Admiral Merchants Motor Freight, Inc.

National Labor Relations Board - Board Decisions

Oct 19, 1982

265 N.L.R.B. 134 (N.L.R.B. 1982)

DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Admiral Merchants Motor Freight, Inc. and Auto-
mobile Mechanics Local 701, International As-
sociation of Machinists and Aerospace Workers,
AFL-CIO. Case 13-CA-20679
October 19, 1982
DECISION AND ORDER
BY MEMBERS FANNING, JENKINS, AND
ZIMMERMAN
On March 10, 1982, Administrative Law Judge
Robert A. Giannasi issued the attached Decision in
this proceeding. Thereafter, Respondent filed ex-
ceptions and a supporting brief,' and the General
Counsel filed an answering brief, cross-exceptions,
and a brief in support thereof.
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.
The Board has considered the record and the at-
tached Decision in light of the exceptions and
briefs and has decided to affirm the rulings, find-
ings, and conclusions of the Administrative Law
Judge, as modified below, and to adopt his recom-
mended Order, as modified herein.
The Administrative Law Judge found that Re-
spondent violated Section 8(a)(5) and (1) of the Act
by circumventing the exclusive status of the Union
as bargaining agent by attempting to deal, and deal-
ing, directly with its represented employees regard-
ing changes in their terms and conditions of em-
ployment as set forth in the parties' collective-bar-
gaining agreement, and by unilaterally implement-
ing such changes without first notifying or bargain-
ing with the Union. The Administrative Law
Judge found Respondent's defenses for such con-
duct to be "patently frivolous," and, in addition to
the Board's traditional order requiring Respondent
to cease and desist from any like or related con-
duct, recommended that Respondent be ordered to,
inter alia, reimburse the General Counsel and the
Chlarging Party for all expenses incurred as a result
of the instant proceeding. Respondent excepts to
the Administrative Law Judge's finding that its
direct dealing with employees and unilateral
changes are unlawful, reiterates its asserted de-
fenses, and contends that the extreme remedial
relief recommended by the Administrative Law
Judge is unwarranted in this case. The General
Counsel, on the other hand, urges the Board to
adopt the Administrative Law Judge's 8(a)(5) and
(1) violation findings and his recommended Order
I Respondent has requested oral argument. This request is hereby
denied as the record, the exceptions, and the briefs adequately present the
issues and the positions of the parties.
265 NLRB No. 16
with respect thereto. The General Counsel con-
tends, however, that the Administrative Law Judge
erroneously refused to pass upon two asserted inde-
pendent violations of Section 8(a)(1) of the Act oc-
curring during the course of Respondent's direct
dealings with its employees. While we are in agree-
ment with the Administrative Law Judge, and, for
the reasons set forth by him, find that Respondent
violated Section 8(a)(5) and (1) of the Act, we do
not find the recommended extraordinary relief ap-
propriate on the facts of this case. Additionally, we
find, for the reasons set forth below, that the sepa-
rate 8(a)(1) violations sought by the General Coun-
sel warrant independent consideration and remedial
relief.
1. The employees at Respondent's terminal are
represented for purposes of collective bargaining
by the Union. The parties' most recent collective-
bargaining agreement is effective through April 20,
1982. On August 29, 1980, Respondent's president
and owner, Robert E. Short, in a speech to the as-
sembled Chicago terminal employees, stated that
Respondent was having economic difficulties; that
Respondent had been ordered by a district court in
Minnesota to make certain payments to pension
and health and welfare funds created pursuant to
agreements between Respondent and the Teamsters
Union representing Respondent's St. Paul terminal
employees; and that a "debt reduction plan" had
been devised whereby the employees at the St.
Paul terminal had given up some of their benefits
in order to help Respondent out of its financial dif-
ficulties and pay its obligations. Short asked the
Chicago employees to similarly forgo some of their
benefits and stated that, if the employees did not
agree to participate in the debt reduction plan, Re-
spondent would not be able to operate and would
probably close. Thereafter, Shop Foreman and
Maintenance Supervisor Earl Berg2 distributed let-
ters from Respondent to all unit employees seeking
their written authorization for certain enumerated
reductions in their contractually established com-
pensation and benefits for a designated 12-month
period. Berg explained the debt reduction plan to
all employees who had not attended the meeting,
including John Plaza, who was on layoff status at
the time. Berg called Plaza into the terminal, pre-
sented him with a letter describing the debt reduc-
tion plan, and told him to sign it. Berg said that all
of the other employees had signed similar letters,
and, according to Plaza's uncontradicted testimony,
2 The uncontradicted evidence establishes that Berg gave the mechan-
ics in the shop their work assignments on a day-to-day basis, and had the
authority to hire and fire employees, reprimand them for misconduct, and
grant them time off. We therefore find Berg to be a supervisor within the
meaning of Sec. 2(11) of the Act.
134
ADMIRAL MERCHANTS MOTOR FREIGHT, INC.
said "if I did not sign it I don't go back to work."
