Flamingo Hilton-Laughlin v. N.L.R.B.

Decision Date31 July 1998
Docket NumberNo. 97-1467,P,HILTON-LAUGHLI,AFL-CIO,97-1467
Parties158 L.R.R.M. (BNA) 2961, 331 U.S.App.D.C. 312, 135 Lab.Cas. P 10,209 FLAMINGOetitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent, United Steelworkers of America,CLC, Intervenor.
CourtU.S. Court of Appeals — District of Columbia Circuit

On Petition for Review and Cross-Application for Enforcement of an Order of the National Labor Relations Board.

Joseph E. Herman argued the cause for the petitioner. Richard C. Hotvedt entered an appearance.

Robert J. Englehart, Attorney, National Labor Relations Board, argued the cause for the respondent. Linda Sher, Associate General Counsel, Aileen A. Armstrong, Deputy Associate General Counsel, and Frederick C. Havard, Attorney, National Labor Relations Board, were on brief.

Rudolph L. Milasich, Jr. argued the cause for the intervenor.

Before: HENDERSON, ROGERS and GARLAND, Circuit Judges.

Opinion for the court filed by Circuit Judge KAREN LeCRAFT HENDERSON.

Separate concurring opinion filed by Judge ROGERS.

KAREN LeCRAFT HENDERSON, Circuit Judge:

Petitioner Flamingo Hilton-Laughlin (Flamingo), a subsidiary of Hilton Gaming Corp., operates a resort hotel and casino in Laughlin, Nevada. On July 29, 1997 the National Labor Relations Board (NLRB, Board) issued a Gissel order 1 which directed Flamingo to bargain with the United Steelworkers of America, AFL-CIO CLC, (Union) as the exclusive bargaining representative of two units of Flamingo employees, based on findings that Flamingo had engaged in numerous unfair labor practices during the Union's unsuccessful organization campaign. Flamingo Hilton-Laughlin, 324 N.L.R.B. No. 14 (1997). Flamingo petitions for review of the Board's decision on the grounds that (1) the Board failed to adequately justify issuance of a Gissel bargaining order; (2) some of the unfair labor practices found by the Board are unsupported by substantial evidence and (3) Flamingo was denied its due process right to a neutral decisionmaker. The NLRB has filed a cross-application for enforcement of its order. For the reasons and to the extent set out below, we grant in part Flamingo's petition for review and deny the NLRB's application for enforcement of its Gissel order and two of its unfair labor practice findings. We nonetheless deny review and grant enforcement of the Board's order with respect to the remaining unfair labor practices included therein.

I.

In January 1993 the Union began an organizing campaign at Flamingo's hotel and casino, which, with more than 2,000 employees, is the largest of several gaming establishments in Laughlin, Nevada. Flamingo hired a labor relations consulting firm and conducted a vigorous counter-campaign. In March 1993 the Union filed a petition to be certified as representative of a bargaining unit comprising "[a]ll full-time and part-time employees in the departments of Housekeeping/Custodial, Food/Beverage, Slots, Coin Room Hotel Services/Bellmen, Front Desk, Valet, and Cage." Joint Appendix 4. On June 9, 1993 the NLRB issued a "Decision and Direction of Election," which excluded slot machine and coin room employees from the proposed bargaining unit and scheduled an election among the roughly 1,000 remaining unit employees for July 6. During the union campaign the Union had solicited and obtained union authorization cards from a majority of the hotel unit employees and of the excluded slot and coin room employees. In the July 6 election, however, the hotel unit employees rejected union representation by a vote of 495 to 389. On October 28, 1993 the Union filed an unfair labor practice charge with the NLRB and, as a result, on February 25, 1994 the Board's acting regional director filed a complaint and notice of hearing alleging more than seventy unfair labor practices.

