Christopher Street Owners Corp.

National Labor Relations Board - Board Decisions

May 26, 1989

294 N.L.R.B. 277 (N.L.R.B. 1989)

CHRISTOPHER STREET OWNERS CORP
Christopher Street Owners Corp . and Local 32B-
32J, Service Employees International Union,
AFL-CIO. Case 2-CA-22258
May 26, 1989
DECISION AND ORDER
BY CHAIRMAN STEPHENS AND MEMBERS
CRACRAFT AND HIGGINS
On April 14, 1988, Administrative Law Judge
Edwin H. Bennett issued the attached decision.
The Respondent filed exceptions and a supporting
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 brief and has
decided to affirm the judge's rulings, findings, I and
conclusions as modified,2 to modify his remedy,
but not to adopt the recommended Order.
1. The judge found that the Respondent violated
Section 8(a)(5) by unilaterally changing one of the
porter's job duties. We agree. The "Job Responsi-
bility Memo" that the Respondent distributed to
unit employees in May 1987 "materially, substan-
tially, and significantly" altered the porter's duties
to include the regular distribution of post office
and United Parcel Service packages to tenants. The
fact that the porter testified that he performs these
additional duties only twice a week is not determi-
native. There is no guarantee that the frequency of
this distribution will not increase; indeed, it likely
will on at least a seasonal basis. In any event, the
nature of the unilateral change, and not the fre-
quency of its performance, triggers the bargaining
obligation.
2. We agree with the judge that the Respondent
violated Section 8(a)(5) by failing to notify Local
32B-32J, Service Employees International Union,
AFL-CIO (the Union) that the employees' medical
insurance coverage was canceled in May 1987, by
i The Respondent has excepted to some of the judge's credibility find-
ings The Board's established policy is not to overrule an administrative
law judge's credibility resolutions unless the clear preponderance of all
the relevant evidence convinces us that they are incorrect Standard Dry
Wall Products, 91 NLRB 544 (1950), enfd 188 F 2d 362 (3d Cir 1951)
We have carefully examined the record and find no basis for reversing
the findings
2 We reject the judge's statement in par 13 of his decision's "Discus-
sion," that the "Respondent's purchase of new insurance, or its acting as
a self-insurer, even without bargaining with Local 32, would not have
violated its bargaining obligation " On the contrary, that unilateral action
would violate Sec 8(a)(5) Clear Pine Mouldings, 238 NLRB 69 (1978),
enfd 632 F 2d 721 (9th Cir 1980), Eastern Washington Distributing Co,
216 NLRB 1149 (1975) The Respondent is, however, as explained below,
required to maintain medical insurance benefits at the pre-May 1987
level, to the extent that it must make whole its employees for losses suf-
fered as a result of the unlawful discontinuation of those benefits, until it
fulfills its bargaining obligation with the Union
277
Local 2, New York State Independent Union of
Building Service Employees and Factory Workers,
N.F.I.U. (Local 2), and by failing to bargain with
the Union over the effects of this cancellation. We
agree with the judge that, to remedy this violation,
the Respondent is required to make whole employ-
ees for losses suffered as a result of the May 1987
discontinuation of medical insurance coverage until
such time as the Respondent fulfills its bargaining
obligation. 3
3. Contrary to the judge, we do not find that the
"Staff Problems" provision of the "Job Responsi-
bility Memo" unlawfully commands employees to
deal directly with the Respondent on mandatory
bargaining subjects. The "Staff Problems" provi-
sion merely instructs employees to raise work-relat-
ed issues with the superintendent, a unit employee,
or with management, rather than to embroil tenants
in employee disputes. There is nothing in the "Staff
Problems" provision, or the context in which it ap-
pears in the "Job Responsibility Memo," which
either prohibits employees from discussing work-
related problems among themselves or penalizes
employees for such activity. Nor does this provi-
sion directly or impliedly preclude employees from
consulting with a lawful bargaining representative,
on "any problems affecting . . . work or sched-
ule." Rather, the "Staff Problems" provision
9 In its Decision and Order reported at 286 NLRB 253 (1987), the
Board found that on July 16, 1984, the Respondent became a successor
employer obligated to recognize and bargain with the Union The Board
further found that on January 31, 1985, the Respondent violated Sec
8(a)(2) by executing a collective-bargaining agreement with Local 2
Having established terms and conditions of employment in the January
1985 contract, albeit unlawfully, the Respondent thereafter could not
alter them without first satisfying its bargaining obligation to the Union
See NLRB v Katz, 369 U S 736 (1962) Notwithstanding this obligation,
however, in May 1987, when Local 2 canceled the employees' medical
insurance coverage, the Respondent failed to notify the Union of this de-
velopment and failed to bargain over the effects of the cancellation In-
stead, as the judge pointed out, the Respondent simply elected to discon-
