John Ascuaga's Nugget

JOHN ASCUAGA'S NUGGET Sparks Nugget, Inc., d/b/a John Ascuaga's Nugget and Hotel-Motel-Restaurant Employees & Barten- ders Union, Local 86, Hotel & Restaurant Employ- ees & Bartenders International Union, AFL-CIO and Sparks Nugget Employees' Council, Party in Interest. Cases 20-CA-9803, 20-CA-9853, 20- CA-9869, 20-CA-9897, 20-CA-9905, and 20- CA-9957 June 17, 1977 DECISION AND ORDER BY CHAIRMAN FANNING AND MEMBERS PENELLO AND MURPHY On December 9, 1976, Administrative Law Judge Stanley Gilbert issued the attached Decision in this proceeding. Thereafter, Respondent and the General Counsel filed exceptions and supporting briefs. 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,1 findings,2 and conclusions 3 of the Administrative Law Judge,4 except as discussed below, and to adopt his recommended Order as modified herein. 5 We agree with the Administrative Law Judge, for the reasons stated by him, that Respondent variously violated Section 8(a)(l), (3), and (5) as fully described in the attached Decision. In support of its alternative defense that the Union did not, in fact, enjoy majority status on December 20, 1974, when recognition was withdrawn, Respondent asserts in its brief that it should have been permitted to adduce testimony from Business Representative Howard Lawrence regarding the existence of union business records demonstrating (if such could) that as of that date the Union represented a majority of the employees employed by Respondent. We find no merit in this contention, as it is well established that particularly where, as here, union membership was voluntary such records are irrelevant to a determination of whether a majority of the employees desired union representation. Retired Persons Pharniacy v. N.LR.B., 519 F.2d 486, 491 (C.A. 2, 1975). In further support of its alternative defense, Respondent asserts in its brief that it should have been permitted to adduce testimony from Field Examiner David Sargent of Region 20 of the National Labor Relations Board concerning his alleged review of the Union's business records. Respondent contended at the hearing that it also sought to question Field Examiner Sargent with respect to his alleged statement to Respondent's counsel in May 1975 that the unfair labor practice charge against Respondent would be dismissed. At the hearing, the Administrative Law Judge revoked the subpena directed to Field Examiner Sargent. We are satisfied that the testimony sought by Respondent fell within the "limited evidentiary privilege which protects the informal investigatorial and trial- preparatory processes of regulatory agencies such as the NLRB," Stephens Produce Co., Inc. v. N.LR.B., 515 F.2d 1373, 1376 (C.A. 8, 1975), and that Respondent has shown no substantial reason to disregard it. Indeed, union business records are wholly irrelevant to the issue raised by Respondent's defense, Retired Persons, supra, and any remark Board Agent Sargent may have made to Respondent's counsel concerning the anticipated dismissal of the instant unfair labor practice charge is irrelevant to any issue in this proceeding because the General Counsel did, in fact, issue a complaint. Accordingly, we conclude that the Administrative Law Judge properly revoked the subpena of Field Examiner Sargent. 230 NLRB No. 43 However, for the reasons set forth below, we disagree with the Administrative Law Judge's con- clusion that the Sparks Nugget Employees' Council (herein the Council) is a labor organization within the meaning of Section 2(5) of the Act, and that Respondent's assistance to and domination of said Council violated Section 8(aX2) of the Act. In mid-February 1975, Respondent distributed a memo dated February 13, 1975, addressed "To: All Nuggett Employees" which stated: "Effective Febru- ary 16, 1975, an impartial Employees Council will be established at the Nugget for employees who are unable to resolve problems with their supervisors." The memo outlined the grievance procedure which culminated in final resolution of grievances by the Council, and provided a ballot which employees were instructed to use in selecting their representa- tives for the Council. The Council was implemented on February 17, 1975, when the employees voted for their representatives. As set forth in the memo, and in the "Nugget Employees Council Rules of Procedure," 6 the employees in each department are to vote annually for an employee representative on the Employees' Council. When it meets to resolve grievances, the Council is composed of Respondent's director of employee relations, who sits as chairman, the employee member elected from the grievant's depart- ment, and a third member selected by the first two. This member must come from the management of a department other than that of the grievant. 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 credibility 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., d/bla Jim Kelley's Tahoe Nugget, 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 Respondent's employees as part of a multiemployer unit survived Respondent's timely withdrawal from that unit. 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 Respondent's request for oral argument is hereby denied as the record, the exceptions, and the briefs adequately present the issues and the positions of the parties. I In par. I(h) of his recommended Order, the Administrative Law Judge uses the narrow cease-and-desist language "in any like or related manner," rather than the broad injunctive language "in any other manner," which the Board traditionally provides in cases involving serious 8(aX3) discriminato- ry conduct. See N. LR.B. v. Entwistle Mfg. Co., 120 F.2d 532, 536 (C.A. 4, 1941). Accordingly, we shall modify the recommended Order to require the Respondent to cease and desist from in any other manner infringing on employee rights. The notice to employees will also be modified. These rules were not formulated by the Council, but appear to have been dictated by Jerry Higgins, Respondent's director of public and employee relations. 275 DECISIONS OF NATIONAL LABOR RELATIONS BOARD The first two stages of the new grievance procedure involve discussions between the grievant and his or her supervisor and department head. If the employee is not satisfied with the resolution at either stage and makes a timely request, the Employees' Council is convened by Respondent's personnel department. The Council meets in a meeting room in the Nugget complex (but outside the offices of manage- ment) and receives testimony and/or exhibits, first from the employee and then from the employee's immediate supervisor. The Council then makes a decision 7 which is binding on all involved. Ex parte contacts with members of the Council are forbidden and will disqualify from the Council any member who engages in such contacts. The Council is convened on an ad hoc basis to deal with specific employee grievances. Nothing in the memo announcing its formation, in the "Rules and Procedure," or in its functioning thus far indicates that the Council performs any but an adjudicatory function regarding employee grievances. Nor is there evidence that the Council has ever initiated grievanc- es, recommended for management's consideration changes in terms and conditions of employment, or acted in any manner as an advocate of employee interests. Section 2(5) of the Act defines a "labor organiza- tion" as including any "employee representation committee or plan, in which employees participate and which exists for the purpose, in whole or in part, of dealing with employers concerning grievances, labor disputes, wages, rates of pay, hours of employ- ment, or conditions of work." Although the Supreme Court has held that the term "dealing with" encom- passes more than the term collective bargaining,8 we find, as set forth below, that the Employees' Council herein does not "deal with" the Employer within the scope of the statutory definition. In Cabot Carbon, and in the other cases cited by the Administrative Law Judge in support of his finding that the Employees' Council is a labor organization, the organizations in question "dealt with" the respective employers in some sense as the ' There is no testimony as to whether the Council's deliberations are in private or whether the determination of the grievance is reached by secret ballot. Such evidence, however, is not crucial to our finding here. a N.L.R.B. v. Cabot Carbon Company, 360 U.S. 203, 211 (1959). 9 For example, in Cabot Carbon, supra, the "Employee Committee" discussed with management, inter alia, such topics as safety, efficiency and production, and grievances. In handling grievances, the Employee Commit- tee gathered and evaluated pertinent information; if the Committee considered the grievance just, it presented the grievance to the designated management representative. The Committee could also appeal any griev- ance which it considered to have been unfairly resolved. Similarly, the "Company Committee" in Money Oldsmobile Company, 201 NLRB 155, 156-157, 167-168 (1973), was set up to discuss with manage- ment current problems, suggestions for improvement, complaints, and grievances, particularly with regard to working conditions. See also North American Rockwell Corporation, 191 NLRB 833, 837-838 (1971), in which the employee grievance committee in meetings with management discussed employees' advocates.9 Here, however, as noted above, the Employees' Council performs a purely adjudicatory function and does not interact with management for any purpose or in any manner other than to render a final decision on the grievance. Therefore, it cannot be said that the Employees' Council herein "deals with" management. Rather, it appears to perform a function for management; i.e., resolving employee grievances. Accordingly, we conclude that, inasmuch as the Employees' Council is not a labor organization, Respondent's conduct in instigating, dominating, and assisting said Council was not unlawful under Section 8(a)(2) of the Act. Nonetheless, as set forth below, we find that Respondent, by unilaterally establishing said Council for the purpose of adjudicating employee grievances, thereby violated Section 8(a)(5) and (1) of the Act. It is clear from the record that Respondent instituted and utilized this grievance procedure without consulting the Union. As noted above, at the time of the Respondent's refusal to bargain, the Union herein continued to enjoy a rebuttable presumption that its majority status continued. We conclude, for the reasons set forth by the Administra- tive Law Judge, that Respondent has not rebutted that presumption. Accordingly, we find that by unilaterally instituting a new grievance procedure, including the Employees' Council, while Respondent was under a continuing obligation to bargain collectively with the Union, Respondent violated Section 8(a)(5) and (1) of the Act.10 AMENDED CONCLUSIONS OF LAW We modify the Administrative Law Judge's Con- clusions of Law as follows: 1. Delete paragraph 6 and renumber the subse- quent paragraphs accordingly. 