Prime Time Shuttle International

National Labor Relations Board - Board Decisions

Aug 24, 1994

314 N.L.R.B. 838 (N.L.R.B. 1994)

838
314 NLRB No. 139
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
1 We agree with the judge’s conclusion that Kurios, Inc. is a labor
organization under Sec. 2(5) of the Act. Indeed, we note that this
conclusion is consistent with the requirements for labor organization
status set forth by the majority opinion and concurrence in E. I. du
Pont & Co., 311 NLRB 893 (1993), which issued after the judge’s
decision.
Member Cohen finds it unnecessary to pass on the validity of the
various opinions expressed in Electromation, Inc., 309 NLRB 990
(1992); and E. I. du Pont & Co., supra. He is satisfied that, under
any of these views, the Kurios Drivers’ Council is a statutory labor
organization.
Member Cohen finds that Respondent did not establish a good-
faith belief that employees engaged in misconduct. He does not
agree with the test formulated by the judge in his decision. See fn.
3 of the judge’s decision and accompanying text.
1 Scheduled business means a passenger who has a reservation
with Respondent. Unscheduled business means a passenger without
a reservation. While drivers are free to pick up unscheduled business
there are certain restrictions. The unscheduled business must be ap-
proved by Respondent’s dispatcher. Generally the unscheduled busi-
ness must not interfere with the scheduled business and must be con-
sistent with the principle of the most efficient route for ride-sharing
purposes.
Prime Time Shuttle International, Inc. and Kurios,
Inc. Cases 31–CA–19392 and 31–CA–19475
August 24, 1994
DECISION AND ORDER
BY MEMBERS STEPHENS, DEVANEY, AND COHEN
On March 11, 1993, Administrative Law Judge Jay
R. Pollack issued the attached decision. Thereafter, the
Respondent filed exceptions and a supporting brief.
The General Counsel filed a brief in support of the
judge’s decision and an answering brief to the Re-
spondent’s exceptions. The Respondent filed a reply
brief.
The National Labor Relations Board has delegated
its authority in this proceeding to a three-member
panel.
The Board has considered the record and the at-
tached decision in light of the exceptions and briefs
and has decided to affirm the judge’s rulings, findings,
and conclusions1 and to adopt the recommended Order.
ORDER
The National Labor Relations Board adopts the rec-
ommended Order of the administrative law judge and
orders that the Respondent, Prime Time Shuttle Inter-
national, Inc., Sun Valley, California, its officers,
agents, successors, and assigns, shall take the action
set forth in the Order.
Ann L. Weinman, Esq., for the General Counsel.
Lloyd C. Ownbey Jr., Esq., of Pasadena, California, for the
Respondent.
Helena Sunny Wise, Esq., of Burbank, California, for the
Charging Party.
DECISION
STATEMENT OF THE CASE
JAY R. POLLACK, Administrative Law Judge. I heard this
case in trial at Los Angeles, California, on November 5, 6,
13, 19, and 20, 1992. On May 19, 1992, Kurios, Inc.
(Kurios) filed the original charge in Case 31–CA–19392 al-
leging that Prime Time Shuttle International, Inc. (Respond-
ent) committed certain violations of Section 8(a)(5), (3), and
(1) of the National Labor Relations Act (the Act). On June
24, Kurios filed an amended charge alleging that Respondent
had violated Section 8(a)(1) and (3) of the Act. Thereafter
on July 22, Kurios filed the charge in Case 31–CA–19475
alleging that Respondent violated Section 8(a)(1) of the Act.
The Acting Regional Director for Region 31 of the National
Labor Relations Board issued a complaint and notice of hear-
ing against Respondent on July 1, 1992, in Case 31–CA–
19392. On August 27, 1992, a consolidated complaint issued
in both cases. The complaint alleges that Respondent was the
employer of its ‘‘independent contractor’’ van drivers, that
Kurios was a labor organization, that Respondent unlawfully
discharged three employees for their activities on behalf of
Kurios and unlawfully threatened to sue these employees be-
cause of their protected concerted activities. Respondent filed
a timely answer to the complaints, denying all wrongdoing.
All parties have been afforded full opportunity to appear,
to introduce relevant evidence, to examine and to cross-ex-
amine witnesses, and to file briefs. Upon the entire record,
from my observation of the demeanor of the witnesses, and
having considered the posthearing briefs of the parties, I
make the following
FINDINGS OF FACT AND CONCLUSIONS
I. JURISDICTION
Respondent is a California corporation with an office and
principal place of business located in Sun Valley, California,
where it is engaged in providing passenger shuttle service to
and from public passenger terminals. Respondent in the
course and conduct of its business operations, annually pur-
chases and receives goods and products valued in excess of
$50,000 from sellers or suppliers located outside the State of
California. Accordingly, Respondent admits and I find that it
is an employer engaged in commerce within the meaning of
Section 2(2), (6), and (7) of the Act.
