Hallmark-Phoenix 3, LLC

National Labor Relations Board - Board Decisions

Dec 22, 2014

361 N.L.R.B. 1304 (N.L.R.B. 2014)

1304 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
Hallmark-Phoenix 3, LLC and Transport Workers
Union of America, Local 525, AFL–CIO

Hallmark-Phoenix 3, LLC and International Alliance
of Theatrical Stage Employees and Motion Pic-
ture Technicians, Artists and Allied Crafts of
the United States, its Territories and Canada,
Local 780, AFL–CIO. Cases 12–CA–090718 and
12–CA–094037
December 16, 2014
DECISION AND ORDER
BY CHAIRMAN PEARCE AND MEMBERS HIROZAWA
AND JOHNSON
On May 19, 2014, Administrative Law Judge Joel P.
Biblowitz issued the attached decision. The Respondent
filed exceptions and a supporting brief, and the General
Counsel and International Alliance of Theatrical Stage
Employees and Motion Picture Technicians, Artists and
Allied Crafts of the United States, its Territories and
Canada, Local 780, AFL–CIO (IATSE) each filed an
answering brief. In addition, the General Counsel filed
exceptions and a supporting brief, and the Respondent
filed an answering brief.
The National Labor Relations Board has delegated its
authority in this proceeding to a three-member panel.
The Board has considered the decision and the record
in light of the exceptions1 and briefs and has decided to
affirm the judge’s rulings,2 findings,3 and conclusions4
1 We adopt the judge’s finding that the Respondent is required to in-
clude the $1.50 hourly wage differential when calculating its lead em-
ployees’ severance pay. In so doing, we agree with the General Coun-
sel that this differential is part of the lead employees’ hourly wage rate,
and thus is properly factored into the severance payments owed to them
under the Respondent’s collective-bargaining agreements with IATSE
and Transport Workers Union of America (TWU).
2 In adopting the judge’s finding that deferral to arbitration is not ap-
propriate in this case, we find no merit in the Respondent’s contention
on exception that “[c]ontract interpretation is outside the jurisdiction of
the NLRB.” See, e.g., Mining Specialists, Inc., 314 NLRB 268, 268 fn.
5 (1994).
3 There are no exceptions to the judge’s finding that the Respondent
violated Sec. 8(a)(5) and (1) of the Act by failing to pay its IATSE-
represented employees for all of their accrued vacation time in a timely
manner, and by failing to include the $1.50 wage differential in the
vacation pay of lead employees in the IATSE unit.
For the reasons stated by the judge, we adopt his findings that the
Respondent violated Sec. 8(a)(5) and (1) by failing to pay its TWU-
represented employees for all of their accrued vacation time in a timely
manner; failing to include the $1.50 hourly wage differential in the
vacation pay of lead employees in the TWU unit; failing to make sever-
ance payments to its employees; and failing to deduct employees’ union
dues and transmit them to IATSE. In doing so, we note that as all of
these findings involved the Respondent’s failure to comply with its
obligations under its collective-bargaining agreements with the Unions,
this conduct constitutes midterm contract modifications within the
meaning of Sec. 8(d) and, as such, violates Sec. 8(a)(5) of the Act. See,
and to adopt the recommended Order as modified and set
forth in full below.5
ORDER
The National Labor Relations Board orders that the
Respondent, Hallmark-Phoenix 3, LLC, Cocoa, Florida,
its officers, agents, successors, and assigns, shall
1. Cease and desist from
(a) Adding waiver language on the back of employees’
paychecks, stating that the employee acknowledges the
check represents the full amount owed to the employee,
without first notifying the employees’ collective-
bargaining representative, International Alliance of The-
atrical Stages Employees and Motion Picture Techni-
e.g., Rapid Fur Dressing, 278 NLRB 905, 906 (1986). See also
Parkview Furniture Mfg. Co., 284 NLRB 947, 973 (1987). We also
find, contrary to the Respondent’s exceptions, that the Respondent has
failed to prove it relied on a sound arguable contract interpretation in
failing to make severance payments. We note that prior to the hearing
in this case the Respondent successfully gained reimbursement from
the United States Air Force for severance payments that the Respondent
unconditionally stated it was obligated to make, based on the same
contract provisions relied on by the General Counsel and cited in the
judge’s decision. Chairman Pearce and Member Hirozawa do not agree
with the “sound arguable basis” standard articulated in Bath Iron Works
Corp., 345 NLRB 499, 502 (2005), affd. 475 F.3d 14 (1st Cir. 2007),
but agree that under this standard, the Respondent’s failure to make
severance payments violated the Act.
We adopt the judge’s finding that employee Kevin Ratliff’s em-
ployment with the Air Force since November 5, 2012, did not excuse
the Respondent’s obligation to pay him severance under the collective-
bargaining agreement with IATSE. In addition to the reasons cited by
the judge, we additionally note that Ratliff was entitled to severance
pay under arts. 20.6.1 and 20.6.3 of the agreement because—as of
October 1, 2012— he had been laid off for more than 30 days.
For the reasons stated in his decision, we adopt the judge’s finding
that the Respondent violated Sec. 8(a)(5) and (1) by inserting waiver
language on the back of each employee’s paycheck, stating that the
employee acknowledges that the check represents the full amount owed
to the employee. In doing so, we find it unnecessary to pass on the
General Counsel’s contention that the Respondent’s conduct in this
regard constitutes a modification of the applicable collective-bargaining
agreement, as any such finding would not affect the remedy.
4 In his decision, the judge inadvertently stated that the Respondent
owed $3010 in vacation pay for employees represented by TWU, rather
than $3028.16, as set forth in the compliance specification and App. A
to the judge’s decision, attached herein. This inadvertent error does not
affect our disposition of this case.
In addition, although the judge inadvertently stated in his decision
that, as the union dues owed had been deducted and transmitted to
IATSE, “no remedy is required,” he correctly clarified in the remedy
section that “no affirmative remedy is required.”
5 We shall modify the judge’s recommended Order to conform to the
Board’s standard remedial language for the violations found and in
accordance with J. Picini Flooring, 356 NLRB 11 (2010) and Tortillas
Don Chavas, 361 NLRB 101 (2014). We shall also substitute a new
notice to conform to the Order as modified.
Because the Respondent no longer maintains operations at the Cape
Canaveral Air Force Station or the Patrick Air Force base, we further
modify the judge’s Order to limit the notice provision to a mailing
requirement.
361 NLRB No. 146