2. Insert the following as paragraph 8: "8. By unilaterally instigating, establishing, main- taining, or utilizing a new and different grievance procedure, including the establishing of the Sparks Nugget Employees' Council, for its employees in the a "broad range of subject matter," including "working hours, job assignments, wage inequities, merit raises, bonuses, seniority, retirement fund, equipment and conditions of work, and generally the whole gamut of grievances." 1' See, e.g., Eastern Washington Distributing Company, Inc., 216 NLRB 1149, 1154-55(1975). Although the Respondent's unilateral institution of its new grievance procedure, of which the Sparks Nugget Employees' Council was an integral part, was not specifically alleged as a separate violation of Sec. 8(aX5), it was alleged as part of the general 8(aX5) allegation. Furthermore, the instigation, establishment, assistance, and domination of the Council by Respondent were alleged as a violation of Sec. 8(aX2) and were fully litigated in that context. Accordingly, Respondent cannot claim that it is prejudiced by our finding that its conduct was unlawful under Sec. 8(aX5). It is well settled that the Board may find violations which were not alleged, if the issues and facts were fully litigated. Lorenz d Sons, Inc., 217 NLRB 471 (1975). 276 above-described bargaining unit, Respondent violat- ed Section 8(a)(5) and (1) of the Act." 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, as modified below, and hereby orders that the Respon- dent, Sparks Nugget, Inc., d/b/a John Ascuaga's Nugget, Sparks, Nevada, its officers, agents, succes- sors, and assigns, shall take the action set forth in the said recommended Order, as so modified: I. Substitute the following for paragraph l(d): "(d) Unilaterally instigating, establishing, main- taining, or utilizing the Sparks Nugget Employees' Council and the grievance procedure of which said Council is a part." 2. Substitute the following for paragraph 1(h): "(h) In any other manner interfering with, restrain- ing, or coercing its employees in the exercise of the rights guaranteed them in Section 7 of the Act." 3. Substitute the attached notice for that of the Administrative Law Judge. CHAIRMAN FANNING, dissenting in part: I cannot join my colleagues in reversing the 8(a)(2) violation found by the Administrative Law Judge with respect to the Sparks Nugget Employees' Council. There can be no question that the Respon- dent was the moving force in instigating, implement- ing, and dominating-the latter partly by its 2-to-1 ratio of committee participation-the new grievance plan which was to supplant the grievance provisions of the contract about to expire. Apparently because the committee was designed to "deal with" individu- al employees' grievances, my colleagues find it an adjudicatory body rather than a labor organization within the meaning of Section 2(5) of the Act. They concede that the Supreme Court has found that the said definition of a labor organization as "dealing with" employers means more than collective bargain- ing, but overlook the disjunctive phrasing of the statutory definition. On its face it patently provides that a committee or plan in which employees participate and which exists for the purpose, in whole or in part, of dealing with employers concerning grievances is a labor organization. Dealing with an employer concerning one or more of the matters enumerated in the statute suffices. See Thompson ]l See FTS Corp. (Division of Hitco), 184 NLRB 787, 794-795 (1970), where the Administrative Law Judge noted the view taken by one of the circuit courts of appeal (N.LR.B. v. Associated Machines, Inc., 219 F.2d 433 (C.A. 6, 1955)), that individual grievances were not within the definition of Sec. 2(5) of the Act, a result with which he did not agree (his position adopted by the Board panel). I would note that the Sixth Circuit's decision in 1955 took the position that the term "grievances" is not associated with JOHN ASCUAGA'S NUGGET Ramo Wooldridge, Inc. (Dage Television Division), 132 NLRB 993, 994 (1961). Evidence of policy sugges- tions to an employer having been made by a committee, or of possible expansion of the committee role beyond dealing with grievances, is superfluous. But of course the adjudication of individual griev- ances in itself tends to encompass other 2(5) alternative purposes such as wages, or rates of pay, or hours, etc."1 With respect to the remedy for this 8(aX2) violation, I am, however, not in agreement with the Administrative Law Judge that it is enough to order that Respondent cease and desist from again initiat- ing such an organization even though, as the Administrative Law Judge provided, his remedy also includes "from maintaining and dealing" with it. In my view an affirmative order to disestablish and withdraw recognition is appropriate.1 2 My colleagues are content to dismiss the 8(aX2) allegation with respect to this activity and find instead that this unilateral establishment of the committee is an 8(aX5) violation. It can be so found, though not so alleged. However, the failure to treat instigation and domination of the committee as the obvious 8(a)(2) violation it is can only weaken the general bargaining order for withdrawing recognition from the Union, with which we all agree. My colleagues apparently wish simply to say that Respondent must bargain about changes in the contract grievance procedure because of its unilateral action, in connection with bargaining generally concerning a new contract. Thus they fail to clear the air for meaningful bargaining on a new contract. By failing to disestab- lish and to order withdrawal of recognition of the competing "labor organization" created by Respon- dent's efforts to oust the incumbent Union, they ignore the unsettling effect of a committee organiza- tion, even if dormant, a situation that will tend to dilute or divert the employees' support for the Union that is attempting to secure a new contract in their behalf. I agree with my colleagues' and the Administrative Law Judge's finding of an 8(aX5) violation based upon the unilateral implementation of a new insur- ance policy, which occurred well before the February 15 contract termination date and in apparent derogation of Respondent's commitment under the expiring contract to keep the insurance benefits in force during negotiations, until May 15, 1975, if necessary. I would, however, expand the remedy. the major objectives of labor organizations, whereas the Supreme Court 4 years later in its Cabot Carbon opinion interpreted "dealing with," as used in Sec. 2(5), as of broader import than collective bargaining. The Associated Machines decision seems fundamentally inconsistent. 12 See STR, Inc., d/b/a Sound Technology Research. 221 NLRB 496 (1975); Rupp Industries. Inc, 217 NLRB 385 (1975). 277 DECISIONS OF NATIONAL LABOR RELATIONS BOARD That the Union, which had for several months been busy negotiating a new multiemployer contract in other parts of the State, waited until February 13 to request information from Respondent concerning the insurance issue it had precipitated is in my view no reason to penalize the unit employees who may have been affected. The Administrative Law Judge limited the affirmative relief to furnishing the Union a copy of the policy. Instead, I would direct the Respondent to furnish the Union, upon request, with all informa- tion necessary to determine whether the new policy unilaterally effectuated should be continued in force, and give the Union the option of requesting that Respondent rescind the said insurance plan and restore the earlier plan pending bargaining with the Union about changed provisions. In addition, I would direct Respondent to make whole the employ- ees, if any, who may have suffered as a result of the unilaterally substituted insurance plan. Finally, inasmuch as maintaining a no-solicitation rule that is invalid on its face is at issue here, I would not limit the violation found to the prohibition of after-shift solicitation. I would also prohibit mainte- nance of the first "sentence" of the rule covering solicitation during "working time." See Member Jenkins' and my dissent in Essex International, Inc., 211 NLRB 749, 753 (1974), wherein we said that "the phrase 'working time' standing alone does not clearly and unambiguously convey to employees the valid intent and purpose of restricting their organizational activities only during the time they are required to be working at their stations." APPENDIX NOTICE TO EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government WE WILL NOT maintain any rule or regulation prohibiting our employees from soliciting on our premises after their shifts have been completed. WE WILL NOT unlawfully interrogate employees concerning their relationship to and activities upon behalf of Hotel-Motel-Restaurant Employ- ees & Bartenders Union, Local 86, Hotel & Restaurant Employees & Bartenders Internation- al Union, AFL-CIO, or any other labor organiza- tion. WE WILL NOT issue warning notices to employ- ees in order to deter them from supporting or engaging in activities