Electro Vector, Inc.

National Labor Relations Board - Board Decisions

Sep 18, 1975

220 N.L.R.B. 445 (N.L.R.B. 1975)

ELECTRO VECTOR, INC. 445
Electro Vector, Inc. and General Truck Drivers,
Warehousemen & Helpers Union , Local 980, Inter-
national Brotherhood of Teamsters, Chauffeurs,
Warehousemen and Helpers of America. Case
20-CA-9771
September 18, 1975
DECISION AND ORDER
BY CHAIRMAN MURPHY AND MEMBERS FANNING
AND JENKINS
On April 8, 1975, Administrative Law Judge Rich-
ard J. Boyce issued the attached Decision in this pro-
ceeding. Thereafter, Respondent filed exceptions and
a supporting brief, and the General Counsel filed a
brief in support of the Decision.
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 briefs
and has decided to affirm the rulings, findings and
conclusions of the Administrative Law Judge and to
adopt his recommended Order.'
The Administrative Law Judge finds that Respon-
dent unlawfully denied bonus payments to striking
employees. We agree.
The facts here are not in controversy. Respondent
in 1974 had in effect a bonus program. Under the
program such employees received a basic amount of
$150, less diminutions due to absences or due to not
being on the payroll for the entire fiscal year. The
diminutions were based on a formula uniformly ap-
plied. However, no bonus was paid to any employee
who was not on the active payroll, i.e., actually work-
ing, both on the last day of the fiscal year, September
30, and the date the bonus was paid, November 27,
1974. On May 2, 1974, the employees had gone on
strike. The strike was continuing as of November 27,
1974. As a result of their participation in the strike, a
number of employees were not on the payroll on the
two qualifying dates and were, therefore, denied any
bonus.
The benefit here was earned as a result of work
attendence over the fiscal year. As of the May 2,
1974, strike date the employees had, under
Respondent's formula, earned a part of the benefit
' In the absence of exceptions, we adopt pro forma the Administrative
Law Judge's conclusion that the strike was not converted into an unfair
labor practice strike.
In support of our finding of a violation , we also rely on N.L R B v Great
Dane Trailers, Inc., 388 U .S. 26 (1967).
subject only to their being on the active payroll on
the two qualifying dates. Depriving striking employ-
ees of the benefits which- they have previously quali-
fied for because they are on strike will have the natu-
ral tendency of coercing employees to give up the
strike.
Nevertheless, disqualification of the strikers is not
unlawful if it serves Respondent's legitimate business
interests in some significant fashion. N.L.R.B. v.
Great Dane Trailers, Inc., 388 U.S. 26. It is, of course,
legitimate to reduce the bonus by the length of any
employee's absence, even if that absence is due to a
strike.2 The Administrative Law Judge's proposed
remedy, correctly, calls for such a reduction. Howev-
er, Respondent offers no justification, nor do we per-
ceive any, for its requirement that the strikers be ac-
tually on duty on the two eligibility dates. Thus,
Respondent does not contend that the failure of em-
ployees to work on those dates, as opposed to any
other dates of the year, has any significant impact on
its business. Nor does it contend there is anything
else special about those particular dates.
Depriving employees of any entitlement to the bo-
nus which they had otherwise qualified for because
they are on strike on two dates without special busi-
ness significance is inherently destructive of the em-
ployees' right to strike? Therefore, we adopt the Ad-
ministrative Law Judge's finding that Respondent
violated Section 8(a)(3) and (1) by depriving strikers
of bonus payments.
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, Electro Vector, Inc., Forest-
ville, California, its officers, agents, successors, and
assigns, shall take the action set forth in the said rec-
ommended Order.
MEMBER FANNING, concurring:
I concur in my colleagues' adoption of the Admin-
istrative Law Judge's Decision.
