San Diego Princess

SAN DIEGO PRINCESS San Diego Princess and San Diego Bartenders and Culinary Workers Insurance Trust Fund. Case 21-CA-25264 July 29, 1988 DECISION AND ORDER BY CHAIRMAN STEPHENS AND MEMBERS BABSON AND CRACRAFT On December 16, 1987 , Administrative Law Judge George Christensen issued the attached deci- sion. The Respondent and the General Counsel filed exceptions and supporting briefs.' The National Labor Relations Board has delegat- ed its authority in this proceeding to a three- member panel. The Board has considered the decision and the record in light of the exceptions and briefs and has decided to affirm the judge's rulings, findings,2 and conclusions and to adopt the recommended Order as modified. ORDER The National Labor Relations Board adopts the recommended Order of the administrative law judge as modified below and orders that the Re- spondent, San Diego Princess, San Diego, Califor- nia, its officers, agents, successors, and assigns, shall take the action set forth in the Order as modi- fied. 1. Substitute the following for paragraph 1(b). "(b) Refusing to pay to the Trust Fund the amounts owed for each such shift." 2. Substitute the attached notice for that of the administrative law judge. MEMBER CRACRAFT, dissenting. For the reasons stated in my dissent in Shelter Island, Inc., 290 NLRB 246 (1988) I would find that the Respondent did not violate Section 8(a)(5) and (1) of the Act by failing to make payments to the San Diego Bartenders and Culinary Workers Insurance Trust Fund for shifts worked by its em- ployees between December 1 and December 18, ' In Shelter Island, Inc, 290 NLRB 246 (1988 ), a companion case to this one, the General Counsel riled exceptions and a brief addressing Judge Christensen's proposed order in both cases concerning the rate at which the Respondent in each case should be required to make the Fund whole. As in Shelter Island, supra, we find merit to the General Counsel's exception and shall , accordingly, modify the Judge's recommended Order to provide for a general make-whole remedy We leave it to the compli- ance stage of this proceeding to determine the correct rate and amount owed to the Fund pursuant to this decision 2 For the reasons stated in Shelter Island, supra, we find no merit to the Respondent's contention that it was under no obligation to submit pay- ments to the Fund for shifts worked by its employees from December I to 18, 1986, because an impasse in bargaining was reached on December 19, 1986, and payment for the preimpasse shifts worked by employees was not due, and coverage would not begin , until January 1987, after im- passe had been reached 253 1986, and by failing to submit a report indicating which shifts were worked during this period. 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. WE WILL NOT continue to refuse to file with the San Diego Bartenders and Culinary Workers Insur- ance Trust Fund a report reflecting the number of shifts each of our employees in the following unit worked between December 1 and December 18, 1986: All kitchen and stockroom employees, lunch and dining room employees, bartenders and cocktail lounge employees, special occasion bartenders, housekeeping and service depart- ment employees and cafeteria employees em- ployed by the Employer; excluding all other employees, office clerical employees, profes- sional employees, guards, and supervisors as defined in the Act. WE WILL NOT continue to refuse to pay to the Trust Fund the amount owed for each shift worked by each employee within that unit between December 1 and December 18, 1986. WE WILL file the report and pay the amount or amounts described above. WE WILL make whole any employees within the unit who suffered losses because of our nonpay- ment of the amount or amounts described above. WE WILL pay to such employees and to the Trust Fund any interest, penalties, or other sums adjudged payable in the compliance phase of this proceeding before the Board. SAN DIEGO PRINCESS Theodore R. Scott, Esq., for the General Counsel. Dennis Childs and John D. Collins, Esq. (Sheppard, Mullin, Richter & Hampton), of San Diego, California, for the Respondent. DECISION STATEMENT OF THE CASE GEORGE CHRISTENSEN , Administrative Law Judge. On July 30, 1987, I conducted a hearing at San Diego, California, to try issues raised by a complaint issued on April 10, 1987, based on a charge filed by San Diego 290 NLRB No. 36 254 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD Bartenders and Culinary Workers Insurance Trust Fund (the Fund) on March 2, 1987. The complaint alleged that San Diego Princess (the Employer) violated Section 8(a)(1) and (5) of the Nation- al Labor Relations Act (the Act) by refusing to make payments to the Fund for shifts worked between Decem- ber 1 and 18, 1986, by its employees represented by Local 30, Hotel & Restaurant Employees Union, AFL- CIO (the Union). The Employer conceded it refused to make the pay- ments in question but denied it thereby violated the Act. The issue is whether the Employer violated the Act by refusing to make the payments in question. The General Counsel and the Employer appeared by counsel and were afforded full opportunity to adduce evidence , examine and cross-examine witnesses, argue, and file briefs. Both filed briefs. Based on my review of the entire record , observation of the witnesses, perusal of the briefs, and research, I enter the following