II. THE ALLEGED UNFAIR LABOR PRACTICES
A. The Facts
Prior to 1991, Respondent directly employed van drivers
to drive passengers to and from airports in the greater Los
Angeles area. In early 1991 Respondent experimented with
the idea of having its drivers become ‘‘independent contrac-
tors.’’ A pilot program was begun with approximately 10
drivers. These drivers paid a fee for the use of their van and
paid their own gas expenses. However, they received a high-
er commission than employees on scheduled business and
were permitted to keep all revenues on unscheduled busi-
ness.1 The pilot program was suspended due to a lawsuit
filed by a competing van company. The lawsuit was dis-
missed and in August 1991 Respondent required all its driv-
ers to sign a ‘‘prefranchise agreement’’ making them ‘‘inde-
839PRIME TIME SHUTTLE INTERNATIONAL
2 Respondent was required by the State Public Utilities Commis-
sion to provide workers’ compensation. It passed on the cost of
workers’ compensation to the drivers by charging them $5 per shift.
pendent contractors.’’ Under the agreement the drivers paid
a lease fee on a shift basis for using a van. Drivers were re-
sponsible for paying their gas expenses. Respondent was re-
sponsible for maintenance of the van. Apparently, under this
arrangement drivers were able to increase their earnings. In
addition to signing a prefranchise agreement each driver was
required to pay a fee for disability insurance which was later
changed to workers’ compensation insurance.2
Under the prefranchise agreement drivers were required to
wear the Prime Time uniform. Failure to wear the proper at-
tire subjected a driver to a fine under the agreement. Re-
spondent was required by airport regulations to have uni-
forms for its drivers but the particular design was left to Re-
spondent. Drivers were also subject to fines for arriving late
for their shifts, coming in late at the end of their shifts, for
taking passengers without approval, for returning with less
than a full tank of gas and for using a certain brand of gaso-
line which was prohibited by the agreement. At the end of
each shift a driver was required to reconcile his receipts with
one of Respondent’s cashiers.
Although most of the agreements provided for the lease of
a particular van, drivers did not necessarily receive their van
but rather received an available van. The agreement did not
provide for the lease rate and that rate was unilaterally
changed by Respondent. Respondent unilaterally changed
from a monthly deduction for disability insurance to a per
shift charge for workers compensation insurance. Workers’
compensation was required by the California Public Utilities
Commission (PUC). During the term of the agreement Re-
spondent unilaterally changed the method of payment by
raising the lease rate and then absorbing the workers’ com-
pensation payment.
At the time of the execution of a prefranchise agreement,
a driver was required to become a member of Kurios and to
sign a written authorization to have $1 per shift deducted
from his receipts and paid to Kurios. Kurios began as a driv-
ers council to work with Respondent’s management as a liai-
son with the drivers and as a means of making the operation
more efficient. When the change was made to the ‘‘inde-
pendent contractor’’ status of the prefranchise agreement, the
intent was that Kurios be a driver association and help the
drivers obtain health insurance and a gasoline tax credit.
John Kindt Jr., Respondent’s president and chief executive
officer, set up Kurios and had his attorney incorporate the
drivers council. Kindt suggested that Kurios have its own
separate business location and suggested that its officers be
paid for their time spent administering to the association’s af-
fairs.
B. The Discharges
Former employee Deborah Chase testified that she was the
treasurer for Kurios in 1991. In March 1992 Chase became
chairperson of Kurios. Joseph Cain was one of the original
members of the Kurios board. As a member of the Kurios
board, Cain discussed a draft of the proposed prefranchise
agreement and was able to obtain one favorable term for the
drivers. At Cain’s suggestion, the agreement provided that
the lease rate could not be raised without 10 days’ notice.
Gransberry testified that he was appointed to the Kurios
board in February 1992 and elected to the position in March.
According to Everett Gransberry, he meet with Kindt and
other managers over driver concerns such as loop fees, pro-
cedures at airports, insurance and an awning for drivers wait-
ing for vans. I find no merit to Respondent’s contention that
Gransberry was not a duly elected official of Kurios. The
uncontradicted evidence clearly shows that Gransberry was
first appointed by the board to a vacancy and then later voted
to a position on the Kurios board. The credited evidence
shows that Gransberry was appointed to fill a vacancy on the
Kurios board and was later elected to that same position.