Pursuant to a practice instituted in 1973, Respon-
Z Cf. Tex-Tan Welhausen Company and Tex-Tan Western Leather Compa-
ny, Division of Tandy Corporation, 172 NLRB 851, 889-890 ( 1968), enfd. 419
F.2d 1265 (C.A. 5, 1969), rehearing denied and rehearing denied en banc
Jan 12, 1970.
7 Quality Castings Company, 139 NLRB 928 ( 1962). The instant case is
factually much stronger for the result reached than Quality Castings. In that
case the employer sought to apply a 50-percent attendance requirement for
eligibility to participate in a profit-sharing plan. Such a requirement bears at
least some relationship to productivity Whether there is a sufficient rela-
tionship to productivity to warrant denial of benefits to strikers must be
determined on the facts of each case . We perceive no business justification
herein which would even arguably warrant denial of benefits to strikers for
failure to work on the two eligibility dates.
220 NLRB No. 71
446 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
dent paid a bonus to employees who worked for it
during fiscal year 1974. Respondents fiscal, year runs
from October 1 to September 30 of the following cal-
endar year. The bonus was computed on a base of
$150 for a full year's work, which amount was dimin-
ished according to a set formula for absences during
the fiscal year. According to Respondent's officials,
the reason for instituting the practice of paying a bo-
nus was "a humanistic one due to the economic
hardships which the employees were suffering . . . in
addition to the company's desire to keep attendance
at an optimum." Under Respondent's practice, the
bonus earned by an employee during the fiscal year
was paid to him only if he was on the "active pay-
roll," i.e., actually working on September 30, the last
day of the fiscal year, and on the date the Respon-
dent chose to pay the bonus, which in 1974 was No-
vember 27.
A strike commenced on May 2, 1974, and was still
in progress on November 27. Some strikers had re-
turned to work prior to September 30, and those who
did and were not absent from work for other reasons
on that date or on November 27 were paid their
earned bonus computed on the basis of the amount
of time actually worked during the fiscal year. The
bonus was of course less than the $150 paid to em-
ployees who did not strike and worked the full fiscal
year. Employees who remained on strike through
November 27 and thus were not working on the two
dates in question were not paid any bonus. Certain
other employees who were absent for other reasons
on September 30 or November 27 also did not re-
ceive a bonus.
The issue in this case is whether Respondent's
treatment of the strikers' absence on September 30
and November 27 as absence from the "active pay-
roll" consitituted discrimination against the strikers
because of their participation in.protected concerted
activities likely to discourage such participation. I
think there is little doubt that that is the case, for
quite clearly employees who did not go on strike,
those who quit the strike prior to September 30, and
those who were hired as replacements for strikers
were paid the bonus, but the strikers were not. The
sole reason the latter were not paid the bonus was
that they chose to remain on strike rather than come
to work on September 30 and remain at work until
the Respondent chose a date (at his discretion) to
make the bonus payment. This different treatment of
two groups of employees-one working, one on
strike-each of which had earned a bonus, constitut-
ed "discrimination in its simplest form." N.L.R.B. v.
Great Dane Trailers, Inc., 388 U.S. 26, 32. By the
same token, the payment of the earned portion of the
bonus to one group of employees but not to another
"who are distinguishable only by their participation
in protected activities surely may have a discourag-
ing effect on either present or future concerted activi-
ty." Ibid. There seems to me no reasonable doubt
that the determination between the two groups was
"so `inherently destructive of employee interests' that
it may be deemed proscribed without the need of
proof of an underlying improper motive." Id. at 33. I
can perceive no business justification that would ex-
cuse this discriminatory conduct.
