Fox Painting Company

National Labor Relations Board - Board Decisions

Aug 16, 1982

263 N.L.R.B. 437 (N.L.R.B. 1982)

FOX PAINTING COMPANY
Fox Painting Company and International Brother-
hood of Painters and Allied Trades of the
United States and Canada, Local 768, AFL-
CIO. Case 9-CA-16050
August 16, 1982
DECISION AND ORDER
BY MEMBERS JENKINS, ZIMMERMAN, AND
HUNTER
On January 29, 1982, Administrative Law Judge
James L. Rose issued the attached Decision in this
proceeding. Thereafter, Respondent filed excep-
tions 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,l
and conclusions of the Administrative Law Judge
and to adopt his recommended Order, as modified
herein.
As a remedy for Respondent's unlawful abroga-
tion of the current terms of its collective-bargain-
ing agreement with the Union, the Administrative
Law Judge, inter alia, recommended that Respond-
ent be ordered to make those payments which
should have been made to the Union's health and
welfare trust fund under the terms of that bargain-
ing agreement. We conclude that this remedy is in-
sufficient to the extent that it does not order that
all payments due to similar funds under the agree-
ment likewise be made, including those to the vaca-
tion fund, inadvertently omitted from his recom-
mended remedy, and to the education fund. We
agree with the Administrative Law Judge's limita-
tion of the remedy only to the extent of not order-
ing Respondent to make payments into the industry
advancement fund involved herein. See Finger
Lakes Plumbing & Heating Co., Inc., 254 NLRB
1399 (1981).2 Accordingly, we shall revise the
Order to include that payments be made to these
other funds. We further order any interest applica-
ble to such payments be made in accordance with
the criteria set forth in Merryweather Optical Com-
pany, 240 NLRB 1213 (1979). 3 In adopting the Ad-
' Respondent in its exceptions correctly states that charges against it
were filed with the Joint Trade Board on July 13, not July 31. 1980.
a See, generally, Allied Chemical d Alkali Workers of America Local
Union No I v. Pittsburgh Plate Glass Chemical Division. et aL, 404 U.S.
157 (1971).
a Member Jenkins would award interest on Respondent's other back-
pay due based on the formula set forth in his dissent in Olympic Medical
Corporation., 250 NLRB 146 (1980).
263 NLRB No. 71
ministrative Law Judge's additional remedy that
Respondent be held liable to the Union for any loss
of dues, we rely exclusively on Respondent's obli-
gation to honor the union dues-checkoff provision
in the bargaining agreement.
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, as modi-
fied below, and hereby orders that the Respondent,
Fox Painting Company, Lexington, Kentucky, its
officers, agents, successors, and assigns, shall take
the action set forth in the said recommended
Order, as so modified:
1. Substitute the following for paragraph 2(c):
"(c) Reimburse all employees in the bargaining
unit, the funds established under the bargaining
agreement (excluding the industry advancement
fund) and the Union for any losses they may have
suffered as a result of Respondent's abrogation of
the collective-bargaining agreement from and after
May 7, 1980, with interest, in the manner pre-
scribed in the Board's Decision."
2. Substitute the attached notice for that of the
Administrative Law Judge.
APPENDIX
NOTICE To EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
After a hearing at which all sides had an opportu-
nity to present evidence and state their positions,
the National Labor Relations Board found that we
have violated the National Labor Relations Act, as
amended, and has ordered us to post this notice.
WE WILL NOT withdraw recognition from
International Brotherhood of Painters and
Allied Trades of the United States and
Canada, Local 768, AFL-CIO, as the duly
designated representative of our employees in
a unit appropriate for collective bargaining.
WE WILL NOT abrogate the duly negotiated
collective-bargaining agreement entered into
on our behalf with International Brotherhood
of Painters and Allied Trades of the United
States and Canada, Local 768, AFL-CIO.
WE WILl. NOT in any other manner interfere
with, restrain, or coerce our employees in the
exercise of the rights guaranteed them by Sec-
tion 7 of the Act.
