Georgetown Hotel v. National Labor Relations Board

835 F.2d 1467, 266 U.S. App. D.C. 371, 127 L.R.R.M. (BNA) 2129, 1987 U.S. App. LEXIS 16855

• Court: Court of Appeals for the D.C. Circuit
• Decided: December 29, 1987
• Docket: 86-1643
• Status: Published

Opinions

Opinion for the Court filed by Circuit Judge EDWARDS.

Dissenting Opinion filed by Circuit Judge SILBERMAN.

HARRY T. EDWARDS, Circuit Judge:

This case involves an unfair labor practice charge filed by Local 25 of the Hotel Employees and Restaurant Employees International Union, AFL-CIO (“Union”), with the National Labor Relations Board (“NLRB” or “Board”), alleging that the Georgetown Hotel (“Hotel”) violated sections 8(a)(1) and (5) of the National Labor Relations Act (“Act”), 29 U.S.C. § 158(a)(1), (5) (1982), by refusing to bargain with the Union after voluntarily recognizing it as the bargaining representative of the Hotel’s housekeeping, housemen, linen and bellmen employees (“housekeeping employees”). Relying on inferences alone, an Administrative Law Judge (“AU”) found that the Hotel had, in fact, voluntarily recognized the Union, and had therefore violated the Act by subsequently refusing to bargain. The AU thus issued a recommended order directing the Hotel to bargain with the Union. The Board summarily adopted the AU’s decision and recommended order.

Because there is no evidence in the record even remotely suggesting that the Hotel recognized the Union, the chain of inferences adopted by the Board is devoid of support. Accordingly, we hereby reverse the decision of the Board and deny its petition to enforce the order to bargain.

I.Background

On Friday, March 12, 1982, four of the Union’s agents, led by Ronald Richardson, met with the Hotel’s managing director, Jack Rosenbloom, in an attempt to secure Rosenbloom’s voluntary recognition of the Union as the bargaining representative of the Hotel’s housekeeping employees. Upon entering Rosenbloom’s office, Richardson handed Rosenbloom 17 union authorization cards, which Richardson claimed were signed by a majority of the Hotel’s housekeeping employees, together with photocopies of each card.¹ Following a request from Richardson, Rosenbloom confirmed that there was a photocopy of each card.²

Richardson then asked Rosenbloom to sign a union recognition agreement. Ro-senbloom refused. He later explained that he refused to sign the agreement because he “was not familiar with the names of the employees in the housekeeping department, and also there was no way that [he] could confirm or validate the signatures on the cards.”³ Richardson testified that Rosen-bloom agreed, nonetheless, to sign the agreement and to commence negotiations when and if he could verify that the names on the cards appeared on the Hotel’s payroll records and that they represented a majority of the Hotel’s housekeeping employees.⁴ Rosenbloom denied making this agreement.⁵

Both sides agree, however, that the March 12 meeting ended with Richardson leaving Rosenbloom the photocopies of the cards and the proposed union recognition agreement. Rosenbloom immediately contacted Peter Chatilovicz, an attorney for the Hotel Association of Washington, D.C. Chatilovicz informed Rosenbloom that he had three options: he could simply do nothing; he could attempt to confirm the Union's alleged majority status; or he could file an election petition with the Board.⁶ Chatilovicz advised Rosenbloom to send him the cards and the union recognition agreement as soon as possible, and to take no other action.⁷

On Tuesday, March 16, Chatilovicz and Richardson met for lunch at the Mayflower Hotel.⁸ Richardson later testified that, after he described the March 12 meeting, Chatilovicz made the following remark: “I know that you’ve been through this, and that you’ve done it already, and Mr. Rosen-bloom reached an agreement, but we would like very much to have [a Board] election.” ⁹ According to the Board’s General Counsel, “Richardson’s initial response [to Chatilovicz’ proposal] was that he was not concerned with Rosenbloom’s problem and that the Union would file charges with the Board and picket if the Hotel fired Rosen-bloom and tried to renege on the agreement.” ¹⁰ Nonetheless, Richardson suggested that a private, non-Board election be conducted.¹¹

Chatilovicz relayed this suggestion to Ro-senbloom, who, after consulting with officials from Wayside Realty Group, Inc. (“Wayside”), the Hotel’s corporate owner, agreed to a private election. The arrangements for a March 24 election were set forth in a letter from Chatilovicz to Richardson dated March 23.¹² The letter contained a list of 31 employees who were eligible to vote in the election, and the following statement:

It is agreed that if Local 25 wins the election the Hotel will recognize the Union as the exclusive bargaining representative for the above employees. If the Hotel should win the election, Local 25 agrees that it shall be barred from petitioning for an election or seeking recognition by any other means for a period of six months.¹³

It is undisputed that Richardson agreed to these terms.