The members of Kurios’ board, including discriminatees
Chase, Cain, and Gransberry, met with Kindt and other su-
pervisors of Respondent on a weekly basis. It is undisputed
that Chase attended disciplinary meetings as a representative
of drivers alleged to have committed driving infractions.
In February 1992, Kindt was informed by the Public Utili-
ties Commission that the van drivers were considered to be
employees for workers’ compensation purposes and that Re-
spondent was engaged in ‘‘unlawful business practices’’ by
not providing the drivers with workers’ compensation insur-
ance. As a result of his communications with the PUC, Kindt
reinstated workers’ compensation insurance for the drivers
and unilaterally charged the drivers $5 per shift for the cov-
erage. The cost of the workers’ compensation insurance was
more expensive than the disability insurance previously
charged on a monthly basis.
On March 5, Kindt notified the Kurios board and later all
the drivers that Respondent had filed a petition in bank-
ruptcy. Kindt incorrectly informed the Kurios board that
Kurios was not a creditor in the proceeding. When Kindt no-
tified the Kurios board of the bankruptcy filing, Gransberry
asked some questions about the effect of the bankruptcy on
the drivers. Kindt answered some of Gransberry’s questions
then lost his temper and swore at Gransberry.
In April the members of the Kurios board sought legal ad-
vice in dealing with Respondent. Respondent had filed for
bankruptcy under Chapter 11 and Kurios was listed as a
creditor. Checks from Respondent to Kurios had been re-
turned by the bank as uncollected. Further, the drivers were
concerned that the only way Kurios could receive the desired
gasoline tax credit was to become the employer of record of
the drivers. The drivers were afraid that such a filing would
subject Kurios and the drivers to substantial liability.
Chase, Gransberry, and Cain obtained the services of a
labor attorney, Helena Sunny Wise. On April 29, Wise wrote
Kindt alleging that the drivers were employees and request-
ing that he bargain in good faith. Wise stated that she wished
to bargain about the monies owed to Kurios, the gasoline tax
credit and workers’ compensation.
Upon receipt of Wise’s letter, Kindt called Chase and told
her that he was not going to deduct dues to allow Kurios to
use an attorney against him. Kindt called back later and said,
‘‘I don’t understand.’’ A few days later, Kindt accused the
drivers of betraying him by suing him. He further stated that
he could close down and that if the drivers ‘‘wanted 300 jobs
on their heads,’’ he didn’t care.
On May 12, Chase, Cain, and Gransberry circulated a peti-
tion advising the drivers that Kurios would continue to hold
meetings and that the $1-per-shift dues should be paid di-
840 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
rectly to Kurios. Gransberry gave a copy of this petition to
Mike Kaliczak, Respondent’s driver supervisor.
On May 14 Chase, Gransberry, and Cain were each given
a letter of termination. The employees were terminated sepa-
rately and were prevented from communicating with other
employees. When Cain came to work, he was escorted up-
stairs and given his termination letter. Cain was told that he
should have resigned from Kurios. Kindt said it was the sad-
dest decision he had ever had to make. That same date Kindt
distributed a memorandum to all drivers expressing his dis-
satisfaction with Kurios and the three terminated drivers.
On May 19, Cain, Chase, and Gransberry sent a letter to
all the drivers in which they urged the drivers to continue
working. The letter stated that the three would continue to
serve on the Kurios board. Finally, the letter stated that a
drivers’ meeting would be held on May 28. On June 24, Re-
spondent, by an attorney, sent the three drivers a letter threat-
ening to file a lawsuit against them for ‘‘continuing to com-
municate with employees and contractors.’’
Kindt testified that he believed the Kurios board had mis-
appropriated funds because he had not been given an ac-
counting of the association’s funds. At the hearing, Chase ac-
counted for the approximately $19 paid to Kurios. She testi-
fied that payments to board members for time spent at meet-
ings was approved at an open meeting. This idea was sug-
gested and approved by Kindt. Kurios made some payments
toward health premiums for 18 employees including the three
discriminatees. This was contemplated by formation of
Kurios and not shown to be wrongful. The insurance plan
was made available to all drivers. The three Kurios officers
were discharged shortly after this program began. The result
was that the policy was canceled for nonpayment of pre-
miums.
