District 65, Distributive Workers

National Labor Relations Board - Board Decisions

Nov 19, 1974

214 N.L.R.B. 1059 (N.L.R.B. 1974)

DISTRICT 65, DISTRIBUTIVE WORKERS
District 65, Distributive Workers of America and
Frances Flores and Blume Associates, Inc., Party to
the Contract. Case 22-CB-2538
November 19, 1974
DECISION AND ORDER
BY CHAIRMAN MILLER AND MEMBERS FANNING AND
PENELLO
On May 28, 1974, Administrative Law Judge Mau-
rice S. Bush issued the attached Decision in this pro-
ceeding. Thereafter, Respondent filed exceptions and
a supporting brief.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the Na-
tional Labor Relations Board has delegated its au-
thority in this proceeding to a three-member panel.
The Board has considered the record and the at-
tached Decision in light of the exceptions and brief
and has decided to affirm the rulings, findings,' and
conclusions 2 of the Administrative Law Judge and
to adopt his recommended Order.
We agree with the Administrative Law Judge that
the Respondent violated Section 8(b)(1)(A) by dis-
tributing the settlement funds only to persons who
engaged in picketing. We so find because the
Employer's payment to the Union in settlement of
the unfair labor practice charges against the Employ-
er was for distribution to all "eligible employees in
accordance with their rights." Those "rights," plain-
ly, were the rights of all the employees in the unit to
backpay, since it was the entire unit's loss of jobs and
right to reinstatement which were put in issue by the
complaint and settled by the parties. The Union's
discriminatory dispersal of those funds to only those
employees who actively engaged in picketing or relat-
ed activities clearly was based on support of the
Union and clearly restrained and coerced employees
in the exercise of their Section 7 right not to engage
in such activities. That so obviously violates Section
8(b)(1)(A) that there is no need to consider the extent
or nature of a union's fiduciary duty to employees it
represents. Surely our colleague would have no diffi-
culty in finding a violation of Section 8(b)(1)(A) had
i The Respondent has excepted to certain credibility findings made by the
Administrative Law Judge It is the Board's established policy not to over-
rule an Administrative Law Judge 's resolutions with respect to credibility
unless the clear preponderance of all of the relevant evidence convinces us
that the resolutions are incorrect Standard Dry Wall Products, Inc, 91
NLRB 544 (1950), enfd 188 F 2d 362 (C A 3, 1951) We have carefully
examined the record and find no basis for reversing his findings
2 At In 4 of his Decision, in the second from the last sentence , the Ad-
ministrative Law Judge inadvertently referred to "Blume 's" testimony in-
stead of "Dicker's" testimony
1059
the Union negotiated a pay raise, secured reinstate-
ment, or made job referrals under an exclusive hiring
arrangement, only for union members or members
who had engaged in picketing? Furthermore, the an-
swer to our concurring colleague's puzzle is that, as
he later notes, the payment was not an unrestricted
fund in the Union's treasury .4
We find it unnecessary to consider whether or not
the Union also violated Section 8(b)(2) of the Act,
since finding a violation of that section would not
affect the remedy in this proceeding. We shall amend
the Administrative Law Judge's remedy accordingly.
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor Re-
lations Board adopts as its Order the recommended
Order of the Administrative Law Judge and hereby
orders that Respondent, District 65, Distributive
Workers of America, New York, New York, its offi-
cers, agents, and representatives, shall take the action
set forth in the said recommended Order.
CHAIRMAN MILLER, concurring in part and dissenting
in part:
Respondent Union here filed charges against the
Employer in connection with a plant move which the
Union believed presented a "runaway shop" situa-
tion. Eventually the charges were withdrawn in con-
sideration of an agreement by the Employer to estab-
lish a new warehouse and therein employ some of the
employees previously employed in the closed facility,
plus an agreement by the Employer to pay $92,500 to
the Union. The agreement did not specify what the
Union was to do with the money payment, but it did
state that it was paid in full settlement for "all dam-
ages on behalf of itself and all eligible employees."
There was no agreement as to how much damage the
Union qua Union had incurred or as to what "eligi-
ble" employees should be construed to mean.
Respondent Union then distributed the $92,500 in
3 See, e g, Brotherhood of Teamsters & Auto Truck Drivers Union, Local 70
(Sam-Jo, Inc, d/b/a Smiser Freight Service), 197 NLRB 262 (1972), Interna-
tional Photographers of the Motion Picture Industries, Local 659, IA TSE
(MPO-TV of California Inc), 197 NLRB 1187 (1972), enfd 477 F 2d 450
(CAD C , 1973), Passaic, Morris, Sussex Co Bergen Counties Newspaper
Printing Pressmen 's Union No 60 (The Passaic Daily News, trading as the
Herald News), 190 NLRB 268 (1971), Local Union No 450, International
Union of Operating Engineers, AFL-CIO (Tellepsen Construction Company),
122 NLRB 564 (1958), enfd in relevant part 281 F 2d 313 (C A 5, 1960),
cert denied 366 U S 909 Cf N L R B v Erie Resistor Corp, 373 U S 221
(1963)
4 We find it unnecessary to adopt the Administrative Law Judge' s find-
ings as to the intention of the parties with respect to the claimed under-
standing that $75,000 was for general distribution and $17,500 was for those
senior employees who were bypassed for transfer to the new warehouse The
language of the agreement is unambiguous and we will not undertake to
interpret it
214 NLRB No. 158
1060 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
accordance with a plan approved at a membership
meeting which resulted in distributing the fund only
to employees who had actively assisted the Union in
the pursuit of the strike against the Employer which
had occurred in protest against the facility's closing.
