Barney's Club, Inc.

414 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Barney's Club, Incorporated and Hotel -Motel-Restau- rant Employees & Bartenders Union, Local 86, Hotel and Restaurant Employees & Bartenders International Union, AFL-CIO. Case 20-CA-9737 December 17, 1976 DECISION AND ORDER BY CHAIRMAN MURPHY AND MEMBERS FANNING AND PENELLO On February 20, 1976, Administrative Law Judge Richard D. Taplitz issued the attached Decision in this proceeding. Thereafter, the Respondent filed exceptions and a supporting brief. The General Counsel and the Charging Party filed briefs in support of the Decision. 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,' findings,2 and conclusions3 of the Administrative Law Judge4 and to 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, Barney's Club, Incorporated, Stateline, Nevada, its officers, agents, successors, and assigns, shall take the action set forth in the said recommended Order. i The Respondent's request for oral argument is hereby denied, as the record and the briefs adequately present the issues and positions of the parties We also find no merit in the Respondent's motion to strike the Charging Party's brief on various grounds and that motion is hereby denied 2 The Respondent has excepted to certain credibility findings made by the Administrative Law Judge It is the Board's established policy not to overrule an Administrative Law Judge 's resolutions with respect to credibili- ty unless the clear preponderance of all of the relevant evidence convinces us that the resolutions are incorrect. Standard Dry Wall Products, Inc, 91 NLRB 544 (1950), enfd 188 F 2d 362 (C A. 3, 1951). We have carefully examined the record and find no basis for reversing his findings. 3 For the reasons set forth in Tahoe Nugget, Inc, 227 NLRB 357 (1976), we agree with the Administrative Law Judge's conclusion that the Union's presumption of majority status based on its recognition as the bargaining representative for the Respondent's employees as part of a multiemployer unit survived the Respondent's timely withdrawal from that unit and the shift to bargaining on a single-employer basis Also for the reasons set forth in Nevada Lodge, 227 NLRB 368 (1976), we disagree with the Respondent's contention that the Board should not assert its clearly established legal jurisdiction in this case 4 Chairman Murphy in agreeing that the Respondent violated Sec 8(a)(I) of the Act in maintaining the disputed no-solicitation rule does so on the ground that in her view the rule was overly, and thus unlawfully, broad See her concumng opinion in M Restaurants, Incorporated d/b/a The Mandann, 221 NLRB264(1975) 227 NLRB No. 74 Member Penello adheres to the position he took in GTE Lenkurt, Incorporated, 204 NLRB 921 (1973), but agrees with Chairman Murphy, for the reasons given by her in her concumng opinion in Mandarin, supra, that the instant no-solicitation rule which is identical to the one considered by the Board in Mandarin is not a "no-access" rule under the principles set forth in Lenkurt, supra, but is an unlawfully broad no-solicitation rule. DECISION STATEMENT OF THE CASE RICHARD D. TAPLITZ, Administrative Law Judge: This case was heard in South Lake Tahoe, California, on October 1 and 2, 1975. The charge was filed on November 19,1974, by Hotel-Motel-Restaurant Employees & Bartend- ers Union Local No. 86, Hotel and Restaurant Employees & Bartenders International Union, AFL-CIO, herein called the Union. The complaint and amended complaint issued on April 11 and July 31, 1975, respectively, alleging that Barney's Club, Incorporated, herein called Respon- dent, violated Section 8(a)(1) and (5) of the National Labor Relations Act, as amended. Issues The primary issues are: 1. Whether Respondent violated Section 8(a)(1) of the Act by maintaining a written rule prohibiting solicitation on company premises by employees after the employees' shifts, while permitting employees to remain on the premises for other purposes. 2. Whether Respondent violated Section 8(a)(5) and (1) of the Act by withdrawing recognition from and refusing to bargain with the Union as the collective-bargaining repre- sentative of its bar and culinary employees. Subsidiary issues with regard to that allegation are: (a) Whether the rebuttable presumption of the Union's continued majority status which flowed from a contract in a multiemployer bargaining unit survived Respondent's time- ly withdrawal from that unit and was applicable to a single- employer bargaining unit. (b) If the presumption did apply, whether Respondent has rebutted that presumption by affirmatively establishing that the Union had, in fact, lost its majority or by showing that Respondent had sufficient objective bases for reason- ably doubting the Union's continued majority. A further issue is whether the Employer has engaged in any conduct tending to encourage employee disaffection from the Union. All parties were given full opportunity to participate, to introduce relevant evidence, to examine and cross-examine witnesses, to argue orally and to file briefs.' Briefs, which have been carefully considered, were filed on behalf of the General Counsel, Respondent, and Charging Party. Upon the entire record of the case, and my observation of the witnesses and their demeanor, I make the following: i In its brief Respondent requests reconsideration of its motion to reopen its case-in-chief For the reasons set forth in the record relating to the original motion, the request is denied BARNEY'S CLUB 415 FINDINGS OF FACT 1. THE BUSINESS OF RESPONDENT Respondent is a Nevada corporation engaged in the operation of a gaming casino, bar, and restaurant at Stateline, Nevada. During the year immediately preceding issuance of complaint, Respondent's gross revenues were in excess of $500,000, and' during the same year Respondent purchased goods and materials valued in excess of $10,000 which originated outsideof Nevada. Respondent is an employer engaged in commerce and in a business affecting commerce within the meaning of Section 2(6) and (7) of the Act, and it will effectuate the policies of the Act for the-Board to assert jurisdiction. See The Anthony Company d/b/a El Dorado Club, 220 NLRB 886 (1975); and cases cited therein. II. THE LABOR ORGANIZATION INVOLVED The Union is a labor organization within the meaning of Section,2(5) of the Act. - III.. THE ALLEGED UNFAIR LABOR PRACTICES A. The Background The Reno Employers Council,-herein called the Associa- tion, is a Nevada, corporation with an office located in Reno, Nevada. It is a voluntary association of employers engaged in the casino, restaurant, and other industries. The Association-exists in part for the purpose of representing its member-employers in collective bargaining and in adminis- tering collective-bargaining agreements with various labor organizations, including the Union. The Union and the Association entered into _ a multiemployer collective-bar- gaining contract on August 3, 1959. The Association agreed to the contract on behalf of employers it represented in the Lake Tahoe area. Succeeding contracts followed,2 with the last effective from December 1, 1971, through November 30, 1974.3 That contract was between the Union,and the Association on behalf of the individual members thereof signatory thereto. Five employers were signatory to the contract, including Respondent .4 Employees covered by that contract were those in the employers' bar and culinary operations at Lake Tahoe. On May 16, 1963, Respondent and the Union entered into a single-employer collective-bargaining agreement effective by its terms from November 30, 1962, through November 30, 1965. In the contract, Respondent recog- nized the Union as the sole bargaining agency for all 2 In some of those contracts new member-employers of the Association were added and other employers were deleted. 3 Nevada is a right-to-work State and none of the contracts contain a union-security clause. 4 The signatory employers were Barney's Club, Harvey's Resort Hotel, Nevada Lodge, Sahara-Tahoe, and Tahoe Nugget. 5 The General Counsel concedes in its complaint that the withdrawal was timely. 6 Berry is also vice president of Respondent and a member of its board of directors 7 These findings are based on a stipulation of the parties. There is no evidence in the record that the employees were aware of the rule before the posting. Respondent offered no evidence that would indicate that the rule was necessary to maintain discipline or production. employees employed by it in its bar and culinary operations at Lake Tahoe. At some unspecified date, Respondent joined,the Association. Respondent became a party to the multiemployer bargaining agreement between the Associa- tion and the Union, which was effective from November 30, 1965, through November 30, 1968. Respondent continued to be a. party to the successive multiemployer collective- bargaining contracts through the one that expired on November 30,1974. On August 30, 1974, Respondent timely withdrew its membership from the Association.5 On October 24, 1974, Respondent refused to bargain with the Union, and Respondent has withdrawn recognition from the _ Union. On _ July 25, 1975, Respondent filed a petition for .an election with -the Board. That.petition sought an election among Respondent's culinary and bartender employees in a single-employer unit. The complaint alleges a refusal to bargain, in. that - single-employer unit.. The complaint alleges, the- answer as amended ad_mits, and I find that the appropriate bargaining unit is:_ All employees employed by the Respondent in its bar and culinary operations at its Stateline, Nevada, opera- tions, excluding all other employees, guards, -and supervisors as defined in the Act-"- B. The No-Solicitation Rule 1. The facts - - On about July 22, 1974, Respondent posted a n6-solicita- tion rule on its front door. The posting was authorized by Robert'G. Berry, Respondent's chief executive officers The posted rule enunciated a policy that had been in existence for at least 4 years prior to July 22, 1974.7 The part of the rule that is alleged to be violative of the Act states: 8 Based upon long established rules, your attention' is called to the following: Solicitation on company premises by employees after employees shift has been completed is prohibited. Violation of any of the above rules will result in immediate disciplinary action, including dis- charge Solicitation of any type by employees during working time is prohibited. Distribution of literature of any type or description by employees during working time is prohibited. Distribution of literature of any type or description in working areas is prohibited. 