Patrish, LLC, d/b/a Northwest Airport Inn

690 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 359 NLRB No. 83 Patrish, LLC, d/b/a Northwest Airport Inn and UNITE HERE Local 74. Case 14–CA–080874 March 20, 2013 DECISION AND ORDER BY CHAIRMAN PEARCE AND MEMBERS GRIFFIN AND BLOCK On October 24, 2012, Administrative Law Judge Ar- thur J. Amchan issued the attached decision. The Re- spondent filed exceptions and a supporting brief. The Acting General Counsel filed an answering brief to the exceptions, cross-exceptions, and a supporting brief. The National Labor Relations Board has considered the decision and the record in light of the exceptions and briefs and has decided to affirm the judge’s rulings, find- ings,1 and conclusions, to modify his remedy,2 and to adopt the recommended Order as modified and set forth in full below.3 1 The Respondent has excepted to some of the judge’s credibility findings. The Board’s established policy is not to overrule an adminis- trative law judge’s credibility resolutions unless the clear preponder- ance of all the relevant evidence convinces us that they are incorrect. Standard Dry Wall Products, 91 NLRB 544 (1950), enfd. 188 F.2d 362 (3d Cir. 1951). We have carefully examined the record and find no basis for reversing the findings. Further, to the extent the Respondent argues that Owner Naresh Patel’s testimony that the Respondent was open to negotiations does not support the judge’s finding of a fait ac- compli, we find the judge implicitly discredited this testimony. Absent evidence showing that officials of union benefit funds acted as agents of the Union, we do not rely on the judge’s inference that notice to union benefit funds of prior layoffs was notice to the Union itself. See, e.g., Commercial Property Services, 304 NLRB 134, 134 (1991) (relying on reasoning of the Supreme Court in NLRB v. Amax Coal Co., 453 U.S. 322 (1981), the Board stated that “[w]e are not suggesting that an individual who serves as a trustee always acts in his capacity as trustee, and therefore can never serve as an agent for the union or the employer. We simply proceed from the premise that a trustee is not acting for the union or the employer unless contrary evi- dence shows otherwise” (citations omitted)). 2 In accordance with our recent decision in Latino Express, Inc., 359 NLRB 518 (2012), we shall order the Respondent to compensate the unit employees for the adverse tax consequences, if any, of receiving lump-sum backpay awards and to file a report with the Social Security Administration allocating the backpay awards to the appropriate calen- dar quarters for each unit employee. 3 We have modified the judge’s recommended Order to conform to the violations found, specifically including the Respondent’s unlawful refusal to recognize the Union, as well as to reference our additional backpay remedial requirements. We have also substituted a new notice to conform to the modified Order. We find no merit in the Respondent’s exception to the judge’s order- ing of reinstatement and backpay. The Respondent contends that its financial condition should be a factor in determining the appropriate remedy. To the contrary, a remedial order should not be tempered based on a wrongdoer’s financial situation, and whether a respondent is unable to meet its backpay obligations is a matter for compliance. See Schnadig Corp., 265 NLRB 147, 148 (1982). There are no exceptions to the judge’s grant of an affirmative bar- gaining order to remedy the Respondent’s unlawful withdrawal of ORDER The National Labor Relations Board orders that the Respondent, Patrish, LLC, d/b/a/ Northwest Airport Inn, St. Ann, Missouri, its officers, agents, successors, and assigns, shall 1. Cease and desist from (a) Failing and refusing to bargain with the Union re- garding a successor collective-bargaining agreement and withdrawing recognition from UNITE HERE Local 74 as the exclusive collective-bargaining representative of the employees in the unit. The bargaining unit is: All housekeeping employees, including inspectress and houseman, employed by Respondent at its St. Ann, Missouri facility. (b) Failing and refusing to bargain with the Union by unilaterally subcontracting the work of all bargaining unit employees and terminating the remaining two bar- gaining unit employees. (c) In any like or related manner interfering with, re- straining, or coercing 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) Recognize and, on request, bargain with the Union as the exclusive representative of the employees in the appropriate unit, listed above, concerning terms and con- ditions of employment and, if an understanding is reached, embody the understanding in a signed agree- ment. (b) Within 14 days from the date of this Order, rescind the unilaterally implemented subcontracting of all bar- gaining unit work, restore the bargaining unit positions eliminated by this unilateral action, and offer Tamera Poetting and Gary Wohldman full reinstatement to their former jobs, without prejudice to their seniority or any other rights or privileges previously enjoyed. (c) Make Tamera Poetting and Gary Wohldman whole for any loss of earnings and other benefits suffered as a result of their unlawful unilateral discharge, in the man- ner set forth in