Borden, Inc.

National Labor Relations Board - Board Decisions

Mar 12, 1980

248 N.L.R.B. 387 (N.L.R.B. 1980)

BORDEN. INC. 387
Borden, Inc., Borden Chemical Division and Local
No. 553, International Chemical Workers
Union. Cases -CA-12252 and 1-CA-12327
March 12, 1980
SUPPLEMENTAL DECISION AND
ORDER
BY CHAIRMAN FANNING AND MEMBERS
JENKINS AND PENELLO
On April 20, 1978, the National Labor Relations
Board issued its Decision and Order in the above-
entitled proceeding,' finding that Respondent vio-
lated Section 8(a)(5) and (1) of the National Labor
Relations Act, as amended, by failing to supply the
Union with requested information concerning the
Company's insurance, pension, and health plans,
and that Respondent violated Section 8(a)(3) and
(1) of the Act by refusing to confer accrued vaca-
tion benefits to striking employees because of their
strike activity. The Board ordered Respondent to
cease and desist from engaging in such unlawful
conduct; to furnish the Union the requested infor-
mation; to make Donald J. Collette and any other
eligible employee whole with respect to their ac-
crued vacation benefits in the manner set forth in
the section of the Decision entitled "The Remedy";
and to post appropriate notices. Thereafter, on
June 22, 1979, the United States Court of Appeals
for the First Circuit issued its decision 2 wherein it
affirmed the Board's 8(a)(5) finding, but denied en-
forcement of the Board's 8(a)(3) finding, and re-
manded the case to the Board for determination of
the legitimacy and the substantiality of Respon-
dent's asserted business justification for withhold-
ing the accrued vacation benefits. On September
12, 1979, the Board notified the parties that it had
decided to accept the remand and invited them to
file statements of position. Thereafter, a statement
was filed by Respondent.
In its decision, the Board found that Respon-
dent's refusal to pay accrued vacation benefits to
strikers when requested resulted in the inhibition of
the employees' free exercise of their fundamental
right to strike and constituted conduct inherently
destructive of employees' rights within the meaning
of N.L.R.B. v. Great Dane Trailers, Inc., 388 U.S.
26 (1967). The Board concluded, therefore, that it
was not necessary to consider evidence of antiun-
ion motivation. The court disagreed because, in its
view, Respondent's conduct did not meet the Great
Dane "inherently destructive" test of "carr[ying]
with it 'unavoidable consequences which the em-
ployer not only foresaw but which he must have
235 N RB X2
'2 L R B 1 n .I- B od Ir C , l Divio. i, X) F 2d 313
248 NLRB No. 60
intended' and thus bears 'its own indicia of intent."'
388 U.S. at 33. The court found, instead, that the
conduct in issue had only a "comparatively slight"
impact on employees' rights; that Respondent had
presented a business justification for its conduct,
namely, the terms of the collective-bargaining
agreement and past practice; and that the Board
should have determined whether that asserted justi-
fication was legitimate and substantial, and, if so,
whether it was pretextual, and remanded for deter-
mination of those issues. The Board, having accept-
ed the remand, deems the court's decision to be the
law of the case.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the Na-
tiona: Labor Relations Board has delegated its au-
thority in this proceeding to a three-member panel.
The Board has considered the record as a whole,
the decision of the United States Court of Appeals
for the First Circuit remanding the proceeding, and
the statement of position, and, for the reasons set
forth infra, has decided to affirm its conclusion that
Respondent violated Section 8(a)(3) of the Act.
The undisputed basic facts are that the parties'
collective-bargaining agreement provides, in perti-
nent part, that, "[e]xcept where the Company and
Union determine otherwise in individual cases, em-
ployees shall not be paid vacation pay in lieu of va-
cation"; that, pursuant to that agreement and past
practice, employees with extra weeks of vacation
are permitted to schedule their vacations at any
time during the June 1 to December 15 vacation
period, provided the operation of the plant is not
impaired; that, beginning on October 1, 1976, Re-
spondent's employees engaged in protected strike
activity; that, at the outset of the strike, Respon-
dent rejected the union president's request that ac-
crued vacation benefits be paid to employees quali-
fied therefor, with the statement that it would not
pay vacation pay to strikers; and that, several
months later, after the vacation period had ended
but while the strike still was in progress, Respon-
dent paid the accrued benefits.