FINDINGS OF FACT 1. JURISDICTION AND LABOR ORGANIZATION The complaint alleged, the answer admitted , and I find at all pertinent times the Employer was an employer en- gaged in commerce in a business affecting commerce and the Union was a labor organization within the meaning of Section 2 of the Act. 11. THE ALLEGED UNFAIR LABOR PRACTICE A. Facts The Employer operates a resort hotel in San Diego. At least since 1980, the Union has represented and has been recognized by the Employer as the exclusive col- lective-bargaining representative of a unit consisting of the following: All kitchen and stockroom employees , lunch and dining room employees , bartenders and cocktail lounge employees, special occasion bartenders, housekeeping and service department employees and cafeteria employees employed by the Employ- er; excluding all other employees , office clerical em- ployees, professional employees, guards, and super- visors as defined in the Act.' On October 26, 1980, by its designated collective-bar- gaining representative, Restaurant Hotel Employers Council of San Diego, Inc. (Council), the Employer en- tered into a collective-bargaining agreement with the Union in which the Employer recognized the Union as the exclusive collective-bargaining representative of the unit employees, and specified their wages , rates of pay, hours, and working conditions for a term commencing April 7, 1980. The agreement, inter alia, contained the following pro- visions: ' I find this unit is appropriate for collective-bargaining purposes within the meaning of Sec 9(b) of the Act SECTION 19-HEALTH AND WELFARE PLAN: (a) The San Diego Bartenders and Culinary Workers Insurance Fund Trust Indenture executed on the Seventh (7th) day of January, 1952, and any amendments as may be made from time to time thereto, are hereby incorporated by reference and made a part of this Agreement . The Employer, by signing this Agreement , agrees to be bound by all the terms and provisions of said Trust Indenture. (b) The Employer shall pay the sum of two dol- lars ($2.00) per day for each shift worked by each employee covered by the terms of the contract to the San Diego Bartenders and Culinary Workers In- surance Fund. The Employer shall forward to the Trustees (on forms approved by, and at a time and place designated by them) a report of the names and number of days of employment of all employees covered by this contract. Said payments are to be made by the Employer directly to the Trustees of the San Diego Bartenders and Culinary Workers' Health & Welfare Trust Fund. The Employer signa- tory hereto hereby accepts the present Council ap- pointed Trustees and their duly selected successors and alternates as his representatives on said Trust Fund. (d) The Employer, upon demand of either the Trustees of the San Diego Bartenders and Culinary Workers Insurance Fund or of the Local Joint Board, shall submit such reasonable information, employment and payroll records as may be relevant and necessary for the ascertainment by the Trustees or the Union, of the amount of monies due and owing by the Employer of the Trust. (g) The Trustees of the Fund, in the event pay- ments have not been received by the Trust by the twentieth of the month succeeding the month for which payments are due , may sue said Employer for one or more of the following : An accounting, injunction, recovery of the delinquent payments, reasonable costs of suit and any other relief that may be appropriate under the circumstances. Payments and reports tendered to the Fund assured coverage under the agreement's plan for the month in which the tender was received, provided the employee completed 12 shifts for participating employers during the preceding month.2 After timely Employer withdrawal from council mem- bership, and timely notice to the Union, the Employer terminated the agreement , effective October 31, 1986. Negotiations between the Employer and the Union over terms for a new or successor agreement reached an im- passe on December 19, 1986 . In the course of the negoti- ations, the Employer proposed the substitution of a health plan of its choosing for the agreement 's health plan. The Employer's health plan limited coverage to 2 Though it required payment for at least 22 shifts ($44) to fund the Fund's monthly payouts for monthly benefits and administrative costs SAN DIEGO PRINCESS "key employees" and excluded "on-call employees,"a it also required an employee work at least 25 hours each week during a month to qualify for coverage during that month. The Union resisted any change from the health plan provisions of the agreement. Between the date the agreement was terminated (Octo- ber 31, 1986) and the date the impasse occurred (Decem- ber 19, 1986), the Employer continued to participate in the agreement's health plan, sending a report to the Fund in early November 1986 reporting the number of shifts worked by covered employees during October 1986, and tendering the requisite payment (assuring coverage for eligible employees during November 1986), and sending a similar report to the Fund in early December 1986 re- porting the number of shifts worked by covered employ- ees during November 1986, and tendering the requisite payment (assuring eligible employees coverage during December 1986). Following the December 19, 1986 impasse, the Em- ployer notified the Union and the Fund it was withdraw- ing from any further participation