Playboy Hotel & Casino

National Labor Relations Board - Board Decisions

Sep 30, 1986

281 N.L.R.B. 1181 (N.L.R.B. 1986)

PLAYBOY HOTEL & CASINO 1181
Playboy Elsinor Associates , t/a Playboy Hotel &
Casino and Sports Arena Employees Union
Local 137, a/w Laborers' International Union
of North America , AFL-CIO. Cases 4-CA-
13144 and 4-RC-15038
30 September 1986
DECISION, ORDER, AND DIRECTION
OF SECOND ELECTION
BY CHAIRMAN DOTSON AND MEMBERS
BABSON AND STEPHENS
On 3 June 1983 Administrative Law Judge
Walter H. Maloney Jr. issued the attached decision.
The Respondent, Playboy Elsinor Associates, t/a
Playboy Hotel & Casino (Playboy), filed exceptions
and a supporting brief, and the General Counsel
and Sports Arena Employees Union Local 137
(Local 137) filed answering briefs.
The National Labor Relations Board has delegat-
ed its authority in this proceeding to a three-
member panel.
The Board has considered the decision and the
record in light of the exceptions and briefs and has
decided to affirm the judge 's rulings, findings,' and
conclusions as modified and to adopt the recom-
mended Order as modified.
Playboy excepts to the judge 's conclusion that it
violated Section 8(a)(1)2 of the National Labor Re-
lations Act by granting a wage increase to its
casino dealers on 10 March 1982,3 after the Union
had begun an organizational effort among the deal-
ers. Playboy also excepts to the judge 's conclusion
that it violated Section 8 (a)(1) and engaged in ob-
jectionable conduct by announcing increases in the
health benefits of its nonunion employees on 13
April and by extending health and vacation benefits
to its part-time employees on 3 May. In addition,
Playboy excepts to the judge 's conclusion that it
engaged in objectionable conduct by announcing
on 21 May an additional benefit of making avail-
able to employees certain medical tests at its in-
house medical station . Finally, Playboy excepts to
the judge 's conclusion that the representation elec-
tion conducted among its casino dealers on 8 June,
which the Union lost by a vote of 277 to 240,
should be set aside . 4 We find merit only in Play-
' The Respondent has excepted to some of the judge's credibility find-
ings. The Board 's established policy is not to overrule an administrative
law judge's credibility resolutions unless the clear preponderance of all
the relevant evidence convinces us that they are incorrect . Standard Dry
Wall Products, 91 NLRB 544 (1950), enfd . 188 F 2d 362 (3d Cir. 1951).
We have carefully examined the record and find no basis for reversing
the findings.
$ 29 U.S.C. § 158(axl).
All dates herein are in 1982 unless otherwise indicated.
4 The number of challenged ballots was insufficient to affect the elec-
tion results.
boy's exception to the judge's conclusion regarding
the 3 May memo concerning extension of benefits
to part-time employees.
1.
Playboy opened its hotel and casino in Atlantic
City, New Jersey, in April 1981 and by 1982 em-
ployed about 3200 employees , of whom about 1300
to 1400 were unionized . On 2 April, Local 137
filed a petition with the Board seeking to represent
a unit of Playboy's casino dealers . On 13 April, all
Playboy's nonunion employees received notices
stating that , as of 1 April, Playboy had improved
its health care plan by adding coverage for nursery
charges for newborn children and by eliminating
the $100 deductible for diagnostic testing. The
notice also informed the employees that the health
care plan was being made contributory . The cost
for single employee coverage was to be $1 per
week, and the cost for family coverage was to be
$2 per week . The notice further stated that , begin-
ning with the week of 3 May, health care deduc-
tions would be made from the pay of any employee
who had Prudential health care coverage . Employ-
ees who did not want to continue coverage under
the Prudential plan or who wished to transfer to
the Southshore health plan were to advise Play-
boy's benefits office by 23 April. On 20 April, the
employees were notified that there would be an
open enrollment period over the next 2 weeks for
enrolling in, withdrawing from, or changing enroll-
ment to either the Prudential or the Southshore
plan. On 21 May all casino department employees
received a memo announcing that any employee
needing medical tests, such as blood tests, could
have such tests done at a reduced price at Play-
boy's in-house medical station.
The judge found that Playboy 's improvements in
health benefits announced on 13 April constituted a
violation of Section 8(a)(1) and objectionable con-
duct affecting the 8 June election . He rejected
Playboy 's explanation that the change in benefits
simply resulted from the expiration of its prior
health insurance contract on 31 March and negotia-
tions with the insurer over a new contract. The
judge also found Playboy 's 21 May announcement
of inexpensive in-house medical testing constituted
objectionable conduct affecting the election.
We agree with the judge that Playboy engaged
in objectionable conduct by announcing new and
improved employee health insurance benefits on 13
April and new in-house medical testing on 21 May.
We also agree that the former announcement vio-
lated Section 8(a)(1). Playboy announced the
changes in its health insurance benefits by issuing a
notice from its president that read in part, "It is my
281 NLRB No. 159
1182 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
pleasure to announce that we have improved our
health care planning." The critical period notice
announcing medical testing benefits similarly
stated, "[W]e are pleased to inform you that we are
able to offer an additional benefit to our employees
through our medical unit." Thus, Playboy itself
characterized both changes as improvements and
clearly and specifically held out to the employees
just prior to the election a "velvet glove" by prom-
ising these improvements. See NLRB v. Exchange
Parts Co., 375 U.S. 405, 409 (1964). Additionally,
we rely on the fact that Playboy granted a wage
increase prior to the beginning of the critical
period for the illegal purpose of interfering with
the employees' rights. This unlawful conduct
strongly indicates that the motive behind the an-
nouncement of benefit increases while the election
petition was pending was for the purpose of inter-
fering with employees' free choice. 5
II.
