SMG Puerto Rico II, LP

National Labor Relations Board - Administrative Judge Opinions

Apr 17, 2015

12-CA-130436 (N.L.R.B. Apr. 17, 2015)

JD(ATL)–07–15
San Juan, PR
UNITED STATES OF AMERICA
BEFORE THE NATIONAL LABOR RELATIONS BOARD
DIVISION OF JUDGES
ATLANTA BRANCH OFFICE
SMG PUERTO RICO, II, LP
and CASES 12–CA–130436
12–CA–132098
UNITED HERE!, LA GASTRONOMICA, 12–CA–132104
LOCAL 610 12–CA–132904
12–CA–132908
Maria Margarita Fernandez, Esq.,
for the General Counsel.1
Marcelle D. Martell-Jovet, Esq.,
for the Respondent.2
Manuel Rodriguez Banchs, Esq. and
Rosa Sequi, Esq., for the Charging Party.3
DECISION
STATEMENT OF THE CASE
WILLIAM NELSON CATES, Administrative Law Judge. These cases were tried before me
in San Juan, Puerto Rico, on February 4–5, 2015.4 The charge in Case 12–CA–130436 was filed
by the Union on June 11, and amended on September 30. The charges in Cases 12–CA–132098
and 12–CA–132104 were filed by the Union on July 2. The charges in Cases 12–CA–132904
and 12–CA–132908 were filed by the Union on July 16, and Case 12–CA–132908 was first
amended on September 30, and a second time on October 30. The parties admit the accuracy of
the filing dates for all charges and amendments. After an investigation of all charges and
amendments, the Government, on October 31, issued an order consolidating cases, consolidated

1 I shall refer to counsel for the General Counsel as counsel for the Government and to the General Counsel
as the Government.
2 I shall refer to counsel for the Respondent as counsel for the Company and to the Respondent as the
Company.
3 I shall refer to counsel for the Charging Party as counsel for the Union and to the Charging Party as the
Union.
4 All dates are 2014 unless indicated otherwise.
JD(ATL)–07–15
2
complaint and notice of hearing.5 At the beginning of the trial the Company and Union
introduced a proposed settlement agreement (Jt. Exh. 1) resolving two of the charges.6 The
remaining complaint allegations are: on May 3 the Company suspended, and, on May 12
discharged, its employee, Osman Alvarez; on May 7 it discharged its employee Iris Mangual;
and, on July 9 discharged its employee Veronica Mercado. It is alleged the Company exercised 5
discretion in imposing the discharges described above and that the suspension and discharges
relate to wages, hours, and other terms and conditions of employment of the stipulated
bargaining units hereinafter described and are mandatory subjects for the purpose of collective
bargaining. It is alleged, the Company engaged in this conduct without prior notice to the Union
and without affording the Union an opportunity to bargain with the Company with respect to this 10
conduct, and the effects of this conduct, and by its actions set forth above, has been failing and
refusing to bargain collectively with the exclusive bargaining representatives of its employees in
violation of Section 8(a)(5) and (1) of the National Labor Relations Act (the Act).
The Company in its answer to the complaint, and at trial, denies having violated the Act 15
in any manner alleged in the complaint.
The parties were given full opportunity to participate, to introduce relevant evidence, to
examine and cross-examine witnesses, and to file briefs. In addition to the settlement agreement
the parties entered into certain admissions and stipulation of facts. The Government called three 20
and the Company called one witness. I have studied the whole record, the posttrial briefs, and
the authorities cited. I conclude and find the Company violated the Act substantially as alleged
in the complaint.
FINDINGS OF FACT25
I. JURISDICTION, LABOR ORGANIZATION STATUS AND SUPERVISORY/AGENCY STATUS

5 I shall to refer to the consolidated complaint simply as the complaint. The Company’s argument that in the
absence of a lawfully appointed Board quorum at the time Margaret Diaz was designated Regional Director
for Region 12 of the Board that her appointment was invalid and she lacked authority to issue the complaint
and/or to delegate the issuance of the complaint to Action Regional Director David Cohen is without merit.
On July 18, 2014, a full complement of the five Board Members, as reflected in the “Minute of Board
Action” of that date took certain actions including:
Nevertheless, in an abundance of caution, with a full complement of five Board Members we now
confirm, adopt and ratify nunc pro tunc all administrative, personnel and procurement matters
approved by the Board or taken by or on behalf of the Board from January 4, 2012 to August 5, 2013,
inclusive. This action is intended to remove any question that may arise concerning the validity of the
administrative, personnel, and procurement matters undertaken during that period. In a further
abundance of caution, and in an effort to bring an end to ongoing litigation regarding the actions of the
Board and its personnel between January 4, 2012 and August 5, 2013, having considered the relevant
supporting materials, the Board hereby expressly authorizes the following actions:
1. The selection of Dennis Walsh as Regional Director for Region 4 (Philadelphia);
2. The selection of Margaret Diaz as Regional Director for Region 12 (Tampa);
Also See: Professional Transportation, Inc. 362 NLRB No. 60 ft. at. 7 (2015).
6 I approved on the record the proposed settlement agreement of the Company and Union addressing the
independent 8(a)(1) allegations set forth in paragraph 7 (a)-(g), and, the information request allegations set
forth in paragraph 10 (a)-(c). I severed from the complaint and remanded to the Regional Director for
Region 12 of the Board Cases 12–CA–130436 and 12–CA–132104 for monitoring compliance with the
terms of the approved settlement agreement and for all other matters related to those two cases.
