Quality Inn Waikiki

QUALITY INN WAIKIKI I Quality Inn Waikiki and Culinary and Service Em- ployees Union, Local 555, AFL-CIO. Case 37- CA-2000 17 September 1984 DECISION AND ORDER BY CHAIRMAN DOTSON AND MEMBERS ZIMMERMAN AND HUNTER Upon a charge filed by the Union on 17 January 1983, the General Counsel of the National Labor Relations Board issued a complaint on 28 February 1983, a first amended complaint on 1 September 1983, and a second amended complaint on 7 Sep- tember 1983 against the Company, the Respondent, alleging that it has violated Section 8(a)(5) and (1) of the National Labor Relations Act The complaint alleges that on 6 December 1982, following a Board election in Case 37-RC-2494, the Union was certified as the exclusive collective- bargaining representative of the Company's em- ployees in the unit found appropriate (Official notice is taken of the "record" in the representation proceeding as defined in the Board's Rules and Regulations, Secs 102 68 and 102 69(g), amended Sept 9, 1981, 46 Fed Reg 45922 (1981), Frontier Hotel, 265 NLRB 343 (1982) ) The complaint fur- ther alleges that since 14 January 1983 the Compa- ny has refused to bargain with the Union On 11 March 1983 the Company filed its answer and on 14 September 1983 the Company filed its answer to the second amended complaint admitting in part and denying in part the allegations in the com- plaint On 21 September 1983 the General Counsel filed a Motion for Summary Judgment On 28 Novem- ber 1983 the Board issued an order transferring the proceeding to the Board and a Notice to Show Cause why the motion should not be granted The Company filed a response The National Labor Relations Board has delegat- ed its authority in this proceeding to a three- member panel Ruling on Motion for Summary Judgment The Company's answers to the complaint and the second amended complaint admit its refusal to bargain but deny that the Union's certification was properly issued In its brief in opposition to the General Counsel's Motion for Summary Judgment, the Company attacks the validity of the certifica- tion on the grounds that the Union has an interest in the financial success of a competing hotel which raises a conflict of interest precluding the Union from representing the Company's employees ' The Company also contends that the record must be re- opened for additional evidence relating to the "nature of the relationship between Local 555 and Teamsters Local 996" (Hawaii Teamsters and Allied Workers Local 996) The General Counsel argues that all material issues have been previously decided We agree with the General Counsel The record, including the record in Case 37- RC-2494, reveals that an election was held 30 De- cember 1980 pursuant to a Stipulated Election Agreement The tally of ballots shows that of ap- proximately 112 eligible voters, 64 cast ballots for and 24 cast ballots against the Union There were three challenged ballots, an insufficient number to affect the results of the election After conducting a hearing on the Company's objection, the hearing officer on 6 August 1982 issued his report recom- mending that the objections be overruled The Company filed exceptions On 6 December 1982 the Board adopted the hearing officer's recommen- dation and certified the Union as the exclusive bar- gaining representative of the employees in the stip- ulated unit 2 By letters dated 16 December 1982 and 12 Janu- ary 1983 the Union requested the Company to bar- gain and furnish it certain relevant information to allow it to prepare to negotiate a collective-bar- gaining agreement In a 14 January 1983 telephone conversation and a letter dated 24 February 1983 the Company declined to bargain with the Union because it believed that the Union was not the properly certified representative of its employees It is well settled that in the absence of newly dis- covered and previously unavailable evidence or special circumstances, a respondent in a proceeding alleging a violation of Section 8(a)(5) is not entitled to relitigate issues that were or could have been litigated in a prior representation proceeding See Pittsburgh Glass Co v NLRB, 313 U S 146, 162 (1941), Secs 102 67(f) and 102 69(c) of the Board's Rules and Regulations All issues raised by the Company were or could have been litigated in the prior representation pro- ceeding The Company does not offer to adduce at ' Our dissenting colleague would find that a father son relationship by Itself is sufficient to establish a clear conflict of Interest " We disagree We do not find that the Employer has met its "considerable burden of establishing that International vice President Anthony Rutledge's con nection, if any, with a competing hotel controlled by his father will con- flict with his required single minded purpose" of representing the mem bers of the bargaining unit The mere existence of a family relationship is not enough to establish a conflict of Interest Finally, we find no evidence that Anthony Rutledge, by acting in a merely advisory capacity, controls Local 555 2 Chairman Dotson and Member Hunter did not participate in the un derlying representation proceedings The heanng