The Administrative Law Judge found that this distri-
bution by Respondent resulted in violation of Sec-
tion 8(b)(1)(A) and 8(b)(2) of the Act. My colleagues
affirm the Administrative Law Judge's disposition of
the matter, without comment.
I find the case much more puzzling than either the
Administrative Law Judge or my colleagues do and I
have ultimately concluded that there is here present
an 8(b)(1)(A) violation on grounds quite different
than those found by the Administrative Law Judge,
although I do not reach this conclusion without con-
siderable hesitation. I would dissent from the finding
of an 8(b)(2) violation since I am firmly convinced
that none has been made out upon this record.
The Administrative Law Judge found the
8(b)(1)(A) violation on the ground that the failure to
distribute money to those who had not actively en-
gaged in supporting the strike had the effect of re-
straining and coercing those employees who had not
engaged in strike activities and thus was an illegal
restraint on employees who chose not to engage in
concerted activities. That basis for the finding is, I
believe, completely erroneous. The use of union
funds to compensate those who assist a strike, while
not compensating workers affected by the strike but
who do not actively support it is not, in my view, a
violation of Section 8(b)(1)(A), and does not unlaw-
fully coerce those who refrain from such activity as
picketing.
Had the Union distributed $92,000 of funds from
its own treasury, commencing at the outset of the
strike, only to employees who were willing to engage
in picketing or otherwise assisting in the strike effort,
I cannot imagine that this Board or any court would
have found such an expenditure of union funds to be
violative of the Act. It is common practice for unions
to have strike relief funds and to require employees,
in order to qualify for participation in those funds,
actively to support the strike, either by engaging in
picketing or in some other manner. Such use of union
funds helps to preserve the effectiveness of the strike
which, in turn, is deemed by the Union to be for the
benefit of all of the members of the bargaining unit.
It is my view that any reviewing authority would find
this a reasonable use of union funds, properly ex-
pended in the interest of all members of the unit.
Maintaining the effectiveness of the strike is, in my
opinion, plainly a legitimate union interest, and that
purpose may lawfully be furthered by expending
funds therefore.
But that does not serve to determine the 8(b)(1)(A)
issue here. For Section 8(b)(1)(A) has also been inter-
preted by this Board to impose upon the Union a
duty of fair representation. Miranda Fuel Company,
Inc., 140 NLRB 181 (1962). Courts have affirmed
this Board in finding that Section 7 grants to employ-
ees the right of fair representation, and that union
conduct which violates that duty violates Section
8(b)(1)(A). Local Union No. 12, United Rubber, Cork,
Linoleum & Plastic Workers of America, AFL-CIO
[Goodyear Tire & Rubber Co. of East Gadsden, Ala.] v.
N.L.R.B., 368 F.2d 12, 17 (C.A. 5, 1966).
The question presented under Section 8(b)(1)(A) in
this case, in my view, is whether the Union violated
its duty of fair representation by undertaking to set-
tle an unfair labor practice charge and then distribut-
ing funds secured in settlement thereof on a basis
quite different from that upon which this Board
would have allocated any "make whole" financial
remedy, had we processed the case and found the
charges meritorious.
Our remedial order in such a case as this would
have required the offending employer to make whole
all employees who had lost jobs as a result of the
allegedly unlawful facility closure for losses of earn-
ings occasioned by the said unlawful closure. We
would clearly have made no distinction, in imple-
menting such a make-whole order, between employ-
ees who had actively participated in the strike and
those who had not. Equally plainly, I think, this
Board would not have approved any voluntary settle-
ment to which this Board was a party which would
have involved any substantial departure from that
universally applied method of any such "make
whole" funds.
The question, then, as I see it, is whether the
Union here violated a fiduciary obligation to the po-
tential beneficiaries of such a Board order by sub-
stantially departing from our customary allocation in
disbursing the settlement funds in issue.
The effects of the departure are plain enough. The
charging party employees here had lost their jobs
and, if the original union charges had been sustained
by this Board, they would have been the beneficiaries
of a Board make-whole order. But under the Union's
plan of distribution they received nothing. Did the
Union have a fiduciary duty towards them which
was violated by the course of conduct the Union fol-
lowed?
The answers to this inquiry do not come easily.
Normally, a union has a wide degree of discretion in
the settlement of grievances and also in the settle-
ment of unfair labor practice charges. It may, in
some circumstances, settle a grievance for only a
fraction of the amount of damages it may claim that
DISTRICT 65, DISTRIBUTIVE WORKERS
one of its constituents suffered by virtue of an
employer's breach of an agreement. It may, in some
circumstances, settle an 8(a)(3) charge filed on behalf
of an employee for something less than the total loss
of earnings that the employee claims resulted from
his discharge. But, while less than full satisfaction of
claimants' desires may be an appropriate and lawful
basis for some settlements, yet I do not believe that a
union may make a settlement either of a grievance or
of an unfair labor practice charge in such manner as
to invidiously or arbitrarily discriminate among the
class of potential beneficiaries whom it purports to
represent.
A settlement, particularly of a grievance, which is
authorized by a fair and democratic majority vote of
its membership, should normally not be deemed to
be invidious or arbitrary, since the principle of ma-
jority rule is firmly woven into the fabric of labor
relations and union representation. But even majori-
ty rule cannot always be a perfect defense to charges
of invidious or arbitrary discrimination. If a settle-
ment of several discharge grievances, for example,
was approved by the majority of employees at a
union meeting, but the settlements were found to
have been invidiously motivated, such as, for exam-
ple, if all white employees received the full amount of
their claims, but all black employees were denied re-
lief of any kind-I have little doubt that both we and
the courts would find unlawful discrimination in a
breach of the duty of fair representation, despite any
defense based simply on majority rule. Yet, in more
doubtful cases, majority rule and collective consider-
ations may well prevail, even though individual ineq-
uities may result.