HALLMARK-PHOENIX 3, LLC 1305
cians, Artists and Allied Crafts of the United States, its
Territories and Canada, Local 780, AFL–CIO (IATSE),
and giving it an opportunity to bargain.
(b) Failing and refusing to deduct union dues from the
paychecks of employees in the IATSE-represented unit,
and failing to transmit these dues to IATSE, as required
under its collective-bargaining agreement with IATSE.
(c) Failing and refusing to pay employees their sever-
ance pay and all of their accrued vacation pay in a timely
manner, as required under its collective-bargaining
agreements with IATSE and Transport Workers Union of
America, Local 525, AFL–CIO (TWU).
(d) Failing to include the $1.50 wage differential in its
lead employees’ vacation and severance payments, as
required under its collective-bargaining agreements with
IATSE and TWU.
(e) In any like or related manner interfering with, re-
straining, or coercing 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) Pay its TWU- and IATSE-represented employees
their accrued vacation pay and severance pay, including
any applicable wage differential, in the amounts set forth
in Appendixes A and B, respectively, plus interest ac-
crued to the date of payment, at the rate prescribed in
New Horizons for the Retarded, 283 NLRB 1173 (1987),
compounded daily as prescribed in Kentucky River Medi-
cal Center, 356 NLRB 6 (2010), and minus tax withhold-
ings required by Federal and State laws.
(b) Rescind the waiver language placed on the back of
the paychecks of its IATSE-represented employees.
(c) Compensate employees for any adverse tax conse-
quences of receiving lump-sum backpay awards, and file
a report with the Social Security Administration allocat-
ing the backpay awards to the appropriate calendar quar-
ters for each employee.
(d) Preserve and, within 14 days of a request, or such
additional time as the Regional Director may allow for
good cause shown, provide at a reasonable place desig-
nated by the Board or its agents, all payroll records, so-
cial security payment records, timecards, personnel rec-
ords and reports, and all other records, including an elec-
tronic copy of such records if stored in electronic form,
necessary to analyze the amount of backpay due under
the terms of this Order.
(e) Within 14 days after service by the Region, mail to
employees, at its own expense and after being signed by
the Respondent’s authorized representative, copies of the
attached notice marked “Appendix.”6 The Respondent
shall mail copies of the notice, together with Appendixes
A and B, to all employees employed by the Respondent
at the Cape Canaveral Air Force Station and the Patrick
Air Force Base as of August 31, 2012, at their last known
address. In addition, the notices shall be distributed elec-
tronically, such as by email, posting on an intranet or an
internet site, and/or other electronic means, if the Re-
spondent customarily communicates with its employees
by such means.
(f) Within 21 days after service by the Region, file
with the Regional Director for Region 12 a sworn certifi-
cation of a responsible official on a form provided by the
Region attesting to the steps that the Respondent has
taken to comply.
APPENDIX
NOTICE TO EMPLOYEES
POSTED AND MAILED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government

The National Labor Relations Board has found that we vio-
lated Federal labor law and has ordered us to post and obey
this notice.
FEDERAL LAW GIVES YOU THE RIGHT TO
Form, join, or assist a union
Choose representatives to bargain with us on
your behalf
Act together with other employees for your bene-
fit and protection
Choose not to engage in any of these protected
activities.

WE WILL NOT add waiver language on the back of your
paycheck, stating that you acknowledge the check repre-
sents the full amount owed you, without first notifying
your collective-bargaining representative and giving it an
opportunity to bargain.
WE WILL NOT fail and refuse to deduct union dues
from your paycheck and fail to transmit these dues to
your collective-bargaining representative.
WE WILL NOT fail or refuse to pay you severance pay
and all of the accrued vacation pay in a timely manner, as
required under our collective-bargaining agreements with
International Alliance of Theatrical Stage Employees and
6 If this Order is enforced by a judgment of a United States court of
appeals, the words in the notice reading “Posted and Mailed by Order
of the National Labor Relations Board” shall read “Posted and Mailed
Pursuant to a Judgment of the United States Court of Appeals Enforc-
ing an Order of the National Labor Relations Board.”

1306 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
Motion Picture Technicians, Artists and Allied Crafts of
the United States, its Territories and Canada, Local 780,
AFL–CIO (IATSE) and Transport Workers Union of
America, Local 525, AFL–CIO (TWU).
WE WILL NOT fail and refuse to include the $1.50 hour-
ly wage differential in our lead employees’ vacation and
severance payments, as required under our collective-
bargaining agreements with IATSE and TWU.
WE WILL NOT in any like or related manner interfere
with, restrain, or coerce you in the exercise of the rights
listed above.
WE WILL pay you for your accrued vacation pay and
severance pay, including any applicable wage differen-
tial, plus interest accrued to the date of payment, and
minus tax withholdings required by Federal and State
laws.
WE WILL rescind the waiver language placed on the
back of the paychecks of IATSE-represented employees.
WE WILL compensate you for any adverse tax conse-
quences of receiving a lump-sum backpay award, and WE
WILL file a report with the Social Security Administration
allocating the backpay award to the appropriate calendar
quarters for each of you.

HALLMARK-PHOENIX 3, LLC

The Board’s decision can be found at –
www.nlrb.gov/case/12-CA–090718 or by using QR code
below. Alternatively, you can obtain a copy of the decision
from the Executive Secretary, National Labor Relations
Board, 1099 14th Street, N.W., Washington, D.C. 20570, or
by calling (202) 273-1940.