C. Contentions of the Parties
The General Counsel and Kurios contend that the drivers
were employees and not independent contractors. They argue
that Kurios was a labor organization composed of driver em-
ployees. They further contend that Respondent violated Sec-
tion 8(a)(3) and (1) of the Act by terminating the employ-
ment of Chase, Cain, and Gransberry because of their un-
wanted activities on behalf of Kurios and the other employ-
ees. The General Counsel and Kurios further argue that Re-
spondent threatened to close its business and discharge the
employees because of their activities on behalf of Kurios. Fi-
nally, the General Counsel and Kurios argue that Respondent
threatened a frivolous lawsuit in order to preclude the em-
ployees from engaging in any further activities on behalf of
Kurios or the employees.
Respondent argues that it was not the employer of the
drivers but rather that the drivers were independent contrac-
tors. Respondent further argues that since the drivers were
not employees, Kurios was not a labor organization. Re-
spondent then argues that it cannot have violated the Act by
terminating its agreements with the three drivers. Respondent
contends that even if found to be the employer of the drivers
that the terminations were for misdeeds and misappropriation
of funds and, thus, for just cause.
Analysis and Conclusions
A. The Independent Contractor Issue
In determining the status of employees, the Board employs
a ‘‘right of control’’ test. Standard Oil Co., 230 NLRB 967
(1977); NLRB v. United Insurance Co., 390 U.S. 254 (1968).
Among factors considered significant in connection with the
‘‘right to control’’ test in determining whether an employ-
ment relationship exists are (1) whether individuals perform
functions that are an essential part of the Company’s normal
operations or operate an independent business; (2) whether
they have a permanent working arrangement with the Com-
pany which will ordinarily continue as long as performance
is satisfactory; (3) whether they do business in the Com-
pany’s name with assistance from the Company’s personnel
and ordinarily sell only the Company’s products; (4) whether
the agreement which contains the terms and conditions under
which they operate was promulgated and changed unilater-
ally by the Company; (5) whether they account to the Com-
pany for the funds they collect under a regular reporting sys-
tem prescribed by the Company; (6) whether particular skills
are required for the operations subject to the contract; (7)
whether they have a proprietary interest in the work in which
they are engaged; and (8) whether they have the opportunity
to make decisions which involve risks taken by the inde-
pendent businessman which may result in profit or loss.
Standard Oil Co., supra at 968.
The drivers clearly perform an essential part of Respond-
ent’s business. The business of the Respondent is providing
shared rides to the public and its vans and drivers perform
that function. Driving is not merely an essential part of Re-
spondent’s business it is Respondent’s business. While on
duty the drivers perform no other work. While theoretically
they may have the power to do other work, the intent of all
parties is that while on duty the drivers exclusively drive
under the supervision of Respondent’s dispatchers. The driv-
ers can be fined for arriving late to work, returning a van
late, driving out of route, over charging customers, returning
with less than a full tank of gas, or for using prohibited fuel.
Under the ‘‘prefranchise agreement’’ it is assumed the
drivers will continue to drive for Respondent as long as per-
formance is satisfactory. The drivers drive for the public
using Prime Time vans and Prime Time uniforms. Even for
unscheduled business, the intent is that the customers will re-
turn for Prime Time’s services rather than that of the driver.
Even for unscheduled business, the drivers must obtain ap-
proval of Respondent’s dispatchers. The drivers must contact
a dispatcher after each delivery.
The contractual agreement was drafted by Respondent and
drivers were required to sign the agreement in order to con-
tinue driving for Respondent. The agreement has been
changed unilaterally by Respondent on several occasions. Re-
spondent changed the disability insurance to workers’ com-
pensation and changed the rate paid by drivers unilaterally.
Respondent also unilaterally set and changed the lease rate
for its vans. The fares charged to customers are set by Re-
spondent. On a daily basis the drivers’ account to Respond-
ent for their daily receipts under the reconciliation system set
by Respondent. The skills required to perform can be taught
to a licensed driver in 3 days. No special skills are required.
Respondent has suspended employees for careless driving
841PRIME TIME SHUTTLE INTERNATIONAL
and on one occasion required a driver to attend traffic
school. The drivers have an incentive to maximize their in-
come much the same as an employee working on commis-
sion. However, they really do not own anything or have a
proprietary interest in a business. Most important, the drivers
do not own the vans. Respondent owned the vans and paid
for maintenance, liability insurance, and collision insurance.
