Chicago Dining Room Employees

604 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Chicago Dining Room Employees, Cooks & Bartend- ers Union, Local 42 and Clubmen, Inc., d/b/a Gaslight Club, Palmer House and Palmer House Company; Ambassador East Hotel; Am- bassador West Hotel; Arlington Park Hilton; Astor Tower Hotel; Bismarck Hotel; Blackstone Hotel; Conrad Hilton Hotel; Continental Plaza; Drake Hotel; Executive House; Holiday Inn Chicago-City Center; Holiday Inn Chicago- Downtown; Holiday Inn Chicago-Lake Shore Drive; Holiday Inn Chicago-Mart Plaza; Hyatt Regency Chicago; Hyatt Regency O'Hare; Lin- colnwood Hyatt House; Midland Hotel; Oak Brook Hyatt House; O'Hare Hilton; Pick-Con- gress Hotel; Playboy Towers; Ramada, The O'Hare Inn; Ritz-Carlton Hotel; Rodeway Inn- Chicago; Radisson-Chicago Hotel; Sheraton Oak Brook Motor Hotel; Sheraton Plaza; Water Tower Hyatt House; Whitehall Hotel; Chicago Joint Executive Board, Hotel and Res- taurant Employees, and Bartenders Internation- al Union, AFL-CIO; Hotel, Motel, Club, Cafe- teria, Restaurant Employees and Bartenders Union, Local 450; Hotel-Motel Service Work- ers, Drug Store, Sports Events, Industrial Ca- tering and Miscellaneous Employees Union, Local 593, Parties to the Contract and Greater Chicago Hotel and Motel Association, Party in Interest. Case 13-CE-60 March 21, 1980 DECISION AND ORDER BY CHAIRMAN FANNING AND MEMBERS PENELLO AND TRUESDALE Upon charges filed by Clubmen, Inc., d/b/a Gaslight Club, Palmer House, the Regional Direc- tor for Region 13 of the National Labor Relations Board, acting on behalf of the General Counsel of the Board, on November 21, 1978, issued a com- plaint alleging that Respondent Union, Chicago Dining Room Employees, Cooks & Bartenders Union, Local 42, violated Section 8(e) of the Na- tional Labor Relations Act, as amended. Respon- dent thereafter filed an answer to the complaint wherein it denied having committed any unfair labor practices. On July 16, 1979, the General Counsel, the Charging Party and Respondent entered into a stip- ulation in which they agreed to certain facts rel- evant to this proceeding and also agreed to the in- troduction of other documents. They also joined in filing a motion to the Board to transfer these pro- ceedings directly to the Board. As part of the motion, the parties agreed to waive a hearing before an administrative law judge, the issuance of an administrative law judge's decision, and the pre- sentation of any evidence other than that contained in the stipulation and the exhibits attached thereto. 248 NLRB No. 83 By order dated October 19, 1979, the Board ap- proved the stipulation and transferred the proceed- ing to the Board. Thereafter, the Charging Party filed a brief. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the Na- tional Labor Relations Board has delegated its au- thority in this proceeding to a three-member panel. The Board has considered the entire record in this case, including the Charging Party's brief, and makes the following findings: I. THE BUSINESS OF THE EMPLOYER The Charging Party, Clubmen, Inc., d/b/a Gas- light Club, Palmer House, is an Illinois corporation and a wholly owned subsidiary of Gaslight Club, Inc. At all times material herein the Charging Party has maintained an office and place of busi- ness at 17 East Monroe Street, Chicago, Illinois, where it is engaged in the operation of a restaurant, lounge, and key club. During the calendar year 1978, a representative period, the Charging Party, in the course and conduct of the business operation described above, had a gross volume of business in excess of $500,000 and has purchased and received goods and products valued in excess of $50,000 di- rectly from points located outside the State of Illi- nois. The parties stipulated and we find that the Charging Party is, and has been at all times materi- al herein, an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act. It. THE LABOR ORGANIZATION INVOLVED The parties stipulated and we find that Respon- dent is a labor organization with the meaning of Section 2(5) of the Act. 1II. THE ALLEGED UNFAIR LABOR PRACTICES A. The Relevant Stipulated Facts The Palmer House Company (hereinafter re- ferred to as Palmer House) operates a multi-story commercial hotel facility at 17 East Monroe Street in Chicago, Illinois. From about 1955 to the pre- sent it has been a member of the Greater Chicago Hotel and Motel Association (hereinafter referred to as the Association). On behalf of its members, including Palmer House and the approximately 30 other hotels named in the caption herein, the Asso- ciation negotiates collective-barganing agreements with the Chicago Joint Executive Board, Hotel and Restaurant Employees and Bartenders International Union, AFL-CIO (hereinafter referred to as Joint Board). In such negotiations, the Joint Board is the CHICAGO DINING ROOM EMPLOYEES 605 exclusive collective-bargaining agent for the Re- spondent Union and the two other labor organiza- tions who are Parties to the Contract named in the caption. In April 1977, the Association and the Joint Board negotiated a collective-bargaining agreement that is effective until March 31, 1981. That agree- ment