upon behalf of said Union, or any other labor organization. WE WILL NOT instigate, establish, maintain, or utilize Sparks Nugget Employees' Council and the grievance procedure of which said Council is a part. WE WILL NOT unilaterally institute any altera- tions, modifications, or changes in the terms and conditions of employment which are mandatory subjects of bargaining with the aforesaid Union. WE WILL NOT refuse to furnish to said Union a copy of our current insurance program covering employees represented by said Union. WE WILL NOT refuse to recognize and bargain with said Union as the exclusive bargaining representative of the employees in the appropriate bargaining unit described below with regard to the wages, hours, working conditions, and other terms and conditions of employment of the unit employees: All employees employed in our bar and culinary operations at our Sparks, Nevada, place of business, excluding all other em- ployees, guards and supervisors, as defined in the Act. WE WILL NOT in any other manner interfere with, restrain, or coerce employees in the exercise of the rights guaranteed them by Section 7 of the Act. WE WILL recognize and, upon request, bargain collectively with Hotel-Motel-Restaurant Em- ployees & Bartenders Union, Local 86, Hotel & Restaurant Employees & Bartenders Internation- al Union, AFL-CIO, as the exclusive bargaining representative of the employees in the appropriate unit described above, with regard to the wages, hours, working conditions, and other terms and conditions of employment of the unit employees, and, if an understanding is reached, embody such understanding in a signed agreement. WE WILL furnish said Union, upon request, a copy of our current insurance policy covering our employees in the above-described bargaining unit. WE WILL remove from the personnel file of John Dyer the warning notice we issued to him on or about January 20, 1975. SPARKS NUGGET, INC., D/B/A JOHN ASCUAGA'S NUGGET DECISION STATEMENT OF THE CASE STANLEY GILBERT, Administrative Law Judge: Based on charges, as amended, filed in the above cases by Hotel- Motel-Restaurant Employees & Bartenders Union, Local 86, Hotel & Restaurant Employees & Bartenders Interna- 278 JOHN ASCUAGA'S NUGGET tional Union, AFL-CIO, hereinafter referred to as the Union, the amended complaint' herein was issued on September 22, 1975. The charges in said above cases were filed as follows: (1) in Case 20-CA-9803 on December 16, 1974, as amended on December 18, 26, and 31, 1974, January 3 and 6, May 9, and June 2, 1975; (2) in Case 20- CA-9853 on January 13, 1975, as amended on June 17, 1975; (3) in Case 20-CA-9869 on January 16, 1975, as amended on June 17, 1975; (4) in Case 20-CA-9897 on January 23, 1975, as amended on June 17, 1975; (5) in Case 20-CA-9905 on January 27, 1975, as amended on May 7 and June 25, 1975; and (6) in Case 20-CA-9957 on February 10, 1975, as amended on May 2 and June 2, 1975. Said amended complaint herein, which was amended during the course of the hearing, alleges that Sparks Nugget, Inc., d/b/a John Ascuaga's Nugget, hereinafter referred to as Respondent or Company, violated Section 8(a)(1), (2), (3), and (5) of the Act. Respondent, by its answer as amended during the course of the hearing, denies that it committed the unfair labor practices alleged as well as other allegations. 2 Pursuant to notice a hearing was held in Reno, Nevada, on August 3, 4, and 5, 1976, before me. Appearances were entered on behalf of the General Counsel, Charging Party, and Respondent and briefs were timely filed on behalf of said parties on September 23, 1976. Based upon the entire record3 in this proceeding and my observations of the witnesses as they testified, I make the following: FINDINGS OF FACT I. THE BUSINESS OF THE RESPONDENT As is admitted by Respondent, it is a corporation engaged in the operation of a hotel, restaurant, bar, and casino in Sparks, Nevada; and, during the past calendar year, in the course and conduct of its business operations, it received gross revenues in excess of $500,000 and purchased and received goods and materials valued in excess of $10,000 which originated outside the State of Nevada. Respondent is, and at all times material herein has been, an employer engaged in commerce and in operations affecting commerce within the meaning of Section 2(2), (6), and (7) of the Act. 4 II. THE LABOR ORGANIZATIONS INVOLVED Although Respondent, by its answer, denies the allega- tion in paragraph IV of the complaint as follows: "The Union is, and at all times material herein has been, a labor organization within the meaning of Section 2(5) of the Act," it entered into the following stipulation: that the I On August 26, 1975, a consolidated complaint was issued in the above cases naming Sparks Nugget, Inc., d/b/a John Ascuaga's Nugget and other employers as Respondents. On September 18. 1975, an order was issued severing the other employers from the instant case and pursuant thereto the amended consolidated complaint herein was issued. 2 Among the allegations denied is that Respondent is an employer "within the meaning of Section 2(2), (6), and (7) of the Act." The argument in support of this denial is essentially that the Board's assertion of jurisdiction over employers in the gaming industry in Nevada is "arbitrary Union "exists for representing employees for the purposes of wages, hours and working conditions." Respondent did not, in its brief, offer any argument in support of its denial of the aforesaid allegation. It appears from the record that for a considerable period of time the Union represented employees in a multiemployer bargaining unit (which included employees of Respondent) for the purpose of collective bargaining. Consequently, it is found that the allegation in paragraph IV of the complaint has been sustained. For the reasons set forth hereinbelow, it is found that the Sparks Nugget Employees' Council is, and at all times material herein since February 16, 1975, has been, a labor organization within the meaning of Section 2(5) of the Act. m. THE UNFAIR LABOR PRACTICES A. Background Information and Undisputed Facts The Reno Employers Council, herein referred to as REC, is a Nevada corporation with its office located in Reno, Nevada. At all times material herein, as well as prior thereto, REC has been a voluntary association of employ- ers engaged in, inter alia, the casino and restaurant industry. The purpose of REC is to represent its member- employers in collective bargaining, negotiating, and admin- istering collective-bargaining agreements with various labor organizations, including the Union. From 1956 through 1975, REC, on behalf of its member- employers in the Reno area, and the Union, have been parties to a series of multiemployer collective-bargaining agreements in a multiemployer collective-bargaining unit. Respondent joined REC in 1960 and became bound by the Union's 1961-63 contract with REC which was entered into on or about August 16, 1961. Respondent continued its membership in REC until December 9, 1974, at which time it timely withdrew from the multiemployer group. In anticipation of the expiration of the 1972-75 collec- tive-bargaining agreement, Al Bramlet, the International trustee of the Union, wrote to Respondent and REC on November 15, 1974, requesting that they contact the Union regarding negotiations and proposed modifications. On December 9, 1974, Respondent, by its representative, John Ascuaga, advised REC of its withdrawal from that multiemployer association. Subsequently, on December 12, 1974, Ascuaga advised the Union of Respondent's intent to terminate the collective-bargaining agreement upon its expiration. Additionally, on December 12, 1974, Clinton G. Knoll, general manager of REC, advised the Union by letter that the current collective-bargaining agreement would be terminated on February 15, 1975, and that REC was no longer authorized to represent certain signatories to the agreement (including Respondent) for collective-bar- gaining purposes. and capricious" in view of its refusal to assert jurisdiction over employers in the horseracing industry. Since I am bound by the Board's decisions to assert jurisdiction over employers in the gaming industry, I find no merit in this contention of Respondent. 3 It should be noted at this point that at the hearing General Counsel withdrew the allegation in par. VIi(e) of the complaint and that the allegations in par. Vll(a), (b), (f), and (g) were dismissed on the grounds that no evidence was introduced in the record to support said allegations. 4 See fn. 2, npra. 279 DECISIONS OF NATIONAL LABOR RELATIONS BOARD On December 13, 1974, the Union's attorney, Philip P. Bowe, wrote to Respondent and REC, referring to Bramlet's November 15, 1974, letters, requesting that they contact Bramlet to commence contract negotiations. On December 17, 1974, Bowe, in a letter addressed to Knoll with a copy addressed to Respondent, again requested that Respondent commence negotiations or face possible NLRB charges. On December 20, 1974, Respondent's attorney, Nathan Berke, by letter addressed to the Union expressed Respondent's ". . genuine doubt that [the Union] continues to represent an uncoerced majority of [its] employees in an appropriate unit." It is undisputed that Respondent has refused and continues to refuse to bargain collectively with and has withdrawn recognition from the Union as the exclusive bargaining representative of employees employed by Respondent in its bar and culinary operations at its Sparks, Nevada, casino. B. The Bargaining Unit Involved It is alleged in paragraph XII of the complaint as follows: All employees employed by Respondent in its bar and culinary operations at its Sparks Nevada place of business, excluding all other employees, guards and supervisors as defined in the Act, constitute a unit appropriate for the purposes of collective bargaining within the meaning of Section 9(b) of the Act. Although Respondent, by its answer, denies said allega- tion, it failed to introduce any evidence or assert any argument in support of said denial. Since historically the employees of Respondent in the above-described bargain- ing unit were part of the multiemployer bargaining unit and were severed from said multiemployer bargaining unit by the above-mentioned timely withdrawal of Respondent from REC, it would follow that Respondent's employees in the above-described individual unit constitute an appropri- ate bargaining unit within the meaning of Section 9(b) of the Act. It is noted that during the time material herein there were approximately 700 employees in said bargaining unit. C. The Issues The General Counsel, in his brief, contends that Respondent violated the Act as follows: 1. That it violated Section 8(aX)(1) of the Act by the following conduct: (a) By unlawfully interpreting an otherwise valid no- solicitation rule. (b) By unlawfully interrogating and threatening employ- ee Gail Launius on October 17, 1974. (c) By unlawfully reprimanding employee Richard Davis on the same date. (d) By maintaining a no-solicitation rule which is invalid on its face. 2. That it violated Section 8(a)(3) and (1) of the Act by unlawfully issuing a warning notice to employee John Dyer on or about January 20, 1975. 