A Holiday Inn Express Hotel and Suites in downtown Minneapolis signed voluntary settlement agreements with three federal agencies arising out of an Immigration and Naturalization Service raid in October.

The separate settlements with the NLRB, the EEOC, and the Justice Department resolve alleged violations of labor and civil rights laws by the Hotel.

The dispute grew out of a Summer 1999 organizing drive by HERE Local 17 at the Holiday Inn. The NLRB certified the union local as the employees' bargaining agent, after the Hotel's housekeeping staff voted 11-7 in favor of representation by HERE.

The Hotel then allegedly contacted the INS, which questioned and detained eight hotel employees of Mexican origin who were found to be working without proper work authorization documents.

The all-parties informal settlement agreement reached by the NLRB resolves allegations that the Hotel constructively discharged the eight undocumented employees for their union activity when it contacted the INS. Under the terms of the settlement, the Hotel, which denies any culpability, nonetheless agreed to make the employees whole for any losses they may have suffered as a result of the hotel's notification to the INS. The eight employees, plus a ninth undocumented Mexican employee who was not detained in the raid, will share a $72,000 award.

The former employees, who remain in the United States pending a hearing before an INS judge, have agreed to waive any reinstatement right.

Meanwhile, the Hotel and Local 17 have negotiated a two-year agreement providing a starting rate of $7.50 per hour. In the second year, the hotel's wage rates will come into line with the rates in Local 17's citywide hotel industry agreement.

In addition to the monetary award, the EEOC consent agreement provides for a federal court injunction against the Hotel prohibiting retaliation and discrimination and calls for training for hotel staff and reports to the agency over the next year.

Separately, the Hotel also signed an agreement with the Justice Department's Office of Special Counsel for Immigration-Related Unfair Employment Practices. The settlement requires the Hotel to comply with the non-discriminatory provisions of the immigration law, submit to federal monitoring of its employment practices, and educate its employees about non-discriminatory hiring practices. |
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Courts Reach Differing Conclusions Regarding Pre-Hire Arbitration Agreements

A black restaurant manager must submit his race discrimination and retaliation claims against his employer to arbitration as called for under an agreement the manager signed when he was hired, ruled a federal district court in Mississippi. (Campbell v Ryan's Family Steak House Inc., N.D. Miss. 2/28/00).

Granting the motion by Ryan's Family Steak House to compel arbitration, Judge W. Allen Pepper of the U.S. District Court for the Northern District of Mississippi found that the arbitration agreement Campbell signed when he was hired was a valid contract requiring arbitration of any employment-related dispute that might arise.

Ryan's hired Campbell in 1995. He worked as an assistant manager at two of the chain's restaurants in Tennessee. In 1997, he was promoted to manager of a facility in Horn Lake, Mississippi. In July 1998, he applied for the position of general manager. However, the job was given to Morelli, a white male, whom Campbell claimed was not qualified because he previously had been demoted.

Campbell filed a charge of discrimination with the EEOC in July 1998. Soon thereafter, he alleged that the area supervisor, Nick Pallino, and Morelli criticized him for filing the EEOC charge. In October 1998, he received an written reprimand. On January 15, 1999, Pallino discharged Campbell for temporarily leaving a closed restaurant, stating he had used "poor judgment" and was "seemingly indifferent to his job as a manager." Campbell then filed suit alleging violations of Title VII of the 1964 Civil Rights Act and Civil Rights Act of 1991.

When he was hired, Campbell signed an arbitration agreement with a third-party arbitration service stating that "any employment-related dispute . . . which would otherwise be brought in State or Federal court will be brought ONLY in an arbitration forum." Pursuant to the terms of that arbitration agreement, Ryan's asked the court to dismiss Campbell's discrimination suit and to compel arbitration.

In ruling for the company, the court rejected Campbell's assertions that the agreement should not be enforced because no consideration existed between himself and the arbitration service. Campbell also alleged that the agreement was open-ended because it provided that the rules and procedures might be modified and amended.

The court held that under Mississippi law, the "quantum of consideration of a contract is irrelevant so long as it is something of real value. All that's necessary is a benefit to the promissor or a detriment to the promisee." Also, while the agreement gave the arbitration service the right to modify the rules and procedures, this did not alter the parties' agreement with each other to arbitrate any employment-related dispute that might arise.

Finally, the court rejected Campbell's argument that the arbitration agreement was incompatible with Title VII and should not be enforced, noting that the Fifth Circuit has ruled that Title VII cases may be subjected to compulsory arbitration.

However, in a similar case involving the same company, the U.S. Court of Appeals for the Sixth Circuit has refused to enforce pre-hire arbitration agreements between an arbitration service and Ryan's employees in Kentucky and Tennessee, finding the employees did no validly waive their right to sue the company in federal court. (Floss v. Ryan's Family Steak Houses Inc., 6th Cir. 5/1/00).

The arbitration agreements Plaintiffs signed with a third-party arbitration service provider, Employment Dispute Services, Inc. ("EDSI"), did not create a binding obligation and were therefore unenforceable under Kentucky and Tennessee contract law.

Plaintiff Daniels applied for a job with Ryan's in Tennessee in July 1994, and received the arbitration agreement as part of the employment application packet. He signed the agreement, and began working shortly thereafter. On August 13, 1997, Ryan's terminated Daniels when he returned to work from a medical leave taken to treat viral hepatitis. He sued the restaurant chain in federal court, alleging that Ryan's terminated him because of a disability in violation of the ADA.

After Ryan's moved to compel arbitration, the district court ruled the agreement unenforceable because EDSI did not provide Daniels with any consideration for his promise to arbitrate his dispute with Ryan's. The lower court said the agreement did not bind EDSI, because it gave EDSI an unlimited right to modify or amend the rules of the arbitration proceeding without notifying Daniels.

