Golconda Corp.

National Labor Relations Board - Board Decisions

Dec 16, 1971

194 N.L.R.B. 609 (N.L.R.B. 1971)

BASTIAN-BLESSING 609
Bastian-Blessing, Division of Golconda Corporation
and Local 893 , United Brotherhood of Carpenters
and Joiners of America, AFL-CIO. Case
7-CA-8433
December 16, 1971
DECISION AND ORDER
BY CHAIRMAN MILLER AND MEMBERS
FANNING AND JENKINS
thereafter continuing, the self-insured program, failed to
bargain in good faith in violation of Section 8(a)(5) and (1)
of the National Labor Relations Act,2 and (b) whether the
amended charge , alleging a further violation in the
Company's concurrent change in life insurance carriers,
was untimely filed on February 16.
Upon the entire record ,3 including my observation of the
demeanor of the witnesses , and after due consideration of
the briefs filed by the General Counsel and the Company, I
make the following:
FINDINGS OF FACT
On June 22, 1971, Trial Examiner Marion C.
Ladwig issued the attached Decision in this proceed-
ing. Thereafter, Respondent filed exceptions and a
supporting brief.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the
National Labor Relations Board has delegated its
authority in this proceeding to a three-member panel.
The Board has considered the record and the Trial
Examiner's Decision in light of the exceptions and
brief and has decided to affirm the Trial Examiner's
rulings, findings, and conclusions and to adopt his
recommended Order.
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor
Relations Board adopts as its Order the recommend-
ed Order of the Trial Examiner and hereby orders that
Bastian-Blessing, Division of Golconda Corporation,
Grand Haven, Michigan, its officers, agents, succes-
sors, and assigns, shall take the action set forth in the
Trial Examiner's recommended Order.
TRIAL EXAMINER'S DECISION
STATEMENT OF THE CASE
MARION C. LADWIG, Trial Examiner: This case was tried
at Grand Haven, Michigan, on April 19, 1971.1 The charge
was filed by the Union on January 22 (amended February
16), and the complaint was issued on February 22. The case
arose on August 1 when the Company, faced with using
medical and hospitalization costs under the umon-negotiat-
ed contributory health insurance plan, unilaterally-and
without any notice to the Union--canceled the Aetna
group health policy and substituted a self-insured program.
The Union expressed fears that the Company would "shave
claims to save money," made inquiries (still unanswered at
the trial) about adequate funding of the self-insured
program, and repeatedly requested a return to Aetna. The
primary issues are (a) whether the Company, the Respon-
dent, by unilaterally substituting on August 1, and
I All dates are from August 1970 until May 1971 unless otherwise
stated
2 The Company, without explanation , moves in its brief to strike from
its answer the affirmative defense that the Board must defer to the
I. JURISDICTION
The Company, an Idaho corporation, is engaged in the
manufacture of food service equipment at its plant in
Grand Haven, Michigan, where it annually ships products
valued in excess of $50,000 directly to customers located
outside the State. The Company admits, and I find, that it is
an employer engaged in commerce within the meaning of
Section 2(2), (6), and (7) of the Act, and that the Union is a
labor organization within the meaning of Section 2(5) of the
Act.
II. ALLEGED UNFAIR LABOR PRACTICES
A. Rise in Costs
Aetna Life Insurance Company had been the Company's
group insurance carrier since World War II . Its Group
Policy GC-40,636, originally issued in 1959, contained the
provisions of the contributory health insurance plan
negotiated by the Union for the approximately 166
employees in the so-called Carpenters Unit (described
hereafter) at the Grand Haven , Michigan, plant. The
employees' weekly contribution was $1, about 40 percent of
the total cost of insurance. The Aetna group policy, which
was in effect until August 1 , also covered (with varying
provisions) two other classes of employees : those in the
Grand Haven plant represented by the Sheet Metal
Workers, and other employees in this plant and at other
locations.
