Downtown Motel Inn

238 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD Muskegon Motel Corporation d/b/a Downtown Motel Inn and Local 235, Hotel, Restaurant and Bartenders Union, AFL-CIO. Cases 7- CA-21680 and 7-CA-22467 15 June 1987 DECISION AND ORDER BY CHAIRMAN DOTSON AND MEMBERS BABSON AND STEPHENS Upon individual charges filed by the Union, on 25 January and 11 August 1983 respectively, the General Counsel of the National Labor Relations Board issued separate complaints against the Re- spondent, on 28 February 1983 with respect to Case 7-CA-21680 and on 27 September 1983 with respect to Case 7-CA-22467. Each complaint al- leged that the Respondent was in violation of Sec- tion 8(a)(5) and (1) of the National Labor Relations Act. 1 Although properly served copies of the charges and complaints, the Respondent failed to file an answer to either complaint. Subsequently, the General Counsel filed two Motions for Default Judgment with the Board, on 16 September 1983 with regard to Case 7-CA- 21680 and on 29 December 1983 with respect to Case 7-CA-22467. Accordingly, the Board issued separate orders transferring the cases to the Board and Notices to Show Cause why the General Counsel's motions should not be granted. The Re- spondent did not respond to either notice. On review of the General Counsel's motions and supporting documents, the Board separately issued Notices to Show Cause why the complaints should not be dismissed for want of jurisdiction, on 23 February 1984 with respect to Case 7-CA-21680 and on 30 April 1984 concerning Case 7-CA- 22467. In each notice the Board pointed out that while the complaint stated that the Respondent's business involves "the providing of food and lodg- ing," the General Counsel did not allege the Board's jurisdiction pursuant to a discretionary standard applicable to a restaurant/motel operation. The General Counsel filed responses to the Board's notices on 8 March and 8 May 1984, re- spectively. No responses were filed by the Re- spondent. In each response the General Counsel contended that, pursuant to a contract with the State of Michigan, the Respondent provides food and lodging services to state prisoners; the General Counsel characterized the Respondent's operation 1 The complaint in Case 7-CA-21680 alleged that the Respondent had failed to remit to the Union the union dues and fees it had collected from unit employees over a 3-month period In Case 7-CA-22467 it was al- leged that the Respondent had failed to maintain insurance for its unit employees, a requirement of the parties' collective-bargaining agreement. as a "halfway house." He also contended that the State of Michigan makes annual purchases of over $50,000 in interstate commerce. He further asserted that the contractual relationship between the Re- spondent and the State establishes the Respondent's services as indirect outflow and nonretail by nature, and that the value of those services exceeds $50,000 annually. Accordingly, the General Coun- sel contended that the Board's assertion of jurisdic- tion over the Respondent is proper under the non- retail discretionary standard as alleged in each complaint. On 3 October 1984 a panel majority of the Board (former Member Zimmerman dissenting) issued separate, unpublished Orders with respect to the General Counsel's motions. In each Order, the Board asserted that the General Counsel still had not pleaded a sufficient basis for the Board's discre- tionary assertion of jurisdiction over the Respond- ent. It was also noted that the General Counsel had raised an issue of the Board's jurisdiction over the Respondent in view of its relationship with the State of Michigan, an exempt entity. Thus, the Board denied the default motions and remanded the cases to the Region for further appropriate action. On 19 November 1984 the General Counsel issued an order consolidating Cases 7-CA-21680 and 7-CA-22467 and an amended complaint. The amended complaint in general incorporates the alle- gations of the two earlier complaints. It also com- bines the jurisdictional averments of the two earlier complaints with those contained in the General Counsel's responses to the Board's Notices to Show Cause of 23 February and 30 April 1984. Further, it alleges that the value of the Respond- ent's services resulting from its contractual rela- tionship with the State is in excess of $140,000 an- nually. The amended complaint also includes at- tachments concerning the Respondent's business re- lationship with the State. The General Counsel al- leges that although the State has a contractual rela- tionship with the Respondent, the State, an exempt entity, exercises no appreciable control over the terms and conditions of employment of the Re- spondent's employees. The General Counsel also avers that on 25 July 1984 the Respondent filed for bankruptcy under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Western District of Michigan. Although prop- erly served copies of the order consolidating the cases and the amended complaint, the Respondent failed to answer the amended complaint. On 30 January 1985 the General Counsel filed with the Board a Motion for Default Judgment with respect to the consolidated cases. On 8 Febru- 