Ace Galvanizing, Inc.

National Labor Relations Board - Board Decisions

Mar 27, 1975

217 N.L.R.B. 144 (N.L.R.B. 1975)

144 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Ace Galvanizing, Inc. and James A. Douvier. Case
19-CA-7286
March 27, 1975
DECISION AND ORDER
BY MEMBERS JENKINS, KENNEDY, AND PENELLO
Upon a charge filed August 28 and amended Septem-
ber 30, 1974, by James A. Douvier, an individual, the
General Counsel of the National Labor Relations
Board, by the Regional Director for Region 19, issued
a complaint on October 7, 1974, against Respondent,
Ace Galvanizing, Inc.
The complaint alleged that Respondent violated Sec-
tion 8(a)(1) and 8(a)(5) of the Act' by its refusal to
pay as severance pay wages in lieu of accrued sick leave
which had accrued to employees pursuant to the terms
of an expired labor agreement prior to the date on
which Respondent put into effect its "last and best
offer." Respondent denied the material allegations of
the complaint.
On December 2, 1974, the parties entered into a
Stipulation of Facts for Submission to the Board. By
the terms of the stipulation, the parties agreed to trans-
fer the proceeding to the Board, to waive a hearing
before an Administrative Law Judge and the issuance
by him of a decision and recommended order, and to
submit the case for findings of fact, conclusions of law,
and order directly by the Board based on a record
consisting of the formal papers, stipulation of facts, and
the attached exhibits. On December 10, 1974, the
Board approved the parties' stipulation, and ordered
that the proceeding be transferred to the Board. There-
after, the Respondent and General Counsel filed briefs.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the Na-
tional Labor Relations Board has delegated its au-
thority in this proceeding to a three-member panel.
Upon the basis of the stipulation, including the ex-
hibits, the briefs, and the entire record in this proceed-
ing, the Board makes the following:
FINDINGS OF FACT
I. THE BUSINESS OF THE EMPLOYER
Respondent, Ace Galvanizing, Inc., is a Washington
corporation engaged in the business of galvanizing
metal objects in Seattle, Washington. Respondent, dur-
ing the past 12 months, made out-of-state sales and
purchases each in excess of $50,000. We find the- Re-
1 The complaint originally alleged violations of Sec 8(a)(1), (3), and (5).
By letter dated October 22 , 1974, the Regional Director approved Douvier's
request for withdrawal of the 8 (a)(3) allegation.
spondent is, and at all material times has been, engaged
in commerce within the meaning of Section 2(6) and (7)
of the Act and that it will effectuate the purposes of the
Act to assert jurisdiction herein.
II THE LABOR ORGANIZATION INVOLVED
International Brotherhood of Teamsters, Chauf-
feurs, Warehousemen & Helpers of America, Local
Union No. 174, is, and at all times material herein has
been, a labor organization within the meaning of Sec-
tion 2(5) of the Act.
III THE UNFAIR LABOR PRACTICES
The parties' stipulation shows these facts:
On or about May 1, 1970, Northwest Galvanizing
Company entered into a labor agreement with Inter-
national Brotherhood of Teamsters, Chauffeurs, Ware-
housemen &Helpers of America, Local Union No.
174,3 the duly recognized exclusive bargaining agent
of Northwest's production and maintenance
employees.4 The collective-bargaining contract ex-
pired on April 30, 1973.
In May 1972, Respondent purchased the assets of
Northwest and assumed the obligations and respon-
sibilities of Northwest under the collective-bargaining
contract as a successor employer.
The following provisions included in the May 1970
collective-bargaining contract are relevant to the issue
raised in this proceeding:
ARTICLE XVII
Sick Leave
3. EFFECTIVE May 1, 1972: All regular em-
ployees shall accumulate sick leave pay at the rate
of one (1) day (eight (8) hours) per month.
ARTICLE XVII
7. In the event an employee is discharged or
terminates his employment,all the accumulated
sick leave shall be paid to the employee as sever-
ance pay.
From May 1, 1973, to January 7, 1974, the Respond-
ent and the Union met in several negotiating sessions
and utilized the services of a mediator from the Federal
2 Herein called Northwest
3 Herein called the Union.
4 The collective-bargaining agreement covered the following appropriate
unit
All production and maintenance employees at the Employer 's facility
at 429 South 96th Street, Seattle, Washington , excluding office cleri-
cals, professional employees , guards , and supervisors as defined by the
Act.
