Opposition Brief — Local 54, Hotel Employees & Restaurant Employees International Union v. National Labor Relations Board

No. 89-1228

SPANIOL, dR

In the Supreme Court of the Unite States—

OCTOBER TERM, 1989

LOCAL 54, HOTEL EMPLOYEES & RESTAURANT

EMPLOYEES INTERNATIONAL UNION, AFL-CIO,

PETITIONER

v.

NATIONAL LABOR RELATIONS BOARD

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

BRIEF FOR THE

NATIONAL LABOR RELATIONS BOARD

IN OPPOSITION

KENNETH W. STARR

Solicitor General

Department of Justice

JERRY M. HUNTER Washington, D.C. 20530

General Counsel 202) 633-2217

D. RANDALL FRYE

Associate General Counsel

ROBERT E. ALLEN

Associate General Counsel

NORTON J. COME

Deputy Associate General Counsel

LINDA SHER

Assistant General Counsel

CARMEL P. EBB

Attorney

National Labor Relations Board

Washington, D.C. 20570

BEST AVAILABLE COPY = r

QUESTION PRESENTED

Whether petitioner violated Section 8(b)(1)(A)

of the National Labor Relations Act, 29 U.S.C. 158

(b) (1) (A), when it imposed fines on union members

who, during an economic strike, notified petitioner

that they wished to change their status from full

membership to financial core membership and then

returned to work.

TABLE OF CONTENTS

Page

Opinions below ee. ets oe no Pip ire 1

Jurisdiction ated . BBP FEE EY CPC ARI AOA 2

eS acancennesins Renter en is he ak 2

Argument ....... | Ca ST a Nk Ne PPR Dr RC OS 7

Conclusion ................ as EEA ce er RE ceeds 12

TABLE OF AUTHORITIES

Cases:

Carpenters District Council for Seattle, 277

N.L.R.B. 530 (1985) ............ pe ROR: lS ACRE 6,8

Carpenters Local 470, 277 N.L.R.B. 513 (1985)... 6, 8

Communications Workers v. Beck, 487 U.S. 735

Sa TL seeidaibahaiebcwnascanctaamens 3

NLRB Vv. Allie-Chalmers Myo. Ce. 388 U.S. 175

as a a OE eT 5, 7,11

NLRB vy. General Motors Corp., 373 U.S. 734

a lhe ee ca eR 3, 11

NLRB v. Granite State Joint Bd., Textile Workers

Union, Local 1029, 409 U.S. 213 (1972) ............ 7,8, 11

Pattern Makers’ League v. NLRB, 473 U.S. 95

| > en eas 3,7, 8, 9, 10, 11

Scofield v. NLRB, 394 U. S. 423 (1969) . ae 8

Statutes:

National Labor Relations Act, 29 U.S.C. 151 et

seq.:

I NE ak oe i snonnakioonmminebonsans 5, 7

§ 8(a) (3), 29 U.S.C. 158 (a) (8) ........000022..... 3, 9,10, 11

§ 8(b), eT ea |) cc 5

§ 8(b) (1) (A), 29 U.S.C. 158(b) (1) (A) 4, 5, 7, 8,

9,10

§ 8(b) (2), 29 U.S.C. 158 (b) (2) 3

(IIT)

on “*

f {oo oE!

a a aes

Iu the Supreme Court of the United States

OCTOBER TERM, 1989

No. 89-1228

LOCAL 54, HOTEL EMPLOYEES & RESTAURANT

EMPLOYEES INTERNATIONAL UNION, AFL-CIO,

PETITIONER

U.

NATIONAL LABOR RELATIONS BOARD

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

BRIEF FOR THE

NATIONAL LABOR RELATIONS BOARD

IN OPPOSITION

OPINIONS BELOW

The opinion of the court of appeals (Pet. App. A2-

A16) is reported at 887 F.2d 28. The decision and

order of the National Labor Relations Board (Pet.

App. A17-A21), affirming the decision of the admin-

istrative law judge (Pet. App. A22-A38), is reported

at 291 N.L.R.B. No. 140.

