Areo Electric Co.

National Labor Relations Board - Board Decisions

Aug 22, 1978

237 N.L.R.B. 708 (N.L.R.B. 1978)

DECISIONS OF NATIONAL L.ABOR RELATIONS BOARD
Arco Electric Company and International Brotherhood
of Electrical Workers, Local Union No. 611, AF--
CIO. Case 28 C'A 4601
August 22. 1978
DECISION AND ORDER
By MIMN1BIIRS JiNKINS. Mt RPHII \NI) I RI 1Sl)D I
On May 9. 1978, Administrative Law Judge Ber-
nard J. Seff issued the attached Decision in this pro-
ceeding. Thereafter, Respondent filed exceptions and
a supporting brief, and the General Counsel filed an
answering brief.
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, findings, and
conclusions of the Administrative Law Judge and to
adopt his recommended Order, as modified herein.'
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 modified
below, and hereby orders that the Respondent, Arco
Electric Company, Roswell, New Mexico, its offi-
cers, agents, successors. and assigns, shall take the
action set forth in the said recommended Order, as so
modified:
Substitute the following for the first sentence of
paragraph 2(b):
"In addition, reimburse all employees in the bar-
gaining unit for any loss of wages incurred by the
employees as a result of Respondent's unilateral
changes, with interest calculated in the manner set
forth in Florida Steel (orporation, 231 NLRB 651
(1977), in accordance with Isis Plumbing & Heating
Co.. 138 NI RB 716 (1962)."
I he Adrinislraitti. e I lw Judge, ill his recolmmended Order. required
Ihal Respondent reilmburse .ill nit emliplovees for a.n loiss of wlgcs lliur-
red as a result of Respondent's unlawiful condu t d luiCeTv . Ihe Adllllnitlra-
five i.uw Judge failed to require Ihat Respondent pas interest ont suich
mone-,s owed to enlplo),ees Acco rdingl. vie shlial riodift the Adlimistral-
live I. ;w Judge's recommenlded ()rder to requine thul tinl mruone owed h,
Responldett to ts emtploeevs sh;ll hear interest to he computed ill lle ill.ll-
ner prescribed in fhritda Sic[l ( .rporr. l.. 231 NiRB 651 (19771 ind l/so
Plumrhlng & Ifetitng (', 138 Nl RB 716 ( 1962I
DECISION
SIAItMENt o I HtI CASE
BtERNARD J Silt. Administrative Law Judge: This case
came on for a hearing before me in Roswell, New Mexico,
on February 28. 1978. The original charge was filed by the
Union on November 9, 1977. The charge was filed by the
International Brotherhood of Electrical Workers, Local
Union No. 611. AFL CIO, hereinafter referred to as the
Union. Respondent is the Arco Electric Company. herein-
after referred to as Respondent or the Company. The com-
plaint was issued on December 29. 1977. It alleges that
Respondent, since July 1977 has refused to bargain with
the Union and made unilateral changes by establishing dif-
ferent rates of pay than had prevailed under the contract.
Respondent admits in its answer jurisdictional facts, and
the fact that the Union is a labor organization within the
meaning of the Act. It denies the commission of any unfair
labor practices.
Upon consideration of the entire record in this case and
the briefs which were submitted by the General Counsel
and Respondent. I make the following:
FINDING(S OF FACT
I I BI SINESS OF THE RESPONDENT
Respondent is and has been at all times material herein a
corporation duly organized under and existing by virtue of
the laws of the State of New Mexico. At all times material
herein. the Respondent has maintained its principal office
and place of business at 210 East Fifth Street, Roswell,
New Mexico, where it is engaged as an electrical contrac-
tor in the building and construction industry. Respondent.
in the course and conduct of its business purchased goods
and materials valued in excess of $50,000 and has caused
the same to be transported in interstate commerce and de-
livered to its place of business in New Mexico, directly
from suppliers located in States of the United States other
than the State of New Mexico. I find that the Respondent
is an employer engaged in commerce within the meaning
of Section 2(2). (6). and (7) of the Act.
11 1i111 ABOR OR(iANIZA ION INVOI.VED
The Union is a labor organization within the meaning of
Section 2(5) of the Act, and I so find.
IIl IHE ALL.E(;lEDl) SNFAIR I.ABOR PRACTICES
There is no dispute as to the facts of the instant case. For
a good man), years, Respondent has been operating under
a contract with the Union.