3. That it violated Section 8(a)(2) of the Act by initiating, forming, sponsoring, and promoting the Sparks Nugget Employees' Council on February 13, 1975, and by assisting, dominating, contributing to the support of, and interfering with the administration of said Council. 4. That it violated Section 8(a)(5) and (1) of the Act by unilaterally instituting a new and different insurance program on December 1, 1974, and by subsequently refusing to furnish the Union with information with respect to the new program. 5. That it also violated Section 8(aX5) and (1) of the Act by withdrawing its recognition of the Union as the exclusive bargaining representative of the employees in the above-described bargaining unit (which was found hereina- bove to be an appropriate unit) and refusing to bargain with the Union with respect to said unit. D. Resolution of the 8(a)(1) and (3) Issues Since at least 1968, and within the time material herein, Respondent maintained a set of rules as follows: NO SOLICITATION RULE Based upon long established rules, your attention is called to the following: Solicitation of any type by employees during working time is prohibited. Solicitation on company premises by employees after employees shift has been completed is prohibited. Distribution of literature of any type or descrip- tion by employees during working time is prohi- bited. Distribution of literature of any type or descrip- tion in working areas is prohibited. Violation of any of the above rules will result in immediate disciplinary action, including discharge. The above rules were posted on the main bulletin board by the payroll timekeeping office and were included in departmental handbooks which employees "normally" received upon being hired. In addition, a sign stating "no soliciting" was posted at each entrance to the premises. It appears, and there is no dispute, that the rule against solicitation "during working time" is valid on its face. Although there is evidence that Respondent referred to this rule as applying to "company time," there is no probative evidence to support a finding that employees were led to believe that the rule applied to anything beyond "working time," and, therefore, it is concluded that the General Counsel has failed to prove his contention that this rule was unlawfully interpreted. There is also an issue as to the validity of the rule prohibiting solicitation on company premises after the employee's shift has been completed which is considered hereinbelow. With respect to the incident involving Launius on October 17, 1974, there was testimony from three witness- 280 JOHN ASCUAGA'S NUGGET es, Thomas (Jerry) Higgins, Richard Davis, and Eugene Berry. Launius was not called as a witness. Higgins, Respondent's director of public and employee relations and an admitted supervisor, was called as a witness by General Counsel and credibly testified that he and Berry, assistant restaurant director, interviewed Launi- us, a waitress, in the breakroom on October 17, 1974. Higgins further credibly testified that he had received a report from his supervisor that Launius had been making personal calls on company time which is against company policy; that the two of them met with her to "counsel her in that regard"; that counseling consists of giving a notice which could be in the nature of a reprimanad that he told her of the report he had received about making telephone calls; that she admitted doing so and signed the notice; that thereafter he told her he heard she was employed by the Union at a salary of $S100 a month "to spy or inform on the Nugget to the union" and that she was "soliciting" on behalf of the Union; that he asked her if she had been doing it on her own time or on "company time"; that she said "mostly on her own time"; and that he warned her that any further confirmed reports of her soliciting in violation of the "Company's rule" could result in her termination. Davis testified that he heard part of the conversation during the interview, but his testimony neither adds to, nor contradicts anything of significance in, the testimony of Higgins. Berry testified to the effect that Davis was not in the breakroom at the time of the interview with Launius. Berry's testimony was not convincing inasmuch as he was facing the wall during the interview and was not able to identify any of the five or six employees who he testified were also present. In any event, since I find Davis' testimony to be of no significance, even assuming Berry's testimony were to be credited, it would not affect any of the findings with respect to the interview. Davis further testified to another incident on October 17, 1974, as follows: I was working at the time in the Pancake Parlor. Mr. Keister, one of the two chefs, told me that I was wanted in the chef's office. I went into the chef's office and there was Mr. Lesquereux and Mr. Higgins. Mr. Higgins informed me that I had been seen violating company policy to soliciting. I said that I had not. He showed me a notice that had something to do with soliciting on it, saying that people were not to solicit in the Nugget. I told him at that time that I understood what my rights were as far as solicitation was con- cerned, that I could not solicit, that I could not speak to people about the union during working hours. But that I was able to talk to people about the union and union activities not soliciting, but to speak to them about union activities during off hours and during my own time on breaks. I said this was the only time I had spoken to people about it. He subsequently tore up the counselling notice.5 5 Although according to the above uncontradicted testimony it appears that Higgins stated an unlawfully overbroad interpretation of the Compa- ny's rules, I am of the opinion that his version of what Higgins stated was inadvertently imprecise, as well as his own version of the rules. In any event, With respect to the rule prohibiting solicitation on the company premises after the end of an employee's shift, it is, on its face, violative of Section 8(aXl) of the Act. East Bay Newspapers, Inc., d/b/a Contra Costa Timnes, 225 NLRB 1148 (1976). Respondent argues that, although employees are welcomed in the public areas after their shift, they are treated as customers and customers are not permitted to engage in solicitation as evidenced by signs at entrances to the premises stating "No Soliciting." It is inferred that said signs are intended to apply to vendors, such as sellers of flowers, attempting to ply their trade among customers, and that it cannot reasonably be construed to restrict customers from engaging in the many forms of solicitation they are wont to do, such as soliciting business which is common among customers in public places such as restaurants and bars. Respondent has failed to show any overriding reason for prohibiting an employee, as a customer, soliciting another employee, also as a customer, to support the Union. Consequently, it is concluded that said rule is not "necessary for protection, safety, or discipline," and is violative of Section 8(aXl) of the Act. East Bay Newspapers, Inc., supra With respect to the conduct involving employee John Dyer, he credibly testified to a conversation he had with Higgins on January 20, 1975, as follows: Oh. Mr. Maclntire called me into the office and said Mr. Higgins wanted to talk to me. And Mr. Higgins told me that he had more than two reports that I had been soliciting for the union. And it was his duty to counsel me on it. He showed me a slip of paper and had me to read it. And he said this was the rules and regulations against soliciting for the Nugget, put out by the Nugget. It appears that the rules he was shown are those set forth hereinabove, including the rule which has been found to be unlawful and that said rule was one of two specifically referred to by Higgins. Dyer's credited testimony continues as follows: He had a pad of counselling notices in his hand, or more than one sheet, anyway. And he asked me to read it and if I had any comments to write them down on it and told me he - he asked me to sign it. And he said signing it didn't mean that I was admitting that I did it. It was only that I received the counselling slip. I told him that I hadn't solicited for union membership on Company time or otherwise. Q. And what was his response to that, if any? A. Well, he told me that he had more than two reports of this. And that in view of that that he was required to give me a counselling slip. It is noted that the "violation" stated on the notice is as follows: "soliciting for union membership on company General Counsel represented that his testimony related to par. Vll(d) of the complaint (unlawful reprimand) and the incident was not fully litigated. Therefore, the above-quoted testimony is only considered with regard to said paragraph of the complaint. 