Here charging parties received nothing out of the
distribution, despite the fact that they had incurred
losses of earnings in the same manner as all other
employees who had been adversely affected by the
allegedly unlawful facility closure. On the other
hand, if I understand the facts correctly, it is also
true that these employees had chosen not to support
the union strike actively and, under these circum-
stances, the Union deemed it to be in the best inter-
ests of all employees in the unit to utilize the settle-
ment funds in a manner which, had it utilized its
general treasury funds in the identical manner, ab
initio, would presumably have been legitimate. And,
alleges the Union, this decision was made in accor-
dance with a vote of the membership.
While the proper accommodation between individ-
ual rights and collective rights is a difficult one here,
I have concluded that when a union undertakes to
settle a charge and receive funds it must hold those
funds under a fiduciary duty essentially the same as
that imposed upon an attorney or other agent acting
1061
for a class of potential benficiaries of the contemplat-
ed litigation. Funds received in settlement of litiga-
tion assume a different character from other moneys
held in the general fund of the union and intended to
be spent for general union purposes. Settlement
funds should be regarded as being held in trust for
the potential beneficiaries of the intended litigation
and thus must be distributed in a manner paralleling
that which would have resulted had such funds been
obtained through full pursuit of the litigation.
One may legitimately question whether the en-
forcement of such a special fiduciary obligation is
properly within the province of this Board or wheth-
er, instead, enforcement of such a special fiduciary
obligation ought to be relegated to the judiciary,
which normally deals with such questions of law.
Yet, if this Board is properly charged with the task of
enforcing the duty to fairly represent, it then seems
reasonable that we must also deal with those special
fiduciary relationships which a union undertakes only
because it has a special representative status under
our law. Thus, upon these considerations, I am will-
ing to find an 8(b)(1)(A) violation here and to reme-
dy it by requiring the Union to make whole those
employees who were deprived of a share in the settle-
ment fund by reason of the Union's violation of its
fiduciary obligation.
The 8(b)(2) violation found by the Administrative
Law Judge is, however, in my view, totally without
foundation. The Union did not cause the Employer
here to commit any unfair labor practice. Nor did it
attempt to do so. Contrary to the Administrative
Law Judge, I do not conclude that the payment of
the settlement moneys to the Union made the Union
the agent of the Employer. Indeed, my finding of an
8(b)(1)(A) violation rests upon a quite contrary legal
conclusion-i.e., that the Union was the fiduciary
agent for the employees. It violated that duty-not
any duty to the Employer. The Employer settled the
potential litigation by a payment to the Union, made
in part on the strength of the known legal status of
the Union as representative of the employees, but
more particularly because of the Union's willingness
to undertake the settlement as agent for the potential
beneficiaries of the litigation. A defendant to a law
suit who pays settlement funds to an attorney repre-
senting the plaintiff does not make the plaintiff's at-
torney his agent, but instead is entitled to rely on an
agency and fiduciary relationship existing between
the plaintiff and the plaintiff's attorney. The same
basic principle is applicable here.
For the above reasons, I would sustain the
8(b)(1)(A) findings for the reasons indicated in this
separate opinion and would dismiss the 8(b)(2) alle-
gations of this complaint.
1062 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
DECISION
STATEMENT OF THE CASE
MAURICE S. BUSH , Administrative Law Judge: On May 1,
1973, certain employees in a unit of warehouse employees
and office clerical employees in the employment of Blume
Associates, Inc., ceased work concertedly and engaged in a
strike.
On May 4, 1973, Blume , a wholesaler of ladies apparel,
notified the Respondent Union representing the unit that it
had decided on the previous day, May 3, to close its ware-
house at Moonachie, New Jersey, at which the strike was
taking place and to initiate negotiations looking toward the
transfer of its Moonachie operations to Georgia. Later in
the fall of 1973 Blume began conducting its former Moo-
nachie operations in Milledgeville, Georgia.
On June 27, 1973, a complaint was issued in Case 22-
CA-5437, against Blume pursuant to unfair labor charges
filed by the same Union here involved arising out of the
closing of Blume 's Moonachie facility. The complaint al-
leged violations of Section 8(a)(1), (3), and (5) of the Na-
tional Labor Relations Act. The complaint, among other
matters, sought reinstatement of the employees who had
been on strike since May 1, but who had made uncondi-
tional offers on May 21, 1973, to return to their former
positions of employment. The complaint alleged that
Blume refused to reinstate the striking employees.
On August 17, 1973, during the course of a trial in the
said Case 22-CA-5437 before Administrative Law Judge
Theeman, Blume and the Union entered into a settlement
agreement which resulted in the dismissal of that proceed-
ing.
Under the settlement agreement Blume agreed to pay
and actually did pay to the Union the sum of $92,500 "in
full settlement, discharge, and release of all liabilities, if
any, arising out of the Union's claim for damages on be-
half of itself and all eligible employees" resulting from the
closing of its Moonachie warehouse and the resulting loss
of jobs. As part of the settlement, the Union agreed to
distribute the $92,500 "to all eligible employees in accor-
dance with their rights."
The Union in distributing the $92,500 fund made distri-
butions only to such employees who had engaged in picket-
ing or related strike activities from May 21, 1973, the date
the striking employees had made an unconditional offer to
return to their former positions of employment, to August
17, 1973, the date of the settlement agreement.