All employees employed by the Respondent who are en-
gaged in performing electrical work, excluding office cleri-
cal employees, guards, and supervisors as defined in the
Act, and all other employees constitute a unit appropriate
for the purposes of collective bargaining within the mean-
ing of Section 9(b) of the Act.
237 NLRB No. 93
708
ARCO ITI EIH RRI C OMt'A 7t Y
On or about May 16. 1975. the Respondent signed a
letter of assent which provided. inter alia, that the Respon-
dent would be bound bv the terms and conditions of em-
ployment contained in the collective-bargaining agreement
negotiated between the Central New Mexico Chapter of
NECA, Inc.. (herein called NECA), and the Cnion which
was effective from April I. 1974. through March 31. 197h.
and that said letter of assent would renew itself unless the
Respondent notified the Linion of the contrar, in writing
at least 60 days prior to the termination date of the afore-
said collective-bargaining agreement.
The Respondent failed to timely notif' the Union that it
desired to withdraw or cancel said letter of assent as re-
quired by the provision of the letter of assent referred to
above.
On or about April 1. 1976. NECA and the Union en-
tered into a successor collective-hargaining agreement
which was to be effective from April 1. 1976. to Ma'a 31.
1978.
Respondent, since May 16. 1975. had abided by and
complied with all the terms and conditions of emploxment
set forth in the agreement referred to above. including the
payment of contractual wage scales and fringe benefits foi
its unit employees.
Richard Vogel, the president of Arco. testified that on
May 16, 1975. he, on behalf of Arco Electric. executed a
letter of assent in which he agreed that Arco Electric would
comply "with all the terms and conditions of employ ment
contained in . . . and all approved amendments thereto"
of the 1974-76 labor agreement between NECA and L ocal
611. The undertaking in the letter of assent further states.
in substance, that the signing of the letter of assent shall be
as binding as though Arco Electric had signed a 1974 76
labor agreement including any improved amendments
thereto. The effective date of the letter of assent is stated as
April 1, 1975, and it is provided that it shall remain in
effect until March 31, 1976. Significantly. there is a further
provision in the document that if Arco Electric does not
intend to renew the assent it shall notify Local 611 in writ-
ing at least 60 days prior to March 31, 1976h.
At no time did Respondent notify Local 611 in writing
or otherwise that it did not intend to renew the assent
signed on May 16, 1975. Subsequently, NECA and l.ocal
611 negotiated a successor labor agreement to the 1974-76
agreement whose stated term is April I. 1976. through May
31, 1978.
It should be noted especially that until approximately
July 1977, Arco Electric attempted to comply with all of
the terms of the 1976-78 labor agreement. Therefore. Arco
Electric, during the period from April I. 1976 to approxi-
mately July 1977, availed itself of the benefits of the union
hiring hall for referral of employees; pursuant to appropri-
ate authorizations, deducted union assessments and remit-
ted them to Local Union 611: made appropriate deduc-
tions for various funds including the health and welfare
trust fund, vacation plan, and apprenticeship fund, and
remitted the required payments to the trustees of those
funds; reported the fund payments on forms provided
therefore under the contract and paid its employees work-
ing under the contract the wage scale called for or even
higher pay. The monthly payroll report for the month of
Juls 1977 was, the last one submitted bh Vogel on behalf of
Arco Eleclric on ,Wlhich he wrote "final report" and signed
his namle under that notation. F rom that point forward in
1977. Vogel. on behalf of \rco Electric. has not obhsersed
the collecltixc-hargaining relationship with l.ocal 611 and
has refused to consider that the 1976 78 labor agreement is
binding on Respondent.
l'he (ieneral Counsel argues that bh the terms of the
assent siglltied oni behallf of :\rco Hlectric on Ma;s 16. 1975.
alid since Arco lectrlic did not notuif Local 61 I of Its
intention not to renew the assent. it thereby became hound
to the 1976 78 labor agreement between NE CA and Local
611. Since the letter of assent s,,ias is binding as if Respon-
dent had signed the 1974 76 labor agreement. the changes
to that agreement i hich sere incorporated in the 1976 78
labo- agreemelnt also became binding on Respondent
I urthermore. it is ohbvious that Vogel understood the
obligaltions that attached bh not notifning the [tnion of his
intention to terminate the letter of assent since he contin-
ued to conduct his business in conformance with his under-
standing of the provisions of the 1976 78 labor agreement.
