Hotel & Restaurant Employees Local 54 (Atlantis Casino)

HOTEL & RESTAURANT EMPLOYEES LOCAL 54 (ATLANTIS CASINO) Local 54, Hotel Employees & Restaurant Employees International Union, AFL-CIO (Atlantis Casino Hotel) and Joseph Quaranta Case 4-CB-5551 November 30 1988 DECISION AND ORDER BY CHAIRMAN STEPHENS AND MEMBERS CRACRAFT AND HIGGINS On August 8 1988 Administrative Law Judge Joel A Harmatz issued the attached decision The Respondent filed exceptions and a supporting brief 1 the General Counsel filed cross exceptions and a brief in support of the cross exceptions and in answer to the Respondents exceptions 2 and the Charging Party filed a brief in opposition to the Respondent s exceptions 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 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 Local 54 Hotel Employees and Restau rant Employees International Union AFL-CIO Atlantic City New Jersey its officers agents and representatives shall take the action set forth in the Order as modified 1 Insert the following as paragraph 2(b) and re letter the subsequent paragraphs (b) Notify in writing all employee members who tendered resignations from full membership that their resignations have been accepted as of the date received 2 Substitute the following for new paragraph 2(c) (c) Expunge from its records all references to the aforedescribed charges and fines and notify all ' The Respondent also filed a motion for oral argument The motion is denied as the record exceptions and briefs adequately present the issues and the positions of the parties 2 The General Counsel has excepted only to the judge s failure to in clude a provision in his recommended Order requiring the Respondent to notify those employees who sought to resign from full membership in writing that their resignations have been accepted We find merit in the General Counsels exception and shall accordingly modify the judges Order to include such remedial language Also the General Counsel cor rectly asserts in the exceptions that par 2 (b) L 3 of the judge s recom mended Order should read all employee members in the appropriate collective bargaining unit the judge s recommended Order shall be cor rected in this respect 989 employee members in the appropriate collective bargaining unit that all fines have been rescinded all records of charges expunged and that financial core status henceforth shall be recognized as a per missible form of union membership 3 Substitute the attached notice for that of the administrative law judge APPENDIX NOTICE To MEMBERS 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 Section 7 of the Act gives employees these rights To organize To form join or assist any union To bargain collectively through represents tves of their own choice To act together for other mutual aid or pro tection To choose not to engage in any of these protected concerted activities WE WILL NOT decline any request by an employ ee that he or she wishes to resign from full union membership and become financial core members obligated only to tender periodic dues and uniform ly applied fees WE WILL NOT process internal union charges against you or fine you for activities in which you have engaged after becoming financial core mem hers obligated only to tender periodic dues and uni formly applied fees WE WILL NOT in any like or related manner re strain or coerce you in the exercise of the rights guaranteed you by Section 7 of the Act WE WILL rescind all charges and fines imposed on employee members for conduct that occurred after they became financial core members and WE WILL refund any such fines that they have paid plus interest WE WILL remove all references to the unlawful charges and fines from our records WE WILL notify in writing those employees who tendered their resignations from full member ship that their resignations have been accepted as of the date received LOCAL 54 HOTEL EMPLOYEES & RESTAURANT EMPLOYEES INTERNA TIONAL UNION AFL-CIO 291 NLRB No 140 990 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD Dennis P Walsh Esq and Margaret McGovern Esq for the General Counsel Bernard N Katz Esq and Lynne P Fox Esq (Meranze & Katz) of Philadelphia Pennsylvania for the Respond ent Howard R Flaxman Esq (Blank, Rome Comisky & McCauley) of Philadelphia Pennsylvania for the Charging Party DECISION STATEMENT OF THE CASE JOEL A HARMATZ Administrative Law Judge This proceeding was heard by me on May 24 1988 in Lin wood New Jersey on an original unfair labor practice charge filed on November 25 1987 and a consolidated complaint issued on March 31 1988 1 The complaint al leged that Respondent violated Section 8(b)(1)(A) of the Act by refusing to accept membership resignations from bargaining unit employees and by later invoking internal disciplinary procedures against and fining certain of these employees because they returned to work during a strike In its duly filed answer the Respondent denied that any unfair labor practices were committed Following close of the hearing briefs were filed on behal4' of the General Counsel the Charging Party and the Respondent On the entire record in this proceeding including con sideration of the posthearing briefs it is found as follows I JURISDICTION The Employer Elsinore Shore Associates t/a Atlantis Casino Hotel is a New Jersey partnership engaged in the operation of a hotel and casino in Atlantic City New Jersey the sole facility involved in this proceeding In the course of its operations the Employer during the cal ennar year preceding issuance of the complaint a repre sentative period derived gross revenues exceeding $500 000 and purchased goods and materials valued in excess of $50 000 directly from points outside the State of New Jersey The complaint alleges the answer admits and it is found that the Employer is and has been at all times material an employer engaged in com merce within the meaning of Section 2(2) (6) and (7) of