GAF Corporation

National Labor Relations Board - Board Decisions

Dec 16, 1982

265 N.L.R.B. 1361 (N.L.R.B. 1982)

GAF CORPORATION
GAF Corporation and General Industrial Workers
Union, Local 146, Distilling, Rectifying, Wine
& Allied Workers International Union, AFL-
CIO. Case 22-CA-10706
December 16, 1982
DECISION AND ORDER
BY CHAIRMAN VAN DE WATER AND
MEMBERS FANNING AND ZIMMERMAN
On June 30, 1982, Administrative Law Judge
Harold B. Lawrence issued the attached Decision
in this proceeding. Thereafter, Respondent filed ex-
ceptions and a supporting brief, and the General
Counsel filed an answering 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
briefs and has decided to affirm the rulings, find-
ings, and conclusions of the Administrative Law
Judge only to the extent consistent herein.
The Union has represented Respondent's em-
ployees at its Linden, New Jersey, plant for several
decades. During that time the parties have negoti-
ated several successive collective-bargaining agree-
ments, referred to by the parties as Works Agree-
ments. In addition, since approximately the mid-
1940's, the parties have also negotiated separate re-
tirement agreements, referred to as Pension Agree-
ments. Until 1979, the Works Agreement was
always negotiated separately from the Pension
Agreement, resulting in two separate agreements
with two different termination dates.' The pre-1979
Pension Agreement was a contributory retirement
plan for hourly paid employees and contained the
following procedure for resolving a disagreement
over the calculation of pension benefits: 2
13.06 (c)(l) In the event of a dispute be-
tween the Trustees and a Participant or Bene-
ficiary over the amount of benefits payable
I Since 1969, a Works Agreement was negotiated in 1970, 1972, 1974,
1977, and 1980; a Pension Agreement was negoitated in 1973. 1976, 1977,
and 1979.
Prior to January 1., 1975, the main effective date of the Employee
Retirement Income Security Act, the parties resolved three disagree-
ments involving both the Pension Agreement and the Works Agreement
by utilizing the collective-bargaining agreement's grievance/arbitration
procedure. Specifically, in grievances #1200, #1219, and #171, the
Union claimed essentially that, when an employee is laid off by the Com-
pany and withdraws his pension contribution, he does not lose the recall
rights provided to employees under the Works Agreement. Following
hearings, an arbitrator held, on April 27, 1973, and July 22, 1974, respec-
tively, that such an employee does not lose the Works Agreement recall
rights, adding in his opinion the statement that, if such an employee is
later recalled, he has the right to be covered under the Pension Agree-
ment as a new employee.
265 NLRB No. 176
under the Plan, the Participant or Beneficiary
may file a claim for benfits by notifying the
Trustees in writing of such claim. Such notifi-
cation may be in any form adequate to give
reasonable notice to the Trustees, shall set
forth the basis of such claim and shall author-
ize the Trustees to conduct such examinations
as may be necessary to determine the validity
of the claim and to take such steps as may be
necessary to facilitate the payment of any
benefits to which the claimant may be entitled
under the Plan.
(2) The Trustees shall decide whether to
grant a claim within ninety (90) days of the
date on which the claim is filed, unless special
circumstances require a longer period of adju-
dication and the claimant is notified in writing
of the reasons for an extension of time within
such ninety (90) days period; provided, how-
ever, that no extensions shall be permitted
beyond ninety (90) days after the date on
which the claimant received notice of the ex-
tension of time from the Trustees. If the Trust-
ees fail to notify the claimant of their decision
to grant or deny such claim within the time
specified by this Subsection (c), such claim
shall be deemed to have been denied by the
Trustees and the review procedure described
in Subsection (3) shall become available to the
claimant.
(3)(i) Whenever a claim for benefits is
denied, written notice, prepared in a manner
calculated to be understood by the claimant,
shall be provided to him, setting forth the spe-
cific reasons for the denial and explaining the
procedure for review of the decision made by
the Trustees. If the denial is based upon sub-
mission of information insufficient to support a
decision, the Trustees shall specify the infor-
mation which is necessary to perfect the claim
and their reasons for requiring such additional
information.
(3)(ii) Any claimant whose claim is denied
may, within sixty (60) days after his receipt of
written notice of such denial, request in writ-
ing a review by the Board, the members of
which shall be "named fiduciaries", within the
meaning of Section 402(a) of ERISA, for the
purpose of adjudicating such appeals. Such
claimant or his representative may examine
any Plan documents relevant to his claim and
may submit issues and comments in writing.
The Board shall adjudicate the claimant's
appeal within sixty (60) days after its receipt of
his written request for review, unless special
circumstances require a longer period for adju-
1361
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
dication and the claimant is notified in writing
of the reasons for an extension of time; pro-
vided, however, that such adjudication shall be
made no later than one hundred twenty (120)
days after the Board's receipt of the claimant's
written request for review.
(3)(iii) If the Board fails to notify the claim-
ant of its decision with respect to his request
for review within the time specified by this
Subsection (c), such claim shall be deemed to
have been denied on review.
(4) If the claim is denied by the Board, such
decision shall be in writing, shall state specifi-
cally the reasons for the decision, shall be
written in a manner calculated to be under-
stood by the claimant and shall make specific
reference to the pertinent Plan provisions upon
which it is based.
(5) The procedure set forth in this Section
13.06(c) shall be interpreted in accordance
with regulations promulgated by the United
States Department of Labor or any successor
authority regulating claims procedures for em-
ployee benefit plans.
In the negotiations for the 1979 Pension Agree-
ment, the parties agreed to certain changes, includ-
ing: a shift from a contributory plan to a noncontri-
butory plan; a specified benefit level, for 1979, of
$9.25 per month per year of credited service to age
65; a pension benefit level increase of 50 cents per
year on each February 1, starting in 1980 and con-
tinuing through the expiration of the next negotiat-
ed Works Agreement; and termination of the Pen-
sion Agreement at the time the next negotiated
Works Agreements terminated. All other provi-
sions of the pre-1979 pension plan were retained.