The business justification presented by Respon-
dent rests on its contentions that the quoted con-
tractual provision did not require the payment of
vacation pay in lieu of actual vacation until the ex-
piration of the vacation period, and also authorized
it not to consider time off on strike as being time
off for vacation purposes so as to render employees
eligible to receive vacation pay. However, Respon-
dent's stated determination at the outset of the
strike not to pay strikers on its face tends to dis-
pute both the legitimacy and substantiality of its
subsequently asserted business justification since it,
in fact, did pay the accrued benefits to strikers
BORDEN. INC
388 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
during the strike-some 3 months after the pay-
ment request. That justification, moreover, is fur-
ther diluted by Respondent's failure to adduce any
evidence to show that it ever before had asserted
such a policy, or that it ever had applied that
claimed policy to employees other than strikers, or
that it ever before had refused to pay accrued va-
cation pay because of the use to which an employ-
ee planned to put, or put, his vacation time.
Indeed, the only evidence adduced as to past appli-
cation of the contract in this regard indicates that
its sole purpose was to preclude employees from
working and simultaneously receiving vacation
pay; i.e., to insure that time off was taken instead
of being foregone for extra pay. This business pur-
pose of the contract provision is, of course, legiti-
mate and substantial, but it has no relevance to the
delay in the strikers' cases, because they were
taking time off and had no possibility of substitut-
ing work for vacations and receiving additional
pay.
Apart from this purpose of the clause, we can
find the existence of no other substantial business
reason for Respondent's delay in paying benefits al-
ready earned and accrued, and it has offered none.
Thus, the absence of a legitimate reason for pe-
nalizing the employees in this fashion for striking
gives rise to the inference3 that Respondent's true
motive was to impress upon the strikers that union
support risked reprisals which Respondent was
willing to inflict. As the Supreme Court described
the message of such conduct, it showed that Re-
spondent, and not the Union, is the source of vaca-
tion benefits, and that "the source of benefits now
conferred is also the source from which future
benefits must flow and which may dry up if it is
not obliged." N.L.R.B. v. Exchange Parts Co., 375
U.S. 405, 409 (1964). Inflicting a disadvantage on
employees because of their union support is, of
course, the definition of a violation of Section
8(a)(3).
We find, therefore, that Respondent's asserted
reasons for withholding the accrued vacation bene-
fits are pretextual, that it withheld payment of
those benefits from those eligible in order to dis-
courage the employees' support for the Union and
the strikers, and that, by refusing to confer the ac-
crued benefits upon request, because of the em-
ployees' protected strike activity, Respondent
has engaged in unfair labor practices within the
meaning of Section 8(a)(3) and (1) of the Act. Ac-
cordingly, we shall affirm our initial Order in its
entirety.
3 Cf. Shattuck Denn Mining Corporation (Iron King Branch) v
N.L.R.B., 362 F.2d 466, 470 (9th Cir 1966).
ORDER
Based on the foregoing and the entire record in
this proceeding, the National Labor Relations
Board hereby affirms the Order issued in this pro-
ceeding on April 20, 1978, reported at 235 NLRB
982.
MEMBER PENELLO, dissenting:
Contrary to my colleagues, I would find, for the
reasons stated below, that Respondent did not vio-
late Section 8(a)(3) of the Act by postponing pay-
ment of vacation benefits until after the expiration
of the contractual vacation period.