in the agreement's health plan, and that it was going to institute the health plan it proposed during negotiations. In a subsequent conversation between representatives of the Employer and the Fund, in response to Employer inquiries, a fund representative stated the Fund's rules and regulations prevented its acceptance of payments from the Employer for any shifts unit employees worked on and after De- cember 19, 1986 (the impasse date), and the Fund "prob- ably" would not demand payments from the Employer for shifts unit employees worked between December 1 and 18, 1986, in the event the Employer provided those employees coverage under its plan for January 1987.4 The Employer instituted the health plan it proposed during negotiations in January 1987. The plan provided benefits equal or superior to benefits provided under the agreement's plan and was more costly to the Employer than the plan but, as noted above, was more limited in coverage of unit employees because it excluded "on-call" employees. The fund representative received an opinion from counsel that the Fund was entitled to payments from the Employer for all shifts unit employees worked between December 1 and 18, 1986. She addressed a letter to the Employer following nonreceipt by January 20, 1987 (the date any December 1986 report and payments became delinquent), of any report or payments for the December 1-18, 1986 period, stating counsel advised her such report and payments were due and payable , and request- ed their tender. At all times thereafter, the Employer refused to tender the requested report and payments. It was established (by stipulation) several unit employ- ees worked a substantial number of shifts for the Em- ployer between December 1 and 18 , 1986: Carlos Bernal, 3; Maria Conriguez, 16; Jose Diaz, 14; Brad Fox, 14; Al- 3 Employees classified as "on-call employees" under the employer plan were covered by the agreement's plan. * The fund representative explained she so commented because she was unsure at the time whether the Fund was legally entitled to payments for shifts worked by unit employees between December I and 18 , 1986, and was awaiting an opinion on the question from counsel. 255 berto Jimenez, 10; Gumereindo Jimenez, 14; Daniel Lopez, 14; and John Medina, 2.5 Conriguez, Diaz, Fox, A. Jimenez, G. Jimenez, and Lopez were classified as "key employees " under the em- ployer health plan and worked a sufficient number of hours in January 1987 to qualify for coverage; Bernal and Medina were classified as "on -call" employees under the employer health plan and were not covered.6 B. Analysis and Conclusions The Board, with court approval, has consistently held an employer violates the Act by failing or refusing to make deferred payments based on work performed prior to a bargaining impasse, on the premise the purposes of the Act are best served by requiring an employer to maintain its employees' wage components (including pay- ments to provide health and pension coverage ) provided under an expired collective-bargaining agreement, un- changed, while the parties negotiate over terms for a possible successor agreement.? In this case, the Employer refused to pay to the Fund $2 for each shift worked by unit employees between De- cember 1 and 18, 1986, the day before the Employer and the Union reached an impasse in their negotiations over the terms for a possible successor to an expired agree- ment requiring such payment. On these facts, the line of cases just recited support the conclusion the Employer thereby violated the Act. The Employer contends O'Malley Lumber Co., 234 NLRB 1171 (1978), dictates a contrary conclusion. Al- though that case holds the employer did not violate the Act by discontinuing payments to a health fund estab- lished under an expired collective -bargaining agreement with the union representing its employees following the expiration of the agreement, the case is readily distin- guishable from this one; the major issue litigated in O'Malley was whether the parties to the expired agree- ment ever reached a bargaining impasse prior to the em- ployer's implementation of the health plan it proposed during negotiations, with the General Counsel contend- ing no such impasse was reached , and the employer con- tending a bargaining impasse was reached 16 days after the agreement expiration . The employer's contention was sustained and on the basis: (1) prior to the expiration of 5 Although the underlying charge alleges there were approximately 297 employees in the unit, no evidence was offered to identify additional unit employees eligible for the fund coverage and the number of shifts they worked for the Employer during the December 1-18, 1986 period 6 By virtue of their work during the entire month for employer-parties to agreements requiring the fund payments other than the Employer, Bernal and Medina were covered by the agreement's health plan for the month of January 1987. r NLRB Y. Katz, 369 U.S. 736 (1962), Southwestern Steel & Supply, 276 NLRB 1569 (1985), enfd. 806 F.2d 1111 (D.C Cir. 1986), Auto Fast Freight, 272 NLRB 561 (1984), enfd . 122 LRRM 3058 ( 1986), American Distributing Co., 264 NLRB 1413 (1982 ), enfd. 715 F.2d 446 (9th Cir. 1983), cert . denied 466 U.S. 958 ( 1984), Stone Boat Yard, 264 NLRB 981 (1982), enfd . 