Club Cal-Neva

DECISIONS OF NATIONAL LABOR RELATIONS BOARD Sierra Development Company d/b/a Club Cal-Neva' and Hotel-Motel-Restaurant Employees and Bar- tenders Union, Local 86, Hotel and Restaurant Employees and Bartenders International Union, AFL-CIO. Cases 20-CA-9803-6, 9853-6, 9869-6, 9897-6, and 9905-6 July 29, 1977 DECISION AND ORDER BY CHAIRMAN FANNING AND MEMBERS PENELLO AND MURPHY On March 15, 1977, Administrative Law Judge Martin S. Bennett issued the attached Decision in this proceeding. Thereafter, General Counsel and Charging Party filed exceptions and a supporting brief, and Respondent filed cross-exceptions and a supporting brief. 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, find- ings, 2 and conclusions of the Administrative Law Judge only to the extent consistent herewith. The Administrative Law Judge found, and we agree, that Respondent violated Section 8(a)(1) and (3) of the Act. However, he dismissed the refusal-to- bargain allegation of the complaint on the ground that since Respondent had changed from an individ- ual employer unit to part of a multiemployer unit and then back to an individual employer unit there is no presumption of majority status. For the reasons set forth below, we disagree with the Administrative Law Judge. The facts may be summarized as follows: Respon- dent has operated a combined bar, restaurant, and casino in Reno, Nevada, since 1962. In April 1962, Respondent voluntarily recognized and signed a contract with Bartenders Union Local 86, and Culinary and Hotel Service Union, Local 45,3 covering its 77 bar and culinary employees. In 1964, Respondent joined the Reno Employer's Council and became a party to a series of multiemployer I The name of Respondent appears as amended at the hearing. - 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 credibility unless the clear preponderance of all oft the relevant evidence cons inces us that the resolutions are incorrect Standard Dry Wall Products, Ino.. 91 NLRB 544 (1950), enf'd. 188 F.2d 362 (C.A. 3, 1951). We have carefully examined the record and find no basis for reversing his findings. Respondent has excepted to the Board's asserting jurisdiction in this proceeding. II argues that the Board's assertion of jurisdiction over the 231 NLRB No. 5 bargaining agreements between the Union and the Council until 1975. Respondent doubled in size in 1969, when it expanded its restaurant, added to its bar, and installed a snackbar. After this expansion, Respon- dent employed approximately 175 bar and culinary employees. In 1973, Respondent's snackbar and restaurant were enlarged. This increased the comple- ment of such employees to 240. In February 1975, Respondent employed 202 bar and culinary employ- ees. On June 7, 1974, the Union was placed under trusteeship of its International. During the summer and fall of 1974, the Union's business agents actively solicited Respondent's employees to become mem- bers of the Union. During the last half of 1974, some employees complained to their supervisors that they did not want to join the Union because of the lack of benefits. The supervisors reported these conversa- tions to Respondent's president, Nightingale. The Union, on November 15, 1974, notified Respondent and the Council that it desired to reopen the agreement and negotiate a new contract, as the existing one was due to expire on February 15, 1975. On December 10, Respondent informed the Union that it had a genuine doubt as to the Union's majority status, and that it would not bargain with the Union until it had been certified as the bargaining representative of Respondent's employ- ees. On the same day, Respondent notified the Council that it was withdrawing therefrom. On December 13, 1974, the Union requested Respondent to bargain with it. In February 1975, Nightingale held two meetings with the bar and culinary employees. He told them that with the expiration of the existing contract Respondent would no longer bargain with the Union. Nightingale further announced that a new group insurance plan, a cost-of-living wage plan, a merit wage plan, and the formation of a grievance committee would be initiated after the expiration of the existing contract. Respondent later instituted the benefits. The Administrative Law Judge found that there is no presumption that the Union has majority status when Respondent, which voluntarily recognized the Union, has changed from an individual employer unit to an association unit and then back to an gaming industry is arbitrary and capricious when compared to the Board's refusal to assert jurisdiction over the horseracing and dogracing industries. The Board has in previous cases considered and rejected arguments identical to those now raised by the Respondent. Nevada Lodge, 227 NLRB 368 (1976); El Dorado Inc., d/b,,a El Dorado Club, et al, 151 NLRB 579 (1965). :1 These two unions merged in 1968 to form the Hotel-Motel-Restaurant Employees & Bartenders Union, Local 86, Hotel & Restaurant EmploNees & Bartenders International Union. AFL CIO, hereinafter the Union. 