Bohn Heat Transfer Group, Gulf And Western Mfg. Co.

National Labor Relations Board - Board Decisions

Nov 27, 1987

286 N.L.R.B. 1122 (N.L.R.B. 1987)

1122 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
Bohn Heat Transfer Group , Gulf and Western Mfg.
Co. and International Union, United Automo-
bile, Aerospace and Agricultural Implement
Workers of America (UAW) and its Local 1271.
Case 33-CA-5032
27 November 1987
DECISION AND ORDER
By MEMBERS BABSON, STEPHENS, AND
JOHANSEN
On 4 August 1981 Administrative Law Judge
Stanley N. Ohlbaum issued the attached decision in
this proceeding. Thereafter, the Respondent filed
exceptions and a supporting brief; the General
Counsel filed a brief in support of the judge's deci-
sion ; and the Charging Party Union filed an an-
swering brief.
The National Labor Relations Board has delegat-
ed its authority in this proceeding to a three-
member panel.
The Board has considered the decision and the
record in light of the exceptions and briefs and has
decided to affirm the judge's rulings, findings, and
conclusions and to adopt the recommended Order,
as modified,' for the reasons explained below.
The judge found that the Respondent violated
Section 8(a)(1), (3), and (5) of the Act by discon-
tinuing premium payments for accrued group
health insurance benefits for its disabled, nonstrik-
ing employees during the pendency of a strike that
took place in July and August 1980. In so doing,
the judge applied "the [then] currently governing
rule" set out in Emerson Electric Co., 246 NLRB
1143 (1979), enfd. as modified 650 F.2d 463 (3d
Cir. 1981), cert. denied 455 U.S. 939 (1982), and
found that the benefits withdrawn were, in the case
of disabled employees, an accrued benefit because
the premium payments were compensation for past
work performed rather than for the contemporane-
ous delivery of services and that the Respondent's
discontinuance of this benefit during the pendency
of the strike was "inherently destructive" of, or
i We agree with the Respondent 's contention that the judge's recom-
mended Order inappropriately addresses employee benefits other than
group health insurance premiums. In this regard , we note that the com-
plaint alleged that the Respondent unlawfully had ceased paying only
group health insurance premiums for unit employees who were on work-
ers compensation leave and/or regular sick leave . Moreover, the stipula-
tion of facts on which the case was submitted to the judge also provided
that the sole issue to be resolved involved the legality of the Respond-
ent's conduct with respect to the group health insurance premiums. In
these circumstances , and considering that we have no factual basis for
any finding with respect to the Respondent 's conduct about any other
benefit , we shall modify the recommended Order to delete references to
benefits other than the group health insurance premiums We shall fur-
ther modify the recommended Order to provide that the computation of
interest be consistent with the Board 's decision in New Horizons for the
Retarded, 283 NLRB 1173 (1987) (see fn 9 infra)
reasonably tended to interfere with, employees' ex-
ercise of Section 7 rights.2 The judge further found
the Respondent's action to have been motivated by
an intent to coerce and discriminate against em-
ployees in retaliation for their lawful strike. In this
regard, the judge noted that the benefit was discon-
tinued "on the heels of and seemingly in direct re-
sponse to the inception of an economic strike." The
judge further found the Respondent's conduct to
be violative of Section 8(a)(5) because the Re-
spondent discontinued this benefit unilaterally and
without bargaining with the Union.
Subsequent to the judge's decision, the Board
issued its decision in Texaco, Inc., 285 NLRB 241
(1987), which overruled the analysis set out in Em-
erson Electric and held that the question of whether
an employer violates Section 8(a)(3) or (1) by dis-
continuing benefit payments to a disabled employee
at the commencement of a strike will be resolved
by applying the Great Dane test for alleged unlaw-
ful conduct. Under this test, the General Counsel
has the initial burden of proving that the denial of
the benefit has had at least some adverse effect on
employee rights. This burden can be met by show-
ing that (1) the benefit was accrued, i.e., due and
payable on the date on which the employer denied
it, and (2) the benefit was withheld apparently on
the basis of a strike. The Board emphasized the im-
portance of proving that the benefit is accrued be-
cause otherwise there is no basis for finding that
employee rights have been adversely affected,
given that an employer is not required to finance a
strike against itself by paying wages or similar ex-
penses dependent on the continuing performance of
services. The Board noted that, on a case-by-case
basis , proof of accrual most often will turn on in-
terpretation of the relevant collective- bargaining
agreement , benefit plan, or past practice.
Under Texaco, once the General Counsel makes
a prima facie showing of at least some adverse
effect on employee rights, the burden then shifts to
the employer to prove a legitimate and substantial
business justification for its cessation of benefits.
The employer may meet this burden by proving
that a collective-bargaining representative has
clearly and unmistakably waived its employees'
statutory right to be free of such discrimination or
2 The judge did not set out any factual basis for finding the premium
payments to have been accrued other than his reasoning that the benefits
withdrawn here were like those in Emerson which the Board found to
have been accrued Apparently the judge did not analyze the terms of the
parties' relevant collective-bargaining agreement , the benefit plan, or the
parties past practice in reaching this conclusion Although the judge did
discuss certain provisions of the group health insurance policies, he did
so only concerning the question of whether the discontinuance of the
premium payments would cause the termination of the underlying insur-
ance coverage
286 NLRB No. 101
GULF & WESTERN MFG. CO
coercion. Alternatively, the employer may contest
the disabled employee's continued entitlement to
benefits by demonstrating its reliance on a contract
interpretation that is nondiscriminatory, reasonable,
and arguably correct and thus sufficient to consti-
tute a legitimate and substantial business justifica-
tion for its conduct. Moreover, consistent with
Great Dane, even if the employer proves business
justification, the Board may still find that the em-
ployer has committed an unfair labor practice if the
conduct is demonstrated to be "inherently destruc-
tive" of important employee rights or motivated by
antiunion intent.