On 3 May, Playboy posted a notice signed by its
president , which was addressed to all part-time em-
ployees and read as follows:
I am pleased to offer each of you the oppor-
tunity to take advantage of Playboy 's Employ-
ee Benefit program.
This will include the Employee Health Plan
which covers you for life, medical , dental and
vision insurances . Health coverage becomes ef-
fective June 1 for all permanent part-time em-
ployees who have been employed at Playboy
for at least 30 days . Please notify the benefits
office before May 28th if you wish to enroll in
our health care plan.
In addition , all permanent part-time employ-
ees with at least 1 year of active service are
now eligible for vacation days . These days
will be prorated based on the amount of your
regular annual wages . So as not to interfere
with our busy summer season , part-time em-
5 Chairman Dotson finds that the General Counsel failed to prove that
Playboy's 13 April change in health benefits violated Sec 8(a)(1). Al-
though Playboy increased its health coverage to include newborn nursery
charges and it eliminated the $100 deductible for diagnostic tests, it also
changed the plan to require employee contributions It is not apparent,
and it was not shown , whether the net result of the health benefit
changes was economically beneficial or detrimental to the employees.
Indeed , it may be that the modest expansions in health coverage were
implemented by Playboy merely to make the change to a contributory
plan less unpalatable Accordingly, Chairman Dotson finds that the Gen-
eral Counsel failed to prove that the changes constituted an improvement
in employee benefits . Thus, he also finds Playboy's 13 April change in
health benefits not to constitute objectionable conduct Chairman Dotson
also finds insufficient evidence to establish that Playboy's program for in-
house medical testing was implemented for the purpose of affecting the
outcome of the election . See his concurring and dissenting opinion in
Adams Super Markets Corp., 274 NLRB 1334 (1985) Accordingly, he
would certify the election results.
ployees will be able to take vacations any time
after September 6, 1982.
By offering these additional benefits to part-
time as well as to our full-time employees, we
encourage the team effort of all employees
that will make Playboy No. 1 in Atlantic City.
Playboy's explanation of the 3 May notice was
that it had never had part-time employees on its
payroll before and that the memorandum was a re-
minder to those initial part-time employees, hired
in late March and added to the payroll in early
April, that they were eligible to sign up for medi-
cal and other benefits. The judge rejected this ex-
planation and concluded instead that in its 3 May
memorandum Playboy extended benefits to part-
time employees for the first time.
In reaching his conclusion, the judge discounted
the testimony of Playboy's vice president, Phifer,
that the decision to employ part-time employees
and to give them health benefits was made in late
March, before the critical period began. In so
doing, the judge relied on credited testimony
which he found established that part-time employ-
ees were employed before the middle of March.
However, the testimony on which the judge relied
is not inconsistent with Phifer's contention. In this
regard, the only testimony about the appearance of
part-time employees, aside from the testimony of
Playboy's witnesses, came from two full-time em-
ployees, Edwards and Adams. Edwards testified
that he knew there were already part-time employ-
ees in March because Playboy's schedule contained
the words "full-time" and "part-time." However,
when Playboy's schedules were produced at the
hearing they showed no part-time employees
scheduled prior to 4 April and the word "part-
time" did not appear on the schedule before that
date. Adams testified that Playboy began "picking-
up part-time help" in March, a statement which is
consistent with Phifer's statement that he told an
interviewer to start interviewing part-time appli-
cants in the middle of March and is also consistent
with the statement of Playboy's casino administra-
tor, Riverso, that he witnessed such interviewing in
the middle of March.
In discounting Phifer's statements, the judge also
relied on his findings concerning Playboy's pur-
chase of a personnel action form. The judge found
that the form was sent to the printer on 3 March
with a notation that part-time employees were not
to receive any benefits. The judge further found
that between 3 March and 31 March a pageproof
of the form was changed to delete the benefit ex-
clusion. However, the evidence of this transaction
does not conflict with Phifer's testimony. The form
PLAYBOY HOTEL & CASINO 1183
sent to the printer on 3 March might have been in-
tended for current part -time employees or it might
have been drafted in anticipation of future part-
time hiring . The record offers no basis on which to
choose between these possibilities . Assuming, ar-
guendo , that Phifer decided to hire and grant bene-
fits of part-time employees in the middle of March,
he might well have told employees working on the
personnel action form of his decision . If he had
done so, it is probable that those employees would
have changed the pageproof of the personnel
action form to eliminate the benefit exclusion
before they submitted it to the printer on 31
March . In short, the events regarding the personnel
form are inconclusive as to whether Playboy em-
ployed part-time employees before March.
Finally, the judge does not note or discuss Ri-
verso's tes ' mony . Riverso , the casino administra-
tor, testifie that during the middle of March he
heard c n tes for part-time positions being inter-
viewed in an -office directly across from his office,
and that those candidates were told by the inter-
viewer, Swing Shift Manager Zappulla , that they
would receive health, ' dental, and vacation benefits.
This testimony, which apparently played no part in
the judge 's deliberations , not only corroborates
Phifer's testimony but provides an independent
basis for concluding that , part-time employees were
actually granted benefits in - March rather than
May.
In view of the foregoing , we find that Playboy
created a new category of employees , part-time
employees, in mid-March and at that time deter-
mined to grant to that new category health and
other benefits . We further find that the 3 May
memorandum was merely a reminder to employees
who began work in the part-time category on or
after 4 April and who previously had been told
about benefits to sign up for health and other bene-
fits . Accordingly, we conclude that Playboy did
not violate Section 8(a)(1) or engage in objection-
able conduct by issuing its 3 May memorandum.