22 CLUB CAL-NEVA individual employer unit. He noted that the Board found otherwise in Tahoe Nugget, Inc. d/b/a Jim Kelley's Tahoe Nugget, 227 NLRB 357 (1976), but indicated that he disagreed with the Board's deci- sion.4 Accordingly, the Administrative Law Judge dismissed the refusal-to-bargain allegation of the complaint. We find that the Union retained its presumption of majority status. As we stated in Tahoe Nugget, supra, a case involving the same Union and Employer's Council as the present case, "the presumption of majority arising from Respondent's voluntary recog- nition of a labor organization as the exclusive collective-bargaining representative of its employees continued after its withdrawal from a multiemployer unit and reversion to its original status." We see no reason to deviate from that principle here. 5 Having determined that the principle applies, we next turn to Respondent's contention that it had an objective basis for doubting the Union's continued majority status. The Board has consistently held that in order to rebut the presumption of majority status, an employer must either show that the union in fact no longer enjoys majority status, or that its refusal to bargain was based on a reasonably grounded doubt as to the union's majority status. 6 As to a reasonably grounded doubt, the doubt must be based on objective considerations 7 and such doubt must be raised in a context free of unfair labor practices.8 Respondent stated in its December 10, 1974, letter that it had a genuine doubt as to the Union's majority status. It relies on the following as a basis for those doubts: (1) it was never shown any evidence that the Union represented a majority of employees when it first signed the contract in 1962, and it signed the contract only to accommodate the Union; (2) no election has ever been conducted by the Board; (3) the club has expanded since 1962, and the number of employees in the bar and culinary departments has tripled; (4) the turnover of employ- ees each year during the term of the last agreement has been approximately 500 percent; (5) the Union was placed in trusteeship by its International because of its poor financial condition; (6) Union Trustee The Administrative Law Judge erroneously relies on N. L RB. v. Walter E. Herman, d b a Stanwood Thrifrmart, 541 F.2d 796, 800 (C.A. 9. 1976). The case is legally and factually distinguishable from the present case. The court stated. "Majority representation is not the issue in this case." The issue was what effect the district court's rescission of a contract has on the Board's finding a presumption of majority representation based on that contract. The portion of the decision cited by the Administrative Law Judge to the effect that there was not a fair opportunity to rebut the presumption is not applicable to the facts in the present case. Respondent had an opportunity to rebut the presumption by showing a reasonably grounded doubt as to the Union's continued majonty status, infra. : 227 NLRB 357 (1976). Nevada Lodge, 227 NLRB 368 (1976); Barney'r Club, Incs orporated, 227 NLRB 414 (1976): Carda Motels, Inc., d ,'ba Holiday Hotel & Casino, 228 NLRB 926 (1977). The Administrative Law Judge's failure to find the presumption of majority status is a fundamental error. Bramlett publicly announced that less than 20 percent of the employees in the Reno-Lake Tahoe area were members of the Union; (7) the Union was attempting to organize employees at the Club; (8) a majority of the employees had reported to various supervisors that they had no interest in the Union; (9) Respondent had never called the Union to refer employees; (10) the Union filed but one grievance between 1962 and 1974, although during this period Respondent had employed 10,000 employees; (II1) Respondent had withdrawn from a multiemployer bargaining unit and is now a single-employer unit; (12) Nevada is a right-to-work State and there was no union-security clause or dues-checkoff provision in the agreement. Most of the items cited by Respondent, even if true, cannot be legitimately relied on by it as objective considerations forming part of the basis for its doubt as to the Union's majority status. Thus, the fact that Respondent was never shown any evidence that the Union represented a majority when Respon- dent first signed a contract, its assertion that it signed the contract only to accommodate the Union, and the absence of an election cannot be considered in establishing a reasonably grounded doubt as to majority status. As we stated in Tahoe Nugget, "a respondent may not defend against a refusal-to- bargain allegation on the ground that original recognition, occurring more than 6 months before charges had been filed in the proceeding raising the issue, was unlawful." Also, the fact that an election has never been held is not a basis for doubting the Union's majority.9 Nor is the fact that Respondent had withdrawn from a multiemployer unit a basis for such doubt. As we found, supra, the fact that Respondent withdrew from a multiemployer unit does not affect the Union's presumption of majority status. Similarly, it would be sheer speculation to make an evaluation of employee support of the Union based on the fact that the Union was placed in trusteeship by its International because of its poor financial condition.' 0 Further, Trustee Bramlett's public an- nouncement that less than 20 percent of the Under the Board's consistent policy it is the Administrative Law Judge's duty to apply established Board precedent which the Board or the Supreme Court has not reversed. Iowa Beef Packers, Inc., 144 NLRB 615. 616( 1963): Novak Logging Company, 119 NLRB 1573, 1575 76 (1958); Insuranct Agents' Internatrional Union, AFL-CIO (The Prudential Insurance Compans ofAmerica), 119 NLRB 768, 773 (1957). 6 Tahoe Nugget, supra; James W. WhitJield, d b'a Curten Supermarket, 220 NLRB 507, 508 (1975); Terrell Machine Company, 173 NLRB 1480 (1969). enfd. 427 F.2d 1088 (C.A. 4, 1970). cert. denied 398 U.S. 929. 7 N.L. R. B. v. Gulfmont Hotel Company, 362 F.2d 588(C.A. 5, 1966), enfg 147 NLRB 997 (1964). s Nu-Southern Dyeing & Finishing, Inc., and Henderson Combining Co.. 179 NLRB 573 (1969), enfd. in part 444 F.2d I I (C.A. 4. 