Analyzing the relevant facts of the present case
in light of the principles set forth in Texaco, we
note initially that the record shows that the Union
and the Respondent have had a collective-bargain-
ing relationship since the early 1960s. Prior to the
strike, which commenced on 10 July 1980, the par-
ties' most recent collective-bargaining agreement
was effective for the period 10 July 1977 to 10 July
1980.3 Article 18 of the agreement provided group
health insurance benefits to eligible employees and
their covered dependents completely at the Re-
spondent's expense. Sections 13a and 13b of article
18 sets out the basis for employee eligibility and
termination of insurance as follows:
a. Eligibility. Except as otherwise specified
within this article 18, new employees and
family members are eligible to participate in
this plan without cost and without medical ex-
amination as soon as the employee has com-
pleted 30 days of employment, provided he is
a permanent full-time, active employee. If he
should be disabled on the day his insurance
would normally become effective, he and his
family members will be eligible for benefits
specified herein on the day he returns to work
b. Termination. This insurance will termi-
nate as follows:
1. When employment is terminated, or
2. Upon expiration of the following periods.
a. Maximum of three months for an author-
ized medical including Workman's Compensa-
tion, or maternity leave. An employee may
elect to pay the Company the monthly group
premium rate for up to an additional six
months.
b. Maximum of one month following the
month in which a layoff or an authorized
leave of absence commenced (other than medi-
cal or maternity).
3 Hereafter all dates refer to 1980 unless noted otherwise.
1123
3. When the Master Group Policy is termi-
nated.
Insurance policies are contracts between the
insurance company and Bohn Heat Transfer
Division. The insurance described herein is
provided under and is subject in every respect
to all of the terms of the group policies, which
alone constitute the contracts.
Around 19 June, the parties began negotiating
for a new agreement. Proposals to increase medical
insurance benefits were discussed at several of the
bargaining sessions. When neither a new agreement
nor an extension of the old one had been negotiat-
ed as of 10 July, the Union commenced an eco-
nomic strike that same day. On 15 July the Re-
spondent notified the Union orally and in writing
that, effective that date, it was suspending certain
benefit programs for its employees including group
health insurance premiums for some 16 unit em-
ployees who were on workers compensation leave
and/or regular sick leave at the inception of the
strike. The Respondent did in fact suspend this
benefit by prorating its normal monthly premium
payment to provide coverage only through 15
July. The Respondent notified the Union that it
was suspending the benefit, but did not bargain
with the Union prior to taking this action. Thereaf-
ter, the Union paid the premiums for the group
health insurance for the affected employees for the
period 15 July to 25 August, when the strike
ended. The striking employees returned to work
around 26 August.
Based on the above, we find that the General
Counsel has met the initial burden of showing that
premium payment for group health insurance con-
stituted an accrued benefit, due and payable on the
date on which the Respondent withheld it on the
apparent basis of a strike. This finding is based on
our interpretation of the relevant provisions of the
collective-bargaining agreement. In this regard,
under section 13, once an employee meets the eligi-
bility requirements of subsection a, his entitlement
to health insurance "without cost" continues until
one of the conditions for termination set out in sub-
section b is met. The relevant provision of subsec-
tion b provides for termination on the expiration of
a maximum 3 month authorized medical, workers
compensation, or maternity leave. Thus, those em-
ployees eligible under subsection a who were on an
authorized medical, workers compensation, or ma-
ternity leave were entitled to receive group health
insurance without cost, based on past performance
and with no further work required, until their leave
exceeded the maximum 3-month period. Accord-
ingly, the Respondent's premium payments neces-
1124 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
sary to provide this insurance were an accrued
benefit, due and payable on the date withheld, for
all those eligible employees whose leave was of less
than 3 months' duration.4
Because we find that the General Counsel has
met the initial burden of showing that the Re-
spondent's denial of the benefit has adversely af-
fected employee rights, the burden shifts to the Re-
spondent to prove a legitimate and substantial busi-
ness justification for its conduct. In this regard, the
Respondent contends first that the premium pay-
ments were not an accrued benefit but were tanta-
mount to wages, i.e., payment for the contempora-
neous rendering of work. The Respondent further
contends that under article 18, section 13 and arti-
cle 20, section 2 of the collective-bargaining agree-
ment, its obligation to make the premium payments
terminated at the expiration of the collective-bar-
gaining agreement.5 The Respondent also argues
that the Union did not protest its termination of the
premium payments, that no one suffered any cutoff
of insurance benefits for prior insured-against risks
or claims," and that during past negotiations the
parties had agreed that insurance premiums would
not be paid if agreement were not reached and a
strike ensued.
Analyzing the Respondent's arguments in light
of Texaco, we find that the Respondent has failed
to meet its burden of showing a legitimate and sub-
stantial business justification for withdrawing this
benefit.7 In this regard, the Respondent has failed
to show either that the Union clearly, unmistak-
ably, and explicitly waived the employees' rights or
that its conduct was based on a nondiscriminatory,
reasonable, and arguably correct interpretation of
4 Conversely, under the provisions of the collective-bargaining agree-
ment, the premium payment would not be an accrued benefit for any em-
ployee whose leave may have exceeded the maximum 3-month period of
entitlement to "without cost" health insurance coverage For these em-
ployees, if any, the right to without-cost health insurance would have ter-
minated on attainment of the 3-month period and the benefit would not
thereafter be due and payable Because the record does not show the
length of leave for any of the employees who were on workers compen-
sation and/or regular sick leave, we shall leave this matter to the compli-
ance stage of this proceeding
5 Art 18, sec 13 is set out above Art 20, sec 2 provides in essence
that the agreement is to remain in effect until 10 July and thereafter from
year to year unless either party gives a specified 60 days written notice of
a desire to change or terminate it
6 The Respondent takes issue with the judge's speculation that the fail-
ure to make current premium payments during the strike might jeopard-
ize retroactively the employees' eligibility for benefits with respect to
events that occurred before the strike The Respondent asserts that there
is no evidence that any such benefits were cut off That contention, how-
ever, does not alter our finding, infra, that the Respondent's cessation of
premium payments was unlawful, it could be relevant only to the extent
of the remedy found to be appropriate Ironically, it is not even relevant
to the monetary relief imposed here, which is limited to reimbursing the
Union for its payment of health insurance premiums during the strike
In these circumstances we find it unnecessary to pass on the judge's
finding that the Respondent's conduct was inherently destructive of em-
ployee rights
the collective-bargaining agreement. First, even as-
suming that, as the Respondent contends, the
Union failed to protest the Respondent' s termina-
tion of the benefit, this would be insufficient to es-
tablish an effective waiver as specified in Texaco,
and in any event it is clear that the Respondent's
decision was presented as a fait accompli. More-
over, there is no evidence to support the Respond-
ent's contention that the parties in the past had
agreed that premium payments would cease in the
event of a strike. Indeed, this unsupported conten-
tion seems inconsistent with the parties' representa-
tion in the stipulation of facts that the Respondent
did not negotiate with the Union concerning the
cessation of payments of the group health insur-
ance premiums. Second, the Respondent' s argu-
ment that its conduct was privileged by the collec-
tive-bargaining agreement is not reasonable nor
even arguably correct. Thus, no reasonable inter-
pretation of article 18, section 13 would support
the Respondent's contention that premium pay-
ments on behalf of its disabled employees were
payments for the contemporaneous rendering of
work and thus were not an accrued benefit. To the
contrary, as noted above, we have found that
under article 18, section 13 the premium payments
were an accrued benefit at least regarding employ-
ees whose leave did not exceed 3 months. Article
20, section 2 merely sets out typical "boilerplate"
language concerning the term of the agreement and
there is nothing in it which even arguably privi-
leges the Respondent's withholding of this benefit.