ORDER
The National Labor Relations Board adopts the
recommended Order of the administrative law
judge as modified below and orders that the Re-
spondent , Playboy Elsinor Associates, t/a Playboy
Hotel & Casino , Atlantic City, New Jersey, its offi-
cers,, agents, successors, and assigns , shall take the
action set forth in the Order as modified.
1. Insert the following as paragraph 1(a).
"(a) Granting increases in wages and fringe bene-
fits to , dissuade employees from supporting the
Union."
2. Substitute the attached notice for that of the
administrative law judge.
IT IS FURTHER ORDERED that the election held
on 8 June 1982 in Case 4-RC-15038 be set aside
and the case remanded to the Regional Director
for Region 4 for the purpose of conducting a new
election.
[Direction of Second Election omitted from pub-
lication.]
APPENDIX
NOTICE To EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
The National Labor Relations Board has found
that we violated the National Labor Relations Act
and has ordered us to post and abide by this notice.
Section 7 of the Act gives employees these rights.
To organize
To form, join, or assist any union
To bargain collectively through representa-
tives of their own choice
To act together for other mutual aid or pro-
tection
To choose not to engage in any of these
protected concerted activities.
WE WILL NOT grant increases in 'wages and
fringe benefits to dissuade employees from support-
ing the Union.
WE WILL NOT in any like or related manner
interfere with, restrain, or coerce you in the exer-
cise of the rights guaranteed 'you by Section 7 of
the Act.
PLAYBOY ELSINOR ASSOCIATES, T/A
PLAYBOY HOTEL & CASINO
Henry R. Prota.S Esq., for the General Counsel.
Peter Pantaleo, Esq., and Arthur Kaufman, Esq., of New
York, New York, for the' Respondent.
Robert F. O'Brien, Esq., of Haddonfield, New Jersey, for
the Charging Party.
DECISION
STATEMENT OF THE CASE
WALTER H. MALONEY JR., Administrative Law Judge.
This case came on for hearing before me at Atlantic
City, New Jersey, on an unfair labor practice com-
plaint,1 issued by the Regional Director for Region 4 of
' The principal docket entries in the complaint case are as follows:
Continued
1184 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
the Board that alleges that the Respondent, Playboy El-
sinor Associates, t/a Playboy Hotel & Casino (Play-
boy),2 violated Section 8(a)(1) of the Act. More particu-
larly, the complaint alleges that the Respondent granted
a pay increase to its dealers on March 10, 1982, in order
to dissuade them from supporting the Union's organizing
drive, announced increases in its health benefits on April
10 for the same reason, and extended health and vacation
benefits to part-time employees on May 3 for antiunion
reasons. The Charging Party, which filed a representa-
tion petition on April 2, alleges that the latter two
events, having occurred within the Goodyear period,3
constitute objectionable conduct warranting the setting
aside of the June 8 election. It also complains about new
health benefits that were extended on May 21. The Re-
spondent admits that wage increases and fringe benefit
enlargements were made, as alleged, but contends that
they were prompted solely by business considerations
and constitute neither unfair labor practices nor objec-
tionable conduct. On these contentions the issues herein
were drawn.
1. THE UNFAIR LABOR PRACTICES AND
OBJECTIONABLE CONDUCT ALLEGED
The Respondent is one of nine organizations that oper-
ate gambling casinos in Atlantic City, New Jersey. These
operations are licensed by the New Jersey Casino Con-
trol Commission and are closely supervised by that Com-
mission and by the Attorney General of New Jersey.
The Respondent opened its hotel-casino about April 10,
1981, and now employs about 3200 employees. Some of
its employees are organized and are represented by vari-
ous labor organizations, such as the Culinary Workers,
the Operating Engineers, and other affiliates in the build-
ing trades. Among its unrepresented work force are ap-
proximately 520 casino employees who are engaged in
Charge filed by Sports Arena Employees Umon Local 137, a/w La-
borers' International Union of North America, AFL-CIO (the Union)
against the Respondent on August 17, 1982; complaint issued by Regional
Director for Region 4 against the Respondent on September 30, 1982, the
Respondent's answer filed on October 12, 1982, hearing held in Atlantic
City, New Jersey, on March 17, 1983, briefs filed by the General Coun-
sel, the Charging Party, and the Respondent on or before May 2, 1982
The principal docket entries in the representation case are as follows
Petition filed by the Union on April 2, 1982, seeking an election among
all full-time and regular part-time dealers employed by the employer at
its Atlantic City, New Jersey casino, excluding seasonal employees,
boxmen , floor persons, and the other usual exclusions ; Stipulation for
Certification upon Consent Election approved by Regional Director for
Region 4 on May 3, 1982 , election held on June 8, 1982, in which 240
votes were cast in favor of the Union, 277 were cast against the Union,
and there were insufficient challenges to affect the result of the election,
Report on Objections issued on September 30, 1982, objections to the
conduct of the election filed by the Union on June 15, 1982, order con-
solidating Case 4-RC-15038 with Case 4-CA-13144 issued by Regional
Director for Region 4 on February 18, 1983
2 The Respondent is a partnership that maintains its principal place of
business in Atlantic City, New Jersey , where it is engaged in operating a
hotel and gambling casino During the year preceding the issuance of the
complaint herein , the Respondent derived gross revenues from this oper-
ation which exceeded $500,000 and purchased directly from points and
places located outside the State of New Jersey goods and services valued
in excess of $50,000 Accordingly, it is an employer engaged in com-
merce within the meaning of Sec 2(2), (6), and (7) of the Act The Union
is a labor organization within the meaning of Sec. 2(5) of the Act
3 Goodyear Tire & Rubber Co, 138 NLRB 453 (1962)
such occupations as blackjack dealers, crap shooters, and
operators of other gambling games . These individuals are
licensed by the Casino Control Commission and may not
be employed in these occupations, either by the Re-
spondent or its competitors, without Commission ap-
proval. In addition to whatever fringe benefits that may
be extended to dealers by the respective "properties," as
the casinos often refer to themselves, dealers are com-
pensated by a modest hourly wage that is supplemented
by the "tokes," or tips, which are left by customers of
the gaming operation. "Tokes" are collected by the Re-
spondent, pooled, and then distributed by a "toke" com-
mittee that is elected from the ranks of the casino deal-
ers. "Tokes" are computed on a weekly basis and vary
depending on the business done by the house and the
generosity of its customers. The business of the casinos is
seasonal . The busy season extends from about the middle
of June until Labor Day, although various holiday week-
ends outside that period also provide large revenues.
