3750 Orange Place Ltd. Partnership v. N.L.R.B.
| Decision Date | 24 June 2003 |
| Docket Number | No. 01-2385.,No. 01-2734.,01-2385.,01-2734. |
| Citation | 333 F.3d 646 |
| Parties | 3750 ORANGE PLACE LIMITED PARTNERSHIP, d/b/a Beachwood Holiday Inn; Snavely Development Co., Inc., a/k/a Snavely Management Services; Snavely Hotel Services, LLC, Petitioners/Cross-Respondents, v. NATIONAL LABOR RELATIONS BOARD, Respondent/Cross-Petitioner. |
| Court | U.S. Court of Appeals — Sixth Circuit |
Robert L. Gross (briefed), Sanford Gross (argued and briefed), Gross & Gross, L.L.C., Cleveland, OH, for Petitioners.
Fred L. Cornnell (briefed), National Labor Relations Board, Aileen A. Armstrong (briefed), Dep. Asso. Gen. Counsel, National Labor Relations Board Appellate Court Branch, Washington, DC, Kathleen Lyon (argued and briefed), Washington, D.C., for Respondent.
Before: NELSON and COLE, Circuit Judges; ROSEN, District Judge.*
Petitioners-Cross-Respondents 3750 Orange Place Limited Partnership ("Orange Place"), Snavely Development Company, Inc. ("Management Services"), and Snavely Hotel Services, LLC ("Hotel Services") petition for review of the August 23, 2001 Decision and Order of Respondent-Cross-Petitioner the National Labor Relations Board (the "Board") requiring Petitioners, as successor employers, to recognize, bargain with, and provide information to the Service Employees International Union, Local 47 (the "Union") as the collective-bargaining representative of the housekeeping unit at the Holiday Inn Beachwood ("HIB"). The Board's decision and order affirmed the April 29, 1999 conclusion of the Administrative Law Judge (the "ALJ") that Petitioners had committed unfair labor practices in violation of Sections 8(a)(1) and (5) of the National Labor Relations Act, 29 U.S.C. § 151 et seq. (the "Act"). The Board cross-petitions for enforcement of its final order.
For the reasons stated below, we GRANT the Board's petition and direct the enforcement of its final order.
Ownership of HIB, a full service hotel in Beachwood, Ohio, changed hands three times between October 1995 and January 1998: from Summit Associates, Inc. ("Summit") to Citizens Service Corporation (the "Bank") to Petitioner Orange Place to Patriot American Hospitality Operating Partnership, L.P. ("Patriot").
Early in October, 1995, Summit owned HIB, along with a sister property, the Holiday Inn Mayfield ("HIM"). Lane Hospitality ("Lane") managed both hotels on behalf of Summit. Summit authorized Lane to enter into a collective bargaining agreement with the Union effective May 1, 1994 to April 30, 1997 (the "CBA"). Dennis Dingow, the Union's business representative, testified before the ALJ that the CBA represented the most recent embodiment in a series of collective bargaining agreements between the parties. Although the CBA did not specifically define the bargaining unit represented by the Union, Dingow explained that the hotels' housekeeping departments constituted the historical bargaining unit represented by the Union. Dingow further testified that the bargaining unit included housekeepers and housemen (porters), but excluded inspectresses and laundry workers.
On October 12, 1995, Summit transferred HIB and HIM to the Bank in lieu of foreclosure. In conjunction with this transfer, the Bank retained Beck-Group Management Corp. ("Beck") to operate the hotels. Beck, in turn, retained Hospitality Employee Leasing Program, Inc. ("HELP") to manage the facilities. Under the terms of the October 12, 1995 Client Services Agreement entered into with Beck, HELP agreed to furnish personnel, including housekeeping employees, to Beck to operate HIB and HIM. Beck and HELP further agreed that all individuals assigned by HELP to the hotels would remain HELP employees. The ALJ found that a majority of the housekeeping employees retained by HELP to work at the hotels were former Lane employees. Furthermore, no break in operations occurred during the transfer of ownership and management from Summit and Lane to the Bank, Beck, and HELP.
In an October 6, 1995 letter, Summit notified the Union that it was terminating the CBA and its covered employees in conjunction with the transfer of HIB and HIM to the Bank. This correspondence included a draft termination letter to employees, indicating that HELP would have employment application forms at the front desk. Upon transfer of the hotels to the Bank, neither the Bank, Beck, nor HELP assumed the CBA.
