Kauai Coconut Beach Resort

National Labor Relations Board - Board Decisions

Jun 28, 1995

317 N.L.R.B. 996 (N.L.R.B. 1995)

996
317 NLRB No. 145
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
1 The Petitioner withdrew its Objection 1, 5, 8, and 10. In the ab-
sence of exceptions, we adopt, pro forma, the hearing officer’s over-
ruling of the Petitioner’s Objection 2, 3, 4, 6, 7, 11, and 12.
2 All dates are 1994 unless otherwise indicated.
3 Hawaiian word meaning help or assistance.
Pleasant Travel Services, d/b/a Kauai Coconut
Beach Resort and Hotel Employees and Res-
taurant Employees, Local 5, AFL–CIO, Peti-
tioner. Case 37–RC–3657
June 28, 1995
DECISION AND CERTIFICATION OF
RESULTS OF ELECTION
BY MEMBERS STEPHENS, BROWNING, AND COHEN
The National Labor Relations Board, by a three-
member panel, has considered objections to an election
held May 26, 1994, and the hearing officer’s report
recommending disposition of them. The election was
conducted pursuant to a Decision and Direction of
Election. The tally of ballots shows 50 for and 64
against the Petitioner, with 10 challenged ballots, an
insufficient number to affect the results.
The Board has reviewed the record in light of the
exceptions and brief and has adopted the hearing offi-
cer’s findings and recommendations,1 only to the ex-
tent consistent with this decision. Contrary to the hear-
ing officer, who found that Petitioner’s Objection 9
was meritorious, we overrule the objections in their en-
tirety and certify the results of the election.
During the critical period preceding the election, the
Employer announced, to the employees, that it would
not disclose the amount of a pending pay raise until
after the election to avoid the appearance of inter-
ference with the election. Prior to the critical period,
the Employer announced that there would be a pay
raise on April 1. Although the amount had been de-
cided, this was not announced.
The hearing officer reasoned that withholding the
amount of the raise interfered with the election be-
cause: (1) but for the election petition (filed on March
16), the employees would have been granted a 2-per-
cent wage increase on April 1, before the May 26 elec-
tion; (2) the Employer announced during the critical
period that the amount of the employees’ pay raise
would not be disclosed until after the election; and (3)
the fact that the Employer withheld the scheduled
wage increase, raised the question of the amount, then
declined to disclose the predetermined and customary
amount, meant that the Employer was using a ‘‘fist in-
side the velvet glove.’’ The hearing officer found that,
while the message to the employees was subtle, it gave
an inference of improper motivation. The hearing offi-
cer concluded that this conduct constituted objection-
able conduct which warranted setting aside the elec-
tion.
The Employer excepts. It argues that its refusal to
announce the amount of the expected pay increase was
not objectionable because it delayed the announcement
to avoid the appearance of interference with the elec-
tion. We agree.
The facts are not in dispute. The petition was filed
on March 16, 1994.2 On April 4, approximately 8
weeks before the election on May 26, the Employer’s
general manager, Brian Allen, posted and distributed a
memorandum to the employees regarding a pay in-
crease that had been announced approximately March
1. The memorandum states:
It has been our practice to give pay raises twice
a year on April 1st and October 1st. In accord-
ance with that practice, we had scheduled a pay
raise effective April 1, 1994. You will receive that
pay raise effective April 1, 1994. However, in
order to avoid the appearance of interference with
the NLRB Representation Election, the amount of
your pay raise will not be disclosed to you until
after the election is held. You will receive the pay
regardless of the outcome of the election. The pay
raise will be retroactive to April 1, 1994. We ap-
preciate your Kokua3 and look forward to telling
you the amount of your pay raise immediately
after the election.
On May 6, Union Secretary-Treasurer Anthony Rut-
ledge sent a letter to the president of the Employer,
copies of which were distributed to employees. The
letter alleged that Allen was committing an unfair
labor practice by withholding the scheduled wage in-
crease, and requested that the Employer correct the
error. Allen responded in a letter to the employees that
if Rutledge thought an unfair labor practice had been
committed, a charge would have been filed with the
NLRB. But, the letter went on, the Union knew that
the law had not been broken by deferring announce-
ment of the amount of the raise.
Allen testified that the Employer gave a 2-to 3-per-
cent raise in October 1992. In April 1993, a scheduled
raise was deferred after a hurricane struck that had
caused severe damage. In October 1993, employees
were given a nonretroactive 2-percent raise. In March
1994, before the petition was filed, the Employer de-
termined that it would give a 2-percent increase in
April. The Employer announced a wage increase for
April, but not the amount. Allen testified that in April
the Employer deferred the raise and withheld the an-
nouncement of the amount because the Employer did
not wish to interfere with the election and did not want
the employees to feel that they were being ‘‘bought
off.’’ Allen’s response to Union Secretary-Treasurer
Rutledge’s May 6 letter stated at least twice that the
announcement of the amount of the pay raise would be
997KAUAI COCONUT BEACH RESORT
4 Emergency One, Inc., 306 NLRB 800, 807 (1992); Montana
Lumber Sales, 185 NLRB 46, 49 (1970); and Uarco Inc., 169 NLRB
1153, 1154 (1968). 1 All dates are in 1994 unless stated otherwise.
deferred until after the election ‘‘to avoid the appear-
ance of interfering with the election process.’’
