Culinary Workers & Bartenders U., Local 814 v. Salatich

• Decision Date: 23 September 1970
• Docket Number: Civ. A. No. 70-1102.
• Citation: 318 F. Supp. 1047
• Parties: CULINARY WORKERS AND BARTENDERS UNION, LOCAL 814, an unincorporated association, Plaintiff, v. John V. SALATICH, individually and doing business as the Gas Lite, a sole proprietorship, Captain's Wharf, a corporation, John V. Salatich, John L. Salatich and Betty R. Salatich, as officers and directors of Captain's Wharf, a corporation, Defendants.
• Court: U.S. District Court — Central District of California

318 F. Supp. 1047

CULINARY WORKERS AND BARTENDERS UNION, LOCAL 814, an unincorporated association, Plaintiff, v. John V. SALATICH, individually and doing business as the Gas Lite, a sole proprietorship, Captain's Wharf, a corporation, John V. Salatich, John L. Salatich and Betty R. Salatich, as officers and directors of Captain's Wharf, a corporation, Defendants.

Civ. A. No. 70-1102.

United States District Court, C. D. California.

September 23, 1970.

Lionel Richman, Richman & Garrett, Los Angeles, Cal., for Culinary Workers and Bartenders Union, Local 814.

Willard Z. Carr, Jr., Kenneth W. Anderson, Los Angeles, Cal., for John V. Salatich, John L. Salatich, Betty R. Salatich and Captain's Wharf, Gibson, Dunn & Crutcher, Los Angeles, Cal., of counsel.

DECISION AND ORDER FOR DISMISSAL

HAUK, District Judge.

Plaintiff filed a Complaint in this Court alleging that the defendants were in violation of the terms of a collective bargaining agreement by refusing to recognize the applicability of such agreement to them. Plaintiff sought damages in the amount of the initiation fees and dues lost because of the alleged failure of the defendants to observe the collective bargaining agreement and for a declaration that the defendant Captain's Wharf and its employees were bound by all the terms and conditions of the collective bargaining agreement.

The jurisdiction of the Court was asserted pursuant to Section 301 of the Labor Management Relations Act.¹

The Complaint alleged that on or about October 23, 1968, the plaintiff and defendant, John V. Salatich, then doing business as the sole proprietor of a cocktail lounge known as The Gas Lite, entered into a collective bargaining agreement. Article I, section 2 of that agreement provided:

"This agreement applies to and covers the employees in any other establishments within the jurisdiction of the union which the Employer may own or operate during the term of this agreement. The term `Employer' shall also be deemed to include any person, firm, partnership, corporation, joint venture or other legal entity which is now, or during the term of this agreement or any extensions thereof, may be substantially in control of, or substantially controlled by such signatory Employer."

The Complaint further alleged that on or about May 21, 1969 the defendant, John V. Salatich, together with his son, John L. Salatich, and his wife, Betty R. Salatich, established a corporation known as the Captain's Wharf to engage in the restaurant and tavern business. According to the Union allegations, the Captain's Wharf has been and is now substantially controlled by John V. Salatich. During the early part of 1970, the plaintiff made a demand upon the defendants to apply The Gas Lite collective bargaining agreement to the employees at the Captain's Wharf. The defendants, however, refused and their refusal precipitated the suit.

The collective bargaining agreement in question contained a standard union security clause, requiring employees to become members of the union on the 31st day after beginning employment. It also provided for the discharge of employees if they failed to pay their union dues and required the employer to pay 13¢ per hour worked by each employee to a Union Welfare Fund.

The defendants moved to dismiss, asserting that N.L.R.B. had exclusive jurisdiction over this matter, that the plaintiff failed to avail itself of the arbitration clause of this contract, that there had been a failure to join indispensable parties, namely the employees of the Captain's Wharf, and that such a clause as Article I, § 2 was unlawful according to decisions by the Board and courts under the National Labor Relations Act.² The motion was accompanied by affidavits which alleged that The Gas Lite was a cocktail lounge doing business in Santa Monica, California and employing never more than four employees. It was further alleged that the sole owner, John V. Salatich, had put the business up for sale prior to the opening of the Captain's Wharf and in fact had sold it at about the time of institution of this suit. The Captain's Wharf was alleged to be a restaurant in Marina Del Rey, California, employing 25 people at its opening in January, 1970 and presently employing 35 employees. The affidavits alleged that only two employees transferred from The Gas Lite to the Captain's Wharf and that the son, John L. Salatich (not John V. Salatich) is the individual who is managing the operations of the Captain's Wharf. There were no allegations that any of the employees of the Captain's Wharf, let alone a majority, desired to be represented by the plaintiff union.