officer s report is at tached hereto as 'Appendix B 272 NLRB No 1 2 DECISIONS OF NATIONAL LABOR RELATIONS BOARD a hearing any newly discovered and previously un- available evidence, 3 nor does it allege any special circumstances that would require the Board to re- examine the decision made in the representation proceeding. We therefore find that the Company has not raised any issue that is properly litigable in this unfair labor practice proceeding. Accordingly we grant the Motion for Summary Judgment. On the entire record, the Board makes the fol- lowing FINDINGS OF FACT I. JURISDICTION The Company, a Hawaii corporation, operates a hotel providing food and lodging for guests at its facility in Honolulu, Hawaii, where it annually pur- chases goods and services valued over $50,000 di- rectly from outside the State. We find that the Company is an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act and that the Union is a labor organization within the meaning of Section 2(5) of the Act. II. ALLEGED UNFAIR LABOR PRACTICES A. The Certification Following the election held 30 December 1980, the Union was certified 6 December 1982 as the collective-bargaining representative of the employ- ees in the following appropriate unit: All full-time and regularly scheduled part-time employees of the Employer employed on the Island of Oahu; excluding confidential employ- ees, professional employees, managerial em- ployees, guards and/or watchmen, and super- visors as defined in the Act. The Union continues to be the exclusive represent- ative under Section 9(a) of the Act. B. Refusal to Bargain Since 16 December 1982 the Union has request- ed the Company to bargain, and since 14 January 1983 the Company has refused. We find that this refusal constitutes an unlawful refusal to bargain in violation of Section 8(a)(5) and (1) of the Act. CONCLUSIONS OF LAW By refusing on and after 14 January 1983 to bar- gain with the Union as the exclusive collective-bar- gaining representative of employees in the appro- 3 Although the Company urges the Board to reopen the record for ad- ditional evidence, it has not shown the relevance of such information nor how It would change the result herein The Company's motion is there- fore dented. priate unit, the Company has engaged in unfair labor practices affecting commerce within the meaning of Section 8(a)(5) and (1) and Section 2(6) and (7) of the Act. REMEDY Having found that the Respondent has violated Section 8(a)(5) and (1) of the Act, we shall order it to cease and desist, to bargain on request with the Union, and, if an understanding is reached, to embody the understanding in a signed agreement. To ensure that the employees are accorded the services of their selected bargaining agent for the period provided by law, we shall construe the ini- tial period of the certification as beginning the date the Respondent begins to bargain in good faith with the Union. Mar-Jac Poultry Co., 136 NLRB 785 (1962); Lamar Hotel, 140 NLRB 226, 229 (1962), enfd. 328 F.2d 600 (5th Cir. 1964), cert. denied 379 U.S. 817 (1964); Burnett Construction Co., 149 NLRB 1419, 1421 (1964), enfd. 350 F.2d 57 (101h Cir. 1965). ORDER The National Labor Relations Board orders that the Respondent, Quality Inn Waikiki, Honolulu, Hawaii, its officers, agents, successors, and assigns, shall 1. Cease and desist from (a) Refusing to bargain with Culinary and Serv- ice Employees Union, Local 555, AFL-CIO, as the exclusive bargaining representative of the employ- ees in the bargaining unit. (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) On request, bargain with the Union as the ex- clusive representative of the employees in the fol- lowing appropriate unit on terms and conditions of employment and, if an understanding is reached, embody the understanding in a signed agreement: All full-time and regularly scheduled part-time employees of the Employer, employed on the Island of Oahu; excluding confidential employ- ees, professional employees, managerial em- ployees, guards and/or watchmen, and super- visors as defined in the Act. (b) Post at its facility in Honolulu, Hawaii, copies of the attached notice marked "Appendix QUALITY INN WAIKIKI 3 A "4 Copies of the notice, on forms provided by the Regional Director for Region 20, after being signed by the Respondent's authorized representa- tive, shall be posted by the Respondent immediate- ly 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 Respondent to ensure that the notices are not altered, defaced, or covered by any other material (c) Notify the Regional Director in writing within 20 days from the date of this Order what steps the Respondent has taken to comply MEMBER HUNTER, dissenting Contrary to my colleagues, I would deny the General Counsel's Motion for Summary Judgment and would dismiss the complaint I would also revoke the Board's earlier certification of Local 555 as collective-bargaining representative of the Respondent's employees Thus, I find merit in the Respondent's contention that there is a conflict of interest here which precludes Local 555 from prop- erly representing the Respondent's employees For this reason, I consider