the remedy section of the judge’s decision as amended in this decision. (d) Compensate Tamera Poetting and Gary Wohldman for the adverse tax consequences, if any, of receiving lump-sum backpay awards, and file a report with the Social Security Administration allocating the backpay awards to the appropriate calendar quarters for each unit employee. recognition. Therefore, we find it unnecessary to provide a specific justification for that remedy. See Gene’s Bus Co., 357 NLRB 1009, 1013 fn. 18 (2011), and cases cited therein. NORTHWEST AIRPORT INN 691 (e) Preserve and, within 14 days of a request, or such additional time as the Regional Director may allow for good cause shown, provide at a reasonable place desig- nated by the Board or its agents, all payroll records, so- cial security payment records, timecards, personnel rec- ords and reports, and all other records, including an elec- tronic copy of such records if stored in electronic form, necessary to analyze the amount of backpay due under the terms of this Order. (f) Within 14 days after service by the Region, post at its St. Ann, Missouri facility copies of the attached notice marked “Appendix.”4 Copies of the notice, on forms provided by the Regional Director for Region 14, after being signed by the Respondent’s authorized representa- tive, shall be posted by the Respondent and maintained for 60 consecutive days in conspicuous places, including all places where notices to employees are customarily posted. In addition to physical posting of paper notices, notices shall be distributed electronically, such as by email, posting on an intranet or an internet site, and/or other electronic means, if the Respondent customarily communicates with its employees by such means. Rea- sonable steps shall be taken by the Respondent to ensure that the notices are not altered, defaced, or covered by any other material. If the Respondent has gone out of business or closed the facility involved in these proceed- ings, the Respondent shall duplicate and mail, at its own expense, a copy of the notice to all current employees and former employees employed by the Respondent at any time since November 21, 2011. (g) Within 21 days after service by the Region, file with the Regional Director for Region 14 a sworn certifi- cation of a responsible official on a form provided by the Region attesting to the steps that the Respondent has taken to comply. 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 vio- lated Federal labor law and has ordered us to post and obey this notice. FEDERAL LAW GIVES YOU THE RIGHT TO Form, join, or assist a union 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- tional Labor Relations Board” shall read “Posted Pursuant to a Judg- ment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board.” Choose representatives to bargain with us on your behalf Act together with other employees for your bene- fit and protection Choose not to engage in any of these protected activities. WE WILL NOT fail and refuse to recognize and bargain with the Union regarding a successor collective- bargaining agreement and withdraw recognition from UNITE HERE Local 74 as the exclusive bargaining rep- resentative of a unit of all our housekeeping employees, including inspectress and houseman, employed at our extended stay hotel in St. Ann, Missouri. WE WILL NOT fail and refuse to bargain with the Union by unilaterally subcontracting the work of all bargaining unit employees and terminating the remaining two bar- gaining unit employees. WE WILL NOT in any like or related manner interfere with, restrain, or coerce you in the exercise of the rights listed above. WE WILL recognize and, on request, bargain with the Union and put in writing and sign any agreement reached on terms and conditions of employment for our employ- ees in the bargaining unit. WE WILL, within 14 days from the date of the Board’s Order, rescind the unilaterally implemented subcontract- ing of all bargaining unit work, restore the bargaining unit positions eliminated by this unilateral action, and offer Tamera Poetting and Gary Wohldman full rein- statement to their former jobs, without prejudice to their seniority or any other rights or privileges previously en- joyed. WE WILL make Tamera Poetting and Gary Wohldman whole for any loss of earnings and other benefits result- ing from their termination, less any net interim earnings, plus interest compounded daily. WE WILL compensate Tamera Poetting and Gary Wohldman for the adverse tax consequences, if any, of receiving lump-sum backpay awards, and WE WILL, file a report with the Social Security Administration allocating the backpay awards to the appropriate calendar quarters for each unit employee. PATRISH, LLC, D/B/A NORTHWEST AIRPORT INN Rochelle K. Balentine and Lynette K. Zuch, Esqs., for the Gen- eral Counsel. Tedrick Housh III (Lathrop & Gage LLP), of Kansas City, Missouri, for the Respondent. DECISION STATEMENT OF THE CASE ARTHUR J. AMCHAN, Administrative Law Judge. This case was tried in St. Louis, Missouri, on August 27, 2012. The 692 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD Charging Party, UNITE HERE Local 74, filed the initial charge in this matter on May 11, 2012, and an amended charge on July 30, 2012.1 The General Counsel issued