Jemco, Inc.

National Labor Relations Board - Board Decisions

Apr 28, 1971

190 N.L.R.B. 166 (N.L.R.B. 1971)

166 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Jemco , Inc. and United Steelworkers of America,
AFL-CIO. Case 7-CA-8133
April 28, 1971
DECISION AND ORDER
BY MEMBERS FANNING, JENKINS, AND KENNEDY
shall take the action set forth in the Trial Examiner's
recommended Order as herein modified:
1. Delete from paragraph 2(a) of the Order the word
"June" and substitute "July" therefor, and add "with
interest from on or after that date."
2. Substitute the attached notice for the Trial Ex-
aminer's.
On January 25, 1971, Trial Examiner Paul E. Weil
issued his Decision in this proceeding, finding that the
Respondent had engaged in and was engaging in cer-
tain unfair labor practices and recommending that it
cease and desist therefrom and take certain affirmative
action, as set forth in the attached Trial Examiner's
Decision. The Trial Examiner also found that Re-
spondent had not engaged in certain other unfair labor
practices alleged in the complaint and recommended
dismissal of those allegations. Thereafter, Respondent
filed exceptions to the Trial Examiner's Decision and
a supporting brief.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the Na-
tional Labor Relations Board has delegated its powers
in connection with this proceeding to a three-member
panel.
The Board has reviewed the rulings of the Trial Ex-
aminer made at the hearings and finds that no prejudi-
cial error was committed. The rulings are hereby
affirmed. The Board has considered the Trial Ex-
aminer's Decision, the exceptions and brief, and the
entire record in this proceeding, and hereby adopts the
findings, conclusions, and recommendations of the
Trial Examiner' as modified below.
ORDER
Pursuant to Section 10(c) of the National Labor Re-
lations Act, as amended, the National Labor Relations
Board adopts as its Order the recommended Order of
the Trial Examiner as modified below and hereby or-
ders that the Respondent, Jemco, Inc., Buchanan,
Michigan, its officers, agents, successors, and assigns,
' Respondent excepts to the finding in section I of the Trial Examiner's
Decision that Respondent annually causes to be shipped to its Michigan
plant goods and materials valued in excess of $50 ,000 from points outside
the State. Since Respondent denied this allegation in its answer to the
complaint and no evidence was adduced on this point, we do not rely on
this finding.
Respondent also excepts to the Trial Examiner's finding at fn. 4 that it
admitted that vacation pay was withheld from some employees who were
not involved in the activities which gave rise to the injunction. Examination
of Respondent's testimony on this point reveals that, although it can be
given this interpretation, it does not compel this conclusion and thus is
something less than an admission . We do not rely on the Trial Examiner's
finding that Respondent admitted that it had withheld vacation pay from
employees who had not participated in the activities in question.
Additionally, Respondent excepts to the Trial Examiner's finding that
interest on vacation pay is due from June 1, 1970. Since the contract pro-
vides that eligibility for vacation pay shall be determined as of June 30, we
find merit to this exception and shall modify the Order accordingly.
APPENDIX
NOTICE To EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
WE WILL NOT withhold vacation pay from or
in any other manner discriminate against our em-
ployees with regard to hire or tenure of employ-
ment or any term or condition of employment to
encourage or discourage membership in any un-
ion.
WE WILL NOT in any like or related manner
interfere with , restrain , or coerce our employees in
the exercise of their right to self-organization, to
form , join , or assist unions , to bargain collectively
through representatives of their own choosing and
to engage in other concerted activities for the pur-
poses of collective bargaining or other mutual aid
or protection, or to refrain from any or all such
activities.
WE WILL pay to each employee on our payroll
who qualifies for vacation pay under the terms of
our contract with United Steelworkers of
America, AFL-CIO, the vacation pay due on or
after July 1, 1970, under the terms of the aforesaid
contract.
JEMCO, INC.
(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 Boule-
vard, Detroit, Michigan 48226, Telephone 313-226-
3200.