the Board's earlier certifica- tion of Local 555 to have been inappropriate The appended hearing officer's report fully sets forth the facts showing the complex interrelation- ship of Local 555, Local 5, the International, and a hotel which is in competition with the Respondent This competing hotel was constructed with loans from Local 5 and from the Teamsters The key figure presenting a conflict of interest here is Inter- national official Anthony Rutledge who has con- nection with Local 555 and with the owner and/or controller of the competing hotel Thus, by virtue of his several offices with the International, Antho- ny Rutledge is responsible for assisting in Local 555's contract negotiations, moreover, it is Antho- ny's father, Arthur Rutledge, himself a former offi- cial of the International and Local 5, who owns and/or controls the competing hotel This relation- ship establishes a clear conflict of interest Accord- ingly, I would find that the hearing officer and the Board in the earlier representation case erroneously rejected the Respondent's assertion of a conflict of interest based solely on the absence of record evi- dence that Anthony would take his father's inter- ests into account should he assist in Local 555's ne- gotiations The question of whether Anthony would in fact abuse his power is irrelevant when a true conflict of interest exists The conflicting inter- 4 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 Na tonal Labor Relations Board shall read "Posted Pursuant to a Judgment of the United States Court of Appeals Enforcing an Order of the Nation al Labor Relations Board" ests do not disappear merely because there is no evidence as to what Anthony's subjective intent might be with respect to exercising his influence Moreover, I believe that it would be virtually im- possible for the Respondent to obtain any direct evidence of Anthony's subjective intent I would find it sufficient that the Respondent has estab- lished the conflict of interest Also, I would find that even assuming that there is only a potential conflict of interest here, in the circumstances of this case, that alone is sufficient grounds to dis- qualify Local 555 from representing the Respond- ent's employees This is so because the connections of Anthony Rutledge, noted above, present an innate or proximate danger that the employees' in- terests would be subordinated to interests not ger- mane to the employer-employee relationship ' Cf National Food Stores of Louisiana, 186 NLRB 127 (1970) 1 Contrary to my colleagues' assertion, my finding of a conflict of in terest here is not premised even primarily on the father son relationship of Arthur and Anthony Rutledge It is based on the complex interrela tionship of Local 5, Local 555, the International, and the competing hotel I note particularly that the competing hotel was constructed par Willy with loans from Local 5, that Anthony is an official with the Inter national, and that he has the authority to assist in Local 555's negotia tions APPENDIX A 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 refuse to bargain with Culinary and Service Employees Union, Local 555, AFL- CIO, as the exclusive representative of the employ- ees in the bargaining unit 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, on request, bargain with the Union and put in writing and sign any agreement reached on terms and conditions of employment for our employees in the bargaining unit All full-time and regularly scheduled part-time employees of the Employer employed on the Island of Oahu, excluding confidential employ- ees, professional employees, managerial em- 4 DECISIONS OF NATIONAL LABOR RELATIONS BOARD ployees, guards and/or watchmen, and super- visors as defined in the Act QUALITY INN WAIKIKI APPENDIX B HEARING OFFICER'S REPORT ON OBJECTIONS Pursuant to a Stipulation for Certification Upon Con- sent Election approved on December 1, 1980, an election by secret ballot was conducted on December 30, 1980, in a unit of all full-time and regularly scheduled part-time employees of the Employer employed on the Island of Oahu, excluding confidential employees, professional em- ployees, managerial employees, guards and/or watch- men, and supervisors as defined in the Act The official Tally of Ballots served on the parties at the conclusion of the election reflects that of approximately 112 eligible voters, 64 cast ballots for and 24 cast ballots against Peti- tioner There were three challenged ballots which are in- sufficient in number to affect the results of the election On January 6, 1981, the Employer filed timely objec- tions to the election, a copy of which was served on Pe- titioner The Employer's objections state 1 Petitioner and its alter egos Local 5, Hotel Res- taurant Employees and Bartenders Union, AFL- CIO and Unity House either own or effectively control the operation and management of the Wai- kiki Marina Hotel which is a direct competitor of the employer herein, Napualarn Hotel Such con- trol of a direct competitor raises a clear conflict of interests and must be deemed to disqualify peti- tioner from effectively representing the independ- ent