JD(ATL)–07–15
3
The Company is a limited partnership that provides management, operations and
maintenance services for the Puerto Rico Convention Center, a facility located in the Puerto Rico
Convention District Authority, at 100 Convention Boulevard, San Juan, Puerto Rico. In
conducting its operations the Company, during the 12 months prior to the issuance of the 5
complaint herein, a representative period, purchased and directly received at its San Juan, Puerto
Rico facility goods valued in excess of $50,000 from points outside the Commonwealth of
Puerto Rico. The parties stipulate, and I find, the Company is an employer engaged in commerce
within the meaning of Section 2(2), (6), and (7) of the Act.
10
The parties stipulate, and I find, the Union is a labor organization within the meaning of
Section 2 (5) of the Act.
The parties stipulate that Company Director of Administration Jeanette “Gina” Montalvo,
Director of Finance Jorge Perez, Operations Manager David Rodriguez, and General Manager 15
Blarys Segarra are supervisors and agents of the Company within the meaning of Section 2(11)
and (13) of the Act.
II. THE ALLEGED UNFAIR LABOR PRACTICES
20
A. Facts
The Company and Union have for a period of time been in negotiations toward a
collective-bargaining agreement for Company employees in the units set forth below.
25
The parties stipulated the following employees of the Company (Unit A) constitute a unit
appropriate for the purposes of collective bargaining within the meaning of Section 9(b) of the
Act:
All on-call Food and Beverage Attendants employed by the Employer at the
Puerto Rico Convention Center, 100 Convention Blvd., San Juan, Puerto Rico 30
Excluding all other employees, guards, professional employees and supervisors as
defined by the Act.
On January 28, the Union was certified as the exclusive collective-bargaining
representative of Unit A and at all times since that date, based on Section 9(a) of the Act, the 35
Union has been the exclusive collective-bargaining representative of Unit A.
The parties stipulated the following employees of the Company (Unit B) constitute a unit
appropriate for the purposes of collective bargaining within the meaning of Section 9(b) of the
Act:40
All regular full-time housekeeping, engineering/maintenance, and Set-up
employees employed by the Employer at the Puerto Rico Convention Center,
located at 100 Convention Blvd., San Juan, Puerto Rico, excluding all other
employees, guards, professional employees and supervisors as defined by the Act.
45
JD(ATL)–07–15
4
On April 4, the Union was certified as the exclusive collective-bargaining representative
of Unit B and at all times since that date, based on Section 9(a) of the Act, the Union has been
the exclusive collective-bargaining representative of Unit B.
It is admitted, that at all times material here, the parties have not arrived at a grievance 5
and arbitration procedure in their ongoing negotiations toward a collective-bargaining
agreement.
It is stipulated the Company suspended its employee Osman Alvarez, with pay, on May 3
and discharged him on May 12. It is stipulated the Company exercised discretion in the discharge 10
of Alvarez.
It is stipulated the Company discharged its employee Iris Mangual on May 7. It is also
stipulated the Company exercised discretion in the discharge of employee Mangual and that it
did not give notice to the Union nor did it afford the Union an opportunity to bargain prior to 15
Mangual’s discharge.
The Company denies it discharged its employee Veronica Mercado on July 9, but, rather
contends it dropped her from its on-call list for failure to accept work.
20
Food and beverage department employee Mercado started working for the Company in
2004 and most recently was supervised by Banquet Supervisor Jennifer Ramirez. Mercado’s
work hours depended on the amount of available and scheduled work. Mercado and other food
and beverage department employees were advised weekly usually on Tuesdays, by email of work
opportunities and schedules by the Company. The Company posts work opportunities on its 25
“When to Work” page and employees each are given an identification and password to access
“When To Work.” Food and beverage employees review the hours of work available and choose
which hours they wish to work. Mercado testified she was available 20–30 hours per week in
May 2014. According to Mercado, employees are allowed until noon on Wednesday to set their
available work hours. After selecting their available for work hours employees are then notified 30
on Wednesday evening or Thursday morning when they will actually work. Mercado testified
the last time she was assigned work was on May 9, and she received that assignment from Food
and Beverage Supervisor Ramirez.
Mercado testified she was attending mandatory training at the Company on July 16, and 35
around 10 a.m. Supervisor Ramirez and Margarita Matos notified her to collect her belongings
that she had to leave the class and would also be leaving the building. Mercado was escorted to
Director of Administration Montalvo’s office where Montalvo presented her a letter “which
indicated that I no longer worked for SMG.” Mercado testified Montalvo told her she “was not
complying with the hours, I wasn’t working with the hours, that what I was working 17 hours 40
and because of that reason, I was discharged.” The Company’s July 9 letter to Mercado in
pertinent part reads:
July 9, 2014
45
Veronica Mercado
JD(ATL)–07–15
5
475 Carr 8860 Apt. 2260
Cond. Patios Sevillanos
Trujillo Alto, PR 00976
Dear Veronica:5
According to our records, your last day of work was on May 9, 2014. Since
January of 2014 to the present, you have worked on 4 days, for a total of 17 hours.