Thus the Union has made no distribution and still refus-
es to make distribution of any part of the $92,500 fund to
employees in the unit who had not engaged in picketing or
in related strike activities from May 21 to August 17, 1973,
unless an employee could prove to the Union's satisfaction
that he was not able to picket
Under these skeletonized but essentially undisputed
facts, the issues under the pleadings are whether the Re-
spondent Union has engaged in unfair labor practices in
violation of Section 8(b)(1)(A) and (2) of the National La-
bor Relations Act by denying certain employees the right
to share in the $92,500 fund from Blume because they had
not engaged in picketing Blume or in related strike activi-
ties during the period between May 21 and August 17,
1973.
The complaint herein was issued on November 30, 1973,
pursuant to a charge filed on October 29, 1973, and an
amended charge filed on November 6, 1973, copies of
which were duly served upon the Respondent Union.
The Respondent Union' s answer denies the alleged un-
fair labor practices.
The case was heard on February 4, 5, 6, and 8, 1974, at
Newark, New Jersey. Briefs filed by the parties on March
8, 1974, have been carefully reviewed and considered.
For reasons hereinafter indicated, I find the Respondent
Union in violation of the Act as alleged in the complaint.
Upon the entire record in the case and from my observa-
tion of the witnesses, I make the following:
FINDINGS OF FACT
1. JURISDICTIONAL FINDINGS RE EMPLOYER
Blume Associates, Inc., a New Jersey corporation, some-
times referred to as the Employer or Blume, has at all times
here material maintained its principal office and place of
business at Moonachie, New Jersey, and also a place of
business at Lodi, New Jersey. Blume at all times here mate-
rial has engaged at these places of business in the ware-
housing and distribution of women's apparel and related
products.
During the past 12 months which is a representative peri-
od Blume caused to be sold and distributed at its Moona-
chie and Lodi places of business, products, goods, and ma-
terials valued in excess of $50,000, of which, products,
goods, and materials valued in excess of $50,000 were
shipped from the Moonachie and Lodi places of business
in interstate commerce directly to States of the United
States other than the State of New Jersey.
II. THE RESPONDENT UNION
District 65, Distributive Workers of America, the Re-
spondent Union herein, is a labor organization within the
meaning of Section 2(5) of the Act.
III. THE UNFAIR LABOR PRACTICES
A. Background and Chronology of Events
Blume has been an employer member of the Knitwear
Employers Association, Inc., and as such was an employer
participant in a nationwide multiemployer collective-bar-
gaining agreement the Association had with the Respon-
dent Union covering all of Blume's warehouse, office, and
clerical employees for a 3-year term that ended on April
30, 1973.
Some days prior to the termination of this multiemployer
contract, Blume began negotiations for a separate collec-
tive-bargaining agreement with Respondent Union, cover-
ing its warehouse and office clerical employees at both its
Moonachie and Lodi, New Jersey, plants, although the re-
cord shows that Blume had stopped operations in its Lodi
DISTRICT 65, DISTRIBUTIVE WORKERS
plant sometime in April 1973 and that virtually all of its
Lodi plant employees except one or two were transferred
to its Moonachie plant on or by April 30, 1973. In these
negotiations, it is admitted that the Respondent Union was
the exclusive representative of a unit in Blume's Moona-
chie and Lodi plants consisting of all of its warehouse and
office clerical employees, with certain exclusions not here
pertinent. As of May 1, 1973, the unit consisted of about 80
employees.
The Union called a strike against Blume on May 1, 1973,
on the ground that Blume was not bargaining in good
faith. The record shows that on that date all of Blume's
unit employees at the Moonachie plant and the one or
more remaining employees at the Lodi plant ceased work
concertedly I and engaged in a strike against the Compa-
ny?
On May 4, 1973, Blume notified the Union by letter that
it had come to a decision as of the previous day, to "per-
manently cease operations" at its Moonachie facility. In
the letter, Blume further notified the Union that Charlie's
Girls, one of the several names Blume was known by in the
trade, would "initiate negotiations with Baldwin Enterpris-
es . . . for the purpose of determining whether satisfactory
arrangements can be worked out to have the operations
heretofore conducted at Moonachie performed by Baldwin
at the Baldwin plant in Milledgville, Georgia." Finally,
Blume in its letter expressed its "desire to promptly com-
mence bargaining with you [the Union] with respect to the
effects of this decision, the terms of severance for the em-
ployees at Moonachie, and any other appropriate bargain-
ing matter relating to the discontinuance of the operations
at Moonachie"
On May 11, 1973, the Union, as the exclusive bargaining
representative of the above-described unit, filed an unfair
labor practice charge against Blume pursuant to which a
complaint was issued on June 27, 1973, in the above-men-
tioned case 22-CA-5437, alleging violations of Section
8(a)(1), (3), and (5) of the Act. More particularly the com-
plaint alleged that Blume was bargaining in bad faith,
"with no intention of entering into any final or binding
collective-bargaining agreement." The complaint further
alleged that Blume "threatened its employees, in effect,
that if the Union did not execute a collective-bargaining
agreement for the employees in the unit . . on terms satis-
factory" to Blume, that Blume "would forthwith close its
Moonachie facility and remove the work to its facility in
the State of Georgia." Blume in its answer denied these
i The Union's vice president, Al Dicker, testified, "At the time of the
strike, there was nobody-as far as we knew, nobody was working at the
Moonachie plant Nobody was working anywhere
2 Although at the trial the Respondent Union disputed the existence of a
strike against Blume , the record is conclusive that such a strike took place
on May 1, 1973 The Union in its answer "admits that certain employees of
the Employer ceased work concertedly on May I and engaged in a strike
" In the aforementioned proceeding before the Board in Case 22-
CA-5437, involving the same Union as the Charging Party and Blume as
the Respondent, the complaint alleges and the Union's answer admits that
there was a strike at Blume's Moonachie and Lodi plants on or about May
1, 1973 Al Dicker, the Union's aforementioned vice president, admitted in
the prior proceeding that a strike had been called against Blume and that he
notified the Company that the employees would go on strike on May 1,
1973
1063
allegations.