(1)

2

JURISDICTION

The judgment of the court of appeals was entered

on October 5, 1989. A petition for rehearing was

denied on November 1, 1989 (Pet. App. Al). The

petition for a writ of certiorari was filed on January

26, 1990. The jurisdiction of this Court is invoked

under 28 U.S.C. 1254(1).

STATEMENT

1. Petitioner, Local 54, Hotel Employees and Res-

taurant Employees International Union, AFL-CIO,

and Elsinor Shore Associates T/A Atlantis Casino

Hotel were parties to a collective bargaining agree-

ment effective from September 1983 to September

1988. The agreement included a wage reopener

clause and a union security provision, which required

bargaining unit employees to join the union and re-

main members in order to retain their employment.

In September 1987, in support of economic demands

it had advanced in mid-term negotiations, petitioner

commenced a strike and established a picket line.

The unexpired agreement remained in force through-

out the strike. Pet. App. A5, A24-A25.

During the strike, more than 100 bargaining unit

employees crossed the picket line and returned to

work: Pet. App. A5-A6. Before doing so, each sent

the following letter to petitioner (id. at A6):

I am an employee of Atlantis Casinu Hotel in

Atlantic City, New Jersey. This letter will serve

as notification that I am changing my memher-

ship status in Local 54, Hotel Employee and

Restaurant Employees (H.E.R.E.) International

Union from that of a “full” member to that of a

“financial core’ member. As a “financial core”

member, I wil! continue to pay to the union all

3

initiation fees and dues uniformly required of

all members [for] maintaining membership. I

am not resigning from the union. I am only

changing my membership status. I will not,

henceforth, be subject to any obligations of mem-

bership other than that of paying uniformly re-

_ quired dues and initiation fees required of all

Local 54 H.E.R.E. members.'"'

‘Under Sections 8(a)(3) and 8(b)(2) of the Act, 29

U.S.C. 158(a) (3), 158(b) (2), it is an unfair labor practice

for an employer or a union to discriminate against an em-

ployee in his employment ‘‘to encourage or discourage mem-

bership in any labor organization.” However, under a proviso

to Section 8(a) (3), an employer and a union are permitted

to include a union security provision in their collective bar-

gaining agreement—a provision requiring bargaining unit

employees to become members of the union within 30 days of

employment and to maintain membership as a condition of

continued employment—provided that:

no employer shall justify any discrimination against an

employee for nonmembership in a labor organization * * *

if he has reasonable grounds for believing that member-

ship was denied or terminated for reasons other than

the failure of the employee to tender the periodic dues

and the initiation fees uniformly required as a condition

of acquiring or retaining membership * * *.”

In NLRB v. General Motors Corp., 373 U.S. 734, 742 (1963),

the Court observed that under Section 8(a) (3), “ ‘[m]ember-

ship’ as a condition of employment is whittled down to its

financial core.” “[A]n employee required by a union security

agreement to assume financial ‘membership’ is not subject

to union discipline. Such an employee is a ‘member’ of the

union only in the most limited sense.” Pattern Makers’

League V. NLRB, 473 U.S. 95, 106 n.16 (1985). See also

Communications Workers Vv. Beck, 487 U.S. 735 (1988). In

seeking “financial core’’ membership, therefore, the employees

who crossed the picket line in this case sought to limit their

membership in the union to those obligations enforceable

consistent with Section 8(a) (3).

4

Before taking this step, these employees were full

members of the union in good standing and were cur-

rent in their obligation to pay dues. After returning

to work, they continued to satisfy their financial ob-

ligations to petitioner. 7d. at A6-A7, A25.

Under petitioner’s constitution and bylaws, the

timely payment of dues and initiation fees is the

only condition for full membership. Neither peti-

tioner’s constitution and bylaws nor the collective

bargaining agreement refers to any limited form of

membership. Pet. App. A7, A25. Petitioner notified

each of the nonstrikers that its constitution and by-

laws contain no provision for “financial core’ affilia-

tion and that the ‘only level of affiliation which

exists is that of a full member based on the payment

of required dues and initiation fees.” Each non-

striker was also advised that he or she was “still

deemed to be a full member of this Union and ac-

cordingly bound by the terms and conditions of its

By-laws and all obligations arising thereunder.” /d.

at A25-A26.

