ECDO, Inc.

National Labor Relations Board - Administrative Judge Opinions

Feb 5, 2009

02-CA-038482 (N.L.R.B. Feb. 5, 2009)

JD(NY)–04–09
New York, NY
UNITED STATES OF AMERICA
BEFORE THE NATIONAL LABOR RELATIONS BOARD
DIVISION OF JUDGES
NEW YORK BRANCH OFFICE
ECDO, INC., EARLY CHILDHOOD
DEVELOPMENT CENTER
and Case Nos. 2-CA-38482
2-CA-38929
LOCAL 205, DC 1707, AFSCME, AFL-CIO
Simon-Jon H. Koike Esq., Counsel for the
General Counsel
Thomas M. Murray, Esq., Counsel for the
Union
Richard K. Muser, Esq., Counsel for the
Respondent
DECISION
Statement of the Case
RAYMOND P. GREEN, Administrative Law Judge. I heard this case in New York on
December 16, 2008. The charge in 2-CA-38482 was filed on October 10, 2007 and the charge
in 2-CA-38929 was filed on August 18, 2008. An initial Complaint was issued on July 30, 2008
and a subsequent Consolidated Complaint was issued on November 19, 2008. In substance the
allegations were:
1. That since April 20, 2007, (six months prior to the filing of the charge in 2-CA-38482),
the Respondent has failed to pay wage increases that were required under the terms of a
collective bargaining agreement that was in effect from July 6, 2004 through July 1, 2008.
2. That the aforesaid failure to comply with the contract was made in the absence of
consent by the Union and therefore is a violation of Section 8(d) and 8(a)(5) of the Act.
3. That on or about July 31, 2008, the Respondent unlawfully withdrew recognition from
the Union.
At the hearing the parties entered into a Settlement of Case No. 2-CA-38929 whereby,
the Respondent agreed to resume collective bargaining with the Union. Consequently, the
General Counsel moved to sever that case from the instant proceedings and I granted the
Motion.
The only issue remaining is the contention that the Respondent has violated Sections
8(a)(1) & (5) and 8(d) by failing to pay the contractually required wage increases during the term
of a collective bargaining agreement that were scheduled for July 1, 2006 and July 1, 2007.
The Respondent does not dispute the non-implementation of the wage increases at the
contractually set times. It does contend, however, that the Complaint is barred by Section 10(b)
of the Act.
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On the entire record, including my observation of the demeanor of the witnesses, and
after considering the briefs filed, I make the following
I. Jurisdiction
The parties agree and I find that the Respondent is an employer engaged in commerce
within the meaning of Section 2(2), (6) and (7) of the Act. It also is agreed and I find that the
Union is a labor organization within the meaning of Section 2(5) of the Act.
II. The Alleged Unfair Labor Practice
The Respondent is a not-for profit enterprise that operates a day care center in
Manhattan. For some years, the Union has represented certain employees of the Respondent
in the following appropriate unit:
All full-time and regular part-time group teachers, assistant teachers, teacher
aides, cooks, cook’s assistants, and receptionists/office assistants employed by
the Respondent but excluding Executive Directors, Center Directors, Education
Directors, Fiscal Directors and Supervisors.
The last collective bargaining agreement ran from July 6, 2004 through July 1, 2008.
The agreement at Article 4, Section 1, provides for annual wage increases on July 1, 2005, July
1, 2006 and July 1, 2007.
Notwithstanding the terms of the contract, the Respondent failed to implement the wage
increase for July 1, 2005. This resulted in an arbitration proceeding where the Company claimed
an inability to pay. On January 9, 2006, the arbitrator found against the Respondent and
ordered it to pay the wage increase. The Company complied.
By letter dated April 18, 2006, Janice Berthoud, the Respondent’s Executive Director
wrote to Raglan George Jr., the Executive Director of the Union. She stated, inter alia:
Mr. George, the day care program is operating with a deficit of more that $17,000
every month. This expense is quickly mounting. A 4% wage increase was
awarded the employees as per the Arbitrator’s Award and Opinion dated January
9, 2006 despite the agencies operating deficiencies. The agreement calls for an
additional 4.5% wage increase to take effect July 1, 2006. According to Mr. Huff
this is contrary to the Collective Bargaining Agreement governing the members of
Local 205.
It is imperative that we address this matter or face certain bankruptcy.