Nor has Respondent come forward with a justifi-
cation for discriminating between those employees
who received the earned portion of their bonus and
the strikers who did not. At most, Respondent argues
that it did not have a discriminatory motive because
it treated strikers the same way it treated other em-
ployees who were absent from work on September 30
or November 27. But the argument at once proves
too little and too much. It proves too little because it
does not address itself to the question of whether
there was discrimination between those who received
the bonus and the strikers who did not, but rather to
the question whether there was discrimination be-
tween two groups of employees who did not receive
the bonus. It proves too much in that with respect to
those employees who did not receive the bonus the
apparent reason for requiring their presence on the
"active payroll" on September 30 and on some un-
disclosed date in the future when the payment was to
be made was to discourage all absences from work .4
Thus, Respondent's apparent justification for not
paying the earned portion of their bonus to employ-
ees on strike on those dates was a desire to discour-
age their absence, which is to say it intended to dis-
courage them from striking. The fact that it was not
contrary to the Act for Respondent to use the pay-
ment-or nonpayment-of the bonus to discourage
employees from absenting themselves from work for
reasons not connected with the exercise of Section 7
rights cannot be a justification for discouraging em-
ployees from engaging in those protected activities.
Respondent's equation of absence from work by rea-
son of strike activity with other absences and its con-
sequent discrimination between strikers and employ-
ees who had not struck or had ended their strike
subverts the protection afforded employees' lawful
strike activity. Quality Castings Company, 139 NLRB
928, 931.
I would therefore find that Respondent's denial of
The testimony of Respondent's accountant is inconsistent with the as-
sertion that Respondent's policy requires presence at work on the two crit-
ical dates in all instances . As noted in Respondent's brief, she testified "that
a person on lay-off for maternity leave might receive the bonus even though
she was not actively working on the date of payment, if she had in fact been
working at the close of the fiscal year."
ELECTRO VECTOR, INC.
a bonus to strikers because they were not at work on
September 30 and November 27 violated Section
8(a)(3) and (1) of the Act.
DECISION
STATEMENT OF THE CASE
RICHARD J. BOYCE , Administrative Law Judge : This case
was heard before me in San Francisco , California, on
March 4 , 1975. The charge was filed December 3, 1974,
and amended January 29, 1975, by General Truck Drivers,
Warehousemen & Helpers Union , Local 980 (herein called
the Union). The complaint issued January 29, 1975, was
amended February 6, and alleges that Electro Vector, Inc.
(herein called Respondent) violated Section 8 (a)(1) and (3)
of the National Labor Relations Act.
The parties were permitted at the hearing to introduce
relevant evidence , examine and cross -examine witnesses,
and argue orally . Briefs were filed for the General Counsel
and Respondent.
1. ISSUES
The issues are whether Respondent , by not paying year-
end bonuses to economic strikers in the circumstances de-
tailed below, violated Section 8 (a)(1) and (3) of the Act;
and, if so, whether the strike thereby was converted into an
unfair labor practice strike.
11. JURISDICTION
Respondent is a California corporation engaged in For-
estville , California , in the manufacture of electronic prod-
ucts . It annually sells and causes to be delivered to custom-
ers outside California products of a value exceeding
$50,000.
Respondent is an employer engaged in and affecting
commerce within Section 2 (2), (6), and (7) of the Act.
111. LABOR ORGANIZATION
The Union is a labor organization within Section 2(5) of
the Act.
IV. THE ALLEGED UNFAIR LABOR PRACTICE
A. Facts
Respondent's production and maintenance employees
are represented in collective bargaining by the Union. On
May 2, 1974, during contract negotiations with Respon-
dent, the Union called a strike in support of its demands.
The strike is still on.
Respondent's fiscal year is October 1 through September
30. On November 27, 1974, it paid end-of-fiscal-year bo-
nuses to those of its employees who were on the "active"
payroll-i.e. actually working-on both that date and on
the final day of the fiscal year, September 30. There were
about 100 recipients, among them strikers who had quit the
447
strike in time to meet the September 30-November 27 qua-
lifying standard , as well as striker replacements meeting
that test . Respondent's general manager , Philip Del Valle,
testified credibly and without refutation that the qualifying
test was not compromised for anyone. Strikers and anyone
else not satisfying it were ineligible. There were about 33
strikers in this category.