On May 21, 1973, the employees in the unit made an
unconditional offer to return to work. Blume did not ac-
cept the offer as it had decided to terminate its Moonachie
operation as of May 3, 1973, as shown above, and, accord-
ingly, the employees remained on strike.
On July 13, 1973, the complaint in Case 22-CA-5437
was amended to read that Blume on or about May 22,
"terminated its Moonachie and Lodi ... operations, dis-
charged its employees and since . . . about June 1, 1973,
has attempted to remove its Moonachie and Lodi opera-
tions to Georgia" for the purpose of avoiding dealing with
the Union.
A 9-day trial took place in said Case 22-CA-5437 before
Administrative Law Judge Theeman but was settled with-
out further trial by a written agreement between the Union
and Blume dated August 17, 1973, with the subsequent
concurrence of General Counsel and Judge Theeman. Un-
der the agreement, the Union agreed to "immediately ter-
minate its strike, picketing and boycott against the Em-
ployer and its parent and affiliate corporations as well as
any and all other economic activities against them... .
In addition the Union agreed to "withdraw, with prejudice,
all charges against the Employer now pending before the
National Labor Relations Board and shall join with the
Employer in applying to the National Labor Relations
Board and to the General Counsel thereof and the Admin-
istrative Law Judge thereof for the withdrawal of the com-
plaint issued against the Employer upon the Union's
charges."
In consideration for the above, Blume agreed to and did
"pay the Union the sum of $92,500 in full settlement, dis-
charge and release of all liabilities, if any, of the Employer
arising out of the Union's claim for all damages on behalf
of itself and all eligible employees." 3 (Emphasis supplied.)
In addition Blume agreed that the new corporation it was
to sponsor for the establishment of a new warehouse in
New York City would hire 17 of Blume's former employees
for employment at its new warehouse. From evidence de-
hors the settlement agreement, to wit, the testimony of the
Union's Vice President Dicker, I find that the Company as
part of the settlement was given the right to select the em-
ployees its successor would hire in the New York City
warehouse without regard to seniority. This resulted in the
bypassing of certain employees with superior seniority for
transfer to the new warehouse in New York City.
Dicker also testified, dehors the settlement agreement,
3 The settlement agreement also provided that "Liquidation Benefits" be
increased to $175 per week This was intended to tie in with paragraph 26 of
the collective-bargaining agreement between the Union and Knitwear Em-
ployers Association, Inc, which expired on April 30, 1973, and to which
Blume was an employer party as a member of Knitwear Employers Associa-
tion That bargaining agreement provides that if an employer wholly termi-
nates its business and as a result thereof the employer severs the employ-
ment of persons then engaged in the coverage of the bargaining agreement,
the employer shall become obligated to pay to such employees "the regular
straight time weekly wage rate in effect at the time of termination, multi-
plied by the number of full calendar years, plus the fraction thereof equiva-
lent to any additional part of a year, of such employee's active service
" (Joint Exh 4.) These "Liquidation Benefits" are not involved in the
present proceedings, but are noted because they are in the nature of true
severance pay as distinguished from the $92,500 paid by Blume as damages
arising from the closing of its Moonachie and Lodi facilities
1064 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
that $17,500 of the $92,500 damage settlement , was intend-
ed solely for the benefit of the former Blume employees
who despite their greater seniority were to be bypassed on
transfers to the new warehouse. I do not credit that testi-
mony because the settlement agreement with reference to
the distribution of the $92,500 makes no distinction be-
tween the employees who lost their jobs by reason of
Blume 's closing of its Moonachie facility and those em-
ployees who lost their jobs by being bypassed for transfer
to the soon to be established New York City warehouse
despite the fact that they had seniority over the employees
who were chosen by Blume for transfer. In either case the
involved employees lost their jobs. The settlement agree-
ment simply states that the sum of $92,500 ° was to be paid
by Blume to the Union as damages "on behalf" of the
Union and "all eligible employees." I find and conclude
without the necessity of further elaboration in the section
entitled "Discussion and Conclusions" below that the dis-
tribution of the $92,500 was to be made by the Union to
"all eligible employees" whether they lost their jobs by the
closing of the Moonachie facility or by being bypassed on
transfers to the new New York City warehouse. The by-
passed employees only lost their jobs once, not twice; to
allow them distribution from $75,000 of the $92,500 in
damages paid by Blume and also distribution from the re-
maining $17,500 would be to allow them distribution twice
from their only once lost jobs. Moreover, such a distribu-
tion would be unfair to the rest of the employees in the unit
who lost their jobs solely through the closing of the Moo-
nachie facility as obviously their share of the so-called
damages paid by the Company to the Union would be less
if carved out of $75,000 than $92,500.
