# Petition — Barney's Club, Inc. v. National Labor Relations Board > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385007_1057%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition - **Published:** January 1, 1981 - **Citation:** 452 U.S. 932 ## Text i rt'te 8Q-10838 JAN 2 1981 MICHAEL RODAK, JR., , CLERK In the Supreme Court of the United States OcroBer TERM 1980 Barney’s Cuvs, Ine. Petitioner, v. NaTIonaL Lasor ReEvations Boarp Respondent. Sparks Nuacet Ine. d/b/a Jonn AscuaGa’s NUGGET Petitioner, v. NaTionau Lasor RELATIONS Boarp Respondent. Petition for a Writ of Certiorari to the United States Court of Appeals for the Ninth Circuit Wituram W. Wertz 25th Floor One Embarcadero Center San Francisco, California 94111 415-398-3344 Counsel for Petitioners Counsel of Record Of Counsel: Severson, Werson, Berke & MELCHIOR 25th Floor One Embarcadero Center San Francisco, California 94111 SSS BORG PRINTING COMPANY OF CALIFORNIA, 346 FIRST STREET, GAN FRANCISCO 84i08 ~ i QUESTIONS PRESENTED 1. Whether there is a conflict between the refusal to bar- gain decision sought here to be reviewed and decisions on the same matter of federal law of other Courts of Appeals. 2. Whether the Court below was in error in holding that the National Labor Relations Board (the Board) may ig- nore federal law and N.L.R.B. v. Local U. 103, Int.’l Ass’n. etc., 434 U.S. 335 (1978), and for policy reasons establish a presumption based upon two other presumptions. 3. Whether the Board may establish a rebuttable pre- sumption to which is given mere lip service and which in actual practice as applied by it is an absolute and irrebut- table presumption resulting in denial of due process. 4. Whether the Board and the Court of Appeals were in error in holding that Petitioners’ no-solicitation rules are too broad under the National Labor Relations Act (the Act), notwithstanding the overriding interests of the State of Nevada in regulating its gaming industry where the State gaming regulations create “special circumstances” which make Petitioners’ broad rules permissible under the Act. 5. Whether the Board and Court of Appeals erred, cre- ating a conflict among the Courts of Appeal, by failing to consider alternative means of communication by the Union which would lessen the degree of “special circumstances” needed to uphold Petitioners’ no-solicitation rules. '% 7. SUBJ ECT INDEX Page Questions Presented ................... i Opinion Below 2 RAN To Sone ORE EE A 2 Constitutional and Statutory Provisions Involved ........ 2 Statement of the Case ..... 4 Reasons for Granting the Writ .....................- 6 The Decision Below Conflicts with the Decisions of Other Courts of Appeal and this Court as to the Ap- plication of the Presumption of a Union’s Continuing Majority Status ET Ee oer The Board’s Derivative Presumption Is Contrary to Federal Law, Labor Policy and Is Impermissible ..... The Board’s Presumption Is One of Irrebuttable Force and Constitutes a Denial of Due Process ...................... Special Circumstances Exist in the Nevada Gaming In- dustry Which Require Broad No-solicitation Rules and Make Such Rules Permissible Under National RET AR NT AT CITE Fe aE The Decision Below Conflicts With Other Courts of Appeal as to Consideration of Alternative Means of Communication by the Union; Those Means Existed Which Would Lessen the Degree of Special Circum- stances Needed to Support Petitioners’ No-solicita- I I i MEATS RR oe AN CORD ER PA moe, Appendix 12 14 19 TABLE OF AUTHORITIES CITED Pages Ariasi v. Orient Ins. Co., 50 F.2d 548, 582-554 (9th Cir. S| Se eA 7 Amalgamated Meat Cutters, etc., Local No. 36% v. N.L.R.B., 435 F.2d 668 (9th Cir. 1970) ....0222222. 28 Automated Business Systems v. N.L.R.B., 497 F.2d 262 (Gth Cir. 1976) ccc ceecccbeccdcncenee % ee Barney’s Club Incorporated, 227 NLRB 414 (1976) .... 2, 20 Bellwood General Hospital v. N.L.R.B., ......F.2d ........ Se ND sis vss deveialasshnsianpuitiiasdcuaciicaboeis 11 Diamond Shamrock Co. v. N.L.R.B., 443 F.2d 52 (3rd SIS PRM peek ai oat censclenomidalibibaabateo aateenebactebe 23, 25, 26, 27 | GTE Lenkurt Inc., 204 NLRB 921 (1978) .....0.00.2........ 23 Hall v. Atchison, Topeka & Santa Fe Railway Com- pany, 349 F.Supp. 326, 330 (D. Kan. 1972) ................ 14 Harvey’s Wagon Wheel, Inc. v. N.L.R.B., 550 F.2d DR Rs BPTI ictal aian tts ciconthsadsisehes poskudancbole 16 Hormel v. Helvering, 312 U.S. 552, 560, 61 S.Ct. 719, UE UR soc siicdiplictes bd sicckdeecptenipinedacoinubaiieecad tebekincnaeediaediioetide 16, 17 Ingress-Plastene, Inc. v. N.L.R.B., 430 F.2d 542 (7th I IIE isocratic sclenigc nce ics asa dnl oetioshguinonaleas Agua 11 Korn Industries, Inc. v. N.L.R.B., 389 F.2d 117 (4th gs |) EP UMRTIED PRCRDE ee MUURD bens ces COMET OSE He OURO a 26 Jim Kelley’s Tahoe Nugget, 227 NLRB 357, 363 2 | ROSA RERS TEAERER AIAN cro Meme saeD ResnEIS SP SC A ONORE 12,13 Local Lodge No. 1424 v. N.L.R.B., 362 U.S. 411 (1960)... 17 Linden Lumber Division, Summer & Co. v. N.L.R.B., GE IR COUN easiest ote ities eesabiiceconciacenillintios 18 Lodges 1746 & 743, Int. Ass’n of Mach. & Aero Wkrs. v. N.L.R.B., 416 F.2d 809 (D.C. Cir. 1969) ................ 11,12 Looney v. Metropolitan R. Co., 200 U.S. 480, 26 S.Ct. IR, I OD Aeshna ign ls calube sles nid cain aah iain 13 *% iv Pages Manhattan General E. Co. v. Commissioner of Int. Rev., 297 U.S. 129, 56 S.Ct. 397 (1936) ........2........-.-0- 17 Manning v. Insurance Co., 100 U.S. 693, 698 (1880)... 13 May Department Stores, 59 NLRB 976 (1944), enf’d as modified, 154 F.2d 533 (8th Cir. 1945), cert. denied, Re A as CRED hc iipcnsschsarcaimesdoniicinacinsuoisidatnoroaten 19 McDonnell Douglas Co. v. N.L.R.B., 47 2 F.2d 539 (8th RIA. PE OED: ikiilegh bce sbcrobcc pected ice * 21 National Cash Register Company v. N.L.R.B., 494 F.2d Se TI UES a a 11 National Steel Corp. v. N.L.R.B., 415 F.2d 1231 (6th Gy SRR RRE SRR 5S A ld a eee 26 N.L.B.B. v. Babcock & Wilcox, 351 U.S. 108 (1956) ....25, 26 N.L.B.B. v. Alvin J. Bart and Co., 598 F.2d 1267 (2nd Ss | Re Rar SP ean oh eM ON OORCY 1 AERoOOOO 8,9 N.L.R.B. v. Beth Israel Hospital, 437 U.S. 483, 98 S.Ct. Se eI ica heath dec insnsaiieatcatenaaindibnnniesetorinipecsnoqninsudiel 19, 27 N.L.R.B. v. Gissel Packing Co., 398 U.S. 575 (1969) ...... 18 N.L.R.B. v. Heyman, 541 F.2d 796 (9th Cir. 1976) ........ 17 N.L.R.B. v. Richard W. Kaase Company, 346 F.2d 24 EE, ___ | pa Ra AOS oe oo A SRP 10 N.L.R.B. v. LeTourneau Co. of Georgia, 324 U.S. 793 SITES lclasainicescn chen ihsdamhcdbcilasdies—abaeniieeacdosinaaiadidoniedetahehtonn 24 N.L.R.B. v. Local U. 103, Int’l Ass’n Bridge, ete., 434 i IE sists chim sebiicichibi heii cjeessbiabtatiatinitnidites 7,8 N.L.R.B. v. Magnavox Company of Tenn., 416 U.S. ERR IRERE TSC REA SSD ca Cree Ee Se 27 N.L.R.8. v. Nu-Southern Dyeing & Finishing, Inc., 444 po BS RE: 4 RRR Ss Peneiotrs SANS sO 12 N.L.R.B. v. Randle-Eastern Amb, Serv., Inc., 584 F.2d ee I iia RAID setcclabtaiid chi inceickstnniestaidShenckeielateinewets 10 N.L.R.B. v. Rockwell Mannfacturing Co. (DuBois Div.), 271 F.2d 109 (3rd Cir. 1959) .................... 24, 25, 26, 27 Pages N.L.R.B. v. Tahoe Nugget, Inc. and Nevada Lodge, 584 F.2d 293 (9th Cir. 1978), cert. denied, 442 U.S. 921. (1979) 6, 7 N.L.R.B. v. United Aircraft Corp., 324 F.2d 128 (2nd Cir, 1963) , z 2,6 N.L.R.B. v. United Steelworkers of America, 357 U.S. Sea) OO Wears NN CRD cisco ivsesctcndeeiedieece 21, 25, 26 Nevada Lodge, 227 NLRB 368, 374 (1976) a 12,13 Otis Elevator Company v. Yager, 268 F.2d 137, 144 (8th Cir. 1959) ........... 13 Peyton Packing Company, 49 NLRB 828 (1940) ........ 19, 26 Ref-Chem Company v. N.L.R.B., 418 F.2d 127, 130-131 NE RSI SARC RUC i Mn SOONER COO IO 7 Republic Aluminum Company v. N.L.R.B., 394 F.2d I I a ai acta en Sea wera Sabhllenincnine | 26 Republic Aviation Corp. v. N.L.R.B., 324 U.S. 793 a a ich aban daia he nla ns apieiomiibtanibanaiestionen 19, 26 Retired Persons Pharmacy v. N.L.R.B., 519 F.2d 486 I NS TN i al 15 J. W. Ringrose v. W & J Sloane, 266 F.2d 402, 404 (E.D. Pa. 1920), affd. 272 F. 445 (3rd Cir. 1921) ......13, 14 Sahara-Tahoe v. N.L.R.B., 533 F.2d 1125 (9th Cir. ER SR a AS 9c pe 7 Sahara-Tahoe Corp. v. N.L.R.B., 581 F.2d 676 (9th Cir. 1978), cert. denied, 442 U.S. 917 (1979) ............... 28 St. John’s Hospital and School of Nursing, Inc., 222 RES EA RE ASSP ce Oe ON 19 San Diego Trades Council v. Garmon, 359 U.S. 243 OC Se cee Ree Ce 23 Sears Roebuck & Co, v. Carpenters, 436 U.S. 180 (AEE ARR RR a i SR ee A 23 Smith v. Fidelity Casualty Company of New York, 261 F.2d 460, 462 (Sth Cir. 1966) nc enenacecccsesecsnsecencesee 13 ?-*. vi | Pages Smith v. Pennsylvania R. Co., 239 F. 103, 104 (2nd Cir. 1917) » 14 Sparks Nugget, Inc., 230 NLRB 275 (1977). 2, 20 Star Mfg. Co., Div. of Star Forge, Inc. v. N.L.R.B., 536 F.2d 1192, 1196 (7th Cir. 1976) idiahnttsachina 11 Teamsters, Local 24 v, Oliver, 358 U.S. 283 (1959)...... 23 Time-O-Matic v. N.L.R.B., 264 F.2d (7th Cir. 1959)... 26 US. v. Ross, 92 U.S. 281, 23 L.Ed. 707 (1876)................ 13 W & W Steel Co. v. N.L.R.B., 599 F.2d 934 (10th Cir. 1979) ah 9, 10 vii MISCELLANEOUS AUTHORITIES Pages U.S.C., Constitution, Amendment 5.... 2 28 U.S.C. § 1254(1) ............. ba 2 29 US.C.: ES) RRO, RETR aae Speen wr 3,5 Cae i sadeaattenenie A TDN SP dah 3 RIE te cso s coh neces liaiitonaiiipeseenensgiotaenhanteavoheinee 3,5 EN iieicsapeipcicscctnledssaduabhosnaaaiyestasbotceacteenelbcets 3,5 a a alpine 18 1 BRIDES ERTS a oat EAP eet esy BB) 3,5, 15 National Labor Relations Act, [61 Stat. 136, 73 Stat. 519, 29 U.S.C. § 151, et seq. ] I I ii iiss sodas snap ennepondidlininsoakansabacabiaieenalevens 13 I oa se dh cnainnasbeccoonbaion 13 TERRES iy BORE Alr Weacie WY BU ther ars ieee 13 EE ER CT ie VEE UR LT SRE: 13, 15 ESE RIDES cs SSD sear Pen Eom AAA 18 PGE EE EISSN ita ak a PRESETS COREE A et OD 13, 15 99 Comm Hee. SERB (1947 We. .nn..ekcncencereedocorssecccscesecesveetesh 18 Nevada Gaming Commission and State Gaming Control Board I I i stecnensbanehnmlaenbcabeseshiaainnesinod 22 IE pA RES Avan nr RA OER De 22, 23 RSA ones Maree IER 22 RS SE SEE S EDRRR Se oeae ONR TSE SOT SE 22 Nevada Gaming Control Act III oss. sarnsccnitcetnenspcgp viaeenaijinonenmiienniehapeanian ~- 22 as semble 22 ES TETANUS, SES ICO TORII 22 I i saci caahctnlaiscein late hdeensedintlaniiononibicieiuie 22 EI SIIIIIITTE 1. isciscoinn hanthnnielishcoheaehnentaisenvielins 22 McCormick, Evidence, § 309, p. 641-0202... eeceeeeeeeee 7 Federal Rules of Evidence, Rule 301 «2.20... ese 15, 16 Freedom of Information Act (5 U.S.C. § 551, et seq.) 16 In the Supreme Court of the United States Octoser Term 1980 Barney’s Cuvs, Inc. Petitioner, v. 7 NATIONAL Lasor Retations Boarp Respondent. Sparks Nuccet Inc. d/b/a JoHn Ascuaca’s NUGGET Petitioner, v. NaTIONAL LAspor RELATIONS BoarpD Respondent. Petition for a Writ of Certiorari to the United States Court of Appeals for the Ninth Circuit The Petitioners, BARNEY’S CLUB, INC. (Barney’s) and SPARKS NUGGET, INC. d/b/a JOHN ASCUAGA’S NUGGET (Sparks), respectively, pray that a Writ of Cer- tiorari issue to review the judgments and opinion of the United States Court of Appeals for the Ninth Circuit.' Judgment as to Barney’s was entered on August 18, 1980. Judgment as to Sparks was entered on September 12, 1980. 1. Hotel-Motel-Restaurant Employees and Bartenders Interna- tional Union, Local 86 AFL-CIO intervened in those proceedings. ae OPINION BELOW The opinion of the Court of Appeals is reported at 623 F.2d 571. A copy of the opinion appears in the Appendix hereto. The decisions and orders of the Board are reported at 227 NLRB 414 (Barney’s) and 230 NLRB 275 (Sparks). Copies of those decisions and orders appear in the Appendix hereto. JURISDICTION The opinion of the Court of Appeals was filed on May 27, 1980. A timely petition for rehearing with suggestion for rehearing en banc was denied on July 14, 1980. A copy of that order appears in the Appendix hereto. On August 18, 1980 judgment was entered as to Barney’s; and judgment was entered on September 12, 1980 as to Sparks. Justice Rehnquist on November 7, 1980 and November 26, 1980 granted timely applications by Barney’s and Sparks for filing their petitions to January 2 and 4, 1981, respectively. This Court’s jurisdiction is invoked under 28 U.S.C. § 1254(1). CONSTITUTIONAL AND STATUTORY PROVISIONS INVOLVED U.S.C., Constitution, Amendment 5: No person shall be held to answer for a capital, or other- wise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offence to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation. 3 United States Code, Title 29: § 158(a)(1): It shall be an unfair labor practice for an employer to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in section 7; § 158(a)(3): It shall be an unfair labor practice for an employer by discrimination in regard to hire or tenure of employment or any term or condition of employment to en- courage or discourage membership in any labor organiza- tion;... § 158(a)(5): It shall be an unfair labor practice for an employer to refuse to bargain collectively with the repre- sentatives of his employees... § 160(b): Whenever it is charged that any person has engaged in or is engaging in any such unfair labor practice, the Board, or any agent or agency designated by the Board for such purposes, shall have the power to issue and cause to be served upon such person a complaint stating the charges in that respect, and containing a notice of hearing before the Board or a member thereof, or before a desig- nated agent or agency, at a place fixed, nor less than five days after the serving of said complaint: Provided, That no complaint shall issue based upon any unfair labor practice occurring more than six months prior to the filing of the charge with the Board and the service of a copy thereof upon the person against whom such charge is made... Any such proceeding shall, so far as practicable, be conducted in accordance with the rules of evidence applicable in the dis- trict courts of the United States under the rules of civil pro- cedure for the district courts of the United States, adopted by the Supreme Court of the United States... | 4 STATEMENT OF THE CASE From 1960 to December 9, 1974, Sparks was a member of a multi-employer group known as the Reno Employers Council (Council). From an unspecified date in the period between 1963 to 1965 through August 30, 1974, Barney’s was a member of the Council. By August 30, 1974 and December 9, 1974, Barney’s and Sparks respectively had withdrawn their memberships from the Council. During their membership, each Petitioner was represented by the Council in collective bargaining and were parties to the Council’s multi-employer collective bargaining agreement with Local 86 of the Hotel-Motel-Restaurant Employees In- ternational Union (the Union). Thereafter, each Petition- er’s status was that of a single