contains the following provision: Section 4-Change of Identity (d) If a portion of any Employer's facility is sold, leased, transferred or otherwise disposed of through contractual arrangement where members of the bargaining unit are employed at the time of such sale, lease, transfer or con- tractual arrangement, such purchaser-lessee or transferee shall as a condition precedent to such transaction execute this Agreement, pro- viding such purchaser-lessee or transferee em- ploys employees working in job classifications covered by this Agreement. The Charging Party herein is not a member of and is not affiliated in any manner with the Associ- ation, nor is it a party or a signatory to any collec- tive-bargaining agreement with Respondent. Re- spondent does not represent any employees of the Charging Party. The unit of employees covered by the collective-bargaining agreement between the Association and the Joint Board includes only em- ployees of Palmer House and other members of the Association and does not include any employees of the Charging Party. At all times material herein, Palmer House has had a lease agreement with the Charging Party whereby the Charging Party leases and occupies space for its business operations, including a restau- rant, lounge, and key club. The lease agreement provides that commencing on January 1, 1978, and extending until December 31, 1982, the Charging Party/lessee will occupy specified clubroom space on the fifth floor of the Palmer House/lessor's fa- cility. The lease provides renewal options for two additional 5-year terms. It requires that the Charg- ing Party pay Palmer House both a fixed rent and an additional sum if and when the Charging Party's gross sales exceed a specified amount. Said lease agreement requires the Charging Party to comply with all applicable laws and provides that the Charging Party cannot make alterations or addi- tions to the premises without Palmer House's ad- vance written consent. The lease does not reserve to Palmer House any control over hiring, firing, and/or terms and condi- tions of employment of the Charging Party's em- ployees. The lease contains no reference to the col- lective-bargaining agreement described above or its terms. Prior to the Charging Party's occupancy of the fifth-floor premises of Palmer House, the same premises, with the exception of an adjacent dining room, were occupied and leased by the Traffic Club. The adjacent dining room, now leased and occupied by the Charging Party, was used periodi- cally by Palmer House prior to the Charging Party's occupancy. About November 1977, the Traffic Club moved its operation intact to leased second-floor space of the Palmer House facility where it has remained ever since. At all times during the Traffic Club's occupancy of the fifth floor and at all times thereafter, Palmer House, as part of its lessor obligation to the Traffic Club, operated the food and beverage service of the Traffic Club, which has been staffed by ap- proximately 15 Palmer House employees. These employees are members of Respondent Union. None of the 15 Palmer House employees lost their jobs as a result of the Traffic Club's move from the fifth floor to the second floor of the hotel. The Charging Party at all material times has em- ployed approximately 100 employees in the Palmer House, including waiters and waitresses, busper- sons, cashiers, bartenders, cooks, and other kitchen staff. The Charging Party does not employ, and has not employed, at its leased space in the Palmer House, any employees previously employed by Palmer House, including any employees serving the Traffic Club operations. The Charging Party hires its own employees by means of transfer of employees from other clubs operated by Gaslight Club, Inc., newspaper adver- tisments, or unsolicited "walk-ins." It trains its own employees and operates its own food and beverage service with no assistance from Palmer House. The Charging Party exercises exclusive control over the hiring, firing, and terms and conditions of em- ployment of its employees employed in its restau- rant, lounge, and key club in the Palmer House. Although Respondent Union has requested that the Charging Party execute the collective-bargain- ing agreement in effect between Respondent and Palmer House, the Charging Party refused and continues to refuse to execute said collective-bar- gaining agreement. On or about June 8, 1978, Respondent Union filed a lawsuit in United States District Court for the Northern District of Illinois, Eastern Division, Civil Action No. 78-C-2315, against the Palmer House, alleging that the Charging Party refused to execute said collective-bargaining agreement, and seeking further to enjoin Palmer House from con- tinuing to lease space to the Charging Party at its 606 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Monroe Street facility. The Charging Party inter- vened in that lawsuit. On March 1, 1979, a United States District Court judge entered an "Order Granting Preliminary In- junction" in Civil Action No. 78 C 4637, enjoining Respondent Union from engaging in conduct al- leged to be violative of the Act in Case 13-CE-60, pending final disposition of said case by the