Opposition — Tahoe Nugget, Inc. v. National Labor Relations Board

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In the Supreme Court

OF THE

United States

Ocroser Trrm, 1978

No. 78-1379

Tanor Nvuaeet, Inc., dba Jus Kuxizizy’s Tanor Nvuaget,

and Nevapa Lopar,

Petitioners,

vs.

Nationa Lasor Rexations Boarp, and

Horet-Moret-Restavrant Empvovess & Bartenvers Union,

Locat 86, Hore. & Restaurant Emproyzrs & BarTEnvErs

InTeRNATIONAL Union, AFL-CIO,

By,

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We:

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On Petition for a Writ of Oertiorari to the e

United States Court of Appeals |

for the Ninth Circuit

RESPONDENT UNION’S BRIEF IN OPPOSITION

Counsel for Respondent Union

Davis, Cowzi. & Bows

Pawar Pavut Bows

351 California Street, Fourth Floor

San Francisco, California 94104

May 7, 1979

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TABLE OF AUTHORITIES CITED

Cases

Page

Bally Case & Cooler, Inc. v. N.L.R.B., 416 F.2d 902 (6th Cir.

BMI oo. 0 cc lgas'vts banks tvs ves ke

Celanese Corp. of America, 95 N.L.R.B. 664, 672 (1951) ..... 3,4

International Ladies’ Garment Workers’ Union v. N.L.R.B., 366

UG, TER (IGTE) oo. os on ceoigies oo « snes MED) ee

Local Lodge No. 1424, 1.A.M. v. N.L.R.B., 362 U.S. 411 (1060) 5

Lodges 1746 & 743, I.A.M. v. N.L.R.B., 416 F.2d 809 (D.C. Cir.

1969), cert. denied, 396 U.S. 1058 (1970) ................

N.L.R.B. v. Burns Security Service, 406 U.S. 272 (1972) ..... 4

N.L.R.B. v. Cayuga Crushed Stone, Inc., 474 F.2d 1380 (2d

Cin MSA. cot cant. -< fc ney nea een

N.L.R.B. v. Dayton Motels, Inc., 474 F.2d 328 (6th Cir.

DOIIN ioies vggrcd Kure Csi Gby a BIO ip. oh ge oe 6, 7,8

‘N.L.R.B. v. Denham, 469 F.2d 239 (9th Cir. 1972), vacated on

other grounds; 411 U.S. 945 (1973) ....... 0.0... eee ee.

N.L.R.B. v. District 30, U.M.W., 422 F.2d 115 (6th Cir. 1969),

cert. denied, 398 U.S. 959 (1970) .......... ccc cceceeeeees 5

N.L.R.B. v. Frick Co., 423 F.2d 1327 (3d Cir. 1970) ......... 3

N.L.R.B. v. Richard W. Kaase Co., 346 F.2d 24 (6th Cir. 1965) 4

N.L.R.B. v. Vegas Vic, Inc., 546 F.2d 828 (9th Cir. 1976), cert.

Geaas, G54 TS. GE are. vis cov Wer eacvavccnwhon caw 6

N.L.R.B. v. Washington Manor, Inc., 519 F.2d 750 (6th Cir.

i Raa a wl cane, PRN ee Rs Woke la guar eet 7

Terrell Machine Co. v. N.L.R.B., 427 F.2d 1088 (4th Cir.

1970), cert. denied, 398 U.S. 929 (1970) ................. 6

Universal Camera Corp. v. N.L.R.B., 340 U.S. 474 (1951) .... 10

Wausau Steel Corp. v. N.L.R.B., 377 F.2d 369 (7th Cir. 1967) 10

Statutes

a WR I QO Ae ee iy wh p's o Gowns aioe ie 2

National Labor Relations Act:

29 U.S.C. Section 158 a} See es ee IN UNS 2 i Dee 2

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In the Supreme Court

OF THE

United States

Ocroser Term, 1978

No. 78-1379

Tanoe Nuacet, Inc., dba Jim Keiiey’s Tanor Nuacet,

and Nevapa Lopeg,

Petitioners,

vs.

Nationa Laspor Rexations Boarp, and

Horet-Morert-Restaurant Emp.oyers & Barrenpers Union,

Locat 86, Hore, & Restaurant Emp.oyees & BarTrenpDERS

INTERNATIONAL Union, AF'L-CIO,

Respondents

On Petition for a Writ of Certiorari to the

United States Court of Appeals

for the Ninth Circuit

RESPONDENT UNION’S BRIEF IN OPPOSITION

OPINIONS BELOW

The opinion of the court of appeals (Pet. App. 1-28) is

reported at 584 F.2d 293. The decisions and orders of the

Board (Supp. App. 1-89) are reported at 227 N.L.R.B. 357

and 227 N.L.R.B. 368.

