Ninth Circuit Defers to 2-1 NLRB Ruling That Aladdin HR Managers’ Conduct Legal

The federal court ruled in support of the National Labor Relations Board (NLRB) and against UniteHere’s one-sided approach that attempts to deny employees access to fair, accurate and balanced information.  Both the NLRB and the Court rejected the union’s false accusations that the employer coerced employees by sharing factual information.  This ruling is a victory for employees and their right to make reasoned and informed decisions.

By Susan J. McGolrick

Two human resources managers for the Aladdin hotel and casino in Las Vegas did not engage in improper surveillance of union activity in violation of the National Labor Relations Act by interrupting employees who were asking others to sign union authorization cards in the employee dining room, the U.S. Court of Appeals for the Ninth Circuit ruled Jan. 28 (Local Joint Executive Bd. of Las Vegas v. NLRB, 9th Cir., No. 05-75515, 1/28/08).
Upholding a 2-1 National Labor Relations Board decision in favor of the Aladdin, the appeals court found that the three-factor test adopted by the board for determining when surveillance becomes coercive and therefore illegal is rational and consistent with the statute and is entitled to deference.

The appeals court also deferred to the board’s conclusion that the two HR managers’ “brief, spontaneous interruptions were not coercive,” Judge Consuelo M. Callahan wrote. She found that the board “reasonably determined that where the duration of the observation was short and the employer’s behavior was not out of the ordinary, verbally interrupting organizing activity does not necessarily violate Section 8(a)(1).”

Judges Jane R. Roth and Sidney R. Thomas joined in the opinion.

Two Incidents Occurred Early in Organizing Drive
The Local Joint Executive Board of Las Vegas, Culinary Workers Union Local 226 and Bartenders Union Local 165 began organizing workers in the Aladdin’s housekeeping, food, and beverage departments in late May 2003. The local unions are affiliates of UNITE HERE international union. The case involves two incidents that occurred in the dining room that is available to all employees.

On June 4, 2003, two pro-union employees, Sheri Lynn and Julie Wallack, were eating lunch together in the dining room and asked several buffet servers eating at the next table whether they would like to sign union cards. Tracy Sapien, the vice-president of human resources, also was eating lunch. After briefly observing the encounter, she approached the buffet servers and said, “I would like to make sure you have all of the facts before you sign that card.” Sapien said that signing a card would be “legal and binding” and that it would authorize the deduction of union dues from their paychecks if the union became their bargaining representative.

Lynn asserted that she had given the buffet servers all the facts. During a brief ensuing conversation about health insurance, Sapien said that even if the union organizing campaign was successful, there was no guarantee that there would be any change in health benefits. Sapien also said union dues were $32.50 a month. When Lynn said she had already told the servers about the dues, Sapien said it “looked like [Lynn] had all [her] bases covered” and then walked away. The conversation with Sapien lasted about eight minutes.

The second incident occurred on June 6, 2003. Azucena Felix, an employee who was on the union organizing committee, was speaking to a group of housekeepers sitting at a table in the dining room. One of the housekeepers, Adelia Bueno, had asked Felix to speak to them.

As Bueno was signing a union card, Stacey Briand, the director of human resources, approached the table and said Bueno “shouldn’t be signing things that she wasn’t sure about, because what she was signing was something like a contract, and that [Felix] was probably promising something that [Felix] wasn’t going to be able to give her.” Because Bueno did not understand English very well, Felix voluntarily translated Briand’s comments into Spanish. When Briand asked what Felix was saying, she explained that she had translated Briand’s statements. Briand then walked away.

An NLRB administrative law judge found in May 2004 that the Aladdin committed numerous unfair labor practices during the organizing drive. The employer only appealed the ALJ’s finding that the HR managers’ conduct constituted unlawful surveillance of employees’ union activity. Disagreeing with the ALJ, the board decided 2-1 in August 2005 that the conduct was legal because it took place in a dining room frequented by all types of employees and it was not coercive (345 N.L.R.B. No. 41, 178 LRRM 1288 (2005); 174 DLR A-13)

The Aladdin is now owned by a joint partnership of Planet Hollywood International Inc., Bay Harbour Management LC, and Starwood Hotels & Resorts Worldwide Inc., and was renamed Planet Hollywood Resort & Casino in late 2006.

NLRA Prohibits Coercive Observation of Union Activity
NLRA Section 8(a)(1) prohibits employers from interfering with, restraining, or coercing employees in the exercise of their rights guaranteed by Section 7, Callahan said. The board has interpreted Section 8(a)(1) to make employer observations of union activity unlawful if it becomes unduly coercive or company officials do something out of the ordinary, she said.

The board has applied an objective test that considers whether the employer’s conduct, under the circumstances, would tend to interfere with, restrain, or coerce employees in the exercise of their rights, Callahan said. She found that the board “refined the objective test for surveillance” by stating in its decision in this case that “ndicia of coerciveness include the duration of the observation, the employer’s distance from its employees while observing them, and whether the employer engaged in other coercive behavior during its observation.”

“We determine that this three-factor test is ‘rational and consistent’ with the NLRA, and accordingly, we defer to the Board’s interpretation of when surveillance becomes coercive and the application of the test to these facts,” Callahan said. She found that the board’s announcement of the three factors was a proper exercise of its authority to interpret and apply the statute.

The board also reasoned that the views expressed by the two HR managers was protected by Section 8(c), which protects employer communications that contain “no threat of reprisal or force or promise of benefit.” Callahan found “[t]here is no evidence that either Ms. Sapien or Ms. Briand used threats, force, or promises of benefits that would strip their speech of the protections of Section 8(c).”

According to Callahan, the unions argued that “the interruption of protected union activity, even to express opinions protected by Section 8(c), makes the otherwise lawful observation unlawful.” But the board found that the facts of the case are comparable to those in Metal Industries Inc., 251 N.L.R.B. 1523, 105 LRRM 1201 (1980), in which the board dismissed an illegal surveillance claim. In that case, company officials stationed themselves in the parking lot to say goodbye to employees and answer any questions they might have and one official made check marks on a clipboard that he normally carried.

The appeals court deferred to the board’s rational conclusion that the Aladdin HR managers’ “brief, spontaneous interruptions” were not coercive and that “verbally interrupting organizing activity does not necessarily violate Section 8(a)(1).”

Kristin Martin and Richard G. McCracken of Davis, Cowell & Bowe in San Francisco represented the unions. NLRB attorney David A. Seid inWashington, D.C., represented the board. Brian Herman and Mark J. Ricciardi of Fisher & Phillips inAtlanta represented Reorganized Aladdin Gaming LLC.

Text of the decision may be accessed at

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