Crown Electrical Contracting, Inc.

National Labor Relations Board - Board Decisions

Sep 30, 2002

338 N.L.R.B. 336 (N.L.R.B. 2002)

DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 336
Crown Electrical Contracting, Inc. and Local 1, In-
ternational Brotherhood of Electrical Workers,
AFL–CIO, Petitioner and Congress of Inde-
pendent Unions, Intervenor. Case 14–RC–12252
September 30, 2002
DECISION AND CERTIFICATION OF
REPRESENTATIVE
BY MEMBERS LIEBMAN, COWEN, AND BARTLETT
The National Labor Relations Board has considered
objections to an election held June 22, 2001, and the
hearing officer’s report recommending disposition of
them. The election was conducted pursuant to a Stipu-
lated Election Agreement. The tally of ballots shows 15
for the Petitioner and 16 for the Intervenor, Congress of
Independent Unions (CIU), with no challenged ballots.
The Board has reviewed the record in light of the ex-
ceptions and briefs, has adopted the hearing officer’s
findings1 and recommendations,2 and finds that a certifi-
cation of representative should be issued.
Petitioner’s Objection 4 alleges, inter alia, that during
a mandatory meeting with employees on June 20, 2001,
the Employer promised to increase funding to the em-
ployee benefits plan without reducing the employees’
wages on nonprevailing wage jobs. The hearing officer
overruled this objection. Contrary to our dissenting col-
league, we agree with the hearing officer.
The relevant facts are these. The Employer’s collec-
tive-bargaining agreement with the Intervenor Congress
of Independent Unions requires it to provide employees
with certain basic benefits. These benefits, which in-
clude vacation, holiday pay, and medical insurance, are
funded through a vehicle referred to as the Voluntary
Employee Benefit Association (VEBA or Plan). The
VEBA is funded by the Employer’s monthly contribu-
tions, which are based on the employees’ total hours
worked and total gross wages. The Employer pays for
employees’ basic benefits with its VEBA contributions
and any surplus is deposited into the VEBA. The VEBA
is managed by employee trustees, who are authorized to
provide benefits in addition to those set forth under the
contract as well as to reduce such benefits. If the
monthly expenses for basic employee benefits are greater