190 NLRB No. 36
JEMCO, INC. 167
TRIAL EXAMINER'S DECISION
STATEMENT OF THE CASE
PAUL E. WEIL, Trial Examiner: On August 11, 1970,
United Steelworkers of America, AFL-CIO, hereinafter
called the Union, filed a charge with the Regional Director
for Region 7 (Detroit, Michigan), of the National Labor Re-
lations Board, hereinafter called the Board, alleging that
Jemco, Inc., hereinafter called Respondent, violated the Na-
tional Labor Relations Act, as amended, by refusing to pay
vacation benefits to striking employees. On October 14, 1970,
said Regional Director on behalf of the General Counsel
issued a complaint and notice of hearing alleging that by its
refusal to pay vacation pay to its striking employees and by
discharging its striking probationary employees Respondent
violated Section 8(a)(3) and (1) of the Act. Respondent by its
answer admitted various facts and denied others, denied the
commission of any unfair labor practices and denied that
there is any vacation pay accrued to the striking employees.
On the issues thus joined I conducted a hearing in Niles,
Michigan, on December 10, 1970, at which all parties were
represented, had an opportunity to adduce relevant and
material evidence , to call , examine, and cross-examine wit-
nesses, to argue on the record, and to file briefs. A brief was
received from Respondent.
On the entire record of this case and in consideration of the
brief, I make the following:
FINDINGS OF FACT
1. THE BUSINESS OF RESPONDENT
Respondent is a Michigan corporation engaged in the busi-
ness of precision machining in Buchanan , Michigan. Re-
spondent annually causes to be transported to its plant from
points located outside the State of Michigan goods and
materials valued in excess of $50 ,000 and annually ships from
its Buchanan, Michigan , plant to points located outside the
State of Michigan products valued in excess of $50,000.
Respondent is an employer engaged in commerce within
the meaning of Section 2(6) and (7) of the Act.
II. THE LABOR ORGANIZATION INVOLVED
The Union is a labor organization within the meaning of
Section 2(5) of the Act.
ent's president, stated that the probationary employees were
terminated. According to the testimony of employee Vernon
Vincent, Mr. Johnson said that as far as he was concerned the
probationary employees were fired; that was academic. Al-
though pressed to state in words what he said on that occa-
sion President Johnson as a witness merely said that he re-
jected the Union's demand. However, he gave as his
explanation of the siutation the fact that none of the four
probationers to whom the Union had reference occupied that
status any more: one was no longer a probationer but had
achieved seniority several days before the strike commenced,
a second he understood to have gone in the Navy and he had
seen neither of the other two since early in May and con-
cluded that they had other jobs and were no longer interested.
I conclude that what Johnson said was not that he had dis-
charged the probationers but in substance that they were
terminated, i.e., by their own conduct, and that any discus-
sion of their future with the Respondent was academic be-
cause the man in the Navy had reemployment rights under
the law , the second man was no longer a probationer and the
demand was not applicable to him and the other two had
abandoned their employment . He stated on the witness stand
that if the probationers returned he was prepared to take
them back as probationers to work out their 50 days of proba-
tionery employment. The statement attributed to Mr. John-
son by employee Vincent that the issue was academic sup-
ports this conclusion.
On July 3, 1970, Union Representative Halstead wrote to
Respondent requesting payment of vacation pay under the
terms of the contract. On July 21 President Johnson wrote to
the Union that payment of vacation pay was refused because
Respondent was not "legally obligated for payment of vaca-
tion pay." At the negotiation session on August 11 Johnson
stated that the cost of the legal action necessary to stop
unlawful picket line activity was $1,200' and he was prepared
to negotiate vacation pay against this cost to reimburse Re-
spondent for its expenditure necessitated by the Union's ac-
tion. At the hearing President Johnson stated that he is not
automatically obligated to pay vacation pay but it is a negoti-
able item and pointed out that the contract says that vacation
pay is not a vested interest. He also stated that if he pursues
his damage suit and collects his expenditure of $1,100 under
that he will then pay the vacation pay because he will be made
whole on what he had suffered because of the illegal acts by
the Union.