employer unit. Based upon certain information which came to their re- spective attention, the managers of each Petitioner had a good faith doubt as to whether the Union continued to rep- resent a majority of their employees. This prompted the withdrawal from the multi-employer unit. There had never been a representation election, either in the larger unit or the individual units. By letter, on the dates mentioned, each Petitioner informed the Union of its withdrawal from the Council and the multi-employer unit, and that they were terminating the existing collective bar- gaining agreement effective as of its end of the term. Subsequently, the Union’s attorney wrote each Peti- tioner requesting that individual bargaining take place. Petitioners’ attorney responded on behalf of each that they had a genuine doubt that the Union represented an un- coerced majority in an appropriate unit and urged the Un- ion to petition for an election to demonstrate whether in fact they represented a majority. Petitioners, through their attorney, also offered to cooperate to expedite an election. - = 5 The response of the Union was to file a refusal to bargain and other charges against each Petitioner. Thereafter, a complaint issued and each matter was heard before an Administrative Law Judge. Barney’s was heard by Judge Taplitz and the Sparks was heard by Judge Gilbert. Before these trials and before the Regional Director issued the complaints, Petitioners filed petitions for separate unit elections. The Regional Director refused to process them on the ground that the charges blocked such elections. The Union refused to withdraw the charges or to proceed to an election. In Barney’s Judge Taplitz concluded that by refusing to bargain and by promulgation and enforcement of its no- solicitation rules, Barney’s violated the National Labor Re- lations Act (the Act) [29 U.S.C. $§ 158(a)(1) and (5)]. In Sparks, Judge Gilbert concluded that by refusing to bar- gain, by promulgation and enforcement of its no-solicitation rules, creation of an employees council, unilateral insurance progran. changes and disciplining employees Launius and Dyer, Sparks had violated the Act. [29 U.S.C. §§ 158(a)(1), (2), (3) and (5)]. Both judges’ refusal to bargain findings were based upon a presumption that the Union continued to represent a majority of each Petitioners’ employees by reason of the multi-employer unit and that by derivation the presumption applied to the new single employer units. Each judge concluded that Petitioners had not rebutted the presumption, notwithstanding the plethora of evidence Peti- tioners presented or attempted to present to rebut the so- called rebuttable presumption. Both judges also found Petitioners’ no-solicitation rules too broad and refused to apply the “special circumstances” doctrine which would have validated such rules under the Act. 6 A three-member panel of the Board affirmed Judge Tap- litz in Barney’s. A different three-member panel affirmed Judge Gilbert in Sparks, but modified his determinations as to the Sparks employees council. The Court below en- foreed the Board orders in both cases with modification regarding the no-solicitation rules. Review and reversal of the erroneous findings of both judges, the Board and Court below is sought by Petitioners regarding their no-solicita- tion rules and their refusal to bargain with the Union. REASONS FOR GRANTING THE WRIT The Decision Below Conflicts with the Decisions of Other Courts of Appeal and this Court as to the Application of the Pre- sumption of a Union's Continuing Majority Status. The decision of the Court below is in conflict with the Second, Fourth, Fifth, Sixth, Seventh, Eighth, Tenth and District of Columbia Circuits as well as this Court. The Court below concedes: _ “We recognize the force of [petitioners] contention that the Board has accorded too much weight to the presumption in these cases. This issue involves an im- portant and difficult question which is of current na- tional interest in the labor relations field, [Petitioners] cite cases in other circuits which may ‘ave found the presumption rebutted upon similar or even weaker evidence than was presented in these cases. (fn.) [The footnote cites the cases from the eight other Circuits.]” (Emphasis added, App. pp. 14-15) Further, the Court below “accept[ed] arguendo that a con- flict exists on the issue” (App., p. 15). Petitioners urge, as do petitioners in companion Case No. 80-660 pending before this Court, that N.L.R.B. v. Tahoe Nugget, Inc.,d/b/a Jim Kelley’s Tahoe Nugget and Nevada Lodge, 584 F.2d 293 (9th Cir. 1978), cert. denied, 442 U.S. 921 (1979) and Sahara-Tahoe Corp, v. N.L.R.B., 581 F.2d 7 767 (9th Cir. 1978), cert. denied, 442 U.S. 917 (1979), should not control this Court’s determination, The instant Petition discloses that as opposed to the Tahoe Nugget, Nevada Lodge and Sahara-Tahoe decisions, the instant cases in- volve separate issues.? The conflict conceded by the court here was not conceded in those earlier decisions, This “im- portant and difficult question . . . of current national inter- est” warrants the careful attention and consideration of this Court. In adopting the Board’s presumption approach, the Court below ignored its own precedent, Ariasi v. Orient Ins. Co., 50 F.2d 548, 552-554 (9th Cir. 1931) in which the Court held that a presumption is not evidence and has no pro- bative force. Yet, the Court below based its approval of the Board’s hydra-headed presumption on policy consid- erations. Appendix p. 15. Policy considerations cannot override the law. The principal reason courts recognize a presumption is probability. Ref-Chem Company v. N.L.R.B., 418 F.2d 127, 130-131 (5th Cir. 1969) ; MeCormick, Evidence, § 309, p. 641. Even if policy considerations are to control then this Court’s decision in N.U.R.B. v. Local U, No. 103, International Ass’n of Bridge, Structural and Ornamental Iron Workers, AFL-CIO, 434 U.S. 355, 54 L.Ed. 586, 98 S.Ct. 65 (1978) should prevail, Clearly, the lower court and Board determinations are in conflict with that case. In Local U. No. 103 this Court upheld as “prevailing” the federal: “statutory policy that a union should not purport to act as collective bargaining agent for all unit em- ployees, and may not be recognized as such unless it is 2. Justice White would have granted certiorari in Tahoe Nugget and Nevada Lodge. 442 U.S. 921. Further, several cases cited by the lower court here were not decided at that time. See, e.g., W & W Steel v. N.L.R.B., 599 F.2d 934 (10th Cir. 1979). § the voice of the majority of employees in the unit” 434 US. at 344 (Emphasis added). Here, the “voice of the majori‘~-” has been silenced by the Board, The evidence which the Board, with Court approval, ignored included: (1) that the Union through its trustee publicly stated the Union represented only 20% of the em- ployees in the Tahoe-Reno area, (2) statements by employees that they were dissatisfied with the Union, (3) the Union mounted a desperate membership drive while they were demanding continuing recognition, (4) high employee turnover, (5) reports of employees dissatisfac- tion with the Union, (6) reports of the Union’s inactivity, (7) no dues checkoff, (8) low level of membership among Petitioners’ employees, (9) there never had been a repre- sentation election, (10) the Union had never been certified, (11) admissions by the Union’s representative of the Union’s lack of support, and (12) the change from a multi- employer unit to a single employer unit. (App. pp. 57-60; 122-126) In Barney’s the Union’s ex-president Mr. Staff testified that the Union’s membership was decreasing in 1974. Further, Staff testified that none of its members or employees of Barney’s or any Lake Tahoe establishment attended a meeting of the Union in the spring of 1974 re- garding the expiring coatract and decreasing membership (App. pp. 57-60). In N.L.R.B. v. Alvin J, Bart and Co., 598 F.2d 1267 (2nd Cir. 1979) the Second Circuit rejected the Board’s use of the presumption of majority status in factual circumstances substantially weaker than those relied upon by the Peti- tioners here. The Union had prevailed in a Board conducted election. After almost two vears of bargaining without agreement, the company withdrew recognition. A super- visor circulated a petition among three-fourths of the em- 9 ployees, stating that they did not want the union to have their names and addresses. The company then refused — to provide the union with the names and addresses of employees and unilaterally granted substantial wage in- creases. Despite these Board findings, the Court found that the company had a “serious good faith doubt of the union’s majority.” In so ruling, the Court relied upon the closeness of the vote, the large turnover in employees, and a statement by a union official of the lack of support from employees. Here, each Petitioner relied on factors similar to those in Alvin Bart, as well as several additional factors. In W & W Steel Co. v. N.L.R.B., 599 F.2d 934 (10th Cir. 1979), the situation is on all fours with the instant cases. Here, the Petitioners properly withdrew from a multi-em- ployer unit and each became a separate, independent unit. In W & W Steel, the employer bought a single plant which was part of a multi-plant unit. It questioned the union’s majority status in the single plant. The union and the Board took the position, as in the instant cases, that the union’s majority in the single plant was presumed to exist because the union had been certified as the bargaining rep- resentative following an election in the multi-plant unit. The Tenth Circuit found the emplover had a reasonable doubt of the union’s majority status and denied enforce- ment of the Board’s bargaining order. The Court pointed out that the election in the multi-employer unit had taken place two years and seven months before the employer’s takeover of the plant. In the instant cases, there never was an election in any unit. Each Petitioner here joined an employer association many vears ago and by reason there- of automatically became a party to a multi-employer con- tract between that association and the Union. Even the dissent in W & W Steel recognizes the conflict among the circuits “acknowledg[ing] that this presumption ’*% | 10 has not received universal acclaim”, and cites V.U.R.B. v. Tahoe Nugget, Inc., 584 F.2d 293, n. 4, (9th Cir. 1978), which the Court below relied on principally to summarily enforce the Board orders. The majority in W é W Steel place the Tenth Circuit with the Second, Fourth, Fifth, Sixth, Seventh, Eighth and District of Columbia Circuits, and contrary to the Ninth, holding that a Board-created pre- sumption doesnot rise to the level of substantial evidence. The Fifth Cireuit in N.U.R.B. v. Randle-Eastern, 584 F.2d 720 (5th Cir. 1978) held, denying a bargaining order: “The Company need not have conclusive proof that a majority of the employees do not support the Union . . . » The Board’s determination otherwise rested on presumptions we deem inapplicable, on the rejection of inferences we consider permisible, and on an assump- tion that Union’s loss of support, if any, [was based on factors] we have determined to be entirely lawful.” at 729-730. The Sixth Circuit in N.L.R.B. v. Richard W. Kaase Company, 346 F.2d 24 (6th Cir. 1965), in dealing with the presumption of a union’s continuing majority status, held that withdrawal from a multi-employer unit invalidated the presumption. The Court said there could be no pre- sumption of continuance of a union’s majority status as to a single employer after a year following certification of the union in a multi-employer election of which the employer had been a part. The Court held that before the Board could find the employer in violation of the Act by its refusal to bargain, it must find that at the time of the refusal the union in fact enjoyed a majority status. This burden of proof, said the Court, was upon the General Counsel. It was there stated (at 31): .. . the ambiguity inherent in the multi-employer election here relied on vitiates its efficacy to prove a majority as to any single employer. Before the con- 11 tinuance of the fact of majority support can be pre- sumed, the original existence of that fact must be established. In Ingress-Plastene, Inc. v. N.L.R.B., 430 F.2d 542 (7th Cir. 1970), denying enforcement, the Seventh Circuit in con- sidering the objective considerations which there led the employer to question the union’s continuing majority status, said (at 547): Although the Board attacks each of the reasons advanced by the company in support of its good faith doubt of the union’s majority status, the company does not rely on any one reason alone, but rather on all as a whole. We think the entire record, including evidence against the Board’s position as well as in favor of it . Supports the company’s position. Similarly, Star Mfg. Co., Div. of Star Forge, Ine. v. N.L.R.B., (7th Cir. 1976) 536 F.2d 1192, 1196. See also Bell- wood General Hospital v. N.L.R.B., .... F.2d ...., (7th Cir. 1980) [No. 79-1818 decided Aug. 11, 1980] where the Court denied enforcement of a Board refusal to bargain order where the employer showed evidence of good faith doubt | shifting the burden to the General Counsel, and the General Counsel could not establish the union’s majority status. The Eighth Circuit in National Cash Register Company v. N.L.R.B., 494 F.2d 189 (8th Cir. 1974) reversed a finding of refusal to bargain and denied enforcement, holding the employer on the collective basis of four factors could raise a question as to the union’s majority status. The District of Columbia Circuit in accord with the Second, Fourth, Fifth, Sixth, Seventh, Eighth and Tenth Circuits, held an employer who relied upon the cumulative effect of multiple objective considerations, properly raised a good faith doubt as to the union’s majority status. Lodges *>* 7% 12 1746 & 743, Int, Ass’n, of Mach. & Aero. Wkrs. v. N.L.R.B., 416 F.2d 809 (D.C. Cir. 1969) .