It ; as onli when he felt that the new provisions of the
agreerment had become financiall\ burdensome that he at-
temnlted to avoid those obligations. It is well settled and the
Board has consistently held that financial hardship is no
justification for repudiation or modification of a collective-
bargaining agreement or ans of its terms. See Oak Cliff-
Golnalr B/,king ( rompan.. 207 Nl RB 1063. 1064 (1973):
Ocage .Ioanuitfllturing (',nrpaun. 173 NILRB 458. 461 462
(1968).
It should he emphasized that Respondent engaged in a
course of conduct under the 1976 78 agreement which pre-
vented it from calling a halt to performance under the
agreement except in accordance with its terms. Respondent
argues that its actions and compliance with the agreement's
provisions were undertaken voluntaril, in an effort to keep
its employees from suffering any adverse consequences.
The General ('ounsel calls attention to the fact that what-
eser the motivation. Respondent made payments to the
various funds as called for b, the 1976 78 labor agreement.
utilized l ocal 611's hiring hall to obtain employees, paid at
least the wage scale required by the terms of the agreement.
deducted working dues pursuant to valid authorizations.
and otherwise attempted to abide by all of the terms of the
agreement.
In conclusion to this argument. the General Counsel
takes the position that the cases are numerous. that where
such a course of conduct is undertaken by an employer. the
employer is bound bv its actions and is estopped to assert
that it is not a party to such an agreement.
Particular attention is called to the case of Paint Power.
In(o. 230 Nl RB 758 (1977). and more especially to foot-
note I:
In finding that Respondent was bound to abide b>
the contract negotiated between the Union and the
Association. we reln solely on Respondent's course of
conduct after the effective date of such contract. In
this regard. Respondent made payments into the
I nion's health and welfare and pension trust funds:
utilized the Union's hiring hall to obtain employees:
09
D(DECISIONS OF NATIONAL LABOR RELATIONS BOARD
and specifically relied on the provisions of the con-
tract in pressing its claim against Steven Evans for
improper workmanship. Respondent cannot claim
freedom from the contract where its actions demon-
strate that it did, in fact, abide by certain terms of the
contract, and, further, where it seeks to utilize the pro-
visions of the contract to its own benefit. (Cf. I'in
James Plastering Companlyc. 226 NLRB 125 (1976). and
cases cited therein.
Attention is particularly called to the fact that in the foot-
note dropped by the Board in its short form affirmance of
the decision in Paint Power is the sentence, "We rel? solely
on Respondent's course of conduct after the effective date
of such contract."
Respondent's Defense
The major burden of the Respondent's defense is that
the evidence clearly demonstrates that Respondent never
affirmatively assented to be bound by the terms of the
1976-78 contract negotiated between the Union and
NECA. It is further contended that at no time did the Re-
spondent agree to an extension of that agreement. It is also
further contended by the Respondent that a party cannot
be bound by the terms of an instrument, when such party
has never been made an offer in any form, simply because
the party has conducted some of its affairs in the manner
described by some of the terms of that instrument. Con-
tracts by implication arise after there has been a legally
sufficient offer. There was no such offer made by the
Union with respect to the 1976-78 contract.
Respondent also argues that it had reasonable doubt
based on objective circumstances that the Union had lost
its majority status. Two of the Respondent's three employ-
ees allegedly stated to the Respondent that they wanted to
terminate their relationship with the Union. According to
the Respondent, this action by its employees terminated
Respondent's duty to bargain with the Union.
None of these arguments are persuasive. It would appear
that all that happened in this case is that the Respondent
continued to maintain its relationship with the Union until
certain of the fringe benefits were elevated in cost and it
did not want to be burdened with any additional financial
responsibilities.
Respondent submitted a very lengthy brief consisting of
45 pages, but most of the material contained in this brief
does not appear to me to be relevant. Board case law is
clear that when a company has been involved in a long
relationship with the labor union and has complied with
many of the essential terms of this agreement, it is estopped
from attempting to escape from the conditions of the con-
tract because it claims that to continue would create addi-
tional financial hardships on it. The explicit terms in the
contract required that if Arco Electric did not intend to
renew the assent it should notify Local 611 in writing at
least 60 days prior to March 31. 1976. At no time did Re-
spondent notify Local 611 in writing or otherwise, that it
did not intend to renew the assent signed on May 16, 1975.