The drivers had the option to pay for a lower deductible col-
lision insurance at a per shift rate set by Respondent. The
drivers paid for fuel. Under all of the circumstances, I find
Respondent retained the right to control the manner and
means by which its drivers performed their duties and, there-
fore, that the drivers were employees of Respondent and not
independent contractors. Fort Wayne Newspapers, 263
NLRB 854, 855 (1982); Blackberry Creek Trucking, 291
NLRB 474, 479–480 (1988). See also Siracusa Moving &
Storage, 291 NLRB 143, 145–147 (1988).
B. The Labor Organization Issue
Section 2(5) of the Act defines a labor organization as fol-
lows:
any organization of any kind, or any agency or em-
ployee representation committee or plan, in which em-
ployees participate and which exists for the purpose, in
whole in part, of dealing with employers concerning
grievances, labor disputes, wages, rates of pay, hours of
employment, or conditions of work.
In NLRB v. Cabot Carbon Co., 360 U.S. 203 (1959), the
Supreme Court held that an employee committee that dis-
cussed with management various subjects pertaining to work-
ing conditions, wages, or grievances was a labor organization
within the meaning of Section 2(5) even though the commit-
tee had no membership requirements, collected no dues, had
no funds, and had never attempted to negotiate a collective-
bargaining agreement. Accordingly, the Board has broadly
construed the definition of labor organization under Section
2(5). St. Anthony’s Hospital, 292 NLRB 1304 (1989).
In Electromation, Inc., 309 NLRB 990 (1992), the Board
indicated that the definitional elements of a Section 2(5) or-
ganization require (1) employee participation, (2) a purpose
to deal with employers, (3) concerning itself with conditions
of employment or other statutory subjects, and (4) if an
‘‘employer representation committee or plan’’ is involved,
evidence that the committee is in some way representing the
employees.
Respondent contends that Kurios lacked the formality of a
labor organization. Section 2(5) does not require a labor or-
ganization to have any formal structure. A group of individ-
uals may comprise a labor organization even though they
lack a constitution or bylaws, elected officials, formal meet-
ings, dues, or other formal structure. Columbia Transit Corp.,
237 NLRB 1196 (1978); Arkay Packaging, 221 NLRB 99
(1975). In the instant case, all the drivers belonged to Kurios
and paid fees or dues as a condition of employment. Em-
ployees elected board members who were employees of Re-
spondent. Kurios had a constitution and bylaws, meetings
with employees, and meetings with the Respondent. Clearly,
employees participated in the organization.
The term ‘‘dealing with’’ has been broadly construed to
include various types of employee committees which discuss
seniority, job classifications, holidays, vacations, and various
other conditions of employment. Cabot Carbon Co., supra.
Kurios met with Respondent regularly to discuss driving pro-
cedures and other matters which affected the drivers’ em-
ployment. In disciplinary meetings a Kurios representative
was present. On two such occasions a compromise on the
discipline was reached. With respect to the filing of bank-
ruptcy, the Kurios board spoke with Kindt as advocates for
the employees. It was the adversary nature of these discus-
sions which led to the discharges. Clearly the Kurios officers
were acting in a representational capacity. Kurios definitely
met the four requirements of Section 2(5). I find that Kurios
was a labor organization whose purpose included dealing
with Respondent regarding working conditions within the
meaning of Section 2(5) of the Act.
Further, Respondent argues that no one intended that
Kurios act as a union. If a purpose is to deal with an em-
ployer concerning conditions of employment, the Section
2(5) definition has been met regardless of whether the em-
ployer has created it, or fostered its creation, in order to
avoid unionization or whether employees view that organiza-
tion as equivalent to a union. Electromation, supra.
C. The Discharges
In Wright Line, 251 NLRB 1083 (1980), enfd. 662 F.2d
899 (1st Cir. 1981), cert. denied 455 U.S. 989 (1982), the
Board announced the following causation test in all cases al-
leging violations of Section 8(a)(3) or violations of Section
8(a)(1) turning on employer motivation. First, the General
Counsel must make a prima facie showing sufficient to sup-
port the inference that protected conduct was a ‘‘motivating
factor’’ in the employer’s decision. Upon such a showing,
the burden shifts to the employer to demonstrate that the
same action would have taken place even in the absence of
the protected conduct. The United States Supreme Court ap-
proved and adopted the Board’s Wright Line test in NLRB
v. Transportation Corp., 462 U.S. 393, 399–403 (1983).