* The Board's Derivative Presumption Is Contrary to Federal Law, - Labor Policy and Is impermissible. The Board in the instant cases adopted its earlier fash- ioned so-called derivative presumption, based on the errone- ous rationale of the Judge Taplitz, whose brainchild it was: However, I believe that the presumption of con- tinued majority flowing from the muJt:-employer con- tracts requires a derivative presumption of the Union’s majority status which is applicable to each of the em- ployer-members of the multiemployer bargaining unit separately. Jim Kelley’s Tahoe Nugget, 227 NLRB 357, 363 (1976) ; Nevada Lodge, 227 NLRB 368, 374 (1976). [Emphasis added] Dissenting Board member Walther attacked this novel and legally contrary approach, stating: I take issue with my colleagues’ conclusion that the presumption of majority status flowing from the con- tract in the multi-employer unit survives Petitioners’ timely withdrawal from that unit. By a process resem- bling alchemy, my colleagues have concocted the exist- ence of majority status with only the thinnest support in legal reason and have, in complementary fashion, ignored valid distinctions between the presumptions applicable to single-employer and multiemployer units. e e a 3. See also N.L.R.B. v. Nu-Southern Dyeing & Finishing Inc., (4th Cir. 1971) 444 F.2d 11, where the Board refused to consider an anti-union petition signed by a majority of employees on the ground that the anti-union petition was the result of the employer’s 8(a)(1) violations. The Court held that there were factors other than the anti-union petition, which when viewed in their combined effect, established that the company “possessed a good faith doubt of + aie majority status at the time of the refusal to bargain”’ (at 16). °’.. 13 [C]iting cases which deal with the presumption of majority status in single-employer units, construct two entirely distinct and severable presumptions which in turn give birth to yet a third presumption. Starting with (1) a valid presumption of majority status in the . multiemployer relationship, they turn back, and (2) interweave a second presumption of former majority status in the single-employer unit based upon the 10(b) prohibition against finding conduct which occurred years ago to be unlawful. From the interweaving of these two presumptions the majority manages to con- ceive yet a third presumption of current majority status in the single-employer unit which otherwise has no basis in fact or in logic. While I do believe that the Board can and should base violations of Section 8(a)(5) upon legitimate legal presumptions, a viola- tion predicated upon a presumption raising not out of fact but out of the intermarriage of two other pre- sumptions is, in my view, not a proper basis upon which to establish a violation. Jt must never be for- gotten than an 8(a)(5) finding effectively prevents employees from exercising their right to a free choice im the selection of a collective-bargaining represen- tative—a right these employees have never had an opportunity to exercise. Jim Kelley’s Tahoe Nugget, 227 NLRB at 358; Nevada Lodge, 227 NLRB at 368. (Emphasis added) Early on this Court held that a presumption cannot be built upon another presumption. U.S, v. Ross, 92 U.S. 281, 23 L.Ed. 707 (1876); Manning v. Insurance Co., 100 U.S. 693, 698 (1880); Looney v. Metropolitan R. Co., 200 U.S. 480, 26 S.Ct. 303, 306 (1906). Since then many Courts of Appeais have so similarly held. Otis Elevator Company v. Yager, 268 F.2d 137, 144 (8th Cir. 1959) ; Smith v. Fidelity Casualty Company of New York, 261 F.2d 460, 462 (5th Cir. 1968); J. W. Ringrose v. W & J Sloane, 266 F.2d 402, 404 i 14 (E.D. Pa., 1920), affd, 272 F. 445 (3rd Cir., 1921) ; Smith v. Pennsylvania R. Co., 239 F. 103, 104 (2nd Cir. 1917); and Hall v. Atchison, Topeka & Santa Fe Railway Company, 349 F.Supp. 326, 330 (D. Kansas, 1972). The Board here has gone even beyond basing a presump- tion upon a presumption. As Board member Walther points out, the Board has given “birth to yet a third presumption.” 227 NLRB at 358 and 368. The Board’s entire case and its conclusions, wh *h the Court below followed, rest upon a presumption upon a presumption upon a presumption. The Board and the Court below treated its triple headed pre- sumption as evidence. Without it, the Board had no basis for its conclusion. The Board's Presumption Is One of Irrebuttable Force and Con- stitutes a Denial of Due Process. Petitioners sought to introduce evidence from the Board and the Union which would demonstrate that the Union did not in fact represent a majority of their respective employees. The Board rejected this evidence and the Court summarily affirmed the Board on this issue but for different reasons. Through Board agent Sargent, who had reviewed the Union’s records and informed Petitioners’ counsel the Union’s charges would be dismissed, Petitioners sought evi- dence of the Union’s actual loss of majority. The judges and Board rejected such attempts but the Court concluded the judges rulings were erroneous, (App. 11). Yet, the Court concluded such error was harmless because Sargent’s evi- dence was privileged. (App. 11-12) Through Union agent Lawrence, Petitioners sought access to the Union’s records to determine the existence of any 15 majority status. The Board refused access or any related questioning, the Court disagreed in part, stating: “We affirm the Board’s decision, but on a different basis. The Board cited Retired Persons Pharmacy v. NLRB, 519 F.2d 486, 491 (2d Cir. 1975), for the propo- sition that union membership is irrelevant to the deter- mination of a union’s majority status. We do not agree. It is true that in a right-to-work state an employee may choose not to join a union, but, nevertheless, desire union representation. However, this observation does not render union membership irrelevant to a determin- ation of whether an employee had a reasonable doubt of the union’s majority or whether the union in fact lacked majority support. Union membership, even ‘in a right-to-work state, is some indication of union sup- port, though it may be only marginally relevant.” [Citations omitted] (App. pp. 12-13) Notwithstanding this analysis, the Court, by sheer specu- lation, concluded that even with such evidence which was exclusively controlled by the Union, “the presumption would not have been rebutted” (App. p. 13) by Petitioners. This reasoning is plainly wrong. The Board is bound to follow the “rules of evidence applicable to district courts” (29 U.S.C. 160(b)). The Board, with Court approval here, has prevented Petitioners from submitting any evidence making the so-called rebuttable presumption conclusive in application and impermissably shifting the burden of proof to Petitioners. | Rule 301 of the Federal Rules of Evidence provides: In all civil actions and proceedings not otherwise pro- vided for by Act of Congress or by these rules, a pre- sumption imposes upon a party against whom it is directed the burden of going forward with the evidence to rebut or meet the presumption, but does not shift ’ > | 16 to such party the burden of proof in the sense of the risk of nonpersuation, which remains throughout the trial wpon the party upon whom it was originally cast. [West’s 1979 ed. p. 210, (Emphasis added) | In Automated Business Systems v. NLRB., 497 F.2d 262 (6th Cir. 1974) denying enforcement of a Board bar- gaining order based upon the presumption of continuing majority status the Court held at 271: The Board would not permit the Company to introduce evidence regarding the number of cards filed in support of the decertification petition. Thus the Board puts the burden of proof on the employer and then denies it the means of meeting its burden. We cannot accept this procedure. (Emphasis added) But the Board and the Court below have denied the Petitioners access to evidence bearing on the Union’s majority status and imposed an insurmountable burden of proof on each Company.‘ In defining administrative due process, this Court said in Hormel v. Helvering, 312 U.S. 552, 560, 61 S.Ct. 719, 723 (1941): Congress has entrusted the Board with exclusive authority to determine disputed facts. Under these circumstances we do not feel that petitioner should be foreclosed from all opportunity to offer evidence be- fore the Board on this issue... Despite this Conrt’s mandate, Petitioners here were fore- closed by the Board’s rejection of their proffered evidence and by the Board’s application of its presumption, which 4. Each Company, under the Freedom of Information Act (5 U.S.C. § 551, et seq.) sought production of documents from the Board bearing on this. The Board refused. For a history of these attempts by each Company to obtain such information, see Harvey's Wagon Wheel, Inc. v. N.L.R.B., 550 F.2d 1139 (9th Cir. 1976). 17 made the presumption one of “irrebuttable force.” This brings into play the issue of due process. The Court below, in an earlier decision, citing with approval this Court’s opinion in Hormel v. Helvering, supra, stated in N.L.R.B. v. Heyman, 541 F.2d 796 (9th Cir. 1976) at 801. As a statute creating a presumption which operates to deny a fair opportunity to rebut would not afford due process ...a Labor Board presumption to the same effect would also suffer shortcomings. Also in Heyman, supra, the Court below held (at 801): .. » by coupling § 10(b) with the presumption the Labor Board would create an irrebuttable presumption having the substantive law effect that was rejected in Local Lodge. (Local Lodge No. 1424 v. N.L.R.B., 362 U.S, 411 (1960).] This Court examined the matter of an irrebutable pre- sumption, hence one of substantive law, in Manhattan Gen- eral E. Co. v. Commissioner of Int. Rev., 297 U.S. 129, 56 S.Ct. 397 (1936) and declared (297 U.S, at 134): The power of an administrative officer or board to administer a federal statute and to prescribe rules and regulations to that end is not the power to make law, for no such power can be delegated by Congress .. . From the Union ex-president’s admissions of lack of majority status, its trustee’s public concessions that “less than 20 percent of the Reno-Tahoe area is unionized” with 11 other areas of evidence disclosing the clear lack of Union majority status to Petitioners’ unsuccessful attempts to produce documents and other evidence from the Board and Union of further support to the conclusion that the Union lacked any majority status, Petitioners met a stone wall. 74% -*% 18 The result was a conclusive presumption created by Board fiat and adopted by the Court below in contravention of federal labor law, federal evidence rules and funda- mental rights of due process. By this conclusive presump- tion, upon which the Union’s unfair labor practice charges were solely based, the Board permitted such charges to block Petitioners’ attempts for single-union elections. The statutory right of an employer to seek an election under Section 9(c) of the NLRA [29 U.S.C. § 159(c)] was abro- gated here by such Board fiat and the lower Court’s approval. This result is diametrically opposed to the Congressional purpose of Section 9(c), “which gives [the employer con- fronted with a claim for recognition or a claim of majority support] the right to go to the Board and say, ‘IT want an election. I want to know who is the bargaining agent for my employees.’ ” 93 Cong. Rec. 3838 (1947) (Remarks of Senator Taft). Accord, Linden Lumber Division, Summer & Co. v. N.L.R.B., 419 U.S. 301, 308, 95 S.Ct. 429, 433 (1974). In N.L.R.B. v, Gissel Packing Co., 395 U.S. 575, 89 S.Ct. 1918 (1969), this Court emphasized that the most traveled route for a union to obtain recognition as the exclusive bargaining representative : ... is through the Board’s election and certification procedures under §9(c) of the Act [29 U.S.C. § 159 (c)] The Board itself has recognized, and continues to do so here, that secret elections are generally the most satisfactory indeed the preferred—method of aacer. taining whether a union has majority support. (FEm- phasis added.) (395 U.S. at 602) In short, the presumption abrogates the Petitioners’ statutory right, to paraphrase Senator Taft, “to know who is the bargaining agent for [their] employees.” 19 Special Circumstances Exist in the Nevada Gaming Industry Which Require Broad No-solicitation Rules and Make Seach Rules Permissible Under the National Labor Relations Act. It is .2ttled that while the Board may establish certain presumptions regarding the validity of no-solicitation rules, special circumstances may exist in an industry which over- come the presumption that certain no-solicitation rules are illegal. Republic Aviation Corporation v, N.L.R.B., 324 US. 793, 65 S.Ct. 982 (1945). Thus, special needs associated with maintaining “production or discipline” may support the establishment of a broad no-solicitation rule in certain industrial settings. Peyton Packing Company, 49 NLRB 828, 844, cited with approval in Republic Aviation Corpo- ration v. N.L.R.B., swpra, at 803 n. 10. Additionally, the Board and the courts have recognized the appropriateness of special broad rules regarding no solicitation by employ- ees in retail establishments, May Department Stores, 59 NLRB 976 (1944), enforced as modified, 154 F.2d 533 (8th Cir.), cert. denied, 329 U.S. 725 (1946), and in certain health care operations. St. John’s Hospital and School of Nursing, Inc., 222 NLRB 1150 (1976); N.L.R.B. v. Beth Israel Hos- pital, 437 U.S. 483, 98 S.Ct. 2463 (1978). The Court below recognized but failed to apply these principles. (App., pp. 15-19) Petitioners submitted to the Board and Court of Appeals, below, evidence that the Nevada gaming industry requires a specialized set of rules regarding in-house employee solie- itation because State rules mandate that gaming operators maintain strict control over, and security in, their estab- lishments. Neither the Board nor the Court of Appeals, however, addressed these “special circumstances” which Petitioners showed exist in the gaming industry. In Barnevy’s, Judge Taplitz, as affirmed by the Board, merely noted that gaming enterprises are analogous to 20 retail stores in that they directly serve the public. He then mechanically applied Board doctrine regarding no-solicita- tion rules in general retail establishments. He did not con- sider the evidence that gaming establishments closely con- trolled by State regulations, require more finely specialized rules regarding no solicitation which are specially fitted to the specialized interests and needs of the gaming industry. Similarly, in Sparks, Judge Gilbert, as affirmed by the Board, failed to balance Sparks’ evidence that special cir- cumstances exist in the state-regulated gaming industry which require broad no-solicitation rules. Rather, the Judge summarily concluded that the rule was not necessary for production, safety or discipline. The Ninth Cireuit enforced, with modification, the Board’s orders regarding Petitioners’ no-solicitation rules, but also failed to address Petitioners’ evidence that special circumstances in the gaming industry support special no- solicitation rules. The Court of Appeals also simply applied general retail establishment no-solicitation doctrine stating: In Barney’s Ciub and Sparks Nugget, the respondent employers are engaged primarily in the direct service of customers through their gambling, restaurant and bar facilities. There is no contention any of these facil- ities serve primarily as employee-service areas, Thus, under the previously discussed precedent, the respond- ents could promulgate no-solicitation rules which pro- hibited employees from engaging in solicitation or dis- tribution of materials in areas open to the public even during non-working periods. We agree with the Board, though, that the rules pro- mulgated by respondents were overly broad and thus invalid. (App. pp. 18-19) Thus, the Board and the Court below completely failed to address the evidence submitted by Petitioners which 21 establishes the need for even more specialized no-solicita- tion rules for the gaming industry than those established for general retail operations, Neither the Board nor any court has indicated that the specialized rules for general retail operations or health care institutions provide the exhaustive list of specialized circumstances, or that new exceptions cannot be created in other types of industries. On the eontrary, this Court unequivocally declared in N.L.R.B. v. United Steelworkers of America, 357 U.S. 357, 363, 78 S.Ct. 1208 (1958), that “mechanical answers” are of no avail “for the solution to this nonmechanical, complex problem in labor management relations.” The Third Circuit Court of Appeals aptly instructed in N.L.R.B. v. Rockwell Manufacturing Co., 271 F.2d 109, 115 (3rd Cir. 1959): This is not to say that the Board could not apply a presumption of invalidity to the no-distribution rule. But the burden of proving the unfair labor practice is on the charging party, In order to determine whether the respondent had justified its rule the Board is com- pelled to examine all of the evidence, If respondent is entitled to justify its rule, the Board must examine respondent’s evidence. (Emphasis added) Accord, McDonnell Douglas Corporation v. N.L.R.B., 472 F.2d 539 (8th Cir. 1973). By failing to properly address Petitioners’ evidence of “special circumstances”, the Board, as incorrectly supported by the Court of Appeals, in effect changed the Board’s no-solicitation doctrine into an irrebut- table presumption and impermissibly encroached upon the overriding interests of Nevada to regulate its gaming industry. Nevada is extensively regulated by over 150 separate statutory provisions of the Nevada Gaming Control Act 7% >. 