A 67-day hearing was conducted over the course of one year and on April 25, 1996 an administrative law judge (ALJ) issued a decision finding Flamingo had committed more than forty of the charged unfair labor practices, in violation of section 8(a)(1) and (3) of the National Labor Relations Act (Act), 29 U.S.C. §§ 158(a)(1) and (3), and ordering Flamingo to bargain with the Union as the representative of both the designated unit and a separate unit made up of slot employees. The ALJ found Flamingo itself violated the Act by providing various benefits to unit employees during the preelection period, including improved health insurance coverage, increased wages, a more responsive grievance procedure, higher gratuities for baggage handlers and a seniority-based scheduling and assignment policy for cocktail servers. The ALJ further found Flamingo had, during the same period, unlawfully instituted a new employment application screening process aimed at weeding out applicants with union connections. In addition to Flamingo's violations, the ALJ found that individual Flamingo supervisors had engaged in various unlawful acts including (1) soliciting complaints from employees (with at least implied promises to resolve them) (2) promoting the Culinary Union, a prominent gaming industry union, over the Union, (3) questioning employees about their views on unionization, (4) distributing anti-Union buttons, (5) discouraging display of pro-Union buttons, (6) warning employees that conditions of employment such as wages, insurance benefits and perquisites (including free parking, food and uniforms) would worsen if the Union won the election, (7) suggesting that pro-Union employees would be "blacklisted" among the other (non-union) casinos in the area and (8) conducting meetings on the eve of the election at which Flamingo's new president, William Sherlock, made an antiUnion video presentation and asked employees for "[a] chance for management to work hand in hand with [employees] and no third party to interfere," Flamingo, slip op. at 47.

The ALJ concluded that the unfair labor practices he found made this a "category II" Gissel case, that is, one of "the less extraordinary cases marked by less pervasive practices which nonetheless still have the tendency to undermine majority strength and impede the election processes,' " Flamingo, slip op. at 62 (quoting NLRB v. Gissel Packing Co., 395 U.S. 575, 613, 614-15, 89 S.Ct. 1918, 23 L.Ed.2d 547 (1969)), 2 based on "considerations [that] include 'the number of employees directly affected by the violation, the size of the unit, the extent of dissemination among the work force, and the identity of the perpetrator of the unfair labor practice,' " id. at 62 (quoting FJN Mfg., 305 N.L.R.B. 656, 657 (1991)). Specifically, he determined:

(1) "the number of employees directly affected by the unfair labor practices was extensive" in that "[t]he health insurance changes were shown to affect a substantial percentage of the employees, the same was true of hourly pay increases made, and the new complaint resolution procedure had no limit at all about employee eligibility";

(2) the large size of the unit did not weigh against a bargaining order because "the violations blanketed both units and did not allow the notion to be present that many members of the units were simply not aware of the conduct";

(3) "[t]hese first two factors are largely embodied in the third factor, because dissemination of conduct throughout practically the entire work force was both intended and carried out by the employer" through "items such as wage and benefit increases of tangible effect on why employees were attracted to the Union in the first place, and the inhibiting threat of blacklisting as sprung on the entire work force by universally distributed memorandum just before the election"; and

(4) "of great significance to the question, the perpetrator of the major amount of conduct was [director of human resources John] Kosinski himself" and "[i]t is also influential that Sherlock was a key perpetrator."

Id. at 62-63. The ALJ also stated: "On a matter separate from 'pervasiveness' of unfair labor practice conduct, a Gissel issue is also affected by special considerations such as the applicant screening also devised by Kosinski," which "tainted the bargaining units by employment screening in a manner that cannot be reconstructed," asserting that Flamingo "must bear the consequence of this conduct, both as to unknown probabilities yielding a slightly biased work force to the Union's detriment, and to the possibility that conduct this devious invites the presumption it could readily recur." Id. at 63. Finally, the ALJ "conclude[d] the possibility of erasing embedded effects of Respondent's unfair labor practices is so slight that, on balance, a bargaining order is warranted for each unit." Id.

In its July 29, 1997 decision the NLRB affirmed the ALJ except that it (1) reversed the finding that Sherlock's last minute plea for a "chance" was an unfair labor practice; (2) rejected the ALJ's "discount[ing] the effects of [the] one-on-one type threats, solicitation, or interrogation" and (3) declined to "rely on the judge's analysis to the extent that he imposed a negative connotation on Flamingo's lawful video presentations." Id. at 1-2.

II.

Flamingo argues strenuously that the Board failed to justify ordering bargaining as a remedy. We agree.

" '[A] bargaining order is ... an "extreme remedy" that must be applied with commensurate care.' " Skyline Distribs. v. NLRB, 99 F.3d 403, 410 (D.C.Cir.1996) (quoting Avecor, Inc. v. NLRB, 931 F.2d 924, 938-39 (D.C.Cir.1991), cert. denied, 502 U.S. 1048, 112 S.Ct. 912, 116 L.Ed.2d 812 (1992)) (alteration in Skyline ). In Charlotte Amphitheater Corp. v. NLRB, 82 F.3d 1074, 1078 (D.C.Cir.1996), we again explained the circumstances that warrant a category II Gissel order:

[W]e have insisted, and we continue to insist, that "[b]efore we will enforce a category II order, we must find that substantial evidence supports three findings," among them the finding that the possibility of erasing...

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