The settlement agreement simply states, "The Union
shall distribute said sum [$92,500]" to all "eligible employ-
ees in accordance with their rights." In summary, I find
and conclude that the parties to the settlement agreement
never intended to set up two separate sets of eligible em-
ployees for participation in the $92,500; namely, one for
those employees who lost their jobs strictly and only by the
closing of the Moonachie plant and another for those se-
nior employees who lost their jobs by being bypassed on
transfers to the new warehouse in New York City. I further
find and conclude that the settlement agreement gave "all
eligible employees" the right to share equally in the full
fund of $92,500, but reserve for discussion and conclusion
below whether "eligibility" for sharing in the $92,500 fund
could be conditioned on the striking employees' participa-
tion in picketing the Company or related strike activities
° The original agreement showed a typed figure of $75,000, the agreement
further shows that two inked lines were drawn horizontally over the $75,000
and the figure $92,500 was inserted in ink above the original figure , followed
by Union's Vice President Al Dicker's initials From this appearance of the
paragraph in question in the settlement agreement , Dicker testified that
$17,500 of the $92,500 figure was intended for senior employees who were
bypassed on transfers to the new warehouse in New York City controlled by
the Blume interests We have on this only Dicker's self-serving testimony,
there is no corroboration of Dicker's testimony by any witness connected
with Blume and in fact no officer or person from Blume testified in the
present proceeding As stated above, I do not credit Blume's testimony on
this I find and infer from the record as a whole that $17,500 was added to
the original $75,000 damage figure as a result of the Union's last minute
dickering with Blume
for the above -stated period of May 21 to August 17, 1973.
B. Restraint, Coercion, and Discrimination
On August 17, 1973, the date of the settlement agree-
ment , the employees in the unit ceased their picketing and
related strike activities. The Union called a meeting of
Blume 's employees at its New York City headquarters that
same day, attended by some 50 or 60 employees, to inform
them of the settlement and also to give them an opportuni-
ty to determine how the $92,500 fund received from Blume
should be distributed. A committee of about 10 employees,
mostly picket captains, was selected by the employees to
make a recommendation as to how the money should be
distributed.
Within a week or 10 days later another meeting was
called at which the committee made its recommendations.
The committee recommended that starting with May 21,
1973, the date the employees made an unconditional offer
to return to work, they were to be paid for each week they
had picketed or engaged in related strike activities 5 from
the said date of May 21 to August 17, 1973, the date of the
settlement , a sum of money representing the difference that
they would have earned at Blume and what they actually
earned at other jobs or from unemployment compensation.
Under the committee's recommendation no part of the
$92,500 fund was to be distributed to striking employees
who had not picketed or engaged in related strike activities
from and after May 21, 1973.
The committee's recommendation was accepted by a
vote of the employees in attendance at the meeting.
Thereafter, the Respondent Union, using the formula
which had been accepted by the employees, determined the
amount of money that was due and then prepared the indi-
vidual checks and at a subsequent union meeting distribut-
ed the checks to the employees.
The record shows, and Respondent Union does not dis-
pute the fact that in making distributions of the $92,500
fund received from Blume as damages to the Blume em-
ployees arising from the closing of its Moonachie facility,
the Union made no distributions from the fund to any
Blume employees who had ceased work and engaged in a
strike but had not picketed or engaged in related strike
activities from and after May 21, 1973, except for excuses
considered valid by the Union such as a serious illness.
Ten of an undetermined number of these former striking
Blume employees who received no distributions from the
$92,500 fund testified herein. They are Maureen Knauer,
Margaret Sawicki, Sandra Hanley, Agnes Gilmartin, Beu-
lah Messineo, Donna L'Esperance, Susan Longer, Marga-
ret Bannon, Diane Petrizzo, and Elena Cenicola. All 10 of
the above-named employees had been employed as office
clericals in the unit here involved. They had worked for
Blume for periods ranging from more than 1 year to more
than 4 years. As of May 1, 1973, all 10 had ceased their
work at the Blume facilities and engaged in a strike and
have not worked for Blume since May 1, 1973. Five of the
10 women had engaged in picketing for periods ranging
5 Such as preparing and mailing union strike literature and contacting
Blume's customers in the retail trade in efforts to persuade them not to buy
ladies apparel from Blume during the strike
DISTRICT 65, DISTRIBUTIVE WORKERS
from I day to 3 weeks prior to May 21, 1973; Longo had
actually picketed from May 1 to 21, 1973, when, according
to her credited testimony, she quit picketing upon the rep-
resentation of the Union's Vice President Dicker that she
would be entitled to a distributive share of any funds the
Union was able to get from Blume rising from the closing
of its Moonachie facility whether she picketed or not.
None of these 10 named employees had engaged in any
picketing or related strike activities from and after May 21,
1973.
Of the above-named former employees, Kanaur did not
picket because she has "a little girl and I have to pay a
babysitter and I couldn't afford to do that." Sawicki did
not picket "because the company wasn't there any longer;
they were in Georgia" and she accordingly considered the
picketing useless. Petrizzo and Esperance did not picket for
the same reason. Hanley quit picketing after 2 weeks be-
cause she was near her seventh month of pregnancy. Ban-
non quit picketing after a week, also because of a pregnan-
cy which made her very sick. The remaining named former
employees quit picketing because some of the male picket-
ers were drunk and because they were molested or feared
molestation.
None of the above-named former Blume employees
learned of the $92,500 settlement fund from the Respon-
dent Union. One learned about the settlement from a local
newspaper; the others learned about it from coworkers,
particularly Frances Flores, the Charging Party herein, an-
other office clerical, who was not called as a witness be-
cause she was about to have a baby. A few of the 10 indi-
cated former Blume employees called the Union to see why
they had not received a share of the $92,500 settlement but
got no satisfaction.
