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Case Summary: Hotel Olds v. State Labor Mediation Board

Factual and Procedural Background

Hotel Olds, a metropolitan hotel in Michigan employing between 210 and 220 nonsupervisory employees (about 200 nonclerical), sought review of an order of the State Labor Mediation Board. Local 448 of the Hotel and Restaurant Employees' and Bartenders' International Union (A.F. of L.) originally requested recognition; plaintiff and local 448 agreed to a unit description and held a recognition election on May 17, 1950, which the board supervised and certified. A strike election on the same agreed basis was held August 17, 1950, and defeated; a protest by the union was later withdrawn and the board closed the case September 7, 1950. A new local, Local 634, was formed before September 8, 1950, and sought recognition for a materially reduced bargaining unit (excluding classifications previously included under Local 448). The board initially took no action on the new request (case closed April 9, 1951), but after Local 634 renewed its claim (July 30, 1951) and a hearing on September 13, 1951, the board on September 21, 1951 ordered a strike election in the reduced unit. Hotel Olds appealed to the Michigan Supreme Court; the Court reversed the board's order and permanently enjoined the board from conducting the proposed strike election.

Legal Issues Presented

  1. How should the proviso to section 9e of PA 1939, No. 176 (CL 1948, § 423.9e) — requiring the board to adopt a unit if the group "has been recognized by the employer or identified by certification, contract or past practice" — be construed in the circumstances where a prior agreed unit and board certifications existed?
  2. Whether the holding of two elections under an agreed designation of eligible voter classes (May 17, 1950 recognition election and August 17, 1950 strike election) constitutes "past practice" or an identification/recognition within the meaning of the proviso, thereby requiring the board to adopt the previously established unit rather than a reduced unit sought by a newly formed local.
  3. Whether the board provided adequate reason for excluding certain employee classifications formerly included in the prior agreed bargaining unit when it adopted the reduced unit represented by Local 634.

Arguments of the Parties

Appellant (Hotel Olds) Arguments

  • The two elections held under the previously agreed descriptive unit constituted "past practice" within the proviso of section 9e, requiring the board to adopt that established unit.
  • The employer "recognized" the unit for collective bargaining by certifying in writing as part of the agreement for the recognition election: "The following constitutes the unit appropriate for the purpose of collective bargaining."
  • The defendant board identified Local 448 as the bargaining unit by its certifications of the results of the May 17, 1950 recognition election and the August 17, 1950 strike election.
  • The agreement of May 1950, approved by the board, is a "contract" identifying Local 448 as the bargaining unit.

Respondent (State Labor Mediation Board) Response

  • The board denied the plaintiff's constructions of the proviso and contended against each of the plaintiff's claims (as reflected in the board's opinion and brief).

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
In re Salem Hotel Corporation d/b/a the Hawthorne Hotel and the Hotel and Restaurant Workers, Local 290, A F L, 19 LRRM 1245 (Nov. 20, 1946) Objective in designating bargaining units is to constitute the largest unit compatible with effectuation of the purposes of the law and to include in a single unit all common interests. The Court treated the quoted statement as consonant, "so far as applicable," with the directions of the proviso in Michigan's section 9e and stated that the board should observe this general principle subject to the statute's provisions.
Hotel Utah Co. v. Industrial Commission, 116 Utah 225, 209 P.2d 235 Cited by the defendant as authority regarding bargaining-unit questions. The Court noted the defendant emphasized this case but observed the Utah statute cited there does not contain a proviso comparable to Michigan's section 9e, implying limited applicability to the instant statutory question.

Court's Reasoning and Analysis

The Court's analysis centered on construction of the proviso to section 9e of PA 1939, No. 176 (CL 1948, § 423.9e), which requires the board to adopt a unit if the group "has been recognized by the employer or identified by certification, contract or past practice." The Court noted that evidence showed employees excluded by Local 634 but formerly included in Local 448 were intimately related to and interested in the hotel's general operations. Citing the Hawthorne decision's principle favoring the largest unit compatible with statutory purposes, the Court stated that the board should observe that general principle subject to the statute.