the complaint on July 30, 2012, alleging that Respondent, Patrish, LLC, doing busi- ness as the Northwest Airport Inn, violated Section 8(a)(5) and (1) of the Act. More specifically, he alleges that Respondent violated the Act by refusing to negotiate for a successor collec- tive-bargaining agreement to the contract which expired on November 29, 2011. The General Counsel also alleges that Respondent violated the Act by subcontracting all unit work, terminating the only two bargaining unit members in its employ and withdrawing recognition of the Charging Party Union as the exclusive representative of the bargaining unit. On the entire record, including my observation of the demeanor of the witnesses, and after considering the briefs filed by the General Counsel and Respondent, I make the following FINDINGS OF FACT I. JURISDICTION Respondent, Patrish, LLC, doing business as Northwest Air- port Inn, is a corporation, which operates an extended stay hotel near the St. Louis, Missouri Airport. In the 12 months prior to June 30, 2012, Respondent purchased and received goods and/or services valued in excess of $50,000 from points outside of Missouri. Respondent admits, and I find, that it is an em- ployer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act and that the Union is a labor organ- ization within the meaning of Section 2(5) of the Act. II. ALLEGED UNFAIR LABOR PRACTICES Respondent purchased the Northwest Airport Inn in 2002. The Charging Party Union, UNITE HERE Local 74, had repre- sented employees at this hotel since at least 1991. The parties have had a number of collective-bargaining agreements. The most recent contract was effective between November 30, 2010, and November 29, 2011. On January 27, 2010, Respondent notified its guests that in order to maintain its room rates it was eliminating weekly housekeeping services. Guests were informed that they could exchange their linen and towels at the hotel’s front desk. Guests were also informed that Respondent would no longer be cleaning their rooms once a week. Instead, one of Respond- ent’s employees would inspect each guest’s room once a week to insure that the room was maintained properly (R. Exh. 1). As a result of this change in its business model, Respondent 1 Respondent appears to have abandoned the argument that the alle- gations of the complaint are barred by Sec. 10(b) of the Act, which prohibits the issuance of a complaint based upon an unfair labor prac- tice occurring more than 6 months prior to the filing of the charge. In any event, the May 11, 2012 initial charge was filed within 6 months of the earliest alleged violation (November 21, 2011). The July 30 amended charge is sufficiently related to the initial charge to satisfy the 6-month limitation of Sec. 10(b), Redd-I, Inc, 290 NLRB 1115 (1988). The initial charge alleges the Respondent violated Sec. 8(a)(5) and (1) on November 21, 2011, by refusing to bargain. The amended charge merely fills in the details on that alleged refusal (i.e., withdrawal of recognition; termination of all bargaining unit employees, the unilateral subcontracting of unit work, etc.). laid off four of its housekeeping employees. These employees were not replaced. In February 2010, there was a fire at the hotel which damaged 30 of the hotel’s 187 rooms. The rele- vance of the fire to the instant case is unclear. Later in 2010, Respondent laid off a laundry worker and subcontracted his tasks. There is no credible evidence that Respondent informed the Union of any layoffs that occurred prior to November 2011 until some months after they occurred. However, I infer that union benefit funds were notified when employees were termi- nated, or at least should have noticed when benefit payments ceased. In any event, a union’s acquiescence in previous uni- lateral changes does not operate as a waiver of its right to bar- gain over such changes for all time, Owens-Corning Fiber- glass, 282 NLRB 609 (1987). Thus, the Union did not waive its bargaining rights regarding the lay-offs and subcontracting of unit work in November 2011 by virtue of its acquiescence to the prior layoffs and subcontracting. By the time the 2010–2011 collective-bargaining agreement was signed in November 2010, the bargaining unit consisted of just two employees, an inspectress, Tamera Poetting, and a houseman, Gary Wohldman. Poetting’s job included inspecting each guest room once a week, cleaning vacant rooms, vacuum- ing the halls, and cleaning the windows. Wohldman’s job was to remove trash from locations in which it was placed by guests and taking the trash to a dumpster, shampooing rugs, mopping floors, servicing the hotel’s elevator, and manning the linen station. The Union appears to have little or no contact with Respondent or bargaining unit employees between the signing of the collective-bargaining agreement in January and Novem- ber 2011. Union Business Agent/Vice President Harry Moore appar- ently notified Respondent that the Union wished to reopen the contract 60 days prior to the November 29, 2011 expiration date, as provided in the collective-bargaining agreement (Tr. 90–91; GC Exh. 2, art. 23). On November 21 or 22, 2011, Moore went to the hotel and met with Owner Naresh Patel and General Manager William Thompson. Moore presented