None of the former Blume unit employees left out of the
$92,500 distribution filed a grievance with the Union for
having been left out under the grievance provisions of the
Union's constitution. (Resp. Exh. 1.) One of the Union's
defenses herein is that former Blume employees who were
left out from participation on the $92,500 fund are not
entitled to engage in litigation before the Board because
they "did not exhaust their internal union remedies." In
that connection it is noted that the Union's constitution
allows grievances to be filed only "against another mem-
ber, a Committee, or Officers of the Union," but not
against the Union per se.
Discussion and Conclusions
A. 8(b)(1)(A) Violation
I find and conclude from the record as a whole that the
Employer paid the Respondent Union the sum of $92,500
as damages for distribution to the employees in the unit for
the loss of their jobs due to the Employer 's decision to
close the facilities at which they were employed in New
Jersey and to move its operations to Georgia. The record
shows as heretofore noted that all employees in the unit
ceased work and engaged in a strike on May 1, 1973, and
did not terminate the strike until August 17, 1973, the date
of the $92 ,500 settlement.
I further find and conclude that the Union 's refusal to
1065
make distribution of the $92,500 fund to the striking em-
ployees in the unit who did not picket or engage in other
related strike activities during the period from May 21
(when there was an unconditional offer by the employees
to return to their jobs) to August 17, 1973, is an unfair
labor practice in violation of Section 8(b)(I)(A) of the Act
because that section prohibits a union from restraining or
coercing employees in the exercise of the negative rights
guaranteed in Section 7 of the Act, to wit, the right of
employees to refrain from any and all concerted activities.
These guaranteed rights obviously include the right to re-
frain from picketing. As stated by the Board in Warehouse
& Distribution Workers' Union Local No. 207, 118 NLRB
342, 347 (1957). "Section 7 of the Act guarantees employ-
ees the right to refrain from assisting a labor organization in
its strike or other concerted activities." (Emphasis sup-
plied.)
B. 8(b)(2) Violations
As shown in the above findings, the Union, as part of its
consideration for the receipt of the $92,500 settlement from
Blume, agreed to withdraw its Section 8(a)(1), (3), and (5)
unfair labor charges against Blume, then pending under a
complaint in the aforementioned Case 22-CA-5437. Obvi-
ously in that proceeding, General Counsel sought mone-
tary relief only for the alleged 8(a)(3) violations, to wit, by
way of a backpay order. For the alleged violations of Sec-
tion 8(a)(1) and (5), the General Counsel, of course, sought
only the traditional cease-and-desist orders and an order
requiring the Company to bargain with the Company, re-
spectively.
It, therefore, follows and is found that the $92,500 paid
by Blume to the Union was in effect a compromise settle-
ment of any backpay due to the employees of the unit
because of their alleged discriminatory discharge in viola-
tion of Section 8(a)(3) of the Act. The backpay nature of
the $92,500 fund becomes even more apparent from the
formula adopted by the Union for the distribution of that
fund. Under the Union's own formula, the amount of mon-
ey to be disbursed to each employee out of that fund was
to be based on the wages the employee would have earned
from Blume if he had not been discharged, less any money
he earned at other jobs or from unemployment compensa-
tion, subject however to the condition that payment under
the formula would be paid only for the period between
May 21 and August 17, 1973, and subject to the further
condition that payment out of the fund was to be made
only to employees who picketed or engaged in other relat-
ed strike activities during that same period of May 21 to
August 17. It was this latter condition that caused the un-
fair labor practice charge herein to be filed and the com-
plaint in the present case to be issued.
I find that this denial of participation in the $92,500
fund to employees who had not engaged in picketing or
related strike activities during the above-noted period or
any period is a violation of Section 8(b)(2) of the Act. That
section of the Act makes it "an unfair labor practice for a
labor organization or its agents . . . to cause or attempt to
cause an employer to discriminate against an employee in
violation of" Section 8(a)(3) of the Act. Section 8(a)(3)
1066 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
makes it "an unfair labor practice for an employer . . . by
discrimination in regard . . . to any term or condition of
employment to encourage or discourage membership in
any labor organization... .
It is at once apparent that if Blume as the employer had
directly undertaken to make distribution of the $92,500
backpay settlement to the discharged employees it would
have been obliged under Section 8(a)(3) of the Act to pay
each and every dischargee his appropriate share of back-
pay out of the $92,500 under whatever formula was adopt-
ed for the distribution, regardless of whether or not the
employee had engaged in picketing. It obviously would
have been a clear violation of Section 8(a)(3) of the Act if
Blume had denied backpay out of the $92,500 to any dis-
chargee who had not picketed.
However, under the terms of the settlement agreement,
Blume, as the Employer, did not directly make the distribu-
tion of the $92,500 backpay settlement fund to the employ-
ees in the unit but instead made payment of the total fund
to the Union for distribution to the unit employees. The
agreement specifically directs that, "The Union shall dis-
tribute" the $92,500 fund "to all eligible employees in ac-
cordance to their rights." I find and conclude from this
provision of the settlement agreement that Blume made the
Union its agent for the distribution of the backpay fund to
"all eligible employees." My findings and conclusions
above show that all of Blume's discharged employees in the
unit, regardless of whether or not they picketed , are enti-
tled to and, therefore, "eligible" to share in the $92,500
backpay settlement.
Accordingly I find that the Union by denying to the
nonpicketmg employees their due share of the $92,500
backpay fund caused Blume as the Employer to discrimi-
nate against them in violation of Section 8(b)(2) of the Act.