JURISDICTION

The judgment of the court of appeals was entered on

August 10, 1978, after consolidation of the two cases for

2

argument and decision. A timely petition for rehearing was

denied on October 20, 1978 (Pet. App. 29-30). On January

9, 1979, Mr. Justice Rehnquist exiended the time for filing

a petition for a writ of certiorari to and including March

10, 1979. The instant petition was filed on March 9, 1979.

The jurisdiction of this Court is invoked under 28 U.S.C.

§ 1254(1).

QUESTIONS PRESENTED

1. Whether the Board abused its discretion in holding

that the presumption of majority status, derived from peti-

tioners’ voluntary recognition of the Union as the repre-

sentative of their own employees, could not be defeated by

petitioners’ subsequent withdrawal from a multiemployer

bargaining unit?

2. Whether the Board’s finding that petitioners had not

established a reasonably grounded doubt of the Union’s

majority status was supported by substantial evidence?

STATUTE INVOLVED

1. Section 8(a) of the National Labor Relations Act,

29 U.S.C. §158(a), provides in relevant part:

“Tt shall be an unfair labor practice for an em-

ployer—

(1) to interfere with, restrain, or coerce employees

in the exercise of the rights guaranteed in Section

Perey

(5) to refuse to bargain collectively with the rep-

resentatives of his.employees * * *.”

2. Section 10(b) of the National Labor Relations Act,

29 U.S.C. § 160(b), provides in relevant part:

3

“Whenever it is charged that any person has engaged

in or is engaging in any such unfair labor practice,

the Board * * * shall have power to issue and cause to

be served upon such person a comyiaint stating the

charges * * * and containing a notice of hearing * * *:

Provided, that no complaint shall issue based upon any

unfair labor practice occurring more than six months

prior to the filing of the charge * * *.”

STATEMENT OF THE CASE

The Brief For The National Labor Relations Board In

Opposition herein succinctly and accurately states the case.

ARGUMENT

I. There Is No Conflict Among the Circuits Created By

the Court of Appeal’s Holding That the Presumption

of Majority Status Applies In This Case

Consistent with established judicial authority, the Board

held in this case that petitioners’ voluntary recognition of

the Union as the bargaining representative of their re-

spective bar and culinary employees gave rise to a con-

tinuing presumption of the Union’s majority support among

those employees. (Supp. App. 2-3)' As this Court has

stated, such recognition without a Union majority would

violate the Act. International Ladies’ Garment Workers’

Union v. N.L.R.B., 366 U.S. 731, 737-739 (1961). Once

established, the presumption of majority support continues

throughout the term of a collective bargaining agreement

and beyond. Celanese Corp. of America, 95 N.L.R.B. 664,

See N.L.R.B. 0. Frick Co., 423 F.2d (3d Cir. 1970);

N.L.R.B. v. C Crushed Stone, Inc., 474 F.2d 1380, 1383 (2d

Cir. 1973); N.L.R.B. v. Denham, 469 F.2d 239 (9th Cir. 1972),

vacated on other grounds, 411 U.S. 945 (1973).

4

672 (1951), cited with approval in N.L.R.B. v. Burns Secu-

rity Service, 406 U.S. 272 n.2 (1972).

On this predicate,’ the court of appeal upheld the Board’s

determination that the presumption subsisted following

petitioners’ withdrawal from the multiemployer unit:

“When respondents joined the Association and recog-

nized the Union, they implicitly declared their em-

ployees favored the Union. Thus, majority status can

be directly inferred from the employer’s own conduct;

the presumption is not derived from the larger unit’s

majority, but originates with the employer’s implicit

declaration of a majority in the single employer unit.

Moreover, the original factual inference is convincing:

employers normally will not knowingly violate the law

and union fraud is rare. Continued membership in the

larger unit does nothing to negate this principle even

though the larger unit becomes the appropriate one

for bargaining. The original presumption subsists:

withdrawal from the unit simply entails a reversion to

the original unit, a unit previously determined from

the employer’s own conduct to favor union represen-

tation.” (footnote omitted)

[Pet. App. 17-18]

The case of N.L.R.B. v. Richard W. Kaase Co., 346 F.2d

24 (6th Cir. 1965) is not at all in conflict with the holding

of the Board. As petitioners acknowledge (Pet. 6), the

Kaase court invalidated a presumption of majority status

derived from a tnultiemployer election following the em-

*Plainly, then, petitioners’ assertion that the Board adopted some

“derivative” presumption flowing from the multiemployer bargain-

was

c———_—_— -——

5

ployer’s withdrawal; unlike petitioners, the employer there

had never voluntarily recognized that union as representa-

tive of its own employees.

