Design Originals, Inc.,

National Labor Relations Board - Board Decisions

Dec 16, 2004

343 N.L.R.B. 115 (N.L.R.B. 2004)

343 NLRB No. 115
Design Originals, Inc. a/k/a Original Designs, Inc. and
United Steelworkers of America, District 10,
AFL–CIO–CLC. Cases 4–CA–31926, 4–CA–
32339, and 4–CA–32446
December 16, 2004
DECISION AND ORDER
BY MEMBERS LIEBMAN, SCHAUMBER, AND WALSH
The General Counsel seeks a default judgment in this
case on the ground that the Respondent has failed to file
an answer to the consolidated complaint. Upon charges
filed by the Union in Cases 4–CA–31926, 4–CA–32339,
and 4–CA–32446 on February 24, 2003, August 5, 2003,
and September 23, 2003, respectively, the General Coun-
sel issued the consolidated complaint on November 25,
2003, against Design Originals, Inc. a/k/a Original De-
signs, Inc., the Respondent, alleging that it has violated
Section 8(a)(1) and (5) of the Act. The Respondent
failed to file an answer.
On January 15, 2004, the General Counsel filed a Mo-
tion for Default Judgment with the Board. On January
20, 2004, the Board issued an order transferring the pro-
ceeding to the Board and a Notice to Show Cause why
the motion should not be granted. The Respondent filed
no response. The allegations in the motion are therefore
undisputed.
The National Labor Relations Board has delegated its
authority in this proceeding to a three-member panel.
Ruling on Motion for Default Judgment
Section 102.20 of the Board’s Rules and Regulations
provides that the allegations in the complaint shall be
deemed admitted if an answer is not filed within 14 days
from service of the complaint, unless good cause is
shown. In addition, the complaint affirmatively stated
that unless an answer was filed by December 9, 2003, all
the allegations in the complaint could be considered ad-
mitted. Further, the undisputed allegations in the Gen-
eral Counsel’s motion disclose that, at the Respondent’s
request, the Regional Director granted the Respondent an
extension of time until January 9, 2004 to file an answer.
Despite this extension, however, the Respondent failed to
file an answer.
In the absence of good cause being shown for the fail-
ure to file a timely answer, we grant the General Coun-
sel’s motion for default judgment.
On the entire record, the Board makes the following
FINDINGS OF FACT
I. JURISDICTION
At all material times, the Respondent, a Pennsylvania
corporation with its principal place of business in Allen-
town, Pennsylvania (the Shop), has been engaged in the
manufacture of custom upholstered furniture.
During the year preceding issuance of the consolidated
complaint, the Respondent, in conducting its business
operations described above, purchased and received at
the Shop goods valued in excess of $50,000 directly from
points outside the Commonwealth of Pennsylvania. We
find that the Respondent is an employer engaged in
commerce within the meaning of Section 2(2), (6), and
(7) of the Act, and that United Steelworkers of America,
District 10, AFL–CIO–CLC (the Union) is a labor or-
ganization within the meaning of Section 2(5) of the Act.
II. ALLEGED UNFAIR LABOR PRACTICES
At all material times, James Ellis held the position of
the Respondent’s president, and has been a supervisor of
the Respondent within the meaning of Section 2(11) of
the Act and an agent of the Respondent within the mean-
ing of Section 2(13) of the Act.
The following employees of the Respondent (the unit)
constitute a unit appropriate for the purposes of collec-
tive bargaining within the meaning of Section 9(b) of the
Act:
All employees employed by Respondent at the Shop,
excluding office employees, non-manufacturing per-
sonnel and supervisors as defined in the Act.
At all material times, the Union has been the desig-
nated exclusive collective-bargaining representative of
the unit and has been recognized as the representative by
the Respondent. This recognition has been embodied in
successive collective-bargaining agreements, including
the last executed agreement, which was effective from
March 1, 1999 through February 28, 2002.