Victor F. Whittlesea, d/b/a Whittlesea Blue Cab Company,
162 NLRB 106 (1966).
In summary I find that the Respondent Union by deny-
ing to the nonpicketing employees in the unit here involved
their share of the $92,500 backpay settlement is in violation
of Section 8(b)(1)(A) and (2) of the Act.6
Upon the basis of the foregoing findings of fact and
upon the entire record in the case, I make the following:
6 The Respondent Union 's renewed motions on various grounds for dis-
missal of the complaint are denied The contention in the first motion that
the nonpicketing employees named in the complaint and similar unnamed
nonpicketing employees were not strikers is without evidentiary support and
contrary to the findings in the body of this Decision The contention in the
second motion that the Union "is not the real party in interest" because
"the workers in the shop made the decision as to the distribution of the
monies , not the Union ," is without merit because the Act imposes upon
labor organization the duty to be in compliance with the Act , a labor orga-
nization cannot escape its obligations under the Act for the acts it performs
by shifting the responsibility for such acts to its members . Finally, the con-
tention in the third motion that , "This case was not ripe for litigation in that
the complaining employees did not exhaust their internal remedies " is like-
wise without merit The Union 's constitution , as shown in the findings
above, provides a grievance procedure only "against another member, a
Committee , or Officer of the Union ," and not against the Union itself But
wholly aside from this , it has been long established that a union member
need not exhaust his internal union remedies prior to filing a charge with the
Board Industrial Union of Marine and Shipbuilding Workers of America,
AFL-CIO (United States Lines Company), 159 NLRB 1065 (1966 ), 391 U S
418, 68 LRRM 2257
CONCLUSIONS OF LAW
1. Respondent Union, District 65, Distributive Workers
of America, is a labor organization within the meaning of
Section 2(5) of the Act.
2. Blume Associates, Inc., is an employer within the
meaning of Section 2(2) of the Act and it has been at all
times here material engaged in commerce within the mean-
ing of Section 2(6) and (7) of the Act.
3. By restraining and coercing certain employees in the
exercise of rights guaranteed them by Section 7 of the Act,
as found above, the Respondent Union has engaged in un-
fair labor practices within the meaning of Section
8(b)(1)(A) of the Act.
4. By causing Blume Associates, Inc., to discriminate
against certain employees, as found above, in violation of
Section 8(a)(3) of the Act, the Respondent Union has en-
gaged in, and is engaging in, unfair labor practices within
the meaning of Section 8(b)(2) of the Act.
5. 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
It having been found that the Respondent Union has
engaged in certain unfair labor practices in violation of
Section 8(b)(1)(A) and (2) of the Act, it will be recom-
mended that the Respondent Union be ordered to cease
and desist therefrom and from in any other manner infr-
inging upon the employees' Section 7 rights, and that the
Union take certain affirmative action designed to effectu-
ate the policies of the Act.
It having been found that certain named and unnamed
employees of Blume Associates, Inc., were denied certain
moneys because they did not participate in picketing dur-
ing the period from May 21 to August 17, 1973, it will be
recommended that the Respondent Union make these em-
ployees whole for any losses of monies suffered by reason
of the imposition of this unlawful condition and that such
moneys shall bear interest at the rate of 6 percent per an-
num.
Upon the basis of the foregoing findings of fact and the
entire record in this proceeding, I make the following rec-
ommended:
ORDER'
The Respondent Union, District 65, Distributive Work-
ers of America, New York, New York, its officers, agents,
successors , and assigns shall:
1. Cease and desist from:
(a) Conditioning the rights of employees to share in the
$92,500 fund, described above, upon their participation in
the picketing which took place between May 21 to August
' In the event no exceptions are filed as provided by Sec 102 46 of the
Rules and Regulations of the National Labor Relations Board, the findings,
conclusions, and recommended Order herein shall, as provided in Sec 102
48 of the Rules and Regulations , be adopted by the Board and become its
findings, conclusions , and order , and all objections thereto shall be deemed
waived for all purposes
DISTRICT 65, DISTRIBUTIVE WORKERS
17, 1973.
(b) In any like or related manner interfering with, re-
straining, or coercing employees in the exercise of their
rights guaranteed by Section 7 of the Act.
2. Take the following affirmative action which will ef-
fectuate the policies of the Act:
(a) Make whole the employees for any losses of money
suffered by them by reason of the Respondent Union's
unlawful requirement that they participate in the picketing
between May 21 and August 17, 1973.
(b) Post at its business office and all other places where
notices to membership are customarily posted, in conspicu-
ous places, copies of the attached notice marked "Appen-
dix." s Copies of said notice, to be furnished by the Re-
gional Director for Region 22, shall, after being duly
signed by the Respondent Union's representative, be post-
ed by the Respondent Union immediately upon receipt
thereof, and be maintained by it for 60 consecutive days
thereafter. Reasonable steps shall be taken by the Respon-
dent Union to ensure that said notices are not altered, de-
faced, or covered by any other material.
(c) Notify the Regional Director for Region 22, in writ-
ing, within 20 days from the date of its Order, what steps
the Respondent Union has taken to comply herewith.
1067
United States Court of Appeals , the words in the notice reading "Posted by
Order of the National 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 "
APPENDIX
NOTICE To MEMBERS
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
WE WILL NOT condition the rights of employees to
share in the monies given to us by Blume Associates,
Inc., in settlement of Case No. 22-CA-5437 upon
their participation in picketing.
WE WILL NOT in any like or related manner interfere
with, restrain, or coerce employees in the exercise of
their rights guaranteed under Section 7 of the Nation-
al Labor Relations Act.
WE WILL make whole any employees who were de-
nied any moneys because of our requirement that they
picket.
DISTRICT 65, DISTRIBUTIVE
In the event that the Board's Order is enforced by a Judgment of a WORKERS OF AMERICA