tinue providing medical insurance of any kind for unit employees Al-
though the Respondent was not required to bargain over the termination
of the Local 2 plan, the decision to strip employees of medical insurance
coverage altogether was quite a different matter The Respondent re-
mained obligated to bargain over that decision, just as it would have been
required to bargain over a decision to substitute a different health plan
See Clear Pine Mouldings, 238 NLRB 69, 79-80 (1978), enfd 632 F 2d
721, 729 (9th Cir 1980) The remedy for the violation committed here is
the same as the remedy in Clear Pine in which the respondent unlawfully
instituted substitute health insurance coverage after lawfully ceasing pay-
ments to the prior plan employees shall be made whole, with interest, for
their losses
The Respondent contends, however, that such a make-whole remedy is
inappropriate, citing First National Maintenance, 254 NLRB 289 (1981),
and R J E Leasing Corp, 262 NLRB 373 (1982) Those cases are distin-
guishable In First National Maintenance and R J E Leasing, unlike the
situation here, there was no lawful collective-bargaining representative
and therefore the respondents were not subject to a bargaining duty In
this case, the Respondent could have satisfied its obligations under both
Sec 8(a)(2) and (5) by notifying the Union of the cancellation of the em-
ployees' health benefit insurance and bargaining over the effects of the
cancellation This the Respondent failed to do, and it is therefore only
equitable that it be required to bear the financial consequences of its un-
lawful conduct
294 NLRB No. 18
278 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
merely establishes the general policy that tenants
are not to be enmeshed, at least initially, in employ-
ee complaints.4 Accordingly, we do not find this
provision violative of Section 8(a)(5).
CONCLUSIONS OF LAW
1. The Respondent, Christopher Street Owners
Corp., is an employer engaged in commerce within
the meaning of Section 2(6) and (7) of the Act.
2. The Union, Local 32B-32J, Service Employees
International Union, AFL-CIO, is a labor organi-
zation within the meaning of Section 2(5) of the
Act.
3. The following employees constitute a unit ap-
propriate for the purpose of collective bargaining
within the meaning of Section 9(b) of the Act:
All service employees employed at Respond-
ent's 165 Christopher Street building.
4. At all times material the Union has been and is
now the exclusive representative of all employees
in the appropriate unit for purposes of collective
bargaining within the meaning of Section 9(a) of
the Act.
5. The Respondent has refused to bargain in vio-
lation of Section 8(a)(5) of the Act in the following
respects: (1) by failing to notify the Union of the
May 1987 cancellation of employees' health benefit
insurance and bargain over the effects of this can-
cellation; (2) by promulgating new work rules
about early May 1987 without notification to and
'bargaining with the Union concerning the changes.
ORDER
i The National Labor Relations Board orders that
the Respondent, Christopher Street Owners Corp.,
New York, New York, its officers, agents, succes-
sors , and assigns, shall
1. Cease and desist from
(a) Refusing to bargain collectively with Local
32B-32J by failing and refusing to notify and offer
to bargain with Local 32B-32J about any proposed
changes in health benefit insurance, job duties, and
other terms and conditions of employment; or by
unilaterally promulgating and instituting work rules
relating to job duties and responsibilities of unit
employees.
4 Indeed, the "Job Responsibility Memo," in which this provision ap-
pears, was not prepared in response to the Union's attempts to represent
the Respondent's employees As found by the judge, Simon A Berman
Realty Corporation prepared the memo in 1985, well before it assumed
management of the Respondent's apartment building, for Berman's use in
the approximately 40 apartments it managed
We do not suggest that employers are free to tell employees that they
can never publicize their collective grievances to the public We note
that this case was alleged and litigated entirely on an 8(a)(5) theory relat-
ed to undermining the employees' collective-bargaining representative
(b) 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) Delete and withdraw the handyman and
porter job descriptions from the "Job Responsibil-
ity Memo" distributed to employees in May 1987.
(b) Notify and offer to bargain with Local 32B-
32J about health benefit insurance , work rules, and
other terms and conditions of employment.
(c) Make whole unit employees for any losses
they have suffered, together with interest as set
forth in the remedy section of the judge's decision,
as a result of the Respondent's failure to notify the
Union of the May 1987 cancellation of the employ-
ees' health benefit insurance and failure to bargain
over the effects of the cancellation.
(d) Preserve and, on request, make available to
the Board or its agents, for examination and copy-
ing, all records, including health insurance policies
and trust agreements, necessary for determining the
amounts due to employees pursuant to the make
whole provision of this Order.