On May 14, 1979, the parties signed a memoran-
dum summarizing the changes made from the old
pension plan.
In 1980 the parties negotiated a new Works
Agreement, to run from February 1, 1980, to Janu-
ary 31, 1983. In prior Works Agreements, article
15--entitled "Retirement Plan" and the only provi-
sion concerning pension benefits-was a general
undetailed statement that the parties had agreed to
a retirement plan covering bargaining unit employ-
ees. In the 1980 negotiations, the Union did not
make any written proposals concerning pension
benefits and no changes from the previous article
15 were made. When concordance on a new
Works Agreement was reached in the morning on
February 1, 1980, the parties signed a tentative
agreement, stating that agreement had been
reached subject to ratification by the members.
Following ratification, the new Works Agreement
was printed, with article 15 appearing as follows:
ARTICLE 15
RETIREMENT PLAN
Paragraph 15.01 RETIREMENT PLAN: The
parties to this Agreement have agreed to a Re-
tirement Plan covering the employees in the
bargaining unit.
Retirement Benefits are:
2/1/80-$9.75 x all years of service to normal
retirement age 65.
2/1/81-S10.25 x all years of service to normal
retirement age 65.
2/1/82-S$10.75 x all years of service to normal
retirement age 65.
Further details may be found in the Summary
Plan Description.
The new portion of article 15 (comprised of every-
thing after the first sentence) was inserted unilater-
ally by Respondent's personnel manager, Arthur
Frank, when he drew up the draft of the new
Works Agreement. Frank testified that he added
the language in order to advise the employees what
the pension benefit level would be each year of the
new Works Agreement, as previously agreed to in
the Pension Agreement negotiations. When the
Union and Respondent subsequently were review-
ing the draft copy of the Works Agreement, the
Union asked why article 15 had been changed.
Frank told the Union his reasons, and, according to
Frank, the Union made no objection.
The present Works Agreement also contains a
grievance/arbitration provision, as follows:
ARTICLE 10
GRIEVANCE PROCEDURE
Paragraph 10.02 GRIEVANCE PARTIES
AND DEFINITIONS .... In the event
there is any grievance dispute or difference be-
tween any employee, or the Union, with the
Company or vice versa, with respect to the in-
terpretation or application of any provision of
this agreement, there shall be an earnest effort
made to settle or dispose such matter by nego-
tiation between the representatives of the par-
ties in the manner provided in this grievance
procedure, upon and subject to the provisions
of this agreement.
After setting out certain details for processing
grievances, article 10 then provides: "Any griev-
ances which have been negotiated through each
step of the grievance procedure and have not been
1362
GAF CORPORATION
adjusted, settled or disposed of, may be submitted
to arbitration."
In May 1980 the Union began receiving com-
plaints from several retired employees that, without
notice, they were receiving less pension benefits
than they had anticipated or had experienced a re-
duction in their pension benefits. The Union re-
quested an explanation from William Burke and
Arthur Frank of Respondent's personnel depart-
ment, who told Union Local President Joseph
Chiappino that Respondent's New York office
would resolve the questions. After several months,
Frank advised Chiappino to call Respondent's
labor relations manager in New York. Chiappino
did so, but was told the problem could not be re-
solved. On October 9, 1980, Chiappino filed, under
the collective-bargaining agreement's procedures, a
grievance stating:
The Union protests the interpretation and re-
sulting administration of the new Pension Plan,
referred to in Article 15 of the collective bar-
gaining agreement. Specifically, the Union
protests the company's method of counting the
number of years for measuring an employee's
retirement benefit. Additionally, the Union
protests the company's failure to correctly
apply the "Grandfather" option. Both Compa-
ny actions violate the conclusions of the nego-
tiations resulting in the memorandum of agree-
ment, adopting the new Pension Plan May 14,
1979.
In its reply denying the grievance, Respondent
maintained that such pension benefit calculation
disputes were only resolvable pursuant to the Pen-
sion Agreement's claims procedure (set out above):
The complaint filed protesting the interpreta-
tion and administration of the Pension Plan is
not a grievable matter under the labor agree-
ment grievance procedure.
The Pension Plan is a separate agreement out-
side the labor agreement, and any disagree-
ments must be resolved in accordance with
Article 13 of the Retirement Plan for hourly-
paid employees of GAF Corporation. This
grievance is denied.
At the unfair labor practice hearing, the parties
stipulated that the issues in the grievance are as fol-
lows:
1. What is the proper standard for calculat-
ing the credited service or number of years to
be used in computing the amount of retirement
benefits payable pursuant to the Memorandum
of Agreement between GAF Corporation and
Local 146, dated May 14, 1979, to participants
in the Retirement Plan for Hourly-Paid Em-
ployees of GAF Corporation at the GAF,
Linden, New Jersey plant?
2. What is the proper method of computing
the amount of retirement benefits payable pur-
suant to the Memorandum of Agreement be-
tween GAF Corporation and Local 146, dated
May 14, 1979, to participants in the Retirement
Plan for Hourly-Paid Employees of GAF Cor-
poration at the GAF, Linden, New Jersey,
plant, as a result of the withdrawal of contri-
butions by said Memorandum of Agreement?
The Administrative Law Judge concluded that
Respondent violated Section 8(a)(5) of the Act by
refusing to submit these issues to the grievance/-
arbitration procedure of the collective-bargaining
agreement. Respondent has excepted to the Admin-
istrative Law Judge's rationale and conclusion. We
find merit in that exception.