In the fiscal year ending April 20, 1967 (as reported on
Form D-2 to the Department of Labor), the total premiums
paid Aetna (for over 1,500 employees) amounted to
$395,318. Aetna paid out benefits , and put in reserves, a
total of $312,696, and refunded over $56,000 to the
Company. By fiscal 1969 , with somewhat fewer employees,
the total premiums had increased almost $100,000, to
$493,372, and the total benefit charges had increased over
$229,000 (73 percent) to $541 ,852. Instead of a cash rebate
as in 1967, there was a deficit in 1969 of $92 ,883. (The 1969
Form D-2 shows that Aetna retained $30,053 for expenses,
as compared to fiscal 1968 expenses of $28,765-an
increase of less than $1 ,500. In fiscal 1967, which included a
period of time when the Company's own employees were
processing claims for Aetna, the Aetna expenses were
$15,559. The amount of commissions decreased from
contractual arbitration procedure for a resolution of this matter. The
unopposed motion is granted.
3 The Company's unopposed motion to correct transcript and substitute
exhibit, dated May 14, is granted.
194 NLRB No. 95
610 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
$3,756 in 1967 to $2,625 in 1969, whereas taxes increased
from $6,776 to $11,725.)
Despite the increased costs, the Union negotiated further
health benefits in its new 3-year collective-bargaining
agreement, effective from December 1, 1969, through
November 30, 1972. Nothing was said in the negotiations
about canceling the Aetna policy or changing carriers. I
note that in the preceding 3-year agreement, which expired
on November 30, 1969, the article on health insurance read:
"The Company and the Umon will provide a contributory
insurance plan for all full time employees coming under this
agreement . . . as covered in The Group Insurance Plan
Booklet dated 4/20/64." (That 40-page employee booklet,
issued by Aetna, contained "certain terms" of Aetna Group
Policy GC-40,636, the master ,contract between Aetna and
the Company.) In the new agreement, reference to the old
Aetna booklet (which described the previous benefits) was
deleted and the "principal features" of the increased
benefits were summarized. This brief summary, consisting
of only a few lines in the printed agreement, clearly referred
to the Aetna plan, and did not purport to detail the benefits
of the plan (which were contained in the 56-page group
policy, and the "essential features" of which were described
in the above-mentioned 40-page Aetna employee booklet,
as required by the Aetna group policy). The summary did
not specify such group benefits as the $4,000 accidental
death provision, the 120-day maximum hospital confine-
ment, the $730 maximum in-hospital medical expense, etc.
Referring to the plan's surgical expense benefits, described
in six pages of the Aetna employee booklet, the summary
merely stated, "Surgical schedule increased from $420.00 to
$540.00." Concerning the Aetna plan's major medical
expense benefits, described in seven pages of the employee
booklet (including two pages of exclusions and limitations),
the summary stated, "Major Medical maximum benefit
increased from $10,000.00 to $20,000.00." Thus, I find that
although the reference to the old Aetna employee booklet
was deleted, the Company and the Union still bargained for
a continuation of the Aetna plan. (Following these 1969
negotiations, the Company contracted with Aetna to
amend Group Policy GC-40,636 to provide the increased
benefits.)
B. Unilateral Action
1. Delayed announcement and union protests
On August 1, without a notice of any kind to the Union,
the Company canceled the Aetna insurance, substituted a
new insurance carrier for the life and accidental death
insurance, and set up a new section in its Chicago office to
process a self-insured group health program. The Union
received its first notice of the unilateral action 2 weeks later,
on August 14, when the Company personally notified the
Union and posted notices, addressed to all employees of the
parent corporation. The notice stated that the management
"feels that this direction will bring a closer relationship
between the company and its employees" and expedite
claims. It emphasized that there would be no change in the
present benefits, and referred to the Company's "strong
interest and responsibility in paying the obligations," and
its "interest that the employee recover all costs to which he
is entitled."
The personal notice was given by David Wessell,
industrial relations manager at the Grand Haven plant, to
Union President John Dennis and another union represent-
ative. Dennis (who impressed me as an honest, forthright
witness) credibly testified that he asked Wessell why this
change was made and Wessell responded that it was to save
money. (Wessell' testified that he answered, "I don't really
know why but I believe that there would be some cost
savings and of course we can improve the service to the
employees.")
Three weeks later, on September 3, the Union filed a
grievance, requesting the Company to return to Aetna "as
the group insurance carrier for all members" of the Umon.
The Company denied the grievance, as untimely, on
September 8. As stated in footnote 2 above, the
Company-without explanation-moved in its brief to
strike its affirmative defense in which it asserted that the
Board must defer to the contractual arbitration procedure
(and also indicated its willingness to waive the time limits to
enable the Union to pursue the grievance to arbitration).