interests of employees, since there is an innate or proximate danger that the interests of the Em- ployer's employees whom petitioner seeks to rep- resent will be subordinate to factors which are not germane to the employer-employee relationship 2 Petitioner engaged in conduct which precluded conduct of an election in accordance with the Board's standards for laboratory conditions The Acting Director for Region 20 caused an investi- gation of the Employer's objections to be made and on March 6, 1981 issued a Report on Objections and Notice of Hearing in which he concluded that the investigation of Employer's Objection No 1 disclosed substantial and material issues of fact as to whether Petitioner through its association with Unity House, either owns or effec- tively controls the operation and management of the Waikiki Marina Hotel, a competitor of the Employer, and therefore has a conflict of interest which would dis- qualify it from representing the Employer's employees The Employer submitted no evidence to support the alle- gation that Local 5, Hotel and Restaurant Employees and Bartenders Union, AFL-CIO, is an alter ego of Peti- tioner In these circumstances, the Acting Director for Region 20 directed that a hearing be held with respect to Objection No 1 On March 17 and 30, 1981 respectively, the Employer filed Limited Exceptions and Petitioner filed Exceptions to the Acting Regional Director's Report on Objections and Notice of Hearing On July 14, 1981, the Board issued a Decision and Order Directing Hearing in which it adopted the Acting Regional Director's findings and recommendations Pursuant thereto, a hearing was held before the undersigned in Honolulu, Hawaii on August 19, 24, 25, 26 and 28, 1981 All parties appeared at the hearing and were afforded a full opportunity to be heard, to examine and cross-examine witnesses, and to present evidence relevant to the issues Upon the entire record of the case, and from my ob- servation of the demeanor of the witnesses, I make the following findings of fact, conclusions and recommenda- tions i The testimony at the hearing was for the most part un- contradicted The record reflects that from approximate- ly 1938 until 1979, Arthur Rutledge was the Chief Exec- utive Officer of Hotel, Restaurant Employees and Bar- tenders' Union Local 5, AFL-CIO, herein called Local 5 In addition to his duties with Local 5, the record re- flects that Arthur Rutledge also served as Vice President of the Hotel Restaurant Employees and Bartenders Inter- national Union, AFL-CIO, herein called the Internation- al He has also occupied various positions with Team- sters Locals 996 and 427, the Transit Workers Union and Teamsters Joint Council 50 Unity House Incorporated, herein called Unity House, is a non-profit organization incorporated under the laws of the State of Hawaii It was established by Arthur Rut- ledge in 1951 under the name of the Hawaiian Federa- tion of Labor Memorial Association The record reflects that the name Unity House was adopted by the Hawaiian Federation of Labor Memorial Association in approxi- mately 1956 The charter of incorporation of Unity House provides in Article III that the objective and purposes of Unity House shall be, inter aha "To bring together in a benevolent and fraternal or- ganization all members, past members and friends of the American Federation of Labor in the Territory of Hawaii, including, the Hotel Restaurant Employ- ees and Bartenders Union, the International Broth- erhood of Teamsters and the Transit Workers Union, Independent" Article VIII of the amended charter provides that mem- bership in Unity House shall include, inter aha "Persons who are members, past members, or friends of the Hotel Restaurant Employees and Bar- tenders Union, the International Brotherhood of Teamsters and the Transit Workers Union, Inde- pendent, may be admitted as members of the corpo- ' At the hearing the Employer Incorporated Into the record herein, the transcripts and exhibits from Case Nos 37-RC-2546 and 37-RC- 2555 Accordingly, Petitioner s unopposed post hearing motion that ad ministrative notice be taken of the Regional Director s Decision and Di rection of Election in Case Nos 37-RC-2647, 37-RC-2546 and 37-RC- 2555 is hereby granted QUALITY INN WAIKIKI 5 ration by affirmative vote of its Board of Directors at any meeting thereof duly held "2 The record reflects that Arthur Rutledge was President of Unity House at the time of the hearing herein and that he has occupied this position since its inception in 1951 In 1957, Unity House constructed a building on land that it owns near Waikiki, herein called the Unity Build- ing The money to finance construction of the Unity Building came from loans from the Teamsters Union and from Local 5 Unity House rented office space in Unity Building to various labor organizations including Local 5, and Teamsters Locals 996 and 427 and Joint Council of Teamsters Local 50 In addition to providing office space, Unity House sold various administrative services including secretarial, printing, clipping, switchboard and accounting services and meeting rooms to the tenants of Unity Building The