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Joseph F. Frankl, Regional v. Hth Corporation

September 6, 2012

JOSEPH F. FRANKL, REGIONAL DIRECTOR OF REGION 20 OF THE NATIONAL LABOR RELATIONS BOARD, FOR AND ON BEHALF OF THE NATIONAL LABOR RELATIONS BOARD, PETITIONER-APPELLEE,
v.
HTH CORPORATION, A SINGLE EMPLOYER, DBA PACIFIC BEACH HOTEL; PACIFIC BEACH CORPORATION, A SINGLE EMPLOYER, DBA PACIFIC BEACH HOTEL, KOA MANAGEMENT, LLC, A SINGLE EMPLOYER, DBA PACIFIC BEACH HOTEL, RESPONDENTS-APPELLANTS. NATIONAL LABOR RELATIONS BOARD, PETITIONER,
v.
HTH CORPORATION; PACIFIC BEACH CORPORATION AND KOA MANAGEMENT, LLC, A SINGLE
EMPLOYER, DBA PACIFIC BEACH HOTEL; HTH CORPORATION, DBA PACIFIC BEACH HOTEL; KOA MANAGEMENT, LLC, DBA PACIFIC BEACH HOTEL; PACIFIC BEACH CORPORATION, DBA PACIFIC BEACH HOTEL, RESPONDENTS. HTH CORPORATION; PACIFIC BEACH CORPORATION, DBA PACIFIC BEACH HOTEL; KOA MANAGEMENT, LLC,
DBA PACIFIC BEACH HOTEL,
PETITIONERS,
v.
NATIONAL LABOR RELATIONS BOARD, RESPONDENT.



Appeal from the United States District Court for the District of Hawaii J. Michael Seabright, District Judge, Presiding D.C. No. 1:11-cv-00451- JMS-RLP NLRB No. 37-CA-7311

The opinion of the court was delivered by: Schroeder, Circuit Judge:

FOR PUBLICATION

NLRB No. 37-CA-7311

OPINION

On Petition for Review of an Order of the National Labor Relations Board

Argued and Submitted June 14, 2012-Honolulu, Hawaii

Before: Mary M. Schroeder, Consuelo M. Callahan, and N. Randy Smith, Circuit Judges.

Opinion by Judge Schroeder

OPINION

These two matters have been consolidated for a single opinion because they both arise out of the same long-running labor dispute. The employer is HTH Corporation, which operates the Pacific Beach Hotel ("the Hotel") in Honolulu. The Union is the International Longshore and Warehouse Union, Local 142. In NLRB v. HTH Corp., we have cross-petitions from the 2011 ruling of the National Labor Relations Board ("NLRB" or "the Board") that between August 2005 and May 2008 HTH committed unfair labor practices in violation of the National Labor Relations Act ("NLRA" or "the Act"), 49 Stat. 449 (1935) (codified at 29 U.S.C. § 151 et seq.). See HTH Corp., 356 N.L.R.B. No. 182 (2011). In Frankl v. HTH Corp., HTH appeals from a preliminary injunction that required it to remedy certain actions taken in 2010. These actions are the subject of unfair labor practice charges currently pending before the Board.

The background of the labor dispute is explained at length in our prior opinion, Frankl v. HTH Corp. (Frankl I), 650 F.3d 1334 (9th Cir. 2011), cert. denied, 132 S. Ct. 1821 (2012). We there affirmed a preliminary injunction against HTH pending final Board disposition of the 2005-2008 unfair labor practice charges. The Board resolved those charges in its 2011 ruling, which HTH now asks us to overturn. Notwithstanding the 2010 injunction, HTH repeated the very actions that had been enjoined that year, prompting yet another round of litigation before the Board. The district court granted a second preliminary injunction. HTH now appeals that injunction. We affirm the injunction and grant the Board's application for enforcement of its 2011 ruling.

I. Background

Because this is the second time that we have looked at this labor dispute, we provide only a summary recitation of the relevant factual background. A more complete discussion is contained in Frankl I, 650 F.3d at 1341, 1356-58. See also HTH Corp., Nos. 37-CA-7311, JD(SF)-35-09, 2009 WL 3147894 (NLRB Sept. 30, 2009).