At all material times since at least March 1, 1999,
based on Section 9(a) of the Act, the Union has been the
exclusive collective-bargaining representative of the unit.
On or about February 27, 2002, the Respondent and
the Union reached complete agreement on terms and
conditions of employment of the employees in the unit to
be incorporated in a new collective-bargaining agreement
(the agreement), which had effective dates of March 1,
2002 through February 28, 2006.
Since in or about late December, 2002, the Union pre-
sented the Respondent with a written version of the
agreement, containing the terms and conditions of em-
ployment of the unit employees, and since that date, the
Union has requested that the Respondent execute the
agreement.
Since on or about March 24, 2003, the Respondent has
failed and refused to execute the Agreement.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD2
The agreement contains, among other things, Article V
—Check-off; Article 18—Grievance Procedure; Article
19—Arbitration Machinery; and Article 25—401(k) Plan
Provision.
The subjects set forth above relate to wages, hours, and
other terms and conditions of employment of the unit and
are mandatory subjects for the purpose of collective bar-
gaining.
By the following acts and conduct, the Respondent, on
the dates listed below, has failed to continue in effect all
the terms and conditions of the agreement:
1. Since on or about August 22, 2002 until in or about
February 2003, the Respondent failed to abide by Article
V of the agreement by deducting dues money from the
pay of its unit employees who have authorized such de-
duction, but failing and refusing to remit those monies to
the Union.
2. Since in or about February 2003, the Respondent
has failed to abide by Article V of the agreement by fail-
ing and refusing to deduct dues monies from the pay of
its unit employees who have authorized such deduction
and by failing and refusing to remit those monies to the
Union.
3. Since on or about February 25, 2003, the Respon-
dent has failed to abide by Articles 18 and 19 of the
agreement by failing and refusing to process the griev-
ance filed by the Union dated February 21, 2003, protest-
ing the Respondent’s failure to transmit dues and fees to
the Union
4. Since on or about March 24, 2003, the Respondent
has failed to abide by Article 25 of the agreement by
failing and refusing to contribute 3 percent of gross
wages of unit employees into a 401(k) plan and to im-
plement the Article 25—401(k) Plan provision.
The Respondent engaged in the conduct described
above without prior notice to the Union and without af-
fording the Union an opportunity to bargain or give its
consent with respect to this conduct.
On or about March 24, 2003, the Respondent withdrew
its recognition of the Union as the exclusive collective-
bargaining representative of the unit, during a time when
the agreement was in effect.
CONCLUSION OF LAW
By failing and refusing to execute the 2002–2006
agreement; by failing to continue in effect the terms and
conditions of employment of the agreement; and by
withdrawing recognition of the Union, the Respondent
has failed and refused to bargain collectively and in good
faith with the exclusive collective-bargaining representa-
tive of its unit employees, in violation of Section 8(a)(1)
and (5) of the Act. The Respondent’s unfair labor prac-
tices affect commerce within the meaning of Section 2(6)
and (7) of the Act.
REMEDY
Having found that the Respondent has engaged in cer-
tain unfair labor practices, we shall order it to cease and
desist and to take certain affirmative action designed to
effectuate the policies of the Act. Specifically, having
found that the Respondent violated Section 8(a)(1) and
(5) of the Act by refusing, since March 24, 2003, to exe-
cute the 2002–2006 collective-bargaining agreement
with the Union, we shall order the Respondent to execute
the agreement and give retroactive effect to its terms.
We shall also order the Respondent to make the unit em-
ployees whole for any loss of earnings and other benefits
they may have suffered as a result of the Respondent’s
refusal to execute the agreement, in the manner set forth
in Ogle Protection Service, 183 NLRB 682 (1970), enfd.
444 F.2d 502 (6th Cir. 1971), with interest as prescribed
in New Horizons for the Retarded, 283 NLRB 1173
(1987).