Plaintiff Floss applied for a job at Ryan's in Kentucky in December 1997; she also signed the arbitration agreement before beginning her employment. Floss alleged that she left her job in January 1998 because management employees intimidated and harassed her after learning that she had complained to the Department of Labor about Ryan's pay practices. She sued in federal court, claiming that Ryan's violated the FLSA by not paying minimum and overtime wages, not paying employees for certain hours worked, and retaliating against her for complaining to the DOL. The district court enforced the arbitration agreement, rejecting Floss' argument that claims under the FLSA were not subject to mandatory arbitration.

The court found that under Kentucky and Tennessee contract law, consideration is an essential element of every contract. A promise is legally enforceable only if the promissor, in exchange for a promise, receives some act or promise in return. A promise can be consideration for another promise only when it creates a binding legal obligation. A promise fails to create a legally binding obligation if it, in effect, "promises nothing at all."

In the agreement at hand, EDSI offered its promise to provide an arbitral forum as consideration for Floss's and Daniels's promises to arbitrate their disputes against Ryan's. The court held that, "EDSI's promise to provide an arbitral forum is fatally indefinite." Though obligated to provide some type of arbitral form, EDSI has unfettered discretion in choosing the nature of that forum. Specifically, EDSI has reserved the right to alter the applicable rules and procedures without any obligation to notify, much less receive consent from, Floss and Daniels. EDSI's right to choose the nature of its performance renders its promise illusory."

Also, because Floss and Daniels were not contractually obligated to submit their federal statutory claims to arbitration, the court declined to rule on their contention that the specific arbitral forum provided by the EDSI's rules and procedures did not allow them to vindicate their claims effectively.

This is not the first time Ryan's employees have challenged pre-employment arbitration agreements signed with outside arbitration service. In March 1999, the Alabama Supreme Court ruled 6-3 that a group of Ryan's employees who brought sexual harassment-based tort claims against the restaurant had to arbitrate their claims (Ryan's Family Steak Houses, Inc. v. Regelin, 735 So. 2d 454 (Ala 1999). |
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Seventh Circuit Rejects NLRB Position & Finds Casino Riverboat Officers Are Supervisors

Captains, first mates, and engineers on casino riverboats in Joliet, Illinois, are supervisors who cannot bargain collectively under federal labor law, the U.S. Court of Appeals for the Seventh Circuit ruled, overturning a NLRB bargaining order. (Empress Casino Joliet Corp. v. NLRB, 7th Cir., 2/24/99).

Judge Richard Posner blasted the Board for its "disturbing" interpretation, and held that if the American Maritime Officers union were to be permitted to serve as collective-bargaining representative for the officers ® who were the highest-ranking personnel on the vessels ® "then the union rather than the company will control the riverboat casino operations." He added that the NLRA, "precisely by excluding supervisors rejects a syndicalist (that is, employee-controlled) conception of business."

Empress Casino Joliet Corp. runs two large gambling ships on the Des Plaines River for a mile out and back from Joliet, Ill. The crew of each ship consists of a captain, first mate, chief engineer, and seven to 10 deckhands. A number of other employees, such as cooks, bartenders, waiters, and croupiers bring the total number of employees to about 150 to 200 employees when the ships are sailing.

In December 1998, the NLRB certified the American Maritime Officers union to represent captains, first mates, chief engineers, and assistant engineers on the vessels. The company refused to bargain on the grounds that the unit was composed of supervisors. In a brief March 1999 order, the NLRB held that the company had engaged in an unfair labor practice and ordered it to bargain with the union as the exclusive representative of the officers (Empress Casino Joliet Corp. and American Maritime Officers, 327 NLRB No. 203, 3/31/99).

The court rejected the NLRB's view that the only supervisor of the on-board employees was the shore-based head of marine operations, who worked normal business hours. The concept of "a completely unsupervised vessel is, although implausible, not completely preposterous," Posner wrote, comparing the situation with airline pilots who are allowed to bargain collectively under the Railway Labor Act.

However, in contrast to the pilots, the captains and first mates "have significant supervisory responsibilities, involving hiring and discipline." The court also cited the high ratio of employees to supervisors in determining that the on-board crew members were supervisors. | Back to top

Mother's Emergency Room Visit May Be Covered by FMLA, Split Eighth Circuit Holds

A divided U.S. Court of Appeals for the Eighth Circuit ruled that a fast-food restaurant employee in Arkansas, fired for missing a shift while taking her child to the emergency room for a sudden ear infection, may be covered by the Family and Medical Leave Act because the infection gradually worsened and required surgery. (Caldwell v. Holland of Texas, Inc. d/b/a/ Kentucky Fried Chicken, 8th Cir., No. 99-2382, 3/30/00).

Reversing a lower court's grant of summary judgment for the employer, the appeals court noted, "an employer does not avoid liability by discharging an employee who takes leave in order to seek treatment for a condition that is later held to be covered by the FMLA. The employer who precipitously fires an employee, when the latter claims the benefits of leave under FMLA, bears the risk that the health condition in question later develops into a serious health condition."

Plaintiff Caldwell had worked for Holland of Texas Inc., a Kentucky Fried Chicken franchisee, for three years. On June 7, 1997, she received permission from an assistant manager to miss a shift so she could take her three-year old son to an emergency room, where he was diagnosed with an acute ear infection, and prescribed a 10-day course of antibiotics. The physician also told Caldwell that her son's condition probably would require surgery to avoid permanent hearing loss, and recommended that she schedule a follow-up exam. That night, at the assistant manager's request, Caldwell worked a shift while her elderly mother cared for the child. When she returned to her regular shift two days later, the manager fired her without discussing her absence. After her termination, her son was prescribed a second 10-day course of antibiotics, and underwent surgery on July 17.