The Respondent engaged in large scale hiring when it
opened in the spring of 1981. In August 1981, when it
was experiencing financial difficulties, it underwent a
change in management . In late September 1981, on a day
often referred to as "Black Saturday," the new manage-
ment laid off about 240 employees, including 175 casino
dealers. In addition to these layoffs, other cost control
measures and operational changes were implemented to
improve the Respondent's financial picture. At an em-
ployee meeting held in February 1982 by former Casino
Manager Gary McDonald, crap dealer William Edwards
asked McDonald whether dealers were going to get a
raise . Edwards' testimony is uncontradicted that McDon-
ald replied that the Company was doing poorly and was
experiencing a cash flow problem so he did not think
that any raise would be granted, adding that if any raise
was in the offing, it would not take place until June.
Late in February or early in March 1982, the Union
began an organizing drive among the Respondent's
casino dealers. On March 4, it mailed a letter to all Play-
boy dealers to announce the beginning of its effort, en-
closing with the letter authorization cards to be filled out
and returned by interested employees and their friends.
The letter noted that the Union had already gone to an
election at Resorts International, that it had lost that
election, but had filed objections that it felt would be
sustained. The letter went on to recount that the Union
had recently been approached by some dealers at Play-
boy to try to organize that unit. It set forth six specific
criticisms of the Respondent's personnel policies that in
its opinion, were serious grounds for unionization. On
wages, the union letter stated, "The wage structure for
dealers has remained unchanged despite inflation. You
started at $3.50 and there you stay." The Union criti-
cized the absence of pension benefits and profit sharing,
the lack of seniority rights and job security for dealers,
the variable workweeks, and the failure of the Respond-
ent to provide a promised opportunity to work a second
game . The Union assured dealers that things would be
different and better once the Union represented them.
There is undisputed evidence that the Respondent
learned of this letter. Within days after the date con-
PLAYBOY HOTEL & CASINO
tained on the letter, Casino Administrator Peter Riverso
asked blackjack dealer Charles Adams if he had received
the union literature and requested Adams to bring him a
copy . A couple of days later , Adams offered Riverso a
copy but the latter told Adams that he had already ob-
tained one .4 On March 10, Bucky Howard , the Respond-
ent's vice president for casino operations, posted a notice
in the pits, where the dealers work , which read as fol-
lows:
As you know, I have conducted a series of small
group meetings with a great number of Dealers.
While I have not gotten to everyone yet, I assure
you everyone will be scheduled for a meeting and
that the meetings will, as announced , be regularly
scheduled in the future.
Several things have become clear to us as a result
of these meetings . Although the meetings have
pointed out some shortcomings , we felt that the
very fact that we learned of problems as a result of
the meetings shows that the communications we
hoped to establish are working.
One of the big problem areas that has come to
our attention as a result of dealers speaking up is
the most important question of compensation. As a
result of dealer participation , we conducted a wage
survey for dealers in Atlantic City and discovered
that most of the houses in town had already estab-
lished a system for wage increases at certain times
during the year.
Based on the information received in the survey,
we are implementing immediately the following
wage policy for all dealer personnel:
Twenty-five cents per hour increase after 60
days. (For all of you who have been here over 60
days, this will start with the pay period starting
March 15.) An additional twenty-five cent in-
crease after twelve months.
On another issue of compensation , I am really
proud of the fact that we have been able to raise
your tokes to the point where we are now third in
town in the level of tokes. That 's not good enough.
I promise you that we will not stop trying to im-
prove your tokes. Our marketing effort and our
other plans for the casino all keep in mind the
impact on the tokes. You can believe that this is a
top priority.
The wage policy with the raises, coupled with
the tokes, provides you with a compensation pack-
age that compares favorably to any property in
town. Although money is obviously important, the
ability of the employee to speak up and be heard is
also important, that is why we are going to contin-
ue our meetings and that is why we are going to re-
double our effort to listen to what you have to say.
4 Riverso was summoned to the stand by the Respondent and testified
at length . However, he was never asked about these conversations with
Adams and he never denied them.
1185
On March 12, the Union sent a letter to all dealers,
again enclosing authorization cards, and urged them to
sign up , emphasizing that the time to sign up is now. The
letter began:
Congratulations ! Finally after many empty prom-
ises, Playboy management decided to increase your
hourly wage. Do they actually believe that you
have the mentality of a rabbit? No pun intended,
however, isn't it strange that just after Local 137
began its organizing campaign , Playboy announces
wage increases . While Playboy may say that these
changes have been in the planning stages for a long
time, we think that we can take credit for the
modest improvement which has been made.
The letter ended:
Recently a new threat has emerged in Atlantic
City-the part-time employee, who will work cheap
and care nothing for benefits . Don't wait until it is
too late. THE TIME TO ORGANIZE IS NOW!!
This letter brought about a prompt response from the
Respondent . On March 19 , Vice President of Casino Op-
erations Bucky Howard sent the following letter to all
dealers:
We understand that Local 137 has taken credit
for the raise you recently received . We're not sur-
prised . We expected that they would attempt to ex-
ploit the efforts of management to do what it felt
was proper . If we had it to do all over again, we
would still do the exact same thing.