1 Although we would not take administrative notice of defined con-
tribution welfare plans, as requested by the Petitioner, we have consid-
ered the article on defined contribution welfare plans submitted by the
Petitioner and we find that it does not affect the result herein.
2 In the absence of exceptions, we adopt, pro forma, the hearing offi-
cer’s recommendation to overrule the portions of the Petitioner’s Ob-
jection 4 alleging that the Employer promised the employees a wage
rate after benefits on prevailing wage jobs if the CIU was voted in, and
that the Employer arranged for the election of a new employee trustee
to the employee benefit plan.
than the Employer’s contribution, the VEBA trustees
write the Employer a check to account for the difference.
However, on several occasions in 1997 and 2000, the
Employer permitted the VEBA to maintain a negative
balance over to the next month.
The record identified four instances prior to the elec-
tion in which the VEBA trustees reduced or eliminated
benefits. Aside from the reduction in vacation benefits in
November 2000, these other benefit changes occurred
when the VEBA was financially sound. The evidence
establishes that the VEBA experienced financial diffi-
culty from sometime in 2000 through June 22, 2001, the
date of the election. Upon being informed of the VEBA
trustees’ expressed concerns for the Plan’s financial
health in August 2000, the Employer increased his con-
tributions to the VEBA.
During an employee meeting on June 20, 2001, 2 days
before the election, employee Bob Hall, who was one of
the Petitioner’s witnesses, asked about the financial
health of the VEBA. The Employer responded that he
would do whatever it took to keep or maintain employ-
ees’ current benefits. The record is clear that the Em-
ployer did not elaborate on his statement nor did any of
the employees ask any followup questions.
Contrary to our dissenting colleague, we agree with the
hearing officer that the Employer’s statement that he
would do whatever it took to keep employees’ current
benefits was nothing more than a lawful promise to
maintain the status quo.3 The hearing officer found, and
we agree, that there was no context or history that would
cause employees to interpret the statement as a promise
to increase benefits.
Although the VEBA was experiencing financial diffi-
culty prior to the election, there was no evidence that the
VEBA trustees were planning to cut benefits nor evi-
dence that employees should have reasonably anticipated
a benefit reduction. As the hearing officer found, aside
from the reduction in vacation benefits in November
2000, previous reductions in VEBA benefits had not
been driven by the Plan’s financial difficulty. In this
regard, the VEBA trustees had previously reduced and
eliminated benefits at times when the Plan was finan-
cially healthy. Similarly, when the VEBA was finan-
cially unstable in August 2000, the VEBA trustees ex-
plained the situation to the Employer, who then increased
the Employer’s contribution level. In these circum-
stances, the Employer’s comment promised nothing
more than what the employees already enjoyed.
3 The Board has held that promises to maintain the status quo are not
objectionable. See Weather Shield Mfg., 292 NLRB 1, 2 (1988), revd.
on other grounds 890 F.2d 52 (7th Cir. 1989); El Cid, Inc., 222 NLRB
1315,1316 (1976).
338 NLRB No. 36
CROWN ELECTRICAL CONTRACTING, INC. 337
Our dissenting colleague contends that the Employer’s
statement was an unlawful promise of benefits to the
employees, which warrants setting aside the election. In
reaching this conclusion, our colleague speculates that,
by promising to maintain current benefits, the Employer
was actually promising to change employees’ benefits
from a system of fluctuating benefits—which our col-
league contends is the status quo—to a system under
which employees would be guaranteed the level of bene-
fits they had at the time of the election. According to our
colleague, this purported change in employees’ benefits
was an improvement for employees.
Initially, we note that the dissent’s reference to em-
ployees’ benefits as fluctuating is a mischaracterization