Later that day, however, the Hotel retained new counsel who advised that the election be cancelled. The Hotel then informed the Union that it would not proceed with the election, thus prompting the Union to file the unfair labor practice charge with the Board that forms the basis of this case.

Following the issuance of a complaint by the Board’s General Counsel, a hearing was held before an AU on January 4 and 5,1983. In a decision rendered on April 22, 1983, the AU first rejected the Union’s claim that Rosenbloom agreed to recognize the Union at the March 12 meeting after inspecting the authorization cards proffered by Richardson: “it can hardly be argued that assenting to check the cards amounts to assenting to recognize the Union.” ¹⁴

The AU did find, however, “that Rosen-bloom agreed to recognize the Union upon his verification that the names on the signed cards also appeared on [the Hotel’s] payroll records and represented a majority of employees on [the] payroll records.” ¹⁵ Thus, the critical question was whether the Hotel ever fulfilled this conditional agreement by actually checking the cards against the Hotel’s payroll records. In answering this question in the affirmative, the AU could not cite any direct evidence that Rosenbloom, or anyone else for that matter, actually checked the cards. Instead, the AU relied on the following reasoning:

[T]he condition for Rosenbloom’s recognition of the Union (verification that 17 signed cards represented legitimate employees and a majority of employees) was met and satisfied, as evidenced by the oral agreement reached by Richardson and Chatilovicz on March 13 or 15, and thereafter reduced to writing in a letter signed and dated March 28. The letter shows that [the Hotel] had 30 employees in its employ on March 12, ... and that 17 of the names on the signed cards appear in the letter’s list of 30 eligible voters. It may be reasonably inferred from this agreement that [the Hotel] checked the names on the signed cards with names on its payroll records, and found that they were not only valid but represented a majority of its 30 or 31 employees....

Consequently, I conclude and find that [the Hotel], through its first-retained legal counsel and agent (Mr. Chatilovicz) acknowledged in oral conversations with Richardson on March 13 or 15, and in its letter to the Union of March 23, that the Union actually possessed signed cards from a majority of [the Hotel’s] employees on March 12. Such acknowledgement was the verifying condition upon which Manager Rosenbloom agreed to recognize the Union... ,¹⁶

After finding that the Hotel had voluntarily recognized the Union as the representative of the housekeeping employees, the AU concluded that the Hotel had violated the Act by refusing to bargain with the Union. Consequently, the AU recommended that the Hotel be ordered to bargain with the Union.

The Hotel and Wayside filed timely exceptions with the Board. Over three years later, on September 9,1986, the Board summarily affirmed the AU’s decision and adopted his recommended order. Wayside Realty Group, Inc. & Georgetown Hotel, 281 N.L.R.B. No. 45 (Sept. 9, 1986) (“Board op.”), reprinted in J.A. 32.¹⁷ In a one-paragraph footnote, the Board stated that the Hotel agreed on March 12 “to recognize the Union upon its verification that the card signers were on its payroll.”¹⁸ Furthermore, the Board described the aborted private election as a “nullity [which] left the [Hotel] with the obligation, according to its earlier agreement, to voluntarily recognize and bargain with the Union on the basis of a card majority.”¹⁹ The Board did not find that the card check was actually performed.

The Hotel filed a petition for review of the Board’s decision and order with this court on November 28, 1986. The Board cross-appealed for enforcement of its order against both the Hotel and Wayside.²⁰ It is undisputed that this court has jurisdiction under sections 10(e) and (f) of the Act. 29 U.S.C. § 160(e), (f) (1982).

II. Analysis

The law regarding voluntary recognition is straightforward.. In Linden Lumber Division v. NLRB, 419 U.S. 301, 95 S.Ct. 429, 42 L.Ed.2d 465 (1974), the Supreme Court held that an employer does not commit an unfair labor practice by refusing to accept evidence of majority status proffered by a union through some means other than a Board election. Thus, when confronted with a request for recognition based upon a check of authorization cards, an employer has the right to refuse and insist that the union seek a Board election.

In a line of cases stretching back to Snow & Sons, 134 N.L.R.B. 709 (1961), enforced, 308 F.2d 687 (9th Cir.1962), however, voluntary recognition has been found to have occurred when an employer agrees to recognize a union through a card check or some other procedure and subsequently confirms the union’s majority status through that procedure. Thus, the Board has held that an employer may commit an unfair labor practice if it corroborates a union’s majority status pursuant to an agreed-upon procedure, and then reneges on its promise of recognition. While these cases are fact-specific, there is a common thread — in each case the Board has found abundant evidence that the union’s majority status was in fact verified according to the agreed-upon procedure. In Cam Industries, Inc., 251 N.L.R.B. 11 (1980), enforced, 666 F.2d 411 (9th Cir.1982), for example, the employer signed an agreement in which it promised to grant recognition after an official from the state conciliation service checked the authorization cards furnished by a union and determined that they represented a majority of the employees in the unit at issue. A state conciliator then compared the cards with the employer’s payroll records and W-2 forms. See also Without Reservation, 280 N.L.R.B. No. 165 (July 31, 1986) (clergyman checked cards).²¹