We are aware that Local 137 has been conduct-
ing marathon meetings in an attempt to gain your
support . As we predicted, they have not told the
whole truth. Signing an authorization card does not
merely give the union an idea as to how many of
you sympathize with their efforts to organize. An
authorization card is, in fact , a legally binding docu-
ment . They need that document to show that they
are speaking for you. That is why they are contin-
ually pushing for you to sign it , even going so far as
to invade your privacy by mailing it to your home.
While the union uses the cards for the purpose of
obtaining an election, the fact of the matter is, as
we discussed in our meetings , these cards have
other uses. If you 're not clear about any of the pos-
sible uses of the cards , ask your pit boss or me
about them.
As a dealer, you are unique. We recognize that
fact. The best way to understand your unique con-
cerns and needs as they arise in the daily perform-
ance of your job duties is to work together. Local
137 represents no dealers. Paramutual clerks at race
tracks and construction laborers are a world away
from casino gambling.
We will continue to communicate with you and
provide you with all the facts . When the facts are
revealed we think you will agree with us that sign-
ing a card is not in anybody's best interest.
1186 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
On April 2 , the Union filed a representation petition in
Case 4-RC-15038 . On April 13 , the Respondent posted
and placed in the paychecks of its nonunion employees
the following notice , which was signed by Company
President Arnold Fleischman . It read:
It is my pleasure to announce that we have im-
proved our health care planning beginning April 1,
1982, by adding two new features to our coverage.
Specifically these are:
1. Nursery Charges for Newborn Children
Nursery charges for newborn children will now
be covered as an eligible charge under the mater-
nity plan . Previously these charges had been ex-
cluded from coverage.
2. Diagnostic Testing Without Deductible
Diagnostic tests such as cardiograms, blood tests,
X-rays , etc., ordered by a doctor will now be
paid without the $100 deductible which had been
applied previously.
Our experience has shown that many doctors will
frequently order such tests during office visits to
complete their diagnosis , thereby creating an addi-
tional expense to our employees . A great many of
you have expressed the desire to have these costs
paid directly not subject to the deductible.
In order to offset the costs of these additional bene-
fits, employee participation will be as follows:
Single employee $ 1.00 per week
Family coverage $2.00 per week
New Benefit Booklets are being printed and will be
distributed to all of you as soon as they are avail-
able.
The health care deductions will automatically be
deducted from anyone who now has Prudential
health care coverage, starting with the payroll week
of May 3, 1982 . If you do not wish to continue
under the Prudential Health Care plan or if you
wish to transfer to the Southshore health plan,
please advise the Benefits Office on 3 Mezzanine of
the Tower Building before April 23 . A memo will
be distributed with next week's pay checks giving
you the details of transfer enrollment from Pruden-
tial to Southshore and the payroll deduction amount
for Southshore in 1982.
On April 20, Phifer sent a memo to all nonunion employ-
ees advising them of "open season " for enrolling, with-
drawing , or changing enrollment to either the Prudential
Health Plan or the Southshore Health Plan during the
ensuing 2 weeks. The announcement also set forth the re-
spective weekly employee contributions under both plans
for both single and family coverage.
The original petition filed by the Union simply re-
quested a unit of "all dealers employed at the employer's
gambling casino ." The stipulation , agreed to on April 27
and approved by the Regional Director on May 3, spoke
to a unit of "all full-time and regular part -time dealers
employed by the employer at its Atlantic City, New
Jersey , location ." On May 3 , the Respondent posted an-
other notice addressed to all part-time employees and
signed by Fleischman , which read as follows:
I am pleased to offer each of you the opportunity
to take advantage of Playboy 's Employee Benefit
program.
This will include the Employee Health Plan
which covers you for life , medical , dental, and
vision insurances . Health coverage becomes effec-
tive June 1 for all permanent part-time employees
who have been employed at Playboy for at least 30
days . Please notify the Benefits Office before May
28th if you wish to enroll in our health care plan.
In addition , all permanent part-time employees
with at least 1 year of active service are now eligi-
ble for vacation days . These days will be prorated
based on the amount of your regular annual wages.
So as not to interfere with our busy summer season,
part-time employees will be able to take vacation
any time after September 6, 1982.
By offering these additional benefits to part-time
as well as to our full-time employees, we encourage
the team effort of all our employees that will make
Playboy No . 1 in Atlantic City. [Emphasis in the
original.]
On May 21 , McDonald wrote a memo to all casino de-
partment employees which read as follows:
We are pleased to inform you that we are able to
offer an additional benefit to our employees through
our medical unit.
An employee who is in need of medical testing,
such as blood tests , throat cultures, urinalysis, etc.,
may be able to do so simply by going to the in-
house medical station , located on the second floor
of the tower building, and have the test taken by
the company nurse at the medical station.
We have contracted with a local laboratory to
have a complete line of medical testing done for our
employees at nominal costs . The fees are as much as
60%-70% less than the normal rate charged by hos-
pitals or a physician 's office.
Additionally , any of these tests are now covered
100% by our Prudential Medical Plan, so that there
should be ultimately no cost to employees.
However, blood tests cannot be taken unless or-
dered by a physician . The results of the test must be
returned to that physician.
If there are any questions regarding this new
service , please contact the medical station at Exten-
sion 4015.
On June 8, a representation election was conducted
among the Respondent 's dealers which the Union lost by
a margin of 37 votes out of 517 that were cast.