Even though there was work, the availability that you submitted conflicts with our
operational needs and we have been unable to assign you shifts for more than 9 10
weeks.
For these reasons, we will proceed to terminate the employment that you held up
to now for the Food and Beverages Department in the Puerto Rich Convention
Center.15
We appreciate the time that you worked with us and we wish you success in your
future.
The Government provided, as an exhibit, a November 18, 2013 letter, to Food and 20
Beverage Department employee Jose D. Muriel from Director of Administration Montalvo that
reads in pertinent:
Dear Mr. [Jose D.] Muriel:
25
According to our records, your last day of work was August 8, 2013. More than
three months have passed since you last worked with us. We contacted you in the
month of October and you agreed to let us know of your availability, if any, in
order to continue working with us. However, as of today you have not contacted
us.30
For these reasons, we will proceed to terminate the employment that you held
until now in the Food and Beverage Department at the Puerto Rico Convention
Center.
35
Mercado testified food and beverage department employees Melissa Correa and Harizael
Pagan also had trouble completing their work hours but continued to be employed. Mercado
explained; “Melissa Correa, she was like eight months out. And Harizael was like seven
months.”
40
On cross-examination Mercado acknowledged receiving, on September 5, 2012, a copy
of the Company’s August 17, 2012 policies regarding availability for and assignments of shifts.
Mercado testified the employees were asked to sign their acknowledgements, “in a hurry without
a copy.” Further on cross-examination, Mercado testified:
45
Q. [By Ms. Martell-Jovst]
JD(ATL)–07–15
6
The fact remains that between May of 2014 and the date of the letter
[Mercado’s letter of termination], which is July 9, 2014; you did not
accept any shifts for work.
A. [By Mercado] Because I have another work—another job and it didn’t
match up with the events that the convention center had.5
Q. So is that a yes that you did not accept any shifts?
A. I couldn’t work because my availability was not in accordance with the
events.
Director of Administration Montalvo testified regarding work schedules as:10
Each week, the Company, according to the events that the Company
shows, conventions, makes schedules and announce[s] it through a
webpage called “When To Work”
15
Montalvo explained that “When To Work” was a web page showing the schedule of work
from which the employees could select shifts they would be available for the following week that
is, “the employee can enter the page and set their availability [for work] during the following
week.” Montalvo testified that “according to the policy, they [the employees] need to set at least
20 hours per week in a minimum of two days period, in operational hours of the convention or 20
other events.”
Director of Administration Montalvo testified, “If the employee does not accept shifts in
a six-week period, its considered, normally, a voluntary resignation except if the employee in [is]
licensed, approve—you know, approved by the Company.” Montalvo explained a “licensed” 25
exception would include situations where an employee is granted an approved “medical” or
“military” based exception from accepting shift assignments. Montalvo testified employee
Melissa Correa was not considered a voluntary resignation even though she did not work at all
for a period of time because she was on a medical license approved by the Company. Montalvo
testified Harizael Pagan was not considered a voluntary resignation for his absences from taking 30
assignments because his assignments were cancelled by the Company.
The portion of the schedule assignment and attendance policy that Director of
Administration Montalvo testified about, in part, states:
35
Schedule Assignment and Attendance Policy
SMG generally uses a scheduling assignment system called “When to Work” for
“on-call” employees from the Food and Beverage Department.
In order to achieve a fair scheduling assignment and to reinforce follow-up on the 40
Attendance Policy, it is important for all personnel to comply with the following
rules and measures:
Availability
45
JD(ATL)–07–15
7
Every employee is responsible for updating their availability whether it be
fixed or varied. Also, he or she may notify their availability by calling the
Food and Beverage Department on Tuesday morning at 787-300-6842 or
sending an e-mail to pfigureoa@prconvention.com.
5
Employees must submit an availability to work at least 20 hours a week
(excluding the period between 12am and on or after 7:30pm).
These 20 hours of availability must be distributed over a period of at least
two days a week.10
Every available day must be a minimum of five hours (Banquets) and
eight hours (Kitchen and Concessions).
An employee must make a request to the manager up to four weeks a year 15
in order to close out their full availability (consecutive or split), requesting
it at least two weeks prior to the desired date.
Due a lack of availability, if an employee is not assigned available work
shifts, either for him or her, for a minimum 6-week consecutive period, it 20
shall be considered a voluntary resignation; even when they have
complied with the minimal limits of availability.
Shift assignments
25
The schedule shall generally be posted on Wednesday mornings. From
that time on, the employee is responsible for reviewing and confirming it.
If the employee does not confirm on or before Wednesday at 3pm, he or
she shall be considered unavailable and their shift shall be reassigned.30
In the event of a last-minute increase in guarantees, these shifts shall be
assigned to available personnel at the time they are contacted.
Union Official Barbes testified she only learned that Mercado was no longer employed 35
by the Company after Mercado’s employment had ended. Barbes said she had no occasion to
meet with the Company to discuss its actions related to Mercado prior to her employment
ending.
Housekeeping Team Leader Alvarez commenced working for the Company in October 40
2005 and continued until he was suspended, on or about, May 3 and discharged on May 12.