tenants, in turn, paid Unity House a per capita fee for these services In 1974, Unity House constructed the Waikiki Marina Hotel, herein called the Waikiki Marina, on a parcel of land it owns that is adjacent to the Unity Building On or about October 1, 1975, the Waikiki Marina recognized Local 5 as the collective bargaining representative of certain of its employees Thereafter, as a result of unfair labor practice charges filed by ILWU Local 142, 3 the Director for Region 20 approved a settlement agreement wherein the Waikiki Marina and Local 5 agreed to cease and desist giving effect to the terms of their collective bargaining agreement until Local 5 divested itself of all management control over Waikiki Marina and until Local 5 was certified by the Board as the exclusive col- lective bargaining representative of employees of the Waikiki Marina The record discloses that Culinary and Service Work- ers Union, Local 555, AFL-CIO, herein called Local 555, was chartered by the International in 1974 The charter petition was signed by 25 applicants, who were at the time former members of Local 5 4 The charter pe- tition was given to Anthony Rutledge, the son of Arthur Rutledge, who at the time was vice-president of Local 5 Anthony Rutledge sent the charter petition to the Inter- national The International in turn issued a charter for Local 555 and appointed Anthony Rutledge as the Ad- ministrative Agent for Local 555 Anthony Rutledge served Local 555 in this capacity until April 1979, when, at the direction of the International, he was replaced by Joseph Belardi As administrative agent for Local 555, 2 There is no evidence in the record sufficient to establish who if any one, is a member of Unity House It is noted that this Issue is currently the subject of a civil lawsuit in the Circuit Court of the State of Hawaii Michael G Chambrella et al v Arthur A Rutledge Unity House Incorpo rated a Hawaii corporation and John Does I through 30 3 Case Nos 37-CA-959 and 37-CB-197 4 Anthony Rutledge testified without contradiction that Local 555 was chartered because persons represented by Local 5 who worked in smaller (class B) hotels did not feel they were getting the same representation from Local 5 as those who worked in the larger (class A) hotels and that they also felt they did not have the same say in Local 5 as did those who worked in the larger hotels The record reflects that since the charter was granted to Local 555 the International has ordered a number of the smaller hotels transferred from the jurisdiction of Local 5 to Local 555 and has specifically granted jurisdiction of class B hotels to Local 555 Local 5 was granted jurisdiction of class A hotels Anthony Rutledge hired and fired employees of Local 555, negotiated collective-bargaining agreements on its behalf and paid the Local's expenses At the time he was appointed administrative agent for Local 555, Anthony Rutledge was also employed as vice-president of Local 5, secretary-treasurer of Team- sters Local 427 and as secretary-treasurer of Joint Coun- cil of Teamsters Local 50 The offices of these labor or- ganizations were located in the Unity Building Conse- quently Local 555's offices were also located in the Unity Building Local 555 did not pay rent to Unity Building, however The record reflects that Local 5 pro- vided Local 555 with bookkeeping, secretarial and tele- phone services and loaned or donated approximately $10,000 to Local 555 to help it get started On or about August 22, 1974, the Waikiki Marina rec- ognized Local 555 as the collective bargaining represent- ative of certain of its employees Thereafter, as a result of additional unfair labor practice charges filed by ILWU Local 142, 5 the Acting Director for Region 20 in April 1975, issued an Order Withdrawing approval of the previous settlement agreement and on April 15, 1975, issued a Consolidated Complaint and Notice of Hearing alleging, inter aha, that Respondent Waikiki Marina vio- lated Section 8(a)(1) and (2) of the Act and that Re- spondents Local 5 and Local 555 were alter egos and that they had violated Sections 8(b)(1)(A) and (2) of the Act On August 8, 1975, the Board issued an order approv- ing a formal Settlement Agreement wherein the Waikiki Marina agreed to cease recognizing Local 5 and/or Local 555 as the collective bargaining representative of its employees until said labor organizations, their agents, officers and representatives, have divested themselves of all management control over the Waikiki Marina and until Local 5 and/or Local 555 are certified by the Board as the exclusive collective bargaining representa- tive of employees of the Waikiki Marina in an appropri- ate unit Local 5 and Local 555 agreed to cease accept- ing recognition as the collective bagaming representative of any employees of the Waikiki Marina until each union and/or their agents, officers and representatives divested themselves of all management control over the Waikiki Marina and until either of them are certified by the Board as the exclusive collective bargaining representa- tive of employees of the Waikiki Marina in an appropri- ate unit On February 11, 1976, the