437
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
WE WILL forthwith implement and, if re-
quested, sign the April 1, 1980, contract be-
tween Blue Grass Chapter, Painting and Deco-
rating Contractors of America, and the above-
named labor organization, and any renewal,
extension, or modification thereof, and give
retroactive effect thereto from May 7, 1980.
WE WILL make whole all employees in the
bargaining unit and the Union for lost dues
and for any losses of wages or health benefit
coverage as the result of our abrogating the
terms of said agreement, with interest.
WE WILL make whole our employees by
paying to the various fringe benefit funds, ex-
cepting the industry advancement fund, the
contributions which should have been made
pursuant to the provisions of the above con-
tract.
Fox PAINTING COMPANY
DECISION
STATEMENT OF THE CASE
JAMES L. ROSE, Administrative Law Judge: The Re-
spondent is a sole proprietor painting contractor who in
1978 decided it was to his advantage to become a "union
contractor." He did so by signing the existing collective-
bargaining agreement between International Brotherhood
of Painters and Allied Trades of the United States and
Canada, Local 768, AFL-CIO (herein the Union), and
the Blue Grass Chapter of the Painting and Decorating
Contractors of America (herein PDCA). Then in the
summer of 19801 he decided to cease being a "union
contractor." This case concerns his attempt to do so by
abrogating the then existing collective-bargaining agree-
ment and refusing thereafter to recognize the Union as
the collective-bargaining representative of his employees.
The General Counsel alleges that the Respondent's ab-
rogation of the collective-bargaining agreement and its
withdrawal of recognition were violative of Section
8(a)(5) of the National Labor Relations Act, as amended,
29 U.S.C. §151, et seq.
The Respondent admits that he became a party to the
1978 collective-bargaining agreement between the Union
and PDCA; however, he maintains that the contract ex-
pired on March 31, 1980, and he did not become a party
to the successor agreement. Therefore it was not unlaw-
ful for him to cease complying with its terms or to cease
recognizing the Union.
Upon the record2 as a whole, including my observa-
tion of the witnesses, the briefs, and the arguments of
counsel, I hereby make the following:
All dates are 1980 unless otherwise indicated.
2 Though there are numerous errors in the transcript, detailed correc-
tion is not necessary inasmuch as the errors are either not material or the
correct reading is obvious from the context.
FINDINGS OF FACT AND CONCLIUSIONS OF LAW
I. JURISDICTION
The Respondent, Fox Painting Company (herein Fox
or the Respondent), is owned and operated by John Fox
and is engaged as a painting contractor for residential,
commercial, and industrial structures with its principal
place of business in Lexington, Kentucky. During the 12
months preceding the filing of the complaint herein, the
Respondent performed services valued in excess of
$50,000 in States other than the Commonwealth of Ken-
tucky. I conclude that the Respondent is, and at all mate-
rial times herein has been, an employer engaged in com-
merce within the meaning of Section 2(2), (6), and (7) of
the Act.
1. THE LABOR ORGANIZATION INVOI VED
The Union has 150 to 200 members who are engaged
in the trade of painting commercial, industrial, and resi-
dential structures. For many years the Union has been
recognized as the collective-bargaining representative of
employees of the PDCA, a multiemployer association, in
the following unit, admitted by the Respondent to be ap-
propriate for purposes of collective bargaining:
All employees (engaged in painting) employed by
(Respondent); but excluding all office clerical em-
ployees, guards, professional employees, and super-
visors as defined in the Act.
The Union and PDCA have negotiated a series of col-
lective-bargaining agreements. I conclude that the Union
is, and at all material times herein has been, an organiza-
tion existing for the purpose of representing employees
of employers engaged in interstate commerce with
regard to wages, hours, and other terms and conditions
of employment and therefore has been, and is, a labor or-
ganization within the meaning of Section 2(5) of the Act.