PLAYBOY HOTEL & CASINO 1187
II. ANALYSIS AND CONCLUSIONS
When an increase in wages or benefits has been con-
ferred on employees during the course of an organizing
campaign, there is prima facie evidence that it was grant-
ed in order to undermine the union's efforts and, as such,
is a violation of Section 8(a)(1) of the Act. NLRB v. Ex-
change Parts Co., 375 U.S. 405 (1964). It is incumbent on
an employer who grants such increases in wages or bene-
fits to demonstrate that they were prompted by some
reason wholly apart from union considerations . Colonial
Knitting Corp., 187 NLRB 980 (1971); Fisher-Haynes
Corp. of Georgia, 262 NLRB 1274 (1982); Chester Valley,
Inc., 251 NLRB 1435 (1980). Conduct that violates Sec-
tion 8(a)(1) of the Act and that occurs between the filing
of the representation petition and the date of the election
normally warrants the setting aside of the election and
the running of a second election . Dal-Tex Optical Co.,
137 NLRB 1782 (1962); Caron International, 246 NLRB
1120 (1979).
With respect to the wage increase to dealers that was
announced on March 10, the Respondent maintains that
it occurred solely as the result of a wage survey of all
Atlantic City casinos that it took on or before February
24 and that showed that the Respondent 's wages lagged
behind what was being paid by the competition . In fact,
Riverso did take a wage survey of what was being paid
to dealers by the other Atlantic City casinos, and it did
show that the Respondent was paying less than most of
the other "properties." However, the fact that a wage
survey has been conducted before a wage increase is
granted does not justify giving the increase during the
pendency of an organizational campaign if other factors
demonstrate that the increase was prompted by a desire
to head off the Union. Frito-Lay, Inc. v. NLRB, 585 F.2d
62 (3d Cir. 1978); Montgomery Ward & Co., 253 NLRB
196 (1980). Such is the case here.
It is always possible for the Respondent to coordinate
any personnel action to coincide with a casino wage
survey because such surveys are and have been made
almost monthly by the casinos in Atlantic City. The Re-
spondent frequently makes such inquiries and its com-
petitors are also continually engaged in the same activity.
All casinos have agreed to cooperate with each other
when any of them decides to make a survey and , in con-
sideration of such cooperation, each casino normally
makes available to the other the results of its findings. In
fact, Anthony Margadonna, who was then the Respond-
ent's benefits manager, was making another wage survey
for his purposes about the same time that Riverso was
making the study on which the Respondent bases the jus-
tification for its March 10 increase.
At the same time the Respondent was making the
survey that it claims prompted the announcement of
March 10, McDonald, the casino manager, was telling
employees not to expect a wage increase because the Re-
spondent was doing poorly and its cash flow was bad. In
response to an employee inquiry, he stated that there
would not be a wage increase at least until June, if at all.
However, a substantial increase was announced just
weeks later . 5 The only intervening factor between
McDonald's bad news in February and Howard's good
news on March 10 was the beginning of the union cam-
paign.
It is clear that the Respondent knew of the campaign
before the March 10 announcement was made . Before
that time Riverso had asked Adams for a copy of the
Union's March 14 letter and 1 or 2 days later, when
Adams offered him one, Riverso replied that he had al-
ready obtained a copy. The wage increase was a direct
answer to one of the specific criticisms contained in the
Union's letter : "The wage structure for dealers has re-
mained unchanged despite inflation . You started at $3.50
and there you stay."
The Respondent can draw no support from an asserted
company policy of longstanding that ostensibly appears
in a handbook of personnel policies . The handbook is not
in evidence but a glimmer of its provisions , which was
found in this record, contains only a vague promise that
employees would be reviewed for possible increases after
1 year's service. It contains nothing definite or automat-
ic, nothing as to amount, and nothing at all about in-
creases after 60 days of service. Any quibble that the
March 10 increase was granted in response to the
Union's incipient campaign can be laid to rest by review-
ing the first paragraph of Howard's letter to dealers,
dated March 19. A few days before this memo, the
Union had sent a letter to dealers claiming credit for the
March 10 increase and Howard responded testily, claim-
ing full political credit for the Company and disparaging
Local 137 as being unfit to represent casino dealers. If
the Respondent was wholly indifferent to union consid-
erations when it granted the increase , it would have been
equally indifferent to the Union' s claim of credit, and
such was emphatically not the case . Accordingly, I con-
clude that, by granting employees a wage increase on
March 10 in order to defeat a union organizing effort,
the Respondent herein violated Section 8(a)(1) of the
Act.
In the following 2 months, the union campaign ma-
tured into a representation petition , a "stip" election
agreement , and a fixed election date . There is no reason
to believe that the new and enlarged health benefits that
the Respondent granted during that period of time pro-
ceeded from any different motives than did the March 10
wage increase . The burden of the Respondent to extri-
cate actions taken between the filing of a petition and the
holding of an election from being prima facie evidence of
illegal activity is just as clear and just as great as its
burden respecting prepetition increases.
Fleischman 's April 13 announcement was directed to
all nonunion employees . It informed them of improve-
ments in the health care plan, made retroactive to April
1, including nursery charges for newborn children and
diagnostic tests without the $100 deductible previously
5 The announced raise contained two parts-a 25-cent-per-hour in-
crease after 60 days and a 25-cent-per-hour increase after 1 year. To
many employees who had worked for the Respondent since the opening
of the casino , this meant a 50-cent-per-hour increase either at one time or
within the same month This was not only the largest increase but the
only increase that any of them had received since they started to work
1188 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
imposed . The Respondent 's contention is that this in-
crease in benefits coincided with its decision to renew
the health insurance policy carried by the Prudential
Life Insurance Company for its 1800-1900 employees
who were not covered by various union plans. Hence,
argues the Respondent, this decision was a matter of
business judgment unrelated to union considerations and
should not be considered either objectionable conduct or
an interference with Section 7 rights. In support of this
contention, the Respondent pointed out that its year-long
contract with Prudential for health insurance coverage
expired on March 31 and, in anticipation of this expira-
tion date, it undertook to solicit bids from other carriers
for health insurance coverage for the following year.