Clearly the mere expiration of a collective-bargain-
ing agreement does not permit the Respondent to
withhold an accrued benefit from its employees or
to unilaterally change their terms and conditions of
employment. See NLRB v. Katz., 396 U.S. 736
(1962); Wallace Metal Products, 244 NLRB 41
(1979). Accordingly, based on the above analysis
under Texaco, we agree with the judge's conclusion
that the Respondent violated Section 8(a)(3) and
(1) of the Act by discontinuing payments of group
health insurance premiums for eligible unit employ-
ees who were on workers compensation and/or
regular sick leave during the pendency of the
strike." Further, because the Respondent undertook
a We agree with the judge's finding at fn 22 of his decision , to which
the Respondent does not specifically except, that even though the com-
plaint alleged this conduct to be violative only of Sec 8(aX5) and, mde-
pendently , of Sec 8(a)(1), it is appropriate to find a violation of Sec
8(a)(3) as well because the matter has been fully litigated. We note that
no factual dispute exists as to any aspect of the elements of the 8(a)(3)
violation found Nor is there any contention that , in the circumstances
here, the factual elements of the 8 (a)(3) violation differ from those al-
leged and litigated Thus, in their stipulation of facts and accompanying
exhibits , the parties tendered all the relevant and material facts necessary
to establish both the 8(a)(3) as well as the 8 (a)(5) and ( 1) violations. It is
Continued
GULF & WESTERN MFG. CO.
this action unilaterally and without bargaining with
the Union, we also agree with the judge's conclu-
sion that the Respondent thereby violated Section
8(a)(5). Wallace Metal Products, supra.
ORDER.
The National Labor Relations Board orders that
the Respondent, Bohn Heat Transfer Group, Gulf
and Western Mfg. Co., Danville, Illinois, its offi-
cers, agents , successors, and assigns, shall
1. Cease and desist from
(a) Discriminating against, interfering with, re-
straining , and coercing employees in the exercise of
their rights to engage or refrain from engaging in
union and other protected concerted activities, in-
cluding the right to strike, by withholding premi-
um payments for accrued group health insurance
benefits for eligible employees on workers compen-
sation leave and/or regular sick leave during the
pendency of a strike.
(b) Refusing to bargain collectively with the
Union by unilaterally discontinuing premium pay-
ments for accrued group health insurance benefits
for eligible employees on workers compensation
leave and/or regular sick leave during the penden-
cy of a strike.
(c) In any like or related manner interfering
with, restraining , or coercing, employees in the ex-
ercise of the rights guaranteed them by Section 7
of the Act.
2. Take the following affirmative action neces-
sary to effectuate the policies of the Act.
(a) Reimburse International Union, United Auto-
mobile, Aerospace and Agricultural Implement
Workers of America (UAW) and its Local 1271 for
the premium payments it made to keep in force ac-
crued group health insurance benefits for eligible
employees who were on Workers compensation
and/or regular sick leave for the period 15 July
through 25 August 1980, plus interest as computed
in New Horizons for the Retarded.9 See also Ogle
Protection Service, 183 NLRB 682 (1970). The em-
ployees affected are:
Joyce Forman Thomas Ingram
well established that when , as here, the facts underlying the violation are
fully developed and fully litigated , the Board may find the violation
based on the issues litigated as well as those alleged in the complaint
Southwire Co, 282 NLRB 916 (1987), C & E Stores, 221 NLRB 1321 fn
3 (1976) In the circumstances of the present case, we agree with the
judge 's conclusion that the 8 (aX3) violation found is amply supported by
undisputed record evidence and has been fully litigated
9 In accordance with our decision in New Horizons for the Retarded,
283 NLRB 1173 ( 1987), interest on and after 1 January 1987 shall be
computed at the "short-term Federal rate" for the underpayment of taxes
as set out in the 1986 amendment to 26 US C § 6621 Interest on
amounts accrued prior to 1 January 1987 (the effective date of the 1986
amendment to 26 U.S.C § 6621) shall be computed in accordance with
Florida Steel Corp, 231 NLRB 651 (1977)
James Lewin
Don Hegg
George Haskins
James Seyfert
Maxine Simmons
Jack Hutson
Gerald Lazzell
Odell Smith
Sharon Hannon
Claude Smith
Patricia Graves
Dean O'Connell
William Collins
Gladys Edmunds
1125
(b) Preserve and, on request, make available to
the Board or its agents for examination and copy-
ing, all personnel, workers compensation, insur-
ance, and other records necessary to analyze the
amounts and benefits due under the terms of this
Order.