Among those qualifying, the bonus amounts varied. The
basic amount was $150, but the great majority got less be-
cause of absenteeism or absence from the active payroll
during the fiscal year.' A formula was uniformly applied in
diminution of the basic $150 to allow for these factors, an
exception being that absences sometimes were overlooked,
as in the case of serious illness or maternity leave, if Del
Valle felt the specific circumstances so warranted. The
record does not set forth the particulars of the formula,
and is devoid of citation to any given situation in which
special dispensation was granted. Those who quit the strike
and striker replacements received the same partial-year
treatment as others who worked like periods of time. A
select few, who in Del Valle's judgment had made excep-
tional contributions during the year, received above the
basic $150. Four thus received $225 in 1974. The record
does not reveal the nature of their contributions.
Year-end bonuses were instituted by Respondent in
1973, in lieu of hams and turkeys. Although not a product
of collective bargaining, they apparently had the Union's
blessing. They were administered in exactly the same way
in 1974 as 1973. To quote Del Valle: "[W]e took great
pains to follow the exact formula so there would be no
question of an unfair labor practice." A prime purpose of
the bonuses is to stimulate better attendance, other purpos-
es being to give the employees a stake in the success of the
business after the fashion of profit-sharing plans, and to
ease the economic impact on employees of inflation and
Christmastime.
No evidence was proffered that the denial of bonuses to
strikers prolonged the strike. Two strikers testified of learn-
ing, about the time the bonuses were granted, that they had
been excluded from participation.
B. Discussion
It is concluded, in agreement with the General Counsel,
that Respondent's exclusion of strikers from participation
in the bonus distribution, because not on the active payroll
at the prescribed times, violated Section 8(a)(3) and (1).
This conclusion is grounded on Quality Castings Company,
139 NLRB 928 (1962)-a case similar to the present.
Quality Castings involved distributions under a profit-
sharing plan. Each employee, to qualify, had to have
worked 50 percent of the time between January and Sep-
tember preceeding distribution. As in the present case, the
amounts paid to those qualifying were a function of absen-
teeism , exceptions being allowed for excused absences.
Some 64 employees, who had struck in April and May of
that year and were not thereafter recalled for valid eco-
nomic reasons, were deemed not to have satisfied the quali-
1 For example , Floyd Maes, hired September 26, 1974, received only $10.
448 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
fying criterion.
The Board held that the disqualified strikers had been
discriminated against in violation of Section 8(a)(3) and
(1), determining that the respondent 's interpretation of the
qualifying criterion rested-
on the faulty premise that time on strike may lawfully
be considered the equivalent of normal absence for
purposes of determining profit-share forfeiture. [139
NLRB at 930]
The Board continued (139 NLRB 930-931):
[T]he Respondent cannot be required to make distri-
butions to individuals for the period they were absent
on strike. Neither, however, can the Respondent state
that strike time is merely another form of absence,
equating it to other forms of absence discouraged by
it, and then proceed to impose a total and nonpropor-
tionate forfeiture on employees because they engaged
in such absences-in effect because they engaged in
Section 7 activities.
[N]otwithstanding the obvious fact that strike ab-
sences intensify an employer's production problems,
strikers are given protection under the Act not avail-
able to workers whose absences are caused by other
reasons . While the Act gives no protection to workers
who are absent because of illness , athletic events, or
family celebrations, it does protect employees who are
absent because of a strike, and "excuse" such absenc-
es, in the sense contemplated by Respondent.
Respondent's contrary treatment subverts the protec-
tion afforded by the statute, and its total denial of all
profit-sharing benefits to the strikers because of their
"absence" discriminates against them as directly as if
they were discharged for such activities. Surely the Re-
spondent could not lawfully enforce a general dis-
charge rule for absenteeism against the 64 strikers,
merely because their participation in the strike for its
duration constituted "excessive absenteeism" under
the Respondent's formula. We therefore find that the
100-percent profit sharing forfeiture . . . imposed by
Respondent on the 64 strikers . . . was violative of
Section 8(a)(3) and (1), regardless of Respondent's
motivation in imposing such a penalty.2
This reasoning, which the Board has never disavowed, is
equally apposite to the present situation.'