Following a meeting on March 31 between Phifer, Mar-
gadonna, and Vice President for Financial Services Hank
Applegate, the three of them decided to recommend to
Fleischman retaining Prudential as their health insurance
carrier, and by memo, dated April 1, they did so. On
April 2, Fleischman approved their recommendation and,
on April 13, he put a memo with the paycheck of each
nonunion employee (that group included but was not
limited to casino dealers) announcing the Company's de-
cision and the details of new benefits.
The Respondent's explanation fails to explain the
timing of the announcement of new health benefits with
the continued existence of the Southshore Health Plan,
an alternative health insurance program covering at least
some of its employees that is repeatedly mentioned in the
record but which is nowhere accounted for in the Re-
spondent 's rationale. Its explanation also ignores the fact
that the Respondent's decision to stay with Prudential
was not final until Fleischman made it final, and he did
not do so until April 2, the day on which the representa-
tion petition was filed. But most important, the Respond-
ent's argument fails to explain why the announced im-
provement in health benefits had any necessary connec-
tion with the expiration or renewal of the Prudential
policy. Nursery charges and the elimination of the de-
ductible for diagnostic testing were put in the renewed
master policy because the Respondent decided that these
benefits should be accorded to its employees. These ben-
efits could have been given to employees any time the
Respondent wanted to give them, either directly out of
its own pocket (as in the case of certain laboratory tests
referred to in its May 21 memo) or simply by amending
whatever policy was in existence at the time and paying
an additional premium to the carrier . Margadonna testi-
fied that the improvements were made because "there
was some particular call for benefits in three specific
areas ; number one, improved diagnostic testing which
eliminated the deductible; number two, newborn baby
care; and number three, a bona fide prescription plan. At
that meeting [on March 31] we decided we could go
with diagnostic testing and newborn baby care." It was
that meeting and the subsequent approval by Fleischman,
not the expiration or the renewal of a master health
policy, which determined whether and when enlarged
health benefits would be extended to nonunion employ-
ees. The Respondent's decision in that regard could have
been taken at any point in time or postponed until any
point in time. Contacting the carrier and including the
benefit in the new policy was simply a method of imple-
menting the Respondent 's determination . Because this de-
cision took place during the pendency of an organizing
drive, was finalized and announced within the Goodyear
period , and is unexplained by any business exigency or
past practice, I conclude that the extension by the Re-
spondent of improved health benefits , as announced on
April 13, violated Section 8(a)(1) of the Act and is objec-
tionable conduct that warrants the setting aside of the
June 8 election.
The announcement on May 3 by Fleischman to extend
health insurance and vacation benefits to part-time em-
ployees was a direct answer to one of the campaign ar-
guments found in the Union's letter of March 12,
namely, that casino dealers were being threatened by a
new and ominous development in the casino industry in
the person of part-time employees "who care nothing for
benefits." The Respondent's explanation of its May 3
letter is that it had never had part-time employees on its
payroll before and that it had decided back in March,
when it first decided to hire part- timers, to give them the
same health and prorated vacation benefits that it gave to
its full-time employees. Both the timing and the tone of
the May 3 letter belie this explanation.
The tone of the letter, addressed to all part-time em-
ployees, states that "I am pleased to offer each of you
the opportunity to take advantage of Playboy's Employ-
ee Benefit program." It then goes on to explain what
that program consists of, as well as how part -time em-
ployees can go about enrolling in the program. The
letter concludes, "By offering these additional benefits to
part-time as well as our full-time employees, we encour-
age the team effort of all our employees that will make
Playboy No. 1 in Atlantic City." The letter speaks as if
the benefits discussed therein were brand new and had
previously not existed or been explained to employees,
and has about it the distinct ring of campaign propagan-
da, even though telltale words like "union" or "election"
are not to be found in the text. The announcement was
published just after the Respondent and the Union had
struck an agreement to permit part-time employees to
vote in the forthcoming election. With respect to the
health insurance package mentioned therein, it is most
surprising that the Respondent 's earlier announcement to
all employees on April 13 concerning the new health in-
surance plan made no mention at all of extending cover-
age to part-time employees . The April 13 letter con-
tained many specific details as to new benefits, new par-
ticipation costs to employees, the effective date of the
plan, what to do if an employee did not want to continue
under the Prudential Plan, and the details of the transfer
enrollment from the Prudential to the Southshore Plan.
However, not a word can be found in this memo or in
the April 20 followup memo concerning coverage of
part-timers. These omissions speak loudly as to when, in
fact, a decision was made to include part -time employees
in the health program.6
6 As Margadonna explained, it is largely immaterial to Prudential
whether a covered employee is a full-time or a part -time employee In
fact, Prudential does not even know the identity or the work schedule of
Continued
PLAYBOY HOTEL & CASINO 1189
There is credible testimony in the record that suggests
that the Respondent did in fact employ part-time em-
ployees before the middle of March, 1982, when Phifer
testified that he first decided to embark upon this policy.
A personnel action form was prepared and sent to the
printer on March 3, 1982, that contained an entry for
part-time employees, with the added notation that they
were not to receive any benefits. When the pageproof
came back from the printer, the notation excluding bene-
fits was deleted, and the revised form was sent back for
final printing on March 31. Hence, the argument that
part-timers were first given benefits late in March (but
publicly announced for the first time on May 3) because
there were no part-timers before this time cannot with-
stand scrutiny.
It is obvious that benefits were extended to part-timers
on May 3 for the same reason that the other benefits and
increases , discussed above, were granted , namely, as a
campaign ploy. In this instance , the action was taken to
counter the Union's campaign argument that part-timers,
who care nothing for benefits , posed a distinct threat to
the job security of casino dealers, a situation which the
Union, by its organizational drive, purportedly would be
taking steps to correct. Accordingly, by announcing the
extension of health benefits to part-time employees on
May 3 during the pendency of a representation petition,
the Respondent herein violated Section 8(a)(1) of the Act
and engaged in objectionable conduct warranting the set-
ting aside of the election.