1971). 9 White Castle System, Inc., 224 NLRB 1089 (1976). tO Nevada Lodge, supra. 23 DECISIONS OF NATIONAL LABOR RELATIONS BOARD employees in the area were union members and that the Union was attempting to organize the employees at the Club does not indicate that the Union no longer had majority status nor is it revealing of how many of Respondent's employees were or were not members of the Union. Indeed, even if a majority of Respondent's employees were not members, it does not establish that they did not desire union represen- tation, since there is a distinction between union membership and union support." The union organi- zational activity merely demonstrates a normal desire for more members,' 2 and in fact tends to refute one of the other items (union inactivity) relied on by Respondent. The failure of Respondent to seek referrals from the Union has no bearing on the issue since that is a matter solely within Respondent's control, there is no indication that the Union would have refused to make such referrals, and, in any case, there is no provision in the contract calling for such referrals. Nor does the absence of a union-security clause have a bearing, especially since this is a right-to-work State. The relatively small expansion of a bargaining unit since the last contract does not indicate anything with respect to the status of the Union. Union inactivity in representing the employees would have been a valid consideration if it in fact had been established. However, union agents were on Respondent's premises regularly from 1972 to 1975 and were actually engaged in organizing employees. The failure to file grievances does not establish union inactivity in the absence of any showing that substantial numbers of employee grievances were being ignored. Two items cited by Respondent have some factual support and do bear on the issue of whether there exists a basis for doubting the Union's majority. However, we have considered these items and have concluded they are insufficient to provide an objective basis for doubting the Union's majority. Thus, approximately 29 employees had reported to various supervisors that they were dissatisfied with the Union by stating that they did not want to join the Union, that there was a lack of benefits, or that the union dues were too high. Such statements fail to distinguish between wanting to be a union member and desiring to have union representation. But, even assuming that the statements constitute expressions of rejection of the bargaining agent, 29 employees out of a unit of 202 employees (far less than the majority claimed by Respondent) is insufficient to " Tahoe Nugget, supra, Terrell Machine Company, supra. 12 Washington Manor, Inc., dh/ba Washington Manor Nursing Center (North), 21 I1 NLRB 324 (1974), enfd. 519 F.2d 750 (C.A. 6. 1975). I:3 Kentucky News, Incorporated, 165 NLRB 777, 779(1967). 14 Tahoe Nugget, supra,; Strange and Lindsey Beverages, Inc., and Dr. Pepper Bottling Co.. Inc., Joint Emplo)ers d/b/a Pepsi-Cola-Dr. Pepper Bottling Co., 219 NLRB 1200(1975). establish a reasonably based doubt as to the Union's majority status.' 3 The high turnover rate is a circumstance that is to be considered in determining whether a respondent has a reasonably grounded doubt. Here Respondent experienced a turnover rate of 500 percent during the term of the last agreement. The highest rate was among the busboys and waitresses. The Board has found that high turnover is one circumstance among others that must be considered, but that employee turnover in itself is not sufficient to establish a reasonable doubt as to the Union's majority status. New employees are pre- sumed to support the Union in the same ratio as those they replace.' 4 At most, Respondent had only a minimal number of expressions of dissatisfaction with the Union together with a high turnover rate on which to base its asserted doubt as to the Union's majority status. These items, even considered together, do not constitute a basis for withdrawal of recognition. Thus, we find that the presumption of continued majority representation has not been rebutted either by a showing that the Union, in fact, no longer enjoys majority status or that Respondent had a sufficient objective basis for reasonably doubting the Union's continued majority status. Accordingly, we find that Respondent violated Section 8(a)(5) and (1) of the Act. As we have found that Respondent unlawfully withdrew recognition of the Union, it had a duty to bargain with the Union upon the expiration of the contract. Respondent by unilaterally, without prior notice to or consultation with the Union, granting a new group insurance plan, a cost-of-living wage plan, and a merit raise system and by forming a grievance committee after the expiration of the contract violated Section 8(a)(5) and (1) of the Act.' 5 AMENDED REMEDY Having found that Respondent has engaged in unfair labor practices, we shall order it to cease and desist therefrom and to take certain affirmative action designed to effectuate the policies of the Act. As we agree with the Administrative Law Judge's finding that Respondent violated Section 8(a)(3) and (1) by discriminatorily reducing the hours of work and classification of employee Schwartz, we shall order Respondent to make him whole for any loss of earnings he may have suffered as a result of the discrimination against him, by payment of a sum of 15 Having found that Respondent violated Sec. 8(aX5) and (1) by unilaterally instituting employee benefits, we find it unnecessary to pass on the Administrative Law Judge's finding that Respondent independently violated Sec. 8(aXI) by granting improved working conditions. 