Handleman Co.

National Labor Relations Board - Board Decisions

Mar 31, 1987

283 N.L.R.B. 451 (N.L.R.B. 1987)

HANDLEMAN Co.
Handleman Company and Teamsters Professional,
Public, Medical & Miscellaneous Employees
Local 165, International Brotherhood of Team-
sters, Chauffeurs, Warehousemen and Helpers
of America. Case 20-CA-19388
31 March 1987
DECISION AND ORDER
BY MEMBERS JOHANSEN, BABSON, AND
STEPHENS
Upon a charge filed 29 November 1984 the Gen-
eral Counsel of the National Labor Relations
Board by the Regional Director for Region 20
issued a complaint and a notice of hearing 15 Janu-
ary 1985 . The complaint alleges ' that the Respond-
ent, Handleman Company , violated Section 8(a)(1)
of the National Labor Relations Act by maintain-
ing an employee stock ownership plan that pre-
cludes employees covered by a collective -bargain-
ing agreement from participating unless the Re-
spondent , agrees to coverage under a negotiated
agreement.
On 5 December 1985 all parties including the
General Counsel filed a stipulation of facts and a
motion to transfer proceedings to the Board. The
parties waived a hearing and an administrative law
judge 's decision and submitted the case directly to
the Board for findings of facts, conclusions of law,
and a decision and order. -
On 7 February 1986 the Board issued an order
granting the motion, approving the stipulation, and
transferring the proceeding to the Board . The Re-
spondent and the General Counsel filed briefs.
The National Labor Relations Board has delegat-
ed its authority in this proceeding to a three-
member panel.
On the entire record, the Board makes the fol-
lowing
FINDINGS OF FACT
1. JURISDICTION
The Respondent is a Michigan corporation with
headquarters in Detroit, Michigan, and an office
and warehouse in Sacramento, California. The Re-
spondent is engaged in the wholesale distribution
of records, tapes, and related products. During the
12 months preceding issuance of the complaint, the
Respondent purchased and received at its Sacra-
mento, California facility products, goods, and ma-
terials valued in excess of $50,000 directly from
suppliers outside the State of California. We find
that the Respondent is an employer engaged in
' other complaint allegations were settled by the parties and have been
withdrawn from the complaint.
451
commerce within the meaning of Section 2(6) and
(7) of the Act.
Teamsters Professional , Public, Medical & Mis-
cellaneous Employees Local' 165, International
Brotherhood of Teamsters , Chauffeurs , Warehouse-
men and - Helpers of America is a labor organiza-
tion within the meaning of Section 2(5) of the Act.
II. ALLEGED UNFAIR LABOR PRACTICES
A. Facts
Since 1983 the Respondent has maintained an
employee stock ownership plan under which quali-
fied employees are entitled to acquire stock in the
Respondent 's corporation. The plan defines eligible
employees as:
(1) "Covered Employee" means any Em-
ployee who is classified by the Company as
full-time and who:
(ii) Is not covered by a collective bargain-
ing agreement entered into by the Company
unless such agreement, by specific reference
to the Plan, provides for coverage under the
Plan.
B. Parties' Contentions
The General Counsel contends that the Respond-
ent's promulgating, maintaining, and publicizing the
stock ownership plan is a per se violation of Sec-
tion 8(a)(1) of the Act because it automatically ex-
cludes from coverage employees who become rep-
resented by a labor organization and covered by a
collective-bargaining agreement . The General
Counsel argues that the plan's exclusionary lan-
guage punishes employees who choose a union be-
cause they become subject to risking loss of the
plan's benefits in negotiations while unrepresented
employees would continue to enjoy the benefits.
Thus, the General Counsel argues that the exclu-
sionary language interferes with, restrains, and co-
erces employees because it creates the potential of
discrimination or a loss to employees for choosing
union representation.
The Respondent contends that the plan merely
recognizes that Respondent's duty to bargain with
its employees' bargaining representative over man-
datory bargaining subjects, including participation
in employee benefit plans. Thus, the Respondent
argues that an employee benefit plan may lawfully
