J.F. Swick Insulation Co., Inc.Download PDFNational Labor Relations Board - Board DecisionsJan 28, 1980247 N.L.R.B. 626 (N.L.R.B. 1980) Copy Citation DECISIONS OF NATIONAL LABOR RELATIONS BOARD J. F. Swick Insulation Co., Inc. and Local 40, Heat and Frost Insulators and Asbestos Workers, AFL- CIO. Case 3-CA-8865 January 28, 1980 DECISION AND ORDER BY CHAIRMAN FANNING AND MEMBERS PENELLO AND TRUESDALE On September 20, 1979, Administrative Law Judge James L. Rose issued the attached Decision in this proceeding. Thereafter, Respondent and the Charging Party filed exceptions and supporting briefs. 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 attached Decision in light of the exceptions and briefs and has decided to affirm the rulings, findings,' and conclusions of the Administrative Law Judge and to adopt his recommended Order, 2 as modified herein. ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Relations Board adopts as its Order the recommended Order of the Administrative Law Judge, as modified below, and hereby orders that the Respondent, J. F. Swick Insulation Co., Inc., Delmar, New York, its officers, agents, successors, and assigns, shall take the action set forth in the said recommended Order, as so modified: 1. Substitute the following as paragraph 2(b): "(b) Upon execution of the foregoing agreement, give said agreement retroactive effect to July 1, 1978, and make such health, welfare, pension, and other payments on behalf of those employees in the above unit for whom such contributions would have been made had Respondent not unlawfully repudiated the said collective-bargaining agreement, and make the employees whole for any loss of wages and benefits, with interest on lost wages, and pay the Union any loss of dues suffered, with interest thereon, as a result of Respondent's failure to comply with the collective- bargaining agreement, as provided in the section herein entitled 'The Remedy' as modified by the Board's Decision and Order." 2. Substitute the attached notice for that of the Administrative Law Judge. ' Respondent has excepted to certain credibility findings made by the Administrative Law Judge. It is the Board's established policy not to overrule an administrative law judge's resolutions with respect to credibility unless the 247 NLRB No. 86 clear preponderance of all of the relevant evidence convinces us that the resolutions are incorrect. Standard Dry Wall Products Inc., 91 NLRB 544 (1950), enfd. 188 F.2d 362 (3d Cir. 1951). We have carefully examined the record and find no basis for reversing his findings. The contract negotiated between the Union and the multiemployer association, of which Respondent was a member, contained a valid union dues-checkoff provision. Respondent, in unlawfully refusing to sign and abide by the terms of the negotiated contract, may have failed to deduct the dues of employees who had authorized such action. We find that any failure on the part of Respondent to deduct the dues was, under these circumstances, a violation of Sec. 8(aXS) and (1) of the Act. Thus, we adopt the Administrative Law Judge's recommendation that, as part of the remedy for Respondent's unfair labor practices, Respondent be ordered to pay the Union for any loss of dues suffered as a result of its failure to comply with the collective-bargaining agreement. In doing so, however, we note that the Administrative Law Judge failed to include such a provision in the recommended Order. Accordingly, we shall modify the Order to provide for the payment of dues to the Union as required under the checkoff provision of the contract. We also note that the Administrative Law Judge failed to provide in his remedy-though he did include such a provision in his recommended Order-that Respondent make those health, welfare, pension, and other payments on behalf of unit employees it was obligated to make under the provisions of the 1978 contract which it unlawfully refused to sign. We therefore modify the remedy to require such payments. However, because the provisions of employee benefit fund agreements are variable and complex, the Board does not provide at the adjudicatory stage of a proceeding for the addition of interest at a fixed rate on unlawfully withheld fund payments. We leave to the compliance stage the cjestion whether Respondent must pay any additional amounts into the benefit funds in order to satisfy our "make- whole" remedy. These additional amounts may be determined, depending upon the circumstances of each case, by reference to provisions in the documents governing the funds at issue and, where there are no governing provisions, to evidence of any loss directly attributable to the unlawful withholding action, which might include the loss of return on investment of the portion of funds withheld, additional administrative costs, etc., but not collateral losses. Merryweather Optical Company, 240 NLRB 