III. THE ALLEGED UNFAIR LABOR PRACTICES
The Union has represented Respondent's employees at all
times since Respondent purchased the business some 5 years
ago. In 1969 Respondent and the Union entered into a con-
tract for a period of 3 years. A provision of the contract
provided for a wage reopener on 60 days' notice prior to May
1, 1970. Notice was given by the Union and, no agreement
having been reached by May 1, the Union called a strike
which was still effective at the time of the hearing. Early in
the strike, at the instigation of Respondent , an injunction was
issued by a local court against unlawful picket line activity.
At some time thereafter or at the same time a suit for damages
was filed against the Union by Respondent.
On August 11' the parties met in the presence of a mediator
to negotiate. At this meeting the Union proposed that on the
conclusion of the strike all probationary employees should
return on a seniority basis.' According to the testimony of
Union Business Agent Halstead, Herbert Johnson, Respond-
All dates herein are in the year 1970 unless otherwise specified.
The contract provided that new employees remain in a probationary
status for the first 50 days of work.
Discussion and Conclusions
1. With regard to the probationary employees, in the light
of Respondent's statement at the hearing and of the conclu-
sions reached above with regard to Respondent 's statements
in negotiations , I conclude that no discrimination took place,
the probationary employees have not been discharged and
Respondent proposes to reinstate any who appear after the
strike. Accordingly, no discrimination has taken place, no
violation exists and I shall recommend that the complaint be
dismissed with regard to this allegation.
2. With regard to the vacation pay issue Respondent does
not deny that vacation pay had accrued to the 14 employees
who went on strike but contends that it remained at all times
negotiable and that he proposed to negotiate it as a setoff
against his legal costs.
Whether or not the contract under which the Union de-
manded payment of vacation pay had terminated as a result
of its own provisions is an issue that need not be reached
herein. The record is clear that vacations were a customary
' At a later negotiating session he lowered the figure to $1,100.
168 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
condition of employment and Respondent at no time has
negotiated with a view to removing them as such. Respondent
does not contend that the contract is void, but on the contrary
stated at the trial that it proposes to live up to the contract
which it takes seriously. The issue really boils down to the
question whether Respondent has a right to set off its legal
expenses against the money owing the employees as vacation
pay. Under the circumstances of this case where no evidence
is adduced as to the amount of vacation pay or as to the costs
said to set off against them and where such costs have not,
at least to the time of this hearing, been reduced to any final
figure, a setoff cannot really be effectuated. In addition there
is no showing that the individuals to whom vacation pay is
owed are individuals who were responsible for or guilty of any
unlawful acts which necessitated the expenditure of legal fees
or that under any law they may be held personally responsible
for reimbursement to the Employer of such expended
moneys.
In N.L.R.B. v. Great Dane Trailers, Inc., 388 U.S. 26, the
Supreme Court held that the employer's refusal therein to pay
vacation pay to striking employees was violative of Section
8(a)(3) of the Act and laid down several principles distilled
from its review of the controlling decisions in the field. One
such principle as stated by the Court is as follows:
... once it has been proved that the employer engaged
in discriminatory conduct which could have adversely
affected employee rights to some extent, the burden is
upon the employer to establish that [it] was motivated by
legitimate objectives since proof of motivation- is most
accessible to him.
The Employer herein has in my opinion failed to meet the
burden laid down by the Supreme Court in the Great Dane
case. Elsewhere therein the Court spoke of the need for the
employer to come forth with evidence of "legitimate and
substantial business justifications for the conduct." In my
opinion in the present state of the case the Employer's alleged
justification is neither legitimate nor substantial and I con-
clude therefrom that by its withholding of vacation pay from
its striking employees solely because they were on strike'
Respondent has violated Section 8(a)(3) and (1) of the Act.
THE REMEDY
Having found that Respondent has engaged in and is en-
gaging in unfair labor practices it will be recommended that
it cease and desist therefrom and take certain affirmative
action found necessary to effectuate the policies of the Act.