217 NLRB No. 33
ACE GALVANIZING, INC. 145
Mediation and Conciliation Service in an attempt to
reach agreement on a new contract. The Union's initial
proposal provided for no change in the sick leave clause
and set forth May 1, 1973, as the effective date for a
new collective-bargaining contract . Respondent's
counterproposal, which would delete article XVII of
the expired contract's sick leave clause, provided, in
pertinent part:
ARTICLE XVII
Sick Leave
1. Sick Leave. Employees shall accumulate forty
(40) hours of sick leave with pay in any one (1)
contract year. Sick leave shall accumulate at the
rate of three and one-third (3-1/3) hours per
month. Sick leave benefits shall be payable com-
mencing the employee's second scheduled work-
ing day of sickness. When an individual is hospi-
talized, benefits shall be payable commencing on
the first day. A doctor's certificate must be pre-
sented to the Company in order to receive sick
leave benefits.
2. Amount of Pay. Payment for sick leave days
shall be for an eight (8) hour clay.
3. Sick Leave Bank. Sick leave allowance shall
be used only for bona fide illness of an employee
on his scheduled work days. Any unused sick
leave shall be accumulated into a sick leave bank
of not more than thirty (30) days. Unused sick
leave shall be accumulated into a sick leave bank
of not more than three hundred (300) hours; said
bank to be used for the future illness of an em-
ployee as his needs may require. Sick leave used
shall be deducted from the accumulated bank.
In addition, Respondent proposed that the effective
date of the new contract occur on the first of the month
following an agreement on a new contract.
During the meeting of January 7, 1974, with the
mediator present, it became apparent to both sides that
an impasse had been reached as to the parties' position
on the sick leave plan. Thereafter, Respondent formally
served notice on the Union of its intention to put into
effect the terms of its counterproposal.' Respondent's
final proposal was put into effect on January 15, 1974.
The only immediate effect of the amendment to the
contract was to reduce the rate at which sick leave was
being accrued by unit employees.
The sick leave provision proposed by Respondent
was essentially identical to that appearing in a large
5 Respondent, by letter dated January 9, 1974, advised the Union of its
final position in the form of a proposed amendment to the expired contract.
The letter indicated that unless the proposed amendment was accepted by
the Union within 5 days, the Company intended to place into effect the
terms of the amendment.
number of contracts which the Union had with other
employers. The Union and Respondent understood
that Respondent's proposed sick leave clause would not
provide for payment of accrued sick leave as severance
pay on an employee 's termination , as did the existing
clause . However , at no time during the negotiations did
either party discuss the question of what effect, if any,
Respondent's proposed revision would have on an em-
ployee's right at termination to draw separation pay in
lieu of sick leave which had accrued either prior to
termination of the old agreement or prior to the effec-
tive date of the new agreement.
On December 21, 1973, seven employees were laid
off for approximately 2 weeks. These employees were
paid their accrued vacation benefits and that portion of
their sick leave which had accrued prior to May 1,
1973. Although the contract was silent on employees'
rights in the case of temporary layoffs, it had been the
past practice of Respondent and its predecessor to treat
temporary layoffs as permanent terminations for vaca-
tion and sick leave purposes.
One of the seven employees contacted a business
representative of the Union in order to obtain severance
pay for the sick leave he had accrued for the period of
May 1 through December 21, 1973. The Respondent
contended that the employee was not entitled to the
pay. The business representative informed the em-
ployee that the Union could not assist him due to pend-
ing bargaining negotiations. The employee filed an un-
fair labor practice charge against Respondent alleging
a violation of Section 8(a)(5) and (1) of the Act in
Respondent's failure to pay accrued sick leave for the
period May 1 through December 21, 1973, to the em-
ployees laid off on the latter date. Respondent volun-
tarily paid the employees and the charge was with-
drawn.
On March 18 , 1974, the unit employees began an
economic strike. Thereafter, Respondent hired perma-
nent replacements for the striking employees, During
the period between April 18 and August 1, 1974, the 15
striking unit employees terminated their employment
with Respondent. Each striking employee was paid his
accrued vacation time but was not paid for his accrued
sick leave.' On July 24, 1974, the Union disclaimed
interest in the unit and withdrew its picket lines.