1213 (1979). APPENDIX NOTICE To EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government After a hearing at which all parties participated and were given the opportunity to call, examine, and cross- examine witnesses, it has been found that we have violated the National Labor Relations Act in certain respects. We have been ordered to stop such activity, and to post this notice and to abide by its terms. WE WILL NOT refuse to bargain with Local 40, Heat and Frost Insulators and Asbestos Workers, AFL-CIO, by refusing to sign and implement the 1978-80 contract between that Union and the employer-members of the Insulation Contractors Association of Albany. WE WILL NOT in any like or related manner interfere with, restrain, or coerce our employees in the exercise of the rights guaranteed them by Section 7 of the National Labor Relations Act, as amended. WE WILL forthwith sign and implement the above-mentioned contract and give retroactive effect thereto from July 1, 1978. WE WILL make whole any of our employees in the bargaining unit for any loss of pay or other 626 J. F. SWICK INSULATION CO. employment benefits that they may have suffered, and the Union for any loss of dues suffered, by reason of our refusal to sign and implement the aforesaid collective-bargaining agreement, plus interest. WE WILL make those health, welfare, pension, and other payments on behalf of our employees which we were obligated to make pursuant to the provisions of the aforesaid contract. J. F. SWICK INSULATION CO., INC. DECISION STATEMENT OF THE CASE JAMES L. ROSE, Administrative Law Judge: This matter was heard before me in Albany, New York, on July 2 and 3, 1979, upon the General Counsel's complaint which alleges generally that Respondent violated Section 8(aX5) of the National Labor Relations Act, as amended, 29 U.S.C. § 151, et seq.. by attempting, untimely, to withdraw from a multiemployer association of which it has been a member. Respondent generally denies that it engaged in any violations of the Act, and affirmatively contends that it was privileged to withdraw from the multiemployer association, that the Charging Party knew of and acquiesced in Respon- dent's withdrawal from the association, and that, in any event, if its withdrawal from the association was violative of the Act, such occurred more than 6 months prior to the filing of the charge herein and is barred by Section 10(b) of the Act. Upon the record as a whole, including my observation of witnesses, briefs, and arguments of counsel, I hereby make the following: FINDINGS OF FACT AND CONCLUSIONS OF LAW I. JURISDICTION Respondent, J. F. Swick Insulation Co., Inc., is a New York corporation engaged as an insulation contractor in the insulation of pipes, boilers, breechings, tanks, and equipment and related products. During the year preceding the issuance of the complaint herein, Respondent, in the course and conduct of its business, derived gross revenues in excess of $50,000 from services rendered to other enterprises which are directly engaged in interstate commerce and/or from services it rendered directly outside the State of New York. Respondent admits, and I find, that at all times material herein it has been an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act. ' Finding that Respondent was and continues to be a member of the Association is the principal issue in the matter and will of course be discussed in more detail below. I This figure is taken from the testimony of Swick. No documentation was offered concerning the precise amount of the delinquency; however the Union's business agent testified that the delinquency exceeded Respondent's bond of 5.000. Thus I conclude that the delinquency was in the range as testified to by Swick, the precise amount not being critical. II. THE LABOR ORGANIZATION INVOLVED Local 40, Heat and Frost Insulators and Asbestos Work- ers, AFL-CIO (herein the Union), is admitted to be, and I find is, a labor organization within the meaning of Section 2(5) of the Act. III. THE ALLEGED UNFAIR LABOR PRACTICES A. Background Facts Respondent has been in the insulation contracting busi- ness since October 1, 1965. From that time until it joined the Insulation Contractors Association of Albany (herein called the Association) in 1970, it had a verbal agreement with the Union. Thereafter, until the events involved in this matter, Respondent, acting through its president, Joseph Swick, participated in the business of the Association, which was primarily to deal with the Union with regard to negotiation and enforcement of collective-bargaining agreements. According to Swick, in 1970 the members of the Associa- tion were Johns-Manville, Armstrong Cork, Robert A. Keasbey Company, and Tri-City Insulation. Subsequent to 1970, Armstrong ceased doing business in the Albany area and Tri-City Insulation was absorbed by Tougher Industries. Thus, during 1978 the