Hilton Intern. Co. v. N.L.R.B.
| Decision Date | 29 September 1982 |
| Docket Number | D,1457 and 1458,Nos. 1197,s. 1197 |
| Citation | 690 F.2d 318 |
| Parties | 111 L.R.R.M. (BNA) 2669, 95 Lab.Cas. P 13,804 HILTON INTERNATIONAL COMPANY d/b/a Caribe Hilton Hotel, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent. NATIONAL LABOR RELATIONS BOARD, Petitioner, v. PUERTO RICO HOTEL ASSOCIATION; San Juan Hotel Corporation d/b/a El San Juan Hotel and El Conquistador Hotel, The Puerto Rico Hotel Corporation d/b/a The Palace Hotel; Condado Holiday Inn; and Hilton International Company d/b/a La Concha Hotel-Condada Beach Hotel, Respondents. ockets 82-4022, 82-4040 and 82-4042. |
| Court | U.S. Court of Appeals — Second Circuit |
Agustin Collazo Mojica, Hato Rey, P. R. (William Lespier, Lespier, Munoz Noya & Ramirez, Hato Rey, P. R., of counsel), for petitioner-respondent Hilton Intern. Co.
Godfrey P. Schmidt, New York City (Maria Milagros Soto, Hato Rey, P. R., of counsel), for respondents Puerto Rico Hotel Corp. and Condado Holiday Inn, respectively.
Michael J. Dougherty, N. L. R. B., Washington, D. C. (William A. Lubbers, Gen. Counsel, John E. Higgins, Jr., Deputy Gen. Counsel, Robert E. Allen, Acting Associate Gen. Counsel, Elliott Moore, Deputy Associate Gen. Counsel, Andrew F. Tranovich, N. L. R. B., Washington, D. C., of counsel), for petitioner-respondent N. L. R. B.
Before CARDAMONE and WINTER, Circuit Judges, and MALETZ, * Judge, Court of International Trade.
Most people listening to live music in a hotel are only concerned with whether the music enhances their dining or dancing pleasure. They do not consider whether the musicians are employees of the hotel or work for the leader of the band. Were the question seriously entertained, common sense would suggest that musicians working together as a group are employed by their leader. That question is precisely the one presented on appeal and on the record in this case the common sense conclusion finds full support.
On September 11, 1979, complaints were issued against the Puerto Rico Hotel Association (the Association), which represents certain Puerto Rico hotels for purposes of collective bargaining, and several of the Association's members. The complaint was based upon charges filed by the Federacion de Musicos de Puerto Rico, Local 468 (the Union). The individual hotels named in the complaints included: the San Juan Hotel Corporation d/b/a El San Juan Hotel and El Conquistador Hotel; the Puerto Rico Hotel Corporation d/b/a the Palace Hotel; the Condado Holiday Inn; and the Hilton International Company d/b/a the Caribe Hilton Hotel and the La Concha Hotel-Condado Beach Hotel. Specifically, the complaints asserted that the Union represented musicians employed by Association hotels for so-called "steady engagements" (typically in excess of one week), and that the Association's refusal to bargain collectively with the Union until the Union conceded that the musicians were independent contractors rather than hotel employees, violated Sections 8(a)(1), (3) and (5) of the National Labor Relations Act (the Act), 29 U.S.C. §§ 158(a) (1), (3) and (5) (1976). The complaints further alleged that the Association and its named members violated Sections 8(a)(1) and (5) of the Act by using personal service contracts that disclaimed the employee status of the musicians and by suspending bargaining with the Union because the Union had filed unfair labor practice charges. Additionally, the complaints charged that the El San Juan Hotel, the El Conquistador Hotel and the Palace Hotel, acting as individual entities, violated Sections 8(a)(1) and (5) of the Act by withdrawing the Association's authority to bargain with the Union on their behalf.
