N.L.R.B. v. Tio Pepe, Inc.

• Decision Date: 04 September 1980
• Docket Number: No. 79-1442,79-1442
• Citation: 629 F.2d 964
• Parties: 105 L.R.R.M. (BNA) 2603, 89 Lab.Cas. P 12,243 NATIONAL LABOR RELATIONS BOARD, Petitioner, v. TIO PEPE, INC., Respondent.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 964

629 F.2d 964

105 L.R.R.M. (BNA) 2603, 89 Lab.Cas. P 12,243

NATIONAL LABOR RELATIONS BOARD, Petitioner, v. TIO PEPE, INC., Respondent.

No. 79-1442.

United States Court of Appeals, Fourth Circuit.

Argued March 7, 1980.

Decided Sept. 4, 1980.

Barbara Kraft, N.L.R.B., Washington, D. C. (John S. Irving, 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, Washington, D. C., on brief), for petitioner.

Warren M. Davison, Washington, D. C. (Earle K. Shawe, Eric Hemmendinger, Shawe & Rosenthal, Baltimore, Md., on brief), for respondent.

Before BRYAN, Senior Circuit Judge, and RUSSELL and WIDENER, Circuit Judges.

DONALD RUSSELL, Circuit Judge:

The Board seeks enforcement of its order finding that the respondent, the operator of a popular and luxury Spanish restaurant in Baltimore, Maryland, had violated Section 8(a)(5) and (1) of the National Labor Relations Act by failing to bargain with the Union, which the Board had certified as the bargaining agent of the kitchen and dining room employees of the respondent following a representation election. The respondent admitted its refusal to bargain but asserted, as an affirmative defense, the invalidity of the certification.

The certification proceedings, the validity of which is the critical issue here, began with the filing of a representation petition by the Union. ¹ The Regional Director, after an investigation, determined that the appropriate bargaining unit consisted of "all kitchen and dining room employees" of the respondent and directed the holding of a representation election by the members of the bargaining unit. Over the objection of the respondent, the Regional Director had included the captains, or "redcoats" as the respondent described them, who were employed in the dining room, eligible to vote in the representation election. It was the respondent's position that the captains were supervisors and were ineligible to be members of the bargaining unit. The respondent sought review by the Board of the decision by the Regional Director to include the captains in the bargaining unit. The Board granted review. Without awaiting the result of that review, the Regional Director proceeded with the election, but impounded the votes of the captains pending resolution by the Board of their eligibility to vote. Later the Board sustained the ruling of the Regional Director on the eligibility of the captains to participate in the election as members of the bargaining unit. In sustaining the Regional Director, the Board made findings of fact and conclusions of law. ²

In his factual findings the Regional Director described the restaurant as consisting of eight rooms, each containing four to six tables. Customers of the restaurant are greeted either by Perez, one of the owners, or by Lobo, the maitre d', and assigned a table. Each room is serviced by a team composed of a captain, a waiter and a busboy. The captain normally takes the customer's order, serves the drinks, if any are ordered, presents the check at the conclusion of the meal, and collects payment of the check and the tip. The principal duties of the waiter are to bring the meal from the kitchen, serve it at the table and set tables when necessary. The busboys are concerned with clearing the tables when the meal is completed and resetting the table with clean linen, dishes and cutlery. The captains are in general in charge of their rooms and, if necessary, will assist the waiters in serving the meal. They do not, however, have the right to discipline or discharge a waiter or busboy. They may report any member of their team who is failing to perform satisfactorily to Perez or Lobo, with their recommendation, but only Perez or Lobo has the authority to fire or discipline. Moreover, all hiring in the dining room is under the control of either Perez or Lobo. All the members of a team are paid the same minimum wage of $1.90 per hour but this is a minor part of the earnings of each employee. The primary source of compensation for all employees in the dining room unit is the tips given by the customers. These tips are considerable. They are always collected by the captains. At the end of each day the tips are pooled and are then divided among the captains, waiters and busboys in the ratio of 4-2-1 or 57 percent to the captains, 29 percent to the waiters, and 14 percent to the busboys. This distribution of the tips, it was testified without contradiction, was determined by the captains and only the captains had authority to change it. ³ The ratio used for the distribution was said to be general in the industry and had been the ratio followed by the employees since the restaurant opened.