members of the Association were Johns-Manville, Robert A. Keasbey Co., Tougher Indus- tries, and Respondent.' The members of the Association and the Union have been parties to a number of collective-bargaining agreements the next to the last of which was entered into on July 14, 1975, effective through June 30, 1978. The current contract was entered into on July 24, 1978, effective through June 30, 1980. Among other things, the collective-bargaining agreements obligated each of the Association members, including Respondent, to make certain contributions to various trust funds, including a pension fund and a welfare fund. In 1977 Respondent became delinquent in payments to these funds in the amount of S1 1,000, which amount it ultimately paid. However, by May 1978 Respondent was again delinquent in payments to these funds by $6,700.' During the latter part of May or early June, Raymond Labonte, the Union's business agent, confronted Swick with the fact of this delinquency and demanded payment. Swick apparently paid $1,600 but as of June 3 he continued to owe something in excess of $5,000. Labonte met with Respondent's four union employ- ees and they determined to cease working for Respondent, e.g., go on strike, until Respondent made restitution to the funds. This fact was communicated to Swick and on Monday, June 5, 1978, Respondent's four union employees did not come to work.' On June 5 Swick contacted the president of the Associa- tion, Theodore Reith, the branch manager for the Robert A. Keasbey Co., and told him about the strike. During the The then in effect collective-bargaining agreement provided that: "There shall be no strike or lockouts for any reason during the life of this agreement." However. welfare and pension funds provide: "In addition to any other actions available to the Union against a defaulting Employer, the Union shall have the right to strike against any defaulting employer." 627 DECISIONS OF NATIONAL LABOR RELATIONS BOARD course of their conversation Reith advised Swick that he should not come to the contract negotiation session the Union and the Association had set for the next day presumably in view of these events. In March the Union had notified the Association that it wanted to negotiate a successor collective-bargaining agree- ment. Preparatory to negotiations Swick and other represen- tatives of the Association met on three occasions in March and April to discuss bargaining strategy. Among other things, Swick contended that the Association should take the position that there be no increases in wages or fringe benefits in the successor contract, Swick maintaining that he was financially unable to meet any increases. In any event, Swick participated in the prenegotiation meetings but at Reith's suggestion did not attend the first meeting with the Union on June 6, nor did he attend any subsequent bargaining sessions. At the first meeting Labonte asked where Swick was, and was told by Reith that he was not there. Apparently nothing more was said between the Union and other members of the Association concerning Swick or his absence from the meetings. Specifically, there was no suggestion that Swick had withdrawn from the Association. Unable to reach an agreement, the Union commenced striking the Association on July I and continued to strike until the contract was finally presented to and ratified by the members in late July, the contract being executed on July 24. Shortly following execution of the contract, Reith called Swick and told him what the terms of the agreement were. Then much later, in late November, presumably after Swick finally made restitution to the funds, Labonte called him and asked if he wanted to employ any of the Union's people and if he wanted to sign the contract. At that time Swick told him that he had some objections to the contract. A meeting was discussed but apparently never held. In fact, Swick has not become a party to the contract and has not abided by its terms and conditions. Swick contends that on June 30 he caused a letter to be delivered to the Association in which he stated, inter alia: Please be advised that J. F. Swick Insulation Co., Inc., hereby withdraws membership in the Insulation Con- tractors Association of Albany, effective immediately. He testified that he directed his secretary, Pat Mosely, to deliver it on June 30. However, the letter was date-stamped as received by Reith's company on July 31, and he subsequently had copies sent to other members of the Association. B. Analysis and Concluding Findings At the outset it should be noted that this matter involves not what Swick could legally have done, but what he in fact did do and when. Thus, the fundamental fact question here concerns when Swick attempted to withdraw from the Association and the circumstances attendant at that time. And from this follow the legal conclusions. What he might have done at