Thereafter, petitioner notified most of the non-

strikers that it was bringing intra-union charges

against them because they had crossed the picket

line. After notice and hearing, almost half were noti-

fied that they had been found guilty of the charges

and fined in amounts ranging from $50 to $1500.

Pet. App. A26.

2. The Board, affirming the decision of the admin-

istrative law judge, held that petitioner violated Sec-

tion 8(b) (1) (A) of the NLRA, 29 U.S.C. 158(b) (1)

(A), by rejecting resignations from full union mem-

bership, by processing charges against empleyees who

“previously had declared unequivocally their inten-

tion to become financial core members,” and by fining

5

them for conduct occurring after that declaration.

Pet. App. A17-A18, A33-A34.°

The Board rejected petitioner’s contention that

NLRB y. Allis-Chalmers Mfg. Co., 388 U.S. 175

(1967), established petitioner’s right to impose dis-

cipline upon members who submitted “financial

core” letters. The Board acknowledged that under

Allis-Chalmers “a labor organization may lawfully

invoke internal disciplinary machinery against full

members, who remain in that capacity, while violat-

ing internal rules against strike-breaking.” Pet.

App. A28. However, the Board continued, subsequent

decisions by this Court have manifested ‘‘a judicially

approved concept of ‘voluntarism,’ whereby employ-

ees are given broad personal discretion to alter their

membership and neutralize internal union restric-

* Section 8(b) of the NLRA provides, in pertinent part:

It shall be an urfair labor practice for a labor organi-

zation or its agents—

(1) to restrain or coerce (A) employees in the

exercise of the rights guaranteed in section 157 of

this title: Provided, That this paragraph shall not

impair the right of a labor organization to prescribe

its own rules with respect to the acquisition or re-

tention of membership therein * * *.

The rights of employees guaranteed by Section 7 of the Act,

29 U.S.C. 157, include:

the right to self-organization, to form, join, or assist

labor organizations, to bargain collectively through repre-

sentatives of their own choosing, and to engage in other

concerted activities for the purpose of collective bargain-

ing or other mutual aid or protection, and * * * to refrain

from any or ail such activities except to the extent that

such right may be affected by an agreer:c.it requiring

membership in a labor organization as a condition of

employment as authorized in section 158(a) (3) of this

title.

6

tions.” Jd. at A29. The Board noted that in Carpen-

ters District Council for Seattle (Gordon Construc-

tion), 277 N.L.R.B. 530 (1985), and Carpenters

Local 470 (Tacoma Boatbuilding), 277 N.L.R.B. 514

(1985), it had held that under that policy of volun-

iarism, employees “who remain members [of a

union], but declare financial core status, thereafter

* * * are exempt from union prohibitions.” Pet.

App. A29. The Board found those decisions disposi-

tive of this case.

The Board added that, under petitioner’s view,

“the union shop arrangement would limit the unwit-

ting member to two choices; i.e. support the strike or

resign from full membership and risk discharge,”

and that, if accepted, petitioner's view ‘would

broaden the enforceable scope of the union shop

clause by approving it as an instrumentality for the

indirect enforcement of nonfinancial union regula-

tions.” Pet. App. A31.

3. The court of appeals enforced the Board’s order.

After reviewing the relevant decisions of this Court

and the basis for the Board’s decisions in Tacoma

Boatbuilding and Gordon Construction (Pet. App.

A10-A13), the panel approved the Board’s position

that employees subject to a union security provision

must be allowed to assume financial core membership

in a union. The court reasoned that “if striking

members enjoy a statutorily protected right to

change their minds and return to work after com-

municating their resignations, that choice ought to

be, and is free of job loss constraints” (id. at Al5).

The court rejected petitioner’s contention that “allow-

ing financial core membership regardless of whether

it is provided in the union shop agreement interferes

with the process of collective bargaining.” Ibid. The

panel fouad that contention to be foreclosed by prin-

7

ciples recognized in this Court’s cases (id. at Al5-

Al6):

First, the only aspect of union membership that

can be required pursuant to a union shop agree-

ment is the payment of dues. Second, member-

ship as a condition of employment has been whit-

tled down to its financial core. Third, a distine-

tion exists between full membership and finan-

cial core membership. Fourth, an employee re-

quired by a union security agreement to assume

financial core “membership” is not subject to

union discipline.