(c) Post at its facility in Danville, Illinois, copies
of the attached notice marked "Appendix."10
Copies of the notice, on forms provided by the Re-
gional Director for Region 33, after being signed
by the Respondent's authorized representative,
shall be posted by the Respondent immediately
upon receipt and maintained for 60 consecutive
days in conspicuous places including all places
where notices to employees are customarily posted.
Reasonable steps shall be taken by the Respondent
to ensure that the notices are not altered, defaced,
or covered by any other material.
(d) Notify the Regional Director in writing
within 20 days from the date of this Order what
steps the Respondent has taken to comply.
MEMBER JOHANSEN, concurring.
I concur with my colleagues' in finding that the
Respondent violated Section 8(a)(1) and (5) by uni-
laterally ceasing to pay health insurance premiums
for the named disabled employees. In reaching that
result, however, I do not adopt my colleagues' dis-
cussion of accrual or accrued benefits, nor their
analysis under Section 8(a)(3).
The terms and conditions of employment of the
Respondent's employees included, inter alia, the
Respondent's payment of premiums for comprehen-
sive health insurance coverage, as embodied in the
contract between the Respondent and the Union
covering those employees. That contract expired
by its terms at 12:01 a.m. on 10 July. The com-
plaint here alleged in essence that (a) the Respond-
ent ceased its payment of premiums for the affected
employees on 15 July, (b) that it did so without af-
fording the employees' exclusive representative an
opportunity to negotiate about such action, and (c)
that the Respondent thereby violated Section
8(a)(1) and (5). The Respondent's answer admitted
10 If 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 Nation-
al Labor Relations Board" shall read "Posted Pursuant to a Judgment of
the United States Court of Appeals Enforcing an Order of the National
Labor Relations Board "
1126 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
that it had ceased paying the premiums, but denied
that it did so without affording the Union an op-
portunity to bargain thereafter. The parties execut-
ed a stipulation on which the case was presented to
the judge. The stipulation states that the Respond-
ent did in fact suspend certain benefits, including
the premium payments at issue here, by prorating
its payments to provide coverage "up to 12:01 a.m.
July 15, 1980." Although it notified the Union on
15 July of the suspension effective that date, "the
Respondent did not bargain or negotiate with the
Union" prior to ceasing its payments for the affect-
ed employees who were on workers compensation
and/or sick leave. The payments for these nonstrik-
ing disabled employees' were clearly a term and
condition of employment and a mandatory subject
of bargaining , which the Respondent was not privi-
leged to alter unilaterally without first affording
the employees' exclusive bargaining representative
an opportunity to negotiate. It is stipulated that the
Respondent did not bargain or negotiate . Accord-
ingly, I conclude that it violated the Act as alleged
in the complaint.2
i The Board has recently reaffirmed its rejection of the argument made
by the Respondent that it was entitled to reasonably presume that the af-
fected disabled employees here were either engaged in or supportive of
the strike; under the decision in Southwestern Electric Power Co., 216
NLRB 522 (1975). See Texaco, supra at In. 25
2 That the complaint did not allege a violation of Sec. 8(a)(3) was not
in my view unintentional The original charge, filed October 8, alleged an
8(aX3) violation The amended charge , filed October 16, alleged a viola-
tion of Sec . 8(a)(1) and (5) The complaint , issued on 20 October, alleged
a violation of Sec. 8(axl) and (5) but not Sec 8(a)(3). Inasmuch as the
remedy for the 8(aX5) violation found affords full protection for the af-
fected parties, I do not decide in this case whether in circumstances
where a particular allegation is apparently eschewed by the General
Counsel, and the case is presented for decision on a bare stipulation, the
unalleged violation should be deemed to have been fully litigated.
APPENDIX
NOTICE To EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
The National Labor Relations Board has found
that we violated the National Labor Relations Act
and has ordered us to post and abide by this notice.
WE WILL NOT discriminate against, interfere
with, restrain, or coerce you in the exercise of your
rights to engage in or refrain from engaging in
union and other protected concerted activities, in-
cluding the right to strike, by withholding premi-
um payments for accrued group health insurance
benefits for eligible employees on workers compen-
station leave and/or regular sick leave during the
pendency of a strike.
WE WILL NOT refuse to bargain collectively with
International Union, United Automobile, Aero-
space and Agricultural Implement Workers of
America (UAW) and its Local 1271 by unilaterally
discontinuing premium payments for accrued group
health insurance benefits for eligible employees on
workers compensation leave and/or regular sick
leave during the pendency of a strike.
WE WILL NOT in any like or related manner
interfere with, restrain, or coerce you in the exer-
cise of the rights guaranteed you by Section 7 of
the Act.
WE WILL reimburse, with interest, the above-
named Union for the premium payments it made to
keep in force the accrued group health insurance
benefits for eligible employees who were on work-
ers compensation leave and/or regular sick leave
for the period 15 July through 25 August 1980.
BOHN HEAT TRANSFER GROUP,
GULF AND WESTERN MFG. CO.
Will J. Vance, Esq., for the General Counsel.
Arthur J. Chmiel, Esq., of Southfield, Michigan, for the
Respondent.
Irving M. Friedman, Esq. (Katz, Friedman, Schur &
Eagle), of Chicago, Illinois, and Sharon Walker, of
Georgetown, Illinois, for the Charging Party.
DECISION
STATEMENT OF THE CASE
Preliminary Statement Issues
STANLEY OHLBAUM, Administrative Law Judge. This
proceeding ' under the National Labor Relations Act, 29
U.S.C. § 151 et seq. (the Act), was presented to me in
Champaign, Illinois , on May 29, 1981, on a written stipu-
lation of facts (Jt. Exh. 3) with accompanying exhibits,
all parties participating throughout by counsel and af-
forded opportunity but not desiring to call witnesses.
Briefs and supplements thereto2 were received by July
13, 1981. All have been carefully studied.