(e) Post at its building at 165 Christopher Street,
New York, New York, and at the office of its
agent, Simon A. Berman Realty Corporation,
copies of the attached notice marked "Appendix."5
Copies of the notice, on forms provided by the Re-
gional Director for Region 2, after being signed by
the Respondent's authorized representative, shall be
posted by the Respondent immediately upon re-
ceipt and maintained for 60 days in conspicuous
places including all places where notices to em-
ployees 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.
(f) Notify the Regional Director in writing
within 20 days from the date of this Order what
steps the Respondent has taken to comply.
5 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 "
CHRISTOPHER STREET OWNERS CORP
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 refuse to recognize and bargain
collectively with Local 32B-32J, Service Employ-
ees International Union, AFL-CIO by unilaterally
discontinuing employee medical contributions and
coverage for employees in the unit described below
without notifying the Union of the May 1987 can-
cellation of medical insurance coverage and giving
such bargaining representative an opportunity to
bargain over the effects of this decision. The bar-
gaining unit is:
All service employees employed at our 165
Christopher Street building.
WE WILL NOT unilaterally promulgate and insti-
tute changes in job duties and responsibilities of
unit employees or in any other term and condition
of employment without prior notice to, and bar-
gaining with, the Union.
WE WILL NOT in any like or related manner
interfere with, restrain, or coerce you in the exer-
cise of rights guaranteed you by Section 7 of the
Act.
WE WILL delete and withdraw from the "Job
Responsibility Memo" distributed to unit employ-
ees in May 1987, the handyman and porter job de-
scriptions.
WE WILL notify and offer to bargain with the
Union about health benefit insurance, job duties,
and other terms and conditions of employment.
WE WILL make whole unit employees for any
losses they have suffered, together with interest, as
a result of our failure to notify the Union of the
May 1987 cancellation of the employees' health
benefit insurance and failure to bargain over the ef-
fects of the cancellation.
CHRISTOPHER STREET OWNERS CORP.
Jonathan Leiner, Esq., for the General Counsel.
Marianne J. DeSantis, Esq. (Morris Tuchman, Esq.), for
the Respondent.
Ira Sturm, Esq. (Manning, Rabb, Dealy & Sturm), for the
Charging Party.
DECISION
STATEMENT OF THE CASE
279
EDWIN H. BENNETT, Administrative Law Judge. On
27 May 1987, Local 32B-32J, Service Employees Inter-
national Union, AFL-CIO (Local 32 or Union) filed an
unfair labor practice charge against Christopher Street
Owners Corp. (Employer or Respondent) which, after
investigation by the Regional Office, resulted in a com-
plaint on 10 July 1987 alleging violations of Section
8(a)(5) and (1) of the Act. More particularly, Respondent
is alleged to have unilateral promulgated new work rules
which changed the duties of bargaining unit employees
and to have denied medical and hospital insurance cover-
age for such employees without bargaining with the
Union. A hearing ,on the complaint was held on 2 No-
vember 1987.
On the entire record,' including my observation of the
demeanor of the witnesses, and after due consideration of
the briefs filed by General Counsel and Respondent, I
make the following
FINDINGS OF FACT
1. JURISDICTION
The Respondent,. a 'New York corporation, owns and
operates a residential apartment building at 165 Christo-
pher Street, New York, New York (the Building). Its
annual revenues exceed $500,000 and its purchases of
goods and materials delivered to it directly in interstate
commerce exceed $50,000. Admittedly, Respondent is an
employer engaged in commerce within the meaning of
Section 2(2), (6), and (7) of the Act, and Local 32 is a
labor organization within the meaning, of Section 2(5) of
the Act.
II. THE UNFAIR LABOR PRACTICES
A. Prior Case
On 30 September 1987, the Board issued a Decision
and Order (286 NLRB 253) involving the same parties.
In relevant part, it adopted the Decision of Administra-
tive Law Judge Howard Edelman, issued on 31 July
1986, finding that Respondent had refused to recognize
and bargain with Local 32 for a unit of service employ-
ees at the Building in violation of Section 8(a)(5) and (1)
of the Act and further that it had recognized, and signed
a collective-bargaining agreement with, Local 2, New
York State Independent Union of Building Service-Em-
ployees and Factory Workers N.F.I.U. (Local 2) at a
time when that union did not represent an uncoerced
majority of unit employees thereby violating Section
8(a)(2) and (1) of the Act. The size of the unit has stead-
ily consisted of four employees, a superintendent, a
handyman, and two porters. The Board found these vio-
lations occurred in the early months of 1985.
