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National Labor Relations Board v. Local 54

argued: September 7, 1989.


On Application for Enforcement of a Final Order of The National Labor Relations Board, NLRB 4-CB-5551.

Mansmann, Nygaard and Aldisert, Circuit Judges.

Author: Aldisert


Aldisert, Circuit Judge

This is another in a line of recent cases before the National Labor Relations Board presenting the issue of whether union members, who wish to cross a picket line, may do so without fear of union discipline if they first unilaterally change their membership from "full" to "financial core" status. Financial core membership permits an employee to maintain a dues-paying association with the Union that will protect him or her against the threat of discharge under Section 8(a)(3) of the National Labor Relations Act, 29 U.S.C. § 158(a)(3), without subjecting him to the responsibilities and regulations of full membership.

We must decide whether a union violates Section 8(b)(1)(A) of the Act, 29 U.S.C. § 158(b)(1)(A), by refusing to recognize financial core as a permissible form of union membership and then imposing disciplinary fines on bargaining unit employees who cross a picket line and return to work after notifying the union that they wish to change their status from full to financial core membership.

At issue are two competing policies contained in the Labor Act. One national policy holds that a union functioning as a representative of a group of employees may need both their financial support and some means of controlling dissident elements if is to fulfill most effectively its role as the exclusive representative of the entire group. See Hershey Foods Corp., 207 N.L.R.B. 897, 903 (1973). Another policy is expressed by specific statutory language: "Employees . . . have the right to refrain from any and all . . . activities except to the extent that such right may be affected by an agreement requiring membership in a labor organization as a condition of employment. . . ." 29 U.S.C. § 157. When membership in a union is required as a condition of employment, a tension results if the employee should desire to invoke his Section 7 right to refrain from a concerted activity such as a strike. It is the Union's contention that the employee in such a case must either remain a member of the Union and expose himself to the possibility of union discipline or resign from the Union and subject himself to the loss of his job.

Before us is the application of the Board for enforcement of an order issued on November 30, 1988, against Local 54, Hotel Employees and Restaurant Employees International Union, AFL-CIO. We have jurisdiction under 29 U.S.C. 160(e). The Board certified that its order in the unfair labor practice proceedings is a final order within the meaning of Section 10(e) of the Act. Appeal was timely filed under Rule 4(a), Fed. R. App. P.

The standard of review gives the Board's determinations great deference both as to conclusions of law and findings of fact. The Board's conclusions of law are entitled to respect if based upon a reasonably defensible construction of the Act. NLRB v. United Food & Commercial Wkrs. Local 23, 484 U.S. 112, 108 S. Ct. 413, 421, 98 L. Ed. 2d 429 (1987); Pattern Makers' League v. NLRB, 473 U.S. 95, 100, 87 L. Ed. 2d 68, 105 S. Ct. 3064 (1985). The Board's findings of fact must be sustained if they are supported by substantial evidence on the record considered as a whole. Universal Camera Corp. v. NLRB, 340 U.S. 474, 487-91, 95 L. Ed. 456, 71 S. Ct. 456 (1951); Hunter Douglas, Inc. v. NLRB, 804 F.2d 808, 812-813 (3d Cir. 1986), cert. denied, 481 U.S. 1069, 95 L. Ed. 2d 870, 107 S. Ct. 2461 (1987).


The facts are not in dispute. The Respondent-Union, Local 54, Hotel Employees & Restaurant Employees International Union, AFL-CIO, admits that it rejected appeals by certain members for financial core status before those members refused to honor a strike and returned to work. The Union predicated the rejection on the theory that financial core status is not recognized explicitly in the Union constitution or by-laws. The Union brought internal disciplinary charges against many of the non-striking members and many were fined for having crossed the picket line. The Board challenges each of these actions as violative of Section 8(b)(1)(A) of the Act.

The employer is Elsinore Shore Associates, trading as Atlantis Casino Hotel. It is a New Jersey partnership engaged in the operation of the hotel and casino in Atlantic City, New Jersey, the sole facility involved in this proceeding. The Union represents the employees of the Atlantis Casino Hotel.

The Employer and the Union were parties to a collective-bargaining agreement with a term of September 15, 1983 to September 15, 1988. That agreement included a wage reopener clause. On September 2, 1987, a picket line was established to further the Union's economic demands during the interim negotiations. The unexpired collective-bargaining agreement remained in force throughout the strike. On various dates between September 29, 1987 and February 1, 1988, when the pickets were withdrawn, more than one hundred bargaining unit employees dishonored the picket line and returned to work. Before doing so, each forwarded to the Union the following letter:

I am an employee of Atlantis Casino Hotel in Atlantic City, New Jersey. This letter will serve as notification that I am changing my membership status in Local 54, Hotel Employee and Restaurant Employees (H.E.R.E.) International Union from that of a "full" member to that of a "financial core" member. As a "financial core" member, I will continue to pay to the union all initiation fees and dues uniformly required of all members of maintaining membership. I am not resigning from the union, I am only changing my membership status. I will not, henceforth, be subject ...

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