Norelli v. Hth Corp., Civ. No. 10-00014JMS/LEK.
| Decision Date | 29 March 2010 |
| Docket Number | Civ. No. 10-00014JMS/LEK. |
| Citation | 699 F.Supp.2d 1176 |
| Parties | Joseph P. NORELLI, Regional Director of Region 20 of the National Labor Relations Board, for and on behalf of the National Labor Relations Board, Petitioner,v.HTH CORPORATION, Pacific Beach Corporation and KOA Management, LLC, A Single Employer, d/b/a Pacific Beach Hotel, Respondents. |
| Court | U.S. District Court — District of Hawaii |
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Dale K. Yashiki, Thomas W. Cestare, Trent K. Kakuda, National Labor Relations Board, Honolulu, HI, Jill H. Coffman, Olivia Garcia, National Labor Relations Board, San Francisco, CA, for Petitioner.
Ryan E. Sanada, Wesley M. Fujimoto, Imanaka Kudo & Fujimoto LLC, Honolulu, HI, for Respondent.
ORDER: (1) DENYING RESPONDENTS' MOTION TO DISMISS FOR LACK OF SUBJECT MATTER JURISDICTION; AND (2) GRANTING THE PETITION FOR INJUNCTION UNDER SECTION 10(J) OF THE NATIONAL LABOR RELATIONS ACT
Petitioner Joseph P. Norelli (“Petitioner”), Director of Region 20 of the National Labor Relations Board (the “Board”), asserts that HTH Corp. (“HTH”), Pacific Beach Corp. (“PBC”), and Koa Management, LLC (“Koa”) d/b/a/ the Pacific Beach Hotel (the “Hotel”) (collectively, “Respondents”) have engaged in a litany of violations of the National Labor Relations Act (“NLRA”). On August 15, 2005, the Board certified International Longshore and Warehouse Union, Local 142, AFL-CIO (the “Union”) as the exclusive bargaining representative of the Hotel employees. Petitioner alleges that since that time, Respondents have engaged in unfair bargaining with the Union, terminated certain employees due to their Union support, unlawfully withdrew certification of the Union, and unilaterally changed the terms and conditions of employment of the Hotel employees. On September 30, 2009, Administrative Law Judge James M. Kennedy (the “ALJ”) found that Respondents had committed numerous NLRA violations (the “ALJ Decision”), and Respondents have appealed the ALJ Decision to the Board.
While the appeal to the Board proceeds, Petitioner seeks interim injunctive relief from this court pursuant to § 10(j) of the NLRA, 29 U.S.C. § 160(j) (). Specifically, Petitioner requests that the court issue an injunction ordering Respondents to, among other things, recognize the Union, bargain in good faith with the Union, reinstate several employees, and rescind unilateral changes made to the terms and conditions of employment. Respondents object to the Petition and have also filed a Motion to Dismiss, arguing that the Board did not properly authorize the § 10(j) Petition. Based on the following, the court DENIES Respondents' Motion to Dismiss and GRANTS the § 10(j) Petition.
The Hotel is located in Waikiki and consists of two towers with a total of 837 rooms, and a lower central building housing shops, restaurants, and a multi story fish tank. Pet'r Ex. C at II:1862-63, 1884. HTH owns the Hotel while PBC, a wholly owned subsidiary of HTH, is the management company and the current employer of the Hotel employees. Id. at I:68, 91. As for Koa, HTH and PBC formed Koa in 2004 to satisfy the requirements of a lender, the UBS Bank, when the Hotel became collateral for a loan to HTH. Id. at I:83-5.
All of these entities-HTH, PBC, and Koa-are owned by the Hiyashi family. Id. at I:71. Neither HTH nor Koa has any employees of its own, and these entities share many of the same officers and executives. Id. at I:68, 85, 89-90. The officers of HTH and PBC are “essentially the same,” and Corine Watanabe (“Watanabe”) and her cousin, John Hayashi (“Hayashi”) are members of the Board of Directors for both companies. Id. at I:71-2, 75, 89. Watanabe is also the special member of Koa, and Robert M. Minicola (“Minicola”) is the Regional Vice President of Operations for HTH and PBC. Id. at I:67, 85. While Minicola reports to Watanabe, he holds decision-making authority on all labor-related issues for all of Respondents' entities, including HTH. Id. at I:76-79.
Since beginning its drive to organize the Hotel's employees in 2002, the Union has faced opposition from Respondents. The Board overturned the first election in July 2002 after finding that Respondents engaged in objectionable conduct by coercively interrogating employees and maintaining an overly broad no-solicitation policy. HTH Corp., 342 NLRB 372 (2004). For the second election on August 24, 2004, Respondents challenged several ballots, resulting in the Board ordering those ballots to be counted and the Union winning the election by one vote. Pacific Beach Corp., 344 NLRB 1160 (2005). On August 15, 2005, the Regional Director issued a certificate of representation in favor of the Union. Pet'r Ex. C at I:163; Pet'r Ex. D at GC3 p. 4.