On September 9, the Union (and the Sheet Metal
Workers) wrote the Company a letter, asserting that the
Company's unilateral action violated its bargaining obliga-
tion to the unions, demanding that "Aetna be restored as
the group carrier retroactively to August 1," and stating,
"We hereby particularly give you notice that we intend to
take every action afforded to us by the law if Aetna is not
restored within a reasonable time." The letter also
requested the D-2 forms, and requested "a written letter of
explanation as to why you feel this change is indicated.
What is the advantage to the company in making the
change?" In response the Company furnished the annual
reports, but it failed to give the requested written
explanation.
2. Subsequent bargaining
a. Self-insured health plan
On September 23 and October 8, the Company and the
Union met to discuss the matter. On both dates, the local
management was joined by Richard Watson, the director of
industrial relations for the parent corporation. (The
Company had made the unilateral changes at the corporate
level.) The evidence indicates that before these meetings
were held, Watson and the local management had already
decided that the Company was willing to discuss the
Union's objections, and perhaps make certain modifica-
tions, but that the Company would continue with the self-
insured health program which had been put into effect
corporation-wide. Leonard Scott, the administrative man-
ager at the Grand Haven plant, testified:
Q. Is it still your testimony that it was the
Company's position that maybe you could rescind the
... self-insured plan, is that your testimony?
A. I didn't say that.
* r
Q. During September and October 1970 was it the
Company's position that perhaps the Company would
BASTIAN-BLESSING 611
go back to a carrier . . . and would rescind the self-
insured plan?
A. Mr. Watson and myself . . . decided to listen to
what the Umon had to say about this program and see if
the allegations were in fact true , and see if , there was a
way we could satisfy their apprehension and yet
continue with the program that had been established and
had been running for sometime . [Emphasis supplied.]
As previously indicated , the written announcement of the
changes had been in the form of a notice to "all employees"
of the corporation (which then had three, now two, other
plants). It appears unlikely that the parent corporation,
represented in these two meetings by Watson, would
voluntarily rescind the action for all or part of the Grand
Haven plant , after having canceled its entire group policy
with Aetna . Moreover , Administrative Manager Scott
impressed me as being rather evasive at times. At one point,
when asked if he was told whether or not he could go back
to an insurance carrier, he stated he could not answer that
question . He did not state why he could not answer . Later,
however, he positively denied that anyone told him what
the Company's position was (before admitting what he and
Corporate Industrial Relations Director Watson had
decided , as quoted above). Still later he testified that "No
one from the corporation said to me directly" that he could
go back to a carrier . He appeared to be attempting to
conceal facts, rather than testifying forthrightly.
After considering all the evidence and Administrative
Manager Scott 's evasiveness, I find that the Company had
decided before meeting with the Union in September and
October that the Company's unilateral action was irrevoca-
ble, and I draw the inference and find that both Watson
and Scott were instructed not to agree to return to Aetna. In
this connection , I note that when Scott responded (without
explanation), "I can't answer that question" (upon being
asked if he was told whether or not he could go back to an
insurance carrier), he made the claim (neither supported
nor denied by other witnesses): "We did offer to discuss
carriers but the subject wasn't picked up . We didn't talk
about a lot of different carriers or introduce other plans or
anything of that nature at that time ." (Emphasis supplied.)
When later asked if the Company indicated it was willing to
go "back to a carrier ," Scott answered , "We certainly
indicated our willingness to discuss it" (not mentioning his
earlier claim that they offered to discuss "carriers"). I
seriously doubt that Watson or Scott would be offering "to
discuss carriers" under the circumstances , when the Union
was insisting on a return to Aetna and the Company was
attempting to gain acceptance by the Union (and also by
the Sheet Metal Workers) of the 2-month-old corporate-
wide self-insured program. But even if there had been an
offer "to discuss carriers" or "to discuss it" (going "back to
a carrier"), in view of the foregoing findings , the offer
would have been made in bad faith , with the knowledge
that the parent corporation's decision to become self-
insured was irrevocable.