Caldwell sued, contending that her termination violated the FMLA. The U.S. District Court for the Western District of Arkansas granted summary judgment to her employer, finding that her son's condition did not qualify as a "serious health condition" under the FMLA, and that she was therefore not eligible for FMLA leave.

Under the FMLA, an eligible employee may take up to 12 workweeks of unpaid leave per year to care for an immediate family member with a serious health condition. Such a condition requires inpatient care or continuing treatment by a health care provider. In this case, the issue was whether Caldwell's son had received continuing treatment.

To establish that the FMLA applied to her case, Caldwell had to show that the child suffered incapacity for more than three consecutive calendar days, and that he subsequently received continued, supervised treatment relating to his condition. The court found that she had raised factual issues of dispute on both prongs.

In measuring the period of the boy's incapacity, the court suggested that it may encompass "the entire time during which he was suffering from this illness and being treated for it," from June 7 to July 17, so long as the treatment disrupted his basic daily routines and did not alleviate his condition.

The court also noted that although the boy's condition was not serious enough initially to require immediate surgery, surgery was "the necessary and only treatment" to prevent deafness. Emphasizing "the importance of looking at the disease's effects on the body over the entire period of illness," the court pointed out the possibility that "intermittent leave" is covered by the FMLA.

Finally, the court found that the child's antibiotic treatments, surgery, and at least two post-operative medical examinations also create a genuine issue of fact on the second prong of the threshold inquiry - whether he received "subsequent medical treatment."

Dissenting, Judge David R. Hansen said that Caldwell's affidavits were inconsistent on whether the child was incapacitated for more than three days or merely "at least three days." By reversing the lower court, Hansen noted the Eighth Circuit "has greatly expanded the definition of incapacity to include periods of time when a patient is taking antibiotics or if the illness disrupts basic daily routines."

Hansen asserted that Caldwell's one-day absence from work is not the type of absence the FMLA is intended to cover, and should instead by covered by an employer's sick-leave policy. "I reject the court's suggestion that •incapacity' under the FMLA may be defined by the sniffle standards imposed by a local daycare center." |
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Jury Concludes That Restaurant Discriminated Against Women by Hiring Only Male Servers

The owner of two restaurants in Mississippi and Tennessee violated Title VII of the 1964 Civil Rights Act by refusing to hire women applicants for server positions at either location. (EEOC v. Mike Fink Corp., M.D. Tenn. 3/10/00).

The EEOC sued Mike Fink Corp. on behalf of 30 women who had not been hired, alleging that the company unlawfully employed only male food and beverage servers at its Cock of the Walk restaurants in Nashville, Tennessee and Jackson, Mississippi.

The restaurants are part of a chain that offers southern and seafood dishes. According to the franchisee who owns the two restaurants, the term "cock of the walk" dates from the early 19th century, when it was ascribed to "the toughest man" aboard river boats trading pelts and wares along the southern Mississippi River and its attributaries.

The franchisee argued in court that employing only male servers was reasonably necessary to the normal operation of its historical themed restaurants. However, the EEOC viewed the historical theme of the restaurants as not enough to exempt them from current anti-discrimination laws. Additionally, the franchise agreement Fink entered into did not require that its restaurants employ only male servers. Also, a number of other franchise owners gave depositions stating that they employed women servers at their Cock of the Walk restaurants.

The EEOC charge came about after a woman armed with a hidden tape recorder entered one of the restaurants and asked the manager about server positions. The manager explained the theme of the restaurants and invited her to apply for other positions -- including bartender, a higher paying position -- but she declined. The EEOC recruited the other class members through newspaper advertisements.

Although pre-trial mediation efforts failed, Mike Fink Corp. has been voluntarily employing women as servers at its Cock of the Walk restaurants since the talks ended in 1995.

The EEOC acknowledged that the case would have been harder for it to win had the restaurants required the servers to "look tough" and be feisty with each other, like actors playing a role. | Back to top

New Jersey Jury Awards $500,000 To Former Casino Dealer in FMLA Case

A federal jury in New Jersey awarded a former Atlantic City blackjack dealer with a herniated disk $500,000 for past and future lost wages on her claims that her 1997 discharge violated the Family and Medical Leave Act (Armstead v. Caesars Atlantic City Hotel/Casino, D.N.J., 3/2/00).

The jury awarded Michele Armstead $175,000 in back pay and $325,000 in front pay. Armstead had been a blackjack dealer for Caesars Atlantic City Hotel/Casino for17 years before terminated for excessive absenteeism.

Caesars terminated Armstead under a policy permitting employees to miss work up to six times in any 12-month period, for up to five days each time. The Hotel has a progressive disciplinary policy calling for an oral warning after the fourth absence, a written warning after the fifth absence, and suspension after the sixth absence.

The seventh is grounds for termination.

Armstead had a number of absences from work in the year before her termination, some of which fell within her company-approved FMLA leave because they were related to treatment for a herniated disk.

She received a "final warning" under the progressive discipline policy for an unprotected absence but was fired after the next absence even though it was related to her herniated disk. She complained of an error during her discharge interview. A few weeks later, the Hotel drew up and backdated a revised discharge notice with the protected dates omitted and new dates of absence added, for which she had never been disciplined.

In its defense to liability, Caesars argued that it had made a recordkeeping error in Armstead's original discharge notice and that she had enough unprotected absences to qualify for termination. | Back to top

Hotel's Prompt Response to Guest's Assault on Employee Defeats Liability, Court Rules

A federal district court in New York ruled that a New York hotel employee who was fired 10 weeks after telling management officials she had been sexually assaulted by a hotel guest cannot pursue sexual harassment or retaliation claims against the hotel. (Flower v. Mayfair Joint Venture, S.D.N.Y. 3/13/00).

