Garrett Flexible Products, Inc.

National Labor Relations Board - Board Decisions

Sep 26, 1985

276 N.L.R.B. 704 (N.L.R.B. 1985)

704 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Garrett Flexible Products , Inc. and Local 634,
United Rubber , Cork, Linoleum & Plastic
Workers of America . Case 25-CA-16676
26 September 1985
DECISION AND ORDER
BY CHAIRMAN DOTSON AND MEMBERS
DENNIS AND JOHANSEN
On 2 May 1985 Administrative Law Judge Mi-
chael O. Miller issued the attached decision. The
Respondent filed exceptions and a supporting brief.
The National Labor Relations Board has delegat-
ed its authority in this proceeding to- a three-
member panel.
The Board has considered the decision and the
record in light of the exceptions and brief and- has
decided to affirm the judge's rulings, findings, and
conclusions and to adopt the recommended
Order. I
ORDER
The National Labor Relations Board adopts the
recommended Order of the administrative law
judge and orders that the Respondent, Garrett
Flexible Products, Inc., Garrett, Indiana , its offi-
cers, agents, successors, and assigns, shall take the
action set forth in the Order.
CHAIRMAN DOTSON, dissenting.
Given the circumstances of this case, it is my
view that the Respondent was not obliged to notify
and bargain with the Union about the increase in-
the health insurance premium. The record shows
that increase in the insurance premium have been a
matter of concern for the Respondent in past years.
Each year the Respondent has had to determine
how to absorb the increase. In July 1984 the Re-
spondent was again faced with an increase in the
premium. What the Respondent did at that time
was no different than what it did in past years.
Thus, in the absence of a collective-bargaining
agreement between the Respondent and the Union,
I would find that the Respondent did not violate
Section 8(a)(5) by handling the July 1984 premium
increase as it had handled other increases in the
past.
i Contrary to our dissenting colleague, we adopt the judge 's finding
that the Respondent violated Sec 8(a)(5) by unilaterally increasing the
health insurance premium paid by bargaining unit employees without bar-
gaining with the Union As found by the judge, the Respondent did not
have an established past practice regarding the payment of premium in-
creases Rather, it exercised substantial discretion in allocating the in-
creases between the Company and the employees Thus, we agree with
the judge that the Respondent was obligated to notify and bargain with
the Union before passing on the entire premium increase to the employ-
ees in July 1984 See Oneita Knitting Mills, 205 NLRB 500 fn 1 (1973)
Robert E. Hayes, Esq., of Indianapolis, Indiana, for the
General Counsel.
Mark T. Dykstra, Esq. (Butler, McCanna & Dykstra), of
Auburn, Indiana, for the Respondent.
DECISION
STATEMENT OF THE CASE
MICHAEL O. MILLER, Administrative Law Judge. This
case was heard on March 14, 1985, in Auburn, Indiana,
based on an unfair labor practice charge filed by Local
634, United Rubber, Cork, Linoleum & Plastic Workers
of America (the Union), on September 7, 1984, and a
complaint issued by the Acting Regional Director of
Region 25 of the National Labor Relations Board on
February 14, 1985. The complaint alleges that Garrett
Flexible Products, Inc. (Respondent), violated Section
8(a)(1) and (5) of the National Labor Relations Act by
unilaterally increasing the insurance contribution paid by
unit employees. Respondent's timely filed answer denies
the commission of any unfair labor practices.
All parties were afforded full opportunity to appear, to
examine and to cross-examine witnesses , and to argue
orally. Briefs, which - have been -carefully considered,
were filed on behalf of the General Counsel and the Re-
spondent.
Based on the entire record, including my observation
of the witnesses and their demeanor, I make the follow-
ing -
FINDINGS OF FACT
I. RESPONDENT'S BUSINESS AND THE UNION'S LABOR
ORGANIZATION STATUS-PRELIMINARY
CONCLUSIONS OF LAW
Respondent, is an Indiana corporation maintaining an
office and plant at Garrett , Indiana, where it is engaged
in the manufacture , sale, and distribution of molded and
extruded rubber products . Jurisdiction is not in dispute.
The complaint alleges , Respondent admits, and I find
and conclude that Respondent is an employer engaged in
commerce within the meaning of Section 2(2), (6), and
(7) of the Act.