416 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Respondent permitted employees to come on to its premises after their shifts. Indeed, such a practice was encouraged in that Respondent customarily allowed em- ployees to have a free drink at its bar after they had completed' a shift. Employees often sat-at the bar for extended periods when they were off shift and spoke among themselves and with supervisors. Sometimes the employees were in uniform and sometimes they were not. In general, Respondent considered off-shift employees to be members of the public who were welcome to use its facilities. Respondent did not maintain an employees' lounge or rest area. The only area in Respondent's facility that was reserved for, off-shift or off-duty employees was, a single table, that seated about eight people, in its public restau- rant. That table was about 4 feet away from the next table at which customers sat ,and customers could overhear what was being said at the 'table reserved for employees., That table was generally used by employees =during their break periods and was seldom used by off shift employees. Respondent maintained the no-solicitation rule by post- ing it and thereby notifying the_ employees that it was currently in force. The rule provided on its face that a violation would result in immediate disciplinary action, including discharge. There is' no contention that anyone was disciplined for violation of the rule. 'Off--shift employees did engage in a number of different types of solicitation on Respondent's premises, and Respondent took no action against those solicitations. As to some types of solicitations, there is no evidence in the record that Respondent knew they were taking place. In that category are sales of Avon products and shoes by employees to other employees and invitations by employees to other employees to attend parties .9 With regard to two types of solicitation, Respondent did have knowledge. Those related to the sale of Elks Club raffle tickets and the participation by employees in football and baseball gam- bling pools. ' - Al Labendz, who was employed by Respondent as a bartender from about 1967 through part of 1969 and then again from 1970 through July 1973, credibly testified that, two or three times a year during the time he was employed, he sold Elks Club raffle tickets to employees, supervisors, -and customers on the premises. At times he sold as many as 80 or 100 tickets. Each time a raffle was held, he solicited then General Manager Lewis and then Assistant General Manager Source. Some of the employees he sold the tickets to were on duty and others were off duty. He also sold the tickets to Barney O'Malia, who at one time was owner of the club, and to Eugene Terry, who at one time was bar manager. Labendz credibly testified that a football pool was held every week during the fall up to his termination in 1973. Records of the pool were maintained on a card which was kept in the cashier's cage, and supervisors participated in the pool, including Lewis, Source, Keno Boss Bill Coombs, 9 A] Labendz, who was a bartender for Respondent from about 1967 through part of 1969 and again from 1970 through July 1973, credibly testified that he saw off-duty employees selling Avon products on the premises during both his periods of employment and that at sometime in 1971 or 1972 he' bought a pair of shoes from another employee on the premises. He also averred that he didn't know whether the people showing the Avon products and selling the shoes made any attempt to conceal their and Pit Bosses Lorin Phoenix and Vern Pratt. Gary Powers, who was a bartender from July 1973 to November 1974, credibly testified that most of the employees participated in baseball and football pools after their shifts ended and that supervisors participated. He personally asked employees to participate. He participated in a world series pool in the fall of 1974 and sold chances to off-duty employees. As late as a few weeks before the hearing, one of the bartenders offered Union Business Representative Howard Lawrence a chance to get in the football pool while Lawrence was visiting the premises. 2. Analysis and conclusions with regard to the no-solicitation rule The right of employees to self-organization has often come into conflict with the right of employers to maintain discipline in their establishments and to control the use of their property. Over the years, the Board and the courts have attempted to reconcile these conflicts through the formulation of rules of law which attempt to maximize the scope of the rights of each to the extent that they do not unduly diminish the rights of the other:' Republic Aviation Corporation v. N.LR.B., 324 U.S. 793 (1945); N.LRB. v. Babcock & Wilcox Company, 351 U.S. 105 (1956). In drawing guidelines in this area the United, States Supreme Court has held: "No restriction may be placed on the employees' right to discuss self-organization among them- selves, unless the-employer can demonstrate that a restric- tion is necessary to maintain production or discipline." N.LRB. v. Babcock & Wilcox Co., supra at 113. In N.LRB. v. United Steelworkers ofAmerica, CIO [Nutone], 357 U.S. 357 (1958), the Supreme Court noted that "mechanical answers" do not solve "this non-mechanical, complex problem in labor management relations!' How- ever` certain guidelines have been' well established. In attempting to reconcile the legitimate interests of both employers and unions, the Board has looked at the nature of the business. Thus, the rules which have evolved relating to industrial establishments 10 have not been applied to retail stores. Because active solicitation in a sales area may disrupt the retail store's business, an employer may legally prohibit distribution and solicitation by employees and nonemployees on the selling floor even during the' non- working time of the employees. May Department Stores Co., 59 NLRB 976 (1944), enfd. 154 F.2d 533 (C.A. 8, 1946); Marshall Field & Co., 98 NLRB 88 (1952), enforcement denied in part 200 F.2d 375 (C.A. 7, 1952). In Marshall Field, the Board was faced with the question whether a public restaurant within a department store should or should not be considered a sales area within which employees could be prohibited from soliciting. The Board answered the question in the negative, holding: "The,Board does not agree with the Respondent's general contention action from management, and he didn't know if management knew about the sales. Labendz and Gary Powers, who was a bartender for Respondent from July 1973 to November 1974, credibly testified that on a number of occasions employees on the premises invited them to parties. Even if such invitations could be considered solicitations within the compass of the no- solicitation rule, there is no evidence that Respondent knew of them. 10 See Stoddard-Quirk Manufacturing Co., 138 NLRB 615 (1962). BARNEY'S CLUB that prohibition of all solicitation in public restaurants is lawful." 