Ohio Inns, Inc.

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to this unit is now pending in the Regional Office (Case 9-RM-696) 2 The Employer has by telegram dated July 16, 1973, withdrawn from its position of opposing the petition on jurisdictional grounds and now requests that the Board assert jurisdiction and direct an election in the case at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