Board. The order further stayed all proceedings in Civil Action No. 78 C 2315 pending final disposition of Case 13-CE-60. All parties to the proceedings in Civil Action No. 78 C 4637 and in Civil Action No. 78 C 2315 consented to the entry of the order. B. Contentions of the Parties The General Counsel alleges in the complaint that section 4(d) of the collective-bargaining agree- ment between Respondent and Palmer House vio- lates Section 8(e) of the Act because its restrictions are encompassed within the "cease doing business with any other person" language of Section 8(e). The Charging Party contends that section 4(d) is a facially unlawful union signatory clause because its effect is to require that Palmer House lease only to a lessee signatory or to a lessee willing to be bound by the collective-bargaining agreement bind- ing upon Respondent and Palmer House. It further contends that section 4(d) has only unlawful sec- ondary purposes and makes no pretense of attempt- ing to protect members of the bargaining unit. Fi- nally, the Charging Party contends that the Re- spondent Union's attempt to void the lease in court is a unilateral reaffirmation sufficient to constitute an "entering into" the unlawful agreement within the time limits of Section 10(b) of the Act. Respondent in its answer to the complaint denies that it has committed any unfair labor practices. C. Discussion and Conclusions The threshold issue in this case is whether some action or conduct has been taken by Respondent during the 6-month limitation period provided in Section 10(b) which constitutes an "entering into" within the meaning of Section 8(e) of the Act. The clause at issue herein is contained in an agreement between Respondent and Palmer House in its capacity as a member of the Association. That agreement became effective April 11, 1977, a date more than 6 months prior to the filing of the charge in the instant case on June 27, 1978. On June 8, 1978, a date within the 6-month period prior to the filing of the charge, Respondent filed a lawsuit seeking to compel compliance with the re- strictions on leasing contained therein. Section 8(e) forbids only the "entering into" of an agreement whereby the employer agrees to cease doing business with another person. The Board has found that the maintenance, enforce- ment, and reaffirmation of such an agreement within the 10(b) period constitutes an "entering into" within the meaning of Section 8(e).1 In order to find an "entering into" based on reaffirmation, it is not necessary that there be compliance as well as a demand for compliance. 2 We find that Respon- dent in the instant case, by demanding compliance with the agreement and instituting suit in order to compel compliance, reaffirmed the agreement and maintained the enforceability of the clause. Section 8(e) of the Act makes it an unfair labor practice for an employer and a union to enter into an agreement, express or implied, to cease doing business with another person. The lawfulness of the clause herein depends upon whether the "Union's objective was preservation of work for . . . em- ployees, or whether the agreements . . . were tac- tically calculated to satisfy union objectives else- where.... The touchstone is whether the agree- ment or its maintenance is addressed to the labor relations of the contacting employer vis-a-vis his own employees." 3 It is well settled that contract clauses which pur- port to limit leasing 4 or subcontracting to employ- ers who are signatories to union contracts, so- called union signatory clauses, are proscribed by Section 8(e). Such clauses are viewed as not being designed to protect the wages and job opportuni- ties of unit employees, but as being directed at fur- thering general union objectives and undertaking to regulate the labor policies of other employers. I Bricklayers and Stone Masons Union. Local No. 2, etc. (Gunnar I John- son & Son, Inc.), 224 NLRB 1021 (1976); International Organization of Masters, Mates and Pilots, AFL-CIO (Seatrain Lines, Inc.), 220 NLRB 164 (1975). 2 Hotel and Restaurant Employees and Bartenders' Union, Local 531 (Angelus Auto Parks, Inc. and Elnic Corporation d/b/a Verdugo Hills Bowl), 237 NLRB No. 190 (1978); Bricklayers and Stone Masons Union, Local No. 2 (Associated General Contractors of Minnesota), supra; Dan McKinney Co., 137 NLRB 649 (1962). a National Woodwork Manufacturers Association, et al. v. NL.R.B., 386 U.S. 612, 644-645 (1967). 