The complaint alleges, Respondent admits, and I find
and conclude that the Union is a labor organization
within the meaning of Section 2(5) of the Act
II. THE UNFAIR LABOR PRACTICE
A. Collective-Bargaining History
On July 20, 1984,' the Union was certified as the ex-
clusive representative of the employees in the following
described unit which, Respondent admits, is appropriate
for collective bargaining:
All production and maintenance employees em-
ployed by Garrett Flexible Products, Inc., at its 600
East Quincy Street, Garrett, Indiana facility, but ex-
cluding all office clerical employees, all professional
i Except where otherwise specified , all dates hereinafter are 1984
276 NLRB No. 73
GARRETT FLEXIBLE PRODUCTS 705
employees, all guards and supervisors as defined in
the Act.
At all times since certification, the Union has remained
the employees' exclusive collective-bargaining represent-
ative
B The Unilateral Change
The General Counsel contends that Respondent unilat-
erally changed the employees' portion of the premiums
paid for health insurance, without notice to or bargaining
with the Union, in violation of Section 8(a)(5) and (1),of
the Act Respondent argues that there was no change
such as would have required bargaining. The facts are
simple and essentially undisputed.
In 1980, when Jackson 'E Wetzel became Respond-
ent's general manager and one of its owners, Respond-
ent's employees were covered by a group health insur-
ance policy issued by Metropolitan Insurance. In 1981, in
order to secure lower premium rates, Respondent
switched the coverage to Mutual Security Life Insurance
Company. At all times since at least 1981, the insurance
premiums were paid, in part, by Respondent and, in `part,
by the employees. Respondent maintained no written or
express oral policy setting forth either the maximum
dollar amount or percentage of insurance premiums
which it would pay on the employees' behalf.
In 1981, the employees were paying 92' cents per week
for single coverage and $1.85 per week for coverage
which included their dependents. The' balance was paid
by Respondent. The record does not indicate either the
amount or the percent of insurance coverage being paid
by Respondent at that time. In 1982, the insurance pre-
miums paid by the employees doubled; single coverage
to $1.80 per week, family coverage to $3.65 per week.
The amount of the premiums paid by Respondent on
behalf of the employees also increased by an unspecified
amount.2 In January 1983, the employees', contributions
more than doubled to $4 per week for single coverage
and $8 per week for family coverage. There was, appar-
ently, a second increase in insurance premiums later in
1983; Wetzel testified without contradiction, and the
General Counsel has accepted as true that an increase in
insurance premiums during 1983 was absorbed in its en-
tirety by the Respondent.
As early as March, Respondent began to discuss with
its insurance agent the possibility of changing benefits in
order to slow the rate of increase in premiums . At that
time, Respondent was paying $46.96 per employee per
month toward the health insurance coverage. The insur-
ance agent, at Respondent's request, prepared proposals
that reduced the premium by either increasing the de-
ductible or reducing the benefits. In April, one such pro-
posal was accepted by the Company; it was subsequently
nullified so that the same benefits could be maintained.
In early July, the insurance agent informed Wetzel
that maintaining the same coverage would require premi-
2 Wetzel so testified and the absence of such a statement in his pre trial
affidavit fails to establish, as the General Counsel contends, that the em-
ployees paid the entire increase in 1982 Wetzel's explanation, that he was
not asked that question and had not checked the payroll records prior to
giving his pretrial affidavit, satisfactorily explains the omission
um increases of 20 to 30 percent. Wetzel again asked for
alternatives.3 The insurance renewal date was August 1.
On July 25, 5 days after the Union's certification, the in-
surance agent presented Respondent with proposals to
either increase the deductibles or decrease the benefits.
Either of those proposals would have caused less of an
increase in the premiums than maintenance of the same
benefits. The insurance agent pressed for a response in
light of the imminent renewal date. Wetzel informed that
agent that Respondent would renew the coverage with
no change in benefits, stating that in light of the Union's
certification, he felt he could not change the benefits
without negotiations with the Union.
On July 26, Respondent enclosed a letter in the pay
envelopes of unit employees informing them of the in-
creased premiums. That letter stated:
As we stated in the meetings held over the last sev-
eral months, the Company can not absorb any in-
crease in any- operating costs. We will, however,
maintain the Company's contribution toward your
medical insurance premium at the same level as ex-
perienced last year. 11 increases will have to - be
borne by the ,employees if continuing coverage is
desired.
The Company's contribution last year (August 1,
1983 thru July 31, 1984) was $46.96/employee/-
month. The premiums for renewal for this year are
as follows:
Single-$115.92/month less $46.96 (Company por-
tion) equals $68.96/month (employee's portion).
Dependent-$141.17/month less $46.96 (Company
portion) equals $94.21/month (employee's portion).