The general rule is that, in deciding whether to grant
benefits while a representation election is pending, an
employer should act as if no union were in the picture.
Thus, an employer may not inform employees that it
is withholding wage increases or accrued benefits be-
cause of union activities. Conversely, however, an em-
ployer may tell employees that expected benefits are to
be deferred pending the outcome of an election in
order to avoid the appearance of election interference.4
We find that the instant case is in the latter category.
Clearly the Employer was faced with a dilemma. If
it granted the wage increase, it would assume the risk
and burden of justifying it. Alternatively, it could, as
it did, advise its employees that it was deferring the
wage increase until after the election to avoid the ap-
pearance of interfering with the election. Although the
Employer did have a policy of scheduling wage in-
creases for April and October of each year, this prac-
tice dates back only to October 1992, and there was
at least one deviation from this policy—the withhold-
ing of any increase in April 1993. The record supports,
and we find, that the Employer had a reasonable doubt
as to whether it could meet its burden of justifying any
granting of a pay increase during the critical period
and that it acted for that reason.
Further, there is no evidence that the Employer de-
ferred the announcement of the amount of the pay in-
crease for any reason other than to avoid the appear-
ance of interference with the election. There is no evi-
dence that any agent of the Employer told employees
anything different from the Employer’s April 4 memo-
randum. Employee Adrian Levinthol testified that
when he questioned the hotel’s personnel director,
Carol Nacion, about the raise being withheld, he was
told in effect that they (management) did not want
anybody to think they were bribing employees, so the
raise was being held, just until after the election. Thus,
in the Employer’s postpetition communications with its
employees, it consistently and unequivocally stated that
it was declining to announce the amount of the pay
raise until after the election for the sole reason that it
wanted to avoid the appearance of interfering with the
election process.
There also is no evidence that the Employer’s action
was otherwise linked to any union activity, or that the
Employer considered altering the amount of the in-
crease based on the election results. Allen assured the
employees that the raise would be given after the elec-
tion and that it would be made retroactive to April 1.
Immediately following the election, the Employer
granted the raise retroactive to April 1.
Our colleague would overturn established Board law
to reach a contrary result. We see no reason to depart
from precedent. To the contrary, we believe that the
reasons for the precedent are well illustrated in this
case. Our colleague contends that the Employer could
have granted the 2-percent increase on April 1, with
the assurance that the increase would be found proper
by the Board. We do not think that the law in this
area, as applied to the facts of this case, is as crystal
clear as our colleague believes it to be. In our view,
the Employer could reasonably be concerned that the
increase, if granted, would be condemned as unlawful
or objectionable. In this regard, we note that the past
practice (semiannual increases in April and October)
dates back only to October 1992, and there was a devi-
ation in April 1993. Further, the amount of the in-
crease did not follow a uniform pattern. In these cir-
cumstances, we believe that the Employer could have
a reasonable doubt concerning whether the increase
would pass muster with the Board. Accordingly, it ex-
plained its dilemma to the employees, and told them
that the increase would be given after the election, ef-
fective April 1, irrespective of the outcome of the elec-
tion. We believe that such candor is easily understood
by employees. The established law permits such can-
dor; our colleague would not.
Based on the above, we overrule Objection 9, and
certify the election results.
CERTIFICATION OF RESULTS OF ELECTION
IT IS CERTIFIED that a majority of the valid ballots
have not been cast for Hotel Employees and Restaurant
Employees, Local 5, AFL–CIO, and that it is not the
exclusive representative of these bargaining unit em-
ployees.
MEMBER BROWNING, dissenting.
Contrary to my colleagues, I would affirm the hear-
ing officer’s recommendation and set aside the election
on the basis of Petitioner’s Objection 9. I find that the
Employer interfered with the election by postponing
until after the election the scheduled pay raise that the
Employer had announced it would grant to unit em-
ployees.
The record shows that the Employer has a practice
of giving pay raises two times a year, on April 1 and
October 1. In early March 1994,1 the Employer an-
nounced to employees that it planned a wage increase
for April 1. Although the Employer had determined
that the raise would be 2 percent, it did not inform the
employees of the amount of the raise they would be
receiving. The petition was filed on March 16, and the
election was scheduled for, and held on, May 26.
On April 4, the Employer notified the employees
that their pay raise was being deferred until after the
998 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
2 The Employer, in fact, gave the employees a 2-percent wage in-
crease in June, after the election. This raise was retroactive to April
1.
3 The Great Atlantic & Pacific Tea Co., 166 NLRB 27, 29 fn. 1
(1967).
4 Emergency One, Inc., 306 NLRB 800, 807 (1992); Truss-Span
Co., 236 NLRB 50 (1978); Montana Lumber Sales, 185 NLRB 46,
49 (1970); Uarco Inc., 169 NLRB 1153, 1154 (1968). See also Cen-
tre Engineering, Inc., 253 NLRB 419 (1980).