22 and by over 225 regulations and subregulations of the Nevada Gaming Commission and State Gaming Control Board. Review of these provisions indicates the gaming operators are carefully licensed and closely regulated in the public interest of the State of Nevada. (Nevada Gaming Control Act, Chapter 463.130) Any breach of a statutory provision or of a Gaming Board or Commission regulation can be grounds for loss of an operating license. (Gaming Commission and Gaming Control Board Regula- tion Section 5.010) The State also requires that gaming operation employees are to be closely regulated and are expected to maintain a high degree of integrity in light of their sensitive employment position. (Gaming Control Act, Chapter 463.335) Accordingly, all gaming employees must be licensed and fingerprinted. (Reg. 5.100) Cheating by an employee is not only grounds for loss of the em- ployee’s license, it can also be grounds for severe penalty against the gaming operator/employer. (Gaming Control Act, Chapter 463.337 :Reg, 5.011) State statutory provisions and administrative regulations further authorize the total exclusion of certain individuals from gaming operations whose association would not be in the interest of the in- dustry or the State. (Gaming Control Act, Chapters 463.151- 155) Gaming operators are under an affirmative obligation to keep their premises free of other individuals whose presence and association are inimical to the public interests. (Gaming Control Act, Chapter 463.151(3) ) A broad no-solicitation rule in gaming establishments the general public is necessary to police activities in gaming operations as required by the State of Nevada. Regulation 5.011(1) states that a gaming operator may be disciplined for the “failure to exercise discretion and sound judgment to prevent incidents which might reflect on the repute of 23 the state of Nevada and act as a detriment to the develop- ment of the industry.” (Emphasis added.) Petitioners is- sued the instant off-shift employee no-solicitation rules in accord with these strict State regulations. Nevada’s laws intensively regulating the gaming industry, which necessitate Petitioners’ broad no-solicitation rule, are established in the interests of the health, safety, and morals of the citizens of the State of Nevada. Where the interests of a state are not in full accord with federal labor law doctrine, the interests of the State are not always to be ignored or preempted. Rather, this Court has indicated that states can regulate in areas where there is “an overriding state interest”, San Diego Trades Council v. Garmon, 359 U.S. 243 (1959), and has also indicated that local health and safety regulations are entitled to some deference. Team- sters, Local 24 v. Oliver, 358 U.S. 283 (1959). Regulation of gaming operations is clearly an overriding State and local concern, and here the State regulations necessitating the Petitioners’ broad no-solicitation rules are based on health, safety and public interest. Additionally, Petitioners’ rules, based on the State’s regu- lations, only constrict the organizational rights of off shift employees who the Board and the courts have indicated should be treated as nonemployee solicitors. GTE Lenkurt, Inc., 204 N.L.R.B. 921 (1973); Diamond Shamrock Co., v. N.L.R.B. 443 F.2d 52 (3rd Cir. 1971). This Court has recently upheld a state court application of state tres- passing laws even though those laws had some limiting effect on the arguably protected organizational rights of nonemployees. Sears, Roebuck & Co. v. Carpenters, 436 U.S. 180 (1978). Accordingly, deference to the State gaming statute here by the Board in determining whether “special circumstances” exist is clearly proper. By refusing to consider “special circumstances” here, the ’*% - ' 24 Board with Court approval, violated Petitioners’ rights to due process by creating an irrebuttable presumption. Accordingly, absent overturning the lower court and the Board completely, these actions should be remanded to the Board to allow a proper examination of whether “special circumstances” exist which support Petitioners’ no-solicita- tion rules. The Decision Below Conflicts With Other Courts of Appeal as to Consideration of Alternative Means of Communication by the Union; Those Means Existed Which Would Lessen the Degree of Special Circumstances Needed to Support Petitioners’ No- solicitation Rules. The Board and Ninth Circuit also failed to consider whether alternative means of communication, other than after shift in-house solicitation, existed by which the Union could advance its message. Several circuit courts of appeal have found that alternative methods of communication must be considered in determining the degree of “special cireum- stances” needed to be shown by an employer in support of a non-solicitation rule limiting employees’ rights to engage in in-house solicitation. Alternative means of communication as a necessary con- sideration in determining the validity of an employee no- solicitation rule was first required in N.L.R.B. v. Rockwell Manufacturing Company, supra, see particularly 271 F.2nd at 113-118 (3rd Cir. 1959). The Third Circuit’s well-reasoned analysis of was based upon three of this Court’s decisions, including Republic Aviation Corporation v. N.L.R.B., supra, which was decided together with N.L.R.B. v. Le Tourneau Company of Georgia. The Court noted that in the Le Tour- neau case the Board had specifically found that the isolated nature of the plant made direct contact with employees away from the plant “extremely difficult”. 25 . The second case, N.L.R.B. v. Babcock & Wilcox Co., 351 U.S. 108, 76 S.Ct. 679 (1956) held that alternative methods of communication must be considered in determining the validity of a rule prohibiting the distribution of union literature by nonemployee union organizers on company premises, The third case, V.L.R.B. v. United Steelworkers of America, 357 U.S. 357, 78 S.Ct. 1268 (1958) held that a showing of diminished ability to communicate with em- ployees is a vital consideration in determining whether a valid no-solicitation rule is fairly applied, “just as [it] is a vital consideration in determining the [initial] validity of the no-solicitation rule.” (357 U.S. at 363-364) On these cases, the Third Circuit concluded: Clearly if the employees have virtually no alternative opportunities to distribute literature and membership applications, then respondent must show strong justi- fication for its prohibition. Conversely when, as the respondent contends in this case, the employees have readily available means of distribution, the employcr’s duty to show exceptional justifiable circumstances is lessened. (Emphasis added) Moreover, the Board’s decision merely held that re- spondent had offered no “valid reason for the applica- tion of its no-distribution rule.” Nowhere does the Board’s decision indicate that it considered the sub- stantial evidence offered by respondent in justification of its rule, nor did it find that it operated to prevent the union from effectively reaching respondent’s em- ployees with its prounion message, (271 F.2d at 115- 116) The Rockwell rationale was reaffirmed recently in Diamond Shamrock Co. v. N.L.R.B., supra. Similarly, the Eighth Circuit in McDonnell Douglas Cor- poration v. N.L.R.B., supra, 472 F.2d at 544-547, examined 7% Le 26 Republic Aviation, supra; Babock & Wilcox, swpra; and Umted Steelworkers, swpra, and concluded that the avail- ability of alternative means of communication must be considered by the: Board in cases involving employee solicitation. — The Eighth Circuit declared at 547: ... [O]n remand the Board would be well advised to give consideration, inter alia, to... (2) whether there are other means of access or communication available to employees for distribution and solicitation such as entrances to the parking lots and to the avenues con- sidered in Diamond Shamrock and Rockwell Manufac- turing Co., swpra;... Thus, alternative means of communication is a necessary ingredient in any evaluation of the validity of a. rule broadly prohibiting employee solicitation. A few courts have conversely concluded that alternative means of com- munication need not be considered by the Board in cases involving employee solicitation.’ These courts erroneously concluded that the Court in Republic Aviation limited to its holding in Peyton Packing, which on the surface does not include consideration of alternative communication. These courts further attempt to distinguish the Board’s decisions in Babcox & Wilcor and United Steelworkers, on the grounds that the former case involves nonemployee solici- tation and that the latter case involves the invalid applica- tion of an admittedly valid rule.® 5. Time-O-Matic, Inc. v. N.L.R.B., 264 F.2d 96 (7th Cir. 1959) ; N.L.R.B. v. United Aircraft Corporation, 324 F.2d 128 (2nd Cir. 1963) ; Republic Aluminum Company v. N.L.R.B., 394 F.2d 405 (5th Cir. 1968); and National Steel Corporation v. N.L.R.B., 415 F.2d 1231 (6th Cir. 1969). 6. One other circuit court which had the oppertunity to address the issue, after noting the conflict between the circuits, refused to decide the issue. Korn Industrics, Inc. v. N.L.R.B., 389 F.2d 117 (4th Cir. 1967). The Ninth Circuit enforcing the Board’s decision here did not and has never expressly addressed the issue. 27 These cases reveal the conflict among the circuits which hinges on different interpretations of this Court’s rulings. Accordingly, only this Court can provide a definitive reso- lution of the controversy, which it has not yet done. Two recent decisions of this Court support that conclusion. In N.L.R.B. v. Magnavox Company of Tennessee, 416 U.S. 952 (1974), this Court stressed that the Board must con- sider alternative means of communication in cases involving employee no-solicitation rules which are asserted to be valid by “special circumstances”. N.0.R.B. v. Beth Israel Hospital, supra, 98 S.Ct. at 2476, modifies Magnavoz: While outside the health care context, the availability of alternative means of communication is not, with respect to organizational activity, a necessary inquiry, see Babcock & Wilcox, supra, 351 U.S. at 112-113, 76 S.Ct. at 684, it may be that the importance of the em- ployer’s interest here demands use of a more finely calibrated scale, (Emphasis added. ) Thus, even if this Court were to conclude that alternative means of communication is not a general requirement in cases involving employee or non-employee solicitation pro- hibitions the “special circumstances” which exist in the gaming industry require use of the “more finely calibrated scale” mandated by this Court in Beth Israel, swpra. Again, the matters involve clear and compelling state interests which should not be preempted by inconsistent federal labor law. Finally, Petitioners applications of their rules were proper.’ 