2 Citing Erie Resistor Corp., 132 NLRB 621, later to be affirmed by the
Supreme Court at 373 U S 221 (1963).
This reasoning , however, has experienced some difficulty at judicial lev-
els. Quality Castings Company was reversed at 325 F.2d 36 (C A 6, 1963)
Similarly, Pittsburgh -Des Moines Steel Co, 124 NLRB 855, and National
Seal, Division of Federal-Mogul-Bower Bearings, Inc., 141 NLRB 661, in
which the Board used kindred reasoning to support violations, were re-
versed , respectively , at 284 F 2d 74 (C A. 9, 1960) and 336 F.2d 781 (C.A. 9,
1964). Board law, not that of the circuits, is controlling , however, at this
juncture of this proceeding . E.g., Bricklayers, Masons and Plasterers ' Union,
Local No. 1, 209 NLRB 820, fn . 1 (1974). Academic criticism of the Board's
Quality Castings reasoning appears in Getman , Section 8(a)(3) of the NLRB
and the Effort to Insulate Free Employee Choice, 32 U. of Chi. L. Rev. 735,
741-742 (1965), wherein it is observed , among other things:
Where the employer applies uniform criteria which predate the particu-
lar situation , it makes sense to grant him considerable leeway
. [Tlhe fact that the employer applies these standards in situations
In addition to urging the illegality of Respondent's deni-
al of bonuses to strikers, the General Counsel contends
that the denials converted the strike into an unfair labor
practice strike, entitling any strikers not theretofore perma-
nently replaced to unqualified reinstatement upon their ap-
plication. This contention is rejected. There is no evidence
that the bonus misconduct influenced any striker to pro-
long the strike, and it is not manifest from the facts that the
misconduct would have had that effect. The strike was
called in aid of the Union's overall position in contract
negotiations and already had been underway some 7
months. It cannot be assumed that the larger strike strategy
was affected by the bonus matter. See Romo Paper Products
Corp., 208 NLRB 644 (1974); Anchor Rome Mills Inc., 86
NLRB 1120, 1122 (1949).4
CONCLUSIONS OF LAW
1. By disqualifying strikers from bonuses, as found here-
in, Respondent engaged in unfair labor practices within
Section 8(a)(1) and (3) of the Act.
2. These unfair labor practices affect commerce within
Section 2(6) and (7) of the Act.
3. Respondent's misconduct, as found herein, did not
convert the economic strike that began May 1, 1974, into
an unfair labor practice strike.
THE REMEDY
It is recommended that Respondent be ordered to cease
and desist from the unfair labor practices found.
Affirmatively, it is recommended that Respondent be or-
dered to cure its unlawful discrimination by restoring to
eligibility for the 1974 bonuses those disqualified because
of strike-related absence, and by calculating their bonus
shares in such a way that they do not suffer a dispropor-
tionate reduction because of their strike activities. Their
shares may, however, be reduced pro rata for their absences
from the job during the pertinent fiscal year whether be-
cause on strike or for any other reason. Quality Castings
Company, supra, at 932. Interest at the rate of 6 percent per
annum from November 27, 1974, shall be included in the
shares.
Those entitled to relief include:5
J. E. Anderson M. Gramlich
J. L. Aviles D. G. Herrington
S. A. Aviles S. F. Hester
R. L. Beck I. J. Jorgensen
which do not involve union activity indicates that there is a legitimate
business interest involved
4The General Counsel's argument to the contrary cites N L. R.B v Erie
Resistor Corp, 373 U.S. 221 (1963 ) As I read that decision, however, the
Supreme Court did not address itself to the issue of the strike 's status. Be-
yond that, a reading of the underlying NLRB decision -Erie Resistor Corp,
132 NLRB 621-reveals that in that case , unlike the present , the striking
employees expressly voted to continue the strike in protest of the company's
unlawful conduct.