Ninth Circuit Court of Appeals entered its judgment enforcing the Board's order 6 In late 1978 or early 1979, Richard Tam, who was then Secretary of Local 5, announced that he would challenge Arthur Rutledge in the next election for Presi- dent of Local 5 Tam was immediately fired from all po- sitions he held with Local 5 Shortly thereafter, the International placed Local 5 and Local 555 under trust- eeship The trustee for both locals was Joseph Belardi, from Hotel Restaurant Employees and Bartenders Union, Local 2 in San Francisco, California Anthony Rutledge 5 Case Nos 37-CA-1073 and 37-CB-266 6 Civil No 75-3613 6 DECISIONS OF NATIONAL LABOR RELATIONS BOARD was named by the International as assistant trustee to Be- lardi Anthony Rutledge continued in his duties as adminis- trative agent for Local 555 until April 1979 At this time the International ordered Anthony Rutledge to turn over all of his duties with respect to Local 555 including those of assistant trustee to Belard' 7 Belard' served as trustee for Local 555 and Local 5 until January 1980 In July 1979, Belard' supervised the election of the first slate of elected officers for Local 555 Joe Anne Ferreira was elected chief executive offi- cer of Local 555 One month after her election, Ferreria moved Local 555's offices from the Unity Building to the American Security Bank Building Six months later, she moved Local 555's offices to their present location, 2305 South Beretania Street, Honolulu Hawaii The record establishes that since officers were elected in July 1979, Local 555 has not paid any monies to Unity House, has not been a member or owner of Unity House, and has not been a member or owner of the Waikiki Marina 8 The record further establishes that Arthur and Anthony Rutledge have not held any elected office in Local 555, and have at no time material herein been a member of Local 555's Executive Board Furthermore, Anthony Rutledge has not had the authority to hire employees or pay expenses for Local 555 since April 1979 Rather this authority since July 1979, has been exercised by the chief executive officer of Local 555 In January 1980, the United States District Court dis- solved the trusteeship imposed by the International and ordered a new election of officers for Local 5 Richard Tam was elected to the presidency of Local 5 along with a slate of supporting officers Immediately after his elec- tion, Tam fired Arthur and Anthony Rutledge from every position they held with Local 5 Tam then moved Local 5's offices from the Unity Building and moved to sever all ties between Local 5 and Unity House He dis- claimed on behalf of Local 5 any equitable interest that Local 5 might have in Unity House other than the out- standing loan Local 5 stopped paying per capita dues to Unity House and filed a lawsuit to partition or force sale 7 The record discloses that since resigning as administrative officer of Local 555, Anthony Rutledge has been appointed a vice president of the International Subsequently he was elected to the International's Execu live Board At the time of the hearing Anthony Rutledge was a vice president of the International, sat on the Executive Board of the Interna tonal and was the International's organizer for the State of Hawaii He no longer holds any position in Local 5 or Local 555 In his capacity as organizer for the International, Anthony Rutledge is responsible for as sitting the International s local unions in the State of Hawaii in organiz mg, contract negotiations and grievances He acts under the direction and reports to the International s General President and the International's Director of Organization Local 5 and Local 555 are the only two locals of the International in the State of Hawaii The chief executive officer of each local is responsible for the day-to-day operations of his or her re spective local in accordance with the constitution and by laws of each local They may, but are not required to ask Anthony Rutledge for assist ance Although Anthony Rutledge offers advice and assistance as out lined above, each local union is free to accept or reject that advice it sees fit 8 The record contains no evidence sufficient to establish that any offi cer, agent or representative of Local 555 has been a member of or held any ownership Interest in Unity House and/or the Waikiki Marina since July 1979 of property it owned with the Teamsters and that was administered by Arthur Rutledge The record discloses that since the ouster of Arthur Rutledge from Local 5 a number of acrimonious Jurisdic- tional disputes have arisen between Local 5 and Local 555 As a result of these disputes, the International has awarded jurisdiction of Class A hotels to Local 5 and Ju- risdiction over Class B hotels to Local 555 and has or- dered a number of hotels transferred from the jurisdic- tion of Local 5 to Local 555 In Bausch & Lomb Optical Company, 108 NLRB 1555 (1954) the Board held that an employer is Justified in re- fusing to bargain with a union that is engaged in a direct- ly competitive business In so holding the Board rea- soned that a union must approach the bargaining table 6 4 with the single-minded purpose