7. The Board and the Court below incorrectly concluded that Sparks’, applying its no-solicitation rule, illegally interrogated employee Launius regarding her Union activities and illegally counseled employee Dyer regarding the same. Launius was solicit- ing and apparently acting for the Union during working time. An employer can normally prohibit solicitation on working time as “working time for work”. Republic Aviation Corp., supra. Accord- ingly, Sparks was privileged to question Launius whether her 28 CONCLUSION For these reasons, a writ of certiorari should issue to review the judgments and opinion of the Ninth Circuit. Alternatively the matters should be remanded for further consideration. Respectfully submitted, December 31, 1980. Wituram W. WERTz 25th Floor One Embarcadero Center San Francisco, California 94111 Counsel for Petitioners Of Cownsel: Severson, Werson, BerKE & MELCHIOR 25th Floor One Embarcadero Center San Francisco, California 94111 actions were in violation of its valid rule prohibiting solicitation on working time. The collective bargaining agreement permitted Union representatives to engage in official Union activities during working time but required prior notice. Sparks needed to know whether Launius’ Union activities during working time were peculiarly privileged. Launius was not an “authorized representative’’ within the meaning of the bargaining agreement, thus was told that such future solicitations by her would not be allowed. The questioning of Launius was for legitimate purposes, and the conversation was not coercive; thus it was lawful. “When the in- quiries are not undertaken in a threatening manner but are only isolated instances free of any coercion without any systematic intimidation in the background, they are not unlawful.” Amalga- mated Meat Cutters, etc., Local No. 364 v. N.L.R.B., 435 F.2d 668 (9th Cir. 1970); Sahara Tahoe v. N.L.R.B., 533 F.2d 1125 (9th Cir. 1976). Employee Dyer was soliciting for the Union, both on Sparks time and on its premises after his shift had ended. Sparks, there- fore, properly issued Dyer a counselling notice with regard to that solicitation. Dyer testified that he understood Petitioner’s no- solicitation rule to mean that he could not solicit during working time. Thus, Sparks had a reasonable basis to believe that Dyer was soliciting in violation of its valid no-solicitation rule. IN THE SUPREME COURT OF THE UNITED STATES Octroser TERM 1980 Barney’s Cuvs, Inc. Petitioner, vs. NaTIONAL Lasor RELATIONS Boarp Respondent. Sparks Nuccet Inc. d/b/a John Ascuaga’s Nugget Petitioner, vs. NaTIonaL Lasor REvLatiIons Boarp Respondent. APPENDIX TO A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT WituiaMm W. Wertz 25th Floor One Embarcadero Center San Francisco, California 94111 Counsel for Petitioners Of Counsel: Severson, WeRsON, BerKEe & MELCHIOR 25th Floor One Embarcadero Center San Francisco, California 94111 Filed May 27 1980 Richard H. Deane, Clerk, U.S. Court of Appeals Received May 28 1980 Severson, Werson, Berke & Melchior In the United States Court of Appeals For the Ninth Circwt Nationa. Lasor Reiations Boarp, Petitioner, and Hore - Moret - Restaurant EmpLoyees & BarTeNpDERS Union, Locat 86, Horst, Restaurant & Barrenpers Inrerna- ) No. 77-2311 TIonaAL Union, AFL-CIO, Intervenor, vs. Sriver Spur Casino, Respondent. NaTIONAL Labor RE.Lations Boarp, Petitioner, and Hore - More. - Restaurant Empioyvees & BarTENDERS Union, Locat 86, No. 77-2939 Intervenor, vs. Nevapa Cuvs, Inc., Respondent. -% -% 2 Appendiz Nationa Lasor REtations Boarp, Petitioner, and Horet - Moret - Restaurant Empuoyees & Bartenvers Union, Locat 86, Intervenor, vs. Sparks Nuacet, Inc., d/b/a Jonn Ascua- Ga’s NUGGET, Respondent. Nationa Lasor Retations Boarp, Petitioner, and Hore. - Moret - Restaurant Empvoyveses & BarTenvDERS Union, Locat 86, Intervenor, Vs. Barney’s Cuuvs, Inc., Respondent. Nationa. Lasor Re.ations Boarp, Petitioner, and Hore - Moret - Restaurant Empvoyers & BartTenvers Union, Locat 86, Intervenor, Vs. Finavy, [nc., d/b/a THe Patace Civs, Respondent. No, 77-2954 No. 77-2658 No. 77-2938 -> Appendix 3 OPINION On Application for Enforcement of an Order of the National Labor Relations Board Before: KENNEDY and ANDERSON, Circuit Judges, and SCHWARTZ,®* District Judge. ANDERSON, Circuit Judge: These consolidated cases are before this court pursuant to petitions filed by the National Labor Relations Board (Board) for enforcement of its Orders.’ 29 U.S.C. § 160(e). The unifying issue is whether the employer-respondents violated sections 8(a)(1) and (5) of the National Labor Relations Act (the Act) by refusing to bargain with the Union. We shall consider this issue first, then deal with the other issues that pertain to the individual respondents. I. REFUSAL TO BARGAIN A. Background The respondents were all members of the Reno Employ- ers Council (Council), a voluntary association of employers engaged in casino, restaurant and related businesses. The Council existed in part for the purpose of representing member-employers, in multi-employer units, in collective bargaining with labor organizations. The individual re- *The Honorable Edward J. Schwartz, Chief United States Dis- trict Judge for the Southern District of California, sitting by designation. 1. We were advised by counsel for the respondents at oral argument that the Palace Club (No. 77-2938) nad completely closed down, with no successor taking over that operation. The Board has not withdrawn its petition for enforcement of its order against the Palace Club. Without deciding whether the petition against the Palace Club has, in fact, been rendered moot, we deem this opinion to be moot as to the Palace Club if there is no employer upon whom the order may be enforced. 4 Appendiz spondents joined the Council on different dates, but they all recognized the Union as the bargaining representative of a unit of their employees consisting of culinary workers, waiters and bartenders (employees). After being parties to successive multi-employer collective bargaining contracts with the Union,? respondents withdraw from their multi- employer bargaining units. Subsequent to their withdrawal from the multi-employer units, the respondents informed the Union that they would not negotiate new, individual collective bargaining agreements with the Union. Each re- spondent claimed to have a good faith doubt that the Union enjoyed the majority support of their respective employees. Unfair labor practice charges were filed by the General Counsel of the Board against the respondents for their refusal to bargain with the Union. In each case the Board found that the respondents had committed unfair labor practices by withdrawing recognition of the Union as the collective bargaining representative of their employees and by refusing thereafter to bargain with the Union? The 2. Sparks Nugget, Silver Spur, Nevada Club, and the Palace Club were in the same multi-employer bargaining unit and were signatories to the same 1972-1975 collective bargaining agreement with the Union as the Sierra Development Co., NLRB v. Sierra Development Co., 604 F.2d 606 (9th Cir. 1979), and Carda Hotels, NLRB v. Carda Hotels, 604 F.2d 605 (9th Cir. 1979). Barney’s Club, on the other hand, was a signatory to the same 1971- 1974 collective bargaining agreement with the Union as Tahoe Nugget, NLRB v. Tahoe Nugget, 584 F.2d 293 (9th Cir.), cert. denied, 442 U.S. 921, 61 L.Ed.2d 290, 99 S.Ct. 2847, reh. denied, weieil US. aileeeat, A L.Ed.2d 12, 100 S.Ct. 186 (1979), Nevada Lodge, NLRB v. Nevada Lodge, id., and Sahara-Tahoe, Sahara- Tahoe Corp. v. NLRB, 581 F.2d 167 (9th Cir.), cert. denied, 442 U.S. 917, 61 L.Ed.2d 284, 99 S.Ct. 2837, reh. denied, — sere 62 L.Ed.2d 122, 100 St.Ct. 187. 3. Silver Spur Casino, 228 NLRB 1147 (1977); Nevada Club, Inc., 229 NLRB 1186 (1977); Sparks Nugget, Inc., 230 NLRB 275 (1977); Barney's Club, Inc., 227 NLRB 414 (1977) ; Finally, inc, d/b/a Palace Club, 229 NLRB 1128 (1977). Appendix 5 Board ordered each respondent to cease and desist from the unfair labor practices and required each respondent to recognize and, upon request, bargain with the Union, and post certain notices. These cases are before us in part, for the enforcement of those orders. We enforce the Board’s orders on the issue of the re- spondents’ refusal to bargain based upon the principles we have announced in Tahoe Nugget, Sahara-Tahoe, Carda Hotel, and Sierra Development. We deal with the issue in more depth in the following discussion to emphasize and, where necessary, to clarify portions of our previous opinions. B. Discussion In an unfair labor practice proceeding before the Board the burden is upon the General Counsel to establish by a preponderance of evidence that an unfair labor practice has occurred. NLRB v. United Brotherhood of Carpenters & Joiners, etc., 531 F.2d 424, 426 (9th Cir. 1976). Where an employer has been charged with a violation of section 8(a) (5), refusal to bargain, the General Counsel must show that the union represented a majority of the employees in the unit at the time the employer refused to bargain with the union. NLRB v. Tahoe Nugget, Inc., 584 F.2d at 297. 1. Presumption of Majority Support The General Counsel is assisted by a presumption of majority union support in its attempt to meet its burden of proving that the employer unlawfully refused to bargain. “For a reasonable time, usually one year, after certifica- tion or voluntary recognition, majority support is irrebut- tably presumed absent ‘unusual circumstances.’ After one 4. Citations at footnote 2. -% 6 Appendix year, the presumption becomes rebuttable.” Jd. Where suf- ficient proof to rebut the presumption is not presented by the employer, the presumption carries the General Coun- sel’s burden of proof regarding the unfair labor practice charge. Id. An employer may rebut the presumption by presenting sufficient evidence to demonstrate that the union was ac- tually in the minority or that the employer had a good faith reasonable doubt of the union’s majority support at the time of the refusal to bargain. Jd. If the presumption is deemed rebutted, then the General Counsel must come forward with evidence to satisfy its burden of proof. National Cash Register Co. v. NLRB, 494 F.2d 189 (8th Cir. 1974). The rebuttable presumption was applied by the Board in these cases. The Board determined that the respondents had not rebutted the presumption and found that they had committed unfair labor practices by refusing to bargain with the Union. The respondents challenge that determination on the grounds that: a. the presumption should not be applicable in a situation where employers have withdrawn from a multi-employer unit; b. an emplover’s good faith belief is all that is re- quired to rebut the presumption of majority support for the union; ce. the objective factors considered by the respond- ents were sufficient to rebut the presumption of major- ity support for the union. d. the respondents were improperly precluded from showing, that only a minority of employees supported the vuion. e. the Board has made it impossible to rebut the presumption under the circumstances. Appendix 7 2. Withdrawal from the Multi-Employer Unit The respondents contend that their withdrawal from the multi-employer bargaining unit should allow them to start anew in their relationship with the Union. That is, they wish to be viewed as single employers faced with the Union’s initial claim for recognition. In four previous cases® we have rejected that approach and have determined that the presumption survives an employer’s withdrawal from the multi-employer bargain- ing unit.® The bargaining history of the respondents shows that the same fact patterns have occurred. Thus, the conclusions reached in our previous cases apply equally as well here. Moreover, our conclusion that the presumption survives the respondents’ withdrawal from the multi-employer unit is a recognition that the presumption is also grounded in policy, not just probability. NLRB v. Tahoe Nugget, 584 F.2d at 302. 302. The most valued objective of the Act is industrial peace. Application of the presumption is a policy determination by the Board that industrial peace is more likely to be achieved by maintaining continuity in the bar- gaining structure. We have not failed to observe that, in so deciding, the Board has favored continuity in the bargaining structure 5. NLRB v. Tahoe Nugget; Sahara-Tahoe Corp. v. NLRB; NLRB v. Sierra Development Co.; NLRB v, Carda Hotels. 6. In the formation of multi-employer units, it is an unfair labor practice for an individual employer to voluntarily recognize a union which does not enjoy majority support among that em- ployer’s employees. Thus when employers join a multi-employer unit and recognize the union, they are viewed as implicitly declar- ing that the majority of their employees favor the union. Subse- quent withdrawal from the multi-employer unit simply entails a reversion to the original unit, a unit previously determined from the employer’s own conduct to favor the union's representation. NLRB v. Tahoe Nugget at 303. 7% - 8 Appendix over the enhancement of employee free choice. However, the Board’s decision, while not enhancing employee rights, does not adversely affect those rights. As always, the em- ployees may exercise their freedom of choice by petitioning the Board for an election to choose whether to have another representative or to have no union representation at all. Adherence to the presumption does not stifle that right. The presumption does make it more difficult for the re- spondents to rely on employee rights in refusing to bargain with their employees’ designated representative. However, as we stated in Tahoe Nugget, at 301, “[I]n refusing to bar- gain because of an alleged decline in union adherents, the employer is acting as vicarious champion of its employees, a role no one has asked it to assume.” See, Brooks v. NLRB, 348 U.S. 96, 103, 99 L.Ed. 125, 75 S.Ct. 176 (1954). We thus believe that the Board has not abused its discre- tion in applying the presumption of majority union support here where employers have withdrawn from a multi- employer unit. 3. Good Faith Reasonable Doubt An employer may withdraw recognition from an incum- bent union because of its asserted good faith doubt of the union’s support. Respondents contend that under Celanese Corporation of America, 95 NLRB 664 (1951), the employ- er’s good faith belief that the union no longer had the majority support of its employees is all that is required. The respondents misread Celanese and misconceive the law." 7. Respondents correctly quoted a passage from Celanese which states that: “We believe that the answer to the question whether the Respondent violated Section 8(a)(5) of the Act on October 8 depends not on whether there was sufficient evidence to dem- onstrate that the Union in fact did not represent the majority Appendix 9 An employer’s good faith doubt of a union’s majority status must be reasonable and supported by objective con- siderations. NLRB v. Cornell of Cal., Inc., 577 F.2d 513, 515-516 (9th Cir. 1978) ; Dalewood Rehabilitation Hostal, Inc. v. NLRB, 566 F.2d 77, 80 (9th Cir. 1977); NURB v. Tahoe Nugget, 584 F.2d at 299. Respondents’ contrary in- terpretation of the law is erroneous. 