In an October 18, 1995 letter, the Union notified HELP of the Union's position that HELP was a successor employer to Lane, obligating HELP to bargain with, and provide information to, the Union. The Union sent follow-up letters to HELP on October 25 and November 8, 1995 requesting information on employees and dates to commence negotiations. In a November 17, 1995 response, HELP's attorney objected to the conduct of Union representatives at HIB, but expressly assured the Union that HELP was "not refusing to bargain." [J.A. at 354].
Thereafter, at a December 14, 1995 meeting, HELP and the Union discussed demonstrations at HIB and the Union's earlier information requests. Following this face-to-face meeting, HELP's attorney sent a follow-up letter to the Union on December 21, 1995. This letter, captioned "SEIU & Negotiations with HELP, Inc.," provided, in pertinent part:
Per your request, attached is a breakdown of the costs for health insurance and a description of the coverage. In addition, we have attached a list of the housekeeping employees at the Mayfield and Beechwood facilities along with their hourly rates. We are in the process of developing a contract proposal and should have something to discuss with you sometime in January....
[J.A. at 356]. Despite a February 9, 1996 follow-up letter from the Union, HELP did not provide the Union a contract proposal prior to the Bank's sale of HIM and HIB to separate parties in February and May of 1996, respectively.1
Petitioner Orange Place acquired HIB from the Bank on May 13, 1996, and that same day retained Petitioner Management Services to operate the hotel. The management agreement between Orange Place and Management Services granted Management Services the power to hire and discharge employees of HIB. John T. Snavely, the managing partner of Orange Place and an owner of Management Services, signed the management agreement on behalf of both parties. No hiatus in operations occurred during the transfer of ownership and management from the Bank and HELP to Orange Place and Management Services.
Petitioners' own witness, James Gerish, submitted an affidavit to the ALJ indicating that Orange Place/Management Services hired twenty-two housekeeping employees upon taking possession of HIB, twelve of which were former HELP employees. Based on this affidavit and a comparison of payroll and other records for the relevant period, the Board found that Orange Place/Management Services retained a majority of HELP's housekeeping employees.
On May 6 and May 24, 1996, both shortly before and shortly after Orange Place's acquisition of HIB, the Union sent letters to Management Services requesting information on HIB's housekeeping employees and dates to commence negotiations over a new collective bargaining agreement.2 Counsel for Management Services and Orange Place responded to the Union on May 29, 1996, indicating that Orange Place owned HIB, and that his office was looking into the issues raised by the Union.3 Receiving no further response, on July 11, 1996, the Union filed an unfair labor practice charge against Orange Place, alleging that as a successor employer, Orange Place was unlawfully refusing to recognize, bargain with, and provide information to the Union in violation of the Act. Responding to the Union's charge, the Board's General Counsel issued a complaint against Orange Place on August 28, 1997.
On January 13, 1998, while the General Counsel's unfair labor practice complaint against Orange Place was pending, Orange Place sold HIB to non-party Patriot. At this time, Petitioner Hotel Services assumed the operation and management of HIB from Management Services, without a break in operations. Hotel Services, whose President James Gerish was also an employee and former President of Management Services, is a limited liability company, whose sole member is Management Services. The entities are engaged in the same business — the management of hotels — and share offices as well as the same human resources director. It is undisputed that upon assuming management responsibilities from Management Services, Hotel Services retained all seventeen housekeeping employees at HIB, without applications or interviews.
On May 4, 1998, the Union sent a letter to Patriot, Management Services, and Hotel Services, detailing the Union's numerous efforts to pursue its bargaining rights and renewing the Union's request for information and bargaining on behalf of the housekeeping employees at HIB. Counsel for Hotel Services responded to the Union on May 8, 1998, indicating that Hotel Services was the current employer at HIB under contract with Patriot, that Hotel Services was under no legal obligation to bargain with or provide information to the Union, and that Hotel Services did not believe that the Union represented a majority of the employees at HIB in an appropriate unit.
On May 12, 1998, the Union filed an unfair labor practice charge against Orange Place, Management Services, and Hotel Services, alleging that the entities were violating Sections 8(a)(1) and (5) of ...
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