Section 8(a)(1) is violated if the Respondent knows of its
employees’ concerted activity, if the activity is protected by
the Act, and if the adverse employment action is motivated
by the employees’ protected concerted actions. Amelio’s, 301
NLRB 182 (1991). In general, to find an employee’s activity
to be ‘‘concerted,’’ the Board requires that it be engaged in
with or on the authority of other employees, and not solely
by and on behalf of himself. Meyers Industries, 281 NLRB
882, 885 (1986). The three drivers were acting as the Kurios
board on behalf of the other drivers. The drivers were clearly
acting in concert with each other as the Kurios board. Fi-
nally, the employees were acting on the authority of the driv-
er-members of Kurios. Thus, Respondent knew the drivers
were acting concertedly.
The discipline or discharge of employees for filing or
processing grievances, whether pursuant to a formal contrac-
tual grievance procedure or informally in the absence of such
a procedure, is generally held to be a violation of Section
8(a)(1). John Sexton & Co., 217 NLRB 80 (1975); Ernst
Steel Corp., 212 NLRB 78 (1974); Southwestern Bell Tele-
phone Co., 212 NLRB 43 (1974). Because grievance meet-
ings are generally heated and emotional an employee’s out-
burst will be protected unless the conduct is indefensible
under the circumstances. Postal Service v. NLRB, 652 F.2d
409 (5th Cir. 1981); see also Illinois Bell Telephone Co., 259
842 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
3 Sec. 8(a)(1) is violated if it is shown that the discharged em-
ployee was at the time engaged in a protected activity, that the em-
ployer knew it was such, that the basis of the discharge was an al-
leged act of misconduct in the course of that activity, and that em-
ployee was not, in fact, guilty of that misconduct. NLRB v. Burnup
& Sims, 379 U.S. 21, 23 (1964). See also Ideal Dyeing Co., 300
NLRB 303 (1990).
NLRB 1240 (1982). Since Respondent was aware that the
Kurios officers were representing employees and presenting
grievances to management, Respondent knew of their pro-
tected concerted activities, notwithstanding the fact that Re-
spondent was unaware of the legal significance of that con-
duct.
I find that General Counsel has made a prima facie show-
ing that Respondent was motivated by the protected con-
certed activities of the three drivers in discharging Chase,
Gransberry, and Cain. First, upon learning that the employees
had obtained an attorney to represent employees, Kindt told
Chase and Gransberry that he would close his business if
they continued to negotiate with him—represent the drivers’
interest. Shortly thereafter, Kindt discharged Chase, Cain,
and Gransberry making reference to ‘‘rumors’’ complaining
about the change in direction of the Kurios organization.
Second, when Cain sought an explanation, Kindt stated that
Cain should have resigned from Kurios. Kindt stated that this
was the saddest business decision he had to make. Kindt
made no mention of any misuse of Kurios’ funds or the fail-
ure to give an accounting. Finally, Kindt took steps to pre-
vent further communication between the Kurios officials and
the driver-employees. Based on Kindt’s statements and con-
duct, the three employees could only conclude that the dis-
charges were based on their unwanted efforts to represent the
drivers as agents of Kurios.
The burden shifts to Respondent to establish that the same
action would have taken place in the absence of the employ-
ees’ union and protected concerted activities. Respondent has
shown no lawful reason for the discharges. As more fully
discussed herein, the activities Respondent found offensive
were protected by the Act.
Respondent contends that the employees misused or mis-
appropriated Kurios’ funds. I find no factual basis for the
contention that Chase, Cain, and Gransberry misappropriated
union funds. The payment for time spent on Kurios matters
was approved by the employees and Kindt himself. The pay-
ment of health benefit premiums was consistent with the pur-
pose of Kurios and there is no evidence that the three re-
ceived any benefit not available to any other employee. The
unlawful discharges caused the plan to fail. The three em-
ployees were no longer able to administer the health benefit
plan. Respondent cannot rely on the failure to make pay-
ments caused by its unlawful discharges to justify or defend
these discharges. Thus, I find that Respondent was unable to
show any actual misconduct.
Respondent argues that Kindt perceived that the Kurios
board had misappropriated the funds because no accounting
of Kurios funds was given. I find that argument uncon-
vincing. First, Kindt never gave that reason to the employees.
Second, that lack of accounting had been condoned for
sometime. No written request for an accounting was ever
made. Kindt never explained why that became critical in
May. Most important, the climax according to Kindt, was the
employees’ attempt to continue to collect dues after Kindt
ordered an end to the payroll deduction. The collection of
union dues and the accounting of such dues are an internal
union matter. The discharge of these employees because Re-
spondent did not approve of or appreciate their handling of
union matters is itself a violation of Section 8(a)(3) of the
Act. Respondent’s lack of knowledge as to the legal signifi-
cance of its actions is not a defense. In my view Respondent
could defend such a discharge only by showing actual mis-
conduct, i.e., that the employees actually misappropriated
Kurios funds.3 Respondent was unable to do so.