Despite the Union's "notice" that it intended to take
"every action afforded to us by the law" if the Company
did not return to Aetna "within a reasonable time," the
Company and the Union discussed the matter at length in
the September 23 and October 8 meetings . The Union
protested the Company's unilateral action, and its failure to
notify, and discuss the matter with, the Umon before
August 1. One major concern, on the merits, was whether
the Company would "shave claims to save money,"
notwithstanding the Company's statements that the
benefits would be the same . As testified by Administrative
Manager Scott, "the feeling of apprehension was that
claims that had been administered one way under the
Aetna program might be administered in a different
manner under the company program"-"that the company
administering the program may not honor some of the
claims that were previously paid." (The Company proposed
a grievance-arbitration procedure, providing for a time
limit "no later than the third work shift" for protesting
improper payment of claims and providing for the sharing
of arbitration costs, but this proposal was rejected by both
the Union and the Sheet Metal Workers. The Aetna group
policy contained a 3-year time limit.)
Another major concern on the Union's part was whether
or not the self-insured plan would be adequately funded, to
assure complete payment for current disabilities in the
event the self-insured program was terminated. (Under the
negotiated Aetna major medical plan, claims could amount
to as much as $20,000 per employee or dependent.) The
Union vigorously protested that the Company was not a
"valid" insurance company, and questioned whether the
new program would be adequately funded. As Union
President Dennis testified, "the corporation was going
through another merger with Golconda Mining Company
and we were also apprehensive about the corporation
itself." (The joint proxy statements, dated June 30, 1970,
proposing a merger of Golconda Mining Corporation with
the Company's predecessor parent corporation, Astro
Controls, Inc., indicated that Astro Controls had negotiated
a loan of $3,000,000, mortgaging one of its Chicago plants
and paying 10 percent interest from April 1, 1970, until
April 1, 1990, "to reduce a $4,100,000 note payable to the
bank due January 15, 1971." The statements also indicated
that Golconda Mining's principal source of income was
dividends from its holdings of Hecla Mining Company
common stock, and that Hecla had announced on April 30,
1970, that "it would not pay any further cash dividends
during 1970." At the trial, Employee Benefits Administra-
tor Helen Earl testified that she had heard rumors that the
Company's parent corporation might soon become a part
of another corporation.) The Union's questions on funding
have never been answered. Although Administrator Earl
explained on October 21 how the claims would be
processed under the new program, she was unable to
answer many questions, including how the plan would be
funded. Corporate Industrial Relations Director Watson
was present in the courtroom at the trial but he was not
called to testify. Administrative Manager Scott testified
that he did not know how the self-insured plan was funded,
whether the Company's contributions "would be free from
any claim in bankruptcy," or whether the Company's plan
was covered by the state insurance regulations.
No agreement was reached in settling the dispute. At the
conclusion of the October 8 meeting, as testified by
612 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Administrative Manager Scott, "We [the Company]
suggested that it be tried for ninety days," and if the new
program "didn't work out after ninety days we would get
together to talk about it." (Emphasis supplied.) At the time
this suggestion was made, the terms and provisions of the
self-insured program had not been put in writing. The
meeting concluded, and the Union deferred taking its
further "action" (as announced in its September 9 letter)
until January 22, when it filed the charge herein, alleging
that the Company violated Section 8(a)(5) and (1) by
unilaterally substituting the self-insured plan on August 1.
(The Sheet Metal Workers did not file a charge.) In the
meantime, on January 7 (91 days after the October 8
meeting), the Company issued its "Company Insurance
Certificate" to the employees, describing "certain terms" of
the self-insured plan. (Advance copies had been furnished
union representatives the latter part of December.)
b. Change in life insurance carriers
In the September 23 meeting, the Union informed the
Company that the Union had no quarrel with the change in
life insurance carriers-from Aetna to "another independ-
ent insurance carrier." The Union thus acquiesced in this
part of the Company's August I unilateral action.
Moreover, the Union did not allege as a violation the
unilateral change in carriers until it filed the amended
charge on February 16, 2 days beyond the Section 10(b) 6-
month limitation period (which began on August 14, when
the Union was first advised of the change). In agreement
with the Company, I find that the amended charge was
untimely filed, and that in view of the Union' s earlier
acquiescence, the original charge did not place the
Company on notice. I therefore find that the complaint's
allegations concerning the change in life insurance carriers
must be dismissed.