the Act II THE LABOR ORGANIZATION INVOLVED The complaint alleges the answer admits and it is found that Local 54 Hotel Employees & Restaurant Em ployees International Union AFL-CIO the Respondent is now and has been at all times material a labor organs zation within the meaning of Section 2(5) of the Act III THE ALLEGED UNFAIR LABOR PRACTICES This is another in a line of recent cases presenting the issue of whether union members who wish to cross a lawful picket line may do so without fear of union disci 1 The case number is amended to reflect that prior to the opening of the hearing the Regional Director for Region 4 severed Case 4-CB- 5522 which had been consolidated with this case See G C Exh 1(p) pline by themselves unlaterally changing their member ship to financial core status The facts are not in dispute The Respondent Union admits that it rejected appeals by certain members for fi nancial core status before they broke a strike and re turned to work It is further conceded that internal disci plinary charges were brought against many of these members and many were fined for having crossed the picket line The complaint challenges each of these ac tions as violative of Section 8(b)(l)(A) Specifically the Employer and the Union are parties to a current collective bargaining agreement with a term of September 15 1983 to September 15 1988 That agreement included a wage reopener clause On Septem ber 2 1987 a picket line was established to further the Union s economic demands during the interim negotia tions The unexpired collective bargaining agreement re mained in force throughout the strike According to the complaint on various dates between September 29 1987 and February 1 1988 when the pickets were withdrawn more than 100 bargaining unit employees dishonored the picket line and returned to work Before doing so each forwarded to the Union the following letter I am an employee of Atlantis Casino Hotel in At lantic City New Jersey This letter will serve as no tification that I am changing my membership status in Local 54 Hotel Employee and Restaurant Em ployees (H E R E) International Union from that of a full member to that of a financial core member As a financial core member I will con tinue to pay to the union all initiation fees and dues uniformly required of all members of maintaining membership I am not resigning from the union I am only changing my membership status I will not henceforth be subject to any obligations of mem bership other than that of paying uniformly re quired dues and initiation fees required of all Local 54 H E R E members Before taking that step all were members of the Union in good standing with no arrearages in their dues obliga tion All were covered by the following union security provision in the subsisting collective bargaining agree ment It shall be a condition of employment that all em ployees covered by this agreement who are mem bers in good standing in the Union on the effective date of this Agreement shall remain members in good standing and those who are not members on the effective date of this Agreement become and remain members in good standing in said Union In the event that any employee fails to comply with the requirements of this section the Employer shall discharge said employee within seven (7) days of re ceipt of written demand After returning to work the strikebreakers continued to satisfy their financial obligations to the Union Neither the Union s constitution its bylaws nor the collective bargaining agreement differentiates between HOTEL & RESTAURANT EMPLOYEES LOCAL 54 (ATLANTIS CASINO) 991 the full membership and financial core membership The documents neither mention nor authorize any limit ed form of membership The timely payment of dues and initiation fees constitutes the only condition for the privi lege of full membership Consistently the Union re sponded to most of those who sought financial core status as follows We have received your letter in which you advise that you seek to alter your membership in this Union to that of a financial core member Under the constitution and By laws of this Union there is no provision for financial core affiliation The only level of affiliation which exists is that of a full member based on the payment of required dues and initiation fees In this regard you should note that the question of whether the Constitution and By laws of the Union should be altered or amended to permit financial core membership has been con sidered by the Executive Board and General Mem bership and rejected Accordingly please be advised that your request for financial core status must be denied You are at this juncture still deemed to be a full member of this Union and accordingly bound by the terms and conditions of its By laws and all obligations arising thereunder If you have any questions concerning this matter please do not hesitate to contact this office Thereafter most of the nonstrikers received notifica tion that intraunion charges were being brought against them because they crossed the picket line Additionally after notice and hearing almost half were notified by the Union that they had been guilty of the charges and fined in amounts ranging from $50 to $1500 To date no fines have been paid and the Respondent has not taken of firmative steps to secure their collection 2 The proponents of the complaint argue that the Union violated Section 8(b)(1)(A) of the Act by denying em ployees the right to change their membership status and by threatening to discipline and disciplining these em ployees because they crossed the picket line and returned to work Both the Charging Party and the General Counsel insist that this result is dictated by settled Board authority The Union would distinguish its precedent and argues that the complaints underlying theory in trudes on purely internal union matters and denies it the fruits of collective bargaining by failing to observe