11 In the instant case Respondent operates a gambling casino, bars, and a public restaurant. The gambling establishment is analogous to a retail store for the purposes of the no-solicitation rule. Thus, Respondent could lawfully ban all solicitation in the gambling area, but it could not lawfully maintain a general ban on solicitation in the public bars or restaurant. In that the no-solicitation rule in question applies equally to the gaming area, the bars, and the public restaurant, the legal principles applicable to the lawful limitation of soliciting on the sales floor of a department store do not apply. In GTE Lenkurt, incorporated, 204 NLRB 921 (1973), the Board found to be lawful a no-solicitation rule that read: "An employee is not to enter the ,plant or remain on the premises unless he is on duty or scheduled for work." The Board stated: Under well-settled principles applicable to employee activities ... an employer may not, absent special circumstances, prohibit employees lawfully on the premises from engaging in union solicitation on their own time. However, it is also well settled that nonem- ployees are not entitled to enter an employer's premises to engage in union activity there. Accordingly, to dispose of the issue here, we must determine which of these principles applies to an off-duty employee, i.e., whether, nonwithstanding an employer rule to the contrary, he has a right to enter or remain on an employer's premises if he wishes to do so for this purpose. In our view he does not, for his status is more nearly analogous to that of a nonemployee, and he is subject to the principles applicable to nonemployees. [Footnotes omitted.] In Lenkurt, the Board was dealing with a total exclusion of off-duty employees from respondents nonretail premises. In M Restaurants, Incorporated d/b/a The Mandarin, 221 NLRB 264 (1975), the Board considered a situation where off-shift employees were allowed to enter a restaurant's premises for limited purposes. In,that case, the no-solicita- tion rule read: "Solicitation on - company premises by employees after employees' shift, has been completed is prohibited." The Board distinguished the Lenkurt situation and ruled that the no-solicitation clause was invalid, holding: The rule in the instant case was directed solely at employee solicitation. In fact Respondent permitted off duty employees to wait for fellow employees to finish work, to pick up their paychecks on their days -off, and to return to the premises to eat with their cowork- ers: Under these circumstances and particularly in view of the majority's holding in Lenkurt, it is evident that even under the standard enunciated in that case 11 In N.LKB. v. Magnavox Company of Tennessee, 415 U.S. 322 (1974), the Supreme Court held: The place of work is a place uniquely appropriate for dissemination of views concerning the bargaining representative and the various options 417 Respondent's no-access rule is presumptively invalid and unlawful. In the instant case the no-solicitation rule is identical to the one considered by the Board in the Mandarin case. As in the Mandarin case, Respondent's employees were permitted to come on to Respondent's premises when they were off shift. They were encouraged to do so by Respondent in that Respondent gave them free drinks after shift. They were allowed to remain at the bar and to use Respondent's facilities. In addition, Respondent knew that off-shift employees were participating in sports pools and employees had been solicited to purchase Elk's Club raffle tickets. Respondent made no effort to limit those activities. There is no evidence that the rule was known to employees before the posting. The rule was posted after the Union's renewed organizational activity. Respondent offered no evidence to establish that it's rule was necessary to maintain production or discipline.12 - Respondent cannot justify its no-solicitation rule on the ground that no one was disciplined under it. It was enforced in that employees were warned by the very wording of the rule that they would be disciplined for its violation. As the Board stated in The Great Atlantic & Pacific Tea Company, Inc., 162 NLRB 1182, 1884 (1967): ... we reject the Respondent's argument that the rule could have had no coercive effect since it was not enforced. It is well established that the mere existence of an unlawful no-solicitation rule makes it susceptible to application to employees and this factor alone tends to coerce, restrain, and interfere with their right to engage in self-organizational activities. [Footnote omitted.] I find that the principles enunciated ir.the Mandarin case are controlling and that Respondent violated Section 8(a)(1) of the Act by maintaining the no-solicitation rule. C. The Refusal To Bargain 1. The facts a. The testimony of Staff Alfred E. Staff is the bar manager for the Overland Hotel in Reno. From early July 1973 until the summer of 1974, when a trusteeship was imposed on the Union, Staff was president of the Union. During that time, Staff, in addition to being union president, was a full-time bartender. The only full-time paid union officer was Secretary-Treasurer and Business Manager E. W. Tucker. The following findings are based on the credited testimony of Staff. During the summer of 1974, the Union had about $11,000 in its treasury and that amount was decreasing. However, the Union's liabilities did not exceed its assets. The Union had approximately 1,000 members, of whom between 700 and 800 were paid up in their dues.13 In the spring of 1974, the Union sent Business Manager Tucker to the headquar- open to the employees. So long as the distribution is by employees to employees and so long as the in-plant solicitation is on nonworking time, banning of that solicitation might seriously dilute § 7 rights. 12 Cf. Florida Steel Corporation, 215 NLRB 97 (1974). 13 At another point in his testimony, Staff averred that there were about (Continued) 418 DECISIONS OF NATIONAL LABOR RELATIONS BOARD ters of the International in Cincinnati to see if he could obtain money to help the Union organize. The executive committee of the Union had discussed the need to obtain more members and to build up the membership to a point where the Union could have some strength when it met with the Employers to negotiate the next contract. Tucker went to Cincinnati and discussed the matter with representatives of the International. He then returned and reported to the executive committee that the International would give the Union money to organize if the officers resigned, the Union went into trusteeship, and the International administered the Union. The executive committee decided to let the International take over. The matter was brought up at the next regular meeting of the Union, and a majority of the membership voted to accept the trusteeship. The officers resigned and the trusteeship was imposed sometime during the summer of 1974.14 During the summer of 1974, Tucker told Staff that there were about 30,000 employees in the Lake Tahoe and Reno areas who were employed in categories over which the Union had jurisdiction. Conversations with Tucker and Staffs review of member- ship records led Staff to believe that of the approximately 900 or 1,000 union members in May 1974, about 20 percent were in the Lake Tahoe area and the balance were in Reno. Staff appeared confused in his testimony with regard to the distinction between union members and employees repre- sented by the Union. His testimony, read as a whole, clearly indicates that when he was referring to the approximately 900 or 1,000 employees and to the 20-percent figure, he was referring to members and - not to all employees who were represented through coverage by outstanding contracts. In the spring of 1974, the Union placed announcements in local newspapers stating that the Union would hold a meeting to discuss with employees what it would ask in contract negotiations and to see if it could get more people interested in an expansion of the Union. The employees invited were those in the Lake Tahoe area. No employees showed up for the scheduled meeting and it was not held. During the time that be was president, Staff spoke to some union bartenders whom he worked with at the Overland Hotel in Reno and he received comments from them to the -effect that they were discouraged with the Union, that the Union didn't do anything for them, and that they did not like the way the Union was being run. Some bartenders said: "When is the Union going to be able to do anything for us," "They never do nothing for us," and "What's the sense of joining a Union." He never received any compliments on the performance of the Union. In addition to talking-to bartenders -at-the Overland Hotel, he spoke to some culinary workers at various clubs in the Reno area in an attempt to organize them. However, there is no 700 to 750 paid-up members and in addition there were about 150 other people who were on the membership rolls who were not paid up , but who were not suspended. The highest number of members during Staffs term of office was about 1,200. 14 Staff testified that the officers resigned in July or August 1974, but later in his testimony he averred that the trusteeship might have been imposed in June. 15 As the Board held in Bartenders, Hotel, Motel and Restaurant Employers Bargaining Association of Pocatello, Idaho, and its Employer-Members, 213 NLRB 651 (1974), an employer's reasonably based doubt of the union's evidence in the record that any employees of Respondent expressed dissatisfaction with the Union to Staff. Staff did not communicate any of the matters related above to Respondent and there is no indication in the record that Respondent knew of the substance of those matters at the time that it refused to bargain with the Union. Apparently Respondent is relying on Staff's testimony solely for the purpose of attempting to prove that the Union, in fact, did not have majority status.15 With regard to the matters set forth below, Respondent contends that it did have -a reasonably based doubt as to the Union's majority, upon which it acted in withdrawing recognition. b. Remarks by employees of Respondent, conversations between supervisors, and the newspaper articles In October 1974, Respondent had in its employ about 40 employees in bar and culinary classifications.16 In mid- August 1974 Respondent made a determination that the Union did not represent a majority of its bar and culinary employees. However, Respondent continued its investiga- tion concerning the Union's majority from July 1974 until it authorized its attorney to send a letter dated October 24, 1974, in which the Union was notified that Respondent doubted the Union's majority status.17 The decision to question the Union's majority status was made by Respondent's chief executive officer, Robert G. Berry. Berry