By contrast, in the instant case, neither the AU nor the Board found any evidence that Rosenbloom or his agent, Chatilovicz, actually verified the Union’s majority status according to the agreed-upon procedure — a comparison of the 17 authorization cards with the Hotel’s payroll records. Indeed, the General Counsel conceded at oral argument that there is not one iota of evidence in the record that suggests otherwise. Yet, the AU (and the Board by adopting the AU’s findings) somehow inferred that a card check was performed from the mere fact that Chatilo-vicz and Richardson orally agreed to a private election, and then memorialized this agreement in the March 23 letter.²² This finding is quite extraordinary, because it totally defies both logic and common sense.

This court is obligated to affirm the decision below if it is supported by substantial evidence in the record considered as a whole. See Universal Camera Corp. v. NLRB, 340 U.S. 474, 488, 71 S.Ct. 456, 464, 95 L.Ed. 456 (1951); NLRB v. Gateway Theatre Corp., 818 F.2d 971, 974 (D.C.Cir.1987). However, in this case, because we are unable to find a shred of evidence to support the Board’s rationale, we have no choice but to reverse the decision under review. It simply does not follow that, because the Hotel agreed to a private election and created an employee list, Rosen-bloom or Chatilovicz had checked the authorization cards. Moreover, it defies common sense to argue that Rosenbloom or Chatilovicz could not have prepared the eligibility list without first checking the names on the cards.²³ Thus, unlike Cam Industries, Inc. and Without Reservation, in this case the Board is unable to point to any evidence in the record to suggest that verification, the critical prerequisite to recognition, ever occurred.²⁴

To support the ALJ’s conclusion, one would have to believe that “human nature” instinctively led Rosenbloom or Chatilovicz to check the cards against the payroll list. This view is untenable; indeed, the facts of this case suggest just the opposite, since Chatilovicz’ immediate reaction was to instruct Rosenbloom that he should not check the cards. Moreover, a “human nature” approach would result in a rigid rule whereby in any case in which an employer receives cards from a union, it must always be assumed that the employer will attempt to verify that the names on the cards are legitimate and represent a majority of the employees in an appropriate unit. To our knowledge, the Board has never enunciated such a rule to guide its judgments in cases of this sort, and the General Counsel has not explained why this court sua sponte should adopt this proposition. See Darr v. NLRB, 801 F.2d 1404, 1408-09 (D.C.Cir.1986) (Board must articulate a theory to justify its decision).

If we focus on the credited evidence in this record, we are left with a simple situation in which Rosenbloom reneged on his promise to verify that the names on the cards represented a majority of the housekeeping employees. The Board’s only relevant precedent, United Buckingham Freight Lines, 168 N.L.R.B. 684 (1967), directly supports the Hotel’s position that an employer is free to repudiate a voluntarily agreed-upon verification procedure and to insist on a Board election, so long as the employer makes this choice prior to actually verifying the Union’s majority status.²⁵ The General Counsel has not offered any arguments for why a different rule should apply in this case. See Oil, Chemical & Atomic Workers Int’l Union v. NLRB, 806 F.2d 269, 273-75 (D.C.Cir.1986) (enforcement of orders denied due to Board’s unexplained departure from precedent).²⁶

In short, the Union in this case had nothing more than signed cards from a majority of the housekeeping employees. That alone was not enough to achieve bargaining status, absent recognition by the Hotel. See Linden Lumber Division, supra. But, as the Board found, the Hotel management gave only a conditional promise to recognize the Union if Rosen-bloom personally verified that the names on the cards appeared on the Hotel’s payroll records and represented a majority of the housekeeping employees. When Ro-senbloom subsequently declined to seek this verification, the condition could not be met and recognition could not be achieved without an election. See id.; United Buckingham Freight Lines, supra. Since the Hotel lawfully declined to recognize the Union and did not otherwise violate the Act, the Board had no basis upon which to find a refusal to bargain.

III. Conclusion

For the reasons stated above, we grant the Hotel’s petition for review and deny the Board’s petition to enforce. The decision of the Board is hereby reversed.

So ordered.

1 . It is undisputed that the Hotel had 30 or 31 housekeeping employees at the time of the March 12 meeting.

2 . Each card was titled "Authorization for Representation," and included the following statement: “I desire to be represented by Hotel & Restaurant Employees Local 25, AFL-CIO, and I hereby designate Local 25 as my bargaining agent in matters of wages, hours and other conditions of employment." Wayside Realty Group, Inc. & Georgetown Hotel, No. 5-CA-14675, slip op. at 5 (ALJ decision and order Apr. 22, 1983) ("ALJ op.”), reprinted in Joint Appendix ("J.A.") 11, 15.