C. Adverse Impact on Employee Benefits
1. Changes in coverage
In the negotiations for the current 1969-1972 collective-
bargaining agreement , as previously found, the Company
and the Union bargained for a continuation of the Aetna
plan, with various increased benefits which the Company
thereupon contracted with Aetna to provide. Under this
union-negotiated plan, not only was the payment of the
employees' health benefits ensured in writing by the 56-
page Aetna Group Policy GC-40,636 (the master contract),
but also the interpretation and application of the group
policy was placed in the hands of the well-known group
insurance carrier, Aetna.
The Company's unilateral and irrevocable August 1
cancellation of the Aetna group policy, and the January 7
issuance of its "Company Insurance Certificate," deprived
the employees of both the protection of the enforceable
master contract, and (as discussed later) Aetna's interpreta-
tion and application of it.
The January 7 "Certificate" did not contain all the
pertinent provisions governing the payment of benefits. It
was a modified copy of the most recent Aetna "Group
Insurance Certificate" (employee booklet), and was thus
only a "summary of the essential features" of the previous
Aetna insurance coverage. It failed to set out such
provisions in the Aetna master contract as (a) what
employees are eligible (permitting coverage of full-time
employees working temporarily on a part-time basis), (b)
eligibility after 3 months of continuous service, (c)
requirement of written request, etc., for coverage of
dependents, (d) effective date for dependent's coverage if
application is made within 31 days, and if made thereafter,
(e) the specific amount of nonoccupational disability
weekly benefit ($52, as set out in bargaining agreement), (f)
method of computing "average weekly earnings" for
determining 70 percent limitation on weekly benefit, (g)
exclusions and limitations applied in the event a family
member is disabled when the maximum benefit is
increased, (h) no benefits if prohibited in jurisdiction of
residence, and (i) employer shall not "discriminate unfairly
between individuals in similar situations" in administration
of the provisions.
In many places where the January 7 Certificate is copied
from the Aetna employee booklet, the Company has
substituted the words, "the Plan," for the words, "the group
policy." For example, on the cover page of the Certificate,
the sentence from the Aetna employee booklet containing
the words, "certain terms of the Group Policy," was
changed to read, "The kinds of coverage and certain terms
of the Plan applicable thereto are described on this and the
following pages of this Certificate." (Emphasis supplied.) In
other places in the Certificate, there still remain repeated
references to "the group policy." Thus former references in
the Aetna employee to "the group policy" now appear in
the January 7 Certificate in such phrases as: "subject to the
terms of the Plan," "payable under the Plan," "subject to
the terms of the group policy," "if included in the Plan,"
"benefits provided under the Plan," "coverage under the
Plan," "subject to the limits provided in the Plan,"
"Employee's insurance under the group policy," and
"coverage under the group policy." These references in the
Certificate to "the Plan" and "the group policy" are
evidently made (as were the references in the Aetna
employee booklet) to the detailed provisions in the now-
canceled Aetna Group Policy GC-40,636. Therefore the
Certificate issued on January 7 is not a self-contained
document setting out all the provisions of the self-insured
health program. Furthermore, there appears not to be in
existence any such document, which would be enforceable
as the Aetna group policy was.
Apart from enforceability, there are certain significant
changes in the benefits themselves. The Certificate issued
by the Company deleted the "Conversion Privilege" (which
provided that under specified conditions, an individual
"converted policy" could be'obtained by the employee or
dependent "without any requirement of evidence of
insurability"). The Company unilaterally substituted in the
Certificate a "Deferred Benefit Program," providing for
possible continued coverage, but for only 31 days. The
Company also made a change, which at least placed in
doubt the coverage of newborn babies under the $20,000
major medical benefit. The Aetna group policy (and the
Aetna employee booklet from which the Certificate was
primarily copied) provided such coverage (giving a
BASTIAN-BLESSING
maximum of $20,000 in protection for children born with a
disease , injury, congenital abnormality, or hereditary
complication). This was done by a special provision which
excluded a newborn child from the general provision that
dependents were not covered by the $20,000 major medical
benefits if in the hospital, or confined from a disease or
injury, at the time the dependents otherwise would have
been covered by the insurance. The exclusionary language
read, "other than a child with respect to whom the
employee becomes insured . . . within thirty-one days after
the date of the child's birth." (Emphasis supplied.) The
Company substituted in the Certificate the language, "after
the date upon which the child attains the age of fourteen
days." (In addition, the Company stated in the written
Certificate, under Surgical Expense Benefits, Obstetrics, the
maximum amounts provided in the Aetna group policy for
unrepresented employees-$75 to $300-rather than the
union-negotiated maximum amounts-$80 to $360. The
Company has acknowledged that this was in error.)