received some direct and indirect reports concerning the attitude of some of his employees toward the Union. Sometime between July 15 and the latter part of August 1974, Berry spoke to a waitress named Pam, whose last name he -could not remember. She told him that she had never seen a union person at the Club and didn't want any part of the Union. Sometime between July 15 and late August 1974, Berry spoke to a bartender named Barry, whose last name he could not recall. He had no specific recollection of what that employee told him about the Union. Sometime- before August 30, Berry spoke to a waitress named Connie, whose last name he could not remember. She told him-that she was not interested in being represented by the Union. Sometime in August or September 1974, Respondent's assistant general manager, N. Dart Voss, had a conversa- tion with employee Elmer Willsey. Willsey told Voss that there had been someone from the Union contacting them, trying to get them to join the Union. Willsey also said that he had dealings with those people before and that he did not want anything to do with them. Voss reported the incident to Respondent's general manager, Harry Bay. In September or October 1974, Bay himself had overheard majority status must be predicated on information it had at the time of its refusal to bargain. See also Orion Corporation, 210 NLRB 633 (1974), enfd. 515 F.2d 81(C.A. 7, 1975). - 16 This finding is based on the credited testimony of Respondent's assistant general manager, N. Darl Voss. Robert G Berry, who is Respon- dent's chief executive officer, board member, and vice president , has less daily contact with the employees than Voss. Berry testified that the number of bar and culinary employees in the summer is about 40 to 50, in the fall, 30 to 35, and in the winter about half that of the summer 17 These findings are based on the testimony of Berry. BARNEY'S CLUB Willsey tell someone else : "Damn those unions - I wish they's stay out of here, so I can get my work done." Both these incidents were reported to Respondent's chief execu- tive officer, Berry. Sometime between September through October 1974, Voss spoke to employee Mitch Roskin. Roskin said that a union representative had offered to pay his initiation fees and dues if he would recruit other employees to join the Union. Roskin also told Voss that he had dealings with the Union in the east and he was not too happy with them. Voss reported the conversation to Bay who in turn reported it to Berry. Berry testified that he was told about a Mitch and an Elmer, neither of whose last names he could recall, by Bay. He also averred that he spoke to Voss and Bar Manager Robert Badertscher about employees. He testified that between July 15 and October 1974 Voss told him that,- based on his (Voss) investigation, he was of the opinion that the Union did not represent a majority of the bar and culinary employees. Between July and October 24, 1974, Bar Manager Badertscher told Voss that he (Badertscher) felt the people in the bar were not interested in being represented by the Union and that they were all happy with the conditions as they were. Voss reported that comment to Berry.18 In August 1974, -Badertscher told Bay that in his (Badertscher's) opinion; people who worked under him did not want the Union to represent them. Bay credibly testified that Badertscher did not tell him the basis for that opinion. Bay reported the conversation to Berry. Also in August 1974 Voss told Bay that he (Voss) didn't think the Union had a majority at the Club. Bay reported that to Berry. About late June or early July 1974, Berry read certain articles in the Reno Evening Gazette and the Tahoe Tribune which stated- that there was a trusteeship. He saw in the papers advertisements by International Trustee Bramlet concerning organizational meetings which were to be held. Berry was also informed about the trusteeship by his attorney.19 c. The decision to withdraw recognition Respondent acknowledges that on or about October 24, 1974, it refused to bargain with the Union and that it has withdrawn recognition from the Union. Respondent con- tends that at the time it refused to bargain it had sufficient objective bases for reasonably doubting the Union's contin= ued majority. The remarks of certain employees concerning their attitude toward the Union and various conversations between supervisors relating to the employees' attitudes are discussed above. Also, as indicated above, Berry obtained information concerning the Union's trusteeship and the financial difficulties of the Union. In addition, Berry knew that Nevada is a right-to-work State and the contracts did not contain a union-security clause. He credibly testified 18 These findings are based on the credited testimony of Voss. 19 Berry testified that he understood from several sources that a trusteeship was imposed because of the Union's inadequate funds, lack of membership, and lack of cash flow to conduct operations. When asked the 419 that he had no knowledge ofany election ever having been held among the employees. Sometime prior to October 24, 1974, Berry had a conversation with his law partner, George Allison. Allison had represented another employer , Harvey's Casino, in a state court proceeding, Allison told Berry that during that proceeding a union representative said that he did not know how many people the Union represented at the Lake and that the union representative refused to. disclose the actual membership of the Union among people at the Lake. Respondent also adduced considerable evidence con- cerning the turnover of its employees and the Union's activity or lack thereof. Between July and October 1974, Berry, Bay, and Voss often discussed the amount of turnover among Respondent's employees. During that period the highest number of culinary and bar employees was about 50. Voss testified that from his observation of the employees who were physically present, he concluded that there was about a 50-percent turnover between June, and October 24, 1974. Bay testified that from July to the end of October 1974 the turnover rate among bar and culinary employees was 4 or 5 to 1. Berry testified that during the summer there was a complete turnover of culinary employ- ees about every 2 months and a turnover of bar employees somewhat less frequently . He averred that his data on turnover was based on transaction sheets that he examined every day, on reports from the supervisors, and from his observation of employees on the premises. Respondent did not offer any records in this regard and there was no testimony concerning the classifications of the employees who most frequently left Respondent's employ . However, I credit the testimony of Respondent's witnesses to the extent that they averred that there was a very substantial amount of turnover among Respondent's bar and culinary employ- ees. In late June or early July 1974, Berry attended a meeting of the Association. Berry had been paying dues to the Association and he knew that Respondent was a member. At the meeting, Association Official Knoll told the employ- er-members that the union contract was going to be renegotiated that fall. Berry testified that until that meeting he did not know that Respondent had a contract with the Union. On May 10, 1973, Berry and others purchased a majority of the shares of Respondent. From August 3, 1973, to the present Berry has been a member of the board of directors, vice president, and chief executive officer of Respondent. For about 5 years before 1973, Berry repre- sented Respondent as its attorney. Shortly after Berry took over management of Respondent, he received bills from the Association which he paid. Respondent was a party to successive collective-bargaining agreements with the Union from May 16, 1973, through November 30, 1974. I do not credit Berry's assertion that he acquired a substantial ownership interest as well as managerial control of Respon- dent without looking into and knowing of Respondent's contractual obligations. This is particularly true as Berry had previously represented Respondent as its attorney. sources of his belief, he testified that his opinion was based on such matters as his observation of the poor business practices of the Umon and lack of interest by employees in the Union. He also referred to certain newspaper articles and advertisements he had read. 420 DECISIONS OF NATIONAL LABOR RELATIONS BOARD However, Berry did credibly testify that he had no contact of any kind with the Union from the time that he physically took over Respondent on May 10, 1973, until the Associa- tion meeting in late June or early July 1974.20 He also credibly testified that he knew that from July 15 through August 30, 1974, several organizers came into Respondent's premises and that thereafter organizers continued to come on the premises . Until the middle of the summer of 1974 he never saw or discussed any union business with a union agent. Bay was employed by Respondent as its slot machine manager on June 1, 1973, and was made general manager on August 23, 1973. Bay credibly testified that until sometime in the summer of 1974, he never saw a union representative on the premises. Voss was employed by Respondent as assistant general manager in August 1973. He credibly testified that prior to July 1974 he had not heard employees speak about the Union on the premises and he had not seen a union agent there. In July 1974 he spoke to Bay about union activities inside the Club. He told