After the Union was certified, Minicola began negotiating a collective bargaining agreement (“CBA”) with Dave Mori (“Mori”), the chief spokesperson for the Union. Pet'r Ex. C at I:190-91. From November 29, 2005 through December 14, 2006, Minicola and Mori met for 37 sessions and reached approximately 171 tentative agreements. Pet'r Ex. D at GC3 p. 2 ¶ 1; id. at GC17.
Despite this seeming progress, negotiations were far from smooth and Minicola and Mori were unable to reach a final agreement. Minicola insisted on several provisions that would significantly limit the Union's rights, including: (1) a Union recognition clause in which Respondents would have the “sole and exclusive right to unilaterally and arbitrarily change, amend, and modify the certified bargaining unit” and the conditions of employment; (2) a management rights clause recognizing that Respondents may direct and manage the work force at will without Union interference; (3) an open shop clause that allows employees to choose whether to join the Union and pay dues; and (4) a complaint/grievance procedure for employees that did not include arbitration or other procedural safeguards. Pet'r Ex. D at GC24. Minicola did not waiver from these bargaining positions and no CBA was ever finalized. Pet'r Ex. C at I:235-36; Mori Aff. 2-3.
While these negotiations were going on, Respondents were having discussions with Outrigger Hotels Hawaii (“Outrigger”) over the possibility of a joint venture or management agreement. Pet'r Ex. C at I:374. Outrigger established a separate entity, PBH Management, LLC (“PBHM”), and on September 7, 2006, Koa and Outrigger signed a Management Agreement (“MA”) for PBHM to direct the operations of the Hotel effective January 1, 2007. Id. at I:239; Pet'r Ex. D at GC38. Minicola assured Mori that the change in management would be a “seamless transition,” “that the employees would all be hired with the same seniority, same job[s], [and same] pay[,]” and that Outrigger would be “honoring all [tentative agreements] and would [resume] bargaining with the [U]nion.” Pet'r Ex. C at I:237-38. After management changed, Mel Wilinsky (“Wilinsky”), the Executive Vice President and Chief Financial Officer for Outrigger, began negotiations with Mori, and Minicola ceased his face-to-face negotiations. Id. at I:239-42, 376.
Negotiations between PBHM and the Union continued between February 2007 and July 2007 and the parties made significant progress Wilinsky and Mori reached 13 tentative agreements, including agreements on issues that Minicola previously would not concede such as an arbitration process, union right of access, union bulletin boards, and a partial agreement on the management rights clause. Pet'r Ex. D at GC26; see also Pet'r Ex. C at I:243-47. By July 2007, there were only two outstanding issues-dues check-off and the agency shop clause. Pet'r Ex. Cat I:252-53.
During this process, it was unclear-apparently to both the Union and PBHM-what Respondents' role was in the negotiations and the employment of the Hotel employees. Specifically, the Union had lingering questions regarding whether PBHM truly had control over the Hotel's operation and whether HTH in addition to PBHM needed to agree to any CBA. Id. at I:243-46, 256-58; Pet'r Ex. D at GC28. In response to the Union's questions, both Minicola and Wilinsky explained that HTH was no longer the employer of the Hotel's employees and that PBHM had been the new employer of the Hotel's employees as of January 1, 2007. Id. at GC30, GC32.
In fact, the MA-which PBHM and Respondents kept confidential-required “[Respondents'] approval of any agreement affecting the Hotel (i) the term of which is more than one (1) year in length and that cannot be terminated upon thirty (30) days' notice by [PBHM.]” Id. at GC38 ¶¶ 3.2.C. Due to this provision, PBHM operated under the assumption that it needed Respondents' approval before entering into a CBA. On June 29, 2007, PBHM's attorney, Richard Rand (“Rand”), notified Respondents that they were close to an agreement, but given Rand's understanding that Minicola was “very unhappy” with the concept of a CBA, PBHM would need more direction as to how to proceed. Pet'r Ex. D at GC39. On July 30, 2007, Rand asked Koa, as “owner” under the MA, to consent to Rand providing the MA's contract approval provision to the Union (along with other provisions as well), and that Koa approve 11 specific proposals for the CBA. Id. at GC44. Rand explained that if PBHM made these 11 proposals, the Union would accept them and the parties would likely enter into a CBA. Id. Rand further asserted that if Respondents refused to consent, Respondents would be in breach of the MA and that PBHM would no longer be able to bargain in good faith with the Union. Id.; see also GC45.
On August 3, 2007, PBHM received a formal notice from Minicola stating that Koa was terminating PBHM's operation of the Hotel pursuant to Section 18.3 of the MA.2 Id. at GC46. On the same date, a press release announced that the MA with PBHM was going to be cancelled and that HTH...
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