRB 592 (1975), citing the decisions in
1137
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Terrell Machine Company, 173 NLRB 1480 (1969), enfd.
427 F.2d 1088 (C.A. 4, 1970), and N.L.R.B. v. Gulfmont
Hotel, 362 F.2d 588 (C.A. 5, 1966), the Board stated:
It has been clearly established that a distinction
exists between union membership and union support,
foreclosing relying upon one as evidence of the other.
Here, union membership being voluntary in this right-
to-work State emphasizes that distinction. Many
employees while approving of the Union may not
choose to give it their financial support or participate as
members.
The Board has also stated at 652 that:
Similarly, the Board, with court approval, has held
that a showing that less than a majority of the
employees in the unit are members of the union is not
the equivalent of showing lack of majority support. The
reason is substantially the same as that regarding the
checkoff figures, namely, that no one can know how
many employees who favor union representation do
not become or remain members of the Union.
[Bartenders, Hotel, Motel and Restaurant Employers
Bargaining Association of Pocatello, Idaho and its
Employer-Members, 213 NLRB 651 (1974).]
I find that the Bartenders, Gulfmont, and Wald Transfer
rationale to be applicable here. See also the Board's
decision in Orion Corporation, 210 NLRB 633 (1974).
The amount of turnover among the bar and culinary
employees of the Respondent is still another factor in
Petricciani's decision to withdraw recognition from the
Union. There can be little question that the turnover
among those employees was substantial for the 3-year
period examined by Petricciani. Nevertheless, the Board
has stated with regard to the turnover of employees:
Finally, Respondent relied on the turnover of
employees to support its belief that the Union has lost
majority support. This argument must also be rejected.
The Board has ruled, with court approval, that turnover
among employees cannot, by itself, be used as a basis
for belief that a union has lost majority support since it
is presumed that, absent evidence that would justify a
contrary conclusion, new employees will support the
union in the same ratio as those whom they have
replaced."I Here, there is no independent evidence
from which it may be inferred that Respondent's new
employees did not want the Union to represent them.
Therefore, given our findings above, the turnover of
employees cannot, by itself, be used as a basis for belief
that the Union had lost majority support. [Dalewood
Rehabilitation Hospital, Inc., d/b/a Golden State Habili-
tation Convalescent Center, 224 NLRB 1618 at 1620
(1976).]
l t Laystrom Manufacturing Co., 151 NLRB 1482 (1965); Washington
Manor Inc., doing business as Washington Manor Nursing Center (South).
211 NLRB 315 (1974).
See also Burns International Security Services, Inc., 225
NLRB 271 (1976); A. W. Thompson, Inc., 216 NLRB 710
(1975); Strange and Lindsey Beverages, Inc., and Dr. Pepper
Bottling Co., Inc., Joint Employers d/b/a Pepsi-Cola-Dr.
Pepper Bottling Co., 219 NLRB 1200 (1975).
I have read and considered the recent opinion of the
United States Court of Appeals for the Seventh Circuit in
Star Manufacturing Company, Division of Star Forge, Inc. v.
N.L.R.B., 536 F.2d 1192 (C.A. 7, 1976). Among the several
factors set forth therein, the large turnover of employees
was one factor relied on by the employer for withdrawing
recognition from the union in that case. The court agreed
with the views set forth in the dissenting opinion of
Chairman Betty Southard Murphy and stated: "We adopt
her well reasoned dissenting opinion as the opinion of this
court." The Board's decision is reported at 220 NLRB 582
(1975). There are some factual distinctions between Star
Manufacturing and the instant case, but it is not necessary
to analyze those distinctions because it is Board precedent
which is controlling and which is being applied here.
I have also given consideration to the Board's decision in
Peoples Gas System, Inc., 214 NLRB 944 (1974). However,
the facts in that case are substantially different from the
facts herein. For example, with regard to the turnover
factor, People Gas involved a change in the composition of
the bargaining unit, a strike and the permanent strike
replacements, the acquisition of another business where the
employees there were unrepresented, and the union's
concession that none of the newly acquired employees had
signed union authorization and dues-checkoff cards.