insofar as the record identifies only four changes that
have taken place in the level of VEBA benefits since the
VEBA was instituted. Further, the status quo is not de-
fined by the small number of VEBA benefit changes, as
the dissent suggests. Rather, the status quo is a VEBA in
which benefits can only be changed by its Trustees and
which, from time to time, receives supplemental financial
assistance from the Employer.
We also reject our dissenting colleague’s contention
that employees would have reasonably construed the
Employer’s statement as a guarantee that benefits would
not fall below their existing level at the time of the meet-
ing. First, the record shows that the issue raised at the
meeting was the fiscal stability of the VEBA, not the
level of benefits. As noted, the Employer previously has
provided supplemental financial assistance to the VEBA
when necessary to maintain the plan. Second, benefit
levels are determined by the trustees of the plan, and the
record shows that with one exception previous reductions
in VEBA benefits have not been related to the financial
health of the plan. Therefore, the Employer’s statement
was nothing more than a guarantee of the status quo.
Under the dissent’s view, the employees would have
interpreted the Employer’s comment as a promise to
change the nature of the VEBA. In this respect, by pur-
portedly guaranteeing that benefits would not be reduced
below their existing level, the VEBA trustees would no
longer have the discretion to remove or reduce a particu-
lar benefit; such a situation would arise, for example,
where the trustees determine that a benefit is no longer in
the employees’ best interest. It is inconceivable that em-
ployees would have believed that this was the Em-
ployer’s intention. Likewise, as it is undisputed that the
Employer never had a role in determining what benefits
the trustees offered in addition to those provided in the
contract, it is also unreasonable to assume that employ-
ees would have interpreted an isolated comment as a
promise to change this system.
Our colleague says that the Employer has not shown
that his statement was based on a legitimate purpose
other than influencing the results of the election. To the
contrary, we find that the Employer’s comment was con-
sistent with his past business practice. In this regard,
after being informed that the VEBA was experiencing
financial trouble in August 2000, the Employer increased
his contributions to the VEBA. Similarly, for several
months in 1997 and 2000, when the monthly benefit ex-
penses were greater than the Employer’s contribution,
rather than requiring a check from the VEBA trustees,
the Employer allowed the VEBA to maintain a negative
balance over to the next month. In this respect, the Em-
ployer was loaning money to the VEBA. In each of
those instances, the Employer’s purpose was to ensure
that the VEBA could maintain its respective level of
benefits.
Finally, our finding that the Employer’s statement was
not objectionable finds further support in the fact that the
Employer’s statement was not made as part of a cam-
paign speech or otherwise initiated by the Employer.4
Instead, the statement was simply made in response to a
question from an employee, who was a witness for the
Petitioner. Moreover, the Employer did not elaborate on
the statement, and the employees did not ask him any
followup questions. It is highly improbable that the Em-
ployer saw this employee’s question as an opportunity to
influence the election.
Accordingly, we adopt the hearing officer’s recom-
mendation to overrule this objection and we will issue a
certification of representative.
CERTIFICATION OF REPRESENTATIVE
IT IS CERTIFIED that a majority of the valid ballots have
been cast for the Congress of Independent Unions, and
that it is the exclusive collective-bargaining representa-
tive of the employees in the unit found appropriate:
All journeyman and apprentice electricians and com-
munication employees employed by the Employer at its
3630 South Broadway, St. Louis, Missouri facility,
EXCLUDING office clerical and professional employees,
guards and supervisors as defined in the Act.