Plaza signed the letter and about 2 weeks later was
recalled. 3
The Administrative Law Judge refused to pass
upon whether Short's statements about closure and
Berg's remarks to employee Plaza constituted inde-
pendent violations of Section 8(a)(1) of the Act be-
cause, as urged by the General Counsel, they
would have a tendency to coerce employees into
forgoing collective-bargaining rights. The Adminis-
trative Law Judge reasoned that there were no
such allegations in the complaint that any potential
violation in this regard is encompassed by the de-
rivative 8(a)(1) violation found by him and that an
independent 8(a)(1) violation finding would not
likely significantly alter the remedy. We disagree.
While the Administrative Law Judge is correct
in stating that the statements of Short and Berg
were not specifically alleged as independent viola-
tions of Section 8(a)(l) in either the complaint or
the amended complaint, these issues were fully liti-
gated at the hearing and are in accord with, and
closely related to, the substance of the complaint.
Further, at the close of the hearing, counsel for the
General Counsel made an oral presentation during
which he argued that Short's statements in question
and Berg's remarks independently violated Section
8(a)(l) of the Act. Accordingly, in these circum-
stances, we find no basis for concluding that Re-
spondent would in any way be prejudiced by a
ruling on the merits of these additional allegations. 4
As to the merits, we find that Short's prediction
of plant closure if employees did not accede to the
debt reduction plan and Berg's suggestion that
Plaza's recall would be predicated on his waiver of
existing contractual benefits constitute threats of
reprisal and therefore conduct which would have a
tendency to coerce employees into abandoning
their Section 7 right to bargain collectively
through a representative of their own choosing.
The statements of Short and Berg conveyed the
clear message to the employees that failure to
accede to Respondent's request to waive their con-
tractually established benefits would result in the
loss of their jobs, in the case of the employees then
working, through closure of the terminal, and, in
Plaza's case, by not being recalled from layoff. In
3 We take administrative notice of the fact that concurrent unfair labor
practice charges were filed against Respondent alleging that it had un-
lawfully engaged in direct dealings with union-represented employees at
its Omaha, Nebraska, facility; sought their acquiescence in the above-
mentioned plan agreed to by the St. Paul employees; and pressured the
Omaha employees by various means, including layoffs, until they agreed
to modifications in their existing benefits.
4 E.g., Electri-Flex Company, 228 NLRB 847, fn. 6 (1977); Clinton Corn
Processing Company, a Division of Standard Brands Incorporated, 253
NLRB 622, fn. 1 (1980). Behring International. Inc., 252 NLRB 354, 363
(1980); Pilgrim Life Insurance Company, 249 NLRB 1228, fn. 1 (1980).
the context of the employment relationship, few
statements would tend to be more threatening and
thus coercive than these. Indeed, the employees'
subsequent accession to the request evidences as
much. Accordingly, we find that Respondent vio-
lated Section 8(a)(1) of the Act by such state-
ments. 5
In so finding, we reject the Administrative Law
Judge's conclusion that the 8(a)(5) and derivative
8(a)(1) violations found by him and his recom-
mended remedy for those violations are sufficient
to reach and remedy any independent violations
which might be found based on Short's and Berg's
statements. The coercive statements in question are
not a necessary element of the unlawful bargaining
conduct of Respondent. Thus, Respondent could
have omitted these statements from its conduct in
bypassing the Union as the employees' representa-
tive, and it still would have violated Section 8(a)(5)
and (1) of the Act. That the statements were in-
tended to further such conduct and help Respond-
ent to achieve the desired end of having the em-
ployees agree to a reduction in benefits does not
detract from this conclusion. The statements are no
less coercive or incapable of being sorted out from
Respondent's other unlawful conduct merely be-
cause they were part of Respondent's derogation of
the Union's statutory bargaining rights.
Further, the traditional remedy for Respondent's
failure to bargain with the Union will not enjoin
Respondent from coercively threatening its em-
ployees, the nub of the independent 8(a)(1) viola-
tions found herein. Accordingly, in order to ade-
quately remedy the additional unfair labor prac-
tices, we find it appropriate and necessary to spe-
cifically order Respondent to cease and desist from
threatening employees with plant closure and
denial of recall from layoff status unless they indi-
See Don Brentner Trucking Co., Inc. and Jon's Leasing Co., Inc., 232
NLRB 428, 434 (1977).
Member Fanning does not agree that Respondent's statement that it
would close down absent modifications of its contract constituted an in-
dependent violation of Sec. 8(aXl). Rather, such statement was illegal
only as a function of Respondent's attempts to bypass the Union and deal
directly with employees. Had the statement been made to the Union in
bargaining and not directly to the employees, it would not have been il-
legal. Member Fanning does agree, however, that the statement to Plaza
did constitute a threat of reprisal in that Plaza was told that he would not
be recalled unless he personally agreed to the proposed contractual modi-
fications. Plaza had a Sec. 7 right to oppose contract modifications and
his employment rights could not be conditioned upon his personal deci-
sion.