The Board ordered, inter alia, the Employer to recog-
nize and bargain with Local 32 as the exclusive repre-
' The General Counsel's unopposed motion to correct the transcript is
granted
280 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
sentative of all service employees at the Building and to
cease giving effect to; maintaining or enforcing the col-
lective-bargaining agreement with Local 2. Among other
things, that agreement provided for the Employer to fur-
nish welfare benefits to employees and family members
by making payments on behalf of each employee. into a
welfare trust fund known as the Confederated Welfare
Fund, Local 2 (the Fund). At the time the agreement
was executed (1. February 1985) this contribution
amounted to $1280 per employee annually, a figure that
was subject to adjustment every June 1 by edict of the
insurance company. According to Joseph Donato, acting
president of Local 2, and a trustee of the Fund, the Fund
acts as a self-insurer. The level of benefits is prescribed
in the Agreement and Declaration of Trust. Although
that document is not in evidence, Donato testified that
benefits included Blue Cross and a major medical plan
and it is known that the Fund paid for the hospitalization
of an employee's wife in June 1985, thus establishing
coverage for dependents. Respondent has not taken any
action to comply with the order of the Board that it rec-
ognize and bargain with Local 32. It has, at all times,
continued to deny that it is subject to such lawful re-
quirement. Indeed, Respondent, in the instant case, has
plead a statute of limitations defense although it offered
no evidence in support thereof., Presumably, this merely
is a reiteration of such defense which was raised and re-
jected by the Board in the prior case. Nor has Respond-
ent actively sought to comply with the Board Order that
it cease giving effect to its agreement with Local 2 al-
though, as discussed below, Respondent acquiesced in
Local 2's recision of that contract. At the time of the
hearing in this case, however, no party had begun pro-
ceedings under Section 10(e) or 10(f) of the Act for en-
forcement or review of the Board's Decision and Order.
B. The Instant Case
In March 1987 Simon A. Berman Realty Corporation
(Berman) became the managing agent for Respondent at
the Building. On 12 May 1987, Berman received two let-
ters from Donato In pertinent part one of the letters
stated the following-
Pursuant to the decision and order of the Nation-
al Labor Relations Board of case #2-CA-21055
dated July 31, 1986 the owners of 165 Christopher
Street, their Officers, Agents, Successors and Assign
are ordered to withdraw recognition from Local
No. 2 as the exclusive bargaining representatives of
its employees at the building andto [sic] recognize
and bargain with Local 32B-32J. In essence, the
contract with Local No. 2 was found and declared
to be illegal Accordingly, this Union can no longer
accept dues on behalf of or from any employees at
that location, and each of the employees [sic] being
notified that they are no longer eligible for benefits.
The other letter repeated the first two sentences and
continued with the following:
.. . Accordingly, this Welfare Fund can no
longer accept contributions on behalf of any em-
ployees at that location and each of the employees
is being notified that they are no longer eligible for
coverage by our plan.
I must insist that you cease remitting contribu-
tions as we will only return them as they are re-
cieved. [sic] Please find enclosed a return of your
check #153 in the amount of $420.00.
• At about the same time, Donato sent similar letters to
the employees notifying them that Local 2 no longer
would act as their representative. Each employee was
told further that "pursuant to the rules and regulations of
the Confederated Welfare Fund you may not be permit-
ted to be covered by the Fund for benefits. Please be ad-
vised that you are no longer eligible for benefits from the
Confederated Welfare Fund."
It is undisputed that thereafter unit employees no
longer received any medical insurance benefits either
through Local 2, through any other carrier, or directly
from Respondent It further is undisputed that Respond-
ent did not, at any time, have any communication what-
soever with Local 32 concerning the termination of these
medical benefits or the possible replacement of such ben-
efits with some other form of insurance.
Also, sometime in May 1987, Simon Berman met with
Mario Santiago, the building superintendent, in Berman's
office. Although a unit employee, Santiago is utilized to
transmit the Employer's work assignments,to employees
For that purpose, Berman gave Santiago an eight-page
memo entitled "Job Responsibility Memo" and told him
to distribute a copy to each employee, which Santiago
did shortly thereafter at which time the employees were
told they had to abide by the rules set forth therein. That
document has job duties defined for superintendent, por-
ters, and handyman, as well as for doorman-and elevator
operators, two jobs which do not exist at the Building.
That memo was prepared by Berman in 1985, long
before he became managing agent at the Building. It is a
standard form used by Berman for the approximately 40
buildings he manages with a total of about 70 to 80 em-
ployees. Although Berman testified, that Santiago re-
quested the document in order to settle disputes among
the employees, there is no evidence there were any work
disputes or that Santiago even was aware of the exist-
ence of the memo prior to his receiving it from Berman.