The Administrative Law Judge's analysis rests
on essentially three points: Respondent has previ-
ously utilized the contractual grievance/arbitration
provisions in resolving disputes over pension bene-
fit calculations; Respondent cannot require pension
benefit calculation disagreements to be determined
under the pension plan's claims procedure because
Respondent's version of that procedure violates the
spirit and letter of the Employee Retirement
Income Security Act (ERISA); and Respondent's
refusal to arbitrate the pension benefit calculations
under the contractual grievance/arbitration proce-
dure was based on bad faith and union animus and
thereby violated Section 8(a)(5). We disagree with
each of those three conclusions.
First, there is no record evidence that prior pen-
sion benefit disagreements have been submitted to
the contractual grievance/arbitration procedure.
The only indication of prior practice is that Re-
spondent on three occasions agreed to utilize the
contractual grievance/arbitration procedure in re-
solving disagreements over the recall rights of laid-
off employees who withdrew their pension contri-
butions. That issue was primarily a contractual in-
terpretation question, and involved interpretation
of the Pension Agreement only peripherally. More-
over, the Administrative Law Judge indicated that
Respondent agreed to hear those disputes under the
contractual grievance/arbitration procedure instead
of insisting on utilizing the claims procedure pro-
vided under the Pension Agreement. However,
pension plans were not required to contain the de-
tailed claims procedure provided in the parties'
Pension Agreement until January 1, 1975, the main
effective date of ERISA. It is undisputed that the
only disagreements prior to the instant one involv-
1363
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
ing an aspect of the Pension Agreement arose and
were resolved prior to 1975. Contrary to the Ad-
ministrative Law Judge's statement, there is no
showing here that prior to this dispute there has
been a choice of procedures between the contrac-
tual greivance/arbitration provisions and the
present pension plan claims procedure provisions.
Simply put, the parties' past practice does not sug-
gest that the instant disagreement would normally
be handled via the contract's grievance/arbitration
provisions.
Second, while we do not at this time pass on the
validity under ERISA of Respondent's pension
plan claims procedure, we do note that the reason-
ing which the Administrative Law Judge relied on
in stating that Respondent's plan violates ERISA
appears to be untenable. Respondent's pension plan
provides that failure to notify the claimant of the
Trustees' decision means the claim shall be deemed
to have been denied by the Trustees. The Adminis-
trative Law Judge maintained that this provision of
the plan is "inconsistent" with other provisions of
the plan and is "in clear violation" of ERISA. But
this statement appears to be inaccurate: the imple-
menting regulations issued by the Secretary of
Labor specifically state that a plan can provide that
"[i]f notice of the denial of a claim is not furnished
. . .within a reasonable period of time, the claim
shall be deemed denied." 29 CFR §2560.503-
I(e)(2). The policy rationale for this seems to be to
assure the claimant that delay or inaction by the
trustees considering his claim will not freeze the
claim indefinitely; by deeming the claim denied, the
claimant is "permitted to proceed to the review
stage." Id. The other reason for the Administrative
Law Judge's stating that Respondent's plan violates
ERISA was that appeals of the initial merits deter-
mination under the claims procedure are to plan's
board of directors, a setup which he views as a
"travesty of fair procedure." Agains, the statement
apparently is not accurate: the implementing regu-
lations issued by the Secretary of Labor specifical-
ly provide that "[e]very plan shall establish and
maintain a procedure by which a claimant . . . has
a reasonable opportunity to appeal a denied claim
to an appropriate named fiduciary or to a person
designated by such fiduciary." 29 CFR §2560.503-
l(g)(l). Under the parties' plan, a denied claim may
be appealed to the plan's board of directors, which
is named in the plan as a fiduciary for such pur-
poses. Review by such a fiduciary of denied claims
appears to be exactly what ERISA intended, ac-
cording to the courts. See Amato v. Bernard, et al.,
618 F.2d 559, 569 (9th Cir. 1980); Challenger v.
Local Union No. I of the International Bridge, Struc-
tural, and Ornamental Ironworkers, AFL-CIO, et al.
[Associated Steel Erectors of Chicago], 619 F.2d 645,
649 (7th Cir. 1980).3 Thus, we are not persuaded
that either of the reasons on which the Administra-
tive Law Judge relied demonstrates that Respond-
ent's pension plan claims procedure is inconsistent
with ERISA.
Third, and most important, we cannot agree that
Respondent's action here was in bad faith or moti-
vated by union animus, or that it violated Section
8(a)(5). We note at the outset that the Administra-
tive Law Judge's basis for finding bad faith and
union animus was his findings that Respondent had
backtracked on its prior practice, had adopted an
unfair and unreasonable review procedure, and had
changed retirees' benefits without explanation. We
have rejected above his analysis of Respondent's
prior practice in such disputes and his reading of
the fairness and reasonableness of the Pension
Agreement's claims procedure. As to his last
reason, changing retirees' benefits is the very ques-
tion underlying the issue herein, and we will not at
this time presume, as does the Administrative Law
Judge, that Respondent in fact has changed those
benefits or that if it did so it was seeking to under-
mine the Union. On the contrary, the record shows
that, in declining to utilize the contractual
grievance/arbitration procedure, Respondent was
not simply refusing to discuss or resolve the
matter. Instead, Respondent notified the Union that
pension benefit calculation disputes should be re-
solved pursuant to the procedure which was spe-
cifically designed to handle such disputes: the pen-
sion plan claims procedure. In these circumstances,
bad faith or union animus is not a warranted infer-
ence. The issue herein thus becomes whether a re-
fusal to arbitrate under the contractual
grievance/arbitration procedure one type of griev-
ance, coupled with a willingness to have that
grievance's merits evaluated under the pension plan
agreement, violates Section 8(a)(5) of the Act. The
Board has held that, where there is a collective-
bargaining agreement containing a grievance/-
arbitration clause, an employer's refusal to take all,
or even most, grievances to arbitration constitutes
an 8(a)(5) violation. Paramount Potato Chip Compa-
ny, Inc., 252 NLRB 794 (1980); Independent Stave
Company, Diversified Industries Division, 233 NLRB
1202 (1977); Airport Limousine Service, Inc., and Jay
McNeill, Esq. as Receiverfor Airport Limousine Serv-
ice, Inc., 231 NLRB 932 (1977). However, a refusal
I We note that the Administrative Law Judge's conclusion of unfair-
ness is further undermined by the ERISA provision-not mentioned by
the Administrative Law Judge-for appeal of the board of directors'
action to a U.S. district court. 29 U.S.C. 11132 (a) and (e); Taylor v.