Petricciani also relied on conversations which he had
with two management persons, Stevens and Quilici, former
employee Hollinger, and employees Sarlo, Casanava, and
Kidder. It must be remembered that the 3 employees who
spoke to Petricciani represent a small percentage of the 110
bar and culinary employees of the Respondent at that
point in time. Bartenders, Hotel, Motel and Restaurant
Employers Bargaining Association of Pocatello, Idaho, supra,
and Strange and Lindsey Beverages, supra.
With regard to the factor of statements made by
employees, the Board has held in Golden State Habilitation
Convalescent Center, supra at 1619-20 (1976):
The employee statements are some indication of
employee dissatisfaction. However, they are entitled to
little weight to the extent they purport to convey the
sentiments of employees other than themselves. Other-
wise, a few antiunion employees could provide the basis
for a withdrawal of recognition when in fact there is
actually an insufficient basis for doubting the Union's
continued majority. Since those who expressed anti-
union sentiments were few in number, we conclude that
Respondent could not rely heavily on these expressions
in refusing to bargain.
With regard to the statements made by Stevens and Quilici
to Petricciani, the Board adopted the Administrative Law
Judge's findings in United Aircraft Corporation (Pratt &
Whitney Division), 168 NLRB 480 (1967), wherein it has
stated at 486:
Of prime importance is the fact that evidence of
dissatisfaction with a collective-bargaining agent duly
selected and long accepted and utilized as the means
1138
PALACE CLUB
for obtaining successive improvements in conditions of
employment must properly come from the employees
themselves, if it is to carry any weight, and not from the
employer on their behalf.
After considering the Board and court precedents cited
above and applying them to the factors, considered
together, which were relied on by Petricciani in this case, I
conclude that the Respondent has not rebutted the General
Counsel's prima facie case by showing that it had a
reasonably based doubt, which was based upon objective
considerations, of the Union's presumed majority status at
the time that the Respondent withdrew recognition from
the Union.
With regard to the other defense which the Respondent
raised under Terrell Machine and the other cases cited
previously, there is no evidence on this record which
establishes that the Union, in fact, did not enjoy majority
status at the time that the Respondent withdrew recogni-
tion. Accordingly, I find that the Respondent violated
Section 8(a)(l) and (5) of the Act by withdrawing
recognition from the Union and by refusing to bargain
with the Union on December 20, 1974.
IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES
UPON COMMERCE
The activities of Respondent set forth in section III,
above, occurring in connection with the operations de-
scribed in section 1, above, have a close, intimate, and
substantial relationship to trade, traffic, and commerce
among the several States and tend to lead to labor disputes
burdening and obstructing commerce and the free flow of
commerce.
Upon the basis of the foregoing findings of fact and upon
the entire record, I make the following:
CONCLUSIONS OF LAW
i. Finally, Inc., d/b/a Palace Club, is an employer
engaged in commerce within the meaning of Section 2(6)
and (7) of the Act.
2. Hotel-Motel-Restaurant Employees & Bartenders
Union, Local 86, Hotel & Restaurant Employees &
Bartenders International Union, AFL-CIO, is a labor
organization within the meaning of Section 2(5) of the Act.
3. The following employees constitute a unit appropri-
ate for the purposes of collective bargaining within the
meaning of Section 9(b) of the Act:
All employees employed by the Respondent in its bar
and culinary operations at its Reno, Nevada, place of
business, excluding all other employees, guards and
supervisors as defined in the Act.
4. At all times material herein, the Union has been, and
is, the exclusive representative of all employees in the
above-described appropriate unit for the purposes of
collective bargaining.
'o In the event no exceptions are filed as provided by Sec. 102.46 of the
Rules and Regulations of the National Labor Relations Board, the findings,
conclusions. and recommended Order herein shall, as provided in Sec.
5. By withdrawing recognition from the Union and by
refusing to bargain with the Union as the exclusive
bargaining representative of the employees in the unit
described above, concerning the wages, hours, working
conditions, and other terms and conditions of employment
of the employees in the unit, the Respondent has engaged
in unfair labor practices within the meaning of Section
8(a)(1) and (5) of the Act.
6. The aforesaid unfair labor practices affect commerce
within the meaning of Section 2(6) and (7) of the Act.