284 NLRB No. 29 DOWNTOWN MOTEL INN 239 ary 1985 the Board issued a transfer order and Notice to Show Cause why the General Counsel's default motion should not be granted. The Re- spondent did not respond to the notice. The National Labor Relations Board has delegat- ed its authority in this proceeding to a three- member panel. On the entire record in this proceeding the Board makes the following Ruling on the Motion for Default Judgment We treat the General Counsel's present motion as a renewal of the earlier motions for default judg- ment. 2 On review of the motion and supporting papers, we note the amended complaint's allega- tions that under the Respondent's contractual rela- tionship with the State of Michigan the Respondent provided at all material times food and lodging services to state prisoners valued in excess of $140,000 annually. It is further alleged that the State makes interstate purchases of goods and ma- terials in excess of $50,000 annually. We find these unanswered allegations of the amended complaint adequate to establish discretionary jurisdiction over the Respondent pursuant to the Board's nonretail standard. Section 102.20 of the Board's Rules and Regula- tions provides that the allegations in the complaint shall be deemed admitted if an answer is not filed within 10 days from service of the complaint, unless good cause is shown. The complaint states that unless an answer is filed within 10 days of service, "all of the allegations in the Complaint shall be deemed to be admitted to be true and shall be so found by the Board." 3 Further, the undis- puted allegations in the Motion for Default Judg- ment disclose that the Oeneral Counsel notified the Respondent's attorney, by certified letter received 4 January 1985, that unless an answer was received forthwith, a Motion for Default Judgment would be filed. In the absence of good cause being shown for the failure to file a timely answer, the allegations of the amended complaint are deemed admitted and we so find, and we grant the General Counsel's Motion for Default Judgment. On the entire record the Board makes the fol- lowing 2 We note the General Counsel's failure to make any reference to the previous motions and the Board's determination of them in the current motion papers. 3 Subsequent to the issuance of the complaint, the Board, effective 29 September 1986, revised Sec 102 20 of the Rules and Regulations to pro- vide for the filing of an answer within 14 days of service of the com- plaint. FINDINGS OF FACT I. JURISDICTION The Respondent, a Michigan corporation, at its facility in Muskegon, Michigan, is and has been at all material times engaged in providing food and lodging services to prisoners of the State of Michi- gan pursuant to a contractual relationship with the State. During 1982, a period representative of the Respondent's operations at all material times, the value of the Respondent's contractual services was in excess of $50,000. The State of Michigan, to which the services were rendered, annually pur- chases goods and services in interstate commerce valued in excess of $50,000. Accordingly we find that the Respondent is an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act. The Union is a labor organization within the meaning of Section 2(5) of the Act. II. ALLEGED UNFAIR LABOR PRACTICES At all material times in this proceeding, the Union has been the exclusive collective-bargaining representative of the Respondent's employees in the following unit: All lead maids, maids, porters, salad persons, dishwashers, kitchen helpers, second cooks, cooks, breakfast cooks, waiters, waitresses, breakfast waitresses, bus boys, bartenders, hou- semen, maintenance men, desk clerks and night auditors employed by the Respondent at its 381 W. Muskegon Avenue, Muskegon, Michi- gan facility; but excluding all professional em- ployees, guards and supervisors as defined in the Act. The Respondent has recognized the Union as the representative of the above employees; that recog- nition has been embodied in a series of collective- bargaining agreements, the term of the most recent from 1 January through 31 December 1983. The Union continues to be the exclusive representative under Section 9(a) of the Act. On or about 15 November and 15 December 1982 and 15 January 1983, the Respondent failed to remit and continues to fail to remit to the Union pursuant to the terms of the parties' collective-bar- gaining agreement the monthly dues and fees it de- ducted from the unit employees' pay. On or about 28 February 1983 the Respondent failed and refused, and continues to fail and refuse, to maintain for its employees the insurance cover- age required by the terms of the parties' collective- bargaining agreement. We find that by its conduct described above the Respondent unilaterally changed the terms of the 240 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD parties' agreement and thus refused to bargain with the Union in violation of Section 8(a)(5) and (1) and Section 8(d) of the Act. CONCLUSIONS OF LAW By failing, on or about 15 November and 15 De- cember 1982 and 15 January 1983, to remit to the Union the monthly dues and fees it deducted from the unit employees' wages, as required