Douvier and Gar Isharn, two strikers, terminated
their employment on July 25 and August 1, 1974, re-
spectively . The Douvier and Gar Isham terminations
occurred subsequent to the withdrawal of the picket
line, whereas all other terminations occurred prior to
the end of the strike. Gar Isham was subsequently
rehired by Respondent but was not credited with ac-
crued sick leave.
6 Three of the 15 strikers (Ben Howard, Richard White, and Roy Den-
man) had no accrued sick leave as of the commencement of the strike
146 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
There is no disagreement as to the existence of a
bargaining impasse , nor, is it disputed that an employer
may affect unilateral changes in working conditions by
putting into effect its last offer preceding the
impasse.' However, the General Counsel contends
that if such unilateral change is to be valid the terms
of the employer's last proposal must be reasonably
comprehended within its preimpasse proposals, "that
is, after good-faith negotiations have exhausted the
prospects of concluding an agreement , an employer
does not violate the Act by making unilateral changes
that are reasonably comprehended within his pre-
impasse proposals."' The General Counsel argues
that the implications of Respondent's proposal to dis-
continue severance pay in lieu of sick leave were never
discussed during negotiations. Therefore, Respondent's
proposal could not reasonably be comprehended or in-
terpreted by the Union or employees to mean that sev-
erance pay in lieu of sick leave accrued prior to May
1 and during the hiatus period from May 1, 1973, to
January 15, 1974, would be discontinued, especially
since other contract clauses were intended to have a
prospective application.
Stipulated facts show the Union and the Respondent
understood,that the proposal on its face would discon-
tinue severance pay in lieu of sick leave. However, the
proposal offers no explanation as to the time frame for
Respondent's proposal. There was no discussion during
negotiations as to whether Respondent's proposal
would affect sick leave accrued prior to the expiration
of the old contract, May 1, 1973; or whether it would
discontinue sick leave accrued between May 1, 1973,
and January 15, 1974; or whether its effect would only
apply to sick leave accrued after January 15, 1974.
The bargaining history reveals Respondent intended
the proposal to have a prospective, not retroactive, ap-
plication. During the early bargaining sessions the
Union_ proposed that the new contract be made effec-
tive from May 1, 1973, the termination date of the old
contract. The effect of the Union's proposal would have
made contract terms and benefits retroactive , since an
-agreement would not have been reached until after
May, 1, 1973. Respondent rejected this date and
proposed that the effective date be the first of the
month following agreement on a new contract. The
result of Respondent's proposed date would have made
contract terms and benefits effective in futuro. During
another bargaining session the Union offered October
1,' 1973, as an effective contract date. Respondent again
insisted that the first of the month following agreement
be the effective contract date.
7 Taft Broadcasting Co., WDAFAM-FM TV, 163 NLRB 475 (1967),
enfd . sub nom. American Federation of Television and Radio Artists,
AFL-CIO, Kansas Local v. N.LR.B, 395 F 2d 622 (C A D.C, 1968).
8 Supra, 478.
Moreover , according to the Respondent 's notifica-
tion to the Union, the amendment providing for rate
reduction of accrued sick leave from 8 hours per month
to 3-1/3 hours per month was to become effective on
January 15, 1974.9 On January 15, 1974, Respondent
placed its amendment into effect; the only immediate
effect of the amendment was to reduce the rate at which
sick leave was being accrued by unit employees.
Further, after the filing of unfair labor practice
charges Respondent paid employees temporarily laid
off on December 21, 1973, for accrued sick leave from
May i to December 21, 1973, a period after the expira-
tion of the old contract. Thus, it is difficult not to
interpret Respondent's proposal as meaning that until
January 15, 1974, severance pay in lieu of accrued sick
leave would continue.
We find Respondent's argument that the Union was
aware of the impact of Respondent's proposal because
the Union had similar clauses to that proposed by Re-
spondent in other contracts to be without merit.lo
There is no evidence which indicates the Union under-
stood that a retroactive effect was intended for Respon-
dent 's proposal relative to sick leave , while all other
proposals by Respondent were to have only prospective
effect. Therefore we find that Respondent's sick leave
proposal was intended to have prospective effect only,
but that consequently Respondent violated Section
8(a)(5) and (1) by unilaterally applying its postimpasse
proposal , discontinuing severance pay in lieu of ac-
crued sick leave, retroactively.