THE REMEDY
Having found that the Respondent has engaged in unfair
labor practices in violation of Section 8(a)(1) and (5) of the
Act, I shall recommend that it be ordered to cease and
desist therefrom and that it take certain affirmative action
to effectuate the policies of the Act.
Upon the basis of the foregoing findings of fact,
conclusions of law, and the entire i-cord in this proceed-
ing, and pursuant to the provisions of Section 10(c) of the
Act, I hereby issue the following recommended:
ORDER 10
The Respondent, Finally, Inc., d/b/a Palace Club, Reno,
Nevada, its officers, agents, successors, and assigns, shall:
1. Cease and desist from:
(a) Refusing to recognize and bargain with Hotel-Motel-
Restaurant Employees & Bartenders Union, Local 86,
Hotel & Restaurant Employees & Bartenders International
Union, AFL-CIO, as the exclusive bargaining representa-
tive of the employees in the appropriate bargaining unit
described below, with regard to the wages, hours, working
conditions, and other terms and conditions of employment
of the unit employees:
All employees employed by the Respondent in its bar
and culinary operations at its Reno, Nevada, place of
business, excluding all other employees, guards and
supervisors as defined in the Act.
(b) In any like or related manner interfering with,
restraining, or coercing its employees in the exercise of the
rights guaranteed them by Section 7 of the Act.
2. Take the following affirmative action which is
necessary to effectuate the policies of the Act:
(a) Recognize and, upon request, bargain collectively
with Hotel-Motel-Restaurant Employees & Bartenders
Union, Local 86, Hotel & Restaurant Employees &
Bartenders International Union, AFL-CIO, as the exclu-
sive bargaining representative of the employees in the
appropriate unit described below, with regard to the wages,
hours, working conditions, and other terms and conditions
of employment of the unit employees and, if an under-
standing is reached, embody such understanding in a
signed agreement. The unit found appropriate for the
purposes of collective bargaining is:
102.48 of the Rules and Regulations, be adopted by the Board and become
its findings, conclusions. and Order, and all objections thereto shall he
deemed waived for all purposes.
1139
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
All employees employed by the Respondent in its bar
and culinary operations at its Reno, Nevada, place of
business, excluding all other employees, guards and
supervisors as defined in the Act.
(b) Post at its Reno, Nevada, place of business copies of
the attached notice marked "Appendix."" Copies of said
notice, on forms provided by the Regional Director for
Region 20, after being duly signed by an authorized
representative of the Respondent, shall be posted by the
Respondent immediately upon receipt thereof, and be
maintained by it for 60 consecutive days thereafter, in
conspicuous places, including all places where notices to
employees are customarily posted. Reasonable steps shall
be taken by the Respondent to insure that the notices are
not altered, defaced, or covered by any other material.
(c) Notify the Regional Director for Region 20, in
writing, within 20 days from the date of this Order, what
steps the Respondent has taken to comply herewith.
" In the event that the Board's Order is enforced by a Judgment of a
United States Court of Appeals, the words in the notice reading "Posted by
Order of the National Labor Relations Board" shall read "Posted Pursuant
to a Judgment of the United States Court of Appeals Enforcing an Order of
the National Labor Relations Board."
APPENDIX
NOTICE To EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
After a hearing at which all parties had the opportunity to
present evidence, the National Labor Relations Board has
found that we violated the National Labor Relations Act
and has ordered us to post this notice.
WE WILL recognize and, upon request, bargain with
Hotel-Motel-Restaurant Employees & Bartenders
Union, Local 86, Hotel & Restaurant Employees &
Bartenders International Union, AFL-CIO, as the
exclusive bargaining representative of the employees in
the appropriate unit described below, with regard to the
wages, hours, working conditions, and other terms and
conditions of employment of the unit employees and, if
an understanding is reached, embody such understand-
ing in a signed agreement. The unit found appropriate
for the purposes of collective bargaining is:
All employees employed by the Employer in its
bar and culinary operations at its Reno, Nevada,
place of business, excluding all other employees,
guards and supervisors as defined in the Act.
WE WILL NOT refuse or fail to do the foregoing and
WE WILL NOT in any like or related manner interfere
with, restrain, or coerce our employees in the exercise
of the rights guaranteed them by Section 7 of the Act.
FINALLY, INC., D/B/A
PALACE CLUB
1140