Bay that there were people from the Union trying to contact some of the employees tojom the Union. Voss testified that as of May 1974 he was not aware that there was a union representing the bar and culinary employees and that he had no knowledge of any collective- bargaining agreement. Bay testified that he became aware that Respondent was unionized sometime during the summer of 1974. As indicated above, Berry testified that he was not aware of that fact until late June or early July 1974. I am unable to credit Berry, Bay, or Voss in that regard. All three were intimately familiar with the bar area of the premises. Posted conspicuously . over the bar was a sign 21 that read: "Hotel and Restaurant Employees and Bartend- ers International Union affiliated with AFL-CIO recog- nizes this house as a union house and worthy of the support of organized labor." Berry's explanation of the sign is completely unconvincing. He averred that the sign related to specialized customer treatment for union members and that anyone who showed a union card could get a free drink. Harry Eve, who has been Respondent's bar manager since May 1975, testified that the sign was about 8 or 10 feet from, where customers would be seated, that the sign was discolored from grease and. smoke, and that customers, from where they were seated, would only be able to see the large printing which read "union house." However, Berry, Bay, and Voss were not restricted to customers' tables and their business would carry them to all parts of Respondent's premises. When, Berry was at the Association meeting in late June or early July, he asked for a copy of the union contract and one was sent to him. He testified that when he read the contract he saw a number of very serious violations of the contract by Respondent which had never been called to his 20 It thus appears that during that period of time the Union filed no grievances. 21 Union Business Representative Lawrence credibly testified that union records show that the sign was first posted about 1968. 22 Union Business Representative Lawrence testified that in mid-August 1974 he spoke to Respondent's beverage manager, Badertscher, about a complaint made by employee Hampton. It was stipulated that if Badertscher attention or to the attention of his managers. He did not indicate the nature of the violations. Robert Vickney was a union business agent from 1970 through part of 1972. During that time he visited Respon- dent's premises at least twice a week and spoke to employees about their working conditions. In 1972 one of Respondent's bartenders told him that certain employees did not receive holiday pay for two holidays. Vickney spoke about the matter to one of Respondent's owners but no written grievance was filed. He never filed any written grievances. Al Labendz was a bartender for Respondent from 1970 to mid-1973. Labendz belonged to the Union and kept his union book in a jar by the cash register. That jar was used by barboys and bartenders for the union books. Periodical- ly, a business representative came on to the premises, took money that was left in the union books, and stamped receipts in the books. Labendz credibly testified that about 90 percent of the bartenders and barboys had union books which they kept in the jar and that he personally observed 12 to 15 books in the jar. He credibly testified that some of the supervisors including Tom Pavich, who was bar manager in 1971, knew about the books. He also credibly averred that during the time he was working there, he saw a union business agent on the premises about twice. a week. There is no evidence that the Union engaged in any particular activities at the Respondent's premises from mid- 1973 until early summer 1974. Between-July and the first part of October 1974, Union Business Representative Howard Lawrence visited the premises about twice a week to enforce the contract and receive complaints from employees. After October he visited the premises about twice a month. Berry credibly testified that in the period between July 15 and August 30, 1974, several union organizers came onto the premises. Voss credibly testified that in July 1974 people from the Union were trying to contact some of the employees to join the Union.22 d. The Union's demand for negotiations and Respondent's refusal The last contract expired by its terms on November 30, 1974. By letter dated July 22, 1974, Union International Trustee Al Bramlet notified Respondent of his desire to modify and change the contract and sought to arrange for collective-bargaining negotiations. By a letter to the Associ- ation dated August 30, 1974, Respondent withdrew its authorization for the Association to represent it in connec- tion with collective-bargaining or labor relations. A copy of that letter was sent to the Union, with a covering letter dated August 30, 1974, notifying the Union that Respon- dent terminated the collective-bargaining agreement effec- tive as of the end of the term thereof. By letter dated September 3, 1974, Phillip Bowe, the Union's attorney, acknowledged receipt of Respondent's August 30, 1974, was called to testify he would have denied any conversation with Lawrence concerning an alleged grievance of Hampton. Lawrence acknowledged that no written grievance was filed. The incident took place in mid-August 1974, which was well after the Union had become active on Respondent's premises. The incident adds little to the record and need not be considered further. BARNEY'S CLUB letter and requested that Respondent contact Bramlet- to discuss a convenient time- and place for negotiations. By letter- dated October 18, 1974, Bowe, demanded that Respondent begin negotiations. By letter dated October 24, 1974, Respondent's attorney, Nathan Berke, reminded the Union that Respondent had timely withdrawn from the multiemployer group and was handling its own collective bargaining. Berke wrote that, he would treat the Union's correspondence as a request for Respondent to engage in bargaining on an individual employer unit basis. The letter went on, to state: "At the direction of our client, this is to inform you that our client has a genuine doubt that your Local continues to represent an uncoerced majority of its employees in an appropriate -unit. If, following a validly conducted election' under the aegis of the National Labor -Relations Board, your Local is selected as the bargaining agent, our client will at such time fulfill, whatever legal obligation it may then have." - The Union filed the unfair labor practice charge on November 19, 1974, in which it alleged that Respondent unlawfully refused to recognize and bargain with it. Respondent admits- that commencing on or about October 24, 1974, it has refused to bargain collectively with the Union and has withdrawn recognition from the Union. On July 25, 1975, which was about 9 months after the refusal to bargain- and about 8 months after the filing of the charge, Respondent filed a petition for an election with the Board. 2. Analysis and conclusions with regard to the refusal to bargain23 a. The presumption of majority As the Board held in Walter E. Heyman d/b/a Stanwood Thriftmart, 216 NLRB 852 (1975): - A contract, lawful on its face, raises a -presumption that the contracting union was the majonty representa- tive at the time the contract was executed , dung the life of the contract, and thereafter.2 - 2 Shamrock Dairy, Inc., 119 NLRB 998, 1002 (1957), and 124 NLRB 494, 495-496 (1959), enfd. 280 F.2d 665 (C.A.D C.), cert. denied 364 U.S. 892 (1960). In the instant case, the asserted presumption of continued majority status is based on an initial contract in a' single employer unit, which contract was effective from Novem- ber 30, 1962, through November 30, 1965, and on succes- sive contracts in a multiemployer bargaining unit from November 30, 1965, through November 30, 1974. The complaint alleges a refusal to bargain in a single-employer bargaining unit. No presumption of continued majority can flow directly from the original contract that expired in 1965. If any such presumption is warranted it must flow from the recently expired contract which was in a multiemployer unit. A serious question is presented as to whether the presumption of continued majonty which flowed from the existence of that multiemployer contract survived the 23 Much of the legal analysis set forth below is the same as that which is contained in my decision in Sahara-Tahoe Corporation, d/b/a Sahara-Tahoe Hotel [229 NLRB No 151 (1977)], and Tahoe Nuggets, Inc., d/b/a Jim Kelley's Tahoe Nuggett [227 NLRB 357 (1976) ], cases that involved many of the same legal principles 421 withdrawal of Respondent from the multiemployer unit and can be applied to the recreated single-employer unit. In Downtown Bakery Corp., 139 NLRB 1352 (1962), enforcement denied in pertinent part 330 F .2d 921 (C.A. 6, 1964), a successor employer refused to bargain with a union where that union was the- Board-certified representative of the employees in a multiemployer bargaining unit which included-a predecessor employer. In that case, the predeces- sor employer had- signed a separate collective-bargaining agreement with the -union. Relying, on a presumption of continued majority, the Board- found that the successor employer violated Section 8(aX5) of the Act by refusing to bargain with the union in the single-employer unit. The court refused to enforce` the Board's bargaining -order, holding in part that there was not sufficient evidence in the record