Co-Op City, 255 (2004)

Docket Number:02-CA-32617

Riverbay Corporation, d/b/a Co-Op City and Co-Op City Police Benevolent Association. Case 2-CA- 32617

February 24, 2004



On June 28, 2002, Administrative Law Judge Michael

A. Marcionese issued the attached decision. The General Counsel filed exceptions and a supporting brief, the Respondent filed cross-exceptions and a brief in support of its cross-exceptions and in answer to the exceptions of the General Counsel. The General Counsel filed an answering brief.

The National Labor Relations Board has delegated 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 and to adopt the recommended Order.

The Issue

The principal issue before the Board is whether the judge correctly found that the Respondent did not violate Section 8(a)(1) by maintaining a rule that prohibited employees from participating in the election of the members of the Respondent's board of directors. Contrary to our dissenting colleague, we agree with the judge's dismissal of this complaint allegation.

Factual Summary

The facts are fully set forth in the judge's decision. In brief, the Union in this case, the Co-op City Police Benevolent Association, represents the armed and unarmed security officers and lobby guards employed in the Respondent's department of public safety. There are approximately 95 to 110 employees in the unit.

The Respondent, a limited profit housing company organized under the laws of New York State, owns, maintains, and operates a middle-income cooperative housing development in the Bronx, New York, known as Co-op City. Co-op City consists of 15,372 apartments in 35 high-rise buildings and 8 clusters of 3-story townhouse buildings, 3 shopping centers, and 8 parking garages on a 330-acre site. The Respondent is owned by shareholders or "cooperators," who own and reside in the apartment units.

The Respondent is governed by a 15-member board of directors who hire a general manager to run the complex on a day-to-day basis. At all times material to this case, the general manager was Marion Scott Real Estate, Inc.

(Marion Scott), with Kenneth Silverman, a Marion Scott employee, serving as the executive general manager.

State regulations governing entities like the Respondent, the Respondent's bylaws, and its management contract with Marion Scott establish that the board of directors has no direct control over unit employees' terms and conditions of employment. Rather, Respondent's board of directors functions much like the directors of any corporation, i.e., they set corporate policy, look out for the interests of stockholders, and delegate day-to-day management of the business to professionals hired for that purpose. The regulations of the New York State Division of Housing and Community Renewal, chapter IV, section 1725-3.3 specifically codify that State's public policy against interference by a co-op's board "with the day-to-day management and operation of a project or with its employees." Thus, here, Marion Scott had full responsibility for hiring, discipline, and termination of employees. The board had also delegated to Marion Scott full responsibility for negotiating and administering collective-bargaining agreements with the various labor organizations representing Respondent's employees.1 In addition, Marion Scott had final authority over the settlement of grievances with employees and their unions.

Of the 15 members on the Respondent's board of directors, 5 new members are elected each year by the shareholders/cooperators to serve 3-year terms. Elections are conducted by secret ballot and only resident shareholders may vote for and serve as directors. Elections are held in May and are usually preceded by a 1-2 month campaign.

The Respondent has maintained a rule restricting employee participation in board of director elections since early 1999. It reads as follows:

Employees living in Co-op City are encouraged to individually exercise their rights as residents of the community during the Board of Directors election. They shall refrain, however, from engaging in any activity, such as organizing other employees, that might be construed as an attempt to use their position for the purpose of influencing the outcome of the election. All employee groups and organizations are prohibited from participating either directly or indirectly in the electoral process. They may not raise funds, give donations, encourage their members to give donations, issue endorsements, distribute campaign material, or engage in any other activity that may reasonably be expected to benefit a particular candidate or group of candidates. Non-resident employees may not participate in the

1 The board's role is limited to voting on ratification of the contract negotiated by Marion Scott.


electoral process in any manner except where otherwise specified as part of their normal job duties. Candidates who encourage, accept, or knowingly benefit from such participation are subject to disqualification by the Committee.

The Respondent revoked this rule in the spring of 2000 and replaced it with the following rule, which was still in effect at the time of the hearing:

The election of the Board of Directors is a right of residents in Co-op City. Employees living in Co-op City are encouraged to exercise their rights as residents of the community during the Board of Directors election within the scope of this policy. All Riverbay employees are reminded that as employees they have a duty of loyalty to Riverbay and should not engage in any activity which raises the appearance of impropriety. Participation in the electoral process must not interfere with employees' work duties. All employees shall refrain from engaging in any activity which might be construed as an attempt to abuse their positions as employees for the purpose of influencing the outcome of the election. Examples of acts that may be deemed an abuse of employee position include: soliciting donations for particular candidate(s), distributing campaign material for or against particular candidate(s), or engaging in any other activity which may reasonably be construed as an abuse of position.

Nonresident employees and employee groups and organizations are prohibited from participation in the electoral process.

Candidates who encourage, accept, or knowingly benefit from such prohibited participation are subject to disqualification by the Committee.

This policy does not affect employees' right to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection or their right to refrain from any or all such activities.

The judge implicitly found, and for the purposes of this decision we can agree, that there is no material distinction between these rules.2 Both rules differentiate between employees who are residents and those who are not. Employees who are residents have the right to participate individually in the election process. Employees who are not residents, on the other hand, have no such

2 Arguably, the 1999 and 2000 rules differ in that the former explicitly distinguishes between individual and group participation in co-op board elections while the latter does not. Because the parties have not litigated this case on that basis, we assume, arguendo, that the second rule, like the first, is aimed at concerted activity.

right. In sum, the rules, on their face, only prohibit employees from using their positions as employees to affect the outcome of the election of a member of the Respondent's board of directors.

Nevertheless, the General Counsel contends that the Respondent violated Section 8(a)(1) of the Act merely by maintaining these rules. In an attempt to show some nexus between the election of a member of the Respondent's board of directors and the Section 7 rights of employees, the General Counsel adduced evidence at the hearing concerning the following two matters.

1. The lobby attendant program

Iris Baez was one of the candidates in the 1999 board of directors election. As part of her candidacy, Baez championed a proposal to create a new position of lobby attendant. The judge found that a lobby attendant position arguably would impact the employees represented by the Union because the money budgeted to pay the wages and benefits of the new employees could reduce funds available to compensate existing employees. In addition, duties assigned to the lobby attendants could reduce the role of the existing security force.

Baez won the election and was thereafter selected by the other directors to serve as the Respondent's president. In 2001, the lobby attendant program that Baez advocated was implemented.3

2. The discharge of Joseph Pizzano

The judge found that Baez "played a significant role" in the Respondent's decision to terminate Joseph Pizzano, a public safety officer and resident shareholder. Pizzano was a member of the Union and in 1999 served as its president. Pizzano and the Union opposed Baez' candidacy for the board of directors because of her support for the lobby attendant position.

In his capacity only as a resident shareholder, Pizzano produced and distributed a two-page flyer entitled, "An Unsolicited Opinion from Alcott Place."4 The flyer was critical of the candidacy of Baez and her position on several issues, including the lobby attendant program. Pizzano placed his name and address on the flyer, but made no mention of his employment or union status.

After her election, Baez initiated a complaint against Pizzano based on his preparation of the flyer. Pizzano was ultimately discharged in November 1999, under the first of the rules quoted above. Although the unfair labor practice charge originally alleged that Pizzano was terminated in violation of Section...

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