Although it legally is insignificant for this case to decide
whether or not Santiago actually requested these work
rules, I conclude there is insufficient evidence to support
such conclusion. Rather, I find that the memo routinely
was given to Santiago who was told, in the ordinary
course of events by a new managing agent to distribute
them to employees. In fact, Berman made no effort even
to delete the job descriptions that did not apply to the
Building's employees.
The lead page of the memo is as follows:
PROCEDURES & SCHEDULING
KNOWLEDGE OF PROCEDURES: Staff should
read all job descriptions included in this memo; so
as to fully understand the responsibilities of their
CHRISTOPHER STREET OWNERS CORP
own job, as well as how all staff members work to-
gether.
SCHEDULING: All staff should know their
schedule. All staff should have a copy of the sched-
ule. No staff member may change his hours or
schedule without first receiving permission from the
Super or Management.
STAFF PROBLEMS: Staff members should not
discuss their work related problems and concerns
with tenants.• If a staff member has a problem with
another staff member, or any problem affecting his
work or schedule,. he should bring the_ problem to
the super, or directly to management.
The next two pages deal with the duties and responsi-
bilities of the superintendent and it is stipulated that "the
job memorandum's list of duties for superintendent does
not vary in any way from the duties which Mr . Santiago
was assigned to do previously."
With respect to the handyman job, the memo states
that among his other duties, he will serve as a relief
porter performing all the tasks of that job. Juan Nieves,
handyman, credibly testified that prior to receiving the
memo he occasionally did porter work when either of
the two porters was out sick. Thereafter, however, he
has been required to, and has performed the porter's job
on a regular basis, four times a week caused by the 2
days off each week that each porter receives. Therefore,
he now regularly collects garbage, mops floors, washes
windows, delivers packages , and cleans rugs, duties
which are not part of a handyman's job but which tasks
are expected to be performed regularly by porters.
Devon Blake, one of the porters, credibly testified that
the memo also resulted in changes in his job. Prior to the
memo he was not required to distribute to tenants pack-
ages delivered by United Parcel Service and the Post
Office. Subsequently, this task has been added to the por-
ter's duties and in fact he has performed them although
on an infrequent basis (about twice a week).
Apart from the changes noted above, the memo restat-
ed the job duties and responsibilities already performed
by, or expected of, the unit employees.
Discussion
The effect of the Board's decision in the prior case is
to grant to Local 32 the status of exclusive collective-
bargaining representative under Section 9(a) of the Act
of all service employees at the Building. Although Re-
spondent questions the validity of that holding it is bind-
ing on all parties unless set aside by a court of appeals,
an event that has not occurred. Therefore, if Respondent
has engaged in any action that fails to acknowledge
Local 32's representative status, it will be found to have
further violated Section 8(a)(5) of the Act. Respondent
does not dispute the conduct it is alleged to have com-
mitted but asserts that such conduct is legally permissible
even if Local 32 rightfully is the collective-bargaining
representative, a status which of course it continues to
dispute.
With respect to the alleged unilateral change in em-
ployment conditions, Respondent's defense is twofold. It
asserts that the May 1987 memo describing job duties of
281
unit employees did not represent any significant or sub-
stantial change in working conditions and that at most,
the Employer merely codified existing conditions. There-
fore, it is argued, that under established Board law, typi-
fied by such cases as Rust Craft Broadcasting, 225 NLRB
327 (1976), the Employer did not violate a duty to bar-
gain. In addition, Respondent argues that its distribution
of the memo was in response to employee requests for
such codification in order to avoid disputes among them-
selves over their work assignments . For the reasons that
follow, Respondent's defenses are rejected as unsupporta-
ble both in fact and in law.
I have already determined, contrary to Respondent's
assertion,' that the memo was not distributed in response
to any employee request or indeed in response to em-
ployee unrest or disputes over working conditions.
Rather, the distribution of the memo simply appears to
have been a routine matter by Berman who, as a new
managing agent, was informing employees what was ex-
pected of them by use of a standard job description
memo utilized at' all Berman buildings. Furthermore,
consistent with Respondent's stated refusal to acknowl-
edge Local 32's' representative status, no attempt was
made to notify or consult with the Union concerning the
subject matter of that memo or its distribution to unit
employees. Therefore, if that memo changed terms and
conditions of employment or otherwise reflected a by-
passing of the exclusive bargaining representative, Re-
spondent must be found in violation of the Act and this
would be true regardless of who initiated the Employer's
misconduct. Whereas here, there is present an exclusive
representative, direct negotiations with employees is the
antithesis of collective bargaining, for the statute exacts
of the employer "the negative duty to treat with; no
other." Medo Photo Supply Corp. v. NLRB, 321 U.S. '678,
683 (1944).