Granting summary judgment to the hotel owner, the court found that the Mayfair Hotel Baglioni cannot be liable for retaliation because it took prompt remedial action in response to the customer's sexual assault, and because the assault itself cannot be imputed to the hotel.

The employer's comments to plaintiff Flower after the assault about her "short skirts" do not constitute an adverse employment action resulting from her complaint. In addition, the hotel provided a nonretaliatory reason for her firing, alleging that she had removed a memorandum concerning her work attire from her supervisor's desk.

Flower was hired in August 1991 as an assistant food manager at the hotel in New York City and alleged that in October 1992, she was physically assaulted by a permanent hotel guest. She did not call police or notify hotel security or management about the incident.

Flower's supervisor learned of the incident from other employees and told Flower that the event had to be documented. Flower was directed to meet with the hotel manager, who later told her that the hotel's director had spoken with the customer. She was not harassed by the customer or any other hotel customer or employee during the rest of her employment.

Flower alleged that after the assault the Hotel's management waged "a campaign of criticism" against her and ultimately fired her because of the assault. She claimed that her supervisor criticized the length of her skirt and her job performance, told her that she had been "too friendly" with the hotel guest who assaulted her, and scheduled her to work days she had requested off.

Flower was fired following an incident in which she took a partly written memorandum concerning her work attire from her supervisor's desk and showed it to the hotel director. Flower's supervisors purportedly were concerned about her unprofessional conduct in taking the memo and the director fired her a few days later for her attitude and her inability to follow their orders. Flower sued the owners of the hotel under Title VII of the 1964 Civil Rights Act, the New York State Human Rights Law, and the New York Civil Rights Law.

Considering Flower's hostile work environment claim, the court noted that isolated remarks or incidents of harassment do not merit relief under Title VII. The court found that criticism of Flowers' skirt length did not amount to actionable harassment, but that the customer's "physical attack on her was sufficiently severe to constitute a hostile work environment."

Addressing the issue of whether the hotel can be liable for the assault, the court held that if an employee has a duty to employees harassed by nonemployees, the duty would be no greater than the duty owed in colleague harassment cases. The employer generally will not be held liable "unless the employer either provided no reasonable avenue of complaint or knew of the harassment but did nothing about it." Under this standard, the court found no basis for imputing liability to the hotel when Flower's supervisors responded to the assault, and the customer never harassed her again.

The court also rejected Flower's assertion that the hotel failed to take remedial action because it did not ban the customer from the premises. It found no authority for her theory that Title VII requires an employer to ban the customer under such circumstances.

The court also found no evidence of an adverse employment action, pointing to evidence that the hotel had reprimanded Flower for her job performance and attire before the assault, and that its criticisms after the assault were no different.

Finally, the court found that even if Flower could establish a prima facie case on the basis of her termination, the hotel can provide a nonretaliatory reason for her termination, noting that Flower failed to offer any evidence that the hotel's criticism of her skirt length was a pretext for unlawful retaliation. | Back to top

Waiter Not Entitled to Punitive Damages For Retaliation Under FLSA

The U.S. Court of Appeals for the Eleventh Circuit held that a Florida waiter who was fired after he contacted the Labor Department about his wages is not entitled to punitive damages on his retaliation claim under the Fair Labor Standards Act, reaching a conclusion opposite to that of the Seventh Circuit ® the only other Circuit Court of Appeals to previously review the issue. (Snapp v. Unlimited Concepts, Inc. 11th Cir. 4/6/00).

Deciding the issue, the court affirmed a lower court's decision to strike down a jury's $35,000 punitive award to Brian Snapp on his claim against Unlimited Concepts, Inc. Writing for the court, Judge Gerald B. Tjoflat reasoned that the relief provided in the FLSA anti-retaliation provision allowing employees to sue their employers is compensatory in nature. In contrast, the goal of punitive damages "is to punish and deter the wrongdoer rather than to compensate the aggrieved party." The court held that punitive damages would be out of place in a statutory provision aimed at making the plaintiff whole. Judge Ed Carnes concurred in the decision but he disagreed with the majority's conclusion that Congress's provision for criminal penalties in the FLSA indicated its intent to exclude the availability of punitive damages in the provision allowing employees to sue their employers.

Plaintiff Snapp worked as a waiter for Unlimited Concepts, doing business as Ramshackle's Cafþ, a restaurant chain in Florida. Snapp claimed that he was paid less than minimum wage for time spent performing janitorial and cooking duties, and that he was not paid overtime wages for time worked in excess of 40 hours per week. Snapp further alleged that his boss, Gerken, fired him after discovering that Snapp had contacted the Department of Labor about his wages.

A jury found that Snapp failed to prove that he had not been paid a minimum wage, but that Unlimited Concepts and Gerken were guilty of violating the overtime wage and anti-retaliation provisions of the act. The jury awarded Snapp $200 in overtime wages, $1,000 in wages lost because of the retaliatory discharge, and $35,000 in punitive damages. The jury also found that Gerken was Snapp's employer along with the cafþ, and recommended that Gerken be personally liable for 30% of the punitive award.

The district court granted the defendant's motion for judgment as a matter of law, and struck down the $35,000 award.

Under ó216(b) of the FLSA, any employer who retaliates against an employer for exercising his or her rights under the FLSA "shall be liable for such legal or equitable relief as may be appropriate to effectuate [the anti-retaliation provisions] of this title, including without limitation employment, reinstatement, promotion, and the payment of wages lost and an additional equal amount as liquidated damages." Snapp contended that the "legal relief" courts are empowered to award is broad enough to include punitive damages.