On these facts, the Regional Director held that, contrary to respondent's contention, the captains were not "supervisors" under the Act but "function(ed) more in the capacity of leadmen." He reached this conclusion primarily because "the captain can do nothing more than report to Lobo or Perez that an employee is performing improperly and then Lobo or Perez may or may not take action in regard to the complaint-of conduct." In arriving at his conclusion, the Regional Director made no mention, and apparently gave no consideration to the fact that, under the undisputed evidence of Perez, the captains had the power to fix the real compensation of the waiters and busboys through their control over the distribution of the tips. It was this failure "to consider record evidence establishing that such captains control the compensation received by other dining room personnel" in resolving the issue of whether the captains were supervisors that the respondent particularly complained of in its petition for review as filed with the Board.

After the election, but before the Board had ruled on the respondent's objection to the Regional Director's inclusion of the captains in the bargaining unit, the respondent filed timely objections to the fairness in the conduct of the election. It its initial decision, the Board restricted itself to a review of the Regional Director's determination that the captains were not supervisors under the Act. It dismissed the respondent's claim that such employees were supervisors with this language:

"Further, we find no merit in the Employer's contention that its service captains effectively control compensation of team members by controlling the amount and manner of distribution of tips. Although Perez testified that service captains have the authority to alter the formula by which tips are distributed, there is no evidence that any of the Employer's captains has been informed that he has such authority, or that any captain has in fact exercised it. In these circumstances, we adopt the Regional Director's conclusion that captains are not supervisors."

It then remanded the case to the Regional Director and, by an amended order, directed him to open and count the impounded ballots in the election and to prepare and serve on the parties "a tally of ballots and issue an appropriate certification based thereon." Some months later, the Board issued a "Supplemental Decision," dismissing the respondent's objections to the election and certifying the petitioning Union as the exclusive bargaining agent of the employees in the bargaining unit.

Despite the Board's certification the respondent refused to bargain with the Union. The Regional Director thereupon issued a complaint charging an unfair labor practice against the respondent for refusing to bargain. The respondent answered, admitting the refusal to bargain but denying that the Union was properly certified. While a motion for summary judgment filed by the Regional Director was pending, the respondent filed its motion to reopen the record and for leave to submit newly discovered evidence. It supported the motion with an affidavit of Perez and written statements from waiters and busboys. Asserting that the facts set forth in the attachments raised "genuine and material factual issues," the respondent asked that the Board hold "a hearing in order to reconsider the representation proceeding."

The facts, as set forth in the attachments to respondent's motion to reopen, were that certain of the captains, in an effort to enlist the support for the Union of the waiters and the busboys in the representation election, had promised the waiters and busboys that they (the captains) would revise the manner of distributing the tips to the advantage of the waiters and busboys, and, that, after the election, the captains had fulfilled their promise to change the split of tips at dinner by increasing the share of the waiters and busboys but had reduced the share of the waiters and busboys in the lunch tips, thereby creating a "new controversy, currently unresolved." It was the respondent's position that this evidence, if accepted at a reopened hearing, would both refute entirely the factual basis for the Board's conclusion that the captains were not supervisors and show the invalidity of the election itself since "the captains, * * * solicited for the Union by making promises of increased compensation to waiters and busboys." The Board denied the motion. It found, first, that the evidence offered by the respondent did not "add any meaningful indicia of the supervisory status to the captains" since it was "clear that Perez (had) simply called the dining room employees together on March 3, 1979, and thereby orchestrated whatever change that was made in the tips. Consequently the criterion eluded (sic) to in the aforementioned Decision on Review has not been met." The Board likewise found no merit in the claim of unfairness in the election, as set forth in the motion to reopen, saying:

"It is quite possible for one employee to 'promise' another added benefits if the Union wins. The ability to make the promise in no way demonstrates that the employee had the...