Bakery and Confectionery Union and Industry International Welfare Fund
[American Bakeries Company], 455 F.Supp. 816, 817 (E.D N.C. 1978).
1364
GAF CORPORATION
to arbitrate one type of grievance is not necessarily
an unfair labor practice. Where an employer re-
fuses to arbitrate a very narrow, specifically de-
fined grievance subject matter, the Board has not
found a violation of the Act. Whiting Roll Up Door
Mfg. Corp., 257 NLRB 734 (1981); Central Illinois
Public Service Company, 139 NLRB 1407 (1962);
Airport Limousine, supra at 934. Significantly, Re-
spondent here has not closed off all procedures
agreed to by the Union and Respondent for resolv-
ing pension benefit disputes; Respondent is merely
insisting on utilizing the procedure specifically re-
quired by another important labor relations statute
for resolving pension benefit disputes. Under these
circumstances, we find that Respondent's refusal to
arbitrate pursuant to the contract's procedures the
pension benefit calculations at issue herein, in light
of its good-faith and reasonable explanation that
the Pension Agreement's detailed pension benefit
claims provision is the proper mutually negotiated
procedure for resolving the dispute, did not violate
Section 8(a)(5) of the Act. We will thus dismiss the
complaint in its entirety.
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor Re-
lations Board hereby orders that the complaint be,
and it hereby is, dismissed in its entirety.
DECISION
STATEMENT OF THE CASE
HAROLD B. LAWRENCE, Administrative Law Judge:
This case was heard before me on April 1, 1982, at
Newark, New Jersey. The charge was filed on March
16, 1981, by General Industrial Workers Union, AFL-
CIO, hereinafter referred to as "the Union." The com-
plaint and notice of hearing were issued on June 1, 1981.
The complaint alleges and GAF Corporation, the Re-
spondent, denies that Section 8(a)(5) of the National
Labor Relations Act, hereinafter refered to as the Act,
were violated when the Respondent refused to bargain
with the Union regarding changes effected in the Retire-
ment Plan, frequently referred to as the "pension plan,"
of hourly paid employees at the Respondent's plant at
Linden, New Jersey. ' Underlying this allegation is a situ-
ation in which a number of retirees questioned the
monthly payments they were receiving under the pen-
sion plan and differences became apparent in the manner
in which the Union and the Respondent interpreted
major provisions of the plan. In order to settle these dif-
ferences, the Union attempted to discuss the questions
with the Respondent but was rebuffed. It filed a griev-
ance in the name of Joseph Chiappino, its president and
an employee at the Linden plant for 32 years. The Re-
: At the hearing, the General Counsel stipulated to withdraw par. 14
of the complaint, which alleges failure to bargain with respect to appoint-
ment of a new permanent arbitrator.
spondent, however, refused to cooperate in the process-
ing of the grievance on the ground that the grievance
procedures established under the collective-bargaining
agreement were not applicable to disputes under the pen-
sion plan, which has its own provisions for the settle-
ment of disputes.
In essence, the basic issue of whether the Respondent
violated the Act depends upon whether something more
than a breach of contract is involved in the event that
the Respondent is incorrect in its contention that the
grievance machinery is inapplicable. The Respondent
must be shown, not only to be incorrect in that regard,
but to have adhered to such position in order to impair
or undermine the Union's position as the collective-bar-
gaining agent of the employees in their exercise of the
rights assured to them by Section 7 of the Act.
The parties were afforded full opportunity to be heard;
to call, examine, and cross-examine witnesses; and to in-
troduce relevant evidence. Post-hearing briefs have been
filed by or on behalf of the General Counsel and the Re-
spondent.
Upon the entire record and based upon my observa-
tion of the witnesses and consideration of the briefs sub-
mitted, I make the following:
FINDINGS OF FACT
I. JURISDICTION
There is no issue as to jurisdiction. The complaint al-
leges, the Respondent's answer admits, and I accordingly
find, that the Respondent, a Delaware corporation which
manufactures and sells chemicals, building materials, and
related products, and which has its principal office and
plant at Linden, New Jersey, purchases and has deliv-
ered to its facility there from places outside the State of
New Jersey goods and materials valued in excess of
$50,000; and is, and at all material times herein has been,
an employer engaged in commerce within the meaning
of Section 2(6) and (7) of the Act.
The answer also admits the allegation of the com-
plaint, and I accordingly find, that the Union is, and has
been at all times material herein, a labor organization
within the meaning of Section 2(5) of the Act, and is the
collective-bargaining representative of Respondent's em-
ployees in two units comprising all production and main-
tenance employees and all clerical employees, all labora-
tory technicians and laboratory samplers of the Linden
plant but excluding leadburners, masons, watchmen and
guards as defined by the National Labor Relations
Board, all employees of the Personnel Relations Depart-
ment, all employees of the Industrial Engineering De-
partment, all employees of the Purchasing Department,
all professional employees and all supervisors as defined
in the Act.