ARGUMENT

Under Section 7 of the NLRA, 29 U.S.C. 157, em-

ployees have the right to engage in or refrain from

concerted activities, including strikes, and it is gen-

erally an unfair labor practice for a union to restrain

or coerce an empleyee in the exercise of that right,

29 U.S.C. 158(b)(1)(A): see Pattern Makers’

League v. NLRB, 473 U.S. 95, 101 (1985). AI-

though any form of union discipline for a refusal

to participate in a strike could be said to restrain

the exercise of the right not to strike, this Court has

recognized that Section 8(b)(1)(A) does not fore-

close all strike discipline. In NLRB y. Allis-Chalmers

Mfg. Co., supra, the Court held that Section 8(b) (1)

(A) does not prohibit a union from disciplining em-

ployees who cross a picket line while they are full

union members. See 388 U.S. at 196-197 & n.37.

As the Board and the court of appeals noted, how-

ever, this Court’s subsequent decisions establish

limits on a union’s power to punish nonparticipation

in a strike. In NLRB vy. Granite State Joint Ba.,

Textile Workers Union, Local 1029, 409 U.S. 213

8

(1972), the Court held that a union could not dis-

cipline an employee who had resigned from the union

before returning to work during a strike, where res-

ignations were not prohibited by the union constitu-

tion. The Court explained that “|w]here a member

lawfully resigns from a union and thereafter engages

in conduct which the union rule proscribes, the union

commits an unfair labor practice when it seeks en-

forcement of fines for that conduct.” Jd. at 217.

Further, in Pattern Makers, the Court held that “a

union is precluded from fining employees who have

attempted to resign when resignations are prohibited

by the union’s constitution.” 473 U.S. at 101. The

Court explained that Section 8(b)(1)(A) of the Act

does not authorize unions to restrict the right_to re-

sign and that enforcement of such restrictions would

be “inconsistent with the policy of voluntary union-

ism implicit in $8(a)(3).” 473 U.S. at 102-105,

104. In enacting that Section, the Court declared,

“Congress * * * sought to eliminate completely any

requirement that the employee maintain full union

membership.” Jd. at 107. Thus, a union is free to

enforce only “a properly adopted rule which reflects

a legitimate union interest, impairs no policy Con-

gress has imbedded in the labor laws, and is reason-

ably enforced against union members who are free

to leave the union and escape the rule.” Seofield vy.

NLRB, 394 U.S. 423, 430 (1969) (emphasis added).

Relying upon principles recognized in Textile

Workers, Scofic ld, and Pattern Makers, the Board

has held that the Act does not allow a union to im-

pose discipline fer nonparticipation in a strike on

employees who first relinquish full membership in the

union in favor of financial core membership. Carpen-

fers District Council for Seattle (Gordon Construc-

fiow). supra: Carpe fers Local a0 (Tacoma Boat-

9

building), supra. The Board adhered to that inter-

pretation of the statute in this case—and also re-

affirmed that a union may not deny core financial

membership to those employees who wish to adopt it.

See Pet. App. A29-A32.

Petitioner acknowledges implicitly that Pattern

Makers allows an employee to avoid union discipline

by resigning from a union altogether and that a

union may not restrict the right to resign, but it ar-

gues that Section 8(b)(1)(A) of the Act permits a

union to refuse to recognize financial core members

who are immune from discipline. Pet. 9-10. Empha-

sizing that its members are free to resign (Pet. 5,

15), petitioner argues that Allis-Chalmers recognizes

its “right to impose reasonable discipline on members

who do not obey [union] rules.” Pet. 11. As the

Board has recognized, however, acceptance of this

position would subject employees who are subject to

a union security provision to a Hobson’s choice. Em-

ployees would be forced to choose between full union

membership, accompanied by exposure to union

discipline, and possible loss of employment. The

Board’s refusal to require such a choice is entirely

reasonable and consistent with this Court’s decisions.’