Assuming arguendo, that an accounting is not an internal
union matter, an employer cannot carry its Wright Line bur-
den simply by showing that it had a legitimate reason for the
action, but must ‘‘persuade’’ that the action would have
taken place even absent the protected conduct ‘‘by a prepon-
derance of the evidence.’’ Centre Property Management, 277
NLRB 1376 (1985); Roure Betrand Dupont, Inc., 271 NLRB
443 (1984). It appears Kindt was not seriously concerned
about an accounting until the letter from Attorney Wise ar-
rived. I note that only the three employees attempting to col-
lect dues were discharged and that another board member
was not discharged. Further, Kindt implied to Cain that if
Cain had resigned as a board member he would not have
been discharged.
I find that the strong prima facie case was not rebutted by
Respondent. Respondent must show that the three employees
would have been discharged for lawful reasons even if they
had not engaged in protected concerted activities or union ac-
tivities. Rather, Respondent’s defenses have bolstered the
prima facie case. Accordingly, I find that the termination of
Cain, Chase, and Gransberry was motivated by their pro-
tected union activities and that Respondent has not estab-
lished that it would have discharged them absent that pro-
tected conduct. Thus, I find that Respondent has failed to
carry its burden under Wright Line and that the discharge of
the three employees violated Section 8(a)(3) and (1) of the
Act. See Bronco Wine Co., 253 NLRB 53 (1981); Hunter
Douglas, Inc., 277 NLRB 1179 (1985).
D. The Lawsuit
In Bill Johnson’s Restaurants v. NLRB, 461 U.S. 731
(1983), the Supreme Court held that the filing of a meri-
torious lawsuit did not violate the Act even if filed for a re-
taliatory motive. However, the filing of a frivolous lawsuit
filed for a retaliatory motive constitutes a violation of the
Act. Where the employer presents evidence that its state
court action presents a genuine issue of law or fact, the
Board should stay its proceeding until the state action has
concluded. If the employer prevails in state court then the
employer would prevail before the Board. However, if the
employer is unsuccessful in state court, the Board may con-
sider that decision in determining whether the case was frivo-
lous and brought for retaliatory reasons. If a violation is
found, the Board may order the employer to reimburse the
employees wrongfully sued for their attorney’s fees.
The Board has distinguished employer threats to sue em-
ployees for protected activity from the filing of employer
lawsuits against employees. The Board has held, both before
and after Bill Johnson’s, that a threat by an employer to sue
employees as a tactic to restrain the exercise of Section 7
rights is unlawful. Consolidated Edison Co., 286 NLRB 1031
843PRIME TIME SHUTTLE INTERNATIONAL
4 All motions inconsistent with this recommended Order are here-
by denied. If no exceptions are filed as provided by Sec. 102.46 of
the Board’s Rules and Regulations, the findings, conclusions, and
recommended Order shall, as provided in Sec. 102.48 of the Rules,
be adopted by the Board and all objections to them shall be deemed
waived for all purposes.
5 If this Order is enforced by a judgment of a United States court
of appeals, the words in the notice reading ‘‘Posted by Order of the
National Labor Relations Board’’ shall read ‘‘Posted Pursuant to a
Judgment of the United States Court of Appeals Enforcing an Order
of the National Labor Relations Board.’’
(1987); Carborundum Resistant Materials Corp., 286 NLRB
1321 (1987).
In the instant case Respondent threatened the employees
with a lawsuit if they continued to communicate with em-
ployees. This threat was in retaliation for the employees at-
tempt to collect union dues. Accordingly, I find that Re-
spondent violated Section 8(a)(1) by such conduct.
CONCLUSIONS OF LAW
1. Respondent is an employer engaged in commerce and
in a business affecting commerce within the meaning of Sec-
tion 2(6) and (7) of the Act.
2. Kurios was a labor organization within the meaning of
Section 2(5) of the Act.
3. By threatening employees with the closing of its busi-
ness and threatening to sue employees for engaging in union
activities, Respondent has engaged in unfair labor practices
within the meaning of Section 8(a)(1) of the Act.
4. By discharging Deborah Chase, Joseph Cain, and Ever-
ett Gransberry because of their activities on behalf of Kurios,
Respondent violated Section 8(a)(3) and (1) of the Act.
5. The above unfair labor practices are unfair labor prac-
tices affecting commerce within the meaning of Section 2(6)
and (7) of the Act.