other times forms the basic areas of defense, but is really immaterial. From all the credible evidence I find that Swick did not attempt to withdraw from the Association nor communicate an interest in doing so until late July, following agreement on a new contract between the Association and the Union. I simply do not believe Swick's assertion that his lawyer drafted the letter of withdrawal in late June which he signed on June 30 and had his secretary deliver to Reith on that day. First, I found Swick's demeanor to be negative and his testimony evasive. Second, Reith, who has no apparent stake in the outcome of this proceeding, credibly testified that he first received the letter at his office and that, as a matter of corporate practice, the letter was date-stamped July 31. It is thus substantially probable that the letter was in fact delivered or sent to the Association's president and received by him on July 31 rather than on or about June 30. Third, Swick testified that his secretary typed the letter and was instructed to deliver it. She is still an employee of Respon- dent but was not called to testify in this matter. From this failure I can and do draw the adverse inference that her testimony would not support the assertions of Swick. Finally, Swick testified, with regard to this very matter, "I guess I seemed to have misplaced the file and this [copies of correspondence relating to his purported withdrawal from the Association] was in the file." Misplacing a file, thus allowing for reliance on memory, is too convenient to be credible. On the other hand it is consistent with Swick's acts throughout this matter that he would not in fact have determined to withdraw from the Association until told by Reith the terms and conditions of the new contract. By Swick's admission, his talk with Reith occurred sometime shortly after the parties agreed to the contract on July 24. From all these factors I conclude that Swick first attempted to withdraw from the Association in late July 1978, and this determination was first communicated to the Association on July 31. Swick never personally communicat- ed his determination to the Union, and there is no evidence in this record that the Union ever consented to or acquiesced in Swick's attempted withdrawal from the Association on July 3 1. Respondent argues that Swick withdrew from the Associ- ation on June 5 and this was communicated to the Association and to the Union when he did not appear for the negotiation session on June 6. Respondent also argues that Swick was privileged to withdraw from the Association at that time because the Union had engaged in a strike in breach of the current collective-bargaining agreement. While the legality of the Union's strike may be arguable (though I think permissible when one considers the language in the trust documents notwithstanding the prohibitory language in the contract itself) such is immaterial here. Swick in fact did not withdraw or attempt to withdraw from the Associa- tion following the strike. Nor can his absence from the negotiation session on June 6 be construed as tantamount to withdrawal. Indeed, he was instructed by the president of the Association not to attend the negotiation session presum- ably in view of his trust fund delinquency and the strike action by the Union. Multiemployer bargaining is common. Although it is not statutorily recognized, the Board concluded early on that all 628 J. F. SWICK INSULATION CO. parties could consent to bargaining on a multiemployer basis.' Subsequently, the Board set rules concerning whether and to what extent an employer or union might withdraw from an established multiemployer bargaining arrangement.' In essence, the Board has held that, prior to the beginning of negotiations, either a union or an employer member might withdraw its consent upon giving adequate, unequivocal, written notice of its intention to do so. However, once negotiations have begun,' then neither a member-employer nor the union can withdraw without the consent of the other party, except in the event of "unusual circumstances." There have followed a number of cases dealing with the question of what constitutes "unusual circumstances." The major thrust of Respondent's argument here is that unusual circumstances existed which would permit Respon- dent unilaterally to withdraw from the Association even following the commencement of negotiations for a new collective-bargaining agreement. The unusual circumstance contended by Respondent is its unfavorable financial situa- tion, as demonstrated by its delinquency in payments to the fringe benefit funds and Swick's desire that any new agreement hold the line on wages and fringe benefits. The fact that Respondent was in arrears on payments to the fringe benefit funds does not prove a detrimental financial position. Nor is there any independent evidence other than the vague assertions