281 DECISIONS OF NATIONAL LABOR RELATIONS BOARD time." Respondent contends that there was a discrepancy between his testimony and a statement contained in a "Grievance-Complaint Form" which he signed. Said statement is as follows: "I told Higgins that on my break or before and after work I do talk Union 'pro and con'...." This, to my mind, does not constitute a contradiction of his testimony that he told Higgins that he had not solicited for union membership. In any event, Dyer's testimony was uncontradicted and is credited. Following is a resolution of the issues with respect to the incidents involving Launius, Davis, and Dyer. With respect to the interrogation of Launius, Respondent contends, in effect, that the interrogation as to her being paid by the Union was to ascertain whether she was a business agent of the Union and subject to the provision of the contract which required notification to management of "her presence." I find, however, that this purpose was an afterthought, since no reference was made to the contract provision at that time. Moreover, the accusation that she was being paid "to spy or inform on the Nugget," is not consistent with the duties of a union representative under said provision of the contract and furthermore indicated animosity toward her. As to questioning her about solicitation in violation of the Company's rule, there is no showing that Respondent had any reports she was soliciting during working hours. Considering the evidence of animosity and threat of discharge if there were any further "confirmed reports" of her violating the Company's "no soliciting policy," I am of the opinion that, as contended by General Counsel, Launius was unlawfully interrogated within the meaning of Section 8(a)() of the Act (as alleged in para. VII(c) of the complaint). Foodmak- er, Inc., d/b/a Jack-in-the-Box, 199 NLRB 109, 110-111, 114(1972). As to the incident involving Davis, General Counsel contends that he was unlawfully threatened by Higgins, as alleged in paragraph VII(d) of the complaint. It appears from Davis' testimony that Higgins was investigating reports that he had violated the Company's rule against soliciting, that his denial of doing so was believed, and that the counseling notice charging him with the violation which had been previously prepared was torn up by Higgins. I do not believe, in the circumstances, that Higgins' conduct constituted an unlawful reprimand within the meaning of Section 8(aXl) of the Act, as alleged in the complaint. As to the conduct with respect to Dyer, instead of tearing up the notice as he did in the case of Davis upon Davis' denial, Higgins insisted on giving Dyer the notice despite Dyer's denial. Moreover, he pointed out to Dyer the invalid section of the rule. There is no showing that Dyer did violate the lawful section of the rule or any probative evidence that Higgins had a reasonable basis for believing that he did. It is inferred that by having Dyer sign the notice it would be placed in his personnel file and it is reasonable to assume that its presence in his file might very well affect his job security. In the circumstances, I am of the opinion that the notice was issued because Respondent suspected Dyer of union activity and issued the notice to 6 The third member was required to be chosen from a list of "management representatives." deter him from continuing such activity. Consequently, I am of the opinion that by Higgins' conduct with respect to Dyer Respondent violated Section 8(aX3) and (1) of the Act, as alleged in paragraph VIII of the complaint. E. The Sparks Nugget Employees' Council It is undisputed that on or about February 13, 1975, Respondent announced the formation of an organization called the "Sparks Nugget Employees' Council"; that the idea for the Council originated with Respondent; that it was created by an election of employee representatives directed and conducted by the Respondent; that its "chairman" was one of Respondent's supervisors; and that its purpose was defined by Respondent to handle employee grievances. Respondent asserts that the Employees' Council, imple- mented on February 17, 1975, exists for the purpose of expanding the "open door" policy at the Nugget; that it convenes when an employee is unable to solve a problem with his supervisor or department head; that it is composed of Higgins, the employee representative (elected by the employees of each department) from the complaining employee's department, and a third member chosen by the employee representative and Higgins; 6 and that it is not a continuing body, but operates similarly to an arbitration panel or a tribunal selected by the employee through his department representative and the representative of the employer. Respondent contends, in effect, that the Council does not "negotiate" with respect to any terms or conditions of employment, but rather is a form of "arbitration panel," and therefore is not a labor organization within the meaning of the Act. Section 2(5) of the Act defines a "labor organization" as follows: Any organization of any kind, or any agency or employee representation committee or plan, in which employees participate and which exists for the purpose, in whole or in part, of dealing with employers concerning grievances, labor disputes, wages, rates of pay, hours of employment, or conditions of work. The Council meets the criteria of a labor organization within the meaning of Section 2(5), in that employees participate through the election of representatives to sit on the Council, and the Council does address itself to the solution of employee grievances with their supervisors. Presumably such grievances cover the various aspects of the employees' relationship with their employer, such as tenure or terms and conditions of employment. The fact that the Council did not "negotiate" with Respondent but was limited solely to the processing of grievances and did not engage in any other type of collective bargaining with Respondent does not exempt it from being a labor organization within the meaning of Section 2(5) of the Act. N. LR.B. v. Cabot Carbon Company and Cabot Shops, Inc., 360 U.S. 203, 205-218 (1959) (wherein the employees' committee was found to be a labor organization within the 282 JOHN ASCUAGA'S NUGGET meaning of the Act and the Court said that the language of Section 2(5), "dealing with" is not synonymous with "bargaining with"). See also North American Rockwell Corporation, 191 NLRB 833, 837-838 (1971) (employee grievance committee which was limited to discussion of "complaints, gripes, and questions"). Money Oldsmobile Company, 201 NLRB 155, 167-168 (1973), and cases cited therein (committee was created and defined by the employer). Thus, the Sparks Nugget Employees' Council, as found hereinabove, was and is a labor organization within the meaning of Section 2(5) of the Act. By a document distributed by management entitled "Nugget Employees' Council-Rules of Procedure," Re- spondent instigated the Council and dictated in detail how it was to be formed and how it was to operate. It left no option to the employees not to participate in the formation and operation of the Council except that the individual employee had the option of determining whether to submit his grievance to the Council. The time spent in its operation, the facilities for it, and all administrative expenses were assumed by Respondent. In the circum- stances, I conclude that Respondent violated Section 8(a)(2) of the Act by instigating, assisting, and dominating the Council. F. The New Insurance Program It is undisputed that Respondent on December 1, 1974, instituted a new insurance program covering the bar and culinary employees, who had, prior to that time, been covered by an insurance program included in Respon- dent's collective-bargaining agreement with the Union, which agreement, by its terms, was not due to terminate until the end of February 15, 1975. Also, it is admitted by Respondent that at no time prior to the time it was put into effect did Respondent advise, consult with, or notify the Union of the new program covering the bar and culinary unit. In addition, it is also undisputed that subsequent to the introduction of the program, Respondent refused to provide information to the Union regarding the provisions of the program which was requested by the Union in a letter dated February 13, 1975. Respondent justified its admitted unilateral action in instituting the insurance program by asserting that it had, in the past, instituted other benefits covering employees represented by the Union, without objection. Both Glen Carr, Respondent's general manager, and Higgins testified that they were advised by Clinton Knoll, general manager of the REC, and their attorney, Nathan Berke, that the collective-bargaining contract allowed for such alterations. Both Carr and Berke (in his letter to the Union of February 20, 1975, refusing Respondent's request for information regarding the new policy) referred to article XVIII of the 1972-75 collective-bargaining agreement as justification for instituting the program without consulting the Union and for refusing to provide the necessary information. An examination of article XVIII of the 1972-75 collective- bargaining agreement discloses no basis for Respondent's unilateral institution of the insurance program covering the 7 However, there is a discussion hereinbelow with respect to the Union's reference to this section in its above-mentioned letter of February 13, 1975. bar and culinary employees or for refusing to supply information to the Union regarding said program. Carr testified that he relied on all three sections of article XVIII as the basis for unilaterally instituting the program. An examination of section I of this article (which sets out the benefits under the insurance plan) clearly lends no authority for making the unilateral change. Section 2 which provides: In the event that the parties are unable to reach agreement upon the terms of a new Agreement by February 15, 1975, the Employer agrees to continue to provide such benefits during the period of negotiations (so long as the Union