The Court has examined the entire record which includes, among other things, plaintiff's Complaint, Memoranda of Points and Authorities in support of and in opposition to a Motion to Dismiss, and Affidavits submitted by both plaintiff and defendants. The Court has reviewed all this material and concludes that defendants are entitled to have their Motion to Dismiss sustained on two grounds:

DECISION

The Complaint Fails To Allege Facts From Which The Court Could Conclude That Defendants Were Lawfully Bound By The Terms Of The Collective Bargaining Agreement

Sections 7 and 8 of the National Labor Relations Act provide as follows:

"Employees shall have the right * * * to bargain collectively through representatives of their own choosing * * *" 29 U.S.C. § 157 "It shall be an unfair labor practice for an employer (1) to interfere with, restrain or coerce employees in the exercise of the rights guaranteed in section 157 * * * (3) by discrimination in regard to hire or tenure of employment or any term or condition of employment to encourage or discourage membership in any labor organization * * *." 29 U.S.C. § 158.

The defendants contend that should the Court grant the relief requested by the plaintiff, the freedom of choice guaranteed by these sections of the N.L.R.A. to the employees of the Captain's Wharf would be denied.

The usual manner in which an employer becomes bound to recognize a labor organization as the representative of its employees is for the Union to prove to the employer that a majority of the employees desire the Union to act for them. There are two basic ways this can be accomplished by the Union — certification by the N.L.R.B. or proof by such means as union authorization cards signed by a majority of employees. See N.L.R.B. v. Gissel Packing Co. (1969), 395 U.S. 575, 89 S.Ct. 1918, 23 L.Ed.2d 547. However, there are no allegations in the Union complaint that either of these predicates for Union representation have been satisfied. Thus, unless there is some other doctrine which is applicable, there would be no basis on which the Court could uphold the Union's claims.

The Union has contended in its Complaint that it is entitled to represent the employees of the Captain's Wharf by the mere fact that the clause in the collective bargaining agreement with The Gas Lite contractually obligates the defendants to apply it to the Captain's Wharf. That clause, in brief, states that The Gas Lite agreement covers any future establishment which is substantially controlled by the signer of The Gas Lite agreement, namely John V. Salatich. However, such a clause cannot by itself authorize a result which would have the effect of compelling the employees of the Captain's Wharf to choose between becoming members of the Union or be discharged from employment.

Such a result would be lawful only if the doctrine of "accretion" as developed by the N.L.R.B. would be applicable. Accretion involves the addition of one group of employees to an already existing group. The accreted employees have no choice over whether they want to be included in the existing unit. Because the doctrine of accretion potentially conflicts with section 7 rights of employees, the Board has developed a number of criteria to insure that accretion occurs only in situations where there is sufficiently strong community of interest between the existing unit and the employees to be accreted to justify applying that doctrine. As stated by the Court in Spartans Industries, Inc. v. N. L.R.B. (5 Cir. 1969), 406 F.2d 1002:

"Although the doctrine of accretion has been extended full recognition within the law, the independence of the employee even in this field has been strongly protected." 406 F.2d 1002, 1005.

Without facts sufficient to justify application of a doctrine of accretion, the cases are clear that there can be no extension of a collective bargaining agreement that applies one unit to a new and separate group of employees. Otherwise the employer and the Union would be guilty of committing unfair labor practices such as coercing employees in the exercise of their section 7 rights in violation of 8(a) (1) and unlawfully encouraging membership in a labor organization in violation of 8(a) (3).

One of the leading National Labor Relations Board cases establishing this principle is Masters-Lake Success, Inc. (1959), 124 N.L.R.B. 580, enf. as mod. 287 F.2d 35. In this case the employer owned four stores which had collective bargaining agreements with two locals of a particular union. In the collective bargaining agreement between the employer and the Union, one of the articles stated:

"This agreement shall apply to the establishment now owned, maintained, operated and/or controlled by the Employer Masters, Inc. in the Metropolitan area and/or any new establishment that the Employer may own, maintain, operate and/or control in that area at any time during the term of this agreement." 124 N.L.R.B. 580, 588-589.

There is no important difference between the language of this clause and the one in the instant case. Subsequent to the signing of this clause, the employer opened a new store. Upon demand by the Union to apply all the terms and conditions of the old collective bargaining agreement to the new store, including a union shop clause, the employer acknowledged that the new store would...