The approach that the Board has fashioned for

eases of this kind is a reasonable accommodation of

Section 8(a)(3)’s limited authorization of union

security clauses and of the policy of voluntary union-

ism, recognized in Pattern Makers, that this Section

*In Pattern Makers, the resignations and subsequent re-

fusals to honor the picket line occurred after the expiration of

the collective bargaining agreement. 473 U.S. at 97. The

Board has held that a union security provision in an expired

agreement is not enforceable; thus, the employees who re-

signed from the union in Pattern Makers were not exposed

to discharge on account of such a provision.

10

also embodies. Under Section 8(a)(3), a union and

an employer are permitted to enter into a union se-

curity provision that requires membership in a union

as a condition of employment, but enforcement of

such a provision is permitted only in cases in which

an employee has refused to comply with his obliga-

tion to pay union dues. As Pattern Makers noted,

473 U.S. at 107, Congress’s intention in enacting this

provision was “to eliminate completely any require-

ment that the employee maintain full union member-

ship.” If a union were free to refuse to recognize

the limited form of membership contemplated by Sec-

tion 8(a)(3), employees would be effectively com-

pelled—-contrary to Pattern Makers—to maintain

full membership in order to avoid the possibility of

discharge. Thus, the approach that the Board has

followed in Tacoma Boathuilding, Gordon Construc-

tion, and this case is a logical corollary of Pattern

Mckers.'

The Board’s position does not interfere with the

authority that Section &(b)(1)(A)_ reserves to

unions to prescribe rules “with respect to the acquisi-

tion or retention of membership therein.” See Pet.

9-10. In Pattern Makers, the Court explained that

the rules encompassed by this provision are “those

that provide for the expulsion of employees from the

union.” 473 U.S. at 109. Pattern Makers also dis-

poses of petitioner’s related contention (Pet. 10) that

the “disciplinary proceedines and penalties” that fol-

4 Indeed, as a practical matter, there is little difference in

substance between resignation and adoption of financial core

status. An employee who chooses that status is not subject to

the burdens and does not enjoy the benefits of full union

membership: he thus remains “a ‘member’ of the union only

in the most limited sense.” Pattern Makers, 473 U.S. at 106

n.16.

11

lowed petitioner’s refusal to recognize “financial

core” status were “internal proceedings and did not

impact upon such members’ employment rights vis-a-

vis the employer.” There, the Court rejected the ar-

gument that when “offending members are not dis-

charged, but only fined” there is no interference

“with workers’ employment rights.” 473 U.S. at 107.

Moreover, as the Board found and the court of ap-

peals agreed, the union’s refusal to recognize finan-

cial core status did affect the nonstrikers’ employ-

ment rights in this case because they risked job loss

if they resigned their union membership.

Petitioner’s additional contention (Pet. 11-12) that

the decision below interferes with its ability to per-

form its collective bargaining responsibilities and de-

prives it of the fruits of collective bargaining is also

without merit. Consistent with Section 8(a)(3), a

union and an employer may not enforce a union se-

curity clause that requires anv obligation other than

financial support. General Motors Corp., 373 U.S. at

742; see note 1, supra.’

5 Petitioner’s reliance (Pet. 11, 14) on NLRB Vv. Allis-

Chalmers Mfg. Co., 388 U.S. 175 (1967), is misplaced. In

that case, the employees who were disciplined had elected to

acquire and retain “full union membership,” 388 U.S. at 196,

and the Court expressly reserved the question whether disci-

pline could be imposed “on members whose membership was

in fact limited to the obligation of paying monthly dues,” id.

at 197. See NLRB v. Granite State Joint Bd., Textile Workers

Union, Local 1029, 409 U.S. 213, 215 (1972).

12

CONCLUSION

The petition for a writ of certiorari should be

denied.

Respectfully submitted.

KENNETH W. STARR

Solicitor General

JERRY M. HUNTER

General Counsel

D. RANDALL FRYE

A sociate Ge pie ral Cn inszel

ROBERT E. ALLEN

A O¢ “ite (,enera ( ‘) IRE

NORTON J. COME

De) ty A f ir é (6 ; all nsel