The letter continued, informing employees that they
would have to authorize either continuation, changed
coverage, or cancellation of their coverage with an en-
closed form which was to be returned to the Company's
office before August 1.
Respondent gave no notice of this increase to any offi-
cer or representative of the Union and the Union had
neither officers nor dues-paying members, at that time,
among Respondent's employees. The Union did not learn
of it until sometime in early September. When it learned
of the increase, it immediately filed this unfair labor
practice charge.
Respondent contended that both the time constraints
and the fact that it did not know who, for the Union,
should receive notice of such an action, necessitated the
change being done in the manner it was.
Since the change in employees' insurance premiums,
Respondent has continued to pay the same $46.96 per
employee per month which it was paying before August
1, 1984.
2 The increase was the result of both increased medical costs and the
Company's experience under the policy
706 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
C Analysis and Conclusions
Both the General Counsel and Respondent correctly
assert that the above- 'described history, wherein premi-
um increases for health insurance have been either passed
on to the employees or absorbed, in whole or in part, by
Respondent, fails to establish a past practice. Arguing
from this common ground, however, they seek diametri-
cally opposed results. Respondent contends that in the
absence of a past practice,- it was obligated to continue
the existing benefit; that benefit, it further argues, was
Respondent's monthly contribution of $46.96 per em-
ployee per month toward the cost of health insurance.
The General Counsel, on the other hand, asserts that in
the absence of any established past practice, Respondent
could not make any changes in employee premium con-
tribution levels without affording the Union notice and
an opportunity to bargain.
Where an employer unilaterally implements an estab-
lished condition of employment nondiscnminatorily
adopted, and where that implementation involves no ele-
ments of discretion, that employer's bargaining obligation
is not violated. Charles Mfg. Co., 245 NLRB 39 (1979),
and cases cited therein at fn. 1. However, when that em-
ployer, as here, has retained discretion with respect to
the terms and conditions of employment, unilateral•exer-
cise of that discretion will be found violative of Section
8(a)(5). Hanes Corp., 260 NLRB 557 (1982) (involving
the exercise of discretion with respect to certain aspects
of wage increases, the mechanics of an economic layoff,
and the implementation of rules respecting the wearing
of respirators). See also Charles Mfg., supra. In the in-
stant case,, there can be no question but that Respondent
had always, prior to the advent of the Union, exercised
substantial discretion in allocating premium ' increases be-
tween it and the employees 4 Accordingly, in the ab-
sence of any established past practice with respect to the
payment of insurance premiums, and in light of Respond-
ent's substantial discretion with respect to the allocation
of those premiums, I must find that Respondent was obli-
gated to notify and bargain with the Union prior to pass-
ing on the increased premiums
Respondent further contends that it was under no obli-
gation to bargain with the Union until it had received an
unequivocal demand for bargaining. Here, the Union did
not communicate with the Respondent after certification
until August 8. Respondent asserts further that notice
was given to the employees, "including presumably those
who were union members" on July 26 and Respondent
4 It is on this basis that the instant case must be distinguished from
such cases as Luther Manor Nursing Home, 270 NLRB 949 (1984), House
of the Good Samaritan , 268 NLRB 236 (1983), and A-V Corp, 209 NLRB
451 (1979) In Luther Manor, the employer had an established practice of
allocating the cost of health insurance between itself and the employees
on a fixed ratio and maintained that practice when it passed on an in-
crease during bargaining Similarly, in Good Samaritan, the employer fol-
lowed its written policy- setting forth the maximum dollar amount it
would pay toward employee health insurance In A-V Corp, the obliga-
tion to maintain a fixed ratio with respect to premium payments was con-
tractual The Board , in those cases , found that maintenance of such estab-
lished practices did not violate the employers ' bargaining obligations In
A-V Corp, it further held that a single variance from the practice, where-
by the employer had absorbed all of one premium increase, did not estab-
lish a new practice
received neither a response nor a bargaining demand.
Respondent asserts, "The company cannot be required to
bargain with a phantom." The Union was no phantom.
Its official agents, including both Jerald Call, its field
representative, and Robert Black, the president of Local
634 (an amalgamated local), were present at the election.
