NLRB Uses Dramatic and Novel Penalties to Punish a Flagrant Repeat Offender Employer

In late October, the National Labor Relations Board (NLRB) issued a groundbreaking decision in the long-running dispute between the Pacific Beach Hotel in Waikiki, Hawaii and the International Longshore and Warehouse Union (ILWU).  In HTH Corporation, Pacific Beach, the NLRB took a new approach to enforcement and put other scofflaw employers on notice that their continued disregard for the collective bargaining rights of their employees will not go unpunished.

Beginning in 2002, the ILWU embarked on what would become a ten-year effort to unionize the five-hundred employees of the Pacific Beach Hotel (Pacific Beach).  After the NLRB set aside the results of the first election due to objectionable misconduct by Pacific Beach, the ILWU won a second election in 2004.  Once the ILWU won the right to represent the Pacific Beach employees, the real trouble began.  For three years the ILWU and Pacific Beach met and attempted to bargain a first contract without success.   Following the protracted negotiations, the hotel’s new operator changed course and refused to recognize the union or bargain a contract.  Pacific Beach then repeatedly violated the National Labor Relations Act (NLRA) by making unilateral changes to employees’ workloads without bargaining, firing and otherwise disciplining union activists, and barring union representatives from the facility.  Undeterred by the repeated rulings of the NLRB and the union’s success in federal court, Pacific Beach continued to flagrantly disregard and violate the NLRA.  The hotel even went so far as to refuse to take the remedial steps ordered by the NLRB as a penalty for repeatedly violating the law.

Citing the hotel’s “severe and pervasive” unfair labor practices spanning over a decade, the NLRB used its authority to impose new and novel penalties on Pacific Beach.  In addition to the customary “notice posting” remedy, the NLRB ordered the hotel to distribute an “Explanation of Rights” to all new, current, and former employees, supervisors, and managers.  The Explanation of Rights, “sets out the employees’ core rights under the Act” and was intended to “remedy the chilling effect” of Pacific Beach’s egregious misconduct. Pacific Beach was ordered to post the document for three years, far longer than the usual sixty days ordered for a notice posting.    Pacific Beach was also ordered to require all employees, supervisors, and managers to attend a public reading of the notice and the Explanation of Rights.  In addition, Pacific Beach was ordered to publish the notice and the Explanation of Rights in two local publications twice a week, for eight weeks.

The long list of penalties also required Pacific Beach to reimburse both the NLRB and the ILWU for the costs associated with the case, to reimburse the ILWU for its bargaining expenses, to rescind all of the unilateral changes, and otherwise make employees whole for any resulting losses.  Further, the NLRB has retained the right to inspect the Pacific Beach property for three years to ensure that Pacific Beach is complying with the posting, distribution, and mailing requirements ordered by the Board.

Union activists are applauding what is the latest example of the NLRB exercising its authority to protect the right of employees to work collectively to improve their workplaces.  Hopefully, with continued aggressive and imaginative enforcement by the NLRB, going forward employees and their unions will be empowered to hold other employers accountable for attempting to destroy and undermine collective bargaining.