Members Jenkins and Zimmerman find it irrelevant that the statement
if made to the Union alone would not be illegal. The illegality turns on
the context in which the statement was uttered. Here, it was said to em-
ployees in an attempt to get their approval of contractual modifications
without the participation of the Union, and in derogation of the latter's
status as bargaining representative. As such, it clearly was coercive and
tended to interfere with and restrain the employees in the exercise of
their Sec. 7 rights.
135
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
vidually agree to modifications of their existing
contractual benefits.
2. Respondent asserted before the Administrative
Law Judge, as reiterated in its brief to the Board,
that its direct dealings with employees and its uni-
lateral implementation of benefit changes were
compelled by the above-discussed district court
order to pay off its debts to the Teamsters benefit
funds and its dire economic straits. We agree with
the Administrative Law Judge's analysis which led
him to conclude, as do we, that Respondent's de-
fenses have no basis for support in either fact or
law. We find, however, that the extraordinary rem-
edies recommended by the Administrative Law
Judge are not appropriate on the facts of this case.
At the outset we note our adherence to the prin-
ciple expressed in Tiidee Products, Inc, 6 that the
Board, in appropriate circumstances, is capable of
providing other than the usual remedial relief in
order to rectify particular unfair labor practices.
However, the extent and character of the unfair
labor practices committed by Respondent do not
warrant directing Respondent to reimburse the
General Counsel and the Charging Party for ex-
penses incurred as a result of litigating this pro-
ceeding. This record establishes that Respondent
has a history of a collective-bargaining relationship
with at least two different unions, yet there is noth-
ing to indicate that Respondent is a repeat offender
of this statute. Nor can it be found on this record
that Respondent has engaged in a pattern of unlaw-
ful antiunion conduct for the purpose of denying
all of its employees the exercise of the rights guar-
anteed employees by Section 7 of the Act.7 And,
while Respondent's proffered justifications for its
conduct may be specious, this is not a situation
where the offending party has intentionally used
defenses meritless on their face in a clear attempt
to burden the processes of the Board and the
courts.8 In sum, we find 8(a)(5) and (1) violations
with an order requiring Respondent to cease and
desist from bypassing, and refusing to bargain with,
the Union, but shall delete in our Order and notice
the extraordinary relief recommended by the Ad-
ministrative Law Judge.
6 194 NLRB 1234, 1236 (1972).
7 See Heck's, Inc., 191 NLRB 886 (1971). Compare J P. Stevens d Co.,
Inc., 239 NLRB 738, 772-773 (1978), enforcement denied in pertinent
part 623 F.2d 322 (4th Cir. 1980), cert. denied 101 S.Ct. 856, 90 LC
112,552 (1981).
While Respondent unilaterally implemented benefit changes in reliance
upon the debt reduction plan at more than one of its facilities, such action
does not amount to the same pattern of obstruction of employees' Sec. 7
rights exhibited by employers in cases where extraordinary remedies have
been imposed. Accordingly, we do not find that Respondent has dis-
played the requisite defiance of the Act which is necessary to warrant
such remedies.
8 Fetzer Broadcasting Company, 227 NLRB 1377, 1389-90 (1977).
AMENDED CONCLUSIONS OF LAW
Insert the following as paragraph 4 and renum-
ber the subsequent paragraph accordingly:
"4. By threatening employees with closing the
Chicago terminal unless they agreed to modifica-
tions of existing contractual benefits and by threat-
ening not to recall an employee from layoff unless
he agreed to modifications of existing contractual
benefits, Respondent violated Section 8(a)(1) of the
Act."
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor Re-
lations Board adopts as its Order the recommended
Order of the Administrative Law Judge, as modi-
fied below, and hereby orders that the Respondent,
Admiral Merchants Motor Freight, Inc., Chicago,
Illinois, its officers, agents, successors, and assigns,
shall take the action set forth in the said recom-
mended Order, as so modified:
1. Insert the following as paragraph l(d) and re-
letter the subsequent paragraph accordingly:
"(d) Threatening employees with closure of the
Chicago terminal unless they agree to modifica-
tions of existing contractual benefits and threaten-
ing not to recall employees from layoff unless they
agree to modifications of existing contractual bene-
fits."
2. Substitute the following for paragraphs 2(e)
and (f):
"(e) Preserve and, upon request, make available
to the Board or its agents, for examination and
copying, all payroll records, social security pay-
ment records, timecards, personnel records and re-
ports, and all other records necessary to analyze
the amount of backpay due under the terms of this
Order.
"(f) Post at its Chicago, Illinois, facility copies of
the attached notice marked 'Appendix.'4 Copies of
said notice, on forms provided by the Regional Di-
rector for Region 13, after being duly signed by
Respondent's authorized representative, shall be
posted by Respondent immediately upon receipt
thereof, and be maintained by it for 60 consecutive
days thereafter, in conspicuous places, including all
places where notices to employees are customarily
posted. Reasonable steps shall be taken by Re-
spondent to insure that said notices are not altered,
defaced, or covered by any other material."
