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Pick-Mt. Laurel Corp. v. National Labor Relations Board

decided: June 10, 1980.


On Petition for Review and Cross-Application for Enforcement of an Order of the National Labor Relations Board (Board No. 4-CA-8533)

Before Gibbons, Higginbotham and Sloviter, Circuit Judges.

Author: Sloviter



Petitioner Pick-Mt. Laurel Corporation (hereinafter "Pick") petitions, pursuant to 29 U.S.C. § 160(f), for review of the National Labor Relations Board's order of January 12, 1979 ordering Pick to recognize and bargain with Local 170, Bartenders, Hotel, Motel and Restaurant Employee Union, AFL-CIO (hereinafter "Union"). The General Counsel cross-petitions for enforcement of the Board's order, pursuant to 29 U.S.C. § 160(e). This case raises the issue of the obligation of a successor employer to bargain with the incumbent Union when the successor alleges it entertains in good faith a reasonable doubt as to the Union's majority status based in part on the circumstances surrounding the recognition of the Union which occurred more than six months before change in employer ownership.


On February 9, 1977, P-B Associates, a limited partnership which included Pick as a general partner, purchased hotel and restaurant facilities, known as the Mt. Laurel Hilton Inn, from MLH Development Company (hereinafter "MLH").*fn1 Pick operated the hotel and restaurant from the date of the acquisition by P-B Associates, pursuant to a management contract. The circumstances surrounding the initiation of the Union's relationship with MLH, the predecessor employer, are the basis of Pick's contentions on review.

MLH began operation of the hotel on June 5, 1975. In February 1975, months before the hotel opened for business, the Union and MLH began negotiations directed to their subsequent relationship. The Union and MLH had reached substantial agreement on the terms of their contract by April 22, 1975 before any employees were hired. That agreement was executed on June 1, 1975, stated it was effective from the preceding date of December 5, 1974 to December 4, 1977, recognized the Union as exclusive bargaining representative of employees "engaged in housekeeping, laundry, repair and maintenance, and restaurant and bar activities" with some listed exceptions, and contained a union security clause. That clause provided that employees who were members of the Union at the time the agreement became effective would remain members of the Union, that employees who were not members would join the Union on or after the ninetieth day following the effective date of the agreement, and that employees hired after the effective date of the agreement would become members on or after the thirtieth day following their hiring.*fn2

MLH began its initial hiring of employees in May and continued throughout June 1975. In practice, from May 1975 until February 1977 Wayne Gotta, MLH's assistant food and beverage director, regularly required employees to execute an application for membership in the Union and a dues checkoff authorization card at the time of employment, rather than within thirty days as provided by the written agreement.

During the course of the negotiation for the sale of the hotel, in late 1976 or in January of 1977, hotel general manager Daniel Cummings told Ralph Lewy, Pick's vice-president and treasurer, that he believed the contract had been negotiated before any employees were hired.

When Pick took over the operation of the hotel on February 9, 1977, it retained all of MLH's employees, including all supervisors; all employees retained the same job classifications. At that time there were approximately 80 employees in the bargaining unit; by February 24 there were 103. There was no change or hiatus in the operation of the hotel.

After Pick began operations, Cummings, who remained as hotel general manager, reported that he had heard of employee dissatisfaction with the Union in late 1976 and continuing through 1977.*fn3 However, there was no evidence that any unit employee revoked the dues checkoff authorization, resigned from the Union, or attempted to file a decertification petition.

On February 23, 1977, Union vice-president McBride asked Cummings for payment of funds which he claimed were owed to the Union by MLH under the collective bargaining agreement. On the same day McBride began to solicit signed authorization cards from bargaining unit employees. On February 24, Cummings gave McBride a check drawn on MLH's bank account for Union dues withheld by MLH from employee's paychecks, but refused to make any such payment on behalf of Pick and told McBride that he had been instructed that Pick would not have further dealings with the Union.

On February 25, 1977, after consultation with its lawyer about its doubt as to the Union's status, Pick filed a representation petition seeking a Board conducted election to determine the Union's status as collective bargaining representative. On the same day, McBride called a strike. Thirty-nine of the 103 employees in the unit failed to report to work at their next scheduled work date.

On April 22, the Regional Director of the Board's Fourth Region issued a complaint against Pick, based on charges which had been filed by the Union on March 4, alleging that Pick had committed unfair labor practices by refusing to bargain with the Union. The Regional Director then sought a temporary injunction in federal district court to require Pick to bargain. Following three days of hearings in May 1977, the district court denied the NLRB petition, holding that a temporary injunction was not warranted in view of the "substantial credible and uncontroverted evidence of ...

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