We turn then to the contents of the memo and on the
very first page thereof we are brought face-to-face with
evidence of Respondent's disregard of its employees stat-
utory right to be represented by Local 32. Employees
are commanded to • deal directly with management con-
cerning "any problems affecting his work or schedule."
We need not long dwell on the conclusion that such
statement to employees to disregard their exclusive rep-
resentative and deal directly with management about
mandatory subjects of bargaining is as clear a violation
of the duty to bargain as we are likely to confront.
With respect to the job duties recited in the memo,
Respondent is correct that if the duties were a mere reit-
eration of the status quo there could be no finding of a
unilateral "change." Essentially, in the final analysis, this
is a question of fact. I disagree that the memo does not
require employees to perform substantially different job
duties than before. The handyman's job was materially
altered. Prior to the memo, Nieves performed the por-
ter's duties of mopping floors, washing windows, collect-
ing garbage, etc., only on those infrequent occasions
when a porter was out sick. As a result of the memo he
thereafter was obligated to perform all of the porter's
duties four times a week, in addition to his regular job. I
am not prepared to find that such change was insubstan-
282 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
tial and it most certainly was not a codification of his ex-
isting, job.
Similarly, the porter's duties also were changed, albeit
not to the same extent. Nevertheless, the porters, as a
result of the memo, were required to deliver packages to
tenants on a regular basis, a job not previously required
of them. Given that Respondent admittedly has refused
to recognize Local 32 as the bargaining representative
despite the Board's Order, and in the context of its other
unlawful refusals to bargain, any doubt concerning the
significance of the changes in work assignments are re-
solved against Respondent.
I conclude therefore that by the contents of the memo
Respondent engaged in direct dealings with employees
and announced changes in job assignments which can
not be immunized from violation on the grounds that
such changes are insubstantial, insignificant, or trivial.
Respondent's conduct here in issue constitutes the type
of direct dealings and unilateral changes prohibited by
the Act, NLRB v. Katz, 369 U.S. 736, 743 (1962); Medo
Photo Supply Corp., supra.
We turn our attention then to Respondent's discontinu-
ance of medical insurance without notice to, or consulta-
tion with, Local 32. Respondent does not deny its con-
duct nor does it claim that the termination of that benefit
was an insubstantial matter, nor does it argue that such
benefit was not a mandatory subject of bargaining.
Rather, consistent with the position throughout both
cases, Respondent disputes the validity of the Board's
prior order. But specifically with respect to this matter,
Respondent offers a very special defense.
It asserts that the medical benefit existed by virtue of
its collective-bargaining agreement with Local 2, an ar-
rangement declared by the Board to be unlawful and
therefore it was compelled by operation of law to termi-
nate 'that agreement and all payments to Local 2 pursu-
ant thereto, including contributions to the Fund Re-
spondent argues that it could not continue such pay-
ments without violating the Board's Order and, more sig-
nificantly, the criminal sanctions imposed by Section 302
of the Act. Respondent cites numerous authority for the
proposition that, excluding certain situations not relevant
here, Section 302 imposes a rigid requirement that there
be a valid written collective-bargaining agreement au-
thorizing payments by employers to employee represent-
atives in order to avoid the criminal penalties of Section
302. I agree with the Employer that this case is distin-
guishable from those situations where payments to a wel-
fare fund pursuant to a trust agreement, on expiration of
a collective-bargaining agreement, are held not to violate
Section 302. See, e g., Cauthorne Trucking, 256 NLRB
721 fn. 6 (1981), and that for the sake of argument we
can consider the instant case as if continued payments to
the Local 2 Fund would have been barred by Section
302.
Respondent essentially claims that since it was disput-
ing Local 32's status as the 9(a) representative and appar-
ently hopes to prevail ultimately in court, it would have
jeopardized its legal position if it negotiated a new bene-
fit with Local 32. On the other hand, if the earlier Board
Order ultimately is enforced, Respondent would have
committed an unlawful unilateral act if it instituted a new
plan without bargaining. Therefore, Respondent asserts it
did the only lawfully permitted act, namely nothing,
even though the result was to leave employees without
medical insurance protection. Respondent paints a self-
portrait of an innocent, victimized by forces beyond its
control, without any alternative but to unilaterally dis-
continue medical insurance protection for its employees.