24 CLUB CAL-NEVA money equal to that he would have earned from the date of his demotion to the date of his resignation, with backpay and interest thereon to be computed in the manner prescribed in F. W. Woolworth Company, 90 NLRB 289 (1950), and Isis Plumbing & Heating Co., 138 NLRB 716 (1962). Having found that Respondent violated Section 8(a)(5) and (1) of the Act by unlawfully withdrawing recognition from the Union and by refusing to bargain with the Union on December 13, 1975, and thereafter, and by making unilateral changes, we shall order Respondent to recognize and, upon request, bargain in good faith with the Union. We shall also order Respondent to return to the status quo ante by rescinding the grievance committee procedure. However, nothing herein shall be con- strued as requiring that Respondent rescind benefits granted to its employees. ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Relations Board hereby orders that the Respondent, Sierra Development Company d/b/a Club Cal- Neva, Reno, Nevada, its officers, agents, successors, and assigns, shall: I. Cease and desist from: (a) Telling employees that an employee was being terminated because of wearing a union button; reducing the hours of work of, and demoting, any employee for wearing a union button; imposing a rule forbidding solicitation of employees for union membership on the premises during nonworking time. (b) Unilaterally, without prior notice to or consul- tation with the Union, granting improved working conditions, such as a new group insurance plan, cost- of-living increases, and a merit increase system to forestall union activity. However, nothing in this Order shall be construed as requiring Respondent to rescind any of the benefits granted its employees. (c) Unilaterally, without prior notice to or consul- tation with the Union, establishing and maintaining a grievance committee. (d) Refusing to recognize and bargain collectively in good faith with Hotel-Motel-Restaurant Employ- ees and Bartenders Union, Local 86, Hotel and Restaurant Employees and Bartenders International Union, AFL-CIO, as the exclusive representative of its employees in the following bargaining unit: All employees employed by the Respondent in its bar and culinary operations at its Reno, " In the event that this 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 Lahor Relations Board" shall read "Posted Pursuant to a Nevada, place of business, excluding all other employees, guards and supervisors as defined in the Act. (e) In any other manner interfering with, restrain- ing, or coercing employees in the exercise of their right to self-organization, to join or assist Hotel- Motel-Restaurant Employees and Bartenders Union, Local 86, Hotel and Restaurant Employees and Bartenders International Union, AFL-CIO, or any other labor organization, to bargain collectively through representatives of their own choosing, or to engage in concerted activities for the purposes of collective bargaining or other mutual aid or protec- tion. 2. Take the following affirmative action which is deemed necessary to effectuate the policies of the Act: (a) Make whole Philip Schwartz for any loss of pay or other benefits suffered by reason of the discrimi- nation against him, by payment of a sum of money equal to what he would have earned from the date of his demotion to the date of his resignation, with backpay and interest thereon to be computed in the manner set forth in the Remedy section here. (b) Recognize and, upon request, bargain in good faith with Hotel-Motel-Restaurant Employees and Bartenders Union, Local 86, Hotel and Restaurant Employees and Bartenders International Union, AFL-CIO, as the exclusive representative of all employees in the aforesaid appropriate unit. (c) Rescind the grievance committee procedure. (d) Post at its premises in Reno, Nevada, copies of the attached notice marked "Appendix." 16 Copies of said notice, on forms provided by the Regional Director for Region 20, after being duly signed by an authorized representative of Respondent, shall be posted by it immediately upon receipt thereof, and maintained by it for a period of 60 consecutive days thereafter, in conspicuous places, including all places where notices to employees are customarily posted. Reasonable steps shall be taken by Respondent to insure that said notices are not altered, defaced, or covered by any other material. (e) Preserve and, upon request, make available to the National Labor Relations Board or its agents, for examination and copying, all payroll records, social security payment records, timecards, personnel records and reports, and all other records necessary to determine the amount of backpay due under the terms of this Order. (f) Notify the Regional Director for Region 20, in writing, within 20 days from the date of this Order, Judgment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board." 