In addition, having found that the Respondent violated
Section 8(a)(5) and (1) by withdrawing recognition from
the Union and by failing and refusing to continue in ef-
fect all the terms of conditions of the collective-
bargaining agreement, we shall order the Respondent to
recognize and bargain with the Union, and to (1) deduct
and remit union dues pursuant to valid checkoff authori-
zations that have not been deducted and/or remitted since
August 22, 2002, with interest as prescribed in New Ho-
rizons for the Retarded, supra; (2) process the grievance
dated February 21, 2003 filed by the Union regarding the
Respondent’s failure to transmit dues and fees to the Un-
ion, pursuant to Articles 18 and 19 of the agreement; and
(3) implement the 401(k) plan provision of Article 25 of
the agreement, make the contractually-required contribu-
tions to a 401(k) plan of 3 percent of gross wages of unit
employees that have not been made since March 24,
2003, as well as any additional amounts due the plan in
accordance with Merryweather Optical Co., 240 NLRB
1213, 1216, fn. 6 (1979), and make whole the unit em-
ployees for any loss of interest they may have suffered as
a result of the failure to make such payments.
ORDER
The National Labor Relations Board orders that the
Respondent, Design Originals, Inc. a/k/a Original De-
signs, Inc., Allentown, Pennsylvania, its officers, agents,
successors, and assigns, shall
1. Cease and desist from
(a) Withdrawing recognition from United Steelworkers
of America, District 10, AFL–CIO–CLC, as the exclu-
DESIGN ORIGINALS, INC. 3
sive collective-bargaining representative of the employ-
ees in the following appropriate unit:
All employees employed by Respondent at the Shop,
excluding office employees, non-manufacturing per-
sonnel and supervisors as defined in the Act.
(b) Failing and refusing to execute a written contract
containing the complete agreement reached with the Un-
ion on about February 27, 2002, regarding the terms and
conditions of employment of unit employees.
(c) Failing to continue in effect all the terms of the Re-
spondent’s March 1, 2002—February 28, 2006 collec-
tive-bargaining agreement with the Union by failing to
(i) deduct union dues from employees’ pay and/or remit
the dues to the Union, pursuant to employee authoriza-
tions; (ii) process grievances filed pursuant to Articles 18
and 19 of the agreement; and (iii) implement the 401(k)
plan provision of Article 25 of the agreement, and con-
tribute 3 percent of gross wages of unit employees into a
40l(k) plan.
(d) In any like or related manner interfering with, re-
straining, or coercing employees in the exercise of the
rights guaranteed them by Section 7 of the Act.
2. Take the following affirmative action necessary to
effectuate the policies of the Act.
(a) Recognize and bargain in good faith with the Union
as the exclusive representative of the unit employees.
(b) Execute a written contract containing the agree-
ment reached by the Respondent and the Union on Feb-
ruary 27, 2002, setting forth terms and conditions of em-
ployment of the unit employees, give retroactive effect to
the agreement, and make unit employees whole for any
loss of earnings and other benefits they may have suf-
fered as a result of the Respondent’s failure to execute
the agreement, with interest as set forth in the remedy
section of this Decision.
(c) Deduct union dues from the pay of employees who
have authorized such deductions, and remit to the Union
all dues that have not been deducted and remitted since
August 22, 2002, with interest as set forth in the remedy
section of this Decision.
(d) Process the grievance dated February 21, 2003,
filed by the Union regarding the Respondent’s failure to
transmit dues and fees to the Union, pursuant to Articles
18 and 19 of the collective-bargaining agreement.
(e) Implement the 401(k) plan provision of Article 25
of the collective-bargaining agreement, make the con-
tractually required contributions to a 401(k) plan of 3
percent of gross wages of unit employees that have not
been made since March 24, 2003, as well as any addi-
tional amounts due the plan, and make the unit employ-
ees whole for any loss of interest they may have suffered
as a result of the unilateral failure to remit such pay-
ments, in the manner set forth in the remedy section of
this decision.