The Board and the court of appeal properly held that

petitioners could not avoid application of the presumption

by now claiming that the initial recognition more than a

decade earlier had been unlawful. Because petitioners’

recognition of a minority union would have been an unfair

labor practice occurring beyond the six-month limitation

period in Section 10(b) of the Act, both the Board and the

court of appeal concluded petitioners could not revive a

legally defunct unfair labor practice in order to defend

against a present refusal to bargain. Local Lodge No. 1424,

IAM. v. N.L.R.B., 362 U.S. 411, 416 (1960); N.L.R.B. v.

District 30, U.M.W., 422 F.2d 115, 122 (6th Cir. 1969), cert.

denied. 398 U.S. 959 (1970).

Apart from disallowing petitioners’ attack on the validity

of the Union’s presumption of majority support, the court

of appeal also correctly held that the circumstances of

the initial recognition could not be used to bolster peti-

tioners’ claim of subjective good faith in refusing to bar-

gain in 1974. Even if the companies’ alleged unlawful

recognition were admitted to show their good faith in

suddenly deciding to accord their employees a free choice

of bargaining representative in 1974, the court of appeal

concluded that merely subjective belief was not sufficient

ground to disrupt the stability of the bargaining relation-

ship. Consistent with other courts of appeal, the court held

petitioners’ claimed reasonable doubt could only be sus-

tained by objective facts showing a majority of their em-

6

ployees no longer desired Union representation. N.L.R.B.

v. Vegas Vic, Inc., 546 F.2d 828, 829 (9th Cir. 1976), cert.

denied, 434 U.S. 818 (1978) ; Terrell Machine Co. v. N.L.R.B.,

427 F.2d 1088, 1090 (4th Cir. 1970), cert. denied, 398 U.S.

929 (1970) ; Lodges 1746 & 743, 1.A.M. v. N.L.R.B., 416 F.2d

809 (D.C. Cir. 1969), cert. denied, 396 U.S. 1058 (1970).

As the court below stated:

“We hold the employer is free to act on the objective

grounds before him, regardless of his underlying mo-

tivation. If union support is lacking, the employer’s

action actually furthers the cause of employee demo-

cracy by overcoming the inertia which helps maintain

the status quo. Since the employer’s action is not in

derogation of employee rights, his subjective motiva-

tion is important only evidentially. In sum, when

challenging the union majority, good faith is demon-

strated if the employer is aware of the facts mani-

festing lack of union support and employer misconduct

did not contribute to the loss of support.” (footnotes

omitted )°

[Pet. App. 11-12]

Contrary to petitioners’ assertion (Pet. 8), neither of the

court of appeal’s grounds for excluding evidence of the

claimed unlawful initial recognition conflicts with the Sixth

Circuit’s decision in N.L.R.B. v, Dayton Motels, Inc., 474

F.2d 328 (6th Cir. 1973). In Dayton Motels, as in this case,

the court held that circumstances establishing an unfair

labor practice at the time of initial recognition of the union

could not “. . . constitute an attack on the validity of the

*In this case, the Board also found that petitioner Nevada Lodge

violated Section 8(a)(1) of the Act by announcing and granting

pay increases to induce employees to abandon support of the

nion. (Supp. App. 44, 81).

7

expiring agreement or on the presumption created thereby,

which attack was barred by Section 10(b) of the Act.” Zd.,

474 F.2d at 333. Consistent with the Ninth Cireuit and

other cases in that Circuit, it held that the employer must

show both reasonable grounds for doubting the union’s

majority status, and good faith in asserting that doubt.

Id., 474 F.2d at 330; Bally Case & Cooler, Inc. v. N.L.R.B.,

416 F.2d 902 (6th Cir. 1969); N.D.R.B. v. Washington

Manor Inc., 519 F.2d 750 (6th Cir. 1975). Nevertheless, the

court held, evidence of fraudulent procurement of author-

ization cards at the union’s initial recognition was material

to show the employer’s subjective good faith in refusing to

bargain. Id., 474 F.2d at 334.