Rejecting Snapp's argument, the court pointed out that all of the relief provided in ó216(b) is meant to compensate the plaintiff, noting that "awards of unpaid minimum wages, unpaid overtime compensation, employment, reinstatement, promotion, and the payment of wages lost all attempt to put the plaintiff in the place she would have been absent the employer's misconduct." Looking at ó216's overall remedial scheme, the court noted that because ó 216(a) provides criminal penalties for willful FLSA violations, "there is simply no reason to carry the punitive sanctions in ó216(a) to ó216(b), a provision intended to compensate, not punish." Accordingly, the court held that "given that the evident purpose of ó216(b) is compensation, we reject plaintiff's argument that •legal relief' includes punitive damages."

In addition, the court found that by addressing the issue of punishment with a criminal rather than civil penalty, Congress sought to limit the application of punitive sanctions to cases in which the government could prove willful violations of the anti-retaliation provisions beyond a reasonable doubt. | Back to top

NY Restaurant's Closing Does Not Preclude Manager's Claims

Reversing a lower court's dismissal, the U.S. Court of Appeals for the Second Circuit re-instated age discrimination claims by the oldest and only white employee of a New York City restaurant, rejecting the employer's assertion that the employee lost his job only because it closed the restaurant. (Tarshis v. Riese Org. 2d Cir., 4/27/00).

The Second Circuit disagreed with the lower court that closing a restaurant could not serve as a pretext for discriminating against an employee, noting that the plaintiff had worked his way up from waiter to assistant manager and yet his employer "did not consider Plaintiff good enough to continue employment at one of its 150 New York restaurants."

In 1993, Plaintiff Tarshis, then 67, was ordered to take a one-month vacation from his position as assistant manager at Brew Burger and Lindy's. Both restaurants are owned by the Riese Organization, which operates 150 restaurants in the New York City area. When Tarshis returned to work, Defendant had closed Brew Burger in order to convert to a more upscale restaurant and had replaced Tarshis at Lindy's with a 56-year old Hispanic man.

Tarshis alleged that other Brew Burger employees were reassigned to the new restaurant or to other Riese-owned restaurants. Riese later offered him a lower-paying position that required an additional day of work, but he declined.

Tarshis then sued Riese under the Age Discrimination in Employment Act, Title VII of the 1964 Civil Rights Act, and state and local laws. The district court dismissed his suit for failure to state a claim, finding that Riese's closure of the Brew Burger was a valid, nondiscriminatory, non-pretextual reason for firing him and that Riese could not be liable for failing to reassign Tarshis because he admitted that he turned down an offer of re-employment.

On appeal, the court said Tarshis established a prima facie age discrimination case. The court held that civil rights cases should not be dismissed for failure to state a claim unless it seems "beyond doubt" that no set of facts can be proved to support a claim.

The court further held that the trial court should not have dismissed the suit without considering the circumstances of Tarshis's employment at two restaurants and not simply at the one that was closed, noting that Riese never provided a valid, nondiscriminatory reason for terminating Tarshis from the position at the restaurant that remained open.

While acknowledging that a reduction in force or restructuring that results in job elimination often is a "legitimate reason" for dismissing an employee, the court noted that "such a reduction is not always the whole story." In this case, business at Brew Burger was dong well and an economic downturn did not cause the RIF. In addition, all of the restaurant's employees, except for Tarshis, were reassigned, and the company advertised for assistant manager positions, including some at the newly opened restaurant. |
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Court Throws Out Race Claim by Casino CFO

A federal trial court in Louisiana threw out a race bias claim by the former chief financial officer of Bally's Casino Lakeshore Resort in New Orleans, who was fired after having an "intimate romantic relationship" with a subordinate employee. (Triplett v. Belle of Orleans L.L.C., E.D. La. 3/8/00).

The court found that Plaintiff Triplett's argument that Bally's management planned his termination by arranging his affair with the subordinate was not supported by the record and even if true, did not point to race discrimination. The court also struck down Triplett's claim that the company defamed him by telling other employees, the Louisiana Department of Labor, and the EEOC that he was fired for misconduct.

In 1996, Triplett, an African-American, began a romantic relationship with a female subordinate. That summer, he disclosed the relationship to Bally's management, which believed the relationship showed poor judgment on Triplett's part and worried about exposure to sexual harassment claims. Accordingly, Bally's ordered Triplett to stop having job-related contact with the subordinate. In May 1997, Bally's fired Triplett.

Bally's argued that it fired Triplett because his attitude and work suffered after disclosing the relationships and that Triplett's ability to work as part of a team deteriorated. In contrast, Triplett maintained that his firing was due to race discrimination and that Bally's planned his termination by arranging the affair. He maintained that Bally's discriminated against hin by compensating him at a lower wage than the other employees, offering him a smaller severance package, and hiring a less-qualified white man as his replacement.

Triplett established a prima facie claim for discriminatory discharge by showing that he had the training, experience and qualifications needed for the job, that he was a member of a protected class, and that Bally's filled his position with a white man. Bally's then offered legitimate nondiscriminatory reasons for the discharge, including the affair, the lack of judgment it demonstrated, and its dissatisfaction with Triplett's work attitude.

To rebut Bally's assertions, Triplett argued that Bally's "set him up" by arranging the affair so it could fire him. He claimed that Bally's first tired to lure him into an extramarital affair with another employee and when he did not cooperate, Bally's "arranged for a subordinate to seduce him." In addition, Triplett maintained that Bally's wanted to fire him because he had expressed suspicions about some of its business practices.

In rejecting Triplett's argument, the court noted that Triplett never produced any evidence proving the set-up and that "conjecture alone is insufficient to create a fact issue as to Bally's proffered reason for discharge. The court also noted that even if there was some evidence of the alleged plot, the subterfuge would not point to race discrimination.

