Areo Electric Co.Download PDFNational Labor Relations Board - Board DecisionsAug 22, 1978237 N.L.R.B. 708 (N.L.R.B. 1978) Copy Citation 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 Copy with citationCopy as parenthetical citation