The stipulated issues presented are whether Respond-
ent Employer violated the Act (1) through its admitted
discontinuance of payment-shortly after the inception
of an economic strike after expiration of a collective
agreement-of group health insurance premiums for unit
employees who were on worker's compensation leave or
regular sick leave prior to the inception of and continu-
i Complaint issued October 20, growing out of charge filed September
8 as amended October 16, 1980
2 The supplements, incorporated into the record as A . Exhs. 1-3, mdi-
cated the joinder of the General Counsel and the Charging Party in Re-
spondent 's withdrawal from par 18 of the stipulation of facts (Jt. Exh. 3),
to the effect that an official of Respondent had observed two allegedly
disabled employees "participating in the strike" (described below). Also
received from Respondent , in accordance with par . 14 of that stipulation,
were certain policies of insurance (also referred to below), which have
been incorporated into the record as R. Exh 4
GULF & WESTERN MFG. CO. 1127
ing uninterruptedly into the period of the strike and (2)
through its failure to bargain with Charging Party Union
concerning that action.
On the record presented, I make the following
FINDINGS AND CONCLUSION
1. JURISDICTION
At all material times, Respondent has been and is a
Delaware corporation engaged in manufacturing com-
mercial air-conditioning and refrigeration units, with
office and place of business in Danville, Illinois. During
the 12 months, a representative period, immediately pre-
ceding issuance of the complaint, Respondent sold and
shipped, directly in interstate commerce from its Dan-
ville facility to places outside of Illinois, finished prod-
ucts valued in excess of $50,000; and also, during that
period, in pursuit of its business, purchased and accepted
delivery, likewise directly in interstate commerce, at its
Danville facility from States other than Illinois , of goods
and materials valued in excess of $50,000.
I find that at all material times Respondent has been
and is an employer engaged in commerce within the
meaning of Section 2(2), (6), and (7) of the Act; and that,
at all of those times, the Charging Party has been and is
a labor organization within the meaning of Section 2(5)
of the Act.
II. ALLEGED UNFAIR LABOR PRACTICES
A. Facts
The stipulated facts are as follows:
Respondent Employer and Charging Party Union have
had a collective-bargaining relationship for approximate-
ly 20 years, their most recently expired collective agree-
ment having been for the period July 10, 1977, to July
10, 1980. Under that agreement (Jt. Exh. 1), Respondent
obligated itself to provide various insurance coverages to
unit employees and their dependents, including life, acci-
dent, sickness, hospitalization, survivors', medical, surgi-
cal, and dental (id. art. 18, p. 118 et seq.). Prior to the
expiration of the agreement and in accordance with its
terms, the parties entered into negotiations, commencing
in June and extending to July 9, 1980, for modification
and extension thereof, including liberalization of medical
insurance benefits. Since by 12:01 a.m. on July 10, 1980,
the expiration of the agreement, the parties had been
unable to agree on an extended , modified , or new agree-
ment, the Union at that time commenced a lawful eco-
nomic strike against Respondent at its Danville facility,
during which no union member worked or crossed the
union picket line.
On July 15, Respondent notified the Union orally and
in writing (Jt. Exh. 2) that, effective that date, Respond-
ent was "suspending all benefit programs" to unit em-
ployees and that the "only benefits which will be hon-
ored by the Company are:
1. Pension benefits for current retired employees.
2. Workers Compensation claims active prior to
this date.
3. Sickness and Accident claims active prior to
this date. a
Without bargaining or negotiating with the Union, Re-
spondent did in fact as of that date (July 15) suspend all
of those programs to those employees, including group
health programs4 for 16 unit employees who, since prior
to inception of the strike, had uninterruptedly been on
sick leave or workers' compensation leave. 5 During the
strike, however, Respondent paid vacation pay, under
the collective agreement , to all employees-strikers in-
cluded-who had previously scheduled vacations.
On or about July 21 and 24, the Union requested Re-
spondent to disclose its group health insurance account
or identification number so that the Union could contin-
ue paying premiums to maintain the insurance coverage
of unit employees "affected" by Respondent's above
cutoff action. When Respondent refused, the Union ac-
quired a new account number and defrayed such insur-
ance premiums from July 156 to August 25, when the
strike ended and the striking employees returned to work
(August 26).
B. Discussion and Resolution
It would serve no useful purpose here to review an-
cient precedents regarding the issues presented.' Suffice
it to say that the currently governing rule is explicated in
Emerson Electric Co., 246 NLRB 1143 (1979) (Emerson),
enfd. as modified 650 F.2d 463 (3d Cir. 1981). There the
Board determined that the employer had violated Sec-
tion 8(a)(1) and (3) of the Act by its termination of pay-
ment of sickness and accident benefits to "disabled" em-
ployees during a strike by the employees' bargaining
a No definition or clarification of "active" was provided or is here
vouchsafed. Thus, it is unclear whether this included the cutoff of all
claims for accidents, injuries, illnesses, hospitalizations, deaths, etc,
which had occurred, but had not yet been activated through formal noti-
fication or filing prior to July 15 In comparable situations, such ambigin-
tites have legally been resolved against the instrument 's draftsman. Apph-
cation of that principle could support the contention, not here advanced
by the parties, that there was in fact no cutoff or announced basis for
cutoff of hospitalization, medical , accident, or other claims manifested in
disabilities that had occurred (and were known to Respondent to have
occurred) prior to July 15, since they were "active" prior to that date.
Effectuation of this line of reasoning would mott much if not all of the
discussion that follows in this opinion.
4 The group health insurance coverage (Jt. Exh 1, 1977-1980 collec-
tive agreement , art 18, p 118 et seq) included sickness and accident, as
well as other, benefits Premiums for this coverage had been paid by Re-
spondent in a lump , monthly sum Payment for July was prorated so as
not to be effective beyond 12 01 a.m . of July 15. Workers' compensation
coverage was apparently independent of the foregoing.
5 I e, Joyce Forman, James Lewin, Don Hegg , George Haskins, James
Seyfert, Maxine Simmons, Jack Hutson , Gerald Lazzell, Thomas Ingram,
Odell Smith, Sharon Hannon , Claude Smith, Patricia Graves, Dean
O'Connell, William Collins, and Gladys Edmunds
a The parties' stipulation of facts Qt Exh 1, par. 12) refers to this
period mistakenly as June 15 through August 25 instead of July 15
through August 25, 1980.