differ ences between union security and agency shop arrange ments As a general rule employees under the aegis of Sec tion 7 of the Act are free to decide for themselves whether they wish to support a strike or cross a picket line and report to work The Act insulates them from in timidation in making that determination At the same time employees who elect to break a strike while retain 2 The complaint identifies by name numerous employees affected in this regard Because others might have been involved the parties stipulat ed that any remedy be extended to include all similarly situated employ ees not identified by the pleadings It was agreed that this would be ac complished through the compliance process ing full union membership are within a narrow exception to that guarantee Thus in NLRB v Allis Chalmers Mfg Co 388 US 175 (1967) the Supreme Court held that unions may legitimately enforce strike solidarity by fines and explusion against members who dishonor a lawful strike and return to work Discipline in those circum stances was consistent with the 8(b)(1)(A) proviso that exempts from regulation the right of a labor organization to prescribe its own rules with respect to the acquisition or retention of membership therein Five years after its decision in Allis Chalmers the Su preme Court clarified that a labor organizations preroga tives in this respect are limited strictly to union members Thus in NLRB v Textile Workers Local 1029 Granite State Joint Board 409 U S 213 (1972) the Court held that a labor organization could not lawfully discipline a member who resigned prior to his crossing a picket line Later the permissible reach of internal discipline was narrowed further in Machinists Local 1414 (Neufeld Porsche Audi) 270 NLRB 1330 (1984) in which the Board held that union members have the unfettered right to resign and that union restrictions on that process are a nullity In 1985 this view was affirmed by the Supreme Court in Pattern Makers League v NLRB 473 U S 95 (1985) In doing so the Court agreed that such restric tions are invalid and do not justify imposing sanctions on employees who have attempted to resign from the Union Accordingly the Court concluded that Section 8(b)(1)(A) reasonably may be construed as prohibit ing a union from fining members who have tendered res ignations [even if] invalid under the union constitution The Respondent argues that it acted within lawful pa rameters and did nothing more than what Allis Chalmers permits There can be no quarrel that under settled au thority a labor organization may lawfully invoke inter nal disciplinary machinery against full members who remain in that capacity while violating internal rules against strikebreaking The Respondent argues that no more has occurred here because the employees involved at no time resigned from union membership More over the Respondent also observes that there is no evi dence that there resignations were restricted by internal rules nor does it appear that the Union would have re jested these resignations if duly tendered In essence Re spondent claims that its sole vice was the refusal to rec ognize financial core membership and hence its action against those who sought to return to work under this umbrella was inoffensive to the Court s ruling in Pattern Makers supra The holding in Allis Chalmers supra did not address this question There the members involved made no at tempt to alter their association with the Union before re turning to their strike bound jobs The Court in that case did reconcile the conflict between the Section 7 right to refrain from strike action on the one hand and the fact that the sponsor of Section 8(b)(1)(A) never intended for that provision to interfere with the internal affairs of unions 388 US at 187 However as the Su preme Court would later recognize the crux of [that] holding was the distinction between internal and exter nal enforcement of union rules See Pattern Makers 992 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD League supra In Scofield v NLRB 394 U S 423 (1969) the Supreme Court again held that those who remained members while violating union regulations are vulnerable to legitimate discipline However that decision would later prove to be the touchstone for a judicially ap proved concept of voluntansm whereby employees are given broad personal discretion to alter their mem bership and neutralize internal union restrictions Thus the Court at 394 U S 430 adopted three conditions for lawful enforcement of an internal union regulation stat ing Section 8(b)(1) leaves a union free to enforce a properly adopted rule which reflects a legitimate union interest impairs no policy Congress has embedded in the labor laws and is reasonably enforced against union members who are free to leave the union and escape the rule (emphasis supplied) Consistent with this escape re quirement the Court in NLRB v Textile Workers supra commented that the vitality of Section 7 requires that a member be free in November from the action endorsed in May 409 U S at 217-218 Again 13 years later in Pattern Makers supra the Court condemned union re strictions on the right to resign [as] inconsistent with the policy of voluntary unionism The General Counsel and Charging Party carry volun tansm one step further They point to precedent that em ployees who remain members but declare financial core status thereafter also are exempt from union prohibi tions The Board declared that to be the case in Carpen ters Local 470 (Tacoma Boatbuilding) 277 NLRB 513 (1985) and Carpenters Local 470 (Gordon Construction) 277 NLRB 530 (1985) In each 8(b)(1)(A) violations were predicated on enforcement of strike solidarity rules against union members who before crossing the picket line clearly communicated their intent to become finan cial core members As here at least in Tacoma Boatbuild ing the employees notified the Union that they were not resigning