refrains from engaging in a strike), but no later than May 15, 1975 ... furnishes no basis for unilaterally instituting the new plan. Section 3 provides: Where an Employer now has an acceptable plan equal to or in excess of the conditions stated herein, said plan may continue in full force and effect in lieu of the hereinabove stated benefits, and, then in that event, the wage rates for the classifications shall be five cents (5¢) per hour in excess of those listed in the wage scale herein. Section 3 clearly acknowledges that an employer with a plan already in effect, and acceptable, may maintain such plan rather than the plan provided for in the collective- bargaining agreement, and is only required to adjust the rates to the wage scales included in the agreement. It is apparent that such provision was made to accommodate employers who had an insurance plan in effect at the time they became covered by the collective agreement, and the existing plan would only be allowed to remain in effect if it was found to be acceptable; i.e., the coverage was comparable to or in excess of that provided in the contract. The facts herein do not fit within the meaning of this section of the agreement.7 Consequently, it is found that there is no basis in article XVIII for the unilateral institution of the insurance program undertaken on December 1, 1974. As to the contention that the institution of the new insurance program was legal because of past practice wherein Respondent had altered the contract without objection from the Union, it appears that Respondent's past practice in altering the contract without union objection related to "class" wage increases, which were permitted by the contract and were not "across-the-board" increases. It appears that the institution of the insurance program was the first time any alterations had been made in the collective-bargaining agreement not concerned with wages. Thus, it is clear that any alterations in the contract made in the past were related to wages as permitted by the contract and obviously would not give rise to an objection by the Union. Therefore, it is found that the past unilateral action with respect to wages cannot serve as a basis for finding as lawful Respondent's failure to notify the Union in advance of its implementation of the new program or its 283 DECISIONS OF NATIONAL LABOR RELATIONS BOARD subsequent refusal to furnish the information requested with respect to the insurance program. It is well settled that the institution of unilateral changes, relating to a mandatory subject of bargaining, without notification or consultation with the Union, is a violation of Section 8(aX5) and (1) of the Act. N.LR.B. v. Benne Katz, etc., d/b/a Williamsburg Steel Products Co., 369 U.S. 736 (1962). See also San Luis Obispo County and Northern Santa Barbara Restaurant and Tavern Association, 196 NLRB 1082, 1088 (1972); John E. Holkko d/b/a Lifetime Shingle Company, 203 NLRB 688, 693 (1973); Condon Transport, Inc., 211 NLRB 297, 302 (1974). Consequently, it is concluded that by unilaterally instituting the new insurance program Respondent violated Section 8(a)(5) and (1) of the Act. It is noted, however, that although the Union subse- quently learned of the new insurance program, it made no objection thereto, filed no grievance with respect thereto, or in any way signified that it was interested in bargaining with respect to it, until its letter of February 13, 1975 (some 2-1/2 months after the program had been implemented). It is further noted that in its said letter to Higgins the Union wrote as follows: It has been brought to our attention through the Reno Employees Council that the Sparks Nugget is no longer a participant in the medical care plan as outlined in Article XVIII of the collective bargaining agreement under sections three and four of the above article. The medical plan must be equal to or in access [sic] of the contract provisions. Section two provides for the continuation of the medical plan through May 15, even though a new contract has not been signed. We request that a copy of your policy be sent to this office so that it can be examined for determination that it complies with the collective bargaining agreement. Moreover, Colin McKinlay, who was assigned to work as an official of the Union during the time material herein, and was called as a witness by the General Counsel, credibly testified as follows: THE WITNESS: I had one telephone conversation with Jerry Higgins probably January of 1975, in which I requested or we had a discussion about the change in the conditions of the health and welfare plan. JUDGE GILBERT: You had a question with respect to the change? THE WITNESS: Yes. Q. (By Mr. Rhoads) What was the basis for your calling Mr. Higgins? What was your reason for calling him? A. Well, we felt we needed a copy of the plan so that we could determine whether it-it fell within the guidelines of the contract, whether it met the contrac- tual provisions. Q. Were there any grievances discussed in this meeting or in this conversation? A. I believe the one grievance, yes. Q. Which you previously testified to? A. Yes. Q. What was your conversation with Mr. Higgins, can you recall? A. Well, one of the employees at the Nugget tried to obtain benefits and sick pay and was refused; and we wanted to know why. And his answer was that there was a mistake - a mistake was made someplace; and that the employee should resubmit the claim; and that it would be taken care of. It appears from the above-quoted letter and the credited testimony of McKinlay that the Union did not object to the unilateral implementation of the program or request that Respondent bargain about its implementation, but rather was concerned as to whether the program was "acceptable" under the provisions of section 3, Article XVIII, of the collective-bargaining agreement. It further appears from the failure of the Union to lodge any protest with regard to the unilateral implementation of the program, the position taken by the Union as to compliance with section 3, article XVIII, and the attempt, disclosed in McKinlay's testimony, to obtain benefits for an employee under the program, that the Union condoned Respondent's failure to consult with it prior to its implementation. Consequently, while I find that the unilateral implementation was violative of Section 8(a)(5) and (1) of the Act, in view of said condonation, it appears appropriate to limit the remedy therefor to an order to cease and desist from unilaterally altering or modifying the terms and conditions of a collective-bargaining agreement it may have with the Union. Since I find hereinbelow that Respondent has unlawfully withdrawn recognition from the Union and recommended that it be ordered to bargain with the Union, it follows that the refusal to furnish a copy of the insurance policy inhibits the Union from meaningfully bargaining with respect to it (a mandatory subject of bargaining) and that said refusal is violative of Section 8(aX5) and (1) of the Act. Hotel Enterprises, Inc., d/bla Royal Inn of South Bend, 224 NLRB 810 (1976). The remedy which will be recommended for said violation is that Respondent be ordered to comply with the Union's request for a copy of the current insurance policy covering the employees in the above- described bargaining unit. G. Withdrawal of Recognition and Refusal To Bargain As stated hereinabove, Respondent joined REC in 1960 and in 1961 became subject to the 1961-63 collective- bargaining agreement between REC on behalf of its members and the Union, as well as the succeeding 3-year agreements, including the 1972-75 agreement due to terminate by its terms at the end of February 15, 1975; in anticipation of the termination of the 1972-75 agreement, the Union wrote to REC and Respondent on November 15, 1974, requesting arrangements be made for negotiations with respect to modifications of the then current contract; on December 9, Respondent advised REC of its withdraw- al from that multiemployer association; on December 12, both Respondent and REC advised the Union that the collective-bargaining agreement would be terminated on 284 JOHN ASCUAGA'S NUGGET February 15, 1975, and REC further advised the Union that it was no longer authorized to represent certain employers, including Respondent; on December 13, and again on December 17, the Union wrote to REC and Respondent requesting arrangements to commence con- tract negotiations; by letter dated December 20, 1974, Respondent, through its attorney, advised the Union that it had a "genuine doubt" that the Union "continues to represent an uncoerced majority" of an appropriate unit of Respondent's employees; and it is undisputed that Respon- dent has withdrawn recognition of the Union as the exclusive bargaining representative of the above-described appropriate bargaining unit of its employees and refuses to bargain with the Union with respect to its said employees. There are essentially two issues which must be resolved in determining whether Respondent violated Section 8(a)(5) and (1) of the Act by withdrawing recognition and refusing to bargain: (1) Is there a presumption (which is rebuttable) that the Union continued to represent a majority of Respondent's employees in an individual bargaining unit of its bar and culinary workers after its withdrawal from the multiemploy- er bargaining unit. (2) If there is such a presumption, has Respondent rebutted it by proving that at the time it withdrew recognition it had a reasonable doubt based on objective considerations that the Union enjoyed the support of a majority of the employees in said individual bargaining unit. H. Re the Presumption of Majority The Board stated in Walter E. Heyman d/b/a Stanwood Thriftmart, 216 NLRB 852, 853 (1975): A contract, lawful on its face, raises a presumption that the contracting union was the majority representa- tive at the time the contract was executed, during the life of the contract, and thereafter. 