3. Substitute the attached notice for that of the
Administrative Law Judge.
136
ADMIRAL MERCHANTS MOTOR FREIGHT, INC.
APPENDIX
NOTICE To EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
After a hearing at which all sides had an opportu-
nity to present evidence and state their positions,
the National Labor Relations Board found that we
have violated the National Labor Relations Act, as
amended, and has ordered us to post this notice.
WE WILL NOT refuse to bargain collectively
concerning wages, benefits, hours, and other
terms and conditions of employment with
Automobile Mechanics Local 701, Internation-
al Association of Machinists and Aerospace
Workers, AFL-CIO, as the exclusive bargain-
ing representative of the employees in the fol-
lowing unit:
All head mechanics, leadmen and/or fore-
men, automotive machinists, mechanics,
trailer mechanics, helpers, skilled tiremen,
stockmen, journeymen, stockroom utility ap-
prentices and apprentices employed by us at
our facility currently located at 5504 West
47th Street, Chicago, Illinois, but excluding
all other employees and guards and supervi-
sors as defined in the Act.
WE WILL NOT bypass the Union and deal di-
rectly and individually with any of our em-
ployees in the aforesaid unit with respect to
any changes or modifications in existing or
contractually established wages, benefits,
hours, and other terms and conditions of em-
ployment.
WE WILL NOT refuse to bargain collectively
with the above labor organization by unilater-
ally and without consultation with, or prior
notification to, such labor organization, chang-
ing or modifying existing or contractually es-
tablished wages, benefits, hours, and other
terms and conditions of employment of em-
ployees in the aforesaid unit.
WE WILL NOT threaten employees that we
will close the Chicago terminal unless they
agree to modifications of existing contractual
benefits.
WE WILL NOT threaten employees that we
will not recall them from layoff unless they
agree to modifications of existing contractual
benefits.
WE WILL NOT in any like or related manner
interfere with, restrain, or coerce employees in
the exercise of the rights guaranteed them by
Section 7 of the Act.
WE WILL, upon request, bargain collectively
with the Union as the exclusive bargaining
representative of our employees in the appro-
priate unit with respect to wages, hours, and
other terms and conditions of employment.
WE WILL notify, meet, and bargain with the
Union before modifying, changing or eliminat-
ing any existing or contractual benefits of em-
ployees in the appropriate unit.
WE WILL reinstate the contractual benefits
of employees in the appropriate unit in the
manner, form, and amounts which existed
prior to September 1, 1980, consistent with the
collective-bargaining agreement between us
and the Union.
WE WILL make whole employees for any
loss of wages and other benefits they may
have suffered as a result of the unlawful modi-
fication of contractual benefits to which they
were entitled, with interest.
ADMIRAL MERCHANTS MOTOR
FREIGHT, INC.
DECISION
STATEMENT OF THE CASE
ROBERT A. GIANNASI, Administrative Law Judge:
This case was heard on September 3, 1981, in Chicago,
Illinois. The complaint alleges that Respondent violated
Section 8(a)(5) and (1) of the Act by failing to notify and
bargain with the Charging Party Union and dealing di-
rectly with employees in modifying existing benefits set
forth in a collective-bargaining agreement of the parties.
Respondent, in its answer, denies the substantive allega-
tions of the complaint. The General Counsel made an
oral presentation at the conclusion of the hearing and
Respondent thereafter filed a written brief.
Based upon the entire record in this case, including the
testimony of the witnesses and my observation of their
demeanor, I make the following:
FINDINGS OF FACT
I. THE BUSINESS OF RESPONDENT
At all times material, Respondent, a Minnesota corpo-
ration, was engaged in the business of interstate trucking.
It maintained its principal office in St. Paul, Minnesota,
and maintained terminals in about nine States, including
one located at 5504 West 47th Street in Chicago, Illinois,
the site of the instant dispute. During a representative 1-
year period, Respondent derived gross revenues in excess
of $50,000 from the transportation of freight and com-
modities from the State of Illinois directly to points out-
side Illinois and performed services valued in excess of
$50,000 which were performed outside of Illinois. Ac-
cordingly, I find, as Respondent admits, that it is an em-
ployer engaged in commerce within the meaning of Sec-
tion 2(2), (6), and (7) of the Act.
137
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
11. THE LABOR ORGANIZATION
The Charging Party Union (hereafter the Union) is a
labor organization within the meaning of Section 2(5) of
the Act.
111. THE UNFAIR LABOR PRACTICES
A. The Facts
Since about 1955, Respondent and the Union have
been parties to successive collective-bargaining agree-
ments, the most recent of which is effective through
April 30, 1982. Respondent recognizes the Union as the
exclusive bargaining representative for the following unit
of employees:
All head mechanics, leadmen and/or foremen,
automotive machinists, mechanics, trailer mechan-
ics, helpers, skilled tiremen, stockmen, journeymen,
stockroom utility apprentices and apprentices em-
ployed by Respondent at its facility currently locat-
ed at 5504 West 47th Street, Chicago, Illinois, but
excluding all other employees and guards and su-
pervisors as defined in the Act.