In conclusion, it should be noted that by the terms of the
letter of assent signed on behalf of Arco Electric on MaN
16, 1975. since Arco Electric did not notify Local 611 of its
intention not to renew the assent, it thereby became bound
to the 1976 78 labor agreement between NECA and Local
61 I1. Since the letter of assent was as binding as if Respon-
dent had signed the 1974 76 labor agreement, the changes
to that agreement which were incorporated in the 1976-78
labor agreement also became binding on Respondent.
With respect to the question of the continued majority
status of the Union in the unit, since Respondent has his-
toricallN recognized the Uinion as such, a presumption of
majorits status arose which was in no way rebutted by
Respondent. The General Conunsel calls attention to two
recent cases where the principle that, "recognition estab-
lishes a plesumption of majority status" has been reiterated
bh the Board. See B. C. Hlatwk (Chevrolet, Inc., 226 NLRB
527, 529 (1976): James t'. Whitfield, db,a Currtten Super-
nurket. 220 NLRB 507 (1975). In any event, the Union
represented an actual majority of Respondent's employees
doing electrical work in July 1977 when Respondent broke
off its relationship with the Union. Respondent's President
Vogel, admitted that he knew that two of the three employ-
ees emploNed by him in July 1977 were members of Local
61 1.
I'he two principal issues in this case are: Is Respondent
bound by the terms and obligations of the 1976-78 collec-
tive-bargaining agreement between NECA and the Union
as a result of its having executed the letter of assent on
May 16, 1975: is Respondent bound by the terms and obli-
gations of the 1976 78 collective-bargaining agreement be-
tween NECA and the Union as a result of its having en-
gaged in a course of conduct which estops it from
repudiating the collective-bargaining agreement. From the
record evidence it is clear that the answer to both these
issues is in the affirmative.
B) unilaterally terminating its contractual relationship
with the Union and making changes in wage rates without
consultation with the Union, I find that the Respondent
has violated Section 8(a)(1) and (5) of the Act.
IN IiF RiIMEFIY
Having found that Respondent has committed certain
unfair labor practices, I shall recommend that it be ordered
to cease and desist therefrom, and to take certain affirma-
tive action, inclutding the posting of appropriate notices
and taking other action designed to effectuate the policies
of the Act.
Co()Nl I sIOS OFs LAW
1. Respondent, Arco Electric Company, is an employer
engaged in commerce within the meaning of Section 2(2).
(6), and (7) of the Act.
2. International Brotherhood of Electrical Workers, Lo-
cal LUnion No. 611., AFL C'IO, is a labor organization with-
in the meaning of Section 2(5) of the Act.
3. All emnplo'ees employed by the Respondent who en-
gage in performing electrical work, excluding office clerical
employees. guards, and supervisors as defined in the Act.
710
ARCO EI. ( TRI (COMPANY
and all other employees constitute a unit appropriate for
the purposes of collective bargaining within the meaning of
Section 9(b) of the Act.
4. By ceasing to honor and abide by the terms of the
1976 78 agreement from which it never withdrew accord-
ing to its terms. Respondent has violated Section 8(a)(1)
and (5) of the Act.
Upon the foregoing findings of fact, conclusions of law.
and the entire record. I hereby issue, pursuant to Section
10(c) of the Act, the following recommended:
ORDER'
Respondent. Arco Electric Company, Roswell. New
Mexico. its officers, agents, successors, and assigns. shall:
1. Cease and desist from:
(a) Refusing to recognize and bargain collectively with
the International Brotherhood of Electrical Workers. Local
Union No. 611. AFL-CIO, as the exclusive bargaining rep-
resentative of its employees consisting of all emplosees em-
ployed by the Respondent who engage in performing elec-
trical work, excluding office clerical employees. guards.
and supervisors as defined in the Act. and all other em-
ployees constitute a unit appropriate for the purposes of
collective bargaining within the meaning of Section 9(h) of
the Act.
(b) Refusing to recognize and bargain collectively with
the International Brotherhood of Electrical Workers. l.ocal
Union No. 611, AFL-CIO, as the exclusive bargaining rep-
resentative of its employees performing work covered bs
the collective-bargaining contract between the Respondent
and the Union.