4, Establishing Good Faith Reasonable Doubt Whether an employer has established a good faith rea- sonable doubt defense is a determination that must be made initially by the Board. The Board’s decision will be upheld if it is supported by substantial evidence on the record as a whole, Sahara-Tahoe Corp. v. NLRB, 581 F.2d at 771. In Tahoe Nugget and Sahara-Tahoe we stressed that the evidence presented to establish reasonable good faith doubt, individually or cumulatively, must unequivocally indicate of the employees but upon whether the Employer in good faith believed that the Union no longer represented the majority of the employees.” Id. at 671. However, the respondents failed to turn the page and read on as the Board, later in the opinion, went on to elaborate on the “good faith” criteria, and stated that: “By its very nature, the issue of whether an employer has questioned a union’s majority in good faith cannot be resolved by resort to any simple formula. It can only be answered in light of the totality of all the circumstances involved in a par- ticular case, But among such circumstances, two factors would seem to be essential prerequisites to any finding that the employer raised the majority issue in good faith in cases in which a union had been certified. There must, first of all, have been some reasonable grounds for believing that the union had lost its majority status since its certification. And, secondly, the majority issue must not have been raised by the employer in a context of illegal anti-union activities, or other conduct by the employer aimed at causing disaffection from the union or indicating that in raising the majority issue the employer was merely seeking to gain time in which to under- mine the union.” (emphasis added) Id. at 673. -% *> 10 Appendix that union support had declined to a minority. In those cases the Board found that the employers had not estab- lished the good faith doubt defense. Some evidence was presented of employee discontent, high employee turnover rates, low union membership, financial difficulties of the union, and a vigorous union membership drive. However, efter evaluating the evidence, the Board determined that the evidence introduced by the respondents was not suffi- cient to support a good faith reasonable doubt of the union’s majority status. The evidence, standing alone or viewed in their totality, presented only an ambiguous inference of loss of majority support for the union. We enforced the Board’s orders in those cases, determining that there was substantial evidence on the record as a whole to support the findings. The evidence presented here does not differ materially from that considered by the Board and this court in Tahoe Nugget and Sahara-Tahoe. The Board in the present cases found that the respondents failed to establish the good faith reasonable doubt defense, Substantial evidence on the record as a whole supports the findings that the evidence, individually or cumulatively, presents only an equivocal inference of loss of majority support for the union. 5. Actual Loss of Majority The presumption may also be rebutted when the employer brings forth sufficient evidence to demonstrate that the union did not, in fact, have the support of a majority of the employees in the unit. Tahoe Nugget, 584 F.2d at 297. In Barney’s Club the administrative law judge determined that the respondent’s evidence fell short of demonstrating that the union did not have majority support. The Board Appendix 11 affirmed. Reviewing the record as a whole, we uphold that decision. In Silver Spur, Sparks Nugget, Nevada Club and Finally, Inc., the respondents were restricted in their ability to ques- tion Board field examiner David Sargent and Union agent Howard Lawrence, They contend that the Board’s actions erroneously prevented them from presenting their “actual loss of majority” defense and thus their cases should be remanded. a. Board Field Examiner Sargent Respondents, in their individual cases, subpoenaed Board field examiner Sargent. The administrative law judges quashed the subpoenas on the basis that Sargent’s testi- mony would have been irrelevant (Nevada Club; Finally, Inc.), or that 29 CFR § 102.118 prevented the subpoena from issuing to an agent of the Board without the Board’s or General Counsel’s consent (Silver Spur, Sparks Nug- get). In NLRB v. Heath Tec Division/San Francisco, 566 F.2d 1367, 1371 (9th Cir.) cert. denied, 439 U.S. 832, 58 L.Ed.2d 127, 99 S.Ct. 110 (1978), we stated that in the absence of some valid evidentiary objection or privilege, 29 CFR § 102.118 cannot alone be the basis for the revocation of a properly issued subpoena. Thus the rulings of the adminis- trative law judges in Silver Spur and Sparks Nugget were erroneous. However, the Board upheld the quashing of the subpoenas in all the cases, finding that a valid evidentiary privilege and a valid evidentiary objection existed. We agree. The Board determined that there was an evidentiary privilege which protected the informal investigatory and trial preparatory process of administrative agencies, citing '* | 12 Appendix Stephens Products Co., Inc. v. NLRB, 515 F.2d 1373, 1376-1378 (8th Cir. 1975). Sargent apparently had spoken informally to the attorneys representing the respondents and had stated that the refusal to bargain charges would probably be dismissed. Later, however, formal complaints were filed, charging the respondents with refusing to bar- gain. Through Sargent respondents sought to establish that the initial determintaions were actually made and they also sought the information which provided the basis for those determinations. It is clear that the testimony and documents which the respondents sought were informal investigatory material and preliminary determinations. The qualified privilege of preserving the confidentiality of investigative files is applicable here. NLRB v, Heath Tec, 566 F.2d at 1370; Stephens Products Co., Inc. v. NLRB, 515 F.2d at 1376. As in Heath Tec, and Stephens Products Co., supra, we conclude that the investigatory privilege concerning “informal deliberations of all prosecutorial agencies and branches of government” (Stephens Products, p. 1376, n.1) was properly invoked. Others were present during conver- sations with Sargent. They were not called 1s witnesses, however, and respondents have shown no reason why examining these people was not possible or would not have produced information similar to that which they sought from Sargent. Moreover, we have some doubt whether the information sought was sufficiently material to respondents’ case to outweigh the privilege. 4 b. Union Agent Lawrence The Board also sustained objections to the questioning of Union agent Lawrence regarding whether the Union had any records that would disclose it represented an actual Appendix 13 majority of the unit employees of the respective respond- ents. The Board determined that the line of questioning was irrelevant because where union membership was volun- tary, as in Nevada, such records provided no correlation to whether a majority of employees desired representation. We affirm the Board’s decision, but on a different basis. The Board cited Retired Persons Pharmacu v. NLRB, 519 F.2d 486, 491 (2d Cir. 1975), for the proposition that union membership is irrelevant to the determination of a union’s majority status. We do not agree. It is true that in a right- to-work state an employee may choose not to join a union, but, nevertheless, desire union representation. However, this observation does not render union membership irrele- vant to a determination of whether an employee had a reasonable doubt of the union’s majority or whether the union in fact lacked majority support. Union membership, even in a right-to-work state, is some indication of union support, though it may be only marginally relevant. NLRB v. Tahoe Nugget, 584 F.2d at 307, NLRB v. Vegas Vic, Inc., 546 F.2d 828 (9th Cir.), cert. denied, 434 U.S. 818, 54 L.Ed.2d 74, 98 S.Ct. 57 (1978), and Terrell Machine Co. v. NLRB, 427 F.2d 1088, 1090 (4th Cir.), cert. denied, 398 U.S. 929, 26 L.Ed.2d 91, 90 S.Ct. 1821 (1970), are not to the contrary. The question asked by the respondents was whether the Union could produce any records that would demonstrate that it had the majority support of the employees. Al- though not dispositive, the question had some relevance to the issues of the Union’s majority status and should have been allowed. However, based upon the record before us, we cannot say that reversible error was committed, If the Union had an- swered the question affirmatively, the Union’s position ’;% ’% 14 Appendix would have been bolstered. If the question had been an- swered in the negative, that would have presented only slight evidence that the Union in fact did not have the ma- jority support of the employees. Even with the addition of this evidence, the presumption would not have been re- butted.* Therefore, we find no error that would require a reversal. 6. Impossibility of Rebutting the Presumption Finally, the respondents contend that the Board has in effect created a presumption that is impossible to rebut. Respondents argue that the burden is placed upon them to rebut the presumption, but they are denied the means to do so. Further, the respondents contend that the Board has demanded more evidence than should be required to rebut the presumption. We find no merit to the respondents’ first argument. As we discussed in the previous section, the Board’s rulings regarding Board field examiner Sargent and union agent Lawrence did not improperly deny the respondents access to information. As to the respondents’ second argument, we recognize the force of their contention that the Board has accorded too much weight to the presumption in these cases, This issue involves an important and difficult question which is of current national interest in the labor relations field. Re- spondents cite cases in other circuits which may have found 8. See, Barney’s Club Incorp., 227 NLRB 414 (1976) (Board affirming administrative law judge’s determination that the re- spondent failed to establish that the Union in fact did not represent a majority of the respondent's employees). Moreover, respondents did not materially rephrase the question after the administrative law judge's ruling and either ended the line of questioning or dropped the subject matter. Appendix 15 the presumption rebutted upon similar or even weaker evi- dence than was presented in these cases.® Accepting, argu- - endo, that a conflict exists on this issue, we nevertheless adhere to the views expressed in this and our previous opinions. While we find that there is substantial evidence on the record as a whole to support the Board’s decision in each of these cases, we also believe that the policies and goals of the Act will be best served by the enforcement of the Board’s orders on the respondents’ refusal to bargain. II. NO SOLICITATION RULE A. Background In Barney’s Club and Sparks Nugget the employers promulgated no-solicitation rules which, among other things, prohibited employees from soliciting on company premises after their shifts had been completed. The Board determined in both cases that the employers had violated Section 8(a)(1) of the Act, 29 U.S.C. § 158(a) (1), by main- taining the rules. We agree with the Board that the rules 9. Respondents have cited cases from various circuits where the presumption of majority support was deemed rebutted. See, e¢.g., Ingress-Plastene, Inc. v. NLRB, 430 F.2d 542 (7th Cir. 1970) ; Star Manufacturing Co. v. NLRB, 536 F.2d 1192 (7th Cir. 1976) ; Lodges 1746 & 743, Int'l Ass’n of Mach. & Aero. Workers v. NLRB, 416 F.2d 809 (D.C. Cir.), cert. denied, 396 U.S. 1058, 24 L.Ed.2d 752, 90 S.Ct. 751 (1970); but see, Teamsters Local U. 769 v. NLRB, 532 F.2d 1385 (D.C. Cir. 1976); National Cash Register Co. v. NLRB, 494 F.2d 189 (8th Cir. 1974) ; National Car Rental Sys- tem v. NLRB, 594 F.2d 1203 (8th Cir. 1979); NLRB v. Alvin J. Bart & Co., Inc., 598 F.2d 1267 (2d Cir. 1979) ; W & W Steel Co. v. NLRB, 599 F.2d 934 (10th Cir. 1979); Automated Business Sys- tems v. NLRB, 497 F.2d 262 (6th Cir. 1974) ; NLRB v. Nu Southern Dyeing & Finishing, Inc., 444 F.2d 11 (4th Cir. 1971); NLRB v. Randall-Eastern Ambulance Service, Inc., 584 F.2d 720 (5th Cir. 1978). Of these cases cited by respondents, we believe only W & W Steel Co. v. NLRB, Star Manufacturtng Co. v. NLRB and Ingress-Plastene, Inc. v. NLRB, present factual situations in which other circuits may have found the presumption of majority support rebutted upon similar or weaker evidence than presented in these cases. 16 Appendix promulgated by these respondents were violative of Sec- tion 8(a)(1). However, we believe the Board’s orders were too broad. We thus enforce the Board’s order as modified herein. B. Discussion 1. Applicable Law The freedom to communicate is essential to the effective exercise of organizational rights granted to employees un- der Section 7 of the Act, 29 U.S.C. § 157. Central Hardware Co, v. NLRB, 407 U.S. 539, 543, 33 L.Ed.2d 122, 92 S.Ct. 2238 (1972); Beth Israel Hospital v. NLRB, 437 U.S. 483, 491, 57 L.Ed.2d 370, 98 S.Ct. 2463 (1978). However, the right ot employees to solicit or distribute materials must be balanced against an employer’s right to maintain disci- pline in its establishment. Republic Aviation Corp. v. NLRB, 324 U.S. 793, 797-798, 89 L.Ed. 1372, 65 S.Ct. 982 (1945). Thus, certain rules have been developed with re- spect to the exercise of employee organizational rights un- der Section 7. Since “working time is for work,” a rule prohibiting employee solicitation and distribution of litera- ture during work time is presumed to be valid. On the other hand, “the time outside work, whether before or after work, or during luncheon or rest periods, is an employees’ time to use as he wishes without unreasonable restraint,” even though he is on company property. Therefore, a rule pro- hibiting employee solicitation or distribution of literature during nonworking time in nonwork areas is presumptively invalid unless special circumstances warrant the adoption of the rule. Republic Aviation, at 802 n. 10; NLRB v. Mag- navox Co., 415 U.S. 322, 325, 39 L.F.d.2d 358, 94 S.Ct. 1099, reh. denied, 416 U.S. 952, 40 L.Fid.2d 302, 94 S.Ct. 1962 (1974). i Appendix 17 The finding of the requisite “special circumstances” or an exception to the presumption of invalidity may arise where the business is one dealing in direct selling and service to customers. The Board has approved employer rules which prohibit all employee solicitations, even during an em- ployee’s nonworking time, in the selling areas of stores and restaurants on the theory that such activity may tend to drive away customers. May Department Stores Co., d/b/a Famous-Barr Co., 59 N.L.R.B. 976, 981, enf’d as modified, 154 F.2d 533 (8th Cir.), cert. denied, 329 U.S, 725, 91 L.Ed. 627, 67 S.Ct. 72 (1946); Goldblatt Bros., Inc., 77 N.L.R.B. 1262, 1264 (1948); Marriott Corp., Children’s Inn), 223 N.L.R.B. 978 (1978) ; see also Beth Israel Hospital at 493. In allowing the broader no-solicitation rules, the goal has been to strike the appropriate balance between organiza- tional rights of employees and the rights of employers to control their businesses. Thus, as the Supreme Court stated in Beth Israel Hospital at 506: “Tn the retail marketing and restaurant industries, the primary purpose of the operation is to serve cus- tomers, and this is done on the selling floor of a store or in the dining area of a restaurant. Employee solici- tation in these areas, if disruptive, necessarily would directly and substantially interfere with the employ- er’s business. On the other hand, it would be an un- usual store or restaurant which did not have stock- rooms, kitchens, and other nonpublic areas, and in those areas employees solicitation of nonworking em- ployees must be permitted. In that context, the Board concluded that, on balance, employzes’ organizational interests do not outweigh the employer’s interests in prohibiting solicitation on the selling floor.” However, the fact that an