by Swick, which I generally discredit, to the effect that he was having financial difficul- ties in 1978. The fact of the matter is that in late 1978 Swick in fact paid into the funds the amount of his delinquencies. While a deteriorating financial condition which threatens the very existence of the member of a multiemployer bargaining association may be such a circumstance as to warrant its withdrawal, ' I conclude that this has not been established by sufficient credible evidence. Nor is the fact that the Union engaged in a strike against Swick on June 5 a circumstance which would justify withdrawal from the bargaining association. Indeed, the Union struck the remaining members of the Association 3 weeks later, and, in any event, a strike against one association member during the course of negotiations has never been considered sufficient justification to withdraw unilaterally from multiemployer bargaining. Respondent contends that the strike was in effect an impasse and that an impasse in negotiations is a sufficient unusual circumstance to justify withdrawal. While five circuits have in fact adopted this position,' suffice it to say that the Board has never acquiesced in these determinations by the circuit courts and has never held that an impasse in and of itself is a sufficient unusual circumstance to justify withdrawal from a multiemployer bargaining association. In any event, the strike of June 5 was not tantamount to impasse; nor is there evidence that impasse ever occurred during the course of ' Shipowners'Association of the Pacific Coast. 7 NLRB 1002 (1938). 'See RetailAssociales Inc., 120 NLRB 388 (1958). ' Even accepting Swick's assertion concerning his attempted withdrawal, such occurred on June 30, after negotiations began but less than 6 months before the charge was filed on December 28. However, as found above, I do not believe he ever attempted to withdraw until late July, which was well within the 10(b) period, as was his subsequent refusal to abide by the contract. 'See Hi-Way Billboards Inc., 206 NLRB 22 (1973). ' The Second Circuit in N.L.R.B. v. Independent Association of Steel Fabricators, Inc., 582 F.2d 135 (2d Cir. 1978), cert. denied 439 US. 1130 negotiations even though in order to force its bargaining position the Union did determine to strike as of July I rather than work without a contract. There is no showing that after July I negotiations between the Union and the Association would have been unproductive. Indeed, they were produc- tive, and within about 3 weeks the parties had reached an agreement. The history of bargaining, so far as this record indicates, does not establish that an impasse ever existed. I therefore conclude, based upon the credible evidence of record, that only after negotiations for a new collective- bargaining agreement had commenced did Swick attempt to withdraw from the Association, that such attempt was "untimely and therefore ineffectual to relieve him from the obligations of any agreement that [was] ultimately reached,"' and that to remedy this is not barred by Section 10(b). Further, I conclude that Respondent's attempted with- drawal from the Association was not with the consent, express or implied, or acquiescence of the Union. Finally, I conclude that there were no special circum- stances here to justify Respondent's untimely attempt to withdraw from the Association. Accordingly, I conclude that, by refusing to execute and abide by the collective- bargaining agreement negotiated on its behalf by the Association, Respondent has breached its bargaining obliga- tions in violation of Section 8(a)(5) of the Act. I further conclude that at all material times herein the Union represented a majority of the employees of Respon- dent as well as of all of the Association members in a unit appropriate for purposes of collective bargaining within the meaning of Section 9(b) of the Act as follows: All mechanics and apprentices performing insulation construction work as defined in article X of the collective-bargaining agreement between the Associa- tion and the Union within the geographical jurisdiction of the Union who are employed by the employer- members of the Association, including the Respondent, excluding all office clerical employees, all professional employees, guards and supervisors as defined in the Act, and all other employees. The fact that the union members withdrew their services from Respondent on June 5 pending payment by Swick of the delinquencies to the fringe benefit funds does not alter the Union's status as majority representative of Swick's employees in the appropriate bargaining unit. IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The activities of Respondent set forth above, occurring in connection with its operations, have a close, intimate, and substantial relationship to trade, traffic, and commerce (197q); the Third Circuit in N.L.R.B. v. Beck Engraving Co., Inc., 522 F.2d 475 (3d Cir. 1975); the Fifth Circuit in N.L.R.B. v. Hi-Way Billboards. Inc.. 500 F.2d 181 (5th Cir 1974); the Eighth Circuit in Fairmont Foods Co. v. N.L.R.B.. 571 F.2d 1170(8th Cir. 1972); and the Ninth Circuit in N.L.R.B. v. Associated Shower Door Co.. Inc., 512 F.2d 230 (9th Cir. 1975). In brief, the circuit courts reason that, absent allowing an employer to withdraw after impasse, the union would have two economic weapons (the selective strike and individual negotiations) whereas the employer would have one (the lock- out), and such a situation is not equitable. NL.R.B. v. John J. Corbetr Press. Inc.. 401 F.2d 673, 675 (2d Cir. 1968). 