(c) Refusing to acknowledge, honor. implement. or com-
ply' with the collective-bargaining contract here and above
mentioned for its full term with respect to employees per-
forming the services of the type described above.
(d) In any like or related manner, interfering with, re-
straining, or coercing employees with respect to their exer-
cise of rights which Section 7 of the Act guarantees.
2. Take the following affirmative action which is re-
quired to effectuate the policies of the Act:
(a) Upon request, engage in good-faith bargaining with
the Union. and restore the stalur quo ante which the Re-
spondent shall maintain retroactively to July 1977. All the
terms and conditions of employment that were in effect
pursuant to the 1976-78 contract shall be complied with.
(b) In addition, pay to all employees in the bargaining
unit sufficient money to make up any loss of wages incur-
red by the ernployees as a result of Respondent's unilateral
changes. Respondent should be required to pay all fund
payments as provided in the 1976-78 collective-hargaining
agreement which have not been paid and which would
have been paid absent Respondent's unlawful discontin-
uance of such payments.
(c) Post at its place of business in Roswell, New Mexico.
copies of the attached notice marked "Appendix." 2 opies
of the notice. on forms provided bs the Regional Director
for Region 28, shall be posted immediatel' upon their re-
ceipt. after being duly signed by Respondent's representa-
tive. Vlhen posted, they shall remain posted for 60 consec-
utive dass thereafter, in conspicuous places. including all
places where notices to employees are customarily posted.
Reasonable steps shall be taken bs Respondent to insure
that these notices are not altered. defaced, or covered b\
ans other material.
(d) Notify the Regional Director for Region 28. in writ-
ing. within 20 da\s of the date of this Order, what steps
Respondent has taken to compl) herewith.
;I II ehe cet te ecepiwn- Lire filed ,s prir ided h, See 1)0246 of the
Rules .Itl] RCuIl.rII oII f ithe \1 inlal I Ihr Relaion.l n, oird. the findirngs.
midon ,.ln ,m a i tcortll['1c ,ci (Ireti herein sh.all a. pro.laed in Sec
II'I 48 ofr HeRi e n Res c lalln he ladoipled h the HBoird llnd hecome
II, t isilly ', nlisi l n.d1 (t)lidl l1tl ;Id l ,/hlc ,.iIrtl hireret .shall hb
ticciled 1.tlC d IOr .AI purp-,c,
In flic c ire l hat thih Order I, enforced h L .ludgment 4f the t hited
Sitc, ( o-rt ,[ \ppecls tihe -itd in the tite rcddimg "P-lcd hr Order
,f the \,,LOI, [ iLabor Rei.llilws Bird"- .h.al readt "'Ited Pursuant to a
liii, -ill tIl I f lit I t lter S iftre ( iOtrt If \Xppel' I nforcinf in ()rder Af the
N'ttllLt[ l ahr Relititn B,-,trd-
APPENDIX
Noilliet 'lo E.mi (i)t t
PosllI) ,' ORD[ R O I lIt
N aII()NAI LABOR Ri l.i IONS BORI)D
An Agency of the United States Government
Wi iiil snol refuse to bargain collectively with the
International Brotherhood of Electrical Workers. Lo-
cal Union No. 611. AFL CIO.
The appropriate unit consists of all employees em-
ployed by the Respondent who engage in perform-
ing electrical work, excluding office clerical employ-
ees. guards. and supervisors as defined in the Act.
and all other employees.
We ani solt refuse to acknowledge, honor, imple-
ment. and compls with the collective-bargaining con-
tract for its full term.
Wi an l oT in ans like or related manner interfere
with. restrain. or coerce our employees with respect to
their exercise of the rights guaranteed in Section 7 of
the Act.
W'i. aitl restore retroactively the status quo ante es-
tablished in the collective-bargaining contract with re-
spect to all the terms and conditions of employment
which we terminated in July 1977.
WrI iiI pas to all the employees in the bargaining
unit sufficient moneq to make up any loss of wages
incurred bs the emplo)ees as a result of our unilateral
changes.
W't vnii pal, all fund payments as provided in the
applicable 1976 78 collective-bargaining agreement
which have not been paid and which would have been
paid absent our unlawful discontinuance of such pay-
ments.
,iR( oI [ I IRI( C()Mo}'AN
711