2. Loss of Aetna' s administration
As previously indicated, the Company was faced with
rising medical and hospitalization costs. The benefit
charges at its several plants had increased 73 percent in
about 2 years, and the Union had negotiated even higher
benefits in its 1969-1972 agreement. The expenses charged
by Aetna had increased only $1,500 between 1968 and
1969-to the amount of $30,053 for processing the claims at
all of the Company's plants.
No corporate official of the Company (which made the
unilateral decision at the corporate level) testified at the
trial why the decision was made to cancel the Aetna
coverage. When Administrative Manager Scott was asked if
anyone informed him why the Company went to the self-
insured program, he testified, "We [he and Corporate
Industrial Relations Director Watson] discussed it after we
received the announcement, yes. We had hoped to save
some administrative costs through this procedure and
thought there was a possibility that service might be
improved." (Emphasis supplied.) As when giving other
testimony, he did not appear to be testifying forthrightly. I
do not consider this testimony to be a trustworthy basis for
finding the actual company motivation for the change.
(Concerning any saving on the $30,053 processing expense,
I note that there were an administrator and two employees
assigned in the Chicago office to process the claims, and the
Company also had the expense of visiting consultant.) As
previously stated, Corporate Official Watson was present at
the trial, but he was not called to give direct information
concerning the Company's motivation.
After considering the relatively small amount of the
administrative costs, the minor increase in the expenses, the
apparent lack of candor in Scott's testimony, the failure of
the Company to give the Union the requested written
explanation for making the unilateral change, and the great
increase in the benefit claims-an increase of over $200,000
in about 2 years-I consider it much more likely, and I find,
that the Company was primarily concerned with limiting
claims when deciding unilaterally to become self-insured,
and that any hope of saving some administrative costs and
possibly improving service was merely incidental.
613
The General Counsel correctly argues in his brief that
"there is no safeguard in the self-insured plan to protect the
employees from Respondent altering or deviating from
Aetna's interpretation of matters under the plan." Although
much of the language in the January 7 Certificate was
copies from the Aetna employee booklet, the Certificate
does not bind the Company to follow Aetna 's interpreta-
tion . In fact, the Certificate on its face now transfers much
discretion from Aetna to the Company . It contains such
provisions as: "If evidence satisfactory to the Employer is
furnished," "The Employer will determine," "the Employer
is furnished with evidence satisfactory to it," and "the
Employer will have the right , exercisable alone and in its
sole discretion."
The Board has held , concerning a change in group health
carriers, that "the availability of benefits depends not only
on the language of the insurance policy but also upon the
manner in which the general language of the policy is
construed and administered by the carrier ." Wisconsin
Southern Gas Co., 173 NLRB 480, 483 (1968). Although in
that case, unlike here, there were insurance representatives
who gave supporting testimony , here the actions of
Employee Benefits Administrator Earl demonstrated as
much . Earl testified that for the nonroutine claims (about
25 percent of all claims filed) she had been using a "large
manual" which Aetna had previously given her, to
determine if they were payable . Furthermore, Aetna was
still processing some claims which arose before August 1
and, as further testified by Earl, "If we don't find the
answer there [in the Aetna manual ] we still have occasion
to call Aetna and we can still get the information from
Aetna." Of course , there is no written assurance that the
Company will be able to keep its Aetna manual current, or
that after this proceeding has concluded, the Company will
continue to follow the manual, or will be willing and able to
continue getting free advice from Aetna on the proper
interpretation of the superseded group policy . Furthermore
it is obvious , from a close reading of the many complex
provisions , exclusions , limitations , exceptions, etc., in both
the former Aetna group policy and the abridged Certificate,
that the application of the benefits is not automatic,
without interpretation.
The General Counsel further argues: "Without casting
aspersions on the Respondent, we would submit that the
self-insured Respondent has more reason to apply more
stringent interpretation to lint insurance coverage than
has the independent insurance carrier." I agree , and find
that under the circumstances of this case , the loss of Aetna's
interpretation and application of the group health plan
tended to have an adverse impact on the benefits negotiated
by the Union for the employees in the Carpenters Unit.