I reject Respondent's defenses and conclude that in
order to maintain the status quo Respondent had an obli-
gation to provide without interruption the same benefit
previously enjoyed, that had it instituted an identical re-
placement benefit it would not have further violated the
Act, and that although it was relieved of any obligation
to negotiate the termination of the Local 2 plan it was
under a statutory duty to bargain in good faith with
Local 32 concerning the impact and effect on employees
of this termination as well as any changes or modifica-
tion in benefit protection it wished to institute.2
Nothing in the language of Section 302 of the Act or
the Board's' earlier Order required Respondent to pocket
the $1280 per employee premium rejected by Local 2 in-
stead of spending that, or any other amount, to purchase
medical benefits identical to those enjoyed under the
Local 2 plan. The obligation to continue that benefit is
unaltered by the fact that the Local 2 contract was de-
clared illegal Section 8(a)(5) required that Respondent
bargain with Local 32 before effecting any change in an
established condition of employment.
Under the peculiar circumstances of this case, that
medical benefit can be considered a generic product not
tied to the existence of any identifiable insurance compa-
ny. As Respondent has noted elsewhere, unless a change
in employment conditions has a significant and substan-
tial impact on wages, hours, or working conditions, it
will not be considered to be an ^ unlawful unilateral act.
Here, if benefit levels had been maintained so that there
would not have been any discernible resultant loss to em-
ployees, Respondent's purchase of new insurance, or its
acting as a self-insurer, even without bargaining with
Local 32, would not have violated its bargaining obliga-
tion and it would have maintained a neutral position with
regard to its legal position in the prior case. Cf Golconda
Corp. v. NLRB, 474 F.2d 49 (6th Cir. 1973), enfg. 194
NLRB 609 (1971), where a unilateral change of insur-
ance carriers was held to violate Section 8(a)(5) because
there was a substantive loss to employees in benefits. The
Board, however, expressly left unanswered whether or
not there would not have been a violation if the level of
benefits' had remained stable.
Instead, Respondent chose that course of action which
gave to it the greatest benefit at the greatest loss to its
employees. It seeks, at one and the same time, to avoid
its statutory bargaining obligations under the guise of
avoiding penalties imposed by law (Sec. 302). The irony
2 The General Counsel recognizes that Respondent had no recourse
but to discontinue the Local 2 medical plan on that Union's rejection of
the premium payments and therefore the General Counsel, in his brief,
has withdrawn par 10(a) of the complaint alleging a violation based on a
unilateral termination of medical benefits The General Counsel relies in-
stead on the allegation that Respondent refused to provide medical bene-
fits without bargaining with Local 32 about such conduct The issues de-
cided herein have been fully litigated
CHRISTOPHER STREET OWNERS CORP
of this position is that an adjudged wrongdoer seeks to
profit from. the compounding of its earlier wrong by
using the law to shield its actions.3 The illogic of such
result mandates a finding of violation for the simple fact
is that employee benefits were unilaterally eliminated in
direct contravention of Sections 8(a)(5) and 8(d). Such
action is a refusal to bargain in fact without regard to
motive, NLRB v. Katz, 369 U.S. 736 (1962). I find Re-
spondent's reliance on the strictures of Section 302 mis-
placed and an insufficient justification to immunize its
conduct here in issue.
Finally, if this case is viewed in a light most favorable
to Respondent and deference is given to all of its argu-
ments, a finding of violation nonetheless results. Re-
spondent contends its action in terminating the fringe
benefit was motivated, if not indeed compelled, by re-
quirements of law It would thus place itself in the posi-
tion of urging that the decision to terminate the benefit
could not constitute a mandatory subject of bargaining.
However, it is a long-settled proposition that even where
a managerial decision to alter its method of operation
which has a significant impact on employees is not a
mandatory subject of bargaining, the union must be af-
forded a meaningful opportunity to bargain about the ef-
fects of that decision. First National Maintenance Corp. v.
NLRB, 452 U.S. 666, 681-682 (1981); Cooper Thermome-
ter, 160 NLRB 1902 (1966), enfd. in pertinent part 376
F 2d 684 (2d Cir. 1967). Clearly the Respondent failed in
this obligation pleading its good intention to avoid a
criminal violation as its excuse. It has been demonstrated
that Respondent had several options apart from commit-
ting a crime, including the simple one of complying with
the earlier Board order to recognize and bargain with
Local 32. Under these circumstances its good intentions
do not translate into a legally recognizable defense. It
follows that Respondent violated Section 8(a)(5) and (1)
as alleged.
CONCLUSIONS OF LAW
1. Respondent Christopher Street Owners Corp is an
employer engaged in commerce within the meaning of
Section 2(6) and (7) of the Act.
2. The Union, Local 32B-32J , Service Employees
International Union, AFL-CIO is a labor organization
within the meaning of Section 2 (5) of the Act.
3. The following employees constitute a unit appropri-
ate for the purpose of collective bargaining within the
meaning of Section 9(b) of the Act:
All service employees employed at Respondent's
165 Christopher Street building.
4. At all times material herein the Union has been and
is now the exclusive representative of all employees in
the appropriate unit for purposes of collective bargaining
within the meaning of Section 9(a) of the Act.