Respondent knew who they were, it knew whom the
Board had certified as the collective-bargaining repre-
sentative, and it obviously knew or could easily have as-
certained from the representation case documents where
and to whom communications should be addressed. Any
implications to the contrary are without merit. More-
over, notice to the employees is not notice to the Union,
particularly where, as here, the Union had no officers or
agents among those employees. Even if notice to the em-
ployees would otherwise suffice, it must be noted here
that Respondent's July 26 letter was not notice of a pro-
posed change in insurance premiums. Rather, it was noti-
fication of a change already made, an agreement already
executed between Respondent and the insurance provid-
er. Notice of a fait accompli renders a demand for bar-
gaining unnecessary as futile. See Rose Arbor Manor, 242
NLRB 795 (1979), and Carpenter Sprinkler Corp, 238
NLRB 974 (1978). Cf. Clarkwood Corp., 233 NLRB 1172
(1977); and Medicenter Mid-South Hospital, 221 NLRB
670 (1975), wherein the employers had notified the col-
lective-bargaining representatives of proposed changes in
terms and conditions of employment thus placing, on the
union the obligation to request bargaining.
Further, in response to Respondent's arguments, I note
Allis-Chalmers Corp., 234 NLRB 350, 354 (1978). In that
case, after an election won by the union but while objec-
tions were pending and before the union had presented
any request for bargaining, the employer unilaterally
raised wages. The Board found immaterial the union's
failure to request bargaining, noting: "After the election
the Respondents knew that the Union had won the elec-
tion and represented a majority of their employees. They
could act unilaterally thereafter only at their peril." (Ci-
tations omitted.) Consistent with this holding, I cannot
find that the Union's failure to request bargaining here
materially affected Respondent's obligation to provide
notice and an opportunity to bargain before implement-
ing the new insurance premium allocations.
Neither can I find that the time constraints on Re-
spondent legitimize the unilateral action. Respondent
knew, since long before the election, that it and the em-
ployees were facing substantial premium increases. It had
negotiated various options with respect to insurance cov-
erage and benefits in order to mitigate those increases. It
knew, at the moment of the Union's election victory and
when it was certified that something had to be done with
respect to insurance. After certification, there may not
have been a great deal of time for bargaining but there
was certainly enough time for a telephone call and an in-
quiry as to whether or not the Union wanted to be con-
sulted and bargained with concerning the increases. Had
such a call been made, or letter sent, and had the Union
either failed to timely respond or failed to meaningfully
bargain prior to the insurance renewal date, then Re-
spondent might have been privileged by those time con-
GARRETT: FLEXIBLE PRODUCTS 707
straints to act.. Its obligation was to provide the Union
with that opportunity; it was that obligation which it
breached .5
Accordingly, for the reasons set forth above, I find
that Respondent- violated Section 8(a)(5) and (1) of the
Act by unilaterally passing on the entire increase in in-
surance premiums to the unit employees without notice
to or bargaining with the Union.
CONCLUSIONS OF LAW
1. Local 634, United Rubber, Cork, Linoleum & Plas-
tic Workers of America is and has been at all times since
July 20, 1984, the exclusive representative of Respond-
ent's employees -in the following unit which is appropri-
ate for collective-bargaining purposes within the meaning
of Section 9(b) of the Act:,
All production and 'maintenance employees em-
ployed by Garrett Flexible Products, Inc., at its 600
East Quincy Street, Garrett, Indiana facility, but ex-
cluding all office clerical employees, all professional
employees, all guards and. supervisors as defined in
the Act.
2. By unilaterally, without notice to or bargaining with
the above-named Union, increasing the health insurance
premiums paid by its unit employees on August 1, 1984,
Respondent has failed and refused to bargain in good
faith with the Union in violation of Section 8(a)(5) and
(1) of the Act.
3. The aforesaid unfair labor-practice affects commerce
within the meaning of Section 2(6) and (7) of the Act.
THE REMEDY
It having been found that Respondent has engaged in
an unfair labor practice in violation of Section 8(a)(5)
and (1) of the Act, it will be recommended that Re-
spondent cease and desist therefrom and take certain af-
firmative action necessary to effectuate the policies of
the Act. Specifically, I recommend that Respondent be
ordered to revoke the August 1, 1984 unilateral change
made with respect to the health insurance premiums paid
by the employees and to restore the premiums as paid by
them prior to August 1, 1984, until such time as Re-
spondent negotiates with the Union in good faith until
agreement or an impasse in negotiations is reached. See
Lauren Mfg. Co., 270 NLRB 1307 (1984). I further rec-
ommend that Respondent be required to make all unit
employees whole for expenses or losses they suffered as
a result of Respondent's unilateral change, as prescribed
in -Ogle Protection Service, 183 NLRB 682 (1970), plus in-
terest as computed in accordance with Florida Steel
Corp., 231 NLRB 651 (1977). See also Handi Bag Co.,
267 NLRB 221 (1983). -
5 I note in this regard that Respondent 's earlier negotiations with the
insurance agent demonstrate that bargaining might have been fruitful Re-
spondent already had the information concerning viable alternatives
which the Union could have accepted or rejected
On these findings of fact and conclusions of law and
on•the entire record, I issue the following recommend-
ed6
ORDER
The Respondent, Garrett Flexible Products, Inc., Gar-
rett, Indiana, its officers, agents, successors, and assigns,
shall -
1. Cease and desist from
(a) Refusing to bargain collectively with the Union by
unilaterally implementing changes in the health insurance
premiums paid by unit employees without affording the
Union an opportunity to bargain over such changes.'