The Court criticized the board for failing to disclose any reason for excluding from Local 634 those classifications formerly in Local 448. The Court expressly declined to hold that membership rules once established must remain forever unchanged or to prescribe what future events would justify a change. However, the Court concluded the board erred in ruling that the two elections held under the previously agreed description did not constitute "past practice" under the proviso. The Court further concluded the board had identified and thereby recognized the former unit through its certifications of the May 17, 1950 recognition election and the August 17, 1950 strike election, and that the agreement and certificate of May 17, 1950 established the bargaining unit the board was required to adopt under the statute and facts of the case.

Holding and Implications

Holding: The decision and order of the State Labor Mediation Board of September 21, 1951 is set aside, and the board is perpetually enjoined from conducting the strike election it ordered for Local 634.

Implications: The direct effect is that the board may not proceed with the strike election in the reduced unit represented by Local 634 and, under the Court's construction of the statute as applied to these facts, the board was required to recognize the bargaining unit as established by the May 17, 1950 agreement and certificate (the unit associated with Local 448). The Court limited its decision by noting it did not determine that membership rules must remain permanently unchanged nor define what future events would justify altering membership; the ruling rests on the statutory proviso and the facts here. The Court awarded no costs, noting a public question was involved.

HOTEL OLDS v. STATE LABOR MEDIATION BOARD.

REID, J.

Plaintiff, on leave granted, appeals from an order of defendant board determining that Local 634 of Hotel Restaurant Employees' Bartenders' International Union, A.F. of L. (hereinafter spoken of as the union) is the appropriate bargaining unit for employees of plaintiff, and ordering a strike vote among said employees on the issue of representation.

The Hotel Olds is a metropolitan type hotel with several dining rooms on 3 floors, a bar, its own furniture repair and upholstery department, its own laundry, its own barbershop and its own print shop. The total number of nonsupervisory employees is between 210 and 220, of whom about 200 are nonclerical. The union is an international union which includes hotel employees in its membership and which charters a large number of different types of local unions. There have been 2 successive local charters issued by the union, local 448 and local 634. The constitution shows that there is no local autonomy.

Early in 1950, the union requested recognition of local 448 as the bargaining representative for the employees of the Hotel Olds, and on May 8th, notified the defendant board of a dispute. Pursuant thereto, election proceedings on the question of representation proceedings on the question of representation were instituted by means of an agreement between plaintiff and local 448 for a consent election, which agreement contained the following:

"The following constitutes the unit appropriate for the purpose of collective bargaining: The name of the unit is as follows: All regularly employed employees excepting those in management, supervisory, executive, front office, telephone operators and auditing department."

181 employees were agreed upon as eligible to vote under the above-quoted descriptive words. On this basis the recognition election was held May 17, 1950, under the supervision of the defendant board. The recognition proposition carried. Thereafter and on the same basis for qualifying employees as voters, with a list of 188 employees agreed on as eligible to vote under the above quoted descriptive words, a requested strike election was called for and held under the supervision of defendant board, on August 17, 1950, at which the strike proposition was defeated. The union protested the election on the ground that the persons who voted differed from the agreed list; but afterwards withdrew its protest and the board closed the case September 7, 1950.

A new local was formed some time before September 8, 1950, on which date the union demanded recognition of the new local, 634, and on September 26, 1950, notified defendant board of a dispute and requested a strike election. The new local changed materially the bargaining unit to contain only a portion of the classifications of employees which were in the previously agreed bargaining unit. The new local claimed representation as sole bargaining agent for the employees. The defendant has decided to use the reduced unit as the bargaining unit. Plaintiff protested as improper and illegal the change from the basis for membership as in the previously established bargaining unit, local 448, and further objected that a strike vote should not again be had within a year. On April 9, 1951, the defendant closed the case without action.

On July 30, 1951, local 634 renewed its claim for representation as a bargaining unit though consisting of a portion only of the employees previously agreed to by plaintiff. The union notified the defendant board of a dispute.

A hearing was held September 13, 1951, and the defendant board on September 21, 1951, ordered the conducting of a strike election vote in the new bargaining unit, local 634, requested by the union, from which decision the instant appeal was taken.