715 F.2d 441 (9th Cir. 1983), cert . denied 466 US 937 (1984); Cauthorne Trucking Co., 256 NLRB 721 (1981 ), enfd 691 F 2d 1023 (D.C. Cir. 1982), Antonino's Restaurant, 246 NLRB 833 (1979), enfd. 648 F.2d 1206 (9th Cir. 1981), Hen House Market, 174 NLRB 596 (1969), enfd 428 F 2d 133 (8th Cir 1970); Emsing's Supermarket, 284 NLRB 302 (1987); M. J. Santulli Mail Services, 281 NLRB 1288 (1986), Buck Brown Contracting Co, 272 NLRB 951 (1984) 256 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD the O'Malley-union agreement, the fund adopted the policy of not accepting payments for any hours worked after the expiration of a collective-bargaining agreement requiring theme (a policy known by the employer by virtue of the service of one of its representatives as a fund trustee); (2) the employer nevertheless placed pay- ments in an escrow account covering the 15 days its union-represented employees worked between the date the agreement expired and the date of impasse; (3) no evidence was developed that the fund ever requested the employer tender the escrowed funds or that the employ- er refused to remit them; (4) the fund provided extended coverage to the affected employees for a minimum of 4 and a maximum of 7 months after the agreement expired; (5) the employer did not institute the health plan it pro- posed during negotiations until the expiration of each af- fected employee's health coverage by the fund; (6) it was held that the General Counsel failed to establish employ- er conduct violative of the Act. In this case, the Fund followed the policy of accepting payments from employers for all shifts worked between the date of agreement expiration and date of impasse, based on an opinion by its counsel it was legally entitled to such payments; the General Counsel proved the Fund requested payment for the shifts worked by the unit em- ployees between those dates, and the Employer refused to comply with the request; the Employer failed to dove- tail his plan to the agreement plan (implementation of employer plan coverage following the expiration of agreement plan coverage); the Employer plan differed in health plan coverage from the agreement's plan, and only by operation of the portability principle embodied in the agreement plans did Bernal and Medina (and any other unit employees fortunate enough to be similarly sit- uated) receive health coverage under the agreement plan for January 1987.1 0 Although the Employer did not argue the Fund waived (or was estopped from asserting) any right to re- ceive the December 1-18, 1986 payments, by virtue of the fund representative's statement, the Fund probably would not seek those payments if the Employer placed its plan in effect in January 1987, it did cite that state- ment as one of its grounds for requesting dismissal of the complaint. A waiver (or estoppel) defense requires proof the waiving party knowingly , clearly, and unmistakably waived the right in question , l 1 and that was not true here. Additionally, it is clear the fund representative had no authority to waive the right of the Union (and the af- fected employees on whose behalf the Union was bar- gaining) to the preservation of an economic status quo although the Union pursued continuation of their health benefits to impasse. I therefore reject any employer waiver or estoppel contention based on the fund repre- 8 Based on an opinion by fund counsel , the Fund was not legally enti- tled to such payments. 8 A provision crediting work for all and any participating employers- a valuable benefit within industries where it is common for employees to work for several employers within each month 1° It is further noted that although those payments qualified the two for health coverage by the Fund for January, the payments were insuffi- cient to cover costs ($44 or 22 shifts worked) i i Metropolitan Edison Co V NLRB, 460 U.S. 693, 708-710 (1983) sentative's statement, and find and conclude by its refusal to comply with the Fund 's request for a report of the number of shifts each unit employee worked between December 1 and 18, 1986, and by its refusal to pay $2 to the Fund for each of those shifts, the Employer violated Section 8(a)(1) and (5) of the Act. CONCLUSIONS OF LAW 1. At all pertinent times, the Employer was an employ- er engaged in commerce in a business affecting com- merce, and the Union was a labor organization within the meaning of Section 2 of the Act. . 2. At all pertinent times, the following was an appro- priate unit for collective-bargaining purposes within the meaning of Section 9 of the Act: All kitchen and stockroom employees, lunch and dining room employees, bartenders and cocktail lounge employees, special occasion bartenders, housekeeping and service department employees and cafeteria employees employed by the Employ- er; excluding all other employees , office clerical em- ployees, professional employees, guards, and super- visors as defined in the Act. 3. At all pertinent times the Union was the exclusive representative of the employees within the aforesaid unit for the purpose of bargaining collectively with the Em- ployer with respect to their wages, rates of pay, hours and working conditions. 