25 DECISIONS OF NATIONAL LABOR RELATIONS BOARD what steps Respondent has taken to comply here- with. APPENDIX NOTICE To EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government WE WILL NOT threaten employees with dis- charge for wearing union buttons in support of Hotel-Motel-Restaurant Employees and Bartend- ers Union, Local 86, Hotel and Restaurant Employees and Bartenders International Union, AFL-CIO, demote an employee and reduce his hours of work because the employee wore such a union button or promulgate and maintain a rule forbidding union activities on company premises during nonworking time. WE WILL NOT unilaterally, without prior notice to or consultation with the Union, grant improved working conditions, such as a new group insur- ance plan, cost-of-living increases, and a merit increase system to forestall union activity. How- ever, the Board has not ordered us to withdraw any of the benefits we have given you. WE WILL NOT unilaterally, without prior notice to or consultation with the Union, establish or maintain a grievance committee. WE WILL NOT refuse to recognize and bargain collectively in good faith with Hotel-Motel-Res- taurant Employees and Bartenders Union, Local 86, Hotel and Restaurant Employees and Bar- tenders International Union, AFL-CIO, as the exclusive representative of our employees in the following bargaining unit: All employees employed by the Respon- dent in its bar and culinary operations at its Reno, Nevada, place of business, excluding all other employees, guards and supervisors as defined in the Act. WE WILL NOT in any other manner interfere with, restrain, or coerce our employees in the exercise of their right to self-organization, to join or assist the above-named or any other labor organization, to bargain collectively through representatives of their own choosing, or to engage in concerted activities for the purposes of collective bargaining or other mutual aid or protection. WE WILL make Philip Schwartz whole for any loss of wages or other benefits suffered as a result of our discrimination against him, with interest at 6 percent per annum. WE WILL recognize and, upon request, bargain in good faith with Hotel-Motel-Restaurant Em- ployees and Bartenders Union, Local 86, Hotel and Restaurant Employees and Bartenders Inter- national Union, AFL-CIO, as the exclusive representative of all employees in the aforesaid unit. WE WILL rescind the grievance committee procedure. All our employees are free to become or remain, or refrain from becoming or remaining, members of the above-named or any other labor organization. SIERRA DEVELOPMENT COMPANY D/B/A CLUB CAL-NEVA DECISION STATEMENT OF THE CASE MARTIN S. BENNETT, Administrative Law Judge: This matter was heard at Reno, Nevada on July 14, 15, 16, and 23, 1976. The amended consolidated complaint issued September 22, 1975, and is based upon numerous charges filed between December 16, 1974, and June 25, 1975, by Hotel-Motel-Restaurant Employees & Bartenders Union Local 86, Hotel & Restaurant Employees & Bartenders International Union, AFL-CIO, herein the Union.' The complaint alleges that on various dates after December 1974, specifically including June 1975, the Respondent, Sierra Development Company d/b/a Club Cal-Neva, has engaged in unfair labor practices within the meaning of Section 8(aX5), (3), and (1) of the Act. Most able briefs have been submitted by the parties. Upon the entire record in the case, and from my observation of the witnesses, I make the following: FINDINGs OF FACT I. JURISDICTIONAL FINDINGS Sierra Development Company d/b/a Club Cal-Neva is a corporation which is engaged in the operation of a restaurant, bar, and gambling casino in Reno, Nevada. It enjoys annual gross revenues in excess of $500,000 and also purchases and receives goods and materials valued in excess of $10,000 which originate outside the State of Nevada. Respondent has argued with considerable logic that the nature of the gaming industry, when viewed against the refusal of the Board to assert jurisdiction over the horseracing industry, constitutes an arbitrary and capri- cious decision, citing, e.g., Centennial Turf Club, Inc., 192 NLRB 698 (1971). Respondent extended recognition in April 1962 to Bartenders Union Local 86 and to Culinary and Hotel Service Union, Local 45. The Union, as presently named, was formed in 1968 by a merger of Local 45 into Local 86. There has never been a Board election. 26 CLUB CAL-NEVA I personally have some difficulty in assigning less weight to this transfer of racehorses among 29 States and racing dogs among 8 States, with attending personnel, and this is not disputed, from the present situation where bettors primarily from California perforce travel a much shorter distance to Nevada in order to wager bets on various games of chance including bets on horseraces at horserace parlors, as I have personally observed. But I am con- strained to abide by the decision of the Board in this area. I therefore conclude that the operations of Respondent affect commerce within the meaning of Section 2(6) and (7) of the Act and that it would effectuate the purposes of the Act to assert jurisdiction over these gaming operations, as contrasted with a contrary position as to horseracing and dogracing operations conducted in a much larger area of the United States, as is readily apparent. II. THE LABOR ORGANIZATION INVOLVED Hotel-Motel-Restaurant Employees & Bartenders Union Local 86, Hotel & Restaurant Employees & Bartenders International Union, AFL-CIO, is a labor organization within the meaning of Section 2(5) of the Act. 111. THE ALLEGED UNFAIR LABOR PRACTICES A. Introduction, the Issues The basic issue in this matter is whether Respondent has violated Section 8(a)(5) and (1) of the Act by refusing to bargain with the Union. It is conceded that, on or about December 11, 1974, Respondent timely withdrew from multiemployer association bargaining. B. Sequence of Events In April 1962, Respondent voluntarily extended recogni- tion to the Union and signed a contract with same. In 1964, Respondent joined the Reno Employer's Council, herein the Council, and then became a party to a multiemployer contract between the Council and a group of gambling casinos. A number of similar