HALLMARK-PHOENIX 3, LLC 1307
APPENDIX A

1308 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
APPENDIX B

John King, Esq., for the General Counsel.
Bryant Banes, Esq. (Neel, Hooper & Banes, P.C.), for the Re-
spondent.
Paul Berkowitz, Esq. (Paul Berkowitz & Associates, Ltd.), for
Charging Party IATSE.
Kevin Smith, President, TWU Local 525.
DECISION
STATEMENT OF THE CASE
JOEL P. BIBLOWITZ, Administrative Law Judge. This case
was heard by me on March 3, 2014, in Cocoa, Florida. On Jan-
uary 30, 2013, the complaint issued in Case 12–CA–90718
based upon an unfair labor practice charge and an amended
charge filed on October 4, 2012,1 and January 11, 2013, by
1 Unless indicated otherwise, all dates referred to relate to the year
2012.
Transport Workers Union of America, Local 525, AFL–CIO
(TWU). On February 28, 2013, the complaint issued in Case
12–CA–94037 based upon an unfair labor practice charge and
an amended charge filed on November 30 and February 27,
2013, by International Alliance of Theatrical Stage Employees
and Motion Picture Technicians, Artists and Allied Crafts of
the United States, its Territories and Canada, Local 780, AFL–
CIO (IATSE). These complaints allege that TWU represents an
appropriate unit of employees at Cape Canaveral Air Force
Station and that since in about October 2010, Hallmark-
Phoenix 3, LLC (the Respondent), has recognized it as the ex-
clusive collective-bargaining representative of these employees
and that this recognition was embodied in a collective-
bargaining agreement effective from October 1, 2010, to Sep-
tember 30, 2014, and that IATSE represents an appropriate unit
of employees at Patrick Air Force Station and that since about
October 1, 2008, the Respondent has recognized it as the exclu-
sive collective-bargaining representative of these employees,
and this recognition was embodied in a collective-bargaining
agreement effective from September 1, 2011, to August 31,

HALLMARK-PHOENIX 3, LLC 1309
2014. The complaints allege that the Respondent failed and
refused to continue in effect all the terms and conditions of
these collective-bargaining agreements since about August 31,
by (in the TWU complaint):

(a) Failing and refusing to pay the unit employees for their ac-
crued vacation time as required by the contract; and

(b) Failing and refusing to pay employees Severance Pay as
required by the contract.

It is alleged that these are mandatory subjects of bargaining,
and that by failing and refusing to pay these employees their
accrued vacation pay and severance pay, the Respondent vio-
lated Section 8(a)(5) and (1) of the Act.
The IATSE complaint alleges that since about August 31 the
Respondent has failed and refused to continue in effect all the
terms and conditions of employment of its agreement by:

(a) Failing and refusing to make authorized deduction of un-
ion dues from vacation pay paid to unit employees and refus-
ing to remit these dues to the union as required by the con-
tract;

(b) Failing and refusing to pay unit employees for their ac-
crued vacation time, as provided in the contract; and

(c) Failing and refusing to pay unit employees severance pay
as provided in the contract.

It is further alleged that on about September 14, the Respondent
bypassed IATSE and dealt directly with the unit employees by
requiring them to sign the following waiver in order to receive
vacation pay:

By signing this check, employee agrees that it has been paid
all it is owed for accrued pay and waives any and all claims
for that purpose.

It is alleged that by the acts specified above in (a) through (c)
and by asking the employees to sign this waiver and thereby
bypass the Union, it violated Section 8(a)(5) and (1) of the Act.
The Consolidated Complaint and Compliance Specification
issued on February 7, 2014. It alleges that the Respondent
ceased its operations at the locations involved on August 31
and although it has paid certain vacation pay amounts to the
TWU unit employees on about September 14 and April 5,
2013, it has:

(a) Failed and refused to pay the TWU unit employees for the
remaining accrued vacation hours as of August 31;

(b) has failed and refused to pay the lead employees in the
TWU unit the lead employee wage differential for their ac-
crued vacation hours: and

(c) has failed and refused to pay the TWU unit employees any
severance pay.

The Consolidated Complaint and Compliance Specification2
further alleges that although the Respondent paid vacation pay
2 Counsel for the General Counsel’s Motion to Further Amend the
Compliance Specification, dated April 7, 2014, which makes minor
amounts to its IATSE unit employees on September 14 and the
vacation pay balance on April 5, 2013, it has failed and refused
to pay the lead employees the lead employee wage differential
for their accrued vacation hours and has not paid severance pay
to any of the IATSE unit employees. The amounts due are,
allegedly, as follows:

TWU Unit Vacation Pay Due $3,028.16
TWU Unit Severance Pay Due $108,000
IATSE Unit Vacation Pay Due $1,348
IATSE Unit Severance Pay Due $260,066