4. By refusing to comply with the Fund's request for a report showing the number of shifts the employees within the aforesaid unit worked between December 1 and 18, 1986, and for tender to the Fund of $2 for each such shift, the Employer violated Section 8(a)(1) and (5) of the Act. 5. The aforesaid unfair labor practices affected com- merce as defined in the Act. THE REMEDY The normal remedy in cases of this type is a direction that the employer file with the entity designated by the expired agreement, the requisite report and payments, to make whole any losses its employees suffered by virtue of the nonpayment, and any interest, penalties, or other sums due affected employees and/or the entity. Citing Hassett Maintenance Co., 260 NLRB 1211 (1982), the Employer argues directing such a remedy in this case would "unjustly enrich" the Fund, and consti- tute a "windfall," citing the fact it provided health cov- erage in January 1987 to those unit employees classified as "key employees" under its plan who worked in excess of 25 hours each week of that month, thus its payment to the Fund for shifts worked by those employees between December 1 and 18, 1986, would provide those employ- ees double health coverage for January at double cost to the Employer. That contention fails to address the fact unit employ- ees classified as "on-call" employees under its plan would have no health coverage whatsoever for January 1987, failing their working a sufficient number of shifts in SAN DIEGO PRINCESS December 1986 for other employers and payment there- for, ignores the fact it required payment not for 12, but for 22 shifts to meet fund costs per employee , and ig- nores a basic purpose of the Fund is to provide portabil- ity, i.e., payments from each and every employer partici- pating in the Fund for shifts worked by each and every covered employee, so the total receipts by the Fund are sufficient to meet the cost of providing health benefits to those qualified to receive them. Due to these factors, the Fund neither would be "un- justly enriched" nor receive a "windfall " by receipt of payment for the shifts the Employer's unit employees worked between December 1 and 18, 1986. As the Ninth Circuit Court stated in Stone Boat Yard, supra: Even if Stone's substitute fringe benefit program met the present needs of its employees , the diver- sion of contributions from the union funds undercut the ability of the funds to provide for future needs. [715 F.2d 441 , 446.]12 I shall therefore recommend the Employer be ordered to file with the Fund a report reflecting the number of shifts each unit employee worked between December 1 and 18, 1986, to tender $2 to the Fund for each such shift, to make whole any unit employees who suffered any losses in health benefits due to the Employer's fail- ure to timely tender to the Fund the payments just set forth, and to pay to those employees and to the Fund such interest, penalties, etc., as may appear warranted in the compliance phase of this proceeding.13 On these findings of fact and conclusions of law and on the entire record, I issue the following recommend- ed14 ORDER The Respondent, San Diego Princess, San Diego, Cali- fornia, its officers, agents, successors, and assigns, shall 1. Cease and desist from 12 Also see Antonino 's Restaurant: Buck Brown Contracting Co: and Southwestern Steel & Supply, supra. la See Taurus Waste Disposal, 263 NLRB 309 (1982), and Merryweather Optical Co., 240 NLRB 1213 (1979), for guidance. 14 If no exceptions are filed as provided by Sec 102 46 of the Board's Rules and Regulations, the findings, conclusions, and recommended Order shall , as provided in Sec . 102 48 of the Rules, be adopted by the Board and all objections to them shall be deemed waived for all pur- poses 257 (a) Refusing to file with the San Diego Bartenders and Culinary Workers Insurance Trust Fund a report reflect- ing the number of shifts each of its employees within the following unit worked between the dates of December 1 and 18, 1986: All kitchen and stockroom employees, lunch and dining room employees , bartenders and cocktail lounge employees, special occasion bartenders, housekeeping and service department employees and cafeteria employees employed by the Employ- er; excluding all other employees , office clerical em- ployees, professional employees, guards, and super- visors as defined in the Act. (b) Refusing to pay to the aforesaid Fund $2 for each such shift. 2. Take the following affirmative action necessary to effectuate the policies of the Act. (a) File with the aforesaid Fund the report described above. (b) Pay to the aforesaid Fund the amount or amounts described above. (c) Make whole any employees within the aforesaid unit for any losses they may have suffered by virtue of San Diego Princess' nonpayment of the prescribed amount or amounts. (d) Pay to such employees and to the aforesaid Fund any interest, penalties, or other payments adjudged due and payable in the compliance stage of this proceeding. (e) Post at its facilities at San Diego, California, copies of the attached notice marked "Appendix." 1 s Copies of the notice, on forms provided by the Regional Director for Region 21, after being signed by the Respondent's authorized representative, shall be posted by the Re- spondent immediately upon receipt and maintained for 60 consecutive days in conspicuous places including all places where notices to employees are customarily posted. Reasonable steps shall be taken by the Respond- ent to ensure that the notices are not altered, defaced, or covered by any other material. (f) Notify the Regional Director in writing within 20 days from the date of this Order what steps the Re- spondent has taken to comply. 13 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 "