The Union's organizing drive began more than ten years ago. The first NLRB election was held in July 2002. The Board overturned the first election after finding that HTH had coercively interrogated employees and engaged in other objectionable conduct. HTH Corp., 342 N.L.R.B. 372 (2004).

A second election was held in 2005. Again, the Board found that HTH engaged in unlawful conduct that cast the result of the election in doubt. The Board ruled that if the final vote tally favored the Union the result would stand, but if it favored HTH the election would be overturned. Pacific Beach Corp., 344 N.L.R.B. 1160 (2005). The Union won by one vote and was duly certified on August 15, 2005.

Initial bargaining began in January 2006. Although the parties met 37 times and reached tentative agreement on 170 issues, such apparent progress meant little, because HTH insisted on three provisions that would have eliminated any meaningful role for the Union. HTH demanded, first, a recognition clause that would have retained in HTH the "exclusive right to unilaterally and arbitrarily" change all conditions of employment. The second demand was for a provision that would have retained in the Hotel's management the "sole and exclusive right to manage its workforce at will," including all aspects of hiring, firing, categorizing, and disciplining employees. Finally, HTH insisted on a grievance procedure that routed complaints to Hotel management for final determination. With such provisions, there would have been no effective collective bargaining or union representation.

Then, in December 2006, HTH itself ceased bargaining and assigned management operations to Pacific Beach Hotel Management ("PBHM"), an ostensibly independent entity created by HTH. PBHM took control of the day-to-day operations of the Hotel beginning in January 2007, but HTH remained the owner and continued to call the shots. HTH told the Union to conduct all further negotiations with PBHM but did not disclose to the Union that HTH retained final approval authority over any collective-bargaining agreement that would last more than a year, unless HTH could terminate it on thirty days' notice, or would cost more than $350,000.

Toward the end of 2007, PBHM and the Union seemed close to an agreement. PBHM asked HTH to disclose its approval authority to the Union and approve an agreement. HTH responded by canceling PBHM's management contract. Bargaining then ceased on December 1, 2007.

HTH took back management of the Hotel and withdrew recognition from the Union, claiming that the Union had lost majority support among the Hotel's employees. HTH then unilaterally changed the employees' terms and conditions of employment by, among other things, increasing the number of rooms housekeepers cleaned per day, requiring all employees to reapply for their jobs, and refusing to rehire seven employees who had been members of the Union bargaining committee, effectively terminating them.

One of the employees HTH declined to rehire was union organizer Rhandy Villanueva. Villanueva had worked in the Hotel's housekeeping department as a houseman for over fourteen years prior to his termination. In 2005, the housekeeping staff had selected Villanueva to be one of its representatives on the Union's negotiating committee. He served continuously on that committee through December 2007, at which time HTH ceased bargaining. Villanueva was not rehired by HTH. Villanueva had no written disciplinary records in his file, although other housemen who were rehired did.

The Union responded to HTH's actions by stepping up its boycotts and demonstrations. The Union also employed Villa-nueva as a full-time organizer for the Hotel. Hotel management reacted by meeting with the employees in April and May of 2008, warning them that the Union's actions would hurt business, and threatening the loss of jobs. Management encouraged employees to document with the Hotel's Human Resources Department their dissatisfaction with the Union.

HTH's actions prompted the Union to file a number of unfair labor practice charges with the Board. These charges included allegations that HTH had withdrawn recognition of the Union without just cause, unilaterally changed the terms and conditions of employment, threatened and terminated Hotel employees who were active with the Union, and failed to release to the Union information necessary for collective bargaining. The Union argued that these actions constituted violations of Sections 8(a)(1), (3), and (5) of the Act, which prohibit an employer from interfering with an employee's right to organize and require an employer to bargain in good faith. See 29 U.S.C. § 158(a)(1), (3) and (5).

The Regional Director of the Board agreed and initiated enforcement proceedings against HTH. The Regional Director filed a complaint with the Board alleging that HTH violated Sections 8(a)(1), (3) and (5) for the reasons complained of by the Union. After conducting an extensive hearing, an administrative law judge ("ALJ") found that HTH had violated the Act as alleged by ...


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