from membership but as a financial core member they would not henceforth be subject to any obligations of membership other than that of paying uni formly required dues and initiation fees because the Board held that such a letter was sufficient to estab lish financial core status and further that these members could not lawfully be subjected to union discipline these decisions at least facially appear to be dispositive Nonetheless the Respondent would distinguish them because they involve situations where there was no col lective bargaining agreement in effect This argument is offered without articulation of just how this should alter the result On the contrary if financial core members are immune from discipline when their offensive conduct re lates to renegotiation of an expired contract surely that protection is not lost when the strike is pursuant to a midterm reopener The coercive impact of union disci pline on Section 7 rights is the same in either case 3 3 In its postheanng brief the Respondent asserts that the union in Tacoma supra contended that the strike breaking employees were not union members While it is inconceivable that the union would have advanced that view from my reading of Tacoma I am convinced that the union argued there as here that the financial core letters were inef fective to support resignation and hence those who crossed the picket line remained members subject to lawful application of internal union rules 277 NLRB at 527-528 Along this same line the Respondent argues that the existence of a viable presently enforceable union shop agreement tips the scales in its favor It would seem however that such an agreement heightens the case for financial core immunity The problem was addressed in Tacoma supra as follows [w]hen there is a union security clause in effect an employee must retain financial core status as a conditon for employment To then say however that a financial core member is subject to the same discipline as a full member is to render meaningless the third part of the Scofield test namely that a member is free to leave the union and escape the rule [277 NLRB at 514 ] In Gordon Construction 277 NLRB at 531 the Board added [F]inancial core membership permits an employee to maintain a dues paying association with the union that will protect him against the threat of discharge under Section 8(a)(3) of the Act when the collec tive bargaining agreement contains a union security provision If the designation of financial core or dues paying only membership is to impart any significance then it must be recognized that it does not rise to the level of full membership for all pur poses but rather is a limited affiliation which ex cludes the employee from certain rights accorded to full members and also removes him from the reach of the union fines More specifically the union security argument is also rejected because irreconcilable with other well settled statutory considerations If sustained Respondents view in this regard would broaden the enforceable scope of the union shop clause by approving it as an instrumen tality for the indirect enforcement of nonfinancial union regulations Thus under the Respondents contention the union shop arrangement would limit the unwitting member to two choices i e support the strike or resign from full membership and risk discharge Obviously the spectre of job loss inherent under the union shop ar rangement would offer a forceful medium or compelling obedience See e g NLRB v Plumbers Local 120 719 F 2d 178 (6th Cir 1983) If striking members enjoy a statutorily protected right to change their minds and return to work after communicating their resignations that choice should be exercisable free of constraints Indeed the Act specifies that legitimate enforceability of union security agreements is confined to the failure of the employee to tender the periodic dues and the initi ation fees uniformly required as a condition of acquiring or retaining membership The financial core alternative adopted by the Board in Tacoma and Gordon supra has the salutary effect of both preserving the Section 7 rights of union members and precluding utilization of the union HOTEL & RESTAURANT EMPLOYEES LOCAL 54 (ATLANTIS CASINO) 993 shop as a standing mechanism for assuring obedience to internal union rules4 The Respondent further argues that the theory of the instant complaint inteferes with the process of collective bargaining In this respect the Union contends that Tacoma Boatbuildmg obliterates the distinction between union shop and agency shop agreements thus diminish ing the choices available in collective bargaining while rendering meaningless the Union s successful negotiation of a union shop clause a mandatory bargaining subject 5 This contention overlooks the fact that in this context the distinction between agency and union shop is more technical than real Neither sanctions the legitimate en forcement of nonfinancial union regulations At the same time the concept of financial core status does not preju dice the union shop s utility as a means of exacting finan cial obligations of all members in the covered collective bargaining unit The Respondent may not expect more Thus as stated by the Supreme Court in Pattern Makers supra at fn 16 Under § 8(a)(3) the only aspect of union mem bership that can be required pursuant to a union shop agreement is the payment of dues (union security agreements cannot be used for any pur pose other than to compel payment of union dues and fees Membership as a condition of em ployment is whittled down to its financial core (under the Railway Labor Act employ ees in a union shop cannot be compelled to pay dues to support certain union activities) Therefore an employee required by a union security agree ment to assume financial membership is not sub ject to union discipline Such an employee is a member of the union only in the most limited sense In sum