to support a finding of majority status of the union. In The Richard W. Kaase Company, 141 NLRB 245 (1963), enforcement denied in pertinent part 346 F.2d 24 (C.A. 6, 1965), a similar- factual pattern was presented, and the Board followed its Downtown Bakery Corp. precedent. In Richard W. Kaase Co., a union was 'certified'-as the collective-bargaining agent of the`employees of employers in a rultiemployer bargaining unit which included a predecessor employer. That employer executed a separate collective-bargaining agreement . Thereafter, a successor employer continued to recognize thee predecessor's contract but later withdrew recognition. The Board found that the successor violated Section 8(a)(5) of the Act. The court once again refused to enforce the .Board's order, holding: "the ambiguity inherent in the multi-employer election here relied on- vitiates its efficacy to prove a majority as to any single employer." The Board law established by the Downtown Bakery and Richard W. Kaase Co. cases is not directly applicable to the instant situation. In each of those cases, the individual employer had -signed separate collective-bargaining con- tracts with the union and the presumption of continued majority could flow from those contracts rather than from the multiemployer certification . In the instant case, the collective-bargaining relationship since 1965 was in a multiemployer bargaining unit and the contracts to which Respondent was a party since then were multiemployer bargaining contracts.24 However, I believe that the pre- sumption of continued majority flowing from the multiem- ployer contracts requires a derivative presumption of the Union's majority status which is applicable to each of the employer-members of the multiemployer bargaining unit separately. Unless a majority of an employer's employees desire representation by a union, that employer may not lawfully force representation on them by joining a multiem- ployer bargaining arrangement. Mohawk Business Machines Corporation, 116 NLRB 248 (1956); Dancker & Sellew, Inc., 140 NLRB 824 (1963), enfd. 330 F.2d 46 (C.A. 2, 1964). Respondent would have violated the Act in 1962 when it became party to the single-employer collective -bargaining agreement if a majority of its employees did not desire representation. Respondent would have again violated the 24 It is also noted that, -unlike the instant situation, both those cases involved conflicting representational claims by rival unions 422 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Act in 1965 when it became a party to the multiemployer bargaining agreement if a majority of its employees did not desire representation at that time. Any unfair labor practice charge relating to such violations would have had to have been filed within 6 months from the violation. Respondent may not now either attack the initial bargaining relation in the single-employer unit or the subsequent bargaining relation in the multiemployer unit. Nor may Respondent use such matters to establish a defense to the refusal to bargain complaint. As the Board held in North Bros. Ford, Inc., 220 NLRB 1021(1975):25 Section 10(b) of the Act confines the issuance of unfair labor practice complaints to events occurring during the 6 months immediately preceding the filing of a charge and has been interpreted by the Supreme Court to bar finding- any unfair labor practice, even though committed within that period, which turns on whether or not events outside that period violated the Act. Bryan .Manufacturing Co.3 The Court, holding that maintenance and enforcement of a contract more than 6 months after recognition of a minority union did not violate th6^Act, -relied in part on the` legislative history indicating that Congress specifically intended Section 10(b) to apply to agreements with minority unions in order to stabilize bargaining relations. Noting that labor legislation traditionally entails- compromise, the Court observed that the interest in employee freedom of choice is one of those given large recognition by the Act as amended. But neither can one disregard the interest in "industrial peace which it is the overall purpose of the Act to secure." 4 The Board, in light ofBryan, has since held that Section 10(b) is applicable to a refusal-to-bargain defense that the bargaining relation was unlawfully established.5 3 Local Lodge No 1424, JAM, AFL-CIO [Bryan Manufacturing Co l v.NLRB,362US 411(1960). 4 Id at 428, citations omitted. 5 Barrington Plaza and Tragmew, Inc, 185 NLRB 962 (1970), enforcement denied on other grounds sub nom Tragmew, Inc, and Consolidated Hotels of California v. N.LR B, 470 F.2d 669 (C.A. 9, 1972); Roman Stone Construction Company, and Kindred Concrete Products, Inc., 153 NLRB 659, fn. 3 (1965). Respondent may not, at this late date, attack either the initial recognition of the Union by Respondent or the initial contract in either the single- or multi-employer units. It cannot defend against the refusal-to-bargain complaint on the ground that those contracts were entered into at a time when the Union did not represent a majority of the employees of Respondent. Nor can it defend on the ground that the Union did not represent a majority of the employees in the overall multiemployer bargaining unit. Those contracts must be considered valid on both those grounds. The presumption of majority status which contin- ued over the years based on successive contracts applies both as to the employees of Respondent and to the employees in the multiemployer unit. I therefore find that the General Counsel has properly relied on that presump- tion to establish the Union's majority in the unit in question. It remains to be considered whether-Respondent has successfully rebutted that presumption. b. The attempt to rebut the presumption (1) The background law In James W. Whitfield, d/b/a Cutten Supermarket, 220 NLRB 507, 508 (1975), the Board summarizedthe^existing law, holding: It is well settled that Section 8(a)(5) and Section 8(d) of the Act require an employer to recognize and bargain in good faith with the bargaining representative selected by a majority of its employees. That recognition establishes a presumption of majority status which, in circumstances such as this, may be rebutted.6 The employer may lawfully refuse to bargain with the union if it rebuts the presumption by affirmatively establishing that the union has in fact lost its majority status, or shows that it has sufficient objective bases for reason- ably doubting- the union's continued majority status.? To establish sufficient objective bases, however, re- quires more than the mere assertion thereof based, upon the employer's subjective frame of mind S Furthermore, the employer must not have engaged in any conduct tending to encourage employee disaffection from the union .9 6 Cf. NL.R.B. v. Frick Company, 423 F.2d 1327 (C.A. 3, 1970); Keller Plastics Easter), Inc., 157 NLRB 583 (1966). 4 Celanese Corporation ofAmenca 95 NLRB 664,672 (1951); Peoples Gas System, Inc„214 NLRB 944,(1974). 8 Laystrom Manufacturing Co., 151 NLRB 1482(1965), enforcement denied 359 F.2d 799 (C.A. 7, 1966); Automated Business Systems, Inc, a Division of Litton Business Systems, Inc., 205 NLRB 532 (1973), enforcement denied 497 F.2d 262 (C.A. 6, 1974). 9 Peoples Gas System, Inc, supra In Bartenders, Hotel, Motel and Restaurant Employers Bargaining Assn. of Pocatello, supra, 213 NLRB at 652, the Board held that these principles are equally applicable whether the union was certified by the Board or was recognized without Board certification. In that case, the Board held that the existence of a prior contract, lawful on its face, raised a presumption that the union was the majority representative at the time the contract was executed and also raised the presumption that the union's majority continued at least through the life of the contract. The Board held that "Following the expiration of the contract ... the presumption continues and, though rebuttable, the burden of rebutting it rests on the party who woulddoso...." (2) The alleged actual loss of majority For the reasons set forth above, the presumption of continued majority which flowed from the contract sur- vived the change in the bargaining unit and applied to the single-employer unit. It follows that the change in the unit 25 See also Stanwood Thnftmart, supra. BARNEY'S CLUB is not-in itself proof that the Union no longer represented a majority of Respondent's employees. During the summer of 1974 the Union had about $11,000 in its treasury and that amount was decreasing. However, the Union's liabilities did not exceed .its-assets, and even if they did the Union's financial condition would not indicate how many employees the Union actually represented. Even if Staff were correct in his estimate that there were about 30,000 employees in the Lake Tahoe area who were employed in categories over which the Union had jurisdic- tion, that figure would not give any insight into how many employees the Union in fact did represent. About that time the Union had approximately 900 or 1,000, members, of whom perhaps 20 percent were from the Lake Tahoe area. Between 700 and 800 were paid up in their dues. Those are industrywide figures and there is no way to tell from them how many of Respondent's employ- ees were union members. Even if Respondent had estab- lished that a majority of its employees were not members of the Union, such a showing would not be the equivalent of establishing a lack of desire of those employees