Evidence of an employer’s subjective good faith could

be relevant where it had already established objective

grounds for doubting a union’s majority status. £.g.,

Bally Case & Cooler, Inc. v. N.L.R.B., supra. But the court

below held that petitioners had not established reasonable

grounds for doubting the Union’s majority status; peti-

tioners’ protestations of good faith were therefore immate-

rial, and the circumstances of initial recognition irrelevant :

“If, but only if, the employer can show the union’s

majority is truly in doubt, the situation confronted

is at the opposite end of the spectrum from the situa-

tion where the employer’s conduct is inherently de-

structive of employee rights. It follows that not only

is proof of anti-union motivation then unnecessary,

but it is immaterial to the charge. We emphasize,

however, that the employer must have ample evidence

in support of his doubt before we can condone this

assumption of the cause of employee democracy.”

[Pet. App. 11 n.24]

8

Consistent with the Sixth Circuit, therefore, the court be-

low held the evidence of subjective good faith inadmissible.

(Pet. App. 13)

The sole conflict between the decision of the court below

and Dayton Motels is, as petitioners assert (Pet. 10), a

difference of whether an employer’s proof of reasonable

good faith doubt serves as a complete defense, or whether

it merely shifts the burden of going forward to the General

Counsel. As the court below stated, “[s]Jince the General

Counsel usually relies’on the presumption alone, as he did

here, the distinction is primarily academic.” (Pet. App. 6).

The distinction is solely academic in this case, as petitioners

did not sustain their burden of rebutting the Union’s pre-

sumptive majority status:

II, The Court Of Appeal And The Board Properly

Assessed The Cumulative Impact Of Factors Claimed

To Support Petitioners’ Reasonable Doubt; Accord-

ingly, There Is No Conflict In Decisions Meriting

Review

Petitioners’ remaining contention is the repeated asser-

tion that the court of appeal and the Board refused to

consider the cumulative effect of the facts claimed to

support the companies’ reasonable doubt. (Pet. 5, 6, 11,

13, 14). That assertion simply has no basis in the record.

After analyzing each of the factors alleged by petitioner

Tahoe Nugget to support its reasonable _—* the Admin-

istrative Law Judge stated:

“After considering all of the factors set forth above,

I conclude that Respondent did not have substantial

and reasonable grounds for believing the Union had

9

lost its majority status. Respondent’s assertion in’ that

regard was based on subjective rather than objective

considerations.” (footnote omitted)

[Supp. App. 36]

The Administrative Law Judge analyzed the same cumula-

_tive impact with regard to petitioner Nevada Lodge. (Supp.

App. 77)

Similarly, the court below analyzed the cumulative effect

of each of the factors asserted by petitioners, in accordance

with explicit guidelines which the opinion set forth:

“When the Board looks to the cumulative force of

the evidence, the factors are reconsidered and weighed

against the force of the, presumption. If unexplained,

the cumulative inferential weight of these equivocal

factors might suffice to establish that the —— to

bargain was reasonable.“

: “*But we have found no cases in which the reasonable doubt

defense was sustained based solely on equivocal evidence.

Common to each case was the presence of at least one factor

clearly referable to a lack of majority support.”

[Pet. App. 21]

The court of appeal concluded that “[n]Jone of the evidence

is wholly referable to a decline in Union support within

the relevant units”, and therefore affirmed the Board’s de-

termination. (Pet. App. 28).

Petitioners are reduced to claiming the Board erred in

the evidentiary weight accorded each of petitioners’ as-

serted objective considerations, since it had previously

held similar factors—once established—sufficient to justify

a refusal to bargain (Pet. 14). In essence, this is a confes-

sion that petitioners have engaged in brinksmanship in

Pi Titi | ial

10

attempting to thwart collective bargaining among their em-

ployees. As another court of appeal stated in an analogous

context, “. . . one who engages in ‘brinksmanship’ may

easily overstep and tumble into the brink” Wausau Steel

Corp. v. N.L.R.B., 377 F.2d 369 (7th Cir. 1967). Peti-

tioners’ disagreement with the Board’s findings with re-

spect to the weight of the evidence does not merit review

by this Court. Universal Camera Corp. v. N.L.R.B., 340

U.S. 474, 490-491 (1951). Also, because such an evidentiary

determination turns on the totality of all the circumstances,

review of the Board’s findings cannot have a substantial

impact on other litigants.

CONCLUSION

For all the above reasons, as well as for the reasons

stated in the Brief For The National Labor Relations

Board in Opposition, the petition for a writ of certiorari

should be denied.

| Respectfully submitted,

Pur Pau Bowe

Grorrrey V. WHITE

351 California Street, Fourth Floor

Fourth Floor

San Francisco, California 94104

Counsel for Respondent Union

May 7, 1979