5. Respondent has refused to bargain in violation of
Section 8(a)(5) of the Act in the following respects (1)
9 This situation brings to mind the humorist's definition of the Yiddish
word "chutzpah" which now is part of the vernacular A convicted mur-
derer, as he is about to be sentenced for killing his parents, begs the
court's mercy on the ground he is an orphan
283
by failing to provide unit employees with health benefit
insurance protecting them against medical and hospital
costs since about 8 May 1987, and by failing and refusing
to bargain with the Union concerning such failure, (2) by
promulgating new work rules in or about early May
1987 concerning the duties and responsibilities of unit
employees without notification to and bargaining with
the union concerning such changes; and (3) by directing
unit employees to disregard the Union as their represent-
ative for the handling of grievances and work-related
problems and to directly deal with Respondent with re-
spect to such matters.
6. The aforesaid unfair labor practices are unfair labor
practices affecting commerce within the meaning of Sec-
tion 2(6) and (7) of the Act.
REMEDY
Having found that the Respondent has engaged in cer-
tain unfair labor practices, I shall recommend that it be
ordered to cease and desist therefrom and to take certain
affirmative action designed to effectuate the policies of
the Act. Respondent would limit any affirmative remedy
to a bargaining order and specifically with respect to the
medical benefits it argues that since it is legally imper-
missible to restore the Local 2 medical plan no affirma-
tive relief at all would be appropriate. I disagree.
It is of course unquestioned that Respondent can not
restore the particular medical benefit that existed by
virtue of its unlawful recognition of Local 2 . It is also
unquestioned that the principle that underlies Board re-
medial authority is the restoration of the status quo ante
to the greatest degree feasible and as nearly as practica-
ble, to assure that Respondent not profit from, its own
wrongdoing. Mead Corp., 256 NLRB 686 ( 1981). In cases
in which, as here, employees have been denied medical
expense insurance it is traditional to require the employer
to reimburse employees for those expenses See, e.g., Fi-
berboard Paper Products Corp., 180 NLRB 142 (1969);
Deena Artware, Inc., 112 NLRB 371, 375 (1955), enfd.
228 F.2d 871 (6th Cir. 1955). This does not impose any
undue or unfair burden and to do otherwise would allow
the employer to profit from its wrong, a glaring example
of which is the Respondent's windfall in this case.
Therefore, the remedy in this case will provide for
"make whole" relief as well as a requirement that Re-
spondent continue to reimburse employees for medical
expenses that would have been covered under the Local
2 plan. Employees shall be made whole for losses they
may have suffered as a result of not receiving this insur-
ance protection with interest on such amounts. In ac-
cordance with the Board's 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 U.S.C. § 56621. Inter-
est on amounts accrued prior to 1 January 1987 (the ef-
fective date of the 1986 amendment to 26 U.S.C. § 6621)
shall be computed in accordance with Florida Steel
Corp., 231 NLRB 651 (1977).
It also is recommended that Respondent be ordered to
rescind the memo distributed to employees in May 1987
284 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
which inter alia, directed them to bypass Local 32 as
their representative for the resolution of work problems
and which unilaterally changed the duties and responsi-
bilities of unit employees. Although not all unit employ-
ees had their jobs redefined, the memo in its entirety
must be revoked because it is not possible to separate the
permissible from the impermissible directives. The unilat-
eral changes and unlawful directives overlap and are
intertwined with superficially innocuous sections of the
memo. Furthermore, the issuance of the memo in context
with Respondent's continued refusal to acknowledge
Local 32's status as the 9(a) representative, taints the Re-
spondent's action to the degree that no part of that
memo may be considered legitimate.
Furthermore, not only must there be restoration of the
status quo ante, but Respondent must maintain in effect
the medical benefits and all other terms and conditions of
employment and is forbidden from changing them unless
it gives notice to Local 32 and affords it an,opportunity
to bargain about any proposed changes in accordance
with its obligation to recognize and bargain with Local
32 pursuant to the Board's prior Decision and Order in
286 NLRB 532.
The General Counsel's routine request that a visitator-
ial clause be included in the remedy is denied on the
basis of Cherokee Marine, 287 NLRB 1080 (1988). The
General Counsel has not advanced any basis, and I per-
ceive none, for concluding that Respondent will attempt
to evade compliance. Although Respondent has not com-
plied with the earlier Board Order it appears that this is
due to a belief that its defenses in that case, notably the
10(b) argument, will prevail in a circuit court on review.
[Recommended Order omitted from publication.]