point out that employees covered by a bargaining
agreement are not eligible to participate unless the
bargaining agreement provides for coverage. The
Respondent argues that its plan does not exclude
any of its employees from participation but that all
283 NLRB No. 65
452 DECISIONS OF THE NATIONAL ,LABOR RELATIONS BOARD
employees are eligible to participate, subject to its
statutory bargaining obligations. The Respondent
argues that the plan's exclusionary language simply
points out that participation by employees covered
by a bargaining agreement is governed by the bar-
gaining agreement . Accordingly, the Respondent
contends that the plan does not interfere with, re-
strain, or coerce any of the Respondent's employ-
ees.
C. Discussion
The Board has held that an employer violates
Section 8(a)(1) of the Act by maintaining a benefit
plan excluding employees who join a union, choose
union representation, are members of a bargaining
unit, or are covered by a bargaining agreement.
See respectively Toffenetti Restaurant Co., 136
NLRB
,
1156 ' ( 1962),' enfd. 311 F .2d 219 (2d Cir.
1962),` cert . denied 372 U.S. 977 ( 1963); Channel
Master Corp ., 148 NLRB 1343 (1964); Dura Corp.,
156 NLRB 285 (1965 ), enfd . 380 F . 2d 970 (6th Cir.
1967),;' and Niagara Wires, 240 NLRB 1326 (1979).
Such plans interfere with , restrain, and coerce cur-
rently unrepresented employees because the exclu-
sionary clauses automatically eliminate the benefits
on selection of a representative and do not allow
for their continuation pending negotiations . What is
unlawful is the suggestion inherent in the exclu-
sionary language that unrepresented employees will
forfeit the plans ' benefits if they choose union rep-
resentation . In other words , the plans constitute
threats to discontinue the benefits or to refuse to
bargain over continuation of the benefits. Such
threats violate the Act. Como Plastics, 143 NLRB
151 (1963).
The Respondent 's employee stock ownership
plan defines a covered employee as, one ,who: "Is
not covered by a collective bargaining agreement
entered into by the Company unless such agree-
ment, by specific reference, to the Plan, provides
for coverage under the Plan." This exclusionary
language, unlike that in the above cases, indicates
that coverage for the employees is subject to nego-
tiations . The distinction is a critical one. The Re-
spondent's plan does not cut off the benefit prior to
negotiations, but contemplates the continuation of
the benefits during, the negotiations, Rather than
automatically withdrawing or completely foreclos-
ing coverage for represented employees, the Re-
spondent's plan leaves continued coverage to col-
lective bargaining, allowing the parties to agree to
continued coverage or not. The Board has found
that plans containing similar exclusionary provi-
sions are not unlawful. Thus, in Sarah Neuman
Nursing Home, 270 NLRB 663, 680 (1984), the
Board found no violation where the employer,
maintained a profit-sharing plan excluding "any
person who is covered under a collective bargain-
ing agreement . . . unless the collective bargaining
agreement provides for the inclusion of such
person under,the plan." Further in Rangaire Corp.,
157 NLRB 682, 683-684 (1966), the Board found
lawful the employers' maintenance of a pension
plan excluding "any person covered by a collective
bargaining agreement entered into with the em-
ployer, which agreement does not provide for cov-
erage of such person by this plan."
For the foregoing reasons we find that the Re-
spondent's maintenance of an employee stock own-
ership plan does not violate the Act as alleged.2
CONCLUSIONS OF LAW
1. Handleman Company is an employer engaged
in commerce within the meaning of Section 2(6)
and (7) of the Act.
2. Teamsters Professional, Public, Medical &
Miscellaneous Employees Local 165, International
Brotherhood of Teamsters, Chauffeurs, Warehouse-
men and Helpers of America is a labor organiza-
tion within the meaning of Section 2(5) of the Act.
3. HandlemanCompany has not violated the Act
as alleged.
ORDER
The complaint is dismissed.
2 Member Stephens agrees with this finding for the reasons stated in
this opinion and for the reasons stated in his concurring and dissenting
opinion in Lynn-Edwards Cdrp., 282 NLRB 52 (1986).