After a hearing the Administrative Law Judge (ALJ) found that the band leaders in charge of the steady engagement hotel musicians were hotel supervisors, not independent contractors, and that the musicians themselves were hotel employees. The ALJ further concluded that the Union was the proper bargaining representative of the musicians and that, therefore, the Association hotels' use of personal service contracts, the Association's conditional refusal to bargain with the Union violated Sections 8(a)(1) and (5) of the Act. The ALJ also held unlawful the Association hotels' use of personal service contracts, the Association's suspension of bargaining because of the Union's filing of charges, and the three hotels' withdrawal from the Association in order to avoid collective bargaining. Subsequently, the National Labor Relations Board (the Board) issued a decision and order that summarily adopted the ALJ's decision and required the Association and certain of its members to take appropriate remedial measures.
The Caribe Hilton Hotel has petitioned for review of the Board's decision and order, arguing, in part, that the Board erred in classifying the musicians who perform at the hotels as hotel employees and the band leaders as hotel supervisors. The Board has filed a cross-application for enforcement of its order against the Association and the named hotels. Because there is not substantial evidence in the record read as a whole to support the Board's characterization of the steady engagement musicians as hotel employees and of the band leaders as supervisory employees, we grant the petition for review and deny the cross-petition for enforcement of the Board's order.
Section 2(3) of the Act, 29 U.S.C. § 152(3) (1976), specifically excludes from the definition of "employee," and thus from statutory coverage under the Act, any "individual having the status of an independent contractor." General principles of agency law govern the distinction between "employee" and "independent contractor" for purposes of the Act. See, e.g., NLRB v. United Insurance Co., 390 U.S. 254, 256, 88 S.Ct. 988, 989, 19 L.Ed.2d 1083 (1968); Local 777, Democratic Union Organizing Committee v. NLRB, 603 F.2d 862, 909 (D.C.Cir.1978); Lorenz Schneider Co. v. NLRB, 517 F.2d 445, 446 (2d Cir. 1975). This Court in Herald Company v. NLRB, 444 F.2d 430, 432-35 (2d Cir.), cert. denied, 404 U.S. 990, 92 S.Ct. 532, 30 L.Ed.2d 541 (1971), used the common law "right to control" test for distinguishing between employees and independent contractors. Under the common law test an employer-employee relationship exists if the purported employer controls or has the right to control both the result to be accomplished and the "manner and means" by which the purported employee brings about that result. Lorenz Schneider, 517 F.2d at 451; see also Restatement (Second) of Agency § 220(1) (1958). As Judge Friendly noted, this test is difficult to apply since the result is necessarily a function of the manner and means employed. Lorenz Schneider, 517 F.2d at 451. Nevertheless, "the more detailed the supervision and the stricter the enforcement standards, the greater the likelihood of an employer-employee relationship...." Id. Factors which may be considered in determining employee status include: whether the purported employee is engaged in a distinct occupation or business; whether the work involved is usually done under an employer's direction or by an unsupervised specialist; the skill involved; who supplies the instrumentalities and place of performance; the length of employment; the method of payment (by the time or by the job) whether the work is part of the employer's regular business and/or necessary to it; and the intent of the parties creating the relationship. Restatement (Second) of Agency § 220(2). No single factor is determinative, Lorenz Schneider, 517 F.2d at 449.
The ALJ relied on the following facts in finding that the hotels control the members of the steady engagement bands. The hotels determine working hours including overtime, and the locations within the hotels where the bands play. Occasionally, the hotels require certain types of music and direct that the music's volume be increased or decreased. The maitre d'hotel can order music stopped to speed up food service. Additionally, the hotels determine the size of the bands needed and sometimes require that size be increased to produce a certain sound.
Although these facts indicate that the hotels control each band's final product (music of the type requested by the hotels at the time and place desired), these facts fail to demonstrate any significant hotel regulation over the means by which bands produce the music. Instead, the record reveals that the band leaders exercise all the significant control over the manner of their own and their musicians' performances. The leaders hire, fire, instruct and discipline the musicians in their bands without consulting with or following any guidelines set by the hotels. In fact, Association hotel officials do not generally hire, discipline or fire individual band members; an Association hotel contractually can only terminate the engagement of an entire band. Moreover, the leaders...
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