Respondent calls attention to earlier cases that are either readily dis-
tinguishable or seemingly outmoded In its currently controlling Emerson
decision (infra), the Board expressly overruled Southwestern Electric
Power Co, 261 NLRB 522 (1975), to the extent inconsistent , but which
Respondent seemingly continues to prefer That the Board has power to
shift gears or reverse course, see , e g , NLRB Y. Weingarten, Inc, 420
U S. 251, 264-267 (1975); NLRB v Bell Aerospace Co, 416 U S 267 295
(1974)
1128 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
unit . Enforcing the Board 's decision, the court stated,
650 F .2d at 468-469 and 472:
Accrued benefits , in contrast to wages, are de-
ferred compensation for work already done. They
may take the form of wages due for past work, va-
cation time, seniority rights and other conditions of
employment linked to past service.
The employer is merely being required to pay an
accrued benefit, a form of deferred compensation
for service it has already received . The effect there-
fore does no more than prevent unjust enrichment
to an employer by its retention of benefits due to its
employees.
Here also, as in Emerson , the benefits" withdrawn or
discontinued were, in the case of nonstriking disabled
employee, not "compensation for contemporaneous de-
livery of services" but for "past work performed" 10-
i.e., benefits accrued on inception of the disabilities prior
to the strike of the nondisabled unit employees. The
right to hospitalization , medical , and workers' compensa-
tion benefits here accrued at the same time as the disabil-
ities occurred-i.e., prior to the strike , and they both
continued to follow a parallel vested employee
right/employer obligation track until they no longer dis-
abled employees affirmatively joined in the strike.
While an employer is certainly not obliged to "fi-
nance" a strike against him by "subsidizing" striking em-
ployees 11 through continuing to pay their wages (or
"benefits") during the strike, the same clearly does not
hold true for wages (or "benefits") earned or accrued
prior to the strike . ' a Nor, certainly is an employer re-
lieved, simply because of a strike, of his obligations to
nonstriking employees.
While "disability" does not necessarily equate with
nonparticipation in strike activity or sympathy , it may,
s I.e., insurance premium payments . I do not believe that any control-
ling or substantial distinction may be drawn between discontinuance of
benefit payments (as in Emerson) and discontinuance of insurance premi-
um payments for such benefits (as here), since in either case the result is
the same-viz, withdrawal or cancellation of an employee benefit.
s Emerson, above 246 NLRB 1143.
10 Id.
11 Simplex Wore & Cable Co., 245 NLRB 543 (1979) (hospitalization
and medical insurance premiums for striking employees ); Towne Chevro-
let, 230 NLRB 479 (1977) (insurance premiums for striking employees);
Trading Port, 219 NLRB 298, 299 fn . 3 (1975) (insurance premiums for
striking employees); Ace Tank & Heater Co., 167 NLRB 663 (1967)
(health insurance premiums for striking employees); General Electric Co.,
80 NLRB 510 (1948) (wages of striking employees).
12 NLRB v. Great Dane Trailer, 388 U.S. 26, 32 (1967) (accrued vaca-
tion benefits); NLRB v. General Time Corp., 657 F.2d 271 (7th Cir. 1981)
(accrued vacation pay); NLRB Y. Knuth Bros., 584 F.2d 813, 816 (7th Cit.
1978) (accrued vacation pay); Industrial Workers AIW Local 289 v.
NLRB, 476 F.2d 868, 878 (D.C. Cir. 1973) (accrued vacation pay),
NLRB v. Jemc . Inc., 465 F.2d 1148 (6th Cir. 1972) (accrued vacation
pay), cert . denied 409 U.S. 1109 (1973); Flambeau Plastics Corp Y. NLRB,
401 F.2d 128, 135-136 (7th Cir. 1968) (accrued vacation pay), cert.
denied 393 U.S. 1019 (1969); NLRB v. Frick Co., 397 F 2d 956 (3d Cur.
1968) (vacation pay) Indiana & Michigan Electric Co., 236 NLRB 986
(1978) (accumulated leave pay), enfd. 610 F.2d 812 (4th Cir 1979).
It is unnecessary , in this connection, to constitute a violation , to estab-
lish discriminatory or otherwise improper employer motive or intent.
Great Dane Trailers, above; cf. NLRB v. Erie Resistor Corp., 373 U.S. 221,
228 (1963).
depending on the nature and extent of the particular dis-
ability. Here there is no evidence that the Employer in-
quired, or that the employees informed the Employer, as
to the specific character of the level of the alleged dis-
abilities during the strike , or as to whether, by reason
thereof, they were nonparticipants and nonpartisans in
the strike-except that the Union requested from the
Employer utilization (at union expense) of the Employ-
er's group insurance coverage identification number so
that the Union could defray premium payments for "af-
fected" (Jt. Exh. 2, par . 12) employees to avoid lapse of
their insurance coverage . This the Employer declined to
do. It is unclear whether the "affected " employees were
only "disabled" employees, as distinguished from all of
the unit employees-who were, of course, even though
not disabled , also "affected" by the Employer's termina-
tion of coverage. However , it is clear that even without
the Union's request for interim utilization of the Employ-
er's group insurance coverage number , the Employer
knew that 16 of its employees (identified by name in the
stipulation of facts, A. Exh . 3, par . 13) were in "disabil-
ity" status at the commencement of the strike (id.).