The Respondent’s answer states that it ceased being the
prime service contractor for the Air Force on August 31 when
the Air Force decided to in-source the work involved herein,
and that due to the loss of the work, the unit employees were all
terminated on September 1. The Respondent defends that as the
employees were terminated, without any possibility of being
recalled when they lost the contract, it has no obligation to pay
the unit employees severance pay. In the alternative, the Re-
spondent defends that even if severance pay is due to the unit
employees, it should be the Air Force, rather than the Respond-
ent, that is obligated to pay the severance pay to the employees.
The Respondent further argues that it “pursued a challenge to
the in-sourcing at great expense to itself” and that both Unions
refused to join it in this pursuit: “. . . HP3 went to great time
and expense to file and receive payment on this certified claim,
an effort done completely on its own without any assistance
from either the Unions or the NLRB. . . .” The Respondent
further denies that it owes any additional vacation pay to TWU
unit employees because article 27.7 of the TWU contract states
that the maximum carryover for vacation pay is 180 hours, and
also denies that it owes a lead wage differential to the TWU
unit as article 31.3 of the contract states that employees will
receive lead pay for all holidays and vacations while on leave;
the employees herein were not on leave, they were terminated.
The Respondent admits that it has not paid severance pay to the
TWU unit due to: “the loss of the VOMS contract due to in-
sourcing and the great expense incurred by the Respondent both
in working to stop the in-sourcing and to file the certified claim
with the USAF.”
As regards the IATSE unit, the Respondent denies that any
additional vacation pay is owed as article 19.2.4 of the IATSE
contract states that the maximum carryover for vacation pay is
one time the annual award, any unused credits in excess were to
be paid in January of each calendar year: “Respondent did not
pay the excess in January 2012 and IATSE did not grieve the
action, thereby waiving its right to claim the excess credit
now.” Further, the Respondent denies that lead wage differen-
tial is owed to the IATSE unit. The IATSE contract states that
employees will receive lead pay for all hours worked: “Em-
ployees do not get lead pay while not working or terminated.”
The Respondent admits that it didn’t pay severance pay to ei-
ther the TWU or the IATSE employees:

changes in the backpay allegedly owed to the TWU unit and would
substitute for GC Exh. 3, is granted.

1310 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
The combination of the loss of the VOMS contract due to in
sourcing and the great expense incurred by Respondent both
in working to stop the in-sourcing and to file the certified
claim with the USAF to obtain the severance payments…has
resulted in putting Respondent in a difficult financial situation
and unable to pay all severance at one time.
I. JURISDICTION AND LABOR ORGANIZATION STATUS
The Respondent admits, and I find, that it has been an em-
ployer engaged in commerce within the meaning of the Act and
that TWU and IATSE have each been labor organizations with-
in the meaning of the Act.
II. THE FACTS
Waiver Language on Employee Checks
IATSE represented approximately 20 of the Respondent’s
unit employees. The paychecks that the IATSE employees re-
ceived dated September 14, which included the initial payment
for vacation pay, contained the following language: “By sign-
ing this check employee agrees that it has been paid all that it is
owed for accrued pay and waives any and all claims for that
purpose.” Jaroslaw Lipski, the IATSE business manager, testi-
fied that prior to the distribution of these paychecks, the Re-
spondent never notified the Union that they were going to insert
this waiver language on the checks. On September 28, Lipski
wrote to Jason Freeman, the Respondent’s president, stating
that not only were the amounts on some of these checks incor-
rect, but that he was surprised “. . . with the attempt to bamboo-
zle the employees by adding the ‘waiver’ language on the back
of the checks.” On November 28, counsel for IATSE wrote to
counsel for the Respondent asking that the Respondent send
him something stating that the waiver language on the checks
can be disregarded and that the Respondent will not attempt to
enforce it. By email dated December 13 to Lipski and counsel
for IATSE, counsel for the Respondent stated that the Re-
spondent would not enforce the waiver language for any IATSE
member with a claim for additional vacation pay.
Failure to Remit Due to IATSE
The contract between the Respondent and IATSE contains a
checkoff provision authorizing the Respondent to deduct union
dues from employees who have executed the proper authoriza-
tions, and to transmit these amounts to the Union. On Septem-
ber 14, when the Respondent sent vacation paychecks to
IATSE unit employees, it did not deduct any union dues from
these checks, nor did it transmit any dues to the Union. In Lip-
ski’s September 28 email to Freeman, he stated that the Re-
spondent did not check off and forward the dues to the Union.
On April 23, 2013, the Respondent sent a check in the amount
of $1882 to IATSE, as full payment for the checked off dues
owed to IATSE from the vacation pay paid to its unit members.
Background
The Respondent obtained the Vehicle Operations and
Maintenance Services (VOMS) contract at these two locations
in about 2008. Freeman testified that in 2011 the Air Force
advised the Respondent that it was going to in-source the work
which, at the time, was performed by the Respondent’s em-
ployees at the two locations. After hearing this, Kevin Smith,
the TWU president, emailed Freeman, with a copy to IATSE
saying that his members were concerned, and asked: “Just to be
clear and to put some of my members’ fear to rest. The compa-
ny will be paying out severance pay upon layoffs at the end of
the contract…correct?” Freeman responded later that day (also
with IATSE copied): “Our intention is to attempt to comply
with the CBA.” On July 21, John Rogers, Respondent’s vice
president of operations, sent an email to both Unions saying
that the Air Force was still intending to in-source the work and
that Freeman would like to meet with the Unions “. . . to see if
we can help to throw a wrench in their plan and make it more
difficult to insource.” At about this time, Smith had a telephone
conversation with Rogers who asked him if the Union would
agree to lower the employees’ wages by about $5 an hour in
order to assist in maintaining the contract and Smith replied
that, unfortunately, he could not agree to that. In about Septem-
ber 2011, Rogers told him that the Air Force had agreed to
postpone the in-sourcing for about a year.
The Respondent’s VOMS contract was terminated effective
September 1 and the employees’ last day of employment with
the Respondent was August 31. The employees were sent the
following letter from the Respondent dated August 17:

Due to the government’s decision to in-source your positions
and terminate the existing Vehicle Operation and Mainte-
nance contract, this letter will serve as formal notification that
as a result of the termination of our contract, your employ-
ment with Hallmark Phoenix 3, LLC has been terminated.
The termination becomes effective 1September 2012.

You will be compensated for all hours worked and remaining
vacation through the end of your normal workday . . . .

On July 7, Smith wrote to Rogers, inter alia:

I wanted to point out one condition of the Contract that will
continue to be your obligation if you must layoff the current
workforce covered by our Collective Bargaining Agreement.

Article 30.1 states the following: Any employee with one (1)
year or more of service under this agreement who is laid off
for any reason other than those set forth in paragraph 30.2
and 30.5 shall receive severance pay as set forth in paragraph
30.4. I’m bringing this to your attention just to make sure that
you understand your obligation to the article and the severity
of the issue. . . .