When this case was first before us 2 years ago, I
agreed with my colleagues that Respondent violat-
ed Section 8(a)(5) in certain respects, but dissented
from their 8(a)(3) finding on the vacation pay
issue. 4 Thereafter, the Board filed an application
for enforcement of its Order with the United States
Court of Appeals for the First Circuit. On June 22,
1979, the court issued its decision wherein it af-
firmed the Board's 8(a)(5) findings, but denied en-
forcement of the Board's Order insofar as it related
to the 8(a)(3) violation.5 Finding that my col-
leagues had committed legal error in refusing to
consider the issue of whether antiunion motivation
had been proved, the court remanded the case to
the Board "in order that the Board may assess
whether Borden came forward with a legitimate
and substantial business justification for its conduct
and, if so, whether the purported justification was
pretextual."
The relevant facts are not in dispute and are set
forth in my earlier opinion. In sum, the parties' col-
lective-bargaining agreement provided that em-
ployees entitled to a third week of vacation were
required to schedule it during the period of June 1
to December 15, 1976.6 The contract also provided
that "[e]xcept where the Company and Union de-
termine otherwise in individual cases, employees
shall not be paid vacation pay in lieu of vacation."
On September 30 the contract expired, and on
October I the Union called a strike which contin-
ued until January 30, 1977. At the beginning of the
strike, the Union requested that Respondent pay all
accrued vacation benefits, but Respondent refused
on the ground that it has consistently asserted
throughout this proceeding, namely, that until the
contractual vacation period expired on December
15, it was under no obligation to pay vacation
benefits in lieu of employees actually taking vaca-
tions. In complete accord with its position, Respon-
dent did in fact pay the vacation benefits on De-
4 235 NLRB 982.
600 F.2d 313
6 All subsequent dates herein are in 1976 unless otherwise indicated.
BORDEN, INC. 389
cember 26, which was shortly after the expiration
of the contractual vacation period.
Thus, Respondent rests on the terms of its col-
lective-bargaining agreement with the Union as a
legitimate and substantial reason for its conduct.
Accordingly, as stated by the court of appeals, the
critical question here is one of determining "wheth-
er Borden was motivated by its reliance on the col-
lective bargaining agreement or by antiunion
animus when it withheld the accrued vacation
benefits." My colleagues dismiss Respondent's con-
tract justification as pretextual and conclude that
its real motivation was to discourage support for
the Union and the strike. I cannot agree.
First, as I pointed out in my original dissent,
"nothing in the record suggests that Respondent's
conduct in postponing payment of vacation benefits
was motivated by union animus." Second, the con-
tract specifically provided that "employees shall
not be paid vacation pay in lieu of vacation." Re-
spondent's refusal to consider time spent "on
strike" as fulfilling the contractual requirement of
being "on vacation" is not only reasonable and
logical but is also supported by Board precedent.7
'See G. C. Murphy Company, 207 NLRB 579 (1973), discussed in my
original dissent.
According to my collegues, the "sole purpose" of the clause in question
was to prevent employees from working and receiving vacation pay. My
Third, Respondent's conduct is consistent with its
past practice of always requiring employees to take
vacations in order to receive vacation pay. 8
Fourth, and most significantly, once the contrac-
tual vacation period expired, Respondent paid the
accrued vacation benefits, even though the strike
was still in progress. As I stated previously, "Re-
spondent's payment of the vacation benefits on De-
cember 26 during the pendency of the strike
strongly supports the conclusion that its conduct
was dictated by the provisions of the collective-
bargaining agreement and therefore was not viola-
tive of Section 8(a)(3)."
colleagues state that this purpose has "no relevance" to the instant case
where employees were "taking time off and had no possibility of substitut-
ing work for vacations and receiving additional pay". However, the fact
that my collegues' interpretation of the contract differs from that of the
Respondent is immaterial. 600 F.2d at 321. The issue before us is not one of
contract interpretation but of contract reliance, and my colleagues have
pointed to no evidence that would warrant the conclusion that Respondent
did not, in fact, rely on the collective-bargaining agreement when it
postponed payment of the vacation benefits.
a Thus, the Administrative Law Judge found that in the past employ-
ees have not been allowed to work and receive vacation pay. 235 NL.RB
at 989-990.
BORDEN, INC.