MEMBER LIEBMAN, dissenting.
Two days before the representation election in this
case, during a period of financial difficulty for the trust

4 See Duo-Fast Corp., 278 NLRB 52, 53 (1986) (fact that manager’s
comment was in response to employee’s question considered in finding
no implied promise of benefits); cf. U.S. Ecology Corp., 331 NLRB
223, 228 (2000) (respondent did not engage in direct dealing where,
among other things, the respondent did not initiate communications
with employees but rather, sent its letter in response to employees’
questions).
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 338
that provided medical and other employee benefits, the
Employer told employees that he would do whatever it
took to keep their current level of benefits. The majority
concludes that this statement was not an objectionable
promise of benefits, designed to influence the election,
but was simply a permissible pledge to maintain the
status quo. That view, however, is based on a misunder-
standing of what the status quo here actually was. Be-
cause the status quo allowed for benefits to fall—which
was precisely the employees’ concern—a promise to
maintain the current level of benefits offered employees
something more than they already had. Nothing in the
record suggests a reason for this promise other than a
desire to influence the election. Consequently, I would
order a new election.
The essential facts are simply stated: The Employer’s
contract with the Intervenor Congress of Independent
Unions obligates it to provide employees with a basic
level of certain benefits. These benefits (vacation, holi-
day pay, and medical insurance) are funded through a
trust known as the Voluntary Employee Benefit Associa-
tion (VEBA). The Employer makes monthly contribu-
tions to the VEBA based upon the number of hours
worked by employees and total gross wages. The trust is
administered by employee trustees, who have the author-
ity to increase benefits above the level specified by the
contract as well as to reduce benefits that are above the
specified level. The benefits paid to employees from the
VEBA are therefore variable, but may not fall below the
minimum specified by the contract. The record indicates
that the trustees have, at various times, exercised their
authority to increase and reduce benefit levels.
In the spring of 2001, the VEBA was in financial diffi-
culty, which led to rumors among employees that the
VEBA was going broke. An employee meeting was held
on June 20, 2001, 2 days before the election. After the
Employer read a prepared statement about the upcoming
election, a discussion followed. In response to a question
from employee Bob Hall about what would happen if the
VEBA went bankrupt, the Employer told employees that
he would do whatever it took to maintain their current
(above minimum) level of benefits.
The majority agrees with the hearing officer that this
statement was merely a promise to maintain the status
quo and was therefore not objectionable. I disagree. The
evidence shows that under the status quo, the benefits
paid to employees fluctuated (above the contractual
minimum) at the discretion of the trustees. But it was not
this system of fluctuating benefits, with its uncertainty
for employees, that the Employer promised to maintain.
Rather, he promised to maintain the specific level of
benefits that existed at the time of the meeting. Unlike
the majority, I would find this guarantee of a specific
level of benefits to represent a substantial change, for the
better, in the status quo.
The majority’s assertion that employee benefits cannot
be characterized as fluctuating because the record identi-
fies only four changes that have occurred since the
VEBA was instituted is clearly incorrect. Regardless of
how the benefits have been changed, what matters is that,
as discussed above, the VEBA gives the trustees the au-
thority to increase or decrease the level of employee
benefits. In fact, the trustees have altered benefit levels
pursuant to that authority. In these circumstances, the
majority cannot fairly claim that the benefits are unwav-
ering, or that the status quo can be defined as a fixed
level of benefits.
I would further find that employees would have rea-
sonably interpreted the Employer’s statement to be a
guarantee that benefits would not be reduced below the
existing level in the future. In my view, this promise of a
benefit to employees only 2 days before the election, at a
time when employees were unsure about what would
happen to their benefits, would have tended to influence
the outcome of the election.
My colleagues say that there is no evidence that em-
ployees were concerned about a possible reduction of
benefits at the time of the June 20 meeting. To the con-
trary, the record indicates that by June the VEBA could
not pay certain bills that were due, and that rumors were
circulating among employees that the VEBA was going
broke. The record also indicates that employee benefits
had been reduced approximately 6 months earlier, in
November 2000, due to the VEBA’s financial difficul-
ties. Thus, it seems obvious that employees who heard
the rumors would be concerned about a possible loss of
benefits, as the trust apparently is the sole source of those
benefits. Indeed, given these facts, what else could have
prompted employee Hall to ask about the VEBA’s finan-
cial stability at the June meeting? In this context, em-
ployees reasonably would have interpreted the Em-
ployer’s statement as an assurance that their benefits
would be maintained at the existing level despite the ap-
parent financial instability of the VEBA. And that
clearly would be a change in the status quo.
It is well established that the Board will infer that
benefits granted during the preelection critical period are
coercive unless the employer shows that its actions were
motivated by a legitimate business purpose unrelated to
the election. See Network Ambulance Services, 329
NLRB 1 (1999) (and cases cited therein). Here the ma-
jority finds that the Employer’s promise to maintain a
specific level of benefits was consistent with the Em-
CROWN ELECTRICAL CONTRACTING, INC. 339
ployer’s past business practices and is therefore unobjec-
tionable. I disagree.
In 1997 and 2000, the Employer allowed the VEBA to
carry over a negative balance from one month to the
next. In August 2000, when the VEBA was experiencing
financial difficulty, the Employer increased his contribu-
tions to the trust. Unlike here, however, in those in-
stances there is no evidence that the Employer’s intention
was to guarantee that employee benefits would remain at
some specified level. Indeed, my colleagues concede
that the Employer “never had a role in determining what
benefits the trustees offered in addition to those provided
in the contract.” Additionally, there is no evidence that,
in the past, benefits remained at a particular level as a
result of the Employer’s intervention. Rather, the evi-
dence shows that benefits were subsequently reduced in
November 2000, a few months after the Employer in-
creased his contributions. Thus, contrary to the majority,
I would find that the Employer’s promise to maintain
benefits at their current level was not consistent with past
business practice and is therefore objectionable.
Finally, I disagree with the majority that the circum-
stances in which the statement was made supports a find-
ing that it was not objectionable. At the June 20 meet-
ing, the Employer read a prepared statement about the
representation election, followed by a discussion period
during which employee Hall asked about the VEBA.
Contrary to the majority, I do not find it unlikely that the
Employer would have viewed this as an opportunity to
influence the votes of employees. Further, given the
nature of the statement, it does not matter that it was
made in response to an employee question rather on the
Employer’s initiative.5 Consequently, I would find the
Employer’s statement to be objectionable and would
order a new election.

5 See, e.g., BRK Electronics, 248 NLRB 1275, 1276–1277 (1980)
(finding that employer’s statement in response to employee question
was objectionable where employer told employees that pay raises were
contingent on the outcome of the upcoming representation election).