By letter to Freeman dated July 3, counsel for IATSE wrote
that while they were also disappointed at the loss of the VOMS
contract, IATSE intends to strictly enforce the severance pay
provision contained in section 20.6 of their contract. Counsel
for the Respondent answered 6 days later that the Government
told them that they do not believe that severance is warranted
because they view their action as a termination pursuant to
article 23.3 of the contract rather than the layoff provision of
HALLMARK-PHOENIX 3, LLC 1311
article 20.6.1. By email dated August 3, IATSE wrote to Rog-
ers stating that employees were asking about severance pay and
when they can expect to receive it, and Rogers responded later
that day that “[i]f they are paid it will be a lump sum payment,”
but the Government claims that they are not liable for it and, “It
will be a fight. . . .”
After losing the VOMS contract, the Respondent began ne-
gotiating with the Air Force in order to recoup costs that it an-
ticipated might be associated with the loss of the contract and
possible severance pay for the unit employees. When the nego-
tiations proved unsuccessful, the Respondent filed a claim with
the Air Force and, in about August 2013, the Respondent was
paid $400,382 by the Air Force as a severance pay settlement.
None of this money has yet been paid to either IATSE or TWU
employees.
It is alleged that the Respondent violated Section 8(a)(5) and
(1) of the Act by refusing to continue in effect all the terms and
conditions of its collective-bargaining agreements with IATSE
and TWU, by failing and refusing to pay severance pay to its
IATSE employees pursuant to article 20.6 of the IATSE
Agreement, and to the TWU employees pursuant to article 30
of the TWU Agreement. It is further alleged that the Respond-
ent has failed to pay all of the accrued vacation pay due to the
TWU employees pursuant to their contract, as well as the $1.50
differential to be paid to the TWU lead employees, and that
while all accrued vacation pay was paid to the IATSE employ-
ees, although delayed, the Respondent has failed to pay the
$1.50 lead differential for all hours of accrued vacation pay to
the IATSE lead employees. By these refusals, the Respondent
is alleged to have violated Section 8(a)(5) and (1) of the Act.
Vacation Pay
The relevant portions of the collective-bargaining agree-
ments are, for the TWU unit:

27.3
An employee who has completed his probationary period
shall be paid for his accrued vacation upon termination of
employment with the Company, except that he shall not be
paid for such vacation if he has been discharged for a cause
involving monetary or material loss to the Company.

27.7
Vacation carryover will be permitted, per the following
schedule. Any excess hours not used will be forfeited. Days
over and above this requirement are in a use or lose situation,
maximum carry over allowed as of 9/30 is 180 hours.

Carry over does not apply if HP3 is not the successful con-
tractor for the rebid of VOM.

31.3
Any employee selected by Management to perform a lead
function shall receive $1.50 per hour in addition to his regular
straight- time base rate of pay for all hours worked as lead. If
an employee performs as a lead for 30 days or more and is off
on holiday, vacation or sick leave, he shall continue to receive
sick pay.

The TWU contract provides for annual vacations ranging from
10 days to 22 days for employment periods of 1 to 20 years. As
the Respondent paid the IATSE vacation pay, albeit delaying
the payment by about 7 months, it is not necessary to cite or
discuss the vacation provision in its contract. However, as the
Respondent has not paid the lead pay premium for these vaca-
tion hours, paragraph 6 of schedule B states:

Lead Pay
Any employee that performs a lead function shall receive
$1.50 per hour in addition to his/her straight-line base rate of
pay for all hours worked as a lead.

By email dated September 24, Smith wrote to counsel for the
Respondent denigrating his argument that article 27.7 limits
their vacation pay obligation, stating that neither the Respond-
ent nor any other employer bid on the post-September 1 work:
“How can you win or lose a contract you aren’t bidding on?”
Counsel for the Respondent replied that pursuant to article 27.7
of the TWU contract, as the Respondent “was not awarded the
follow-on VOM contract, so the carryover provisions do not
apply. Given this, the maximum vacation paid is any earned
and not used since October 1, 2011 to the date of termination.”
By email to Rogers dated September 24, Smith wrote that the
vacation checks paid to the TWU employees were “far short of
what they should have been.” The balance of the vacation pay
has never been paid and Smith testified that the amount set
forth on appendix A of counsel for the General Counsel’s Mo-
tion to Amend the Compliance Specification accurately repre-
sents the balance owed to the TWU employees. On November
15, TWU filed a grievance alleging that the Respondent did not
pay its members their accrued vacation balance effective Au-
gust 31.
Lipski and Smith testified that, in the past, the Respondent
has paid its lead employees the lead premium rate for their
vacation hours and counsel for the General Counsel introduced
into evidence some of the Respondent’s payroll records which
establish that prior to September 1, the Respondent paid its lead
employees the $1.50 lead premium rate for vacation hours.
Smith testified: “It’s part of the contract, it’s been enforced for
years and we never had a dispute prior to that from anybody.”
However, after September 1, the Respondent did not pay this
lead pay differential with the lead employees’ vacation pay.
Rogers testified that lead pay is paid for lead work, and since
employees don’t work during vacations, they are not entitled to
lead pay for this period. He also testified that prior premium
payments to lead employees during vacation periods were paid
by mistake, and that vacation pay was not due to the TWU
employees under article 27.7 of their contract as the Respond-
ent was not the successful contractor for the rebid of the VOMS
contract.
Severance Pay
It is undisputed that the Respondent has failed to pay sever-
ance pay to either its TWU employees or its IATSE employees.
Article 30 of the TWU contract provides that severance pay is
to be determined by the length of employment of each employ-
ee, ranging from 3 weeks for 1 year of service to 13 weeks for
12 years of service. In addition:

1312 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
30.1
An employee with one year or more of service under this
Agreement who is laid off for any reason other than those set
forth in paragraph 30.2 and 30.5 shall receive severance pay
as set forth in paragraph 30.4.