Under these circumstances , perhaps it would not be
amiss to expect and require the Employer , if it indeed
believed that these "disabled" workers (or some of them)
were strike participants , to communicate those beliefs to
the Union and to ascertain the facts before unilaterally
severing their insurance coverages , at potential financial
hazard to any truly disabled workers-to say nothing of
the Act-related restraint and coerciveness of such a
measure on them and also on all other collective-bargain-
ing unit members . And it seems reasonable to presume
that, by seeking from the Employer data to assure unin-
terrupted coverage for "affected" employees , the Union
did not seek thereby to convey the impression that it ex-
pected the Employer to continue paying current premi-
ums for nondisabled striking employees as well , since it
was utterly plain that the latter were not entitled there-
to.13 Moreover, in disavowing its possibly contrary earli-
er viewpoint in Southwestern Electric, above, the Board
explicitly reasoned in Emerson above at 385 that:
an employer may no longer require its disabled em-
ployees to disavow strike action during their sick
leave in order to receive disability benefits. To
allow the termination of such benefits to certain em-
ployees as a result solely of the strike activities of
others is to penalize the employees who have not
yet acted in support of the strike.
As pointed out by counsel for the Charging Party the
insurance policy provisions are unclear as to the conse-
quences on continued coverage of failure to make cur-
rent premium payments, or of notification that no further
premiums will be paid, following occurrence of an in-
sured-against event.'' If, because of discontinuances of
13 See cases cited, supra, fn. 11.
14 Thus, for example: (1) under the "Blue Cross Comprehensive (CSP)
Certificate" (Jt. Exh. 4), payment of the monthly premium appears to be
a prerequisite "for membership covering the benefits under this Con-
tract," the "term of the Contract" being only "from month to month
Continued
GULF & WESTERN MFG . CO. 1129
premium payments, the insurer canceled coverage and
refused to defray expenses being incurred, affected work-
ers would be relegated to costly litigation of uncertain
outcome. Furthermore, what of attendant cancellation of
nonstriking workers' life and survivors' insurance cover-
ages, as well as hospitalization, medical, and other cover-
ages of their family members under the policies here (Jt.
Exh. 1, art. 18, p. 118 et seq.)? Employer imposition of
such consequences and burdens on already disabled non-
striking employees must be regarded as significantly res-
traintful and coercive under the Act, since they are the
result only of their union affiliation as unit members
under the expired collective agreement in process of re-
negotiation . Such measures are clearly calculated to re-
strain and coerce them in what Congress intended to be
the unfettered right, guaranteed by the Act, to continue
their union membership and support. It not being essen-
tial to the violations alleged to show that they stemmed
from improper motivation or intent on its part, but
merely that they were "inherently destructive of' Sec-
tion 7 rights (Great Dane Trailers, above at 33 fn. 12) or
that their reasonable tendency was to restrain or intere-
fere with employees' exercise of those rights (NLRB v.
Clearfield Cheese Co., 322 F.2d 89, 94 (3d Cir. 1963)),
which they plainly were, Respondent's described actions
here were in violation of Section 8(a)(1), (3), and (5) of
the Act and I so find. I further find, under the circum-
stances, that Respondent's action in cutting off these pay-
ments on the heels of and seemingly in direct response to
the inception of an economic strike and during the proc-
ess of renegotiating a collective agreement, had the pur-
pose, intention, and effect of coercing, restraining, and
discriminating against bargaining; unit employees in re-
spect to and in retaliation for their lawful economic
strike-i.e., in respect to employee activity within the
Act's protection.
The governing principles I derive from the foregoing
are:
1. If the employee's right to payment (e.g., past wages)
or benefit (e.g., hospitalization insurance for existing dis-
ability) has accrued to the employee prior to the incep-
tion of the strike, the employee remains entitled to it and
payment may not be denied or withheld-in the case of
disability, during its continuance-because his unit goes
out on strike while he is disabled,' s or even if he strikes
or exercises any other right guaranteed under the Act. 1 6
until cancelled or terminated ," with automatic termination for nonpay-
ment within 30 days of any monthly premium or for cessation for any
reason of group membership ; (2) the "Group Major Medical Expense
Coverage Subscription Certificate" (Jt Eth. 4) contains a similar provi-
sions regarding automatic termination in the event of nonpayment for 30
days of monthly premium, although covered benefits in this category
may continue to be available on a limited basis with respect to illnesses in
benefit status at the time of termination , and (3) the "Blue Shield Usual
and Customary Fee-Series 100" (Jt Exh. 4), covering certain medical
expenses, is automatically terminated 30 days following nonpayment of a
monthly premium There is no reason to assume that the 30-day grace
periods would be applicable in the event an employer paying the premi-
ums cancels or withdraws the coverage , or expressly indicates that he
will no longer make premium payments.
15 Emerson , above, Board decision, 246 NLRB 1143
16 See Supreme Court and other cases cited, above fn 12 See also
Emerson , court decision, above.
2. If the employee's right to payment or benefit has not
accrued prior to inception of the strike, an employee in
disability status at the time of the inception of the strike is
nevertheless entitled to it during continuance of his dis-
ability, unless it is shown by the employer that the em-
ployee is a participant in the strike or has manifested
"public support" therefor.17 In this situation the employ-
er would be required, for example, to continue to defray
current insurance premiums for risks that have not yet
occurred, since the disabled employee is not among the
strikers-unless the employer establishes the contrary.
3. If payment of the current premium for a disabled
employee encompasses both an accrued coverage benefit
by keepng the policy alive'8 and also at the same time
provides current coverage for risks that have not yet oc-
curred, since it is impossible to separate the two, an un-
avoidable incidental gain as to the latter feature (i.e.,
coverage for fresh risks) is provided to any disabled em-
ployees who associates himself with the strike. In this sit-
uation, in view of the nonseparability or indivisibility of
the premium payment, it would be inequitable and im-
proper under Supreme Court requirements 19 to deprive
a disabled employee, through cessation of premium be-
cause he exercises a right guaranteed under the Act, of
his entitlement to continued accrued pay or benefits for
his disability that occurred prior to the inception of the
strike. 20
Applying the foregoing to the instant case results in
the determination here that the disabled employees in
question continued to be entitled, for the continuance of
their disability during the strike, to Employer insurance
premium payments (as well as workers' compensation
payments) necessary to keep those disability coverages
alive, since their right thereto was earned and had ac-
crued prior to inception of the strike; and that cancella-
tion thereof or failure to continue the same by the Em-
ployer was at the peril of the Employer, in the event of
denial of coverage by the insurer and the expense of es-
tablishing such covering through litigation by the em-
ployees.