The bargaining agreement of the parties is a typical one
which covers a wide range of benefits, wages, hours, and
terms and conditions of employment.
On August 29, 1980, Robert E. Short, the president
and owner of Respondent, visited the Chicago terminal
and gave a speech to assembled employees. No repre-
sentatives of the Union were present. Short told the em-
ployees that Respondent was having economic difficul-
ties. He also explained that a Federal district court in
Minnesota had ordered Respondent to make.certain pay-
ments it owed to pension and welfare funds created pur-
suant to agreements between Respondent and the Team-
sters representing other of its employees. He explained
that a so-called debt reduction plan had been devised
whereby employees at the St. Paul terminal had given up
some of their benefits in order to help Respondent pay
its obligations and help it out of its financial difficulties.
He asked the Chicago employees similarly to forgo some
of their benefits and stated that if the employees did not
agree to this debt reduction plan, Respondent would not
be able to operate and would probably close.
After the speech, letters describing Respondent's debt
reduction plan were distributed to employees. The letter
written by Respondent was to be signed by employees
who agreed to "changes in [their] terms of compensation
.... " The letters read as follows:
As a concerned . . . employee of Admiral Mer-
chants Motor Freight, Inc., who is interested in the
continuing operation of the trucking company, I
hereby offer that you make the following changes
in my compensation during the twelve (12) month
period beginning September 1, 1980 and ending
August 31, 1981:
(1) No paid holidays during the period involved.
(2) No paid sick days during the period involved.
(3) Reduction of paid vacation pay to two (2)
weeks.
(4) Reduction of gross weekly wages by the com-
bined amount of the weekly Health, Welfare and
Pension contribution to the Labor funds.
(5) Road drivers to be paid mileage or hourly
pay only, which ever is applicable.
(6) No Contract wage increase during the period
involved.
(7) No overtime pay during the period involved.
It is understood that the continued Operation of
Admiral Merchants Motor Freight, Inc. will be re-
viewed from time to time to make certain that Man-
agement is successfully re-organizing the carrier.
The letters were distributed to the bargaining unit em-
ployees by Shop Foreman Earl Berg and signed by all of
them within a day or two after the speech. When Berg
distributed the letters to employees who had not attend-
ed the Short speech, he explained the debt reduction
plan to them. According to Berg, no one objected to
signing the letter. However, employee John Plaza testi-
fied that he was at home on layoff status when the
August 29 speech was given. In early September he was
called at home by Shop Foreman Berg and told to report
to the terminal. He did. Berg presented him with the
letter incorporating the debt reduction plan and was told
to sign it. Berg said that all the other employees had
signed similar letters. Berg also told him that "if I didn't
sign it I don't go back to work." Plaza signed the letter.
About 2 weeks later he was recalled from layoff status
and worked continuously until the second week in Janu-
ary 1981.1
It was stipulated that the changes set forth in the let-
ters distributed to and signed by employees were put into
effect and continued in effect until January or February
1981 when Respondent ceased active operations at its
Chicago terminal. The employees did not receive a wage
increase which was due under the collective-bargaining
agreement on November 1, 1980.
At no time between January 1, 1980, and January 1,
1981, did Respondent ever request bargaining or actually
bargain with the Union over modifications of the collec-
tive-bargaining agreement with respect to wage in-
creases, overtime or holiday pay, vacation time or days
off, or contributions to health, welfare, or pension funds.
Nor did Respondent notify the Union of proposed or
actual changes in employee benefits.
Sometime in mid-September 1980, Union President
Donald Gustafson instructed Business Representative
Smith to go to the Chicago terminal and investigate a
report that the collective-bargaining agreement was
being violated. As a result of the investigation, on Sep-
tember 17, officials of the Union sent the following letter
to Respondent:
It has been brought to our attention that manage-
ment representatives of your company have recent-
ly been attempting to convince Local 701 members
Berg did not controvert Plaza's testimony in this respect.
138
ADMIRAL MERCHANTS MOTOR FREIGHT, INC.
employed as mechanics of Admiral Merchants to
work under lesser conditions and benefits than those
specified in the current labor agreement.
I caution you that such action constitutes an
unfair labor practice and further advise that Local
701 expects your company to fully comply with the
terms specified in the current labor agreement.
The letter was signed by Gustafson and Smith. Respond-
ent did not respond to this letter.
A day or two before the letter was sent, Smith visited
the Chicago terminal and spoke with Berg and two other
employees. At this time the letters had already been
signed by the employees and Smith learned about Re-
spondent's difficulties and the alteration in employee
benefits. According to Smith, the meeting lasted 15 min-
utes. Both Berg and Smith testified that Smith protested
that Respondent's debt reduction plan was not in compli-
ance with the collective-bargaining agreement. Berg
could not recall this conversation in any meaningful
detail, although he remembered telling Smith "a half of a
loaf of bread [is] better than none." Smith was pressed
by leading questions on cross-examination to admit that
he gave tacit approval to the plan. He denied approving
the plan, although he candidly stated that, in response to
a question from an employee about what he would do if
the company he worked for was going "down the
drain," he may have said it was up to the employee as to
what he should do in the circumstances. Smith, however,
emphatically denied that he told Berg or any official of
Respondent that it was free to make changes in the con-
tract. Any suggestion by Respondent that Smith ap-
proved, after the fact, Respondent's changes in working
conditions and benefits of employees is completely un-
founded.