3. Question of adequate funding
Despite the Union's repeated inquiries about funding of
the self-insured program, and the questions raised at the
trial, the Company has continued to withhold this
information . The three major company witnesses denied
knowledge about the funding, leaving unanswered ques-
tions about adequate , unencumbered funds to pay pending
claims if the program were discontinued . The Company has
not given any reason for withholding this information from
614 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
the Union, or for failing to offer evidence concerning this
matter at the trial. Under, these circumstances, I draw the
inference that such evidence would not be favorable to the
Company's cause. I therefore find that the Company's
unilateral substitution of a group health program having
questionable funding also tended to have an adverse impact
on the employees' negotiated benefits.
D. Concluding Findings
Faced with using group health costs, the Company
unilaterally canceled-corporationwide-the Aetna group
policy and substituted a self-insured program, under
circumstances which demonstrate that the Company was
primarily concerned with limiting claims. As found above,
this unilateral action-without any prior notice to the
Union-had an adverse impact on the benefits of the
employees in the Carpenters Unit, for which the Union had
negotiated a continuation of the Aetna plan in the
negotiations for the current 1969-1972 collective-bargain-
ing agreement. I therefore find without merit the Compa-
ny's arguments that the change did not bear a "significant
or material relationship" to the employees' wages, hours, or
other conditions of employment; that the change had no
"immediate adverse impact" on the employees, "nor did it
result in any `significant detriment' to them"; and that the
Union bargained solely on the matter of benefit levels, not
on the identity of the insurance carrier.
The Company also contends in its brief that even if the
change "constituted a prima facie violation of Section
8(a)(5), the violation was cured by the overall conduct of
,the Respondent and, in particular, by its subsequent
bargaining with the Union." To the contrary, as found
above, the Company had already decided before meeting
with the Union that the unilateral change was irrevocable. I
therefore find without merit the Company's further
argument that "There is no indication in the record that the
Respondent engaged in these discussions with the fixed
determination not to revert to Aetna under any circum-
stances."
Accordingly I find that the Company failed to bargain in
good faith by unilaterally substituting, and continuing, the
self-insured health program for the Aetna health insurance,
in violation of Section 8(a)(5) and (1) of the Act.
CONCLUSIONS OF LAW
1. The Union is the exclusive collective -bargaining
representative of the Company's employees in the Carpen-
ters Unit , consisting of "All carpenter journeymen,
carpenter journeymen trainees, insulators, finishers, paint-
ers, maintenance men, material handling clerks, custom
material handling group leaders , millroom billing clerks,
packers, craters , lift truck drivers, truck drivers, receiving
clerks, firemen , watchmen, and general laborers employed
at the Respondent's Grand Haven, Michigan plant,
including all limited service employees , but excluding all
employees covered by collective bargaining agreements
with other labor organizations , line managers, assistant line
4 In the event no exceptions are filed as provided by Sec 102.46 of the
Rules and Regulations of the National Labor Relations Board, the
findings , conclusions , and recommended Order herein shall, as provided in
managers, office clerical employees, cafeteria employees,
timekeepers, confidential employees, guards and supervi-
sors as defined in the Act and all other employees."
2. By unilaterally, and without any notice to the Union,
substituting and continuing the self-insured program for
the Aetna group health plan, the Company has on and after
August 1, 1970, engaged in unfair labor practices affecting
commerce within the meaning of Sections 8(a)(5) and (1)
and 2(6) and (7) of the Act.
3. The Union's amended charge, alleging a further
violation in the Company's concurrent change in life
insurance carriers on August 1, 1970, was untimely filed on
February 16, 1971.
REMEDY
In order to effectuate the policies of the Act, I find it
necessary that the Respondent be ordered to cease and
desist from the unfair labor practices found and from like
or related invasions of the employees' Section 7 rights, and
to take certain affirmative action.
The Respondent, as found, had bargained with the Union
for a continuation of the Aetna group health plan in the
negotiations for the current collective-bargaining agree-
ment covering employees in the Carpenters Unit at the
Grand Haven plant. However, in disregard of this fact, the
Respondent unilaterally, and without any notice to the
Union, canceled its entire group insurance policy with
Aetna and became self-insured in order to reduce the
amount of benefits paid employees under the health plan.