1365
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
11. THE DISPUTE BETWEEN THE UNION AND THE
RESPONDENT
2
The current collective-bargaining agreement, known as
the Works Agreement, runs from February 1, 1980, to
January 31, 1983, and contains provisions for a retire-
ment plan and provisions for the resolutions of disputes
which may arise under the Works Agreement. Article 15
of the Works Agreement reads as follows:
ARTICLE 15
RETIREMENT PLAN
Paragraph 15.01 Retirement Plan: The parties to
this Agreement have agreed to a Retirement Plan
covering the employees in the bargaining unit.
Retirement Benefits are:
2/1/80-$9/75 x all years of service to normal retire-
ment age 65.
2/1/81-S10/25 x all years of service to normal re-
tirement age 65.
2/1/82-$10/75 x all years of service to normal re-
tirement age 65.
Further details may be found in the Summary Plan
Description.
Article 10, entitled "Grievance Procedure" provides,
in paragraph 10.02 thereof:
In the event there is any grievance dispute or dif-
ference between any employee, or the Union, with
the Company or vice versa, with respect to the in-
terpretation or application of any provision of this
agreement, there shall be an earnest effort made to
settle or dispose such matter by negotiation between
the representatives of the parties in the manner pro-
vided in this grievance procedure, upon and subject
to the provisions of this agreement.
The procedure for the processing of grievances is then
set forth and it is provided that, "Any grievances which
have been negotiated through each step of the grievance
procedure and have not been adjusted, settled or dis-
posed of, may be submitted to arbitration."
When the parties "agreed to a Retirement Plan" as
stated in article 15 of the Works Agreement, they did so
by means of a document executed on May 14, 1979. By
its terms, an existing contributory pension plan for
hourly paid employees known as Pension Plan IV was
changed to a noncontributory plan providing monthly
benefits amounting to a stated benefit level per month
per each year of credited service to age 65. The agree-
ment was retroactive to February 1, 1979, and was for a
term which was to be coterminous with that of a collec-
tive-bargaining agreement which still remained to be ne-
gotiated. The initial benefit level was $9.75 per month
and an increase was provided for in each of the 3 years
which were to be covered by the new collective-bargain-
2 The facts of the case as hereinafter set forth are a narrative compos-
ite of admissions contained in the answer of the Respondent, stipulations
between counsel, information contained in the exhibits, and the undisput-
ed and credited testimony adduced at the hearing.
ing agreement, which is the current Works Agreement.
Provision was also made for return to the participants of
Plan IV of the contributions previously made by them
together with interest.
The other provisions of the pension plan which were
then in effect and which were to be carried over into the
new plan were preserved by the following language:
5. All other provisions of the current Pension Plan
IV will be retained including joint survivor
option, contingent annuitant, disability and early
retirement factors, and continued for the term or
terms of the above referred collective bargaining
agreements.
By statute which became effective in 1974, every em-
ployee benefit plan must contain provisions for review of
benefit claims which have been denied.3 The claims pro-
cedure as set out in the pension plan under consideration
in this case, as amended and restated effective January
24, 1980, 4 provides that in the event of a dispute be-
tween the trustees and a participant or beneficiary over
the amount of benefits payable under the plan, a claim
may be filed in writing with the trustees. The trustees
are allowed 90 days in which to make a decision, but are
authorized to take another 90 days if necessary. Though
they are required to notify the claimant of the reasons
for rejection of his claim if they decide against him, an
inconsistent provison sets forth that if they fail to notify
the claimant of their decision the claim "shall be deemed
to have been denied by the Trustees." Claimant's appeal
is to the board of directors of the Respondent, which is
allowed 60 days to render a decision, may take another
60 days if it wishes, and is also supposed to notify the
claimant of any reasons for rejection of an appeal. How-
ever, if it fails to notify the claimant of its decision, the
claim is deemed to have been denied on review.
The plan defines the trustee as Bankers Trust Compa-
ny of New York and any additional or successor trustee
of the trust fund. The Company is the plan "administra-
tor" and administers the plan through an Administration
Committee appointed by the board of directors and
which serves at their pleasure. The names of its members
are certified to the trustee by the board. The plan pro-
vides that the board shall interpret the provisions of the
plan and certify to the trustee the amount and kind of
benefits payable to participants and their beneficiaries
and authorizes disbursements by the trustee for the pay-
ment of benefits. The board, as noted above, also adjudi-
cates appeals from decisions of the Administration Com-
mittee. That committee is also given authority to com-
pute the amount and kind of benefits payable to partici-
pants and their beneficiaries.
The description of the claims procedure contained in
the Summary Plan Description prepared by the Re-
spondent for the stated purpose of explaining the plan as
amended to January 1, 1976, and in effect at the time of
the 1979 negotiations, 5 is substantially the same, but
3 29 U.S.C. § 1133.
'Reap. Exh. 9.
Reap. Exh. 6.
1366
GAF CORPORATION
there are differences. The flaccid time limitations are set
forth, together with the permission to the claimant to
assume that his claim or appeal has been denied if no re-
sponse whatever has been received by the expiration of
the stated periods. However, according to the Summary
Plan Description, a claim is filed with the plan adminis-
trator, the committee appointed by the board of direc-
tors, rather than with any trustee.
The dispute between the Respondent and the Union
arose some time in May 1980 when the Union began re-
ceiving complaints from retired union members that they
were receiving less than they had anticipated under the
plan and, in some cases, that the amounts of pensions had
been reduced without explanation. There also appeared
to be discrepancies between the Respondent's calculation
of the amounts of the contributions and accrued interest
refundable to participants under the contributory plan
and their own computations of what was due them.
The Union took the matter up with the Respondent's
personnel department. Inquiries were made to William
Burke, the personnel supervisor of the Linden Plant, and
to Arthur Frank, the personnel relations manager. In dis-
cussions which took place over the course of several
months, they assured Chiappino, the union president,
that the matter would be resolved at Respondent's New
York office. Then Frank suggested that Chiappino call
Frank A. Bowes, Respondent's labor relations manager.
