21st Century Valet Parking LLC d/b/a Star Garden Enterprise

373 NLRB No. 76 NOTICE: This opinion is subject to formal revision before publication in the bound volumes of NLRB decisions. Readers are requested to notify the Ex- ecutive Secretary, National Labor Relations Board, Washington, D.C. 20570, of any typographical or other formal errors so that corrections can be included in the bound volumes 21st Century Valet Parking, LLC d/b/a Star Garden Enterprise and Strippers United Inc. and Lindsey Normington and Actors’ Equity Association Cases 31–CA–291825, 31–CA–292239, 31–CA– 292575, 31–CA–293098, 31–CA–293599, 31–CA– 303519, 31–CA–303537, and 31–CA–311939 July 17, 2024 ORDER DENYING MOTION BY CHAIRMAN MCFERRAN AND MEMBERS PROUTY AND WILCOX The General Counsel seeks a default judgment in this case pursuant to the terms of an informal settlement agree- ment. Upon a series of charges and amended charges filed by Lindsey Normington and Strippers United, the General Counsel issued an Order Further Consolidating Cases, Third Consolidated Complaint, and Notice of Hearing (the complaint) on April 18, 2023, alleging that 21st Century Valet Parking, LLC d/b/a Star Garden Enterprise (the Re- spondent) violated Section 8(a)(1), (3), and (4) of the Act by discharging employees for engaging in protected con- certed activity, misclassifying employees as independent contractors, surveilling employees’ protected concerted activity, publicly announcing that it wished to curtail op- erations due to “labor related legal costs and expenses,” and discontinuing business operations in March 2023 and laying off its remaining employees. The Respondent filed an amended answer to the complaint on May 10, 2023. The Respondent subsequently entered into an informal settlement agreement with Actors’ Equity Association (the Union), Lindsey Normington, and Strippers United Inc., which the Regional Director for Region 31 approved on May 16, 2023.1 Pursuant to its terms, the Respondent agreed, inter alia, to: (1) move to dismiss the Chapter 7 bankruptcy proceeding in In re 21st Century Valet Parking, LLC, Case No. 1:22-bk-11415-VK, with prejudice; (2) re- open and restore its business operation as a topless enter- tainment club within 30 to 60 days of the Chapter 7 bank- ruptcy dismissal;2 (3) sign, date, and post copies of the No- tice to Employees in the dressing room and disc jockey booth at its facility located in North Hollywood, Califor- nia, upon reopening; (4) distribute copies of the Notice to Employees via text and email to all employees who worked at its North Hollywood facility between October 2021 and the present; (5) hold a meeting or meetings on 1 In connection with the settlement, the Region issued an order sev- ering Case 31–RC–301557, scheduling a ballot count, approving partial dismissal of Case 31–CA–311939, and postponing the hearing indefi- nitely. Pursuant to the order, the Region dismissed all references to Re- spondent SJPSC, LLC d/b/a Dreams from the Third Consolidated Com- plaint stating, “[a]ny references to Respondents in the Third Consoli- dated Complaint will refer solely to Respondent Star Garden.” The order each shift, scheduled to ensure the widest possible attend- ance, at which a responsible management official would read the Notice to Employees, in English, in the presence of a Board agent or alternatively, a Board agent would read the Notice in the presence of a responsible manage- ment official; (6) post the “Employee Rights Under the NLRA” poster in the dressing room and disc jockey booth at the North Hollywood, California, facility upon its reo- pening; (7) participate in mandatory training on the Na- tional Labor Relations Act and unfair labor practices, con- ducted by a Board agent; (8) upon reopening, offer, in writing, the employees who worked under the following aliases immediate and full reinstatement to their former jobs, or if those jobs no longer exist, to substantially equivalent positions, without any prejudice to their rights and/or privileges previously enjoyed: Reagan, Selena, Sinder, Wicked, Lilith, Charlie, Charm, and Honey; (9) offer, in writing and when applicable, reinstatement to the remaining employees—Chevelle, DJ Doughboy, Dylan, Iris, Luna, May, (New) Luna, Riv, Scarlett, Sweetie, Vio- let, and Vixen—who would be placed on a preferential hiring list, with the schedule, order, and notification pro- cess subject to bargaining with the Union, if the Union is certified as the exclusive bargaining representative of the unit; (10) make whole employees known by their aliases and named in the settlement agreement by payment of backpay in the amount opposite each name, with appro- priate withholdings; (11) immediately recognize the Un- ion as the exclusive collective-bargaining representative of the unit if the unit received a majority of votes cast in an election conducted in Case 31–RC–301557; and (12) within 30 days of recognition