B. Discussion and Analysis
Sections 8(a)(5) and 8(d) of the Act create an obliga-
tion on the part of an employer to bargain with an in-
cumbent union as the exclusive bargaining representative
of its employees in the matter of wages, hours, and terms
and conditions of employment. It may not attempt to cir-
cumvent the exclusive status of the bargaining agent by
attempting to deal directly with its represented employ-
ees. Medo Photo Supply Corp. v. N.L.R.B., 321 U.S. 678,
684-685 (1944). And where a valid bargaining relation-
ship is in effect, an employer may not unilaterally alter
terms and conditions of employment without first afford-
ing the bargaining representative of its employees the op-
portunity to bargain about such changes until either
agreement or impasse is reached. N.L.R.B. v. Benne
Katz, et al., d/b/a Williamsburg Steel Products Company,
369 U.S. 736, 747-748 (1962); Harold Hinson d/b/a Hen
House Market No. 3 v. N.LR.B., 428 F.2d 133, 136-137
(8th Cir. 1970).
The evidence is clear that Respondent undertook to
deal individually with employees, and actually dealt with
them, by securing signed agreements from them in order
to obtain a diminution in their existing benefits secured
by contract. The evidence shows that it even coerced
one employee to agree to a decrease in benefits by
threatening that he would not be recalled to work if he
did not agree. The changes were thereafter implemented.
At no time before the implementation of benefit changes
did Respondent notify the Union or seek to bargain with
it over the changes. Nor does Respondent even claim it
did. The Union did not acquiesce in Respondent's con-
duct. Accordingly, by its failure to notify and bargain
with the Union in such circumstances, Respondent vio-
lated Section 8(a)(5) and (1) of the Act. 2
Respondent's defense for such a clear violation of the
Labor Act is that its conduct was compelled by a district
court "order" to pay off a debt it owed to a pension and
health and welfare fund created pursuant to a bargaining
agreement between Respondent and another union and
that the order required the Chicago employees represent-
ed by the Union to participate in the payment along with
Respondent. This contention, clothed in a mish-mash of
legal jargon, borders on the ridiculous.
Here are the facts of the Minnesota district court pro-
ceeding. Trustees of a Teamsters pension fund and a
health and welfare fund sued Respondent in the United
States District Court in Minneapolis, Minnesota, for de-
linquent payments required under Respondent's collec-
tive-bargaining agreement with the Teamsters. On
August 7, 1980, the court issued a decision in which it
granted summary judgment in favor of the Teamsters
pension fund against Respondent in the amount of
$576,251.99 and in favor of the Teamsters health and
welfare fund and against Respondent in the amount of
S380,920.79. The court also enjoined Respondent from
failing to pay all moneys due the employee benefit funds
under existing agreements. Judgment was entered on
August 14, 1980. The judgment of the district court was
affirmed by the United States Court of Appeals for the
Eighth Circuit. Subsequently, on April 8, 1981, the par-
ties to the district court action-the Teamsters funds and
Respondent-entered into an agreement for a settlement
of the original claims because of the initiation of involun-
tary bankruptcy proceedings against Respondent and the
institution of judicial compliance and debt reduction
plans by Respondent in order to comply with the district
court's judgment. The district court, in effect, accepted
the settlement and dismissed the proceedings without
prejudice on May 18, 1981.
Respondent argues that all of its employees, including
the Chicago mechanics represented by the Union, were
bound by the district court order of August 7, 1980, and
that operation of that judgment excused it from bargain-
ing with the Union. The argument is preposterous. The
district court's order states that "defendant Admiral Mer-
chants Motor Freight. Inc., acting through its directors,
officers, agents, servants, employees, shareholders, and
all persons acting in privity or in concert with defendant,
is enjoined from failing to pay all monies due" the Team-
In his oral presentation. but not in his proposed order and notice, the
General Counsel argues that Short's speech of August 29 and Berg's re-
marks to employee Plaza constitute an independent violation of Sec.
8(aXI) of the Act because they tended to coerce employees into forgoing
collective rights. I do not make such a finding because there was no such
allegation in the complaint and the derivative violation of Sec. 8(aXI) en-
compassed by my findings sufficiently reaches this conduct. It is unlikely
that the remedy for such an independent violation would be significantly
different than that ordered herein.
139
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
sters funds. (Emphasis supplied.) The injunction runs
against Respondent and all persons acting on its behalf.