Re- spondent with the Union’s proposal for an agreement running from November 30, 2011, through November 29, 2012. The proposal called for a 30-cent-per-hour raise for unit employees, as well as increases in the Employer’s contribution to the Un- ion’s health and welfare and pension funds (GC Exhs. 2 and 3). Patel and/or Thompson responded by telling Moore that Re- spondent had contracted out the work of the bargaining unit employees and was going to layoff both of them (Tr. 93).2 2 I credit Moore’s testimony in this regard. Thompson does not re- call meeting with Moore regarding the collective-bargaining agreement. However, Patel confirms that Thompson was present at the meeting with Moore (Tr. 75, 32). Patel’s testimony at hearing was inconsistent and inconsistent with statements made under oath in his affidavit. Therefore, his testimony that he had not decided to contract out the bargaining unit work prior to the November 2011 meeting with Moore and his testimony denying that he told Moore at the November meeting that he had already subcontracted the work of the two remaining bar- gaining unit employees, is not credible. For example, Patel stated or testified: NORTHWEST AIRPORT INN 693 Moore told Respondent’s representatives that they could not do that and he was going to file an unfair labor practice charge. At the end of the workday on November 29, Bill Thompson in- formed Poetting and Wohldman that they were being laid off. Employees of Southside Temporary began performing the exact same tasks as Poetting and Wohldman almost immediately, if not immediately. Southside Temporaries had apparently provided Respondent with employees to do work not covered by the collective- bargaining agreement sometime prior to July 21, 2011. On that date, Southside provided Respondent with quotes for house- keeping, laundry service, and maintenance employees (GC Exh. 3). ANALYSIS A decision to subcontract bargaining unit work is a mandato- ry subject of bargaining where the employer is merely replacing employees in the bargaining unit with employees of an inde- pendent contractor to do the same work under similar working conditions, Fireboard Paper Products Corp. v. NLRB, 379 U.S. 203 (1979); Sunoco, Inc., 349 NLRB 240, 244–245 (2007). Subcontracting bargaining unit work in such circumstances, without providing sufficient notice and an opportunity to re- quest bargaining over the decision to subcontract is generally a violation of Section 8(a)(5) and (1) of the Act. RESPONDENT PRESENTED THE UNION WITH A “FAIT ACCOMPLI” Respondent contends that it satisfied its bargaining obliga- tions with respect to the subcontracting of unit work. Addition- ally, it argues that the Union waived its bargaining rights with regard to this matter. The General Counsel argues that Respondent failed to pro- vide sufficient notice and instead presented the Union with a “fait accompli” which precludes a finding that the Union waived its bargaining rights, Pontiac Osteopathic Hospital, 336 NLRB 1021, 1023–1024 (2001); UAW-Daimler Chrysler Na- tional Training Center, 341 NLRB 431, 433–434 (2004). I conclude that Respondent presented the Union with a “fait Q. When the contracts came up for renewal in November of 2011, you had already subcontracted out the remaining work to Southside; isn’t that correct? A. That’s correct. [Tr. 26.] “Union Rep Moore never gave any concessions at any time in the past in his contract negotiations.” But that did not matter in this situation because we had already hired other people to sub- contract out the work and our cost structure was already laid out, [Tr. 31.] In his affidavit, Moore stated: “I told him Harry, we don’t have any need for Union employ- ees because it is all subcontracted out. We are not going to sign the contract agreement.” [Tr. 42.] “To us it didn’t make a difference whether Union Rep Moore wanted an increase or a decrease in pay because the decision had been made to subcontract out the work.” [Tr. 47.] “So when the contract came up for renewal in 2011, all the jobs had already been subcontracted out. The union rep wanted us to sign a new agreement, and we refused because there was nothing for union employees to do there. There was [sic] no posi- tions left; they had been subcontracted out to Southside.” [Tr. 69.] accompli.” Owner Patel in his affidavit, which I find to be accurate, stated that it made no difference whether the Union wanted an increase or decrease in employees’ compensation in bargaining because the decision had already been made to sub- contract all the unit work to Southside. Further, I conclude that the decision to subcontract this work had already been imple- mented. I do not credit Patel’s testimony at Transcript 60–61, that unit employees’ tasks were not performed for a period of as much as 10 days. The suggestion that Respondent, for exam- ple, allowed residents’ trash to simply pile up for ten days is not credible. I infer that Southside’s employees began performing unit tasks immediately following the lay off. Thus any attempt by the Union to negotiate the terms and conditions of unit em- ployees would have been fruitless. This establishes a violation of Section 8(a)(5) and (1) unless the Union waived its right to bargain in its 2010–2011 collective-bargaining agreement, Brannen