Alvarez’ job duties included being in charge of housekeeping, recycling, setup, and, keeping the
building clean including public areas, exhibit halls, and big rooms. As a long-term employee,
Alvarez taught young coworkers the various aspects of their jobs. Alvarez worked 6 a.m. to 3
p.m., 40 hours per week, but on no established or set workdays.45
JD(ATL)–07–15
8
Alvarez testified that at the end of his shift on Friday, May 2, Operations Manager David
Rodriguez asked him to call the employees together because he had something to tell them, that
he did not like, from a visit by someone in a high position at corporate level. Alvarez said he
was not feeling well that day, and had in fact, just returned from the emergency room at a local
hospital. Alvarez told Operations Manager Rodriguez he was not feeling well and gave him 5
some “medical papers.”
Around 8:30 p.m. the next day, Saturday, May 3, Alvarez received a telephone call from
Operations Manager Rodriguez who told him he also had Security Supervisor Jacinto de Leon on
a speaker telephone for the call. Alvarez testified Rodriguez told him he had talked to human 10
resources and informed Alvarez he was “suspended under investigation.” Alvarez said that since
he had that day, Saturday and Sunday off work; he asked if they were going to provide him any
documentation regarding his suspension. Alvarez was told they would contact him. Alvarez
remained suspended for 1 week.
15
At the end of that week Operations Manager Rodriguez requested Alvarez come to the
human resources department the following Wednesday. Alvarez contacted Union President
Jason Rodriquez and Union Official Angela Barbes about going with him to the meeting. The
two told Alvarez to go without them and “give my explanation of what had happened.” The
union representatives were unable to go with Alvarez because they were in negotiations that day. 20
Alvarez met with Director of Administration Montalvo and Operations Manager Rodriguez.
Alvarez gave his explanation. Montalvo wrote it down and told him they would continue the
investigation and thereafter contact him. Alvarez was requested to again meet with the Company
on May 12. This time the two union representatives he requested accompanied him to the
meeting. Director of Administration Montalvo and Director of Finance Perez were present for 25
the Company. Alvarez testified Montalvo told him they had already taken a decision to
terminate him. Union Official Barbes asked why Alvarez was being terminated. Montalvo said
it was for abandoning a meeting. The meeting ended. Union Official Barbes testified the
Company never notified the Union of its intention to suspend or terminate Alvarez prior to his
being terminated.30
B. The discharge of employees Alvarez, Mangual and Mercado
As noted earlier, it is alleged that on May 3, the Company suspended, and, on May 12
discharged its employee Alvarez; that on May 7, it discharged its employee Mangual; and, that 35
on July 9 discharged its employee Mercado and exercised discretion in imposing the discharges.
It is alleged the suspension and discharges relate to wages, hours, and other terms and conditions
of employment of employees in Unit A and Unit B and are mandatory subjects for the purpose of
collective bargaining. It is also alleged the Company took the above actions without prior notice
to the Union and without affording the Union an opportunity to bargain with the Company with 40
respect to its actions, and the effects of its actions, and in doing so, has been failing and refusing
to bargaining collectively with the exclusive bargaining representatives of its employees in
violation of Section 8(a)(5) and (1) of the Act.
Before addressing whether an employer has a preimposition duty to bargain 45
involving the imposition of discretionary discipline where the employees are represented by a
JD(ATL)–07–15
9
union, but, at a time when the parties have not arrived at a first contract or an interim grievance
procedure, it is helpful to determine if the preliminary requirements were actually established
such as; was the discipline discretionary; did it involve mandatory subjects for bargaining; was
there a collective-bargaining agreement or interim grievance procedure agreed to; was notice and
an opportunity to bargain provided; and, did the discipline involve unit employees.5
It is undisputed the three employees at issue here were employees either of bargaining
Unit A or Unit B and that the Union is the certified exclusive collective-bargaining
representative for the Unit A and Unit B employees.
10
It is admitted that, at all times material here, the parties have not arrived at a
collective-bargaining agreement, nor, have they agreed upon an interim grievance and arbitration
procedure.
It is stipulated the Company discharged its employee Mangual on May 7, and, 15
that it exercised discretion in doing so, and, that it did not give notice to, nor, did it afford the
Union an opportunity to bargain prior to Mangual’s discharge.
It is stipulated the Company suspended Alvarez on May 3 and discharge him on
May 12 and the Company exercised discretion in discharging Alvarez.20
I now address whether any notice was given to the Union and whether the Company
provided the Union an opportunity to bargain prior to Alvarez’ suspension and discharge. The
evidence is clear, Alvarez was informed on Saturday May 3, he was being suspended from work
starting that day so the Company could conduct an investigation of Alvarez’s actions on Friday, 25
May 2. It appears Alvarez was not feeling well on Friday afternoon and may not have attended a
Company meeting that evening. Alvarez contacted Union President Rodriguez and Union
Official Barbes for them to go with him to the first meeting with the Company so he could give
his explanation of what had happened on May 2, but, the two union officials were unavailable to
do so but encouraged Alvarez to go to the meeting without them and tell his side of the events. 30
There is no credible evidence anyone from the Company notified the Union about this meeting
nor any evidence the Company was ready and willing to bargain, at this point, with the Union
concerning Alvarez. Alvarez was requested to meet with the Company again on May 12.
Alvarez again requested the union representatives accompany him and this time they did.
Director of Administration Montalvo announced to Alvarez the Company had already taken a 35
decision to terminate his employment. Union President Rodriguez and Union Official Barbes
were present at that meeting at the request of Alvarez and not by notification of the Company,
and, clearly not for any bargaining with the Union regarding Alvarez’s termination because the
Company simply announced that decision had already been taken.