30.2
Severance allowance will not be paid if the layoff is the result
of an Act of God, a national war emergency, dismissal for
cause, resignation, retirement, or a strike or picketing causing
a temporary cessation of work.

30.8
Such severance pay shall be paid at the end of a waiting peri-
od of 30 days from the date of such layoff.

The IATSE contract provides for 1 week of severance pay for 1
year of service up to 18 weeks of severance pay for 17years of
service, as well as:

20.6.1
Any employee with more than 6 months of continuous service
credit, who has established seniority, shall be entitled to sev-
erance pay when involuntarily laid off because of lack of
work for a period in excess of 30 days; however, no employee
shall be entitled to severance pay in cases where such layoff is
due to fire, flood, explosion, bombing, earthquake or Act of
God, causing damage at locations where work is performed
under this agreement, or from strikes or work stoppages re-
sulting in the inability to maintain normal operations.

20.6.3
Such severance pay shall be paid at the end of a waiting peri-
od of 30 days from the day of such layoff.

Rogers testified that the Respondent’s position was that nei-
ther the TWU employees or the IATSE employees were enti-
tled to severance pay; the IATSE employees because article
20.6.1 ends by saying, “resulting in the inability to maintain
normal operations,” and the loss of the VOMS contract resulted
in their inability to maintain normal operations. As for the
TWU employees, he testified: “. . . as for TWU, there’s a clause
in there that says it becomes null and void, so I wasn’t really
sure about that.” As stated supra, both Smith and counsel for
IATSE wrote to the Respondent in July setting forth their views
that if the Respondent terminated the employees because the
Air Force in-sourced the work that they had been performing,
then they would be entitled to severance pay under their con-
tracts. Rogers responded to Smith by email dated August 28
that the Government disputes that severance paid is owed, but
that “we will be pursuing a claim.” Smith responded that
whether the Government disputes that it is owed is irrelevant as
“the contract is clear.” Also as stated, supra, counsel for IATSE
wrote to Freeman on July 3 to “remind” him of the contract’s
requirement for severance pay, and counsel for the Respondent
responded 6 days later saying that the request was premature
and that the Government believes that the employees are not
entitled to severance and have refused to pay any portion of it.
By letter dated September 28 to Freeman, the “bamboozle let-
ter,” Lipski stated that the amount in a few of the employees’
checks were incorrect and on October 9, IATSE filed a griev-
ance, and an amended grievance on October 15, alleging a vio-
lation of articles 19, 20, and 23 in that the checks were incor-
rect. On October 18, the Responded denied the grievance:

As Company mentioned before, this grievance is untimely
with respect to severance pay. On July 9, 2012, the Company
sent a letter explaining our interpretation and the Union did
not respond in a timely manner. Any claim for additional va-
cation pay is untimely as well because under the terms of the
CBA, those payments were to be paid in January 2012 they
were not and the Union did not challenge it. The sums paid
reflect all vacations owed under the CBA. Based on sums
paid, no additional union dues are owed.

Lipski responded 5 days later that the grievance was timely and
that they should proceed to arbitration. The Respondent main-
tained its position that the grievance was untimely, and it never
went to arbitration.3 The TWU and IATSE contracts contain
identical provisions regarding timeliness of grievances:

8.2 (TWU), 6.2 (IATSE):
All grievances shall be presented as soon as practicable after
the occurrence of the event on which it is based, but in no
event later than 10 working days if it is a dismissal grievance,
or if the grievance arises from any other cause, no later than
20 working days from the date the union knew or reasonably
should have known of the events giving rise to the grievance.
The Arbitrator may consider the timeliness of the non-
termination grievances filed after the 20th day and before the
45th day and may continue the matter where there is a justifia-
ble excuse for the untimeliness. The failure to submit a griev-
ance within a period of 45 days shall constitute an absolute
bar to further action.

8.3 (TWU), 6.3 (IATSE):
Time limits for grievances at any step, or for any response,
may be extended by mutual agreement between the union and
HP3…

The Respondent defends that arbitration is the proper forum for
this matter, not the Board, although it has denied the Union’s
grievances as untimely and has refused to waive the time limits
contained in the contracts.
By email dated April 18, 2013, the Respondent notified
Smith that the Air Force had just “agreed to pay the severance
to HP3, so it can pass it along to the former employees . . . it
will probably take about 3–4 months to get the payments.” On
July 26, 2013, counsel for the Respondent notified counsel for
the General Counsel that the Air Force agreed to pay the Re-
spondent $400,382 for severance and that it should be sent out
soon.

3 Counsel for the Respondent, by email to Smith dated November
27, 2012, stated: “I have discussed this matter with Ms. Pabon [of the
Board] and her letter does not recite our entire written agreement on
timeliness issues. We did not agree to waive all timeliness issues. We
agreed to allow the grievance and arbitration to proceed for filing pur-
poses, but whether other aspects of timeliness affect entitlement was
not waived.”