Bowes promised to get back to Chiappino about the
problem in a couple of days, but, when he called back, it
was only to say that the problems could not be resolved,
apparently because higher officials of Respondent were
adhering to a particular view of the plan. Chiappino un-
derstood his remarks as attributing a degree of obstinacy
to those higher officials, and his testimony to that effect
was not rebutted.
Early in October 1980, Chiappino filed a grievance in
his own name, protesting the interpretation being placed
on the plan and the manner in which it was accordingly
being administered, and referring to the plan as the one
referred to in article 15 of the collective-bargaining
agreements
At the hearing, counsel stipulated to the following
statement of the issues involved in the dispute:
1. What is the proper standard for calculating the
credited service or number of years to be used in
computing the amount of retirement benefits pay-
able pursuant to the Memorandum of Agreement
between GAF Corporation and Local 146, dated
May 14, 1979, to participants in the Retirement Plan
for Hourly-Paid Employees of GAF Corporation at
the GAF, Linden, New Jersey plant?
2. What is the proper method of computing the
amount of retirement benefits payable pursuant to
the Memorandum of Agreement between GAF
Corporation and Local 146, dated May 14, 1979, to
participants in the Retirement Plan for Hourly-Paid
Employees of GAF Corporation at the GAF,
Linden, New Jersey, plant, as a result of the with-
drawal of contributions by said Memorandum of
Agreement?
This became Orievance 240.
The merits of the dispute do not concern us in this
proceeding. The issues here are whether the dispute de-
scribed above is a subject of mandatory negotiation and
arbitration under the Works Agreement grievance proce-
dures and whether the Respondent's refusal to resolve
the dispute in accordance with those procedures amount-
ed to a violation of Section 8(a)(5) of the Act. These
issues were clearly raised by the Respondent's reply to
the grievance, which was as follows:
The complaint filed protesting the interpretation
and administration of the Pension Plan is not a grie-
vable matter under the labor agreement grievance
procedure.
The Pension Plan is a separate agreement outside
the labor agreement, and any disagreements must be
resolved in accordance with Article 13 of the Re-
tirement Plan for hourly-paid employees of GAF
Corporation. This grievance is denied.
I11. CONSTRUCTION OF THE PROVISIONS OF THE
WORKS AGREEMENT AND THE RETIREMENT PLAN
A. The Works Agreement and the Pension Plan
Provisions for Resolution of Disputes Are Not in
Conflict and Permit Use of Either Procedure at the
Sole Option of the Participant
Under the Employees Retirement Income Security
Act (ERISA),7 employee benefit plans are required to
contain procedures for the resolution of claims:
Section 1133. Claims procedure
In accordance with regulations of the Secretary,
every employee benefit plan shall
(1) provide adequate notice in writing to any par-
ticipant or beneficiary whose claim for benefits
under the plan has been denied, setting forth the
specific reasons for such denial, written in a
manner calculated to be understood by the par-
ticipant, and
(2) afford a reasonable opportunity to any partici-
pant whose claim for benefits has been denied for
a full and fair review by the appropriate named
fiduciary of the decision denying the claim.
The statute, in plain and unmistakable language, re-
quires that a plan afford "a reasonable opportunity" for
"a full and fair review" by the authority which has
denied the claim. I detect nothing in the statutory provi-
sion which makes such "review" exclusive and precludes
a participant from resorting to any other remedies which
he may have in the event of a dispute. The review pro-
cedure outlined is referred to by the indefinite article
throughout. The union plan itself couches its description
of the review procedure in permissive language and fails
to exclude recourse to other remedies:
7 29 U.S.C. §§ 1001, et seq.
1367
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
In the event of a dispute between the Trustees and
a Participant or Beneficiary over the amount of
benefits payable under the Plan, the Participant or
Beneficiary may file a claim for benefits by notify-
ing the Trustees in writing of such claim. Such noti-
fication may be in any form adequate to give rea-
sonable notice to the Trustees .... [Emphasis sup-
plied.]
Reading the Works Agreement and the plan together,
I conclude that a participant has a choice of modalities
to enforce a claim, which appears to be in line with what
the statute requires.a To construe it otherwise would
lead directly to an interpretation which would render the
claims provisions of the pension plan void by reason of
illegality. To the extent possible, the plan must be given
a construction which presupposes the legality of the
plan's provision for adjustment of disputes.9 An examina-
tion of the claims provisions of the plan, however, makes
it apparent that if they continued to be the exclusive
means of settling disputes, then they violate the letter
and the spirit of the law requiring inclusion of such pro-
visions in employee benefit plans. The statute expressly
mandates the furnishing of a statement of the reasons
why a claim has been denied, written in a manner "cal-
culated to be understood by the participant .. . ." If the
participant is not satisfied with the result, he must be af-
forded a "reasonable" opportunity for "a full and fair
review" of the decision denying the claim by "the appro-
priate named fiduciary."
Under the pension plan as described in the Summary
Plan Description, the committee appointed by the Re-
spondent's board of directors and answerable to it is the
arbiter of all claims made under the plan; the plan itself
seems to vest this function in a trustee which is also se-
lected by the board. Whichever way it is, appeals lie to
the board itself. This travesty of fair procedure is com-
pounded by the inordinate leeway given to the commit-
tee (or the trustee) and to the board with respect to
meeting time requirements for answering the claim; there
is no real timetable for decision and, though lip service is
paid to the statutory requirement that the reasons for re-
jecting a claim be explained in writing, the plan actually
contains provisions for deeming a claim or an appeal to
have been denied if no response at all is furnished. These
clearly inconsistent provisions of the plan place the inter-
preter at a crossroads, with one path leading clearly to a
finding that the provisions of the plan for settlement of
claims are in clear violation of the statutory require-
ments. This would be the result of construing the claim
procedure set forth in the plan as being the exclusive
means of resolving disputes related to the question of the
s See Taylor v. Bakery and Confectionery Union and Industry Interna-
tional Welfare Fund [American Bakeries; Company], 455 F.Supp. 816 (E.D.