4The Board has repeatedly held that the sale or transfer of an enter- prise is generally to be viewed not as a business transaction within the scope of Sec. 8(e), but as a substitution of one entity for another while the conduct of business continues, without interruption. International Union of Operating Engineers, Local No. 701, AFL-CIO (Cascade Employ- ers Association, Inc., etc), 221 NLRB 751 (1975); District No. 71, Interna- tional Association of Machinists and Aerospace Workers, AFL-CIO (Harris Truck and Trailer Sales, Inc.), 224 NLRB 100 (1976). A lease, however, is generally not comparable to a sale, for no permanent transfer takes place where one entity is substituted for another. Such is the case with the lease herein. The Palmer House retained an interest in the property and placed conditions on its use in the terms of the lease. Accordingly, we find that the lease here is sufficiently distinguished from a sale to consti- tute a form of "doing business" within the meaning of Sec. 8(e) Hotel and Restaurant Employees, etc., Local 531 Verdugo Hills Bowl), supra; Retail Clerks Union Local 324, Retail Clerks International Association, AFL-CIO (Federated Department Stores, Inc., d/b/a Ralphs Grocery Com- pany), 235 NLRB 711 (1978). CHICAGO DINING ROOM EMPLOYEES 607 We find, for the reasons stated below, that sec- tion 4(d) of the contract has the effect of a union signatory clause and, as such, is unlawful under Section 8(e) of the Act. 5 Section 4(d) of the contract requires that, in the event that the employer leases any portion of its premises where bargaining unit members are em- ployed at the time of the lease, and if the lessee employs any employees in job classifications cov- ered by the agreement, then the lessee must ex- ecute the collective-bargaining agreement or agree to be bound by its terms as a condition precedent to the lease transaction. The effect of this language is that Palmer House is prohibited from conducting such transactions with persons who do not recog- nize and become bound to the observance of Re- spondent's agreement; hence it is a typical "union signatory clause." The clause does not in any way limit its effect to the preservation of the jobs of any unit employees that are employed in the leased portion of the hotel. Rather, it requires the lessee to become bound to the contract regardless of whether or not those unit employees lose their jobs. Thus, the provisions of section 4(d) exceed the legitimate primary purpose of protecting unit work and are directed at the secondary purpose of furthering general union objectives, in violation of Section 8(e). 6 IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The activities of Respondent as set forth above occurring in connection with the Employer's oper- ations have a close, intimate, and substantial rela- tionship 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. CONCLUSIONS OF LAW I. Clubmen, Inc., d/b/a Gaslight Club, Palmer House, is an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act. 2. Respondent is a labor organization within the meaning of Section 2(5) of the Act. 3. By entering into, enforcing, and giving effect to the leasing clause of section 4(d) of its collec- tive-bargaining agreement with the Palmer House Company, Respondent has entered into an agree- ment in violation of Section 8(e) of the Act. I Hotel and Restaurant Employees, etc. Local 531 (erdugo Hills Bowls), supra. eHotel and Restaurant Employees, etc., Local 531 (erdugo Hills Bowl),. supra. THE REMEDY Having found that Respondent has engaged in a violation of Section 8(e) of the Act, we shall order that it cease and desist therefrom and take certain affirmative action in order to effectuate the policies of the Act. ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Re- lations Board hereby orders that the Respondent, Chicago Dining Room Employees, Cooks & Bar- tenders Union, Local 42, Chicago, Illinois, its offi- cers, agents, and representatives, shall: 1. Cease and desist from entering into, enforcing, or giving effect to the leasing clause of section 4(d) of its collective-bargaining agreement with the Palmer House Company, in the manner herein found unlawful. 2. Take the following affirmative action: (a) Post at its business offices and meeting halls copies of the attached notice marked "Appendix."' Copies of said notice, on forms provided by the Regional Director for Region 13, after being duly signed by Respondent's representative, shall be posted by Respondent immediately upon receipt thereof, and be maintained by it for 60 consecutive days thereafter, in conspicuous places, including all places where notices to members are customarily posted. Reasonable steps shall be taken by Respon- dent to insure that said notices are not altered, de- faced, or covered by any other material. (b) Furnish the Regional Director for Region 13 with signed copies of the aforesaid notice for post- ing at Palmer House, should it be willing, at all places where notices to its employees are customar- ily posted. (c) Notify the Regional Director for Region 13, in writing, within 20 days from the date of this Order, what steps the Respondent has taken to comply herewith. ' In the event that this Order is enforced by a Judgment of a United States Court of Appeals, the words n the notice reading "Posted by Order of the National Labor Relations Board" shall read "Posted Pursu- ant to a Judgment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board" APPENDIX NOTICE TO MEMBERS POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government WE WILL NOT maintain, enforce, or give effect to the leasing clause of section 4(d) of 608 DECISIONS OF NATIONAL LABOR RELATIONS BOARD our agreement with the Palmer House Compa- ny in the manner found by the National Labor Relations Board to violate Section 8(e) of the National Labor Relations Act, as amended. CHICAGO DINING ROOM EMPLOYEES, COOKS & BARTENDERS UNION, LOCAL 42