NLRB v. Citizens Hotel Company

• Decision Date: 15 January 1964
• Docket Number: No. 20326.,20326.
• Citation: 326 F.2d 501
• Parties: NATIONAL LABOR RELATIONS BOARD, Petitioner, v. CITIZENS HOTEL COMPANY, d/b/a Hotel Texas, Respondent.
• Court: U.S. Court of Appeals — Fifth Circuit

326 F.2d 501 (1964)

NATIONAL LABOR RELATIONS BOARD, Petitioner, v. CITIZENS HOTEL COMPANY, d/b/a Hotel Texas, Respondent.

No. 20326.

United States Court of Appeals Fifth Circuit.

January 15, 1964.

Marcel Mallet-Prevost, Asst. Gen. Counsel, N. L. R. B., Dominick L. Manoli, Associate Gen. Counsel, N. L. R. B., Allison W. Brown, Jr., Atty., N. L. R. B., Washington, D. C., Arnold Ordman, Gen. Counsel, Allen M. Hutter, Atty., N. L. R. B., for petitioner.

G. W. Parker, Jr., Karl H. Mueller, Harold E. Mueller, Attys., Stone, Parker, Snakard, Friedman & Brown, Mueller & Mueller, Fort Worth, Tex., for respondent.

Before TUTTLE, Chief Judge, and BROWN and GEWIN, Circuit Judges.

JOHN R. BROWN, Circuit Judge.

This case began when the Employer decided to end the practice of giving a Christmas bonus. Based on the undenied fact that in 1961, the Employer¹ did not give to the employees of the Hotel Texas the Christmas bonus customarily given for over 14 years, the Board found violations of § 8(a) (5) for failure to bargain on the theory that this was an impermissible unilateral change. On the further finding that the discontinuance of the bonus was intended to, and in fact did, discriminate against employees because of their membership in, and the recent certification of, the Union,² the Board also held the Employer guilty under § 8(a) (3). A finding of a § 8(a) (1) violation followed both. Besides the usual cease and desist order, the Board affirmatively required the payment of a 1961 Christmas bonus on the same terms followed by the Employer in 1960. We enforce as to § 8(a) (5) and the § 8(a) (1) charge related thereto, but deny enforcement as to § 8(a) (3).

The Employer makes the usual contention that being a Christmas bonus, the money disbursed is a pure gift and therefore not a bargaining matter of wages, hours, and other terms and conditions of employment. 29 U.S.C.A. § 158(d).³ There is considerable evidence including that concerning the manner in which the "gifts" were handed out in many years which sustains this view. But considering the regularity of the gift, the existence of a formal policy as to the eligibility of recipients and ascertainment of the dollar amounts, pre-employment reference to the bonus as an inducement to prospective employees, and the like, we think this was a matter essentially for factual determination by the Board. We therefore sustain the Board's factual conclusion, based upon adequate evidence, that the Christmas bonus was a bargainable matter. N. L. R. B. v. Niles-Bement-Pond Co., 2 Cir., 1952, 199 F.2d 713; N. L. R. B. v. Wheeling Pipeline, Inc., 8 Cir., 1956, 229 F.2d 391, 392; Singer Manufacturing Co. v. N. L. R. B., 7 Cir., 1941, 119 F.2d 131, 136, cert. denied, 1941, 313 U.S. 595, 61 S.Ct. 1119, 85 L.Ed. 1549; N. L. R. B. v. Electric Steam Radiator Corp., 6 Cir., 1963, 321 F.2d 733, 736; cf. Richfield Oil Corp. v. N. L. R. B., 1956, 97 U.S.App.D.C. 383, 231 F.2d 717, 724, 58 A.L.R.2d 833, cert. denied, 351 U.S. 909, 76 S.Ct. 695, 100 L.Ed. 1444; W. W. Cross & Co. v. N. L. R. B., 1 Cir., 1949, 174 F.2d 875, 878.

Thus far no detailed discussion of the evidence has been required. But whether the discontinuance was a failure to bargain, and if so, whether it was something substantially more as a discriminatory or coercive action calls for a more extended treatment.

The Hotel Texas is, to say the least, an unusual business. In its long history from 1921, it has never showed a profit, and hence has never had to pay a single dollar in federal income taxes. In retrospect, this experience seems to confirm what its founders apparently assumed — the hotel was essentially a civic enterprise. That was the way it came into being. In order to build and assure an adequate hotel for the city's future, the corporation was organized and its stock subscribed by leading businessmen of Fort Worth, 15 of whom thereafter were its directors. Among these businessmen was Amon Carter, who served as a vice president. For a period of time it was operated by a lessee, but following bankruptcy the hotel was taken back by the original directors in 1934. For a number of years (1936 to 1946), the hotel was leased to, managed and operated by the Moody interests as a part of the National Hotel affiliated chain. In 1946 Amon Carter, then a newspaper publisher and one of Fort Worth's outstanding citizens, purchased all of the outstanding stock of the corporation, and in turn gave or sold a one-half interest to Sid Richardson, likewise a man of great prominence, wealth and leadership in the community. During that year the Moody lease was bought up and in March 1947 the corporation, Citizens Hotel Company, resumed control of the hotel. It has operated the hotel since that time.