(f) Preserve and, within 14 days of a request, or such
additional time as the Regional Director may allow for
good cause shown, provide at a reasonable place desig-
nated by the Board or its agents, all payroll records, so-
cial security payment records, timecards, personnel re-
cords and reports, and all other records, including an
electronic copy of such records if stored in electronic
form, necessary to analyze the amount of backpay due
under the terms of this Order.
(g) Within 14 days after service by the Region, post at
its facility in Allentown, Pennsylvania, copies of the at-
tached notice marked “Appendix.”1 Copies of the notice,
on forms provided by the Regional Director for Region
4, after being signed by the Respondent’s authorized
representative, shall be posted by the Respondent 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 al-
tered, defaced or covered by any other material. In the
event that, during the pendency of these proceedings, the
Respondent has gone out of business or closed the facil-
ity involved in these proceedings, the Respondent shall
duplicate and mail, at its own expense, a copy of the no-
tice to all current employees and former employees em-
ployed by the Respondent at any time since August 22,
2002.
(h) Within 21 days after service by the Region, file
with the Regional Director a sworn certification of a re-
sponsible official on a form provided by the Region at-
testing to the steps that the Respondent has taken to
comply.
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 vio-
lated Federal labor law and has ordered us to post and obey
this notice.
FEDERAL LAW GIVES YOU THE RIGHT TO
Form, join, or assist any union

1 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 Na-
tional Labor Relations Board” shall read “Posted Pursuant to a Judg-
ment of the United States Court of Appeals Enforcing an Order of the
National Labor Relations Board.”
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD4
Choose representatives to bargain with us on
your behalf
Act together with other employees for your bene-
fit and protection
Choose not to engage in any of these protected
activities.
WE WILL NOT withdraw recognition from United
Steelworkers of America, District 10, AFL–CIO–CLC,
as the exclusive collective-bargaining representative of
the employees in the following appropriate unit:
All employees employed by us at the Shop, excluding
office employees, non-manufacturing personnel and
supervisors as defined in the Act.
WE WILL NOT fail and refuse to execute a written con-
tract containing the complete agreement reached with the
Union on about February 27, 2002, regarding the terms
and conditions of employment of unit employees.
WE WILL NOT fail to continue in effect all the terms of
our March 1, 2002—February 28, 2006 collective-
bargaining agreement with the Union by failing to (i)
deduct union dues from employees’ pay and remit the
dues to the Union, pursuant to employee authorizations;
(ii) process grievances filed pursuant to Articles 18 and
19 of the agreement; and (iii) implement the 401(k) plan
provision of Article 25 of the agreement, and contribute
3 percent of gross wages of unit employees into a 401(k)
plan.
WE WILL NOT in any like or related manner interfere
with, restrain, or coerce you in the exercise of the rights
guaranteed you by Section 7 of the Act.
WE WILL recognize and bargain in good faith with the
Union as the exclusive representative of the unit employ-
ees.
WE WILL execute a written contract containing the
agreement reached by us and the Union on February 27,
2002, setting forth terms and conditions of employment
of the unit employees, give retroactive effect to the
agreement, and make unit employees whole for any loss
of earnings and other benefits they may have suffered as
a result of our failure to execute the agreement, with in-
terest.
WE WILL deduct union dues from the pay of employees
who have authorized such deductions, and remit to the
Union all dues that have not been deducted and remitted
since August 22, 2002, with interest.
WE WILL process the grievance dated February 21,
2003, filed by the Union regarding our failure to transmit
dues and fees to the Union, pursuant to Articles 18 and
19 of the collective-bargaining agreement.
WE WILL implement the 401(k) plan provision of Arti-
cle 25 of the collective-bargaining agreement, and make
the contractually required contributions to a 401(k) plan
of 3 percent of gross wages of unit employees, that have
not been made since March 24, 2003, and make the unit
employees whole for any loss of interest they may have
suffered as a result of our unilateral failure to make such
contributions.
DESIGN ORIGINALS, INC. A/K/A ORIGINAL
DESIGNS