Sand & Gravel, 314 NLRB 282 (1994). THE UNION DID NOT WAIVE ITS BARGAINING RIGHTS OVER THE SUBCONTRACTING OF UNIT WORK To be effective, a waiver of statutory bargaining rights must be clear and unmistakable. Wavier can occur in any of three ways, by express provision in a collective-bargaining agree- ment, by the conduct of the parties (including past practices, bargaining history, and action or inaction), or by a combination of the two, American Diamond Tool, 306 NLRB 570 (1992). Respondent contends that the Union waived its right to bar- gain over the subcontracting of unit work in the 2010–2011 contract. Article 2, section 4 of that agreement provides: From time to time the Company shall hire outside contractors and employees of such contractors shall not be under the ju- risdiction of the Union, GC Exh. 2, p. 2. I agree with the General Counsel that the phrase “from time to time” suggests that the parties agreed that Respondent was entitled to employ workers on a temporary basis, or for tasks unrelated to those performed by bargaining unit members, without these employees becoming part of the bargaining unit. This language does not clearly suggest that Respondent was entitled to permanently replace unit employees with contractor employees. Article 4, the management-rights clause, provides: The management of the business and the direction of the working forces, including the right to plan, direct and control store operations, hire, suspend or discharge for proper cause, transfer or relieve employees from duty be- cause of lack of work or for other legitimate reasons, the right to study or introduce new or improved production methods or facilities, and the right to establish and main- tain reasonable rules and regulations covering the opera- tions of the stores, a violation of which shall be among the causes for discharge, are vested in the Company, provided, however, that this right be exercised with due regard to the rights of the employees, and provide further that it will not be used for the purpose of discrimination against any em- ployee. This paragraph is subject to the arbitration proce- dure. 694 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD This article does not clearly vest in Respondent the right to replace all unit employees with contract employees without providing the Union notice and opportunity to bargain about such subcontracting. In these respects the contract is distin- guishable from Allison Corp., 330 NLRB 1363 (2000),3 in which the management-rights clause explicitly gave the em- ployer the exclusive right to subcontract and Good Samaritan Hospital, 335 NLRB 901 (2001), in which the contractual waiver was also very explicit. I also conclude that the Union did not waive its right to bar- gain over the contracting out of all bargaining unit work by virtue of the past practices of the parties. Unlike the November 2011 layoff, the layoff of the housekeeping employees in Janu- ary 2010 did not entail the replacement of unit employees with contractor employees. Moreover, the management-rights clause of the parties’ collective-bargaining agreement explicitly gives Respondent the right to layoff employees for lack of work; it does not extend this right to subcontracting their work to the employees of a subcontractor. The layoff of Respondent’s laundry employee and replace- ment by a contract employee also does not support a finding of waiver. This is so because Respondent did not notify the Union that it was transferring the work of the unit employee to a sub- contractor. 3 In Allison Corp., the Board found that respondent violated the Act in failing to bargain over the effects of the layoff. In the instant case, failure to bargain over the effects is not alleged as a violation in com- plaint and there the union never requested effects bargaining, as was the case in Allison. CONCLUSION OF LAW Respondent violated Section 8(a)(5) and (1) by unilaterally subcontracting the work of all bargaining unit employees with- out giving notice and an opportunity to bargain with the Union, terminating the two remaining bargaining unit members, refus- ing to bargain for a successor contract and withdrawing recog- nition of the Union.4 REMEDY Having found that the Respondent has engaged in certain un- fair labor practices, I shall order it to cease and desist therefrom and to take certain affirmative action designed to effectuate the policies of the Act. The Respondent, having illegally discharged employees, must offer them reinstatement and make them whole for any loss of earnings and other benefits. Backpay shall be computed in accordance with F. W. Woolworth Co., 90 NLRB 289 (1950), with interest at the rate prescribed in New Horizons for the Retarded, 283 NLRB 1173 (1987), compounded daily as prescribed in Kentucky River Medical Center, 356 NLRB 6 (2010). [Recommended Order omitted from publication.] 4 At p. 7 of its brief, Respondent argues that the complaint should be dismissed because this matter should have been handled through the grievance and arbitration provisions of the parties’ collective- bargaining agreement. However, deferral to arbitration is not appropri- ate in a case such as this in which the Employer had terminated the bargaining relationship, Avery Dennison, 330 NLRB 389 (1999).