5 And such others as are determined , in the compliance phase of this
proceeding, to be entitled . FC.F Papers, Inc, a Division of the Mead Corpo-
ration, 211 NLRB 657 ( 1974); International Brotherhood of Boilermakers,
Iron Shipbuilders , Blacksmiths , Forgers and Helpers, Local 101, 206 NLRB
30, fn 3 (1973)
ELECTRO VECTOR, INC.
A. Bribiescas D. Karson
D. Burris B. L. Kelly
S. E. Butters S. L. Palmer
P. V. Cox J. L. Say
D. G. Cresta V. M. Signett
M. Cribbins A. E. Skinner
S. L. Davis E. Stockman
E. B. Edwards J. B. Tyron
J. Frost B. S. Vierra
H. P. Galusha B. A. Wesley
P. A. Garrison L. K. Whitley
G. A. Gibson F. G. Wilson
R. N. Graham
Upon the foregoing findings of fact, conclusions of law,
and the entire record, and pursuant to Section 10(c) of the
Act, I hereby issue the following recommended:
ORDER6
Respondent, Electro Vector, Inc., its officers, agents,
successors , and assigns , shall:
1. Cease and desist from discouraging membership in
General Truck Drivers, Warehousemen & Helpers Union,
Local 980, International Brotherhood of Teamsters, Chauf-
feurs, Warehousemen and Helpers of America, or any
other labor organization, by discriminatorily denying a bo-
nus distribution to employees because of their participa-
tion in a strike.
2. Take the following affirmative action:
a. Make whole the employees referred to in "The Reme-
dy" section of this Decision, in the manner set forth in that
section, for the losses suffered by reason of Respondent's
discrimination against them.
b. Preserve and, upon request, make available to the
Board or its agents , for examination and copying, all pay-
roll records, social security payment records, timecards,
personnel records and reports, and all other records neces-
sary for determination of the amount of payment due un-
der this Order.
c. Post at its place of business in Forestville, California,
copies of the attached notice marked "Appendix."7 Copies
of said notice, on forms provided by the Regional Director
of Region 20, after being signed by an authorized represen-
tative of Respondent, shall be posted by Respondent im-
mediately upon receipt thereof, and be maintained by it for
60 consecutive days thereafter, in conspicuous places, in-
cluding all places where notices to employees customarily
are posted. Reasonable steps shall be taken to ensure that
said notices are not altered, defaced, or covered by other
material.
d. Notify the Regional Director of Region 20, in writing,
449
within 20 days from the date of this Order, what steps Re-
spondent has taken to comply herewith.
6 All outstanding motions inconsistent with this recommended Order
hereby are denied. 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
7In the event that the Board's Order is enforced by a Judgment of a
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 EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
The hearing held in San Francisco, California, on March 4,
1975, in which we participated and had a chance to give
evidence, resulted in a decision that we had committed cer-
tain unfair labor practices in violation of Section 8(a)(1)
and (3) of the National Labor Relations Act, as amended,
and this notice is posted pursuant to that Decision.
Section 7 of the National Labor Relations Act, as
amended, gives all employees the following rights:
To engage in self-organizing
To form, join, or help unions
To bargain collectively through representatives of
their own choosing
To act together for collective bargaining or other
mutual aid or protection
To refrain from any or all these things
In recognition of these rights, we hereby notify our em-
ployees that:
WE WILL NOT discourage membership in General
Truck Drivers, Warehousemen & Helpers Union, Lo-
cal 980, International Brotherhood of Teamsters,
Chauffeurs, Warehousemen and Helpers of America,
or any other labor organization, by discriminatorily
denying a bonus distribution to employees because of
their participation in a strike.
WE WILL make whole the approximately 33 striking
employees for losses suffered by reason of their being
discriminatorily excluded from the November 1974
bonus distributions.
ELECTRO VECTOR, INC.