of the Union as the exclusive collective-bargaining representative of the unit, bargain in good faith for an initial collective-bargaining agreement and adhere to a bargaining schedule of meeting every other week thereafter until an agreement or lawful overall impasse is reached. The settlement agreement also contains the following performance clause: The Charged Party Star Garden agrees that in case of non-compliance with any of the terms of this Agreement by Charged Party Star Garden, and after 14 days’ notice from the Regional Di- rector of the National Labor Relations Board of such non-compliance without remedy by Charged Party Star Garden, the Regional Direc- tor will reissue the Third Consolidated Com- plaint (complaint) previously issued on April 18, 2023, in the instant cases. In addition, if the also granted the Union’s request to withdraw the single-employer alle- gation from Case 31–CA–311939. 2 Pursuant to the settlement agreement, the Respondent moved to dis- miss the Chapter 7 bankruptcy proceeding with prejudice. The Bank- ruptcy Court thereafter approved the dismissal, and the Respondent reo- pened its facility on about August 24, 2023. DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 2 Bankruptcy Court does not grant Charged Party Star Garden’s motion to dismiss in In re 21st Century Valet Parking, LLC, Case No. 1:22-bk- 11415-VK or if, within 12 months from the date the Regional Director approves this Agreement, Charged Party Star Garden becomes the subject of an involuntary bankruptcy, the Regional Di- rector will reissue the complaint. Thereafter, the General Counsel may file a motion for de- fault judgment with the Board on the allegations of the complaint. Charged Party Star Garden understands and agrees that the allegations of the aforementioned complaint will be deemed admitted and its Answer to such complaint will be considered withdrawn. The only issue that may be raised before the Board is whether Charged Party Star Garden defaulted on the terms of this Agreement. The Board may then, without necessity of trial or any other proceed- ing, find all allegations of the complaint to be true and make findings of fact and conclusions of law consistent with those allegations adverse to Charged Party Star Garden on all issues raised by the pleadings. Charged Party Star Garden agrees that the Board may then issue an order providing, as elected by the Regional Di- rector, a full remedy for the violations found as is appropriate to remedy such violations, and/or an order requiring Charged Party Star Garden to perform terms of this Agreement as specified by the Regional Director. The parties further agree that a U.S. Court of Appeals Judgment may be entered enforcing the Board order ex parte, after service or attempted service upon Charged Party Star Garden/Respondent at the last address pro- vided to the General Counsel. By email dated December 14, 2023, the Region’s com- pliance officer sent the Respondent a letter stating that it had not fully complied with the terms of the settlement agreement. The Respondent was advised that it had failed to offer full and immediate reinstatement to 14 employees without prejudice to their seniority or any other rights and privileges they previously enjoyed.3 With regard to one employee, DJ Doughboy, the letter explained that alt- hough he was purportedly offered reinstatement, the Re- spondent had failed to provide him with any shifts. The letter further explained that the Respondent had limited the hours of the other employees to 4-hour shifts and re- quired them to provide their availability to work a month in advance whereas prior to the club’s reopening they pro- vided their availability on a weekly basis, were not sched- uled for specific shifts, and worked 6 to 8 hours a night. 3 These dancers included Reagan, Selena, Sinder, Wicked, Lilith, Charlie, Charm, Chevelle, Dylan, Iris, May, Riv, and Scarlett. 4 Hereinafter, all dates are in 2024. The Respondent was further advised that the Region was investigating additional instances of alleged noncompli- ance. By email dated March 5, 2024, the Region’s compliance officer sent a second letter notifying the Respondent that although the Respondent had attempted to address the is- sues raised in the Region’s December 14, 2023 letter, the Respondent’s subsequent conduct indicated a continued failure to fully and substantially comply with the agree- ment. According to the Region, the settlement agreement required the Respondent to reopen its business operations as a topless entertainment club and restore the status quo ante. It then detailed a myriad of actions taken by the Re- spondent that were inconsistent with this obligation in- cluding, inter alia, reducing its days of operation from 6 days per week to 3 days per week and reducing its hours of operation by 2 hours each day; implementing and main- taining a cover charge; operating as a cashless