40
More specifically, Union Official Barbes credibly testified the Company never notified
the Union of its intention to suspend or terminate Alvarez prior to his termination.
I specifically find the Company did not give notice to the Union, nor did it afford the
Union an opportunity to bargain prior to Alvarez’ suspension and/or termination.45
JD(ATL)–07–15
10
It is clear Mercado was asked to leave a mandatory training class at the Company on July
16 and taken to the human resources department where she was informed by Director of
Administration Montalvo she had been terminated on July 9, for failing to make herself available
for work on dates that met the Company’s operational needs. Mercado acknowledged she was
unable to accept any shifts for work between May and July 9 because she “couldn’t work 5
because my availability was not in accordance with the events.” Mercado explained she had
another job where she worked.
Mercado testified other employees, namely, Melissa Correa and Harizael Pagan had
trouble meeting/completing their work hour requirements but were allowed to continue their 10
employment rather than being terminated.
Director of Administration Montalvo explained that employee Correa’s absence was
approved by the Company for medical considerations, and, Pagan’s not taking assignments were
excused by the Company because his assignments were cancelled by the Company.15
The evidence demonstrates that after employee Jose D. Muriel missed more than 3
months of assignments, the Company, did not immediately terminate him, but, rather sought him
out seeking his agreement to let the Company know of his availability to accept work
assignments.20
I am persuaded the above demonstrates the Company had, and on occasion exercised,
discretion related to its employees accepting assignments. The Company expressly did so with
respect to employee Muriel. Also the Company made decisions whether to accept an employee’s
absence for medical or cancelled work reasons.25
It is clear the Company did not give notice to nor provide an offer to the Union to bargain
concerning Mercado’s employment with the Company. Union Official Barbes credibly testified
she only learned of Mercado’s termination after Mercado no longer worked for the Company.
Stated differently, Barbes had no occasion to meet with the Company to discuss its actions 30
related to Mercado prior to Mercado’s employment ending.
It is beyond question that employees’ continued employment or termination constitutes
one of many, perhaps the most important, fundamental terms and/or conditions of employment,
and as such are mandatory subjects of bargaining.35
The Government contended at trial and in its posttrial brief that the Board’s rational in
Alan Ritchey, Inc., 359 NLRB No. 40 (2012), “was soundly reasoned and its rational and
reasoning should be adopted here.” The Government further contends it is clear all prerequisites
have been met for triggering the Company’s obligation to bargain before imposing discretionary 40
discipline as outlined in the Alan Ritchey rationale.
The Company contends the Board’s decision in Alan Ritchey is null and void ab initio
pursuant to the Supreme Court’s holdings in New Process Steel, L.P. v. NLRB, 560 U.S. 674
(2010), and Noel Canning 134 S.Ct. 2550 (2014). The Company contends this case is controlled 45
by the Board’s decision in Fresno Bee, 337 NLRB 1161 (2002), where the legality of an
JD(ATL)–07–15
11
employer’s existing, long-established disciplinary policies and procedures is not in question and
have remained unaltered after a union election certification, an employer has no preimposition
duty to bargain over discretionary discipline. The Company contends that until a constitutionally
appointed and impaneled Board “proclaims, in no uncertain terms, that it will either adopt or
reject the Ritchey rational”, the Board’s judges should exercise restraint and not heed the 5
Government’s urging to adopt the Alan Ritchey rational, but, rather should apply the
longstanding and clearly valid holdings of Fresno Bee, supra), that an employer has no
preimposition duty to bargain over discretionary discipline.
Alan Ritchey has no precedential value because the Board’s decision in that case became 10
invalid due to constitutional considerations in Noel Canning, 134 S.Ct. 2550 (2014). In fact, the
Alan Ritchey case has, since Noel Canning issued, been closed by the Board. Although Alan
Ritchey has no precedential value, I, nonetheless, adopt the Board’s Alan Ritchey rationale, as I
find it independently persuasive.
15
In adopting the Board’s Alan Ritchey rational it is helpful to review just what the Board
concluded in its now null and void decision. In Alan Ritchey the Board addressed, in its broader
doctrinal context, under Section 8(a)(5) of the Act, whether an employer whose employees are
represented by a union must bargain with the union prior to imposing discretionary discipline on
a unit employee. The Board noted that this particular question usually arises only during the 20
period after the union has become the employees’ bargaining representative, but before the
parties have arrived at an initial collective-bargaining agreement, and, only if the parties have not
agreed upon an interim grievance procedure. The Board held, under this limited application, that,
like other terms and conditions of employment, discretionary discipline is a mandatory subject of
bargaining and employers may not impose discretionary discipline unilaterally. It is the Board’s 25
rationale that I adopt here and explain as follows.