of protecting and advancing the interests of the employees who have se- lected it as their bargaining agent, and there must be no ulterior purpose " The union may not acquire a special interest which may well be at odds with what should be its sole concern that of representing the interests of the Employer's employees" Bausch & Lomb, 108 NLRB at 1559 In Sierra Vista Hospital, Inc , 241 NLRB 631, 633 (1979), the Board noted that the burden of establishing a disqualifying conflict of interest is on the Employer, and that burden is a heavy one "There is a strong policy favoring the free choice of a bargaining agent by employees The choice is not lightly to be frustrated There is a considerable burden on a non-consenting employer, in a situation such as this, to come forward with a showing that danger of a conflict of interest interfering with the collective bargaining process is clear and present" NLRB v David Buttrick Company, 399 F 2d 505, 507 (1st Cir 1968) In the instant case, the Employer contends that Local 555, the Petitioner herein, should be disqualified from representing the Employer's employees under the princi- ple enunciated by the Board in Bausch & Lomb, supra Contrary to the Employer, the record evidence compels me to conclude that Local 555 has not at any time mate- rial herein been a member of or held an ownership inter- est in Unity House or the Waikiki Marina Furthermore, the record contains no evidence to suggest that any elected officer or other official of Local 555 has at any time material herein possessed any ownership interest in or been a member of Unity House or the Waikiki Marina The evidence also does not establish that Local 555 is an alter ego of Local 5 The record reflects that in 1974 Local 5 loaned or donated start-up money and provided office space and secretarial services to Local 555 At that time Local 5's Vice President Anthony Rutledge was as- signed as Local 555's administrative agent However, it is uncontroverted that since July 1979, Local 555 and Local 5 have had separate offices and that Local 555's elected officials have run the local on a day-to-day basis The record contains no evidence to suggest any official of Local 5 has exercised or attempted to exercise any au- QUALITY INN WAIKIKI 7 thonty over Local 555 during this period In these cir- cumstances I am compelled to conclude that Local 5 and Local 555 are separate and distinct labor organizations The mere fact that both locals are members of the same international union does not compel a different conclu- sion The Employer also contends that Local 555 should be disqualified because of its relationship with Anthony Rutledge In this regard, the Employer argues that An- thony Rutledge is subject to the control of his father, Arthur Rutledge Since Arthur Rutledge effectively owns and/or controls Unity House and the Waikiki Manna and Anthony Rutledge as vice president of the International may be called to assist Local 555 to negoti- ate contracts, the Employer contends that Local 555 has a conflict of interest and must therefore be disqualified The record contains no evidence sufficient to establish that Anthony Rutledge is subject to the control of his father Nor does the record contain any evidence to sug- gest that Anthony Rutledge will take his father's inter- ests into account should he be called by Local 555 to assist in negotiating a collective bargaining agreement with the Employer or a competitor of the Employer The record is uncontroverted that the chief executive of- ficer of Local 555 is free to accept or reject advice from Anthony Rutledge Thus the Employer's contention in this regard must be rejected Since the record evidence does not establish an innate or proximate danger that Local 555's objectives are in- consistent with its duties as a labor organization, and that no officer or agent of Local 555 has an ownership inter- est or effectively controls a competitor of the Employer, I am compelled to recommend that the Employer's ob- jection be overruled in its entirety and that the Board issue an appropriate certification Should it become evi- dent in the future that Local 555's bargaining objectives have become susceptible to extrensic factors procedures exist under the Act to curb such a proclivity National Food Stores of Louisiana, Inc , 186 NLRB 127 (1970) Recommendation Based on the record evidence and the foregoing, it is recommended that the Employer's objection No 1 be overruled It is further recommended that the Board issue an appropriate Certification of Representative Filing of Exceptions Within 10 days from the issuance of this report, any party may file with the National Labor Relations Board in Washington, D C eight (8) copies of exceptions there- to with supporting brief it desired Immediately upon filing such exceptions, the party filing the same shall serve a copy thereof, together with a copy of any brief filed, on the other party and the Regional Director If no exceptions are filed with such report, the Board, upon the expiration of the period for filing such exceptions, may decide the matter forthwith upon the record or make other disposition of the case