In no way could employees with no connection to Re-
spondent's corporate management or the underlying law-
suit be held to be required to pay the corporation's judg-
ments. Nothing in the judgment of the district court re-
quired Respondent to extract from its employees the
money required to pay the judgment. Nor does the
court's subsequent approval of Respondent's so-called ju-
dicial compliance or debt reduction plan constitute either
a confirmation that innocent employees were bound by
the judgment or a sanction of the means by which Re-
spondent went about getting employees to satisfy its obli-
gation.
Even apart from its inherent lack of merit, Respond-
ent's argument that the Chicago employees were bound
by the district court's judgment against Respondent
misses the point. In order for Respondent's argument to
provide a successful defense to the unfair labor practice
herein, one would have to conclude that the district
court both had the authority to, and actually did, order
Respondent to bypass the bargaining representative of
employees completely unconnected with the suit and to
extract payment for the judgment from those employees.
Clearly the court had no such authority. It did not pur-
port to pass on the bargaining obligation of Respondent
with respect to a wholly different group of employees
nor make any finding concerning the bargaining obliga-
tion of Respondent under the Labor Act. Nor does the
order of the district court in any way require Respond-
ent to avoid bargaining with the exclusive bargaining
representative of the Chicago mechanics and deal direct-
ly with these employees in modifying an applicable bar-
gaining agreement. Indeed, the order of the district court
did not specify how or by what means Respondent
should pay the judgment or comply with the order. Re-
spondent's contention that it was incumbent upon the
employees and the Union to enter an appearance in dis-
trict court and argue that it was not bound by the judg-
ment is specious. Since the judgment of the district court
did not suspend Respondent's bargaining obligation
under the Labor Act, there was no requirement that the
Union or the employees do anything to protect their
rights.
Respondent also points to its dire economic condition
in arguing that it was justified in acting unilaterally. This
again is wholly without merit. It is exactly at such times
when employees need their bargaining agent the most.
For example, even where an employer properly ceases
or closes operations, it is required to bargain over the ef-
fects of such cessation or closure. See First National
Maintenance Corp. v. N.L.R.B., 452 U.S. 666 (1981). Re-
spondent was not going out of business in August 1980.
It was seeking to continue operating and was seeking to
do so by altering the contract and extracting from indi-
vidual employees concessions to help pay money which
it owed to another group of employees. The violation is
clear notwithstanding the alleged dire economic circum-
stances which Respondent argues entitle it unilaterally to
suspend the employees' right to speak through their
chosen and exclusive bargaining representative. See also
Airport Limousine Service, Inc., et al, 231 NLRB 932, 934
(1977).
CONCLUSIONS OF LAW
1. The Union is the exclusive bargaining representative
of the following appropriate unit of employees:
All head mechanics, leadmen and/or foremen,
automotive machinists, mechanics, trailer mechan-
ics, helpers, skilled tiremen, stockmen, journeymen,
stockroom utility apprentices and apprentices em-
ployed by Respondent at its facility currently locat-
ed at 5504 West 47th Street, Chicago, Illinois, but
excluding all other employees and guards and su-
pervisors as defined in the Act.
2. By modifying and otherwise changing existing and
contractually established wages, benefits, hours, and
terms and conditions of its employees in the unit set
forth above, unilaterally and without prior notice to, or
consultation with, the Union, Respondent violated Sec-
tion 8(a)(5) and (1) of the Act.
3. By disregarding and bypassing the Union and bar-
gaining and dealing with its employees over modifica-
tions and changes in their established wages, benefits,
hours, and terms and conditions of employment, Re-
spondent violated Section 8(a)(5) and (1) of the Act.
4. The above violations constitute unfair labor prac-
tices affecting commerce within the meaning of Section
2(6) and (7) of the Act.
THE REMEDY
Having found that Respondent violated Section 8(a)(5)
and (1) of the Act, I shall order it to cease and desist
from the conduct found to be unlawful. I shall also order
it to undertake affirmative action which will effectuate
the policies of the Act, that is, to bargain collectively
with the Union, to apply the collective-bargaining agree-
ment to its employees and to make them whole for any
loss of pay or other benefits they may have suffered by
reason of Respondent's unlawful conduct. Such losses
shall be reimbursed, with interest, in accordance with Isis
Plumbing & Heating Co., 138 NLRB 716 (1962); F W.
Woolworth Company, 90 NLRB 289 (1950); and Florida
Steel Corporation, 231 NLRB 651 (1977).
In addition, I believe that Respondent's defense in this
case was patently frivolous. There were no factual issues
in the case and the basic "legal" defense advanced by
Respondent is absurd. There is no basis in fact or in law
or in commonsense for Respondent's argument that the
district court suspended its bargaining obligation under
the Labor Act and permitted direct dealing with employ-
ees. Indeed, the argument is so lacking in substance that
it could not have been made in good faith. The same is
true with respect to Respondent's argument that its eco-
nomic situation justified unilateral action.
Congress has expressed its view that Government
ought not proceed against certain respondents in frivo-
lous cases and has thus created machinery for recovery
of litigation expenses against the Government in such
cases. (Equal Access to Justice Act, Public Law 96-481,
140
ADMIRAL MERCHANTS MOTOR FREIGHT, INC.