According to the court, Triplett offered no evidence to support his claim that he was compensated at a lower rate than similarly situated white counterparts. The only employee with a higher salary than Triplett's was his supervisor, who is also black. The only other person who was compensated at the same level as Triplett was the casino's table games director, a white man, who was highly qualified for his job. Moreover, there was no evidence that the company offered Triplett a severance package that was unreasonable, compared with previous severance packages.

Regarding the defamation claim, the court noted that Bally's told investigating agencies that Triplett was fired for "unsatisfactory performance," not for misconduct. Therefore, Bally's statements to the agencies were not defamatory because they were true. In addition, the publication of alleged defamatory statements in response to a request from a government or quasi-judicial agency is subject to qualified immunity. |
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The Walt Disney Co. has agreed to recognize several unions if they can show majority support from employees at the new California Adventure theme park in Anaheim, California. The unions anticipate that obtaining authorization cards from more than half of the California Adventure employees should not be difficult because they expect that existing union members transferring from Disneyland will comprise the core of the new park's workforce.

Currently, about 3,500 Disneyland employees are covered under the master service trades agreement negotiated between the company and a council of four unions - SEIU, the UFCW, the International Brotherhood of Teamsters, and the Bakery, Confectionery, Tobacco Workers and Grain Millers. The agreement applies to employees in such classifications as ride operators, ticket sellers, food service employees, entertainers, and retail shop clerks. HERE represents another 1,000 employees at two Disney-owned hotels adjacent to the theme park under a separate contract.

Disney and the four unions in the council have already agreed to terms for a first contract that eventually will cover California Adventure employees. However, the contract would not become effective until the unions gain the requisite majority support from employees.

Employees transferring from Disneyland to California Adventure within 90 days of the opening would retain their seniority and would constitute a separate group from new hires for purposes of scheduling and recall rights.

In addition, HERE Local 681 also has an agreement with Disney that if it can show majority support, the company will recognize the local at the new Grand California Hotel, which is being built in conjunction with the new theme park. | Back to top

San Diego Convention Center Board Seeks Neutrality From Hotel Owners & Developers

A resolution adopted by the board of directors of the San Diego Convention Center Corp. is being used by organized labor in its efforts to persuade hotel developers to hire union labor to build and operate new hotels near the convention center.

The resolution, adopted April 14 on a 5-0 vote with one abstention, calls on hotel developers as well as individual, corporate and family owners of hotels in the vicinity of the convention center to talk with representatives of the AFL-CIO to "discuss the adoption of labor neutrality agreements which would preserve the integrity of their operations, promote labor democracy and choice for their employees, and further contribute to the San Diego economy."

The resolution also calls on parties involved in redevelopment projects related to the convention and hospitality industry in downtown San Diego to meet with the AFL-CIO to talk about "areas of mutual interest and benefit."

According to Fahri Jeffers, chairwoman and chief executive officer of the convention center's board of directors, only a few unionized hotels currently operate in San Diego. She claims the city has been unable to attract union convention business because there are no unionized hotels in the vicinity of the center. Jeffers, who is also the secretary-treasurer of the United Domestic Workers of America, is concerned that the Board is missing out on a lucrative market, believing that attracting union business to the center would be a boon for San Diego's economy.

Jeffers also said that the resolution, which also encourages employers to adopt card check recognition agreements, is a way of assuring a fair environment for employees who want to join a union. The Board shortly will be sending letters, with a copy of the resolution attached, to hotel developers in the vicinity of the convention center to encourage them to "take action." Jeffers hopes the resolution should "increase the visibility and credibility of neutrality" agreements. | Back to top

Federal Monitor Recommends That HERE Recover Funds Embezzled by No-Show Organizer

The court-appointed monitor assigned to root out corrupt practices at the Hotel Employees and Restaurant Employees International Union wants the Union to recover more than $170,000 that was allegedly embezzled by a former organizer at Local 1 in Chicago. A Local 1 member has also launched an effort to collect more than $260,000 paid to a Chicago politician listed as a union consultant.

In his report to a federal district court, Kurt W. Muellenberg, HERE's monitor and a former federal prosecutor, recommended that the union's executive board collect funds allegedly embezzled over a five-year period by John F. Duff, Jr., a former international organizer assigned to Local 1. The report accuses Duff of a wide range of corrupt and criminal practices during his tenure with HERE. Among other things, Duff collected an annual salary of $35,125 for several years for doing a "no-show" job.

John Wilhelm, HERE's general president, did not comment on Muellenberg's suggestion. But union reformers called on Wilhelm to use the Landrum-Griffin Act more aggressively to recover members' funds lost through embezzlement, sweetheart deals, no-show payrolling, and bogus consulting contracts in recent years.

Muellenberg's report shows that Duff first became an organizer for Local 1 in 1989, but that he did little or no work for the union. Instead the report portrays him as the operator of mob-controlled sports betting parlors in Florida and a professional gambler.

In a related development, Martin Preib, a Local 1 member, called for Chicago Alderman Patrick Levar to either account for money he received from Local 1 or return it.

Levar acted as a consultant to Local 1 between 1988 and 1996. Through his firm Gateway Associates, Levar collected $267,488 for consulting services on state and federal matters. But in a September 22, 1998 report about corruption within HERE, Muellenberg wrote that no reports were ever generated explaining Levar's activities on behalf of the local.

In a statement, Levar contended he was a legitimate consultant to HERE, offering advise on national and regional governmental and political issues. He suggested that most of his work was conveyed via oral reports to union leaders. | Back to top

Cleveland Restaurant Pays $52,000 to Settle Demeaning Uniforms Claims

A Cleveland restaurant owner has agreed to pay $52,000 to three female servers who alleged that they were required to wear revealing uniforms, rather than the tuxedo-like uniforms worn by male bartenders and servers (EEOC v. Jozac Corp., ND. Ohio).