11I. THE AL LEGED UNFAIR LABOR PRACTICES
A. The Facts
The facts giving rise to this controversy are essentially
undisputed. They begin in December 1978 when Fox
went to the Union's business agent, Walter Douglas
Young, and said that he wanted to become a union con-
tractor. Young took Fox to the next meeting of the Joint
Trade Board, which is set up pursuant to the collective-
bargaining agreement to resolve disputes thereunder and
consists of equal numbers of employer and union mem-
bers. At this December 1978 meeting Fox was asked
whether he wanted to be union for one particular job
only or if he had in mind a continuing relationship with
the Union. Fox assured the Board that he intended to
become and remain a union contractor, since, he assert-
ed, he was already paying at or near union scale. Appar-
ently some vote of approval was taken and Fox signed
the then existing collective-bargaining agreement be-
tween the Union and PDCA. He thereafter complied
with its terms, including paying the appropriate wage
rate to unit employees, making the appropriate remit-
438
FOX PAINTING COMPANY
tances to the fringe benefit funds, and, pursuant to the
Union's security clause, required new employees to
become members of the Union.
Fox never became a member of PDCA, although on
several occasions he told Carl Radden, the PDCA and
Joint Trade Board secretary, that he would join. Radden
testified that when he would ask Fox about joining Fox
would say he did not have the necessary $150. Fox did,
however, use the services of PDCA, as well as the na-
tional body, in matters unrelated to the events herein.
In January 1980, by certified letter, Young advised
PDCA:
I have been instructed by President Jim Jones to
inform you that the membership of Painters Local
Union #768 through a special called meeting, met
and introduced their proposals for a new contract.
As you know our current agreement expires March
31, 1980. A negotiating committee has been selected
and will meet at your convenience.
In early March, representatives of the four members of
PDCA along with Fox had a preliminary meeting to dis-
cuss their bargaining strategy. At this meeting Fox par-
ticipated. Among other things, he argued that they
should press for a helper classification, an idea of which
was never formerly advanced during negotiations.
In any event, representatives of the four contractors
along with Fox then met with representatives of the
Union for their first negotiation session. Not much of
substance occurred at this meeting, although Fox did
state that he felt the Union's proposal with regard to
room and board expenses for out-of-town work was too
high.
Following the first negotiation session, the employers
again met in a strategy session and determined to select
two of their number to act as a bargaining committee,
primarily so they would have the same advantage as
they perceived the union negotiators to have; that is, any
agreement reached would depend on ratification by the
whole group. A "straw vote" was taken with Radden
and the representative of another contractor being select-
ed as the negotiating team. Fox participated in this vote.
On March 31, the two negotiating teams reached an
agreement which was thereafter ratified by the union
membership and implemented by each of the contractors,
including Fox. This agreement was basically an adden-
dum to the then existing contract, relating primarily to
travel pay, wage and fringe benefit rates, plus the re-
quirement that each employer should be required to post
a $2,500 surety bond.
Except for the requirement to post a surety bond, Fox
implemented the changes and he continued to abide by
the terms of the 1978 contract which were not altered.
He stated that he was never asked to furnish a surety
bond. According to the testimony of Young, Elizabeth
Reardon, the secretary for Fox, called for and received
the addendum. She did not deny she had done so.
The addendum was signed by Radden as secretary of
the Joint Trade Board and filed. It was not signed by
any union officer. Indeed, there is a conflict between
Young and Radden as to whether the Union ever execut-
ed the 1978 agreement.
In any event, beginning April 1, Fox implemented the
addendum to the collective-bargaining agreement and, as
of at least mid-April, all of his field employees in the bar-
gaining unit were members of the Union.
According to Fox, the first time he hired an employee
and did not require that employee to become a member
of the Union was in May; but he testified that the influx
of nonunion employees commenced in August.
John Jackson testified, without contradiction, that he
first became employed by Fox on April 9 or 10. The su-
pervisor told him that after 7 days he would have to join
the Union. After he had worked 7 days he talked to Fox
about this matter: "He [Fox] said just to hold off, that he
was going non-union-getting done with the union jobs."