3 . Transcript of Hearing (Jan. 5, 1983) (“Tr. II") at 306, J.A. 336. Rosenbloom had been working at the Hotel for approximately four weeks at the time of the March 12 meeting. AU op. at 10 n. 10, J.A. 20 n. 10.

4 . Transcript of Hearing (Jan. 4, 1983) ("Tr. I”) at 18, J.A. 66. Richardson also testified that, before he handed Rosenbloom the cards, Rosen-bloom agreed to recognize the Union immediately if the cards alone demonstrated that the Union represented a majority of the housekeeping employees. Tr. I at 13-14, J.A. 61-62. The AU discredited this testimony, AU op. at 10-11, J.A. 20-21, and, more important, the General Counsel does not claim on this appeal that the Union secured recognition from Rosenbloom during the March 12 meeting.

5 . Tr. II at 307, J.A. 337.

6 . Tr. II at 276, J.A. 306.

7 . Tr. II at 275, 279, J.A. 305, 309.

8 . Chatilovicz and Richardson had previously scheduled this luncheon meeting in order to discuss matters unrelated to this litigation. Both sides agree that the AU incorrectly stated that this meeting took place on March 13.

9 . Tr. I at 22, J.A. 70; see also ALJ op. at 13, J.A. 23.

10 . Brief for the Board at 11.

11 . Id. at 11-12, 19; see also Tr. I at 23, J.A. 71; ALJ op. at 13, J.A. 23.

12 . Letter from Peter Chatilovicz to Ronald Richardson (Mar. 23, 1982), reprinted in J.A. 371.

13 . Id. at 372.

14 . ALJ op. at 11, J.A. 21. The ALJ thereby rejected the General Counsel’s original theory, set forth in subparagraphs 5(b) and (c) of its complaint, that recognition occurred during the March 12 meeting. See Complaint and Notice of Hearing, reprinted in J.A. 4, 5. As noted above, see note 4 supra, the General Counsel no longer pursues this theory of recognition.

15 . ALJ op. at 11, J.A. 21 (emphasis added). In making this finding, the ALJ discredited Rosen-bloom’s testimony that he never made this agreement. ALJ op. at 11 n. 11, J.A. 21 n. 11.

16 . AU op. at 15, J.A. 25 (emphasis added) (par-entheticals in original) (citations omitted).

17 . The AU’s decision and order is appended to the Board’s opinion. In an unpublished order dated November 20, 1986, the Board denied the Hotel and Wayside’s motion for reconsideration. See Order Denying Motion, reprinted in J.A. 47.

18 . Board op. at 2 n. 3, J.A. 33 n. 3.

19 . Id.

20 . Because Wayside sold its entire interest in the Hotel on February 14, 1985,- it did not petition for review. But, in light of the Board’s petition to enforce its order against Wayside as well as the Hotel, Wayside has entered an appearance in this proceeding. See Brief of Petitioner and Cross-Respondents at 1 n. 3.

21 . Likewise, in cases involving immediate unconditional recognition, there often is no serious dispute whether the employer recognized the union. See, e.g., Jeer-Dan Corp., 237 N.L.R. B. 302, 302 (1978), enforced, 601 F.2d 575 (3d Cir.1979) (employer looked at authorization cards and said "you got them all,” and agreed to meet for the express purpose of engaging in collective bargaining).

22 . The General Counsel does not contend in its brief to this court that there is any direct evidence in the record to support the AU’s finding. Instead, the General Counsel argues that the AU correctly concluded that "Chatilovicz ... implicitly confirmed in a series of ... communications that the Union's majority status had been verified by the Hotel through the agreed-upon procedure.” Brief for the Board at 19 (emphasis added).

23 . As the Hotel points out in its brief: "Chatilo-vicz could have and in fact did obtain these names from the Hotel’s payroll records without any need to look at the signatures on the cards themselves." Brief of Petitioner and Cross-Respondents at 10.

24 . To the extent that the AU relied on Chatilo-vicz' statement to Richardson at the March 16 lunch that Richardson and Rosenbloom had "reached an agreement" on March 12, this reliance is misplaced. This statement only reiterates that recognition was predicated on a card check. Indeed, in discrediting that part of Cha-tilovicz’ testimony in which he denied making this statement, the AU noted that the "agreement” was conditional. AU op. at 13 n. 12, J.A. 23 n. 12.

25 . The Supreme Court explicitly reserved judgment on this issue in Linden Lumber Division, 419 U.S. at 310 n. 10, 95 S.Ct. at 434 n. 10.

26 . In fact, the General Counsel claims at two points in its brief that the issues raised in United Buckingham Freight Lines are “not presented here." Brief for the Board at 17 n. 5, 23 n. 9.