The Board in Alan Ritchey noted it had held in a variety of other contexts that once
employees choose to be represented, an employer may not continue to act unilaterally with
respect to terms and conditions of employment, even where it has previously done so routinely or 30
at regularly scheduled intervals. The Board further notes, the Supreme Court in NLRB v. Katz,
369 U.S. 736 (1962),approved its determination that an employer violates Section 8(a)(5) of the
Act by making unilateral changes to represented employees’ terms and conditions of
employment. Such a unilateral change is a circumvention of the duty to negotiate which
frustrates the objectives of Section 8(a)(5) just as a flat refusal to bargain does. The Board, citing 35
Oneita Knitting Mills, 205 NLRB 500 (1973), pointed out that if an employer has exercised and
continues to exercise discretion in regard to a unilateral change, such as the amount of an annual
wage increase, it must first bargain with the union over the discretionary aspect. The Board’s
Alan Ritchey rationale, relying on Toledo Blade Co., 343 NLRB 385, 387 (2004), does not
require notice and bargaining before every unilateral change but rather those changes that have a 40
material, substantial, and significant impact on employees’ terms and conditions of employment
such as termination. The Board opined that requiring notice and bargaining before imposing
discretionary discipline is appropriate because of the immediate impact on the employees and
because of the harm caused to the union’s effectiveness as the employees’ representative if
bargaining is postponed. The Board in Alan Ritchey went on to explain it has long recognized 45
that an employer’s obligation to maintain the status quo sometimes entails an obligation to make
JD(ATL)–07–15
12
changes in terms and conditions of employment, even when those changes are an established part
of the status quo. The Board in Oneita Knitting Mills, 205 NLRB 500 (1973), held an employer
violated Section 8(a)(5) by unilaterally granting merit wage increases to represented employees,
even though it had a past practice of granting such increases. The Board in Oneita Knitting Mills
explained:5
An employer with a past history of a merit increase program neither may
discontinue that program (as we found in Southeastern Michigan [supra]) nor may
he any longer continue to unilaterally exercise his discretion with respect to such
increases, once an exclusive bargaining agent is selected. N.L.R.B. v. Katz, 369 10
U.S. 736 (1962). What is required is a maintenance of preexisting practices, i.e.,
the general outline of the program, however the implementation of that program
(to the extent that discretion has existed in determining the amounts or timing of
the increases), becomes a matter as to which the bargaining agent is entitled to be
consulted Id. at 500.15
The Board in explaining its Alan Ritchey rationale noted NLRB v. Katz 369, U.S. at 746
involved an employer’s grant of merit increases that were “in no sense automatic, but were
informed by a large measure of discretion.” The Board also noted in its Alan Ritchey rationale
that in the decades since NLRB v. Katz and Oneita Knitting Mills, where considering various 20
terms and conditions of employment, it had applied the principle that even regular and recurring
changes by an employer constitute unilateral actions where an employer maintains discretion in
relation to the nature and/or extent of the changes.
The Board in its Alan Ritchey rationale noted that in Washoe Medical Center, Inc., 337 25
NLRB 202 (2001), an employer’s “substantial degree of discretion” in placing newly hired
employees into one of four wage ranges based on subjective judgments, required the employer to
bargain with the union prior to implementing the wage rates. Further noting it held in Eugene
Iovine, 328 NLRB 294 (1999), an employer’s recurring unilateral reductions in employees’ hours
of work were discretionary and therefore required prior bargaining because there was no 30
reasonable certainty as to the timing and/or criteria for the reduction in employee hours but
rather the employer’s discretion to decide whether and when to reduce employee hours appeared
unlimited. The Board noted that in Adair Standish Corp., 292 NLRB 890 fn. 1 (1989), enfd. in
relevant part 912 F.2d 854 (6th Cir. (1990), it required an employer to bargain regarding
economically motivated layoffs, when the owner selected the employees to be laid off based, not 35
on seniority, but on his own judgment of the employees abilities.
Under this large umbrella of cases (and others) the Board articulated its rationale for
concluding that an employer whose employees are represented by a union, and at a time when
the parties have not arrived at a first contract or an interim grievance procedure, must bargain 40
with the union before imposing discretionary discipline (a mandatory subject of bargaining) on
unit employees.
I find the case here falls under the Board’s articulated Alan Ritchey rationale. In that
regard I note it is stipulated the Company terminated Unit A and/or B employees Alvarez and 45
Mangual on May 12 and 7, respectively, and that the discharges were within the Company’s
JD(ATL)–07–15
13
discretion. It is stipulated the Company did not give notice to, nor, did it afford the Union an
opportunity to bargain prior to Mangual’s discharge. As fully discussed elsewhere here, the
Company did not give notice to, nor, did it afford the Union an opportunity to bargain prior to
Alvarez’ termination. As explained elsewhere here, the record clearly establishes the Company
discharged Unit A employee Mercado on July 9, and did so without notice to and did not afford 5
the Union an opportunity to bargain prior to Mercado’s discharge. The discharges are mandatory
subjects of bargaining and it is stipulated there was no collective-bargaining agreement in effect
and no grievance procedure established at the time of the discharges.
I adopt the Board’s Alan Ritchey rationale and conclude the Company had an obligation 10
to provide notice to and an opportunity to bargain with the Union prior to imposing the
discretionary discipline (discharge) of the three unit employees, and as such, the Company
violated Section 8(a)(5) and (1) of the Act, and I so find.