The Equal Employment Opportunity Commission sued the employer, alleging that the employer discriminated against female bartenders by requiring them to wear revealing uniforms which exposed much of their legs and chest. The EEOC also claimed the employer discharged women who refused to wear the uniforms. As part of the settlement, the employer agreed to allow female servers and bartenders the option of wearing the same style of uniform worn by male servers, at no greater expense. | Back to top

Sodexho Marriott Reaches Aggreement With NLRB to Rescind Work Rules

In a settlement agreement reached with the National Labor Relations Board, Sodexho Marriott Services has agreed to drop work rules which prohibited employees from talking about their working conditions.

A company spokesperson disagreed with the characterization of the challenged work rules. "There was never any work rule that barred employees from speaking with each other or third parties about wage and working conditions."

The employee handbook stated that employees must leave the company/ client premises at the end of their work schedule and are "prohibited from returning to our company/client premises after work to engage in activities or behavior that is not authorized by our client for the general public."

The handbook further stated that it is company policy that employees "must not disclose or improperly use confidential information about our company, other employees, customers, suppliers and/or vendors . . . You should not divulge confidential information to any individuals outside of our company without prior authorization. Confidential information includes, but is not limited to personnel and payroll records (for current and past employees), information about company operations, procedures, practices and products . . . "

The NLRB determined the second rule could be inferred to mean employees could not talk about their wages or working conditions with each other, and concluded that the rules were "ambiguous" and needed to be deleted from the handbook. | Back to top

Bankrupt Denny's Franchisee To Pay $400,000 To Female Employees

The Equal Employment Opportunity Commission announced that a bankrupt Denny's franchisee in California has agreed to pay $400,000 to seven female employees who alleged a high-ranking manager sexually harassed them, (EEOC v. Lal Enterprises, E.D. Calif.).

The franchisee, which operated Denny's restaurants in six Central Valley communities, agreed to settle hostile work environment claims brought under Title VII of the 1964 Civil Rights Act.

Because the EEOC is exempt from legal provisions that otherwise stay all litigation against a bankrupt entity, the agency was able to conduct discovery and proceed with litigation until a settlement was reached.

The agreement also prohibits the franchisee from ever employing a Lal Enterprises vice president. The EEOC alleged that the employer failed to prevent or correct sexual harassment by Nestor, despite the women's complaints to management that he made sexually explicit jokes, used profane language, and touched female employees inappropriately. | Back to top

Divided NLRB Certifies Unions as Agent For Employees at S.F. Hotel

A divided NLRB panel certified HERE Local 2 and SEIU Local 14 as the joint representatives of employees at the Sir Francis Drake Hotel in San Francisco (S.F.D.H. Assocs. L.P. d/b/a Sir Francis Drake Hotel, 330 NLRB No. 98, 2/14/00).

Over a dissent by Member Peter Hurtgen, Members Sarah Fox and Wilma Liebman overruled the employer's objection to the November 19, 1997 election in which employees voted for representation by the unions by a 64-28 margin.

Since the joint organizing drive took place, the two unions have merged; the SEIU local is now part of HERE Local 2.

In objections filed to the election, the Hotel contended that the unions' observer, Lee, repeatedly talked with employees in the polling area, even after the NLRB agent told him to stop, leading the employees to believe that the unions controlled the election, rather than the Board.

The majority found that Lee spoke with a total of five to six voters out of the approximately 100 employees who voted, and that their conversations lasted from a few seconds to one minute. The majority also found that there were no voters present when the Board agent initially told the observers not to speak with voters. Nor did any voters hear the Board agent admonish Lee between voting sessions for saying a few words during the second voting session. At most, five voters may have heard the Board agent admonish Lee after he replied to a question from an employee.

The majority held that "the mere fact that Lee •disregarded' the Board agent's admonitions not to talk to voters in no way suggested to voters that it was the [unions] and not the Board that were conducting the election. For that reason, and in light of the petitioners' large margin of victory, we agree with the hearing officer that Lee's brief remark to five or six voters could not have affected the results of the election and are not sufficient rounds for setting it aside."

In dissent, Member Hurtgen said he would set aside the election because Lee spoke to employees in Spanish at least five times during the election and all five times ignored the Board agent's instructions not to speak with voters, flouting established Board election policies.

"Lee's repeated defiance of the Board agent's instructions amounts to no less than an open flaunting of the Board agent's authority to conduct the election. In my view, NLRB elections are among the crown jewels of the nation's practice of industrial democracy.

The presence of dedicated and experienced Board agents at thse elections is an essential element of that electoral process. If these Board agents cannot effectively control that process, the entire system is in jeopardy."

Hurtgen contended that the majority missed the point in looking at the innocuousness of the conversations and the few number of voters who might have overheard the Board agent's admonitions. "At issue here is the protection of the integrity of the Board's election processes. The Board simply cannot permit the flaunting of the Board agent's valid instructions, irrespective of the number of employees who are aware of such flaunting."