THE REMEDY
Having found that Respondent engaged in unfair labor
practices, I shall recommend that it be ordered to cease and
desist therefrom and that it take certain affirmative action to
effectuate the policies of the Act.
I shall recommend that Respondent offer Deborah Chase,
Joseph Cain, and Everett Gransberry full and immediate rein-
statement to the positions they would have held, but for their
unlawful discharges. Further, Respondent shall be directed to
make Chase, Cain, and Gransberry whole for any and all
losses of earnings and other rights, benefits, and privileges
of employment they may have suffered by reason of Re-
spondent’s discrimination against them, with interest. Back-
pay shall be computed in the manner set forth in F. W.
Woolworth Co., 90 NLRB 289 (1950), with interest as pro-
vided in New Horizons for the Retarded, 283 NLRB 1173
(1987); See also Florida Steel Corp., 231 NLRB 651 (1977);
and Isis Plumbing Co., 138 NLRB 716 (1962).
Respondent shall also be required to remove any and all
references to its unlawful discharges of Chase, Cain, and
Gransberry from its files and notify them in writing that this
has been done and that the unlawful discharges will not be
the basis for any adverse action against them in the future.
Sterling Sugars, 261 NLRB 472 (1982).
On these findings of fact and conclusions of law and on
the entire record, I issue the following recommended4
ORDER
The Respondent, Prime Time Shuttle International, Inc.,
Sun Valley, California, its officers, agents, successors, and
assigns, shall
1. Cease and desist from
(a) Discharging employees in order to discourage union
activities or other protected concerted activities.
(b) Threatening employees with closing its business or
other retaliation for engaging in union activities.
(c) Threatening to sue employees because they engaged in
union or protected concerted activities.
(d) In any like or related manner interfering with, restrain-
ing, or coercing employees in the exercise of the rights guar-
anteed them by Section 7 of the Act.
2. Take the following affirmative action necessary to ef-
fectuate the policies of the Act.
(a) Offer immediate employment to Deborah Chase, Jo-
seph Cain, and Everett Gransberry to the positions they
would have held, but for their unlawful discharges.
(b) Make whole Deborah Chase, Joseph Cain, and Everett
Gransberry for any and all losses incurred as a result of Re-
spondent’s unlawful discharges of them, with interest, as pro-
vided in the remedy section of this decision.
(c) Remove from its files any and all references to the dis-
charge of Deborah Chase, Joseph Cain, and Everett
Gransberry and notify them in writing that this has been
done and that Respondent’s discharge of them will not be
used against them in any future personnel actions.
(d) Post at its Sun Valley, California facilities copies of
the attached Notice marked ‘‘Appendix.’’5 Copies of the no-
tice, on forms provided by the Regional Director for Region
31, after being signed by the Respondent’s authorized rep-
resentative, shall be posted for 60 consecutive days in con-
spicuous places, including all places where notices to em-
ployees are customarily posted. Reasonable steps shall be
taken by Respondent to ensure the notices are not altered,
defaced, or covered by other material.
(e) Notify the Regional Director in writing within 20 days
from the date of the Order what steps Respondent has taken
to comply.
APPENDIX
NOTICE TO EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
The National Labor Relations Board has found that we vio-
lated the National Labor Relations Act and has ordered us
to post and abide by this notice.
Section 7 of the Act gives employees these rights.
To organize
To form, join, or assist any union
844 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
To bargain collectively through representatives of
their own choice
To act together for other mutual aid or protection
To choose not to engage in any of these protected
concerted activities.
WE WILL NOT discharge employees in order to discourage
union activities or other protected concerted activities.
WE WILL NOT threaten employees with closing our busi-
ness or other adverse action in order to discourage union ac-
tivities.
WE WILL NOT threaten to sue employees because they en-
gaged in union activities or other protected concerted activi-
ties.
WE WILL NOT in any like or related manner interfere with,
restrain, or coerce employees in the exercise of the rights
guaranteed them by Section 7 of the Act.
WE WILL offer immediate employment to Joseph Cain,
Deborah Chase, and Everett Gransberry to the positions they
would have held, but for their unlawful discharges.
WE WILL make whole Cain, Chase, and Gransberry for
any and all losses incurred as a result of our unlawful dis-
charges of them, with interest.
WE WILL remove from our files any and all references to
the discharges of Cain, Chase, and Gransberry and notify
them in writing that this has been done and that the fact of
their discharges will not be used against them in any future
personnel actions.
PRIME TIME SHUTTLE INTERNATIONAL, INC.