629 DECISIONS OF NATIONAL LABOR RELATIONS BOARD among the several States and tend to lead to labor disputes burdening and obstructing commerce and the free flow of commerce. V. THE REMEDY Having found that Respondent has engaged in certain unfair labor practices, I will recommend that it cease and desist therefrom and take certain affirmative action neces- sary to effectuate the policies of the Act. In this connection, Respondent should immediately sign and implement the agreement reached between the Union and the Association retroactive to July 1, 1978, making its employees whole for any loss of earnings, and the Union for any loss of dues, suffered as a result of its failure to comply with the agreement, with interest only upon loss of wages and union dues, if any, which Respondent failed to withhold from employees' wages in violation of the collective-bargaining agreements as provided for in Florida Steel Corporation, 231 NLRB 651 (1977).' Upon the foregoing findings of fact, conclusions of law, and the entire record in this matter, and pursuant to Section 10(c) of the Act, I hereby issue the following recommended: ORDER" The Respondent, J. F. Swick Insulation Co., Inc., Delmar, New York, its officers, agents, successors, and assigns, shall: I. Cease and desist from: (a) Failing or refusing to sign and give full effect to the agreement executed on July 24, 1978, between the Insulation Contractors Association of Albany and Local 40, Heat and Frost Insulators and Asbestos Workers, AFL-CIO. (b) Failing or refusing, upon request, to bargain collective- ly with the above-named labor organization as the exclusive collective-bargaining representative of its employees in the above-described appropriate unit. o See, generally, Isis Plumbing Heating Co.. 138 NLRB 716 (1962), and Fitzpatrick Elecric. Inc., 242 NLRB 739 (1979). " 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 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. (c) In any like or related manner interfering with, restraining, or coercing employees in the exercise of the rights guaranteed them by Section 7 of the Act. 2. Take the following affirmative action: (a) Forthwith sign and implement the agreement executed on July 24, 1978, between the Association and the Union insofar as it applies to employees of Respondent in the above-described bargaining unit. (b) Upon execution of the foregoing agreement, give it retroactive effect to July 1, 1978, and make such health, welfare, pension, and other payments on behalf of those employees in the above unit for whom such contributions would have been made had Respondent not unlawfully repudiated the said collective-bargaining agreement, and make the employees whole for any loss of wages and benefits, with interest on lost wages and nonwithheld union dues, as provided for in the remedy section above. (c) Preserve and, upon request, make available to the Board or its agents, for examination or copying, all payroll records, social security payment records, timecards, person- nel records and reports, and all other records necessary to analyze the backpay due under the terms of this Order. (d) Post at its place of business in Albany, New York, copies of the attached notices marked "Appendix."" Copies of said notice, on forms provided by the Regional Director for Region 3, after being duly signed by Respondent's representative, shall be posted by Respondent immediately upon receipt thereof, and be maintained by it fr 60 consecutive days thereafter, in conspicuous places, including all places where notices to employees are customarily posted. Reasonable steps shall be taken by Respondent to insure that said notices are not altered, defaced, or covered by any other material. (e) Notify the Regional Director for Region 3, in writing, within 20 days from the date of this Order, what steps Respondent has taken to comply herewith. " In the event that this Order is enforced by a Judgment of a United States Court of Appeals, the words in the notice reading "Posted by Order of the National Labor Relations Board" shall read "Posted Pursuant to a Judgment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board." 630 Copy with citationCopy as parenthetical citation