IV THE REMEDY
Having found that by the aforementioned conduct
Respondent has violated Section 8(a)(5) and (1) of the
Act, we shall order it to cease and desist from engaging
in such conduct in the future and take certain affirma=
tive action designed to effectuate the policies of the Act.
As we have found Respondent's proposal to discon-
tinue severance, pay in lieu of accrued sick leave effec-
tive as of January 15, 1974, did not apply to sick leave
accrued prior to January 15, 1974, we shall order Re-
spondent to reimburse terminated employees for all
accrued sick leave which they had on the books as of
January 15, 1974, with interest at 6 percent in the
manner set forth in Isis Plumbing & Heating Co., 138
NLRB 716 (1962).
9 The Union was aware that January 15, 1974, would act as the amend-
ment's effective date because Respondent's letter of January 9, 1974, to the
Union stated, "The enclosed Amendment is our Company's final position
If the enclosed Amendment is not accepted within five (5) days, we intend
to place into effect the terms of the Amendment."
10 The fact that such clauses appeared in other contracts in no way
indicates that the Union had ever previously encountered the situation in
which this clause would replace language of the sort contained in Respon-
dent's old contract
ACE GALVANIZING, INC. 147
CONCLUSIONS OF LAW
1. Ace Galvanizing, Inc., is an employer engaged in
commerce within the meaning of Section 2(6) and (7)
of the Act.
2. International Brotherhood of Teamsters, Chauf-
feurs, Warehousemen & Helpers of America, Local
Union No. 174, is a labor organization within the
meaning of Section 2(5) of the Act.
.3. At times material herein the Union was the exclu-
sive representative of the employees in the following
described unit for the purposes of collective bargaining
within the meaning of Section 9(a) of the Act:
All production and maintenance employees at the
Employer's facility at 429 South 96th Street, Seattle,
Washington, excluding office clericals, professional
employees, guards, and supervisors as defined by the
Act.
4. By refusing to pay terminated employees sever-
ance pay in lieu of accrued sick leave pursuant to terms
of an expired labor agreement prior to the date Re-
spondent put into effect its final offer, Respondent en-
gaged in unfair labor practices violative of Section
8(a)(5) and (1) of the Act.
5. The aforesaid unfair labor practices are unfair
labor practices affecting commerce within the meaning
of Section 2(6) and (7) of the Act.
rights guaranteed in Section (7) of the Act.
2. Take the following affirmative action designed to
effectuate the policies of the Act:
(a) Upon request, pay terminated employees, pursu-
ant to terms of the expired contract, severance pay for
all sick leave accrued under the expired contract and
during the-period of May 1, 1973, to January 15, 1974.
(b) Post at its place of business located at 429 South
96th Street, Seattle, Washington, copies of the attached
notice marked "Appendix."" Copies of said notice,
on forms provided by the Regional Director for Region
19, after being duly signed by Respondent's representa-
tive, shall be posted by Respondent immediately upon
receipt thereof, and be maintained by it for 60 consecu-
tive days thereafter, in conspicuous places, including all
places where notices to employees are customarily
posted. Reasonable steps shall be taken by Respondent
to insure that said notices are not altered, defaced, or
covered by any other material.
(c) Notify the Regional Director for Region 19, in
writing, within 20 days from the date of this Order,
what steps the Respondent has taken to comply here-
with.
of the National 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."
ORDER
Pursuant to Section 10(c) of the National Labor Re-
lations Act, as amended, the National Labor Relations
Board hereby orders that the Respondent, Ace Galvan-
izing, Inc., Seattle, Washington, its officers, agents,
successors , and assigns , shall:
1. Cease and desist from:
(a) Refusing to pay terminated employees, pursuant
to terms of the expired contract, severance pay in lieu
of sick leave accrued prior to January 15, 1974.
(b) In any like or related manner interfering with,
restraining, or coercing employees in the exercise of
it In the event that this Order is enforced by a Judgment of a United
States Court of Appeals, the words in the notice reading "Posted by Order
APPENDIX
NOTICE To EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
WE WILL pay terminated employees, pursuant to
terms of the expired contract, severance pay for all
sick leave accrued under the expired contract and
during the period of May 1, 1973, to January 15,
1974.
WE WILL NOT in any like or related manner inter-
fere with, restrain, or coerce employees in the ex-
ercise of rights guaranteed in Section (7) of the
Act.
ACE GALVANIZING, INC