for union representation. Employees may desire representation-with- out wanting to join a union or pay dues. Orion Corporation, 210 NLRB 633 (1974), `enfd. 515 F.2d 81 (C.A. 7, 1975). As the Board stated in Wald Transfer & Storage Co, 218 NLRB 592 (1975): It has been clearly established that a distinction exists between union membership and union support, fore- closing 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.3 3 See Terrell Machine Company, 173 NLRB 1480 (1969), enfd. 427 F.2d 1088 (CA. 4, 1970), cert. demed 398 U.S. 929; N.LR.B v. Gulf- mont Hotel Company, 362 F.2d 588,592 (C.A. 5, 1966). The fact that employees in the industry at the Lake did not attend a union meeting after announcements were placed in newspapers may indicate some apathy on the part of employees who happened to see the announcements. It does not indicate that a majority of Respondent's employ- ees no longer desired to be represented by the Union. The Union sought funds from the International to organize employees in the industry and to build up its membership so that it would have strength in negotiating the next contract. The Union also accepted International trusteeship. Those facts, however, do not indicate whether or not the Union represented a majority of Respondent's employees. The Union wanted to obtain more members in the industry and it engaged in some internal revisions, but it would be sheer speculation to make an evaluation based on those facts as to the number of Respondent's employees the Union actually represented. Some of the bartenders at the Overland Hotel in Reno told Staff, in substalice, that they were dissatisfied with the Union. There is no evidence in the record that any of the employees of Respondent ever expressed dissatisfaction with the Union to Staff. The above matters in themselves, and when considered in connection with the matters set forth below relating to Respondent's claimed reasonable 423 doubt as to the Union's majority, fall short of establishing that the. Union in, fact did not represent a majority of Respondent's employees. (3) The alleged reasonably based doubt of the Union's majority status Respondent, through its chief executive officer, Berry, made a determination in mid-August 1974 that the Union did not represent a majority of its bar and culinary employees. Until October 24, 1974, when the Union was notified that Respondent doubted its majority status, Respondent continued to investigate the matter. However, Respondent's initial determination in that regard was made while it was still'part of the multiemployer bargaining unit and still bound by the multiemployer contract. Respondent did not-withdraw from the Association until , August 30, 1974, 2 weeks later. Respondent did not notify the Union that it questioned the Union's majority status until October 24, 19744 almost 2 months after it withdrew from the Association. Respondent did not file a petition for an election until July 25, 1975, some 9 months after it refused to bargain with the Union. The Board has long held that questions relating to an employer's reasonably based doubt as to a union's contin- ued majority cannot be resolved by the application of any mechanical formulas and can only be answered "in the light of the totality of all circumstances involved in.a particular case." Celanese Corporation of America, 95 NLRB 664 (195 1). In the instant case Respondent has raised a number of matters on which it claims to have based a reasonable doubt as to the Union's majority. These -matters must be considered in the context of the major disruption in the bargaining unit which occurred when Respondent with- drew from the Association, and in the context of the filing by Respondent of a petition for an election. Also to be considered, however, are the facts that Respondent made its determination that the Union did not represent the majority of its bar and culinary workers before it withdrew from the multiemployer bargaining unit and the fact -that Respondent did not see fit to file a petition for an election until some 9 months after it refused to bargain and some 11 months after it made the determination that the Union did not represent a majority. Some of the matters raised by Respondent to establish a reasonably based doubt as; to the Union's majority do, not warrant prolonged discussion. Respondent's chief executive officer, Berry, knew that Nevada was a right-to-work State and that the contracts did not contain a union-security clause. Such matters do not indicate whether or not a union represents a majority of an employer's employees. Cf. Wald Transfer & Storage Co., supra. Berry's law partner told him that in a state court proceeding involving another employer the union representative had refused to disclose the actual membership in the union of the employees at the Lake. No implication can be derived from that fact that the Union did not represent a majority of Respondent's employees. Other matters require more extended attention. Those include the trusteeship, the employee turnover, indications of employee dissatisfaction, and matters relating to union inactivity. 424 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Berry had no knowledge of any election ever having been held among the -employees. However, the presumption of majority can be based on either certification or, voluntary recognition, and where an employer voluntarily recognizes a union it cannot use that fact-as a basis for doubting the union's majority. Cf. Bartenders, Hotel, Motel and Restau- rant Employers Bargaining Assn. of Pocatello, supra. Berry read in the newspapers that the Union was in trusteeship and he heard of financial difficulties of the Union. He also knew that in the summer of 1974 union representatives were on the premises and that organization- al activity was taking place. The fact that the Union was undergoing internal revisions does not indicate whether or not it continued to represent a majority of the Respondent's employees. A union may have financial difficulties whether or not it represents a majority, and organizational activity only indicates that a union desires more members than it has. Berry knew that there was a very substantial turnover among the bar and culinary employees. High turnover is one circumstance, among others, that must be considered in determining whether an employer has a reasonably based doubt as to a union's majority status. Peoples Gas System, Inc., 214 NLRB 930 (1974); Convair Division of General Dynamics Corporation, 169 NLRB 131 (1968); Kentucky News, Incorporated 165 NLRB 777 (1967). However, high employee turnover in itself is insufficient to establish a reasonable doubt as to a union's majority, and the Board has repeatedly held that new employees will be presumed to support a union in the same ratio as those they may replace. Strange and Lindsey Beverages, Inc., et aL d/b/a Pepsi-Cola- Dr. Pepper Bottling Co. 219 NLRB 1200 (1975); King Radio Corporation, 208 NLRB 578 (1974), enfd. 510 F.2d 1154 (C.A. 10, 1975). Berry knew that some of the employees were dissatisfied with the Union. Employee Pam,, whose last name he could not remember, told him that she didn't want any part of the Union. Employee Connie, whose last name he could not remember, told him that she was not interested in being represented by the Union. Berry learned from Assistant General Manager Voss or General Manager Bay that employee Willsey had said that he did not want anything to do with the union people. Berry also learned from Bay or Voss that employee Roskin had said that he had dealings with the Union in the east and that he was not too happy with them. Thus Berry had information that four named employees (two of whose last names could not be recalled) had expressed some , form of disapproval of the Union. There were about 40 employees in the bar and culinary employees' unit in October 1974. The evidence adduced by Respondent falls far short of establishing that a majority of the employees in the bargaining unit expressed displeasure with the Union. The number that had expressed displeasure was ,insubstantial in relation to the overall employee complement in the unit and Respondent could not base a reasonable doubt of majority on such a limited number of remarks. Cf. Strange and Lindsey Beverages, supra. Respondent's supervisors often talked among. themselves about the status of the Union, Bar Manager Badertscher told Voss that he (Badertscher) felt that the people in the bar were not interested in being represented by the Union and that they were all happy with the conditions as they were. Voss reported that to Berry. Badertscher also told Bay that he (Badertscher) was of the opinion that the people that worked for him did not want the Union to represent them. Badertscher did not tell Bay the basis for that opinion. Bay reported the conversation to Berry:Voss told Bay that he (Voss) didn't think the Union had a majority at the club and Bay reported that to Berry. However, the subjective evaluations of supervisors cannot be used as a basis for reasonablydoubting a union's majority. As the Board held in Terrell Machine Company, 173 NLRB 1480 (1969), enfd. 427 F.2d 1088 (C.A. 4, 1970), cert. denied 398 U.S. 929 (1970):26 To be of any significance, the evidence of dissatisfaction with a validly recognized incumbent Union must come from the employees themselves, not from the employer on their behalf. The testimony of Union Business Agent Vickney and employee Labendz established that a union business