business, including failing to provide small cash to customers in ex- change for larger bills for purposes of tipping the dancers; excessively increasing the cost of drinks and billiards; and unreasonably turning away customers and removing cus- tomers from the club. The Region also asserted that the Respondent had sig- nificantly changed the nature of the club’s services by im- plementing and maintaining new house rules and/or more strictly enforcing house rules, including requiring dancers to collect tips by using a broom; prohibiting dancers from performing or dancing outside the black line of the stage and keeping them at least 6 feet away from patrons even when not performing; prohibiting dancers from touching themselves when performing; and scheduling only one to three dancers per shift, resulting in dancers regularly being alone in the club. In light of this potential pattern of non- compliance, the Respondent was advised that if it did not present evidence to establish its compliance with the set- tlement agreement within 14 days, the Region may reissue the complaint and file a motion for default judgment with the Board. On March 22, 2024,4 in accordance with the noncom- pliance provisions of the settlement agreement, the Re- gional Director reissued the complaint. On that same date, the General Counsel filed a Motion for Default Judgment, detailing more precisely the Respondent’s noncompliance and seeking a remedy requiring the Respondent to restore its business operation as it existed prior to January 25, 2023. Thereafter, on April 16, the Board issued an Order transferring the proceeding to the Board and a Notice to Show Cause why the motion should not be granted. On April 30, the Respondent filed a response to the Notice to Show Cause opposing the General Counsel’s motion and moving to dismiss the complaint.5 The Respondent 5 The General Counsel urges the Board to disregard the Respondent’s response to the Notice to Show Cause because it was not timely served 21ST CENTURY VALET PARKING, LLC D/B/A STAR GARDEN ENTERPRISE disputed that it violated the settlement agreement and of- fered its own interpretation of its obligations under the agreement’s terms. On May 7, the General Counsel and the Union filed replies. The National Labor Relations Board has delegated its authority in this proceeding to a three-member panel. Ruling on Motion for Default Judgment To warrant a default judgment, the General Counsel, as the moving party, has the burden of establishing that there are no genuine issues of material fact regarding whether the Respondent violated the settlement agreement. See, e.g., ThyssenKrupp Stainless USA, LLC, 362 NLRB 621 (2015) (denying default judgment motion where genuine issues of material fact existed as to whether settlement agreement had been breached); Vocell Bus Co., 357 NLRB 1730, 1731 (2011) (denying default/summary judgment motion given factual dispute about noncompli- ance with settlement). Having duly considered the matter, we find that default judgment is not appropriate in the circumstances of this case because, based on the conflicting representations of the parties, a genuine issue of material fact exists that pre- vents a final determination as to whether the terms of the settlement agreement have been breached. As detailed above, the General Counsel contends that the Respondent has failed to restore the status quo ante as it existed prior to Star Garden’s closure. By contrast, the Respondent maintains that it was not required to restore the status quo ante in the manner in which the General Counsel contends and that it has fully complied with its settlement obliga- tions to reopen as a topless entertainment club. We find that a hearing is required to resolve this factual dispute. ORDER For the foregoing reasons, it is ordered that the General Counsel’s Motion for Default Judgment is denied. It is further ordered that this proceeding is remanded to the Re- gional Director for Region 31 for the purpose of issuing a notice of hearing and scheduling a hearing before an ad- ministrative law judge, limiting such proceeding to deter- mining whether the complaint should be dismissed on the ground that the Respondent has fully complied with the terms of the settlement agreement. Dated, Washington, D.C. July 17, 2024 ______________________________________ Lauren McFerran, Chairman ______________________________________ David M. Prouty, Member on the Region. Nevertheless, she acknowledges that the Region received an automated notification of the filing via the Agency’s E-Issuance/E- Service Pilot Program and was thereafter served after the Region brought ______________________________________ Gwynne A. Wilcox, Member (SEAL) NATIONAL LABOR RELATIONS BOARD the deficiency to the Respondent’s attention. As General Counsel does not contend that any delay resulted in undue prejudice to the Region, we accept the Respondent’s response.