When July 1, 2006 rolled around, the Respondent failed to put into effect the wage
increase that was called for on that date. In this regard, the Respondent’s Executive Director,
Janice Berthoud, reached out to the Union in order to explain the Respondent’s situation and
the need to renegotiate the contract. She also held a meeting with the employees and
explained that the Company could not, at that time, afford to implement the wage increase. By
letter dated July 7, 2006, she wrote to the employees as follows:
Some weeks ago, I met with the staff to discuss the difficult financial position
facing the Day Care Center. At that time I discussed some options that we were
considering in order to keep the center open. We spoke about a meeting that I
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had with the management of DC 1707. Present at the meeting were Raglan
George, Executive Director, Luz Santiago and others who assured me that every
effort would be made to work with the agency and its members, regarding
renegotiating the current contract to avert the wage increase effective July 1,
2006. I had hoped that you would have heard from the union to discuss
amending or renegotiating this clause but regrettably they have not done so.
Effective July 3, 2006, we increased the tuition. This increase, while it is clearly a
burden to many of the families that we serve, is only enough to cover our current
operating expenses. It is not enough to cover the accumulated debt or support an
additional wage increase. Starting September 2006, we will also reduce
expenses and increase revenue by amending the age of children enrolled from
two months to 1 year. We will continue to aggressively pursue funding or grant
opportunities that are available to day care and early childhood education.
In closing I want to thank you for you hard work and continued support.
I note that according to the testimony of Ms. Berthoud, the Union never actually agreed
to waive the contract in terms of the wage increase requirements and never actually agreed to
renegotiate the terms of the contact. I also note that the evidence shows that the Respondent
did not unambiguously notify the Union or the employees that its failure to pay the wage
increases was permanent. Indeed, Ms. Berthoud testified that had she been successful in
obtaining other funding or sources of revenue, she would have paid the required increases.
The next pay increase of 5% was scheduled to be implemented on July 1, 2007. This
also did not happen. On July 20, 2007, employees sent a memorandum to Berthoud stating:
As you know, we were due a raise of 4.5%, effective July 2006 and a 5% raise,
effective July 2007. To date we have not received either. We understand the
financial situation our organization has faced and we have done all we can to
lend our support. However, we have not heard anything concerning this matter
and we are requesting a meeting with you as soon as possible to disuses this
further.
When no satisfactory resolution was made, the charge in 2-CA-38482 was filed on
October 10, 2007. Subsequently, the Respondent did implement a 5% wage increase on
February 1, 2008 but this was on top of the 2005 raise and not on top of the required 2006
raise.
Analysis
Among other things, Section 8(d) of the Act provides that when a contract is made
between a union and an employer, the duty to bargain “shall not be construed as requiring
either party to discuss or agree to any modification of the terms and conditions contained in a
contract for a fixed period, if such modification is to become effective before such terms and
conditions can be reopened under the provisions of the contract…” The purpose of this
provision, (enacted to modify the decision in NLRB v. Sands Mfg. Co., 306 U.S. 332. 342), was
to insure a degree of stability once the parties to a collective bargaining relationship have
established a contract for a fixed term. (A bargain made is a bargain that must be kept). For
example, if the parties agreed that employees were to receive a defined wage increase at a
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defined period of time, neither the Company nor the Union could require the other to bargain for
a modification of that agreement during the life of the agreement.1 To allow either to require the
other to bargain about an issue that had been set for a fixed period of time, would, in a sense,
make the agreement somewhat illusory and insert a degree of instability into the relationship
between the parties. (There is, however, nothing unlawful if both parties to a collective
bargaining agreement voluntarily and mutually agree to a mid-term modification).
I also note that in cases such as this, a defense asserting a financial inability to pay is
not valid even if true. Mac Plastics, 314 NLRB 163 (1994). It is not within the jurisdiction of the
Board to modify the terms of a collective bargaining agreement. To the extent that this can be
done, it can only be done by the consent of the parties, or in the absence of consent, in a
Bankruptcy proceeding. In this regard, I conclude that the Respondent’s evidence fails to prove
that the Union consented to the contract being modified.
Notwithstanding the above, the Respondent contends that even though it did not
implement the 2006 and 2007 contractually required wage increases, the Complaint in this case
should be barred by the statute of limitations provisions set forth in Section 10(b) of the Act.
Had the employer announced, either to the Union and/or to the employees, on or before
April 10, 2007, that its intention was to repudiate the collective bargaining agreement, the
Respondent would have a reasonable basis to assert that Section 10(b) would bar the
Complaint because the charge would not have been filed more than six months after such a
repudiation.
But that is not the case. While the Employer did not implement the July 2006 wage
increase, the evidence shows that when the employees were notified of this action, they were
not told that it was the Respondent’s unequivocal intention either to repudiate the entire contract
or even to repudiate only the wage increase provisions thereof. Instead, Ms. Berthoud took the
more reasonable approach of advising employees that although it could not afford to make the
payments, she hoped that this was temporary and that the Respondent would do all it could to
pay the raises when that was possible.