Important and practically controlling are questions of construction to be given to section 9e of PA 1939, No 176, as added, being CL 1948, § 423.9e (Stat Ann 1950 Rev § 17.454 [10.4]), which paragraph is as follows:

"The board, after consultation with the parties, shall determine such a bargaining unit as will best secure to the employees their right of collective bargaining. The unit shall be either the employees of 1 employer employed in 1 plant or business enterprise within this State, not holding executive or supervisory positions, or a craft unit, or a plant unit, or a subdivision of any of the foregoing units: Provided, however. That if the group of employees involved in the dispute has been recognized by the employer or identified by certification, contract or past practice, as a unit for collective bargaining, the board shall adopt such unit."

Plaintiff claims that, within the meaning of the proviso of the statute, the holding of 2 elections under the agreed on designation of classes of employees as eligible to vote, constituted "past practice," recognizing as proper the membership basis in local 448, and that the employer "recognized" the unit within the meaning of the proviso by certifying in writing, "The following constitutes the unit appropriate for the purpose of collective bargaining," the same being part of the agreement for recognition election of local 448. Plaintiff further claims that defendant board by its certificate of the results of the recognition election of May 17, 1950, identified (within the meaning of the proviso) local 448 as "Hotel Employees Union, Local 448, A F L;" and that defendant similarly identified local 448, in its certification of the results of the strike election of August 17, 1950; and that the agreement of May, 1950, approved by the defendant board, is a "contract" identifying local 448 as the bargaining unit.

Each of the above-specified claims of the plaintiff as to construction to be given the proviso of the statute in question, is denied by the defendant in its opinion and contended against in its brief.

The testimony of the president and manager of plaintiff company clearly showed that the employees included in local 448 but excluded in local 634, are intimately related to and interested in the general operation and any possible threatened cessation of operations of the hotel.

We note the decision of the Massachusetts Labor Relations Commission, In re Salem Hotel Corporation d/b/a the Hawthorne Hotel and the Hotel and Restaurant Workers, Local 290, A F L, 19 LRRM 1245, decided November 20, 1946:

"In designating bargaining units as appropriate, a primary objective of the commission is to constitute the largest unit which, in the circumstances of the particular case is most compatible with the effectuation of the purposes of the law and to include in a single unit all common interests."

The quoted statement in the Hawthorne Case is, so far as applicable to the instant case, in keeping with the directions of the cited proviso of the statute.

The defendant seems to disregard the general principle set forth in the Hawthorne Case, as hereinbefore cited, which general principle subject to the provisions of the statute, should be observed by defendant board.

Defendant accentuates the case of Hotel Utah Co. v. Industrial Commission, 116 Utah 225 ( 209 P.2d 235). However, the Utah statute, as cited in the opinion in that case, does not contain any such provision as is in the proviso in section 9e of the Michigan statute, hereinbefore cited.

The opinion of defendant board fails to disclose any reason whatever for excluding from the new local, 634, those who are thus excluded but formerly were in local 448. We are not by this opinion determining that the rules for membership, once established, must forever remain the same, without any showing as to what would best secure to the employees their right of collective bargaining, nor do we determine what the future happening must be that should change the rules as to membership.

Defendant board was in error in ruling that the holding of 2 elections under the agreed on designation of classes of employees as eligible to vote did not constitute past practice within the meaning of the proviso in section 9e.

We further consider that the defendant board identified by certifications the former local 448 and thereby recognized the appropriate basis for membership in the bargaining unit by reason of the certifications of the results of the recognition election of May 17, 1950 and the strike election of August 17, 1950. Under the statute and the facts in the case at bar, it was the duty of defendant board to recognize as the bargaining unit, the group of employees as established by the agreement and certificate in the election of May 17, 1950.

The defendant's decision and order of September 21, 1951 is set aside and the board is perpetually enjoined from conducting the strike election provided for in its decision and order of September 21, 1951. No costs, a public question being involved.

NORTH, C.J., and DETHMERS, BUTZEL, CARR, BUSHNELL, SHARPE, and BOYLES, JJ., concurred.

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Comments

HOTEL OLDS v. LABOR MEDIATION BD
(May 16, 1952)