N.C. 1978), wherein it was held that congressional intent was to require
exhaustion of administrative claims procedures prior to resort to litiga-
tion. This is the normal administrative law rule. The case did not involve
a question of choice or conflict of remedies but dealt solely with a situa-
tion in which a lawsuit was started prior to completion of claims proce-
dures provided in a benefit plan, the applicability of which was not in
question.
a Restatement of Contracts, Second, § 203(a) (1979).
amount payable to a participant. The claims provisions of
the plan must therefore be read as being nonexclusive.
B. To the Extent that the Claims Settlement
Provisions of the Works Agreement and the Pension
Plan Are Deemed To Be Mutually Exclusive or in
Conflict, the Provisions of the Works Agreement Are
Controlling
If the Works Agreement and the pension plan are read
together so as to effectuate the provisions of both to the
extent possible, giving in each case the ordinary and
usual meaning to the language employed, the grievance
machinery established by article 10 of the Works Agree-
ment must be held to be applicable to disputes which
may arise under the pension plan. By its terms, article 10
is applicable to disputes which arise under the Works
Agreement. Article 15 incorporated by reference all of
the provisions of the pension plan. It expressly sets out
those provisions of the plan which relate to the amount
of benefits payable, which by the stipulation of the par-
ties quoted above is the gravamen of the dispute which
exists between them. The legal efficacy of the provisions
of article 15 to accomplish this result is not diminished
by the testimony of Arthur Frank that he inserted article
15 into the Works Agreement for the information of the
employees and that article 15 was not a subject of nego-
tiation during the contract talks. It suffices that it is in
the signed agreement and that the signatories were aware
of its inclusion. 'O
There has been neither express nor implied waiver by
the Union of any of the terms of article 10 of the Works
Agreement. Certainly, in a matter as important as em-
ployees' pension rights and as important at the agreed-
upon machinery for settlement of disputes in the work-
place, nothing less than a clear and unequivocal waiver
would suffice. It must be express and cannot be in-
ferred. "
The evidence adduced at the hearing established that
the pension negotiations have always been separate and
apart from negotiations on the collective-bargaining
agreements. That was true in the case of the current pen-
sion and collective-bargaining agreements, with the dif-
ference that this time the pension agreement was made
coterminous with the collective-bargaining agreement,
which was to be negotiated subsequently. The pension
negotiations were concluded May 14, 1979, prior to the
commencement of the collective-bargaining agreement
negotiations.
It should be observed that what was negotiated was an
extension and modification of the terms of the then exist-
ing pension plan, and the changes were embodied in a
memorandum of agreement executed by the representa-
tives of the Respondent and the Union. However, for the
terms of the pension plan itself, resort must be had to the
document issued by the Respondent in January 1980 in
the form of a restated trust indenture or trust declaration.
Many of its provisions, of course, embody the terms of
0o Frank conceded that the inclusion of art. 15 was discussed with the
Union.
II United States Gypsum Company, 200 NLRB 305 (1972); Kroehler
Mfg. Co., 222 NLRB 1269 (1976).
1368
GAF CO)KPORA'I ION
agreements reached with the Union, principally matters
relating to the amount of benefits and the manner of
their computation. Many other provisions, however, may
or may not have been the subjects of direct negotiations
between the Respondent and the Union. The one which
is important in the present case is the provision for the
resolution of claims arising under the plan. The Respond-
ent does not contend that the claims procedure set forth
in the plan was ever negotiated with the Union; in fact,
it is not even contended that the plan itself was ever
shown to the Union. Chiappino disclaimed awareness of
the contents of the plan, insofar as claims procedures
were involved.
It is contended, however, that copies of the Summary
Plan Description were furnished to the Union and mailed
out to all employees involved, which would include
Chiappino, who has worked at the Linden plant for 32
years. The Respondent thus argues that the Union and
the employees are chargeable with notice of the contents
of the plan, even though the document embodying it was
prepared and issued unilaterally.
Two contentions are involved: that copies of the Sum-
mary Plan Description were handed out across the table
at the pension negotiating session and that copies were
mailed out to all employees in conformity with the re-
quirements of law. The union challenges both assertions.
The credible evidence convinces me that copies were in
fact distributed during the negotiations and were mailed
out generally to the employees, including Chiappino.1 2
I find that distribution was made, but I also must con-
clude that the union negotiators did not have actual
knowledge of the procedure for settlement of claims out-
lined in the Summary Plan Description and set forth in
the pension plan itself. Chiappino, of course, denied ever
having seen the pension plan. There is not a scintilla of
evidence that the claims provisions were ever called to
his attention or to the attention of any other union nego-
tiator by any representative of management. While the
suspicion crosses my mind that over the course of time
somebody must have become aware of them, even if
they just read the index to the Summary Plan Descrip-
12 Frank testified that he went with William Burke to a storeroom to
obtain copies of the Summary Plan Description for distribution at the
pension negotiations and that Burke told him he had mailed out copies to
the employees in July 1978. Frank testified that he presumed the legal
requirement of such distribution had been complied with and also in-
ferred that distribution had taken place from the existence of a supply of
computerized mailing labels, the appearance of what seemed to be the re-
mainder of the supply of copies, and the fact that the Respondent's gen-
eral practice in such cases was to send copies to the local personnel de-
partnments for local distribution.