(b) In any like or related manner interfering with, re-
straining, or coercing its employees in the exercise of the
rights guaranteed them by Section 7 of the Act.
2. Take the following affirmative action necessary to
effectuate the policies of the Act.
(a) On request, bargain collectively in good faith with
the Union, as the employees' exclusive collective-bargain-
ing representative with respect to employee health insur-
ance premiums and coverage and any changes in the pre-
miums and coverage.
(b) Revoke any unilateral changes made to the em-
ployee health insurance plan on August 1, 1984, and re-
store employee medical insurance premium as they exist-
ed before the unilateral change, until such time as the
Respondent negotiates with the Union in good faith until
agreement or an impasse in negotiations is reached.
(c) Make whole all employees who incurred additional
expenses or suffered monetary losses as a result of the
Respondent's unilateral change, with interest, as provid-
ed in the remedy section of this decision.
(d) Preserve and, on 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 nec-
essary to analyze the amount of payments due under the
terms of this Order.
(e) Post at its place of business in Garrett, Indiana,
copies of. the attached notice. marked "Appendix."7
Copies of said notice on forms provided by the Regional
Director-for Region 25, after being signed by -Respond-
ent's • authorized representative, shall be posted by Re-
spondent immediately upon receipt and maintained for 60
consecutive days in conspicuous places including all
places where notices to employees are customarily
posted. Reasonable steps shall be taken by Respondent to
ensure that said notices are not altered, defaced, or cov-
ered by any other material.
6 If no exceptions are filed as provided by Sec 102 46 of the Board's
Rules and Regulations , the findings, conclusions, and recommended
Order shall, as provided in Sec 102 48 of the Rules, be adopted by the
Board and all objections to them shall be deemed waived for all pur-
poses
° If 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 Na-
tional Labor Relations Board" shall read "Posted Pursuant to a Judgment
of the United States Court of Appeals Enforcing an Order of the Nation-
al Labor Relations Board "
708 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
(f) Notify the Regional Director in writing within 20
days from the date of this Order what steps Respondent
has taken to comply.
APPENDIX
NOTICE To EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
plementing changes in employee health insurance cover-
age or premiums without affording the Union an oppor-
tunity to bargain over such changes:
All production and maintenance employees em-
ployed by Garrett Flexible Products, Inc., at its 600
East Quincy Street, Garrett, Indiana facility, but ex-
cluding all office clerical employees, all professional
employees, all guards and supervisors as defined in
the Act.
The National Labor Relations Board has found that we
violated the National Labor Relations Act and has or-
dered us to post and abide by this notice.
Section 7 of the Act gives employees these rights.
To organize
To form, join, or assist any union
To bargain collectively through representatives
of their own choice
To act together for other mutual aid or protec-
tion
To choose not to engage in any of these protect-
ed concerted activities.
WE WILL NOT refuse to bargain collectively with
Local 634, United Rubber, Cork, Linoleum & Plastic
Workers of America as the representative of our employ-
ees in the following appropriate unit, by unilaterally im-
WE WILL NOT in any like or related manner interfere
with, restrain, or coerce you in the exercise of the rights
guaranteed by Section 7 of the Act.
WE WILL, on request, bargain with the Union with re-
spect to employee health insurance premiums and cover-
age and any changes in the premiums and coverage.
WE WILL revoke any unilateral changes made to the
employee health insurance plan on August 1, 1984, and
restore employee health insurance premiums as they ex-
isted before the unilateral change, until such time as we
negotiate with the Union in good faith until agreement
or an impasse is reached.
WE WILL make whole all unit employees who in-
curred additional expenses or suffered monetary losses as
a result of the unilateral change.
GARRETT FLEXIBLE PRODUCTS, INC.