Having found that Respondent discriminatorily withheld
from certain of its employees vacation pay for which they had
qualified under the terms of the contract between the Re-
spondent and the Union, it will be required to pay to each
such employee the vacation pay so withheld. The amount due
to each employee shall bear interest at the rate of 6 percent
per annum from June 1, 1970, the date after which such
vacation pay was payable under provisions of the contract,
until paid. It will also be recommended that Respondent
shall, upon request, make available to the Board or its agents,
for inspection and reproduction, all books and records neces-
sary or helpful in determining the identity of employees to
whom vacation pay is due as herein provided and in comput-
ing the amount thereof.
Upon the basis of the foregoing findings of fact and upon
the entire record in the case, I make the following:
' The Employer admitted on the witness stand that some of the em-
ployees from whom vacation pay had been withheld were not involved in
the activities which gave rise to the injunction.
CONCLUSIONS OF LAW
1. The Respondent is an employer within the meaning of
Section 2(2) of the Act engaged in commerce within the
meaning of Section 2(6) and (7) of the Act.
2. The Union is a labor organization within the meaning
of Section 2(5) of the Act.
3. By withholding vacation pay from its employees as set
forth above Respondent has engaged in and is engaging in
unfair labor practices proscribed by Section 8(a)(3) and (1) of
the Act.
4. The aforesaid unfair labor practices affect commerce
within the meaning of Section 2(6) and (7) of the Act.
5. It has not been established by a preponderance of the
evidence that Respondent discharged probationary em-
ployees and that allegation of the complaint should be dis-
missed.
Upon the foregoing findings of fact, conclusions of law, and
the entire record, and pursuant to Section 10(c) of the Act,
I hereby issue the following recommended:'
ORDER
Respondent Jemco, Inc., its officers, agents, successors,
and assigns, shall:
1. Cease and desist from:
(a) Withholding vacation pay from or in any other manner
discriminating against its employees in regard to hire or ten-
ure of employment or any term or condition of employment
to encourage or discourage membership in any labor organi-
zation.
(b) In any like or related manner interfering with, restrain-
ing or coercing its employees in the exercise of the rights
guaranteed them by Section 7 of the Act.
2. Take the following affirmative action which has been
found as necessary to effectuate the policies of the Act:
(a) Forthwith pay to each employee on its payroll who
qualified for vacation pay under the terms of the agreement
between Respondent Jemco, Inc., and United Steelworkers of
America, AFL-CIO, the vacation pay due on or after June
1, 1970, as it is provided in the aforesaid contract.
(b) Post at its plant in Buchanan, Michigan, copies of the
attached notice marked "Appendix."6 Copies of said notice,
on forms provided by the Regional Director for Region 7,
after being duly signed by its representative, shall be posted
by Respondent immediately upon receipt thereof, and be
maintained by it for 60 consecutive days thereafter, in con-
spicuous places, including all places where notices to em-
ployees are customarily posted. Reasonable steps shall be
taken by Respondent to insure that said notices are not al-
tered, defaced, or covered by any other material.
(c) Preserve and, upon request, make available to the
Board or its agents, for inspection and reproduction, all
records and books necessary or helpful in determining the
identity of the employees to whom vacation pay is due as
provided herein computing the amount thereof.
5 In the event no exceptions are filed as provided by Section 102.46 of
the Rules and Regulations of the National Labor Relations Board, the
findings, conclusions, recommendations, and recommended Order herein
shall, as provided in Section 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.
6 In the event that the Board's Order is enforced by a Judgment of a
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 Boards."
JEMCO, INC. 169
(d) Notify the Regional Director for Region 7, in writing , IT IS FURTHER ORDERED that the complaint be dismissed
within 20 days from the date of the receipt of this Decision , insofar as it alleges a discriminatory discharge of the proba-
what steps the Respondent has taken to comply herewith .' tionary employees.
' In the event that this Recommended Order is adopted by the Board
after exceptions have been filed, this provision shall be modified to read : the date of this Order, what steps the Respondent has taken to comply
"Notify the Regional Director for Region 7, in writing , within 20 days from herewith."