The May 21 memo by McDonald to casino dealers,
announcing a new program of laboratory testing through
the in-house medical unit at the casino , is not alleged by
the General Counsel to be a violation of Section 8(a)(1)
of the Act. It is alleged by the Charging Party to be ob-
jectionable conduct warranting the setting aside of the
June 8 election and must be examined in that light. A ra-
tionale for granting this benefit and in granting it 2
weeks before the election was not explained by the Re-
spondent . The free medical testing involved in the an-
nouncement was unrelated to the existence of or employ-
ee coverage by any policy of health insurance and was
contracted for by the Respondent directly with a labora-
tory performing the testing service . Presumably the new
benefit was given to all casino employees , including
those in the dealer bargaining unit and others as well, but
this fact does not immunize the newly announced bene-
fits from the considerations noted above, which govern
the granting of benefits during an election campaign to
members of the bargaining unit involved in a campaign.
Having failed to justify the extension of these benefits on
the grounds of past practice or business necessity, the
Respondent must be found to have granted them with a
view toward influencing the forthcoming vote of its
casino dealers . As such, the announcement of these new
benefits on May 21 constitutes objectionable conduct
warranting the setting aside of the June 8 election.
On the foregoing findings of fact, and on the entire
record herein considered as a whole, I make the follow-
ing
CONCLUSIONS OF LAW
1. The Respondent , Playboy Elsinor Associates, t/a
Playboy Hotel & Casino, is now and at all times material
herein has been engaged in commerce within the mean-
ing of Section 2(2), (6), and (7) of the Act.
2. Sports Arena Employees Union Local 137, a/w La-
borers' International Union of North America, AFL-
CIO is a labor organization within the meaning of Sec-
tion 2(5) of the Act.
3. By announcing and granting a wage increase to its
casino dealer employees about March 10, 1982; by an-
nouncing new and improved health benefits to its em-
ployees about April 13, 1982 ; and by announcing the ex-
tension of health benefits to part -time employees about
May 3, 1982, for the purpose of interfering with the con-
certed protected activities of the employees , the Re-
spondent herein violated Section 8(a)(1) of the Act.
4. By the April 13 and May 3 actions of the Respond-
ent set forth above in Conclusion of Law 3, and by ex-
tending additional health benefits to bargaining unit em-
ployees on May 21, while a representation petition was
pending, the Respondent herein engaged in objectionable
conduct warranting the setting aside of a representation
election which was conducted among its casino dealer
employees on June 8, 1982.
5. The aforesaid unfair labor practices and objection-
able conduct have a close , intimate , and adverse effect
on the free flow of commerce within the meaning of
Section 2(2), (6), and (7) of the Act.
REMEDY
Having found that the Respondent herein has engaged
in certain unfair labor practices and objectionable con-
duct affecting the result of a representation election, I
will recommend that it be required to cease and desist
therefrom and to take certain affirmative actions de-
signed to effectuate the purposes and policies of the Act.
Included in these actions is a recommendation that the
Respondent be required to post the usual notice, advising
its employees of their rights and of the results in this
case.
On these findings of fact and conclusions of law and
on the entire record, I issue the following recommend-
ed7
ORDER
The Respondent, Playboy Elsinor Associates , t/a Play-
boy Hotel & Casino , Atlantic City, New Jersey , its offi-
cers, agents, successors, and assigns, shall
1. Cease and desist from
covered employees Margadonna simply keeps a list of the names of em-
ployees who are covered by the Prudential Plan and remits a monthly
premium check to Prudential based on the number , not the names, of
covered workers . Hence, coverage under the plan can be extended or
withdrawn unilaterally by the Respondent at any time by the simple act
of adding or subtracting names on the master list that it alone keeps.
r If no exceptions are filed as provided by Sec . 102.46 of the Board's
Rules and Regulations, the findings , conclusions, and recommended
Order shall , as provided in Sec . 102.48 of the Rules, be adopted by the
Board and all objections to them shall be deemed waived for all pur-
poses.
1190 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
(a) Granting increases in wages and fringe benefits to
dissuade either full-time or part-time employees from
supporting the Union.
(b) In any like or related manner interfering with, re-
straining , or coercing employees in the exercise of the
rights guaranteed them by Section 7 of the Act.
2. Take the following affirmative action necessary to
effectuate the policies of the Act.
(a) Post at the Respondent 's Atlantic City Hotel and
Casino copies of the attached notice marked "Appen-
dix."8 Copies of the notice, on forms provided by the
Regional Director for Region 4, after being signed by
8 If this Order is enforced by a judgment of a United States court of
appeals, the words in the notice reading "Posted by Order of the Nation-
al Labor Relations Board" shall read "Posted Pursuant to a Judgment of
the United States Court of Appeals Enforcing an Order of the National
Labor Relations Board."
the Respondent 's authorized representative , shall be
posted by the Respondent immediately upon receipt and
maintained for 60 consecutive days in conspicuous places
including all places where notices to employees are cus-
tomarily posted . Reasonable steps shall be taken by the
Respondent to ensure that the notices are not altered, de-
faced, or covered by any other material.
(b) Notify the Regional Director in writing within 20
days from the date of this Order what steps the Re-
spondent has taken to comply.
IT IS FURTHER RECOMMENDED that Case 4-RC-15038
be severed from Case 4-CA-13144, that the election con-
ducted therein be set aside, and that Case 4-RC-15038
be remanded to the Regional Director for Region 4 for
the purpose of conducting another election at such time
as he deems the circumstances will permit the free
choice of a bargaining agent.