under the parties' collective-bargaining agreement; and by failing, on or about 28 February 1983 and thereaf- ter, to maintain insurance for its unit employees, again as required under the collective-bargaining agreement; the Respondent has engaged in unfair labor practices affecting commerce within the meaning of Section 8(a)(5) and (1), Section 8(d), and Section 2(6) and (7) of the Act. REMEDY Having found that the Respondent has engaged in certain unfair labor practices, we shall order it to cease and desist and to take certain affirmative action necessary to effectuate the policies of the Act. To remedy the Respondent's unlawful failure to remit union dues and fees to the Union, we shall order it to remit to the Union the funds unlawfully withheld, plus interest as computed in New Hori- zons for the Retarded. 4 To remedy the Respond- ent's unlawful failure to maintain contractually re- quired insurance for its employees, we shall order it to reinstate immediately such insurance coverage, and to reimburse its employees for any losses or ex- penses incurred because of its unlawful failure to maintain such insurance, with interest as computed in New Horizons for the Retarded, above.5 ORDER The National Labor Relations Board orders that the Respondent, Muskegon Motel Corporation d/b/a Downtown Motel Inn, Muskegon, Michigan, its officers, agents, successors, and assigns, shall. 1. Cease and desist from (a) Refusing to bargain by failing and refusing to remit union dues and fees to Local 235, Hotel, Res- taurant Employees and Bartenders International 4 In accordance with our decision in New Horizons for the Retarded, 283 NLRB 1173 (1987), interest will be computed at the "short-term Fed- eral rate" for the underpayment of taxes as set out in the 1986 amend- ment to 26 U S.0 § 6621 5 In the amended complaint's prayer for relief, the General Counsel, notmg that the Respondent had filed for bankruptcy under Chapter 11, requested a limited remedy for the unfair labor practices alleged, appar- ently in view of the Supreme Court's decision in NLRB v Bddisco & disco, 465 U S 513 (1984) We find Bildiseo inapplicable to this case since the Respondent filed for bankruptcy on 25 July 1984, after the enactment and effective date of the Bankruptcy Amendments and Federal Judgeship Act of 1984 See, e g, Phoenix Co., 274 NLRB 995 (1985) Union, AFL-CIO and by failing and refusing to maintain contractually required insurance for its unit employees. (b) In any like or related manner interfering with, restraining, or coercing employees in the ex- ercise of the rights guaranteed them by Section 7 of the Act. 2. Take the following affirmative action neces- sary to effectuate the policies of the Act. (a) Remit to the Union the dues and fees it has unlawfully withheld, reinstate contractually re- quired insurance coverage for its unit employees, and reimburse its employees for any losses or ex- penses incurred because of its unlawful failure to maintain such insurance, all in the manner set forth in the remedy section of this decision. (b) Preserve and, on request, make available to the Board or its agents for examination and copy- ing, all payroll records, social security payment records, timecards, personnel records and reports, and all other records necessary to analyze the amount of backpay due under the terms of this Order. (c) Post at it facility in Muskegon, Michigan, copies of the attached notice marked "Appendix." Copies of the notice, on forms provided by the Re- gional Director for Region 7, after being signed by the Respondent's authorized representative, shall be posted by the Respondent immediately upon re- ceipt and maintained for 60 consecutive days in conspicuous places including all places where no- tices to employees are customarily posted. Reason- able steps shall be taken by the Respondent to ensure that the notices are not altered, defaced, or covered by any other material. (d) Notify the Regional Director in writing within 20 days from the date of this Order what steps the Respondent has taken to comply. 5 If 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 Nation- al Labor Relations Board" shall read "Posted Pursuant to a Judgment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board." APPENDIX NOTICE To EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government The National Labor Relations Board has found that we violated the National Labor Relations Act and has ordered us to post and abide by this notice. DOWNTOWN MOTEL INN 241 WE WILL NOT refuse to bargain by failing and refusing to remit union dues and fees to Local 235, Hotel, Restaurant Employees and Bartenders Inter- national Union, AFL-CIO and by failing and refus- ing to maintain contractually required insurance for you. WE WILL NOT in any like or related manner interfere with, restrain, or coerce you in the exer- cise of the rights guaranteed you by Section 7 of the Act. WE WILL remit to the Union the dues and fees we have withheld, WE WILL reinstate contractually required insurance coverage for you, and WE WILL reimburse you for any losses or expenses incurred because of our failure to maintain such insurance, plus interest. MUSKEGON MOTEL CORPORATION D/B/A DOWNTOWN MOTEL INN