contracts covering bar and culinary employees with unchanged job classifications have followed since 1964, with changes in the composition of the members. The last of these duly expired on or about February 15, 1975. All this stemmed from timely notice by the Union to both Respondent and the Council on or about November 15, 1974, that it desired to reopen the agreement and negotiate a new contract; conceivably, this case would not have come about absent such action. On or about December 10, 1974, Respondent responded to a communi- cation from the Union stating that it had a serious doubt as to its majority status and declined to bargain with it on an individual basis until due certification by the Board. At the same time, Respondent notified the Council that it was withdrawing from same. It would seem that other members of the Council took similar action. Other alleged unfair labor practices are treated below. 2 I am aware that Nevada is a right-to-work State. but the evidence presented before me tends to gloss over and not distinguish between union membership and union representation. C. The Alleged Refusal To Bargain This case is apparently one of a series generated by the breakdown in bargaining between the Union and the members of the Council. In one of these, Tahoe Nugget, Inc., d/b/a Jim Kelley's Tahoe Nugget, 227 NLRB 351 (1976), the Board recently indicated its initial approach to the matter. The Board held, Member Walther dissenting, that unless a majority of an employer's employees desired union representation an employer could not force representation upon them by joining a multiemployer bargaining unit. But the Board there went on to state that in light of Local Lodge No. 1424, International Association of Machinists, AFL-CIO [Bryan Manufacturing Co.] v. N.LR.B., 362 U.S. 411 (1960), recognition of a labor organization more than 6 months prior to the filing of an unfair labor practice charge could not be attacked. The Board in effect there stated that recognition of the Union on an associationwide basis perforce precluded an attack on the individual majority status of a withdrawn individual employer, a matter not specifically treated in Bryan, as I read it. Needless to say, a voluntarily recognized labor organiza- tion continues to enjoy its representative status. But does this presumption continue when there has been a drastic change in the unit from an individual employer unit to an association unit and then back to an individual employer unit? As a hypothetical example, in a unit of 15 employees, a union might enjoy 100 percent representation as to 14 of them and might have none with respect to the I employee.2 The Board stated in the above case that an employer may show that the labor organization no longer enjoys majority status. But the General Counsel herein flatly opposed any evidence to this effect, except evidence predicated upon a reasonably grounded doubt as to continued majority status. I have considerable difficulty in appreciating this distinction. The simple answer is that a multiemployer unit has been changed to single-employer units and I do not grasp this broad jump, stated simply, after many years of bargaining. Stated otherwise, there has been no attempt to ascertain the sentiments or the views of the employees of Respondent in this area. In my judgment, Bryan does not treat with the basic issue herein. I deem it significant and a matter of urgent consideration to treat with a recent cogent view by the Ninth Circuit Court of Appeals in this area. The court, in whose jurisdiction this case falls, stated in N.L RB. v. Walter E. Heyman, d/b/a Stanwood Thriftmart, 541 F.2d 796 (1976): As a statute creating a presumption which operates to deny a fair opportunity to rebut would not afford due process, Heiner v. Donnan, 285 U.S. 312 (1932); Vlandis v. Kline, 412 U.S. 441 (1973); a Labor Board presump- tion to the same effect would also suffer shortcomings. In the absence of a valid contract, by virtue of the district court judgment of rescission, repudiation and 27 DECISIONS OF NATIONAL LABOR RELATIONS BOARD refusal to negotiate could not constitute unfair labor practices. Thus we decline to enforce the order. In my judgment, the logic of the court is unassailable herein. See also The Evening News Association, Owner and Publisher of "The Detroit News," 154 NLRB 1494, 1499 (1965), enfd. 372 F.2d 569 (C.A. 6, 1967). While I realize that the Board has viewed this issue otherwise in related contexts, I am constrained to agree with the position of Respondent that a presumption of majority status herein cannot stand and that the complaint should not be sustained in this area. I therefore deem it unnecessary and highly superfluous to fully treat with the plethora of evidence introduced concerning Respondent's good-faith doubt of majority representation and the various factors relied upon. How- ever, I cannot avoid noting that the Board has traditionally assumed in the cases of turnover that new hires will desire union representation in similar percentages, but in cases as these it may rely upon turnover as one of the reasons properly relied upon by a respondent in presenting a good- faith doubt as to union majority. I therefore recommend the dismissal of the refusal-to-bargain allegation of the complaint.3 While not treating with the mass of evidence adduced by Respondent in support of its good-faith doubt defense, I note that it basically consists of the following. President Nightingale of Respondent allegedly based his doubt of the Union's majority status on the following objective condsiderations, although as I have indicated