I address the Company’s contention that since the Board’s Alan Ritchey decision is a 15
nullity that Fresno Bee, 337 NLRB 1161 (2002), constitutes current Board law on the
preimposition duty to bargain over discretionary discipline. In Fresno Bee the Board adopted an
administrative law judge’s finding an employer has no preimposition duty to bargain over
discretionary discipline. The Board in discussing its rationale in Alan Ritchey, for rejecting
Fresno Bee, which rationale I adopt here, pointed out that government counsel in Fresno Bee, 20
drawing on the principles and precedent the Board considered in Alan Ritchey, argued the
employer in Fresno Bee exercised considerable discretion in disciplining its employees and thus
had to bargain to impasse with the union over all imposition of discipline. The Board, in Alan
Ritchey, noted the judge in Fresno Bee rejected that argument, but, her rationale for doing so,
misunderstood Board case law and failed to explain why discipline should be treated as 25
fundamentally different from other employer unilateral changes in terms and conditions of
employment. In Alan Ritchey the Board noted regarding the judge’s rationale in Fresno Bee:
As her decision reveals, the judge’s error was to conclude that because the
employer had not changed its disciplinary system, the imposition of discipline30
with respect to individual employees, even if it involved the exercise of
discretion, did not amount to a unilateral change.
The Board’s rationale in Alan Ritchey for arriving at its conclusion the trial judge in
Fresno Bee was wrong, noted the trial judge accepted the fact that the discipline administered to 35
employees in Fresno Bee was, in part, discretionary and noted the judge in Fresno Bee:
Nevertheless, . . . reasoned that the fact the procedures reserve to [the employer]
a degree of discretion or that every conceivable disciplinary event is not specified,
does not vitiate the system as a past practice and policy.” Id. The General Counsel 40
had not contended that the employer’s “discipline policies were unilaterally
altered,” and “[t]here was no evidence that [the employer] did not apply its
preexisting employment rules or disciplinary system in determining discipline.”
Id. “Therefore,” the judge concluded, the employer “made no unilateral change in
terms and conditions of employment when it applied discipline.” Id. at 1186–118745
(emphasis added).
JD(ATL)–07–15
14
Under our case law, the judge’s conclusion was a non sequitur. As we have
explained, the lesson of well-established Board precedent is that the employer has
both a duty to maintain an existing policy governing terms and conditions of
employment and a duty to bargain over discretionary applications of that policy. It 5
was no answer to the General Counsel’s argument in Fresno Bee, then to say that
because the employer’s disciplinary policy had stayed the same, the employer had
no duty to bargain over discretionary disciplinary decisions. Nor did it suffice to
point out that the employer had bargained over the discipline after it was
imposed: the General Counsel was arguing for a preimposition duty to bargain. Id. 10
at 1187
The Board went on to observe in its rationale in Alan Ritchey the demonstrably incorrect
conclusion the trial judge in Fresno Bee had arrived at by:
15
As observed, the Fresno Bee Board simply adopted the judge’s rationale.
But that rationale–the only rationale articulated–was demonstrably incorrect. In
such circumstances, we decline to follow Fresno Bee. See Goya Foods of Florida,
356 NLRB No. 184, slip op. at 3 (2011) (“We are not prepared mechanically to
follow a precedent that itself ignored prior decisions, without explanation.”). To 20
the extent Fresno Bee contradicts our conclusion here, it is overruled. [Footnote
omitted.]
Here, I reject the Company’s contention Fresno Bee is controlling and rather adopt the
Board’s Alan Ritchey rationale that an employer has a preimposition obligation to bargain over 25
discretionary discipline at a time when the parties have not arrived at a first contract or an
interim grievance procedure and the concerns involve mandatory subjects of bargaining. I also
reject the Company’s contention the Union somehow waived its right to notification and
bargaining as the record is void of any evidence of waiver on the Union’s part.
30
CONCLUSIONS OF LAW
1. The Company, SGM Puerto Rico II, LP, San Juan, Puerto Rico, is an employer
engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act.
35
2. The Union, UNITE HERE la Gastronomica, Local 610, is a labor organization
within the meaning of Section 2(5) of the Act.
3. At all material times, UNITE HERE la Gastronomica, Local 610, has been, and
continues to be, the exclusive bargaining representative for the purposes of collective bargaining 40
within the meaning of Section 9(a) of the Act the employees employed by SGM Puerto Rico II,
LP in the following units:
Unit A
45
All on-call Food and Beverage Attendants employed by the Employer at the
Puerto Rico Convention Center, 100 Convention Blvd., San Juan, Puerto Rico
JD(ATL)–07–15
15
Excluding all other employees, guards, professional employees and supervisors as
defined by the Act.
Unit B
5
All regular full-time housekeeping, engineering/maintenance, and set-up
employees employed by the Employer at the Puerto Rico Convention Center,
located at 100 Convention Blvd., San Juan, Puerto Rico, excluding all other
employees, guards, professional employees and supervisors as defined by the Act.
10
4. By failing to provide UNITE HERE la Gastronomica, Local 610 with notice or an
opportunity to bargain concerning the discharge of unit employees Osman Alvarez, Iris Mangual,
and Veronica Mercado, which terminations were within the discretion of the Company, and at a
time when the parties had not arrived at a first contract or an interim grievance procedure, and
which terminations were mandatory subjects of bargaining the Company has violated Section 15
8(a)(5) and(1) of the Act.
5. The unfair labor practices of the Company affect commerce within the meaning of
Section 2(6) and (7) of the Act.