It is accordingly found and determined that by its ac-
tions in discontinuing, withdrawing, cancelling, and at-
temptedly annulling the described benefits and insurance
coverages of disabled, nonstriking unit employees during
the pendency of the aforementioned strike, accrued to
said disabled nonstriking employees at an prior to the in-
ception of the strike, Respondent interfered with, re-
strained, and coerced them and other employees in the
exercise of rights guaranteed under Section 7 of the Act,
and discriminated against them in regard to the hire,
tenure, and terms and conditions of their employment so
as to discourage or encourage membership in a labor or-
ganization; and that by taking such action unilaterally,
Respondent failed and refused to bargain with Charging
Party Union as the employees' exclusive bargaining rep-
resentative.21
14 Emerson , above, Board and court decisions
18 See fn. 14, above.
19 Cf cases cited , supra at fn 12
20 Id , Emerson , above court opinions
21 NLRB v. Katz, 369 U S 736, 742-743 (1962)
1130 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
On the foregoing findings and the entire record, I
make the following
affect commerce within the meaning of Section 2(6) and
(7) of the Act.
CONCLUSIONS OF LAW
1. Jurisdiction is properly asserted here.
2. Through its described actions in discontinuing, with-
drawing, cancelling, and attemptedly annulling accrued
workers' compensation benefits and insurance coverages
and benefits of its disabled, nonstriking employees during
the pendency of the aforedescribed strike, Respondent
violated Section 8(a)(1) and (3)22 of the Act.
3. Through its taking such actions unilaterally and
without bargaining in good faith concerning the same
with the Union as its employees' exclusive bargaining
representative, Respondent violated Section 8(a)(5) of the
Act.
4. The violations and each of them constitute unfair
labor practices under the Act, and they have affected, af-
fected, and, unless permanently restrained and enjoined
and otherwise appropriately remedied, will continue to
22 Although the complaint does not state that the facts alleged (and
here established) constitute violation of Sec. 8(a)(3) as well as (1), the
original charge so alleged , and the amended charge is in its factual allega-
tion verbatim the same as the original charge, and on brief the General
Counsel as well as the Charging Party correctly urge that the facts com-
prise violation of Sec. 8(aX3) as well as (1) and seek a determined accord-
ingly. Under these circumstances since all controlling facts have been
tendered in the parties ' stipulation of facts and thus fully litigated, and it
being clear that Sec. 8(a)(3) as well (1) was violated here, I have included
an 8(a)(3) determination as well , and, if essential for that purpose, deem
the pleadings amended to conform to the proof in that regard NLRB v.
Iron Workers Local 433 (AGC), 600 F 2d 770, 775-776 (9th Cir. 1979),
cert denied 445 U.S. 915 (1979). Cf., e.g Fed.R.Civ P 15(b), NLRB v.
Font Milling Co, 360 U.S. 301, 307-309 (1959), NLRB v. Inland Empire
Meat Co., 611 F.2d 1235, 1237-1238 (9th Cir. 1980); Associated General
Contractors, above ; Gulf States Manufacturers v. NLRB, 579 F.2d 1298,
1302-1304 (5th Cir. 1978), American Boiler Mfg Assn. v. NLRB, 366 F.2d
815, 821 (8th Cir. 1966); Associated Home Builders v. NLRB, 352 F.2d
745, 754 (9th Cir. 1965), Curtiss-Wright Corp. v. NLRB, 347 F.2d 61, 72-
74 (3d Cir. 1965); Fnto Ca v. NLRB, 330 F 2d 458, 465 (9th Cir 1964);
NLRB Y. Puerto Rico Rayon Mills, 293 F 2d 941, 947-948 (lst Cir 1961);
Ackerman Mfg. Co, 241 NLRB 621 (1979); Crown Zellerbach Corp, 225
NLRB 911, 912 (1976), C & E Stores, 221 NLRB 1321 fn 3 (1976);
M & J Trucking Co., 214 NLRB 592, 597 (1974), enfd. 538 F 2d 337 (9th
Cu 1976); Rochester Cadet Cleaners, 205 NLRB 773 (1973), Warren-Teed
Products Co., 138 NLRB 131 (1962), Monroe Feed Store, 112 NLRB 1336,
1337-1338 (1955).
REMEDY
Having interfered with, restrained, coerced, and dis-
criminated against employees in violation of the Act, and
not having bargained collectively with its employees' ex-
clusive bargaining representative as required by the Act,
Respondent should be required to cease and desist from
such and like or related violations. Those violations
having necessitated expenditure by the Union, on behalf
of Respondent's 16 affected disabled, nonstriking em-
ployees, of insurance premium payments to avoid forfeit-
ure of their insurance coverages and consequent much
larger expenses or damages, Respondent should be re-
quired to reimburse the Union therefor, as well as (if ap-
plicable) the affected employees for any associated bene-
fits not paid or expenses incurred by reason thereof or in
connection therewith, together with interest computed as
explicated in F. W. Woolworth Co., 90 NLRB 289 (1950),
Isis Plumbing Co., 138 NLRB 716 (1962), and Florida
Steel Corp., 231 NLRB 651 (1977).23
Since, for reasons that have been explained, I believed
that, under the circumstances here presented, continued
entitlement of the employees who remained in disability
status subsequent to inception of the strike, to their ac-
crued pay or benefits is independent of whether they par-
ticipated in or favored lawful strike or other protected
concerted activity, the recommended Order here is tai-
lored accordingly. This eliminates what would otherwise
be the necessity for determining in a supplemental pro-
ceeding whether any of the 16 affected employees, enti-
tled to the benefits already accrued by reason of disability
antedating inception of the strike, "participated in" or
"associated themselves," publicly or privately, with the
strike in the period (July 15 through August 25, 1980)
here involved, although, it is to be observed, there is no
indication here that any of them did.
Respondent should, of course, be required to post the
usual informational notice to employees.
[Recommended Order omitted from publication.]
23 See also NLRB v. General Time Corp, 657 F 2d 271 (7th Cir 1981).