above, I deem it unnecessary to reach these. (I) He was never shown any evidence that the Union represented a majority of employees when Respondent first signed a contract in 1962 and no such claim was ever made; (2) no election has ever been conducted by the Board; (3) Respondent first signed a contract only to accommodate the Union and there is evidence to support this position; (4) the club had expanded since 1962 and the number of employees in the bar and culinary departments has tripled; (5) the turnover of employees each year during the term of the last agreement was approximately 500 percent; (6) the Union was placed in trusteeship by its International because of its poor financial condition; (7) Trustee Bramlett had publicly announced that less than 20 percent of the employees in the Reno-Lake Tahoe area were members of the Union; (8) the Union was attempting to organize employees at the club, allegedly because of noninterest in representation; (9) a majority of the employees had reported to various supervisors that they had no interest in the Union; (10) Respondent had never called the Union to refer employees; (11) the Union had filed but one grievance between 1962 and 1974, although during this period the club had employed approximately 10,000 employees; (12) Respondent had timely withdrawn from a multiemployer unit, was now a single unit, and it may be noted that it was the Union that instituted the termination of the last contract with the Association, probably an untimely move, as I view it; and (13) Nevada :' I am not unaware that the Board has distinguished two decisions by the Sixth Circuit Court of Appeals in this area; namely, Downtown Bakery Corp., 139 NLRB 1352 (1962). enforcement denied in part 330 F.2d 921 (C.A. 6, 1964), and Richard W. Kaase Company, 141 NLRB 245 (1963), enforcement denied in part 346 F.2d 24 (C.A. 6. 1965). is a right-to-work state, there was no union-security clause in the agreement, and no dues checkoff. As indicated above, the evidence presented before me tended to gloss over and not distinguish between union membership and union representation. Cf. Star Mfg. Co., Div. of Star Forge Inc. v. N.LR.B., 536 F.2d 1192 (C.A. 7, 1976). D. Other Allegations (1) The General Counsel relies upon testimony by former employee Douglas Swift, a fry cook, and Philip Schwartz, a dinner cook and later a fry cook, a position of less prestige, attributing conduct to Juan Casteel, a sous-chef who did not testify herein. As I read the record, Casteel was at best a straw boss or leadman and not a supervisor under the Act. I base no adverse findings thereon. (2) Respondent concedes that Alvin Khan was head chef and a supervisor. Swift testified that on or about January 21, 1975, this one of several talks, Khan said in the presence of the witness, cook Jerry Chmela, and Schwartz, that Chmela was being terminated. Swift asked why this was so and Khan replied that it was because of that "damn button." This was the last day Chmela worked. Schwartz described this as an openly displayed small union button approximately 3/4 of an inch in diameter.4 According to Swift, he was in the presence of Khan about 30 minutes later. He asked if he also would be discharged as he was wearing an identical button. Khan replied that he had orders to fire the two but that Swift knew his job so well that he, Khan, would try to keep him on. Khan also allegedly stated that he had been instructed to drop Schwartz from 6 to 5 days and reduce him from a dinner cook to "the line," because he wore a union button, this a less prestigious position which carried a lower rate of pay. He also advised Schwartz to look for other work as life would be miserable for him at this installation. Schwartz left voluntarily in April, but ceased wearing his union button during the last 2 months of his employment which would have been shortly after this last conversation. Khan, no longer with Respondent, was questioned solely about other aspects of the case. There is no evidence that Respondent's business or employee discipline was affected by the recent wearing of these small buttons because mere contact with customers is manifestly not a sufficient reason for such a restriction. Thus, to discipline or discharge employees for initially wearing simple buttons, absent a prior well-established policy to the contrary, is clearly a violation of Section 8(a)(1) of the Act, and I so find. See Glenlynn, Inc. d/b/a McDonald's Drive-in Restaurant, 204 NLRB 299 (1973). Moreover, this was a newly implemented policy and not furtherance of an older one. Cf. N.L.R.B. v. Harrah's Club, 337 F.2d 177 (C.A. 9, 1964), distinguishing N.LR.B. v. Floridan Hotel of Tampa, Inc., 318 F.2d 1545 (C.A. 5, 1963). I find that this was perforce violative of Section 8(a)(1). There is evidence, undenied by Khan, that Schwartz was, in fact, demoted from dinner cook to fry cook and his 4 The General Counsel specifically disavowed any claim that this termination was violative of the Act; perforce no adverse findings are made thereon. 