By June, Fox was beginning to get in arrears on con-
tributions to the health and welfare fund and, as a result,
on July 31, Young filed charges with the Joint Trade
Board, charging that Fox had: failed to check off dues
for April, May, and June; failed to make vacation fund
deposits for April, May, and June; failed to pay the pre-
vailing wage rate; and failed to notify the Union under
the "8-day security clause of new employees."
Fox, along with PDCA and union members on the
Joint Trade Board, was notified that a meeting would be
held on July 22 to consider the charges. And a certified
letter was sent by Radden to Fox advising him specifical-
ly of the charges brought by Young. Fox was not
present at the meeting of July 22 but his attorney, C.
Wayne Shepherd, represented him and asked that the
meeting be continued to July 31, which it was.
At the meeting on July 31, Shepherd tendered to the
Joint Trade Board Fox's checks and reports for dues for
June and May, his June payment to the vacation fund,
and a check for the May contribution to the education
and industry development fund. And Shepherd asked the
Board to give Fox 3 additional weeks to get the amounts
paid to the health and welfare fund ($1,859.05). The
Board approved the imposition of certain penalties
against Fox for his delinquencies and set up a payment
schedule.
There was another meeting of the Board on August 14
at which it was noted that a check in the amount of
$84.61 had been received from Fox on August 13 but
there was no indication of what that check was for. At
this meeting testimony was taken from individuals who
stated that they had been working for Fox for less than
the wage rate set forth in the addendum to the collec-
tive-bargaining agreement. Fox was levied a fine of
$2,000 at this meeting plus an additional $1,000 if he did
not get current by August 31 and was so notified by
letter of August 15.
According to Fox's testimony, he ceased to recognize
the Union "the date that they held the trial and excluded
my attorneys about the middle of August of 1980." And
again, according to Fox's testimony, thereafter came the
influx of employees who were not required to join the
Union and whom he paid substantially less than the rate
required under the collective-bargaining agreement. Fur-
ther, as to all of his employees, he ceased making pay-
439
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
ments to the various fringe benefit funds or remitting
dues pursuant their checkoff authorizations.
B. Analysis and Concluding Findings
There is no question but that Fox started becoming de-
linquent as to some obligations under the collective-bar-
gaining agreement beginning in May 1980. There was
some discussion concerning this and attempts on his part
to become current. But in August he totally abrogated
the contract.
Fox maintains he was not bound by the new agree-
ment inasmuch as the 1978 contract expired by its terms
on March 31, 1980. Thus his acts were neither breach of
contract nor an unfair labor practice.
The General Counsel contends, and I agree, that Fox
was a party to the collective-bargaining agreement be-
tween PDCA and the Union and that his abrogation of
its terms and his withdrawal of recognition from the
Union were violative of Section 8(a)(5) of the Act.
It is clear that the 1980 agreement was simply an ad-
dendum to the more comprehensive collective-bargaining
agreement entered into between PDCA and the Union in
1978, to which Fox became a party in December 1978.
Fox not only executed that contract, but also implement-
ed its terms and indeed took an active role in the affairs
of the Joint Trade Board under the contract.
The Union's January notification was to modify the
terms of the contract, not to terminate it. After at least
one bargaining session, the Union gave PDCA a list of
proposed changes-not a complete new contract.
Fox participated with the other employers in their first
two strategy sessions as well as participating actively in
the first negotiating session with the Union. Further, at
the second strategy session of employers, Fox author-
ized, by his participating in the vote, Radden and the
other employer to negotiate on his behalf. And following
agreement between the negotiating teams, Fox secured a
copy of the addendum, and implemented it.
Never did Fox give any indication that he did not au-
thorize Radden to negotiate on his behalf, nor did he
ever indicate that following March 31 he would no
longer be bound by the collective-bargaining agreement
or the addendum. In short, by his acts, Fox made
Radden (or PDCA) his agent to negotiate the new col-
lective-bargaining agreement and by his actions after
April I ratified the acts of his agent by adopting and im-
plementing the collective-bargaining agreement. The fact
that he did not sign the addendum is immaterial, for it is
clear that signing this contract by any of the parties was
never meant to be a condition. Only Radden signed it, as
secretary of the Joint Trade Board. Clearly signing the
contract by any of the parties, including Radden on
behalf of his company, would have been a mere ministe-
rial act. Since members of the Union ratified the agree-
ment, and since it was at least partially implemented by
Fox, formal execution was not necessary. There was in
force after April 1, 1980, a contract binding on Fox.