8 It is asserted by the General Counsel in the instant case that a presumption of continued majority status should be found based on the series of 3-year contracts for a multiemployer bargaining unit commencing in 1961 to which Respondent was bound. But the question arises whether or not a presumption of continued majority, based on the original and subsequent multiemployer contracts to which Respondent was bound, can be held to be applicable to a single-employer bargaining unit of Respondent's employees which has been severed from the larger unit. While there never has been a contract between Respondent and the Union in the single-employer unit, it appears appropriate to infer that at the time the Union commenced representing Respondent's bar and culinary employees in the multiemployer bargaining, as well as at the time Respondent became bound by the 1972-75 agreement, a majority of Respondent's said employees desired represen- tation by the Union. Unless a majority of an employer's employees desires representation by a union, that employer may not lawfully force representation on them by joining a multiemployer 8 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). bargaining arrangement. Mohawk Business Machines Cor- porartion, 116 NLRB 248 (1956); Dancker & Sellew, Inc., 140 NLRB 824 (1963), enfd. 330 F.2d 46 (C.A. 2, 1964). Thus, Respondent would have violated the Act in 1961, when it became party to the 1961-63 multiemployer collective-bargaining agreement if a majority of its employ- ees did not desire representation, or at the time it became a party to the 1972-75 agreement. Any unfair labor practice charge relating to such a violation would have had to have been filed within 6 months from such time. The Board stated in North Bros. For4 Inc., 220 NLRB 1021 (1975): 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 the 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 of Bryan, 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, IAM, AFL-CIO[Bryan Manufacturing Co.] v. N.LR.B., 362 U.S. 411 (1960). 4 Id. at 428. 5 Barringron Plaza and Tragniew, Inc., 185 NLRB 962 (1970), enforcement denied on other grounds sub nor, Tragniew, 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). It follows from the above decision of the Board that the Respondent cannot now attack either its initial recognition of the Union or its continued recognition of the Union at the commencement of the 1972-75 agreement on the ground that at either time the Union did not represent a majority of its employees. Consequently, it appears appropriate to conclude that a presumption exists that during the term of the 1972-75 agreement the Union continued to enjoy the support of a majority of Respon- dent's employees. However, said presumption of majority status may be rebutted by Respondent "by affirmatively 285 DECISIONS OF NATIONAL LABOR RELATIONS BOARD establishing that the union has in fact lost its majority status,9 or shows that it has sufficient objective bases for reasonably doubting the union's continued majority sta- tus." James W. Whitfield d/b/a Cutten Supermarket, 220 NLRB 507 (1975). Considered hereinbelow is the issue of whether Respondent had sufficient objective bases for reasonably doubting the Union's continued majority status. I. Re Respondent's Bases for Doubt of Majority Set forth hereinbelow is an analysis of the factors relied on by Respondent in its brief and additional factors to which Carr testified, as proof that it had a reasonable doubt, based on objective considerations, of the Union's majority. It appears from Carr's testimony that it was he who determined that the Union did not represent a majority of the approximately 700 employees in the bar and culinary departments of Respondent. He testified that on or about August 22, 1974, he read an article in a newspaper, "The State Journal," which quoted an official of the Union as stating that the Reno-Tahoe area "is less than 20 percent" unionized, and that that "alerted" him to the possibility that a majority of Respondent's employees did not support the Union. It further appears from his testimony that shortly thereafter he started conferring with six of the supervisors in the bar and culinary departments with the purpose of ascertaining from them what the sentiments of the employees were regarding the Union. It further appears that he instructed them to "keep their eyes and ears open" to learn what the employees' comments were relating to their attitude toward the Union. These conferences and reports to him from the six supervisors apparently extended from early September to the end of November 1974. Carr testified with respect to their reports on employees' sentiments as follows: i. With respect to Yves Lesquereux, the executive chef, who supervised approximately 200 employees: He said he heard several comments from his people that they did not want a union, wished the - "wished the union'd get off my back; what can the union do for us; what has the union done for us; the Nugget has given us more in benefits and wages than the union ever has; do I have to belong to the union to keep my job." Q. Did Mr. Lesquereux say anything else during this conversation concerning the remarks of employees under his supervision? A. Oh, I don't know it was this meeting or not, but he felt at least 70 percent of his people were not in favor of a union. 2. With respect to Robert Turner, assistant bar manag- er, who supervised about 35 employees, Carr testified that Turner told him of the remarks made by employees which were virtually the same as had been reported by Lesquer- 9 There is no evidence in the record that the Union in fact lost its majority status. Respondent attempted to introduce evidence purportedly to prove such loss by issuing subpenas to a Government agent and for the eux and that "he felt" that "the majority" of the employees under him "did not want a union." 3. With respect to Emily Budiga, dining room supervi- sor, who had approximately 90 employees under her, Carr testified that she told him what remarks employees made to her about the Union (which again were virtually the same as those Lesquereux reported had been made to him) and that "she felt that a majority of her people . . . did not favor a union." 4. With respect to Gene Berry, assistant restaurant director, who supervised the culinary workers (approxi- mately 600), Carr testified that "his comment to me was that he felt that a majority of his people did not favor a union." 5. With respect to Scott Steel, dining room supervisor, who had about 35 employees under him, Carr testified as follows: His comment to me was, "most of my people are college students," which they are, "and they could care less about a union. Number one, they don't want to pay dues, number two they don't think they can do them any good." 6. With respect to William Carrington, also a dining room supervisor with approximately 50 employees under him, Carr testified that Carrington told him that a "majority" of his employees "did not favor a union." Carr further testified that he relied on the above- mentioned reports to him from the supervisors in deciding that the Union was not supported by a majority of the bar and culinary employees. In my opinion the above reports of the supervisors to Carr do not constitute "objective considerations." While it is true that Carr's testimony of their reports is hearsay testimony and would be inadmissible in evidence for the truth of the contents of the reports, said testimony is admissible for the fact that the reports were made to him. In any event, I do not rely on the hearsay rule of evidence in arriving at the above conclusion. Rather, I rely on the following factors: Carr made it clear to his supervisors that he was strongly opposed to the Union; the supervisors reasonably must have realized that he desired a report discrediting union support among the employees; and, in such circumstances, Carr could not have reasonably relied on the subjective evaluations of the supervisors who based said evaluations on information merely derived from his instructions to keep their eyes and ears open. It is noted that none of the supervisors was called to testify, and there is no probative evidence of any employee voicing lack of support of the Union to any of said supervisors or to Carr. "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." Terrell Machine Company, 173 NLRB 1480, 1482 (1969). It appears from Carr's testimony that he also relied upon the heavy turnover of his employees. According to his testimony, he had a survey made of the turnover "at the Union's records. Petitions to quash said subpenas were granted during the course of the hearing. 286 JOHN ASCUAGA'S NUGGET Nugget" during periods of 1972, 1973, and part of 1974 which disclosed that 3,700 people had been hired and 3,400 had been terminated. The survey also indicated that in 1972 there were 475 employees "in the bar and culinary unit" and by 1974 there were 700 employees in said unit. The Board has held that, it is presumed, "absent evidence that would justify a contrary conclusion,' 0 new employees will support the union in the same ratio as those whom they have replaced," and that "turnover of employees cannot, by itself, be used as a basis for belief that the Union has lost majority support." Dalewood Rehabilitation Hospital, Inc., d/b/a Golden State Habilitation Convalescent Center, 224 NLRB 1618, 1620(1976). Carr also cited as factors in arriving at his doubt of majority representation that the State of Nevada has a right-to-work law; that there was no union-security clause in the then current contract and that there was no dues checkoff provision in said contract. None of these facts was contradicted. In Wald Transfer & Storage Co. and West- heimer Transfer & Storage Co., Inc., 218 NLRB 592 (1975), citing the decisions in Terrell Machine Company, 173 NLRB 1480 (1969), enfd. 427 F.2d 1088 (C.A. 4, 1970), and N.LR.B. v. Gulfmont Hotel Company, 362 F.2d 588 (C.A. 5, 1966), the Board stated: It has been clearly established that a distinction exists between union membership and union support, foreclosing relying upon one as evidence of the other. Here, union membership being voluntary