20
REMEDY
Having found the Company has engaged in certain unfair labor practices, I find it must be
ordered to cease and desist and to take certain affirmative action designed to effectuate the
policies of the Act.25
I specifically recommend the Company be ordered to bargain with the Union regarding
the discharge of Unit A and/or B employees Osman Alvarez, Iris Mangual, and Veronica
Mercado. I decline the Government’s request to recommend any additional remedies (such as
reinstatement and/or backpay) as the Board, in its null and void Alan Ritchey, Inc., 359 NLRB 30
No. 40 (2012) decision, applied its holdings prospectively. Additionally, I recommend the
Company be ordered, within 14 days after service by the Region, to post an appropriate “Notice
to Employees” in order that employees may be apprised of their rights under the Act and the
Company’s obligation to remedy its unfair labor practices.
35
On these findings of fact and conclusions of law and on the entire record, I hereby issue
the following recommended7
ORDER
40
The Company, SMG Puerto Rico, II, LP, San Juan, Puerto Rico, its officers, agents,
successors, and assigns, shall

7 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.
JD(ATL)–07–15
16
1. Cease and desist from
(a) Failing to bargain with UNITE HERE la Gastronomica, Local 610
concerning the discharge of unit employees Osman Alvarez, Iris Mangual, and Veronica
Mercado.5
(b) In any like or related manner interfering with, restraining, or coercing
employees in the exercise of the rights guaranteed them by Section 7 of the Act.
2. Take the following affirmative action necessary to effectuate the purposes and 10
policies of the Act.
(a) Bargain with UNITE HERE la Gastronomica, Local 610 concerning the
discharge of Unit employees Osman Alvarez, Iris Mangual, and Veronica Mercado.
15
(b) Within 14 days after service by the Region, post at its facility at Puerto Rico
Convention Center, located at 100 Convention Blvd., San Juan, Puerto Rico, copies of the notice
marked “Appendix”8 copies of the notice, on forms provided by the Regional Director for Region
12, after being signed by the Company’s authorized representative, shall be posted by the
Company immediately upon receipt and maintained for 60 consecutive days in conspicuous 20
places including all places where notices to employees are customarily posted. Reasonable steps
shall be taken by the Company to ensure that the notices are not altered, defaced, or covered by
any other material. In addition to the physical posting of paper notices, notices shall be
distributed electronically, such as email, posting on the intranet or an internet site, or other
electronic means, if the Company customarily communicates with its employees by such means. 25
In the event that, during the pendency of these proceedings, the Company has gone out of
business or closed the facilities involved here, the Company shall duplicate and mail, at its own
expense, a copy of the notice to all current employees and former employees employed by the
Company at any time since May 3, 2014.
30
(c) Notify the Regional Director of Region 12 in writing within 20 days from the
date of this Order what steps the Company has taken to comply.
Dated Washington, D.C. April 17, 2015
35
________________________________
William N. Cates40
Administrative Law Judge

8 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.”
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 violated Federal labor law and has
ordered us to post and obey by this notice.
FEDERAL LAW GIVES YOU THE RIGHT TO:
Form, join, or assist a union;
Choose a representative to bargain with us on your behalf;
Act together with other employees for your benefit and protection;
Choose not to engage in any of these protected activities.
WE WILL NOT refuse to bargain in good faith with UNITE HERE la Gastronomica, Local 610
concerning the discharge of Unit A and/or B employees Osman Alvarez, Iris Mangual, and
Veronica Mercado.
WE WILL NOT in any like or related manner interfere with, restrain or coerce our employees in
the rights guaranteed to them by Section 7 of the National Labor Relations Act.
WE WILL bargain in good faith with UNITE HERE la Gastronomica, Local 610 concerning the
discharge of Unit A and/or B employees Osman Alvarez, Iris Mangual, and Veronica Mercado.
SMG PUERTO RICO, II, LP
(Employer)
Dated: _________________ By: ________________________________________________
(Representative) (Title)
The National Labor Relations Board is an independent Federal agency created in 1935 to enforce the National Labor
Relations Act. It conducts secret-ballot elections to determine whether employees want union representation and it
investigates and remedies unfair labor practices by employers and unions. To find out more about your rights under
the Act and how to file a charge or election petition, you may speak confidentially to any agent with the Board’s
Regional Office set forth below. You may also obtain information from the Board’s website: ww.nlrb.gov.
La Torre de Plaza, Suite 1002, 525 F. D. Roosevelt Avenue, San Juan, PR 00918-1002
(787) 766-5347 Hours: 8:30 a.m. to 5:00 p.m.
The Administrative Law Judge’s decision can be found at www.nlrb.gov/case/12-CA-130436 or by using the QR code
below. Alternatively, you can obtain a copy of the decision from the Executive Secretary, National Labor Relations
Board, 1099 14th Street, N.W., Washington, D.C. 20570, or by calling (202) 273-1940.
THIS IS AN OFFICIAL NOTICE AND MUST NOT BE DEFACED BY ANYONE
THIS NOTICE MUST REMAIN POSTED FOR 60 CONSECUTIVE DAYS FROM THE DATE OF POSTING
AND MUST NOT BE ALTERED, DEFACED, OR COVERED BY ANY OTHER MATERIAL. ANY
QUESTIONS CONCERNING THIS NOTICE OR COMPLIANCE WITH ITS PROVISIONS MAY BE
DIRECTED TO THE ABOVE REGIONAL OFFICE’S COMPLIANCE OFFICER, (787) 766-5377.