establishment is a restaurant or a store does not automatically allow it to impose a broad no-solicitation rule. In Beth Israel Hospital the - 18 Appendiz question was whether a hospital cafeteria could prohibit employee solicitations in its dining room. The Supreme Court noted that the primary purpose of the hospital was patient care and therapy. The hospital cafeteria functioned more as an employee-service area than a patient care area, as 77% of its patrons were employees. Thus the Court stated that “when the primary function and use of the cafeteria, the availability of alternative areas of the [hos- pital] facility in which § 7 rights effectively could be exer- cised, and the remoteness of interference with patient care are considered,” it was appropriate for the Board to strike the balance in favor of §7 rights in the hospital cafeteria. Id, at 506. Therefore, the relationship of the restaurant or store to the employer’s business. enterprise must also be considered in striking the appropriate balance between employee and employer rights. Even though an employer’s business enterprise justifies a more restrictive no-solicitation rule, that rule may be over-broad and thus invalid. Marriott Corp. at 978. In Marriott Corp. the Board stated that the employer could prohibit solicitation, even during employee break and lunch periods, in areas where customers were likely to be present. However, the Board determined that the employer’s rule was not limited to the customer or sales area of the res- taurant; thus the rule was declared to be over-broad and invalid on its face. 2. Present Cases In Barney’s Club and Sparks Nugget the respondent employers are engaged primarily in the direct service of customers through their gambling, restaurant and bar fa- cilities. There is no contention that any of these facilities serve primarily as employee-service areas. Thus, under the previously-discussed precedents, the respondents could Appendiz 19 promulgate no-solicitation rules which prohibited employees from engaging in solicitation or distribution of materials in areas open to the public even during nonworking periods. We agree with the Board, though, that the rules prom- ulgated by the respondents were overly broad and thus invalid. However, the Board’s orders in these cases were themselves overly broad. The orders stated that the re- spondments must cease and desist from: “maintaining any rule or regulation prohibiting its em- ployees from soliciting on its premises after their shifts have been completed unless such prohibition is demonstrably necessary to maintain production, dis- cipline or security.” The orders go too far. Since the respondents could prohibit their employees from soliciting during nonworking hours in publie areas of their premises, we modify the Board’s order to read that the respondents must cease and desist from: “maintaining any rule or regulation prohibiting its em- plovees from soliciting on its premises during non- working hours in nonpublic areas of its premises.” We enforce the Board’s order on this issue as modified. Il. UNILATERAL CHANGES As long as its bargaining obligation is not extinguished, an employer has a continuing duty to bargain over manda- tory subjects of bargaining without instituting unilateral changes, even after the expiration of the prior agreement. NLRB v. Sky Wolf Sales, 470 F.2d 827 (9th Cir, 1972). See, Allied Chemical & Alkali Workers v. Pittsburg Plate Glass Co., 404 U.S. 157, 30 L.Fid.2d 341, 92 S.Ct. 383 (1971). Mandatory subjects of collective bargaining include insurance benefits and grievance procedures for employees. _ 20 Appendix 404 U.S. at 159; The Developing Labor Law, 404 (1971). In Sparks Nugget, the Board found that the employer committed unfair labor practices in violation of Sections 8(a)(5) and (1) of the Act, 29 U.S.C. §§ 158(a)(5) and (1), by unilaterally implementing a new grievance pro- cedure and a new insurance program. The respondent’s sole argument to justify the unilateral change in the grievance procedure was that the change was made after its obligation to bargain had terminated. We have already ruled in Section I that there was a continuing duty to bargain, The respondent’s unilateral change of the grievance procedures was an unfair labor practice. NLRB v. United Nuclear Corp., 381 F.2d 972 (10th Cir. 1967). We enforce the Board’s order on this issue. There appears to be little question that the new insur- ance plan was implemented by the respondent without consultation or negotiation with the Union over the matter. The respondent was found to have committed an unfair labor practice, The administrative law judge, however, lim- ited the proposed remedy to requiring the respondent to “cease and desist from unilaterally altering or modifying the terms and conditions of a collective bargaining agree- ment it may have with the Union” (R. 151) because he found that the Union had condoned the respondent’s ac- tions.'® The decision and order were affirmed by the Board. 10. The administrative law judge stated : “It further appears from the failure of the Union to lodge any protest with regard to the unilateral implementation of the program, the position taken by the Union as to compliance with Section 3 of article XVIII, and the attempt, disclosed in McKinlay’s testimony, to obtain benefits for an employee under the program, that the Union condoned the Respondent's failure to consult with it prior to its implementation ... .” (R. 151) The Board affirmed the administrative law judge’s findings. ’% | Appendix 21 We cannot agree that an unfair labor practice can be found as the acts were condoned. Condonation takes place when the injured party demon- strates a willingness to forgive the improper conduct and “wipe the slate clean.” Confectionery & Tobacco Drivers €& Warehousemen’s Union v. NLRB, 312 F.2d 108, 113 (2d Cir. 1963); Cast Optics Corp. v. NLRB, 458 F.2d 398, 404 (3d Cir.) cert. denied, 409 U.S. 850, 34 L.Ed.2d 92, 93 S.Ct. 58 (1972). In Confectionery & Tobacco Drivers, employees had engaged in a walkout in violation of their contractual no-strike clause. The court there stated, however, that, “TA)fter a condonation the employer may not rely upon prior unprotected activities of employees to deny reinstate- ment to, or otherwise to discriminate against them.” 312 F.2d at 113. We agree with the Board that condonation took place with regard to the implementation of the new insurance plan. The Union’s condonation of the unilateral action, however, “wipes the slate clean.” The Board erred in its application of the law of condonation; there was no unfair labor practice upon which to base the charge. We, therefore, deny enforcement of the cease and desist order. TV. REFUSING TO PROVIDE A COPY OF THE NEW INSURANCE PLAN There is a duty on the part of the employer to supply the Union, upon request, with sufficient information to en- able the Union to effectively carry out its collective bar- gaining duties. San Diego Newspaper Guild, etc. v. NLRB, 548 F.2d 863, 866 (9th Cir. 1977). The information how- ever, must be relevant to a legitimate union collective bar- gaining need. 7d. 548 F.2d at 867. Failure of the employer to comply with a request for relevant information is a 3.4% ’> 22 Appendix violation of Sections 8(a)(5) and (1) of the Act, 29 U.S.C. §§ 1158(a) (5) and (1). The administrative law judge found, and the Board sum- marily affirmed, that the respondent committed an unfair labor practice in violation of Sections 8(a)(5) and (1) by its refusal to furnish the Union with a requested copy of the new insurance program. Since there was a continuing duty to bargain, the refusal to comply with the request was found to inhibit the Union in meaningfully bargaining with the respondent. We enforce the Board’s order on this issue; substantial evidence on the record as a whole supports the Board’s determination. V. INTERROGATION OF EMPLOYEE LAUNIUS Section 8(a)(1) of the Act, 29 U.S.C. § 158(a)(1), pro- vides that it shall be an unfair labor practice for an em- ployer to interfere with, restrain or coerce employees in the exercise of their rights guaranteed under Section 7 of the Act. The questioning of employees by the employer regarding their concerted activities can be a violation of Section 8(a)(1) where it interferes with Section 7 rights. Amalgamated Meat Cutters, etc., Local No. 364 v. NLRB, 435 F.2d 668 (9th Cir. 1970). However, employer question- ing of employees regarding their concerted activities is not per se unlawful. Penasquitos Village, Inc. v. NLRB, 565 F.2d 1074, 1080 (9th Cir, 1977). “The test is whether, under all the circumstances, the interrogation reasonably tends to restrain or interfere with employees in the exercise of their protected rights.” 7d. at 1080. To be an unfair labor prac- tice, interrogation “must be associated with express or im- plied threats or promises, or form part of an overall pattern tending to restrain or coerce employees with regard to their protected activities. Amalgamated Meat Cutters, 435 F.2d at 669. Appendia 23 The Board affirmed the administrative law judge’s find- ing that the employer in Sparks Nugget unlawfully inter- rogated employee Gail Launius in violation of Section 8(a) (1). The administrative law judge’s determination was based upon its finding that the totality of the circumstances indicated animosity towards the employee for her union activity and that a threat of discharge for any “further” violation of the company’s no solicitation rule was made. This issue presents a close question. However, the infer- ences drawn from the facts by the administrative law judge and affirmed by the Board are reasonable. Finding sub- stantial evidence on the record as a whole, we enforce the Board’s order on this issue. VI. REPRIMAND OF EMPLOYEE DYER An employer violates Sections 8(a)(3) and (1) of the Act, 29 U.S.C. §§ 158(a)(3) and (1) by discriminating to encourage or discourage membership in any labor organiza- tion. Radio Officers’ Union v. NLRB, 347 U.S, 17, 98 L.Ed. 455, 74 S.Ct. 323 (1954). Discrimination violative of Sec- tions 8(a)(3) and (1) may be found where an employer disciplines an employee because that employee has engaged in or is suspected of engaging in union activities. NLRB v. Bin-Dictator Co,, 356 F.2d 210, 214-215 (6th Cir. 1966). The Board found that employee John Dyer was repri- manded by the employer in Sparks Nugget because he was suspected of engaging in union activities and the employer sought to deter him from such activities. (R. 146) While different inferences may be drawn from the facts, the infer- ences drawn by the Board were reasonable and supported by substantial evidence on the record as a whole. We enforce the Board’s order on this issue. #% *- > 24 Appendix CONCLUSION Summarizing our disposition of the various issues con- sidered: 1. We enforce the Board’s orders with regard to the respondents’ refusal to bargain (Section I) ; 2. The Board’s orders concerning the respondents’ no solicitation rules in Barney’s Club and Sparks Nug- get are enforced as modified (Section IT) ; 3. The Board’s order regarding the unilateral changes made in Sparks Nugget is enforced as to the unilateral implementation of the new grievance pro- cedure, but denied as to the unilateral implementation of the insurance program (Section ITI) ; 4, The respondent in Sparks Nugget committed an unfair labor practice in refusing to provide the Union with a copy of the new insurance program; therefore, we enforce the Board’s order on that issue (Section IV); 5. The interrogation of Sparks Nugget employee Launius and the reprimand of employee Dyer were unfair labor practices. Thus, we enforce the Board’s order on those issues (Sections V & VI). IT IS SO ORDERED. Appendia FILED Jul 14 1980 Richard H. Deane Clerk, U.S. Court of Appeals In The United States Court of Appeals For the Ninth Circuit Natrionau Lasor Retations Boarp, Petitioner, and Horet-Moret-RestauRANT EMPLOYEES & Bartenvers Union, Locat 86, Hore, Restaurant & BARTENDERS No. INTERNATIONAL Union, AFL-CIO, Intervenor, vs. Suiver Spur Casino, Respondent. Nationa Lasor Reiations Boarp, Petitioner, and Horet-Moret-ReEsTAuRANT EMPLOYEES & Bartenvers Union, Loca 86, No. Intervenor, vs. Nevapa Cuvs, Inc., Respondent. Nationa Lasor Retations Boarp, Petitioner, and Hore.-Moret-RestavRaANnt EMPLOYEES & Bartenvers Union, Locat 86, Intervenor, vs. Sparks Nvuacet, Inc., d/b/a Joun Ascuaga’s Nuacet, Respondent. No. 77-2311 77-2939 17-2954 -*% -*% 26 Appendix NationaL Lasor REiations Boar, Petitioner, and Horet-MorTe.t-RESTAURANT EMPLOYEES & Bartenvers Union, Locat 86, No. 77-2658 Intervenor, vs. Barney’s Cuvs, Inc. Respondent. National Lasor REuations Boarp, Petitioner, and Hore.-Moret-REsSTAURANT EMPLOYEES & Bartenvers Union, Loca 86, No. 77-2938 Intervenor, vs. Finay, Inc., d/b/a THe Paxace Civs, Respondent. ORDER Before: KENNEDY and ANDERSON, Circuit Judges, and SCHWARTZ,?® District Judge. The panel as constituted in the above case has voted to deny the petition for rehearing and to reject the suggestion for a rehearing en banc. The full court has been advised of the suggestion for en banc rehearing, and no judge of the court has requested *The Honorable Edward J. Schwartz, Chief United States Dis- trict Judge for the Southern District of California, sitting by designation. Appendiz oT a vote on the suggestion for rehearing en banc. Fed. R. App. P. 3b(b). The opinion in these consolidated appeals is amended as follows: At page 16, line 28 (of the typed manuscript), by adding to the modification of the Board’s Order the following language after the word “premises” : “unless such prohibition is demonstrably necessary to maintain production, discipline or security.” and as applied to Barney’s Club, No. 77-2658, and Sparks Nugget, No. 77-2654. The National Labor Relations Board shall forthwith submit proposed judgments reflecting this amendment. The petition for rehearing is denied and the suggestion for a rehearing en banc is rejected. 