in this right- to-work State emphasizes that distinction. Many employees while approving of the Union may not choose to give it their financial support or participate as members. Based on the above, I am of the opinion that the absence of provisions in the then current contract (at the time the belief of lack of majority was reached) for dues checkoff and union security cannot be relied on as objective considerations for a reasonable belief that the Union lacked majority support. Carr further testified that he relied on the lack of union activity in that only one grievance had been filed by the Union during the duration of the 1972-75 agreement. The record fails to disclose that any grievances were filed which should have been pressed and were not, that any working conditions existed which warranted the filing of grievances, or that the Union was lax in carrying out its obligations under the collective-bargaining agreement. The fact that only one grievance was filed, as above stated, and was later dropped does not, in my opinion, constitute a valid basis for doubting the Union's majority representation. North American Manufacturing Company, 224 NLRB 1252 (1976); A. W. Thompson, Inc., 216 NLRB 710, 712, 714 (1975). In addition to the factors cited in Respondent's brief, Carr also testified that no election had ever been conducted among the bar and culinary workers. As stated hereina- bove, it is presumed that when Respondent agreed to be bound by the contracts between REC and the Union, extending from 1961 to 1975, it did not violate the Act by doing so, i.e., absent a majority support for the Union, and it cannot raise the issue that there was a lack of such majority support at said times as a defense in this proceeding. Moreover, the Board, in White Castle System, Inc., 224 NLRB 1089 (1976), adopted the conclusion of the Administrative Law Judge that "the fact that no election had ever been held is not a valid consideration on which to predicate a doubt of majority status." Another factor not cited in Respondent's brief but to which Carr testified is that he relied on reports in the public media that the Union was in trusteeship due to the lack of funds because of poor membership and that during a "three month period" (presumably just prior to his determination that the Union lacked majority representa- tion) there was more activity by the Union's business agents in the Nugget "than we had seen during the term of the contract." I am far from persuaded that the news reports of the Union's poor financial situation or the increased activity of its agents (presumably to recruit more members) are factors which Carr could reasonably rely on as objective bases for a belief that the Union lacked majority support among Respondent's employees. Based on my above analysis of the factors which Carr testified he relied on as a basis for his reasonable doubt of the Union's majority support, I am led to conclude that Respondent has failed to rebut the presumption that the Union enjoyed majority support of the employees in the above-described appropriate bargaining unit. Consequent- ly, I am further led to conclude therefrom and all the circumstances herein that Respondent violated Section 8(aX5) and (1) of the Act by withdrawing its recognition of the Union as the exclusive bargaining representative of the employees in said unit and by refusing to bargain with the Union as said representative. IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The activities of Respondent, as set forth in section 111, above, occurring in connection with the operations of Respondent described in section 1, above, have a close, intimate, and substantial relationship to trade, traffic, and commerce among the several States and tend to lead to labor disputes burdening and obstructing commerce and the free flow thereof. V. THE REMEDY Having found that Respondent has engaged in certain unfair labor practices, I will recommend that it be ordered to cease and desist therefrom and to take certain affirma- tive action designed to effectuate the policies of the Act. Having found that Respondent violated Section 8(a)(5) and (I) of the Act by unlawfully withdrawing recognition from the Union and by refusing to bargain with the Union as the exclusive representative of its employees in the aforesaid appropriate unit, I will recommend that Respon- dent 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. '0 There is no such evidence in the record. 287 DECISIONS OF NATIONAL LABOR RELATIONS BOARD 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. 2. The Union is a labor organization within the meaning of Section 2(5) of the Act. 3. By maintaining a rule which prohibits solicitation on Respondent's premises by employees after their shift has been completed, Respondent has engaged in an unfair labor practice within the meaning of Section 8(aX 1) of the Act. 4. By unlawfully interrogating Gail Launius on Octo- ber 17, 1974, Respondent violated Section 8(a)(1) of the Act. 5. By issuing John Dyer a warning notice on or about January 20, 1975, Respondent violated Section 8(aX3) and (1) of the Act. 6. Sparks Nugget Employees' Council is a labor organization within the meaning of Section 2(5) of the Act and Respondent, by instigating, assisting, and dominating said Council, violated Section 8(a)(2) of the Act. 7. All employees employed by Respondent in its bar and culinary operations at its Sparks, Nevada, operations, excluding all other employees, guards, and supervisors as defined in the Act, constitute a unit appropriate for the purposes of collective bargaining within the meaning of Section 9(b) of the Act. 8. 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. 9. By its unilateral implementation of a new and different insurance program for its employees in the above- described bargaining unit on December 1, 1975, Respon- dent violated Section 8(a)(5) and (1) of the Act. 10. By refusing to comply with the Union's request for a copy of the new insurance program, Respondent violated Section 8(a)5) and (1) of the Act. 11. 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 and 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)(I) 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: ORDER"t The Respondent, Sparks Nugget, Inc., d/b/a John Ascuaga's Nugget, Sparks, Nevada, its officers, agents, successors, and assigns, shall: 1. Cease and desist from: II 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. (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) Unlawfully interrogating employees concerning their relationship to and activities upon behalf of Hotel-Motel- Restaurant Employees & Bartenders Union, Local 86, Hotel & Restaurant Employees & Bartenders International Union, AFL-CIO, or any other labor organization. (c) Issuing warning notices to employees in order to deter them from supporting or engaging in activities upon behalf of said Union, or any other labor organization. (d) Instigating, assisting, or dominating any labor organization in which its employees participate and maintaining and dealing with Sparks Nugget Employees' Council. (e) Unilaterally instituting any alterations, modifications, or changes in the terms and conditions of employment which are mandatory subjects of bargaining with the aforesaid Union. (f) Refusing to furnish to said Union a copy of its current insurance program covering employees represented by said Union. (g) Refusing to recognize and bargain with said Union as the exclusive bargaining representative of the employees in the appropriate bargaining unit described below, with regard to the wages, hours, working conditions, and other terms and conditions of employment of the unit employ- ees: All employees employed by the Respondent in its bar and culinary operations at its Sparks, Nevada, place of business, excluding all other employees, guards and supervisors, as defined in the Act. (h) In any like or related manner interfering with, restraining, or coercing its employees in the exercise of the rights guaranteed them by Section 7 of the Act. 2. Take the following affirmative action which is necessary to effectuate the policies of the Act: (a) Recognize and, upon request, bargain collectively with Hotel-Motel-Restaurant Employees & Bartenders Union, Local 86, Hotel & Restaurant Employees & Bartenders International Union, AFL-CIO, as the exclu- sive bargaining representative of the employees in the appropriate unit described below, with regard to the wages, hours, working conditions, and other terms and conditions of employment of the unit employees, and, if an under- standing is reached, embody such understanding in a signed agreement. The unit found appropriate for the purposes of collective bargaining is: All employees employed by the Respondent in its bar and culinary operations at its Sparks, Nevada, place of business, excluding all other employees, guards and supervisors, as defined in the Act. 102.48 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. 288 JOHN ASCUAGA'S NUGGET (b) Furnish said Union, upon request, a copy of its current insurance policy covering its employees in the above-described bargaining unit. (c) Remove from the personnel file of John Dyer the warning notice it issued to him on or about January 20, 1975. (d) Post at its Sparks, Nevada, place of business copies of the attached notice marked "Appendix."' 2 Copies of the notice, on forms provided by the Regional Director for Region 20, after being duly signed by an authorized representative of the Respondent, shall be posted by the 12 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 Labor Relations Board" shall read "Posted Pursuant to a Respondent immediately upon receipt thereof, and be 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 the Respondent to ensure that the notices are not altered, defaced, or covered by any other material. (e) Notify the Regional Director for Region 20, in writing, within 20 days from the date of this Order, what steps Respondent has taken to comply herewith. Judgment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board." 289