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NLRB slaps $1.3 million penalty on Wilshire Plaza

by on
in Employment Law,Human Resources

The Wilshire Plaza Hotel in Los Angeles will pay more than $1.3 million following a National Labor Relations Board (NLRB) ruling that it engaged in unfair labor practices during contract negotiations with a hotel workers union.

In late 2006 and early 2007, Majestic Towers Inc., the company that owns the hotel, and Local 11 of Unite Here, a national union that primarily represents hospitality and food service workers, were in the midst of contentious collective bargaining talks.

Then the hotel suddenly declared that negotiations had reached a bona fide impasse. Majestic Towers used that declaration to unilaterally implement some provisions contained in its most recent contract offer—namely cutting employee wages and changing other employment terms.

Local 11 countered by filing unfair labor practice charges against the hotel. Following a preliminary review of the dispute, an NLRB regional director filed a formal complaint against Majestic Towers.

In February 2008, the U.S. District Court for the Central District of California issued a preliminary injunction under the National Labor Relations Act (NLRA) requiring Majestic Towers to refrain from further unfair labor practices and to rescind the unilateral changes.

An administrative law judge found that the hotel had engaged in “extensive and pervasive” unlawful acts—even before the hotel had declared an impasse—that made it “practically impossible” for the parties to arrive at a good-faith bargaining impasse that could have excused the hotel’s unilateral changes. The NLRB was equally harsh, finding in September 2008 that the hotel had committed serious violations of the NLRA that precluded it from contending that negotiations were at a bona fide impasse justifying its unilateral action.

More than four years after the dispute began, Majestic Towers has now agreed to pay $665,092 to 106 individuals and to reimburse $669,870 to the union.

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