HALLMARK-PHOENIX 3, LLC 1313
Kevin Ratliff
Article 20.6.3 of the IATSE contract, concludes by stating:
“Severance pay will not be granted when the employee accepts
employment of the same, similar or greater responsibility or
skill by a Successor Contractor to the PAFB & CCAF VOM.”
Ratliff,4 who had been employed by the Respondent’s prede-
cessors at the facility, began working for the Respondent when
they obtained the VOMS contract in about 2008. He was em-
ployed primarily as a heavy driver, and spent about 60 to 80
percent of his time driving a tractor-trailer; about 20 to 40 per-
cent was spent driving a bus and the remaining 5 percent was as
a forklift operator. He was unemployed from September 1
through November 4, and was offered a job by the Air Force in
late October and began working for the Air Force as a vehicle
operator dispatcher on November 5 at the prior facility. His job
with the Air Force involves, primarily, scheduling. He deals
directly with customers setting up bus support, and occasionally
operates a forklift. Scheduling and data entry requires about 50
to 70 percent of his time, bus support work consumes about 20
to 30 percent, leaving about 5 percent for forklift work. The bus
support duties (and, apparently, the forklift work) are similar to
the work that he performed for the Respondent. Ratliff identi-
fied a document that lists the training that he has received from
the Air Force. It includes training in 37 areas of operational
security; he received training from the Respondent in about 10
of these areas. While employed by the Respondent, he wore a
uniform of polo shirt, pullover, and gray slacks; at the Air
Force he does not wear a uniform. In his current position he
uses a computer about 60 percent of the time; while employed
by the Respondent he only used a computer for training pur-
poses. His employment with the Respondent required him to
have class A CDL license with HAZMAT, which permitted
him to drive vehicles in excess of 32,000 pounds with
HAZMAT materials. His present license is class B, for driving
a bus with 15 to 50 passengers. He testified that while em-
ployed by the Respondent he was responsible for the truck that
he was operating; now he spends most of his time on data entry
on the computer, which he hadn’t done previously, coordinat-
ing the locations of several vehicles at a time. He testified that
the work presently is more difficult for him than his work for
the Respondent because it’s a new job, although, “. . . I don’t
see it as being a greater responsibility what I do now. It’s dif-
ferent, but not necessarily greater.”
Rogers, who was involved in transportation and vehicle
maintenance for the Air Force from 1984 to 2005, testified that
a dispatcher is much more responsible than a driver because he
is, basically the supervisor of the drivers, and he “absolutely”
believes that Ratliff’s present position as a dispatcher involves
greater responsibility than he had while employed by the Re-
spondent, although he has not personally witnessed Ratliff’s
work for the Air Force.
4 In the Respondent’s claim for reimbursement from the Air Force
dated December 11, it included Ratliff’s severance pay in the amount of
$20,800.
III. ANALYSIS
Two weeks after they were terminated by the Respondent
due to the in sourcing by the Air Force, the IATSE employees
were asked to sign a waiver that the check that they received
for accrued vacation pay was all that they were owed by the
Respondent. Prior to issuing these checks with the waiver on
the back, the Respondent had not notified the union that it was
going to do so, nor did it offer to bargain with the Union about
this language. As this was clearly a mandatory subject of bar-
gaining, the Respondent was obligated to bargain with the Un-
ion prior to presenting the employees with this “Hobson’s
Choice” of endorsing the checks and possibly waiving their
rights. By the failure to do so, the Respondent violated Section
8(a)(5) and (1) of the Act. Kaiser Permanente Medical Care,
248 NLRB 147 (1980). The Respondent defends that it notified
the Union that it would not enforce this waiver, but this notifi-
cation came 2 months later and was not adequate to relieve
itself of liability for this activity. Passavant Memorial Area
Hospital, 237 NLRB 138 (1978).
Although its contract with IATSE contained a dues-checkoff
provision, when the Respondent sent these checks to the IATSE
employees on September 14 for their accrued vacation pay, it
failed to deduct union dues from this pay or to transmit these
amounts to IATSE. Lipski notified the Respondent of this error
and the Respondent did not transmit these dues to IATSE until
April 23. By failing to deduct dues from these checks and fail-
ing to transmit this amount to the Union until April 23, the
Respondent violated Section 8(a)(5) and (1) of the Act. As
these dues have since been deducted and transmitted to the
Union, no affirmative remedy is required.
It is undisputed that the Respondent failed to pay the $1.50
lead pay differential to the TWU and IATSE lead employees
for their vacation pay. The evidence establishes that in the past
(while it operated under the VOMS contract) the Respondent
paid this $1.50 differential to the lead employees for their vaca-
tion pay. The Respondent defends that these payments were a
mistake and that the IATSE contract states that the differential
shall be paid “. . . for all hours worked as a lead” and side letter
2 of the IATSE contract states that they will receive lead pay
“for all payroll hours.” [Emphasis added.] However, vacation
hours are earned from hours worked and are therefore payroll
hours. The TWU contract contains similar language as well, but
adds: “If an employee performs as a lead for 30 days or more
and is off on holiday, vacation or sick leave, he shall continue
to receive sick pay.” As vacation pay is a term and condition of
employment and a mandatory subject of bargaining, an em-
ployer cannot unilaterally make changes in the unit’s terms of
employment during the term of the agreement. NLRB v. Katz,
369 U.S. 736 (1962). The evidence is clear that the Respondent
previously paid the lead differential to its lead employees for
vacation pay prior to September 1. By refusing to pay this dif-
ferential for vacation pay after September 1, and by failing to
pay all of the accrued vacation hours to the TWU unit employ-
ees, the Respondent unlawfully modified a mandatory subject
of bargaining in violation of Section 8(a)(5) and (1) of the Act.
Daycon Products Co., 357 NLRB 508 (2011). The Respondent
defends that the TWU contract provides that maximum carryo-
ver is 180 hours, but the contract states that this restriction is