As found, this adversely affected the benefits negotiated by
the Union. Finding the Company to have acted in bad faith
both in taking this unilateral action and in deciding that the
action would be irrevocable before meeting with the Union,
I find it necessary and appropriate that the Respondent be
ordered to restore, upon the Union's written request, the
Aetna group health coverage for the employees in the
Carpenters Unit. The'Respondent argues in its brief that
such a remedy could not be lawfully required because it
"would undoubtedly entail different premium rates,
experience factors, actuarial data, etc., and result in a plan
different from that in effect prior to August 1, 1970."
However, there is no evidence suggesting that the former
health plan could not be negotiated with Aetna for the
employees in the Carpenters Unit alone. In weighing the
alternatives, between requiring an effectual remedy and
permitting the Respondent to flout the Act with actual
impunity, I find it necessary that the Respondent be
ordered to restore this coverage even if the premium would
be higher for this size group. Of course the Respondent
would not be precluded from including other employees in
the insurance group if it chose to do so in order to reduce
the preemployee premium cost.
Upon the foregoing findings of fact and conclusions of
law, upon the entire record, and pursuant to Section 10(c)
of the Act, I hereby issue the following: 4
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.
BASTIAN-BLESSING
ORDER
Respondent, Bastian-Blessing, Division of Golconda
Corporation, its officers, agents, successors, and assigns,
shall:
1. Cease and desist from:
(a) Refusing to bargain collectively in good faith with
Local 893, United Brotherhood of Carpenters and Joiners
of America, AFL-CIO, as the exclusive representative of all
employees in the Carpenters Unit at the Grand Haven,
Michigan plant.
(b) Making unilateral changes in insurance carriers for,
or group health benefits of, employees in the above-
mentioned appropriate bargaining unit during the term of
the current collective-bargaining agreement without first
reaching agreement with the Union concerning the
changes.
(c) In any like or related manner interfering with,
restraining, or coercing employees in the exercise of their
rights under Section 7 of the Act.
2. Take the following affirmative action necessary to
effectuate the policies of the Act:
(a) Upon written request from the Union, and in the
manner set forth in the section of the Trial Examiner's
Decision entitled "Remedy," rescind the self-insured group
health coverage for employees in the Carpenters Unit at the
Grand Haven, Michigan plant and immediately reestablish
for these employees, without any lapse in coverage, the
Aetna Life Insurance Company group health insurance
which was terminated on August 1, 1970.
(b) Post at its plant in Grand Haven, Michigan, copies of
the attached notice marked "Appendix." 5 Copies of the
notice, on forms provided by the Regional Director for
Region 7, after being duly signed by an authorized
representative of the Respondent, shall be posted by the
Respondent immediately upon receipt thereof, and be
maintained-for 60 consecutive days thereafter, in conspicu-
ous places where notices to employees 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.
(c) Notify the Regional Director, in writing, within 20
days from the date of this Order, what steps the
Respondent has taken to comply herewith.
615
IT IS ALSO ORDERED that the complaint be dismissed
insofar as it alleges violations of the Act not specifically
found.
5 In the event that the Board's Order is enforced by a judgment of the
United States Court of Appeals , the words in the notice reading "Posted by
Order of the National Labor Relations Board" shall be changed to read
"Posted Pursuant to a Judgment of the United States Court of Appeals
Enforcing an Order of the National Labor Relations Board."
APPENDIX
NOTICE To EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
The National Labor Relations Board having found, after
trial, that we violated Federal Law by canceling on August
1', 1970, without notice, the Aetna Life Insurance Company
group health coverage for employees in the Carpenters
Unit:
WE WILL restore, upon written request by Carpenters
Local 893; the Aetna group health insurance for the
Carpenters Unit.
WE WILL NOT make changes in insurance carriers, or
in group health benefits, without bargaining at a proper
time.
BASTIAN-BLESSING, DIVISION
OF GOLCONDA
CORPORATION
(Employer)
Dated By
(Representative) (Title)
This is an official notice and must not be defaced by
anyone.
This notice must remain posted for 60 consecutive days
from the date of posting and must not be altered, defaced,
or covered by any other material.
Any questions concerning this notice or compliance with
its provisions may be directed to the Board's Office, 500
Book Building, 1249 Washington Boulevard, Detroit,
Michigan 48226, Telephone 313-226-3200.