In December 1946, after Amon Carter had acquired ownership of the stock of the corporation but while Moodys were still the operating lessee, a Christmas bonus was distributed to the hotel employees as had been done for a number of years. On ascertaining that the Moody bonus had been 10%, Amon Carter thought this insufficient and ordered a separate payment of an additional 6%. Though in no sense an employer in 1946, the corporation obtained a bank loan of $20,000 needed for this purpose. From that time on down to December 1961, the employees received a Christmas gift each year. And in each instance, except one, the money needed was borrowed from a bank. The single exception was the adverse year 1960 in which some airport bonds were redeemed and this converted capital was used to pay the bonus.⁴

Although the exact time does not appear, as early as 1954 a policy formula was adopted as to persons eligible and amounts payable for the Christmas bonus. There were three categories: (1) a two weeks' base pay for those on the payroll January 1 who worked for the balance of the year; (2) one week's base pay for those on the payroll July 1 who worked for the rest of the year; and (3) 3.846% of earnings for those hired after July 1 but before December 1. But in 1958, with mounting cumulative losses and nonexistent profits, management reduced each of these bonuses by one-half.⁵ Bonuses at these reduced rates were given in 1959 and 1960.

Following their regular practice of reviewing each fall the current and future prospects for the business, the directors met informally in early October 1961. At this meeting the directors concluded that no bonus would be granted for Christmas 1961. The various department heads were accordingly advised with instructions to pass the word to the employees of their respective departments. For purposes of the § 8(a) (5) charge, a detailed discussion of the financial evidence on losses is not required. It suffices merely to state that the evidence is both uncontradicted and vivid in showing regular, continuous losses in large cumulative amounts.

Whether this meeting with its nobonus announcement preceded or followed the October 6, 1961, Board certification of the Union is not clear. The Examiner fixed it after, but we doubt that it matters. Management was aware, of course, of the results of the recent election and this was enough to trigger antiunion action if that was the real motive. And as to bargaining, the long time remaining between October and December 20-25 could substantiate an obligation on the Employer's part at least to reconsider the decision. In any event, in late October in connection with its request for bargaining, the Union served the Employer with a list of its demands. These included Clause 9⁶ guaranteeing continuation of all current employee benefits. Formal bargaining sessions were held on December 13. It is uncontradicted that the Employer's attorney, its chief negotiator, undertook in those negotiations to determine just what current benefits the Union had in mind under Clause 9. At no time did the Union representative bring up or even as much as mention the Christmas bonus. Two days later, on December 15, the Employer's representative and the Union representative (its counsel) had further discussions primarily as to the selection of a convenient time for deferred bargaining meetings. At that time the Union attorney stated that he "understood that there had been some signs posted within the hotel * * * stating that there would be no Christmas bonus * * *" for 1961, and if that was true, the Union would have to file charges with the Board. A charge was filed on January 3, 1962, asserting that "on December 15, 1961," the Employer refused to bargain and "since" that "date * * * has unilaterally withheld the annual Christmas Bonus * * *." By an amended charge the discontinuance of the bonus was pinpointed at "on or about December 25, 1961." To complete the story, it is also uncontradicted that at the later bargaining session of February 7, 1962, when the Employer's representative again undertook to ascertain what benefits the Union sought to be continued by Clause 9, he specifically asked whether this included the Christmas bonus. To this the Union representative replied, "We don't want to discuss that. We will see you in court on that in March."⁷

On this the Employer makes a very persuasive argument that despite the change in a prior practice, there has been no real failure to bargain, either technical or more substantial. Rather, its argument proceeds, these facts show that the Christmas bonus was seized upon by the Union to secure the advantage of a cease and desist order whereas its conduct indicates that it had no real desire to negotiate — that is, discuss — the problem in December. A subsidiary element of that approach is the undisputed availability of ample time for further discussion before it was too late, i. e., Christmas 1961.

Nevertheless we do not think that the Employer's contention can be sustained in the light of the implied findings of this record. It is true, of course, as recently pointed out in N. L. R. B. v. Tex-Tan, Inc., 5 Cir., 1963, 318 F.2d 472, 479-481, that an...