1314 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
not effective until September 30, 30 days after the termination.
It also defends that carryover does not apply if the Respondent
is not “the successful contractor for the rebid of VOM.” How-
ever, neither the Respondent nor anyone else bid on the con-
tract as the Air Force began performing the work with its own
employees. As there was no bidding for the contract there could
be no successful bidder. Therefore this sentence does not re-
lieve the Respondent of its obligation to pay the balance of the
vacation pay due to the TWU employees. I therefore find that
the Respondent has failed to pay all of the accrued vacation
hours to the TWU unit members, as well as the lead differential
to lead persons, Schevella Davis and Craig Peterson, in the
amounts set forth in Appendix A. I further find that the Re-
spondent has failed to pay the lead differential to IATSE lead
persons, James Harris, Jerry James, Wilson Scott, and Thomas
Veltri in the amounts as set forth in Appendix B.
It is also undisputed that the Respondent refused to pay sev-
erance pay to its employees in both units. Both contracts specif-
ically provide for severance pay. The TWU contract provides
that it need not be paid where the layoff results from “an Act of
God, a national war emergency, dismissal for cause, resigna-
tion, retirement, or a strike or picketing causing a temporary
cessation of work” (none of which is true herein), and under
Duration of Agreement it states: “This Agreement shall be null
and void for any period(s) for which the Company is not the
prime service contractor for the above mentioned scope of
work.” This provision obviously refers to any future obligations
of the Respondent, rather than past obligations, such as vaca-
tion pay and severance pay. The IATSE contract refers to simi-
lar situations, as well as “. . . strikes or work stoppages result-
ing in the inability to maintain normal operations.” Respondent
defends that this last part of this sentence warrants it to refuse
to pay severance to the IATSE unit. However, this must be read
in its entirety, and clearly refers to strikes or work stoppages by
the unit employees that result in an inability to maintain normal
operations, rather than the loss of a contract to perform the
work, as is true in this situation. As it was the loss of the
VOMS contract, rather than a strike or work stoppage, that
resulted in the loss of work, severance pay is due to the IATSE
employees as well. By refusing to pay severance pay to the
TWU and IATSE employees, The Respondent violated Section
8(a)(5) and (1) of the Act.
The Respondent defends, generally, that as this matter in-
volves contract interpretation, it is improperly before the Board
and that its proper forum is arbitration. I would agree with
counsel’s argument, except that, at least, one aspect of deferral
is missing: the Respondent’s agreement to waive the timeliness
issue. In Hallmor, Inc., 327 NLRB 292 (1998), the Board, in
denying referral to arbitration, referred to Collyer Insulated
Wire, 192 NLRB 837 (1971), and stated:

A key element of the deferral policy is the parties’ expressed
willingness to waive contractual time limitations in order to
ensure that the arbitrator addresses the merits of the dis-
pute…One critical element is that the party seeking deferral
agrees to waive any contractual time limitations…Here, the
Respondent plainly breached its agreement not to raise a time-
liness defense.

On the other hand, in Caritas Good Samaritan Medical Cen-
ter, 340 NLRB 61 (2003), the Board deferred to the parties
grievance arbitration procedure where the employer offered to
waive any timeliness issue. As the Respondent has not uncondi-
tionally offered to waive timeliness issues herein, this matter is
not appropriate for deferral to the parties’ grievance arbitration
process.
The final issue relates to Ratliff, who was terminated by the
Respondent along with the other employees on September 1,
and who began working for the Air Force on November 5. The
IATSE contract states that employees who accept employment
of the same, similar or greater responsibility with the Successor
Contractor for the VOM contract are not entitled to severance
pay, and the Respondent argues that since Ratliff’s job with the
Air Force involves greater responsibility, he is not entitled to
full severance pay. Ratliff’s employment with the Respondent
primarily involved driving a tractor-trailer carrying HAZMAT
material, while his job for the Air Force primarily involves
using a computer on data entry doing scheduling. Clearly, his
work for the Respondent was more difficult, physically, than
operating a computer, while his present job requires more
“skill” than his job with the Respondent as shown by the exten-
sive computer training for his position with the Air Force. I find
that his present job has “greater responsibility and skill” than
his prior position and that he would be excluded from the pro-
visions of article 20.6.3, except that this provision also provides
that the new employer be the “Successor Contractor” to the
VOM that the Respondent operated under. As previously stat-
ed, as the Air Force in-sourced the work, there was no “Succes-
sor Contractor.” Therefore Ratliff is entitled to his full sever-
ance pay.
CONCLUSIONS OF LAW
1. The Respondent is an employer engaged in commerce
within the meaning of Section 2(2), (6), and (7) of the Act.
2. TWU and IATSE are each labor organizations within the
meaning of Section 2(5) of the Act.
3. The Respondent violated Section 8(a)(5) and (1) of the
Act by adding the waiver language on the back of the employ-
ees’ vacation paychecks without prior discussion with IATSE,
the collective-bargaining representative of these employees.
4. The Respondent violated Section 8(a)(5) and (1) of the
Act by failing to deduct the union dues from the September 14
vacation pay checks to these employees and failing to transmit
these dues to the Union, in violation of the contract, and with-
out prior notification to, or negotiations with, IATSE.
5. The Respondent violated Section 8(a)(5) and (1) of the
Act by failing to pay all of the vacation pay that it was obligat-
ed to pay to the TWU employees under its contract, and by
failing to pay all of the vacation pay that was due to its IATSE
employees, under that contract, in a timely manner.
6. The Respondent violated Section 8(a)(5) and (1) of the
Act by failing to pay severance pay to its TWU and IATSE
employees.
7. The Respondent violated Section 8(a)(5) and (1) of the
Act by failing to pay to its lead employees the $1.50 wage dif-
ferential along with their vacation pay, as required under its
contracts with the Unions.
HALLMARK-PHOENIX 3, LLC 1315
THE REMEDY
Having found that the Respondent has violated the Act, I
recommend that it be ordered to cease and desist from engaging
in this activity and to take certain action designed to effectuate
the policies of the Act. As the Respondent, in April, transmitted
the dues to IATSE that were not deducted in September, no
affirmative remedy is required for that violation and as the
Respondent paid the IATSE employees the balance of their
vacation pay on about April 5, no affirmative remedy is neces-
sary for that violation. As this case is a combined unfair labor
practice complaint together with a compliance case, and as I
have found merit to the allegations herein, I recommend that
the Respondent be ordered to pay the amounts set forth below
in Appendix A and Appendix B, attached hereto, to the em-
ployees listed thereon who had been represented by TWU and
IATSE. Also, as the employees are no longer employed by the
Respondent, I shall recommend that the Respondent be ordered
to mail a copy of the notice herein, together with Appendixes A
and B, to each of the employees at their last known address, at
the Respondent’s expense, as well as posting this notice at each
of its locations within the State of Florida.
[Recommended Order omitted from publication.]