5 Even if the employer makes the wage raise retroactive, such a
postponement still would interfere with employees’ free choice be-
cause the employer would have departed from an established prac-
tice and employees’ wages would have been less than expected for
the sole reason that they had chosen to file a representation petition.
Thus, retroactive payment of the raise does not alter the fact that the
employees would have been without their expected raise for a period
of time, and—absent the employer’s payment of interest—the em-
ployees would have suffered an economic loss.
representation election, and that the raise would be ret-
roactive to April 1. The Employer’s memorandum dis-
tributed to the employees stated that ‘‘in order to avoid
the appearance of interference with the NLRB Rep-
resentation Election, the amount of your pay raise will
not be disclosed to you until after the election is
held.’’2
An employer is generally required to grant wage in-
creases while a representation petition is pending as if
the petition had never been filed.3 The Board has held,
however, that an employer does not engage in objec-
tionable conduct by deferring a scheduled wage in-
crease provided that the employer makes clear in its
statements to employees that the only reason it is post-
poning the expected pay raise is to avoid the appear-
ance of interference with the election.4 The Board rea-
soned in Uarco, supra, that when an employer an-
nounces that its sole purpose in postponing an ex-
pected pay raise is to avoid the appearance that it
sought to interfere in the election, employees could not
reasonably conclude that the employer’s postponement
of adjustments in their rates was intended to influence
their decision in the election.
I disagree with that premise, and I would overrule
Uarco and the subsequent Board precedent which per-
mits an employer to postpone expected wage increases
or benefit improvements during the preelection period
so long as it couches that deferral in the right
‘‘magic’’ words. Instead, I would find that an em-
ployer engages in objectionable conduct by deferring a
regularly scheduled wage increase until after the elec-
tion, unless there is a legitimate economic exigency
warranting such deferral and that reason is commu-
nicated to the employees. In a situation, as here, where
there is a definite, established practice of granting reg-
ularly scheduled wage increases, employees will not
reasonably be misled into believing that the employer
is attempting to interfere with the election if the em-
ployer grants the wage raise as scheduled. On the con-
trary, an employer’s postponement of an expected
wage increase or benefit because of an impending elec-
tion would have the reasonable tendency to interfere
with employees’ free choice, because such a postpone-
ment would convey to employees the message that the
presence of the union and the election was depriving
them for a period of time of a wage raise or benefit
which they otherwise would have received earlier.5
Contrary to my colleagues’ assertion, this Employer
was not ‘‘faced with a dilemma’’ of having to choose
between ‘‘the risk and burden of justifying’’ the grant
of a wage increase during the preelection period and
announcing the postponement of that increase. The
Employer easily could ‘‘justify’’ the wage increase to
employees by referring to its established practice.
Thus, the Employer had an objective reason to which
it could point for the granting of the April pay raise,
and employees would not reasonably believe that the
Employer was attempting to interfere with the election
by ‘‘bribing’’ them to vote against union representa-
tion. Here, payment of the wage increase on April 1
would have constituted nothing more than simply what
the employees expected to receive. This is not a situa-
tion where prior wage increases had been provided in
a haphazard or irregular fashion, and therefore the Em-
ployer would have difficulty explaining to employees
the timing of the increase. See, e.g., Village Thrift
Store, 272 NLRB 572 (1983). In fact, the Employer’s
April 4 announcement to employees that the effective
date of the scheduled increase would be postponed
stated that ‘‘[i]t has been our practice to give pay
raises twice a year on April 1st and October 1st. In ac-
cordance with that practice, we had scheduled a pay
raise effective April 1, 1994.’’
One of the dangers of allowing an employer to defer
a scheduled and expected wage increase is that such a
postponement suggests to employees that the employer
may manipulate the amount of the increase depending
on the outcome of the election. That danger is clearly
illustrated here. In telling the employees that the an-
nounced wage increase was being postponed, the Em-
ployer expressly raised the amount of the increase as
an issue and then told the employees that it would not
disclose the amount of the wage increase until after the
election. In my view, this action clearly conveyed to
the employees the possibility that the Employer would
adjust the amount of the pay raise based on how they
voted in the election.
In sum, where an employer has an established prac-
tice of granting periodic wage increases or has an-
nounced before the filing of a petition that it intends
to grant a wage raise or a benefit, I believe that any
deviation from that practice or announcement tends to
interfere with employees’ free choice in the election,
999KAUAI COCONUT BEACH RESORT
even if the employer declares that it is postponing the
effective date of the raise or benefit in order to avoid
interfering in the election. In the circumstances where
employees are entitled to or are expecting a wage raise
before the election, I see no reason to create an excep-
tion to the Board’s well-founded principle that an em-
ployer has a duty during a preelection campaign period
to proceed with the granting of wage raises or benefits
exactly as it would have done had the union not been
on the scene. Accordingly, I would affirm the hearing
officer, sustain Petitioner’s Objection 9, and direct that
a new election be held.