When an identifiable act is committed outside the 10(b) period and only its
consequences continue into the 10(b) period, the Board will find an allegation untimely. Thus,
where a collective-bargaining agreement is clearly and totally repudiated, a theory that there is a
continuing violation is inapplicable. A & L Underground, 302 NLRB 467-468 (1991); American
Automatic Fire Protection, 302 NLRB 1014, 1015 (1991).
On the other hand, where it is alleged that a material contract breach has occurred, a
Complaint will be timely, even when there have been previous breaches outside the 10(b)
period, but where a clear and unequivocal repudiation has only occurred within 6 months of the
charge being filed. Farmingdale Iron Works, 249 NLRB 98-99 (1980), enfd. 661 F.2d 910 (2d
Cir., 1981); A & L, supra, 302 NLRB at 469.

1 Not only may either party refuse to enter into negotiations to modify a contract during its mid-term,
but either may violate the Act if it attempts to impose contract changes on the other. Thus, in NLRB v.
IBEW, (Burroughs Corp.),126 LRRM 2373 (2nd Cir. 1987), a union violated Section 8(b)(3) & 8(d) of the
Act by threatening to strike to obtain a mid-term re-negotiation of a contract. Similarly, in St. Vincent’s
Hospital, 320 NLRB 42, (1995), an employer violated the Act by unilaterally implementing, without the
union’s consent, a new insurance plan to replace one to which the Union had orally agreed. See also,
Mead Corp., 318 NLRB 201 (1995).
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In cases such as this, (involving the failure to make contract payments), Section 10(b)
does not begin to run until the Respondent gives unequivocal notice that it does not intend to
honor the contract. Republic Die and Tool Co., 343 NLRB 683, (2004).
In light of the above, I cannot conclude that the Complaint should be barred as untimely
vis a vis the allegation that the Respondent unilaterally and without consent modified the
contract by failing to implement the July 1, 2006 wage increase inasmuch as the Respondent,
although failing to make the payments, did not give either the Union or the employees clear and
unequivocal notice of its intention to repudiate the collective bargaining agreement or even that
portion of the contract.
In my opinion, the Respondent’s reliance on Ledbetter v. Goodyear Tire & Rubber Co.,
Inc., 550 U.S. 618 (2007) is inapposite. For one thing, the Court’s majority opinion in Lebetter
dealt with the interpretation of a different statute and therefore its interpretation of Title VII’s
limitations bar, is not necessarily translatable to the NLRA’s Section 10(b).
In that case, the plaintiff, (Ledbetter), was faced with a discrete and unequivocal act that
occurred within the limitations period. That was a pay decision, (in 1998), that was not alleged to
have been, by itself, discriminatorily motivated. Her contention was that even so, this final pay
decision was unlawful because it carried forward intentionally discriminatory disparities from
prior years. She also contended that even though the evidence of discriminatory motivation
occurred outside the limitations period, each separate pay check that she received, including
those received during the limitations period, constituted a separate act of discrimination.
In the absence of a claim of fraudulent concealment, the fact is that Ledbetter was on
notice of the various pay evaluation decisions that took place during her employment and each,
including the final one, was discrete, and unambiguous. Unlike the present case, where the
Union and employees, because of the Respondent’s communications, were not really certain as
to whether or when they might receive the contractual wage increases, there was no equivalent
certainty. Ledbetter was notified on specific dates that she was receiving specific amounts of
money as a result of specific pay decisions. Indeed, Lebetter’s case is more analogous to a
typical 8(a)(3) discharge case where an employee has been notified that he or she has been
discharged on a date certain. In such a case, he or she must file an unfair labor practice charge
within six months of the date of the discharge. There is no extension of time to gather evidence,
and if some piece of evidence showing motive is obtained after six months, that does not give
the potential discriminate additional time to file a charge. In that circumstance, a Complaint
based on a charge filed outside the statute of limitations period will be dismissed if the 10(b)
defense is raised by the Respondent. (The Board considers Section 10(b) to be an affirmative
defense that has to be timely raised by a Respondent).
With respect to the failure to comply with the contract’s July 1, 2007 wage increase, the
charge would not be barred inasmuch it was filed within six months of that date.
Conclusions of Law
1. By withholding annual wage increases to employees on July 1, 2006 and July 1, 2007,
the Respondent violated Section 8(a)(1), & (5) of the Act.
2. The aforesaid unfair labor practices affect commerce within the meaning of Section
2(6) & (7) of the Act.