28 CLUB CAL-NEVA workweek reduced because he wore a union button, in this same context. I find that this was violative of Section 8(a)(3) and (I) of the Act because it was obviously designed to penalize him for his union activities.5 (3) The complaint alleges and the record supports the position of the General Counsel that Respondent imposed an unlawful no-solicitation rule. According to the testimo- ny of former Bartender Douglas Goedert, Respondent previously had no rule regarding employee solicitation on the premises prior to February 1975; as noted, the last Association contract expired on or about February 15, 1975. And the record does demonstrate that both General Manager John Brevick and President Leon Nightingale were aware that the Union was soliciting the employees from 1974 on to become members of the Union. Close to the date of the expiration of the contract, Respondent distributed to employees a document containing, inter alia, the following language: The Club Cal-Neva ABSOLUTELY FORBIDS any soliciting for any purpose on the premises. A copy of this was posted at the work station behind each bar and also on a bulletin board next to the timeclock. This evidence was not controverted by any representative of management, including Bar Manager John Blalock. I find that this rule was prima facie invalid as it prohibits employee solicitation upon the premises on nonworking time. Essex International, Inc., 211 NLRB 749 (1974). (4) In February 1975, Nightingale announced to assem- bled bar and culinary workers that Respondent would no longer bargain with the Union and that, upon the expiration of the current contract that month, new and increased benefits would be granted. He arranged for an insurance representative, Smith, to explain to the assem- blage a new group insurance plan that was to be installed. This plan contained increased coverage for employees and their dependents with no cost to the employees. He also told them a cost-of-living wage increase would be granted. Employee Swift testified that Nightingale styled this increase as a cost-of-living increase; this was denied by Nightingale. However, Brevick testified that the employees were told that they would continue to receive wage increases consistent with past practice under the contract. It seems clear that Respondent announced to the assem- blage that they would be receiving a wage increase, this in the context of a union organizational campaign. Respondent also announced on this occasion the institution of a merit increase system. Merit increases had been granted in the past, but there was no written policy of which the employees were aware. It was stated that the institution of these merit wage increases would result in some employees being paid at a higher rate than others, here again in the face of organizational activity. Respondent finally announced the institution of a grievance committee to be composed of employees from each department. Nightingale first admitted making such an announcement but later denied it. The testimony of Lisa Swift is credited in this area. I rely on the fact that Swift left I As stated, employee Schwartz. later quit and the only issue with respect to him is that of hackpay, as the General Counsel in effect has conceded. the employment of Respondent in April 1975; the grievance committee was actually instituted in August 1975 and therefore Swift had no way of learning about this committee other than from being advised thereof at this meeting, again in an organizational context. After the expiration of the contract, I find, Respondent unilaterally instituted, without notification to or consulta- tion with the Union, a new group insurance plan, a cost-of- living wage plan, a merit wage plan, and the formation of a grievance committee. I find that the foregoing granting of new benefits, in the present context, constituted a violation of Section 8(aX)(1) of the Act. This is so because the employees were promised initial benefits in the absence of the Union and then were granted them. Upon the basis of the foregoing findings of fact, and upon the entire record in the case, I make the following: CONCLUSIONS OF LAW I. Sierra Development Company d/b/a Club Cal-Neva is an employer within the meaning of Section 2(2) of the Act. 2. Hotel-Motel-Restaurant Employees & Bartenders Union, Local 86, Hotel & Restaurant Employees & Bartenders International Union, AFL-CIO, is a labor organization within the meaning of Section 2(5) of the Act. 3. By threatening employees with discharge for wearing union buttons, by demoting an employee and reducing his hours of work because he wore a union button, by newly promulgating and maintaining an unlawful no-solicitation rule, by installing a new group insurance plan, by announcing a cost-of-living wage increase, by setting up a formal merit wage increase program, and by instituting a grievance committee, Respondent has engaged in unfair labor practices within the meaning of Section 8(a)(3) and ( I) of the Act. 4. The aforesaid unfair labor practices are unfair labor practices affecting commerce within the meaning of Section 2(6) and (7) of the Act. 5. Respondent has not otherwise engaged in unfair labor practices. THE REMEDY Having found that Respondent has engaged in certain unfair labor practices, I shall recommend that it cease and desist therefrom and take certain affirmative action designed to effectuate the policies of the Act. It has been found that Respondent discriminatorily reduced the hours of work and classification of employee Schwartz, who subsequently resigned. I shall, therefore, recommend that Respondent make him whole for any loss of earnings he may have suffered as a result of the discrimination against him, by payment of a sum of money equal to that he would have earned up to the date of his resignation, with backpay and interest thereon to be 29 DECISIONS OF NATIONAL LABOR RELATIONS BOARD computed in the manner prescribed by the Board in F. W. Woolworth Company, 90 NLRB 289 (1950) and Isis Plumbing & Heating Co., 138 NLRB 716 (1962). Nothing hereinafter is intended to require Respondent to vary existing conditions of employment. [Recommended Order omitted from publication.] 30