7% 28 Appendix RECEIVED SEP 19 1980 Severson, Werson, Berke & Melchior RECEIVED Richard H. Deane Clerk, U.S. Court of Appeals AUG 4 1980 Filed 9-12-80 Docketed 8-27-80 ’% United States Court of Appeals For the Ninth Circuit No. 77-2954 NationaL Lasor RExiations Boarp, Petitioner, and Horet-Morer-ResTauRANT EMPLOYEES & Bartenvers Union, Loca 86, Intervenor, v. Sparks Nuacet, Inc., d/b/a Joun AscuaGa’s NuGGET, Respondent. AMENDED JUDGMENT Before: KENNEDY and ANDERSON, Circuit Judges, and SCHWARTZ,? District Judge. THIS CAUSE came on to be heard upon an application of the National Labor Relations Board for the enforce- 1. The Honorable Edward J. Schwartz, Chief United States Dis- trict Judge for the Southern District of California, sitting by designation. Appendix 29 ment of an order issued by it against the Respondent, Sparks Nugget, Inc., d/b/a John Ascuaga’s Nugget, Sparks, Nevada, its officers, agents, successors, and assigns on June 17, 1977. The Court heard argument of respective counsel on December 12, 1979, and has considered the briefs and transcript of record filed in this cause. On May 27, 1980, the Court, being fully advised of the premises, handed down its opinion granting enforcement of the Board’s Order, as modified. In conformity therewith, it is hereby ORDERED AND ADJUDGED by the Court that Re- spondent, Sparks Nugget, Inc., d/b/a John Ascuaga’s Nugget, Sparks, Nevada, its officers, agents, successors, and assigns, shall: 1. Cease and desist from: (a) Maintaining any rule or regulation prohibiting its employees from soliciting on its premises during nonworking hours in nonpublic areas of its premises unless such prohibition is demonstrably necessary to maintain production, discipline or security. (b) Unlawfully interrogating employees concerning their relationship to and activities upon behalf of Hotel-Motel-Restaurant Employees & Bartenders Un- ion, Local 86, Hotel & Restaurant Employees & Bar- tenders International Union, AFL-CIO, (hereinafter called the Union) or any other labor organization. (c) Issuing warning notices to employees in order to deter them from supporting or engaging in activities upon behalf of said Union, or any other labor organiza- tion. (d) Unilaterally instigating, establishing, maintain- ing, or utilizing the Sparks Nugget Employees’ Council and the grievance procedure of which said Council is a part. ae > | 30 2. has found necessary to effectuate the policies of the Act: Appendix (e) Unilaterally instituting any alterations, modifi- cations or changes in the terms and conditions of employment which are mandatory subjects of bargain- ing with the aforesaid Union. (f) Refusing to furnish to said Union a copy of its current insurance program covering employees repre- sented by said Union. (g) Refusing to recognize and bargain with said Union as the exclusive bargaining representative of the employees in the appropriate bargaining unit de- scribed below, with regard to the wages, hours, working conditions, and other terms and conditions of employ- ment of the unit employees: All employees employed by the Respondent in its bar and culinary operations at its Sparks, Nevada, place of business, excluding all other employees, guards and supervisors, as defined in the Act. (h) In any other manner interfering with, restrain- ing, or coercing its employees in the exercise of the rights guaranteed in Section 7 of the National Labor Relations Act (hereinafter called the Act). Take the following affirmative action which the Board (a) Recognize and, upon request, bargain collec- tively with the Union, as the exclusive bargaining rep- resentative of the employees in the appropriate unit described below, with regard to the wages, hours, working conditions and other terms and conditions of employment of the unit employees, and if an under- standing is reached, embody such understanding in a signed agreement. The unit found appropriate for the purposes of collective bargaining is: '% -% Appendix 31 All employees employed by the Respondent in its bar and culinary operations at its Sparks, Nevada, place of business, excluding all other employees, guards and supervisors, as defined in the Act. : (b) Furnish said Union, upon request, a copy of its current insurance policy covering its employees in the above-described bargaining unit. (c) Remove from the personnel file of John Dyer the warning notice it issued to him on or about January 20, 1975. (d) Post at its Sparks, Nevada, place of business copies of the attached notice marked “Appendix.” Copies of the notice on forms provided by the Regional Director for Region 20 of the National Labor Relations Board (San Francisco, California) after being duly signed by an authorized representative of the Re- spondent, shall be posted by the Respondent immedi- ately upon receipt thereof, and be maintained by it for a period of 60 consecutive days thereafter, in conspicu- ous places, including all places where notices to em- ployees 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. (e) Notify the aforesaid Regional Director in writ- ing, within 20 days from the date of this Judgment, what steps the Respondent has taken to comply here- with. Costs in this court in favor of the petitioner and against the respondent. Costs: BRIEF FOR THE PETITIONER $235.54 *% -% 32 Appendiz Endorsed, Judgment Filed and Entered /s/ Ricuarp H. Deane Clerk A TRUE COPY ATTEST: Ricuarp H, DEanE Clerk SO ORDERED: JUDGES: _ AntuHony M. Kennepy, CJ J. Buarne Anperson, CJ Edward J. Schwartz, DJ A TRUE COPY ATTEST 18 SEP 1980 Richard H. Deane Clerk of Court by: Oscar Tagle Deputy Clerk APPENDIX NOTICE TO EMPLOYEES POSTED PURSUANT TO A JUDGMENT OF THE UNITED STATES COURT OF APPEALS ENFORC- ING AN ORDER, AS MODIFIED, OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States overnment WE WILL NOT maintain any rule or regulation pro- hibiting our employees from soliciting on our premises during nonworking hours in nonpublic areas of its premises unless such prohibition is demonstrably necessary to main- tain production, discipline or security. WE WILL NOT unlawfully interrogate employees con- cerning their relationship to and activities upon behalf of Hotel-Motel-Restaurant Employees & Bartenders Union, Local 86, Hotel & Restaurant Employees & Bartenders International Union, AFL-CIO, or any other labor organi- zation. WE WILL NOT issue warning notices to employees in order to deter them from supporting or engaging in activi- ties upon behalf on said Union, or any other labor organi- zation. WE WILL NOT instigate, establish, maintain, or utilize Sparks Nugget Employees’ Council and the grievance pro- cedure of which said Council is a part. WE WILL NOT unilaterally institute any alterations, modifications, or changes in the terms and conditions of employment which are mandatory subjects of bargaining with the aforesaid Union. WE WILL NOT refuse to furnish to said Union a copy of our current insurance program covering employees represented by said Union. WE WILL NOT refuse to recognize and bargain with said Union as the exclusive bargaining representative of 34 Appendiz the employees in the appropriate bargaining unit described below with regard to the wages, hours, working conditions, and other terms and conditions of employment of the unit employees: All employees employed in our bar and culinary opera- tions at our Sparks, Nevada, place of business, exclud- ing all other employees, guards and supervisors, as defined in the Act. WE WILL NOT in any other manner interfere with, restrain, or coerce emplovees in the exercise of the rights guaranteed them by Section 7 of the Act. WE WILL recognize and, upon request, bargain collec- tively with Hotel-Motel-Restaurant Employees & Bartend- ers Union, Local 86, Hotel & Restaurant Employees & Bartenders International Union, AFL-CIO, as the exclusive bargaining representative of the employees in the appro- priate unit described above, with regard to the wages, hours, working conditions, and other terms and conditions of employment of the unit employees, and, if an under- standing is reached, embody such understanding in a signed agreement. WE WILL furnish said Union, upon request, a copy of our current insurance policy covering our employees in the above-described bargaining unit. WE WILL remove from the personnel file of John Dyer the warning notice we issued to him on or about January 20, 1975. SPARKS NUGGET, INC. d/b/a JOHN ASCUAGA’S NUGGET (Employer) (Representative) (Title) _ Appendix 85 This is an official notice and must not be defaced by anyone. This notice must remain posted for 60 consecutive days from the date of posting and must not be altered, defaced, or covered by any other material. Any questions concerning this notice or compliance with its provisions may be di- rected to the Board’s Office, 13018 Federal Building, Box 36047, 450 Golden Gate Avenue, San Francisco, California 94102, Telephone 415-556-0335. > -_ | 36 Appendix United States Court of Appeals For the Ninth Circuit No. 77-2954 NationaL Lasor Retations Boarp, Petitioner, and Horet-More.t-REsTAURANT EMPLOYEES & Bartenpers Union, Loca 86, Intervenor, v. Sparks Nuacet, Inc., d/b/a Joun AscuaGa’s NuGGET, Respondent. CERTIFICATE OF SERVICE The undersigned hereby certifies that one copy of the Board’s amended proposed judginent in the above-cap- tioned case has this day been served upon the following counsel at the addresses listed below: William W. Wertz, Esquire Severson, Werson, Berke & Melchior One Embarcadero Center San Francisco, California 94111 Geoffrey V. White, Esquire Davis, Cowell & Bowe 351 California Street, Suite 420 San Francisco, California 94101 Exxuiotr Moore Elliott Moore Deputy Associate General Counsel NATIONAL LABOR RELATIONS BOARD Dated at Washington, D. C. this 30th day of July, 1980. Appendix Received Richard H. Deane Clerk, U.S. Court of Appeals Aug. 4, 1980 Filed 8-18-80 Dated : 8-4-80 DM Received Aug 21 1980 Severson, Werson, Berke & Melchior United States Court of Appeals For the Ninth Circuit No, 77-2658 Nationa Lasor Rexations Boarp, Petitioner, and Horet-Morte.-RestauranT EMPLOYEES & Bartenpers Union, Locat 86, Intervenor, v. Barney’s Cuivs, Inc., Respondent. AMENDED JUDGMENT 37 Before: KENNEDY and ANDERSON, Circuit Judges, and SCHWARTZ,® District Judge. THIS CAUSE came on to be heard upon an application of the National Labor Relations Board for the enforcement of an order issued by it against the Respondent, Barney’s *The Honorable Edward J. Schwartz, Chief United States Dis- trict Judge for the Southern District of California, sitting by designation. '% 38 Appendiz Club, Incorporated, Stateline, Nevada, its officers, agents, _ guecessors, and assigns on December 17, 1976. The Court heard argument of respective counsel on December 12, 1979, and has considered the briefs and transcript of record filed in this cause. On May 27, 1980, the Court, being fully advised of the premises, handed down its opinion granting enforcement of the Board’s Order, as modified. In con- formity therewith, it is hereby ORDERED AND ADJUDGED by the Court that Re- spondent, Barney’s Club, Incorporated, Stateline, Nevada, its officers, agents, successors, and assigns, shall: 1. Cease and desist from: (a) Maintaining any rule or regulation prohibiting its employees from soliciting on its premises during nonworking hours in nonpublic areas of its premises unless such prohibition is demonstrably necessary to maintain production, discipline or security. (b) Refusing to recognize and bargain in good faith with Hotel-Motel-Restaurant Employees & Bartenders Union, Local 86, Hotel & Restaurant Employees & Bartenders International Union, AFL-CIO, (herein- after called the Union) as the exclusive representative of its employees in the following bargaining unit: All employees employed by it in its bar and culinary operations at its Stateline, Nevada operations, ex- cluding all other employees, guards and supervisors as defined in the Act. (c) In any like or related manner, interfering with, restraining or coercing employees in the exercise of their rights guaranteed in Section 7 of the National Labor Relations Act (hereinafter called the Act). 2. Take the following affirmative action which the Board has found necessary to effectuate the policies of the Act: 7% 7. Appendia 39 (a) Recognize and, upon request, bargain in good faith with the Union as the exclusive representative of its employees in the unit described above. (b) Post at its Stateline, Nevada facility copies of the attached notice marked “Appendix.” Copies of the notice, on forms provided by the Regional Director for Region 20, after being duly signed by its authorized representative, shall be posted by it immediately upon receipt thereof, and be maintained by it for sixty (60) consecutive days thereafter in conspicuous places, in- cluding all places where notices to employees are cus- tomarily posted. Reasonable steps shall be taken by it to insure that said notices are not altered, defaced or covered by any other material. (c) Notify the aforesaid Regional Directors in writ- ing within twenty (20) days from the date of this Judgment, what steps it has taken to comply herewith. Endorsed, Judgment Filed SO ORDERED: and Entered JUDGES: /s/ Ricuarp H. Deane Antuony M. Kennepy, CJ Richard H. Deane Anthony M. Kennedy, CJ Clerk J. Buarye Anperson, CJ A TRUE COPY J. Blaine Anderson, CJ 20 AUG 1980 Epwarp J. Scuwartz, DJ Edward J. Schwartz, DJ ATTEST: Ricuarp H, Deane Clerk Oscar TAGLE Deputy Clerk -% 40 Appendix NATIONAL LABOR RELATIONS BOARD ' ‘NOTICE TO EMPLOYEES Posted Pursuant to a J udgment of the United States Court of Appeals Enforcing an Order, as Modified, of the National Labor Relations Board An Agency of the United States Government We hereby notify you that: WE WILL NOT prohibit our employees from soliciting on our premises during nonworking hours in nonpublic areas of its premises unless such prohibition is demonstrably necessary to maintain production, discipline or security. WE WILL NOT refuse to recognize and bargain in good faith with Hotel-Motel-Restaurant Employees & Bartenders Union, Local 86, Hotel & Restaurant Employees & Bartend- ers International Union, AFL-CIO, as the exclusive repre- sentative of our employees in the foiiowing bargaining unit: All employees employed by us in our bar and culinary operations at our Stateline, Nevada operations, exclud- ing all other employees, guards, and supervisors as defined in the Act. WE WILL NOT in any like or related manner interfere with, restrain or coerce employees in the exercise of their rights guaranteed by Section 7 of the Act. WE WILL recognize and, upon request, bargain in good faith with said Union as the exclusive representative of our employees in that unit. BARNEY’S CLUB, INCORPORATED (Employer) Dated 0 TARTS Sa aR (Representative) (Title) s* 7% Appendix 41 THIS IS AN OFFICIAL NOTICE AND MUST NOT BE DEFACED BY ANYONE This notice must remain posted for 60 consecutive days from the date of posting and must not be altered, defaced, or covered by any other material. Any questions concern- ing this notice or compliance with its provisions may be directed to the Board’s Office, 13018 Federal Building, Box 36047, 450 Golden Gate Ave., San Francisco, *% 7% 42 Appendix | Barney’s Club, Incorporated and Hotel-Motel- Restaurant Employees & Bartenders Union, Local 86, Hotel and Restaurant Employees & Bartenders International Union, AFL-CIO. Case 20-CA-9737 December 17, 1976 DECISION AND ORDER By CHarrmMAn MurpPHY AND MEMBERS FANNING AND PENELLO On Februar [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385007_1057%3A1. Public record. Not legal advice.