agent visited the premises about twice a week at least until mid- 1973. There is no evidence that the Union took an active role at Respondent's premises from mid-1973 until the early summer of 1974. During that period, Berry, Bay, and Voss saw no union representatives on the premises and no grievances were filed. Beginning in July 1974, Union Business Representative Lawrence visited the premises about twice a week to enforce the contract and to receive complaints from' employees. After October he visited the premises about twice a month. Berry. knew that in the summer of 1974 several union organizers came onto the premises, and Voss knew that starting in July 1974 the Union was trying to contact some of the employees to join the Union. Though there is no evidence that union representatives were on the premises from mid-1973 until early 1974, the contract was in effect during that period. In addition, a sign was prominently displayed over the bar showing that Respondent was a union house. Lack of activity by a union is one factor to be considered in evaluating whether a company has a reasonable doubt of the union's majority. Taft Broadcasting, 201 NLRB 801 (1973). In the instant case, a contract ,was in effect at all times until November 30, 1974, and there is no evidence that the Union abandoned its status as collective-bargain- ing agent of the employees. Berry testified that his reading of the contract in late June or early July 1974 led him to believe that Respondent had engaged in serious violations of the contract without any protest from the Union. However, there is no evidence that the Union had knowl- edge of, any contract violations or had any cause to believe that grievances should be filed. The relative inactivity of the Union between mid-1973 and early summer 1974 is not, in itself, sufficient to raise a reasonable doubt as to the Union's continued majority. In United Supermarkers, Inc., 214 NLRB 958 (1974), the Board found that -an employer did not have a reasonable doubt based on objective facts as to the union's continued majority status. The Board held: zs In finding a violation in the Terrell case, the Board noted. "that the Respondent could have filed a petition for an election, or asked that the Union do so, in order to resolve its alleged doubt, but it took no such steps." BARNEY'S CLUB A showing_ of such doubt requires more than an employer's mere assertion of it, and more than proof of an employer's subjective frame of mind. The assertion must be supported by objective considerations, that is, some substantial and reasonable grounds for believing the union has lost its majority status. [Footnotes omitted.] After considering all of the factors set forth above, I conclude that Respondent did not have substantial and reasonable grounds for believing that the Union had lost its majority status. Respondent's assertion in that regard was based on subjective rather than objective considerations. In sum, I find that the presumption of continued majority has not been rebutted either by a showing that the Union, in fact, lost its majority status or by a showing that Respon- dent had a sufficient objective basis for reasonably doubt- ing the Union's continued majority.27 In addition, Respon- dent's refusal to bargain took place at a time when Respondent was maintaining an unlawful no-solicitation rule. Thus Respondent was engaging in conduct tending to encourage employee disaffection from the Union. Cf. James W. Whitfield, d/b/a Cutten Supermarket, 220 NLRB 507 (1975). I find that Respondent violated Section 8(a)(5) and (1) of the Act as alleged in the complaint. IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The activities of Respondent, as set forth in section III, above, occurring in connection with the operations of Respondent described in section I, 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. V. THE REMEDY Having found that Respondent has engaged in unfair labor practices, I shall recommend that it be ordered to cease and desist therefrom and to take certain affirmative action designed to effectuate the policies of the Act. Having found that Respondent violated Section 8(a)(5) and (1) of the Act by unlawfully withdrawing recognition from the Union and by refusing bargain with the Union as the exclusive representative of its employees in the afore- said appropriate unit, I shall recommend that Respondent be ordered to recognize and, upon request, to bargain in good faith with the Union as the exclusive representative of its employees in that unit. CONCLUSIONS OF LAW 1. Respondent is an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act, and it will effectuate the policies of the Act for the Board to assert jurisdiction. 27 Cf N.LR.B v. Thompson, Inc., 525 F.2d 870 (C.A 5, 1976) 2$ 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. 102 48 425 2. The Union is a labor organization within the mean- ing of Section 2(5) of the Act. 3. By maintaining a no-access rule which prohibits solicitation on Respondent's premises by employees after their shifts have been completed, Respondent has engaged in an unfair labor practice within the meaning of Section 8(a)(1) of the Act. 4. All employees employed by the Respondent in its bar and culinary operations at its Stateline, Nevada, opera- tions, excluding all other employees, guards, and supervi- sors 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. 5. At all times material herein, the Union has been the exclusive bargaining representative of the employees in the aforesaid appropriate unit within the meaning of Section 9(a) of the Act. 6. By withdrawing recognition from the Union and by refusing to bargain with the Union, Respondent has engaged in unfair labor practices within the meaning of Section 8(a)(5) of the Act. 7. By the foregoing conduct, Respondent has interfered with, restrained, and coerced employees in the exercise of rights guaranteed in Section 7 of the Act, thereby engaging in unfair labor practices within the meaning of Section 8(a)(1) of the Act. 8. The aforesaid unfair labor practices affect commerce within the meaning of Section 2(6) and (7) of the Act. Upon the foregoing findings of fact, conclusions of law, and upon the entire record, and pursuant to Section 10(c) of the Act, I hereby issue the following recommended: ORDER28 The Respondent, Barney's Club, Incorporated, Stateline, Nevada, its officers, agents, successors, and assigns, shall: 1. Cease and desist from: (a) Maintaining any rule or regulation prohibiting its employees from soliciting on its premises after their shifts have been completed unless such prohibition is demonstra- bly necessary to maintain production, discipline, or security. (b) Refusing to recognize and bargain in good faith with Hotel-Motel-Restaurant Employees & Bartenders Union, Local 86, Hotel & Restaurant Employees & Bartenders International Union, AFL-CIO, as the exclusive represent - ative of its employees in the following bargaining unit: All employees employed by it in its bar and culinary operations at its Stateline, Nevada, operations, exclud- ing all other employees, guards, and supervisors as defined in the Act. (c) In any like or related manner interfering with, restraining, or coercing employees in the exercise of their rights guaranteed in Section 7 of the Act. 2. Take the following affirmative action which is necessary to effectuate the policies of the Act: of the Rules and Regulations, be adopted by the Board and become its findings, conclusions, and Order, and all objections thereto shall be deemed waived for all purposes. 426 DECISIONS OF NATIONAL LABOR RELATIONS BOARD (a) Recognize and, upon request , bargain in good faith with Hotel-Motel-Restaurant Employees & Bartenders Union, Local 86, Hotel & Restaurant Employees & Bartenders International Union, AFL-CIO, as the exclu- sive representative, of its employees in the unit described above. (b) Post at its Stateline, Nevada, facility copies of the attached notice marked "Appendix." 29 Copies of said notice, on forms provided by the Regional Director for Region 20, after being duly signed by its authorized representative, shall be posted by it 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. Rea- sonable steps shall be taken by it to insure that said 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 it has taken to comply herewith. 29 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 " WE WILL NOT prohibit our employees from soliciting on our premises after their shifts have been completed unless such a prohibition is demonstrably necessary to maintain production, discipline, or security. WE WILL NOT refuse to recognize and bargain in good faith with Hotel-Motel-Restaurant Employees & Bar- tenders Union, Local 86, Hotel & Restaurant Employ- ees & Bartenders International Union, AFL-CIO, as the exclusive representative of our employees in the following bargaining unit: All employees employed by us in our bar and culinary operations at our Stateline, Nevada, operations, excluding all other employees, guards, and supervisors as defined in the Act. WE WILL NOT in any like or related manner interfere with, restrain, or coerce employees in the exercise of their rights guaranteed by Section 7 of the Act. WE WILL recognize and, upon request, bargain in good faith with said Union as the exclusive representa- tive of our employees in that unit. APPENDIX NOTICE To EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government We hereby notify you that: BARNEY'S CLUB, INCORPORATED