Chevron U.S.A. Inc., 244 NLRB 1081 (1979).
Further, at the time the Union ratified and Fox imple-
mented the new agreement, all his employees in the bar-
gaining unit were members of the Union.
I conclude that after April 1, 1980, Fox had a collec-
tive-bargaining relationship with the Union and at that
time entered into a valid and enforceable collective-bar-
gaining agreement.
It may be that some of the fines levied against Fox by
the Joint Trade Board in August were excessive and pos-
sibly not collectible in an action on them under Section
301 of the Act. However, the Respondent offered no au-
thority for the proposition that, by levying such fines,
Fox thereby was relieved of his obligations to recognize
the Union or to abide by the terms of the collective-bar-
gaining agreement. I conclude that the Joint Trade
Board's attempt to bring Fox into compliance with the
contract did not serve to extinguish his obligations under
it.
Further, it is noted that, even after Fox began to fall
behind in some of his obligations under the collective-
bargaining agreement, he still attempted, through his at-
torney, to become current. He tendered checks to the
Joint Trade Board for remission to the appropriate fringe
benefit fund as late as August. Never during the Joint
Trade Board meetings did Fox or his attorney take the
position that Fox was not bound by the collective-bar-
gaining agreement. In short, all of his actions until about
mid-August are to the effect that Fox considered himself
to be bound by the collective-bargaining agreement as, I
conclude, he was.
I further conclude that when Fox abrogated the col-
lective-bargaining agreement and withdrew recognition
from the Union in mid-August, he thereby breached his
obligations to bargain collectively in good faith as re-
quired by Section 8(d) of the Act. He therefore violated
Section 8(a)(5). Gordon L. Rayner and Frank H. Clark,
d/b/a Bay Area Sealers, 251 NLRB 89 (1980).
IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES
UPON COMMERCE
The unfair labor practices found above, occurring in
connection with the Respondent's business as described
above, have a close, intimate, and substantial relationship
to trade, traffic, and commerce among the several States
and tend to lead to labor disputes burdening and ob-
structing commerce within the meaning of Section 2(6)
and (7) of the Act.
V. THE REMEDY
Having found that the Respondent unlawfully abrogat-
ed the collective-bargaining agreement and withdrew
recognition from the Union, I shall order that it cease
and desist therefrom and take certain affirmative action
designed to effectuate the policies of the Act.
I shall order the Respondent to recognize the Union as
the collective-bargaining representative of the employees
in the bargaining unit described above. The Respondent
will be ordered to rescind and revoke the unlawful aban-
donment of the terms and conditions for unit employees
of the PDCA contract with the Union effective April 1,
1980; and enforce the terms and conditions of that agree-
ment, and any renewal, extension, or modification there-
of; and give retroactive effect to all such terms and con-
440
FOX PAINTING COMPANY
ditions to May 7. 1980, or the date of any change, 3 until
the Respondent and Union reach an agreement or im-
passe.
The Respondent will be ordered to make whole the
employees in the unit found appropriate for any loss of
wages or other benefits they may have suffered as a
result of the Respondent's abrogation of the contract and
withdrawal of recognition, with interest as provided for
in Florida Steel Corporation, 231 NLRB 651 (1977). 4
The Respondent will also be ordered to make those
payments which should have been made to the health
and welfare trust fund5 but without interest. Merry-
weather Optical Company, 240 NLRB 1213 (1979). In ad-
dition, the Respondent will reimburse any unit employee
for premiums he may have paid to a third-party insur-
ance company for medical coverage and for any medical
bills any employee paid directly to a health care provid-
er that the contractual policy would have covered. An-
gelus Block Co., Inc., Amari, Inc., 250 NLRB 868 (1980).