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On these findings of fact and conclusions of law and on the entire record, I issue the
following recommended 2
The Remedy
Having found that the Respondent has engaged in certain unfair labor practices, I find that
it must be ordered to cease and desist and to take certain affirmative action designed to
effectuate the policies of the Act.
In accordance with precedent, I am going to recommend that the Respondent make
whole the employees in the bargaining unit for any losses that they suffered because of its
failure to implement the wage increases called for in the collective bargaining agreement.
Nevertheless, because of Section 10(b), the Board cannot require the Respondent to reimburse
employees from July 1, 2006 to March 31, 2007, because that period is more than six months
before the charge was filed. Instead, I shall recommend that the Respondent be ordered to
make the employees whole from April 1, 2007.
Although the General Counsel is seeking an Order calling for the payment of interest on a
compounded basis, I shall not grant this request inasmuch as that is contrary to current law.
Therefore, the Order should require that the amounts be computed on a quarterly basis as
prescribed in F.W. Woolworth Co., 90 NLRB 289 (1950), plus interest as computed in New
Horizons for the Retarded, 283 NLRB 1173 (1987).
ORDER
The Respondent, Ecdo Inc., Early Childhood Development Center, its officers, agents,
successors, and assigns, shall:
1. Cease and desist from
(a) Withholding contractually required annual wage increases to employees
(b) In any like or related manner interfering with, restraining, 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) Make whole, from April 1, 2007, the employees who were not given annual wage
increases that were withheld in 2006 and 2007.
(b) Within 14 days after service by the Region, post at its facility in New York, New York,
copies of the attached notice marked “Appendix .”3 Copies of the notice, on forms provided by
the Regional Director for Region 2, after being signed by the Respondent’s authorized
representative, shall be posted by the Respondent immediately upon receipt and maintained for
60 consecutive days in conspicuous places including all places where notices to employees are

2 If no exceptions are filed as provided by Sec. 102.46 of the Board's Rules and Regulations, the
findings, conclusions, and recommended Order shall, as provided in Sec. 102.48 of the Rules, be
adopted by the Board and all objections to them shall be deemed waived for all purposes.
3 If this Order is enforced by a Judgment of the 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.”
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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. In the event that, during the
pendency of these proceedings, the Respondent has gone out of business or closed the facility
involved in these proceedings, the Respondent shall duplicate and mail, at its own expense, a
copy of the notice to all current employees and former employees employed by the
Respondents at any time since April 1, 2007.
(c) Within 21 days after service by the Region, file with the Regional Director a sworn
certification of a responsible official on a form provided by the Region attesting to the steps that
the Respondent has taken to comply.
Dated, Washington, D.C.,, February 5, 2009.
_____________________
Raymond P. Green
Administrative Law Judge
JD(NY)–04–09
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.
Section 7 of the Act gives employees these rights.
To organize
To form, join, or assist any union
To bargain collectively through representatives of their own choice
To act together for other mutual aid or protection
To choose not to engage in any of these protected concerted activities.
WE WILL NOT withhold contractually required annual wage increases to employees
WE WILL NOT in any like or related manner interfere with, restrain, or coerce employees in the
exercise of the rights guaranteed them by Section 7 of the Act.
WE WILL make whole the employees in the bargaining unit for our failure to pay them the
contractually required wage increases called for in the collective bargaining agreement that was
in effect in 2006 and 2007.
ECDO, Inc., Early Childhood Development Center
(Employer)
Dated _________________ By __________________________________
(Representative) (Title)
The National Labor Relations Board is an independent Federal agency created in 1935 to enforce the
National Labor Relations Act. It conducts secret-ballot elections to determine whether employees want
union representation and it investigates and remedies unfair labor practices by employers and unions. To
find out more about your rights under the Act and how to file a charge or election petition, you may speak
confidentially to any agent with the Board’s Regional Office set forth below. You may also obtain
information from the Board’s website: www.nlrb.gov.
26 Federal Plaza, Federal Building, Room 3614
New York, New York 10278-0104
Hours: 8:45 a.m. to 5:15 p.m.
212-264-0300.
THIS IS AN OFFICIAL NOTICE AND MUST NOT BE DEFACED BY ANYONE
THIS NOTICE MUST REMAIN POSTED FOR 60 CONSECUTIVE DAYS FROM THE DATE OF POSTING AND MUST
NOT BE ALTERED, DEFACED, OR COVERED BY ANY OTHER MATERIAL. ANY QUESTIONS CONCERNING THIS
NOTICE OR COMPLIANCE WITH ITS PROVISIONS MAY BE DIRECTED TO THE ABOVE REGIONAL OFFICE’S
COMPLIANCE OFFICER, 212-264-0346.