the Union has offered no material basis for concluding on this record that internal union interests should take precedence over the Section 7 right of em ployees to refrain from strike action Accordingly on au thonty of Tacoma Boatbutlding supra and Gordon Con struction supra it is concluded that Respondent violated Section 8(b)(1)(A) of the Act by rejecting resignations from full membership 6 by processing charges against those who previously had declared unequivocally their intention to become financial core members and by fining employees for conduct occurring after they had 4 The Respondent observes that financial core status rests on a theory where individuals may readily reap all of the benefits of Union member ship and collective bargaining and at the same time avoid all the respon sibihties This observation though valid offers no basis for distinguish ing Tacoma The administrative law judge dismissed that case describing the authors of the financial core letters as effectively seeking both to have their cake and eat it too 277 NLRB at 527 Thus the Board in reversing the judge was fully aware of this consequence 5 NLRB v General Motors Corp 373 U S 734 (1963) 6 Dick s Restaurant 287 NLRB 1180 (1988) Tacoma and Gordon supra in effect hold that the exercise of the employee s right to become a financial core member does not turn on authorization or recognition of that status in a labor organizations constitution or bylaws As in the case of full resignation the option is reposed in the member and the union may not limit that election by silence any more than it could forbid such a change in status by adoption of a formal rule declared their intention to become financial core mem bers CONCLUSIONS OF LAW 1 Elsinore Shore Associates t/a Atlantis Casino Hotel is an employer engaged in commerce within the meaning of Section 2(2) (6) and (7) of the Act 2 The Respondent Union is a labor organization within the meaning of Section 2 (5) of the Act 3 By refusing to accept employee declarations that they intend to become financial core members by proc essing internal union charges against employees for con duct after these declarations and by fining the financial core members for subsequently crossing its picket line and returning to work the Respondent Union violated Section 8(b)(1)(A) of the Act 4 The unfair labor practices are unfair labor practices having an effect on commerce within the meaning of Section 2(6) and (7) of the Act THE REMEDY Having found that the Respondent Union has engaged in and is engaging in certain unfair labor practices within the meaning of Section 8(b)(1)(A) of the Act it shall be recommended that it be ordered to cease and desist and to take certain affirmative action necessary to effectuate the policies of the Act It shall be recommeded further that the Respondent Union be ordered to notify all employees in the collec tive bargaining unit in writing that it recognizes finan cial core membership and that the internal disciplinary charges filed and the fines imposed against those who had declared such status have been rescinded It shall be recommended further that any fines subsequently paid shall be refunded with interset as computed in New Ho rizons for the Retarded 283 NLRB 1173 (1987) On these findings of fact and conclusions of law and on the entire record I issue the following recommend ed7 ORDER The Respondent Local 54 Hotel Employees & Res taurant Employees International Union AFL-CIO At lantic City New Jersey its officers agents and repre sentatives shall 1 Cease and desist from (a) Rejecting requests by members that they be placed on financial core status (b) Processing internal disciplinary charges against members for activities in which they engaged after their request for financial core membership (c) Imposing fines against members for activities in which they engaged as financial core members 7 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 994 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD (d) In any like or related manner restraining or coerc ing employees in the exercise of the rights guaranteed them by Section 7 of the Act 2 Take the following affirmative action necessary to effectuate the policies of the Act (a) Rescind all charges and fines imposed on employ ees for activities in which they engaged after their re quest for financial core membership and refund to them any sums they might have paid in consequence of Re spondent s imposition of these fines as set forth in the remedy section of this decision (b) Remove from its records all references to the charges and fines and notify all employee members in the appropriate collective bargaining agreement that all fines have been rescinded all records of charges expunged and that financial core status shall be recognized as a permissable form of union membership (c) Post at its business and meeting halls copies of the attached notice marked Appendix 7 Copies of the 7 If no exceptions are filed as provided by Sec 102 46 of the Board s Rules and Regulations the findings conclusions and recommended notice on forms provided by the Regional Director for Region 4 after being signed by the Respondents author ized representative shall be posted by the Respondent immediately upon receipt and maintained for 60 consecu tive days in conspicuous places including all places where notices to members are customarily posted Rea sonable steps shall be taken by the Respondent to ensure that the notices are not altered defaced or covered by any other material (d) Sign and return to the Regional Director sufficient copies of the notices for posting by Elsinore Shore Asso ciates t/a Atlantis Casino Hotel if willing at places where employee notices are customarily posted (e) Notify the Regional Director in writing within 20 days from the date of this Order what steps the Re spondent has taken to comply 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