Finally, the Respondent will be ordered to pay the
Union for any loss of dues, with interest thereon, as a
result of the Respondent's failure to comply with the col-
lective-bargaining agreement, or any renewal, extension,
or modification thereof so long as said contract contin-
ued to contain a valid union-security clause. J. F. Swick
Insulation Co.. Inc., 247 NLRB 626 (1980).
Upon the foregoing findings of fact and conclusions of
law, the entire record in this matter, and pursuant to the
provisions of Section 10(c) of the Act, I hereby issue the
following recommended:
ORDER 6
The Respondent, Fox Painting Company, Lexington,
Kentucky, its officers, agents, successors, and assigns,
shall:
I. Cease and desist from:
(a) Abrogating the terms of the collective-bargaining
agreement to which it has become a party.
(b) Withdrawing recognition from the duly designated
collective-bargaining representative of the majority of its
employees in a unit appropriate for collective bargaining.
s The charge herein was filed November 7, 1980, hence Sec. 10(b) pro-
hibits the remedy of any violation occurring prior to May 6.
4 See. generally. Isis Plumbing & Heating Co., 138 NLRB 716 (1962),
s The only other funds under the contract (education and industry de-
velopment) are nonmandatory subjects of bargaining, hence it was not
unlawful under Sec. 8(a)5) for the Respondent to refuse to make those
payments I L L. Supply. Inc., 258 NLRB 604 (1981).
s 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 find-
ings, 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,
(c) In any other manner interfering with, restraining,
or coercing employees in the exercise of the rights guar-
anteed them by Section 7 of the Act.7
2. Take the following affirmative action necessary to
effectuate the purposes of the Act:
(a) Recognize and, upon request, bargain with Interna-
tional Brotherhood of Painters and Allied Trades of the
United States and Canada, Local 768, AFL-CIO. as the
duly designated collective-bargaining representative of its
employees in the following unit appropriate for purposes
of collective bargaining:
All employees engaged in painting employed by
Fox Painting Company; but excluding all office
clerical employees, guards, professional employees,
and supervisors as defined in the Act.
(b) Abide by the terms of the collective-bargaining
agreement entered into between PDCA and the Union in
1978 as amended on April 1, 1980, and any renewal, ex-
tension, or modification thereof until the Respondent and
the Union reach a new agreement or impasse.
(c) Reimburse all employees in the bargaining unit, the
health and welfare fund, and the Union for any losses
they may have suffered as a result of the Respondent's
abrogation of the collective-bargaining agreement from
and after May 7, 1980, with interest (on wages and dues)
as provided for in the remedy section above.
(d) Preserve and, upon request, make available to the
Board or its agents, for examination and copying, all
payroll records, social security records, timecards, per-
sonnel records and reports, and all other records neces-
sary to analyze the amount of backpay and interest due
under the terms of this Order.
(e) Post at its Lexington, Kentucky, facility copies of
the attached notice marked "Appendix."8 Copies of said
notice, on forms provided by the Regional Director for
Region 9, after being duly signed by the Respondent's
authorized representative, shall be posted by the Re-
spondent immediately upon receipt thereof, and be main-
tained by it for 60 consecutive days thereafter, in con-
spicuous places, including all places where notices to em-
ployees are 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.
(f) Notify the Regional Director for Region 9, in writ-
ing, within 20 days from the date of this Order, what
steps the Respondent has taken to comply herewith.
I The Respondent's acts in this matter indicate a proclivity to engage
in unfair labor practices and accordingly the broad injunctive relief is ap-
propriate. See Hickmott Foods, Inc., 242 NLRB 1357 (1079)
8 In the event that this Order is enforced by a Judgment of a United
States Court of Appeals, the words in the notice reading "Posted by
Order of the National Labor Relations Board" shall read "Posted Pursu-
ant to a Judgment of the United States Court of Appeals Enforcing an
Order of the National Labor Relations Board"
441