Frank's testimony, though based in part on hearsay and surmise, is
challenged only by vague and uncertain testimony of Chiappino. Chiap-
pino could not recall whether he had received the summary in the mail
and professed not to know if other employees had received it. He "was
not fully aware" of whether or not the pension plan contained a proce-
dure for settlement of disputes arising under it, though he participated in
the pension negotiations and the negotiating committee met 15 times, and
though he admitted at one point having seen the summary, which has
two pages on the subject. Chiappino testified variously that he had never
received a copy of the Summary; that he had not seen it before the hear-
ing; that he had seen the summary, but not the plan itself; and that a
copy may have been on the table during the negotiations. I cannot credit
his testimony over the comparatively lucid and detailed testimony of
Frank. See General Teamsters Local 959. State of Alaska., et al. (Northland
Maintenance), 248 NLRB 693, fn. 2 (1980).
tion, what is involved in this case is a question of waiver
and that cannot be decided on supposition. A view that
the claims provisions of the pension plan supersede the
grievance procedure authorized by the Works Agree-
ment would have aroused comment, for the grievance
procedure is central to the Union's conduct of business
with the Respondent with respect to a wide range of
matters, in which the pension plan must be included.
I also find that the Union is not chargeable with
knowledge of the claims provisions of the pension plan
on any theory of imputed or constructive knowledge, de-
spite the distribution of copies of the Summary Plan De-
scription. Such a finding would make a mockery of the
rule that waiver of such important rights must be ex-
press. Considering that the matter was never negotiated,
the observation of a court in similar circumstances be-
comes pertinent: "Notice of a fait accompli is simply not
the sort of timely notice upon which the waiver defense
is predicated."' 3
Consideration must also be given to the past history of
the parties' resolutions of pension plan problems by
resort to the grievance procedures established in the col-
lective-bargaining agreements.
In Grievances 12000 and 1219, an arbitrator appointed
pursuant to the provisions of the Works Agreement
ruled that at any time before an employee's pension
rights vest, he has the right, in event of a layoff, to with-
draw his own contribution to the pension fund without
terminating his employment; if recalled, he has the right,
if he has withdrawn the contribution, to become covered
under the plan again as a new employee. Such a decision
cannot possibly be rendered without in effect interpret-
ing and ruling upon the provisions of the pension plan,
which govern the right to become covered.
Grivance 171 dealt primarily with the question of
whether withdrawal of contributions affected recall
rights under the collective-bargaining agreement, but in
this instance also the arbitrator ruled on the party's right
to coverage under the pension plan upon recall.
Accordingly, it must be held that recourse to the
grievance machinery of the Works Agreement was avail-
able with respect to the instant dispute respecting the
pension plan.
IV. ANALYSIS OF RESPONDENT'S REFUSAL TO
CONSIDER THE GRIEVANCE AS A VIOLATION OF
SECTION 8(A)(5)
Refusal to participate in a grievance procedure may be
a simple breach of contract. The proof of whether it is in
reality something more depends upon the surrounding
circumstances. 4 The evidence in this case establishes
that the Respondent deliberately sought to undermine
the Union's position as the bargaining representative gen-
erally and specifically with respect to questions arising
under the pension plan. The actions of the Respondent in
changing benefit payments and in failing to issue explana-
15 International Ladies' Garment Workers Union, AFL-CIO [McLough-
lin Mfg. Corp.) v. N.L.R.B., 463 F.2d 907, 919 (D.C. Cir. 1972).
1 Chevron Oil Company, 168 NLRB 574 (1967); Airport Limousine
Service, Inc., 231 NLRB 932 (1977); California Portland Cement Company,
103 NLRB 1375 (1953).
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
tions to the participants respecting the discrepancies in
the figures provided to them seem inexplicably high-
handed unless they are viewed in a context of union
animus. The same observation may be made in connec-
tion with the unfair and unreasonable review procedure
set out in the plan and the series of delays, lasting from
May to October 1980, in responding to the union inquir-
ies, when it would seem that on a matter of such keen
interest to the employees a response might have been
made more speedily.' 5 Finally, there is the unquestion-
able backtracking on past practice which has just been
discussed. Having previously arbitrated pension ques-
tions, the Respondent must be found to be acting in bad
faith in refusing to do so in the present dispute.
V. THE EFFECT OF THE UNFAIR LABOR PRACTICES
UPON COMMERCE
The violations of the Act herein found to have been
committed by the Respondent have a close, intimate, and
substantial relationship to trade, traffic, and commerce
among the several States and tend to lead to labor dis-
putes burdening and obstructing commerce and the free
flow of commerce.
15 A series of protracted delays and refusal to meet with the Union as
required by contractual grievance procedures violates duty imposed by
Sec. 8(d) of the Act to meet at reasonable times and confer in good faith.
United States Gypsum Company, supra at 313.
CONCLUSIONS OF LAW
1. Respondent is an employer engaged in commerce
within the meaning of Section 2(6) and (7) of the Act.
2. The Union is a labor organization within the mean-
ing of Section 2(5) of the Act.
3. Respondent violated Section 8(aX5) and (1) of the
Act by refusing to participate in negotiations, arbitration,
and other grievance procedures provided for in the col-
lective-bargaining agreement in effect with the Union
with respect to disputes regarding questions arising
under the pension plan covering hourly paid employees
at the Respondent's plant at Linden, New Jersey, thus
unilaterally effecting changes in the pension plan.
4. The aforesaid unfair labor practice is an unfair labor
practice affecting commerce within the meaning of Sec-
tion 2(6) and (7) of the Act.
THE REMEDY
Having found that the Respondent has engaged in an
unfair labor practice by reason of its refusal to bargain
with the Union with repect to certian changes which it
effected in the pension plan covering its hourly paid em-
ployees at the Respondent's Linden, New Jersey, plant, I
shall recommend that the Respondent be required to
cease and desist from such conduct and that it be re-
quired, on request of the Union, to negotiate with re-
spect to such changes and otherwise comply with the
terms of the grievance procedure provided for in the col-
lective-bargaining agreement, known as the Works
Agreement, now in effect between the parties.
[Recommended Order omitted from publication.]
1370