94 Stat. 2325 (October 21, 1980).) Respondents likewise
should not be permitted to make a mockery of the ad-
ministrative process by interposing frivolous roadblocks
to the enforcement of public rights. The Board and the
Courts have recognized the Board's authority to tax a re-
spondent for litigation expenses in cases where a re-
spondent's defenses are "patently frivolous." See J. P.
Stevens & Co., Inc., 239 NLRB 738, 772 (1978), enfd. in
part and modified and remanded in part 623 F. 2d 322,
328-330 (1980); District 65, Distributive Workers of Amer-
ica v. N.L.R.B., 593 F.2d 1155, 1167-70 (D.C. Cir. 1978)
(Bazelon, J., concurring and dissenting). This is such a
case. Accordingly, I shall recommend that Respondent
be ordered to reimburse the General Counsel and the
Charging Party for all the expenses incurred by them in
the investigation, preparation, presentation and conduct
of this case "including the following costs and expenses
incurred in . . . the Board . . . proceedings, reasonable
counsel fees, salaries, witness fees, transcript . . . costs,
printing costs, travel expenses and other reasonable costs
and expenses." J. P. Stevens, supra, 239 NLRB at 773.
Upon the foregoing findings of fact and conclusions of
law, upon the entire record, and pursuant to Section
10(c) of the Act, I hereby issue the following recom-
mended:
ORDER3
The Respondent, Admiral Merchants Motor Freight,
Inc., Chicago, Illinois, its officers, agents, successors, and
assigns, shall:
1. Cease and desist from:
(a) Refusing to bargain collectively concerning wages,
benefits, hours, and other terms and conditions of em-
ployment with Automobile Mechanics Local 701, Inter-
national Association of Machinists and Aerospace Work-
ers, AFL-CIO, as the exclusive bargaining representative
in the following unit:
All head mechanics, leadmen and/or foremen,
automotive machinists, mechanics, trailer mechan-
ics, helpers, skilled tiremen, stockmen, journeymen,
stockroom utility apprentices and apprentices em-
ployed by Respondent at its facility currently locat-
ed at 5504 West 47th Street, Chicago, Illinois, but
excluding all other employees and guards and su-
pervisors as defined in the Act.
(b) Bypassing the Union and dealing directly and indi-
vidually with any of its employees in the aforesaid unit
I In the event no exceptions are filed as provided by Sec. 102.46 of the
Rules and Regulations of the National Labor Relations Board, the find-
ings, conclusions, and recommended Order herein shall, as provided in
Sec. 102.48 of the Rules and Regulations, be adopted by the Board and
become its findings, conclusions, and Order, and all objections thereto
shall be deemed waived for all purposes.
with respect to any changes or modifications in existing
or contractually established wages, benefits, hours, and
other terms and conditions of employment.
(c) Refusing to bargain collectively with the above
labor organization by unilaterally and without consulta-
tion with, or prior notification to, such labor organiza-
tion, changing or modifying existing or contractually es-
tablished wages, benefits, hours, and other terms and
conditions of employment of employees in the aforesaid
unit.
(d) In any like or related manner interfering with, re-
straining, or coercing employees in the exercise of their
rights set forth in Section 7 of the Act.
2. Take the following affirmative action which will ef-
fectuate the policies of the Act:
(a) Upon request, bargain collectively with the Union
as the exclusive bargaining representative of its employ-
ees in the appropriate unit with respect to wages, hours,
and other terms and conditions of employment.
(b) Notify, meet, and bargain with the Union before
modifying, changing, or eliminating any existing or con-
tractual benefits of employees in the appropriate unit.
(c) Reinstate the contractual benefits of employees in
the appropriate unit in the manner, form, and amounts
which existed prior to September 1, 1980, consistent with
the collective-bargaining agreement between it and the
Union.
(d) Make whole any employees for any loss of wages
and other benefits they may have suffered as a result of
the unlawful modification of contractual benefits to
which they were entitled, with interest, as set forth in
the remedy section of this Decision.
(e) Pay to the Board and the Union the reasonable
costs and expenses incurred by them in the investigation,
preparation, presentation, and conduct of this proceed-
ing, as set forth in the remedy section of this Decision.
(f) Post in conspicuous places at Respondent's Chica-
go, Illinois, facility, including all places where notices to
employees are customarily posted, for a period of 60
consecutive days, copies of the attached notice marked
"Appendix." 4 Copies of said notice, on forms provided
by the Regional Director for Region 13, shall be signed
by Respondent's authorized representative and Respond-
ent shall take reasonable steps to ensure that said notices
are not altered, defaced, or covered by any other materi-
al.
(g) Notify the Regional Director for Region 13, in
writing, within 20 days from the date of this Order, what
steps Respondent has taken to comply herewith.
4 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 of the National Labor Relations Board" shall read "Posted Pursu-
ant to a Judgment of the United States Court of Appeals Enforcing an
Order of the National Labor Relations Board."
141