Local 2 had represented employees at the Sir Francis Drake hotel for more than 40 years until the hotel was sold in 1993. The new owner reopened nonunion. HERE Local 2 and SEIU Local 14 conducted a joint organizing campaign in 1997, with the NLRB election held in November 1997. | Back to top

Chicago Restaurant Violated Federal Law by Increasing Use
of Security During Union Campaign

A divided NLRB panel affirmed an administrative law judge's findings that a Chicago restaurant violated Section 8(a)(1) and (3) of the NLRA by suspending and discharging a union activist for his conduct in connection with the disappearance of certain "manager's logs," and by discharging three other employees pursuant to the discriminatory application of a no-solicitation rules. (Lettuce Entertain You Enterprises, Inc. d/b/a Tucci Milan 330 NLRB No. 77, Jan. 24, 2000). It also found the employer violated Section 8(a)(1) of the NLRA by telling employees that HERE Local 1 had threatened to blow up a house shared by two employees and that employees were in imminent danger of union violence. The panel also found that the employer committed additional violations of Section 8(a)(1) by increasing the use of security guards during the union campaign and by soliciting grievances. | Back to top

NLRB Reaches $750,000 Back-Pay Accord at Puerto Rico Hotel

Some 60 former employees of the Carib Inn Hotel in San Juan, Puerto Rico will receive $750,000 in back pay under a settlement of an NLRB unfair labor practice dispute approved in March by the U.S. District Court for the District of Puerto Rico.

According to the Board, the settlement agreement ends a dispute starting 14 years ago when Horizons Hotel Corp. took over the Carib Inn Tennis Club and Casino and refused to hire employees formerly employed by its predecessor, allegedly because of their union affiliation.

In a 1993 decision, the Board found that the hotel violated the NLRA by refusing to recognize and bargain with Local 610 of the Union de Trabajadores de la Industria Gastronimica de Puerto Rico, a HERE affiliate. The Board ordered the hotel to recognize and bargain with the union, to offer employment to the former employees, and to make them whole for any loss of earnings.

The Hotel appealed that decision; in 1995 the U.S. Court of Appeals for the First Circuit enforced the bargaining order. The Board issued a supplemental decision in 1996 finding that Hotel Associates, Inc., the current owner of the hotel, was the alter ego of Horizons, and was liable for the back pay. The First Circuit enforced that decision in 1997.In 1998 the Board sought and obtained a protective restraining order requiring Horizons and Hotel Associates to deposit money into an account as security for the back pay owed. Because the Hotel failed to comply with the restraining order issued by the First Circuit, the NLRB then instituted civil contempt proceedings, which lead to the settlement. | Back to top

Disneyland and HERE Bargain 4-Year Pact Covering 1,000 Employees at Two Anaheim, California Hotels

A new four-year contract for some 1,000 employees at two Anaheim, California hotels owned by the Walt Disney Co. provides annual wage increases, increases the vacation benefit for senior employees, and lightens the work for housekeeping staff.

The new accord applies to the majority of the staff at the Disney Pacific Hotel and the Disneyland Hotel, both located adjacent to the Disneyland entertainment theme park. The agreement provides that wages will increase 3% each year. This year's 3% adjustment will be made on top of a "meal buyout" that gives employees an additional cash sum in lieu of the free or discounted meals they previously received.

For housekeeping staff, who comprise a large percentage of the bargaining unit, the meal buyout coupled with the 3% adjustment amounts to 58 cents per hour. The new hourly rate for housekeepers jumps to $8.37. This rate will increase to $8.62 next year, $8.88 in the third year, and to $9.15 per hour in the last year of the contract.

The agreement also calls for Disney to raise its contributions to the health and welfare plan by about 4%. Employees with at least 20 years of service will now be entitled to five weeks of paid vacation per year, an increase from the previous four-week maximum.| Back to top

HERE, Concession-Stand Contractor Reach Agreement for Staples Center

After months of negotiations, HERE Local 11 and Ogden Entertainment ® operator of concession stands at the Staples Center, Los Angeles' new sports and entertainment complex ® have reached agreement on a contract covering about 400 concession-stand employees.

The agreement which runs from March 1, 2000, to August 31, 2004, includes wage increases and company-paid family health insurance for all employees, including part-time employees.

In addition to the health coverage, which applies to full and part-time employees who work a minimum of 60 hours a month, the contract calls for a pension plan beginning June 1, 2001, free legal services beginning December 1, 2000, six paid holidays per year, and up to six paid vacation days a year, depending on the number of days worked.

Ogden also agreed not to subcontract any part of the operation covered by the collective bargaining agreement and to protect jobs in the event of a sale of the company.

Regarding wages, the contract retroactively boosts concession-stand attendants' pay from the current $8.76 per our to $10.55 an hour. Their wages will rise to $12.50 per hour by March 1, 2004 - a gain of about 42 percent over the life of the agreement.

Special food preparers, stand leaders, and assistant stand leaders also will see their wages increase to $12.50 per hour as of March 1, 2004, while the wages of cooks and bartenders will rise to between $11.40 and $11.90 an hour over the same period.All classifications will also receive back pay of an additional 75¢ an hour for all hours worked in February.| Back to top

HERE Local 166 Negotiates Initial N.O. Convention Center Contract

Food service employees at New Orleans' Marial Convention Center are working under an initial contract negotiated following an NLRB election. The five-year contract covers both a 200 employee base crew and 500 casual employees. Hourly base crew employees who worked an average of 22 hours per week for the preceding 12 months had their salary raised from $5.58-$6 per hour to a minimum of $7 an hour. The contract provides for wage increases of 2% in each of the second, third, and fourth years, and 3% in the fifth year.

All other current hourly employees will receive an increase of 4 percent immediately, followed by the same percentage increases as the base crew employees. New hourly hires will start at $6.25 per hour and will also receive the same percentage increases in the last three years of the contract. The contract also provides that if the federal minimum wage goes up, hourly employees will be paid no less than 35 cents above the minimum wage.

The rate paid to servers and bartenders to work at functions increases to $85 per function immediately. These employees also will get the yearly percentage increases so by the end of the fourth year the rate will be $92.50. Those rates are for a maximum of 5.5 hours and anything over that is overtime. |
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