Knuth Bros., Inc.

National Labor Relations Board - Board Decisions

Jun 3, 1977

229 N.L.R.B. 1204 (N.L.R.B. 1977)

DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Knuth Bros., Inc. and Milwaukee Printing Pressmen
and Assistants' Union No. 7. Case 30-CA-3108
June 3, 1977
DECISION AND ORDER
BY MEMBERS JENKINS, MURPHY, AND
WALTHER
Upon a charge filed on April 10, 1975, by
Milwaukee Printing Pressmen and Assistants' Union
No. 7, herein the Union, the General Counsel of the
National Labor Relations Board, by the Regional
Director for Region 30, issued a complaint and
notice of hearing on October 24, 1975, against Knuth
Bros., Inc., herein the Respondent. The complaint
alleged that the Respondent had engaged in, and was
engaging in, unfair labor practices within the
meaning of Section 8(a)(1) and (3) of the Act by
conduct hereinafter specified. Respondent filed an
answer in which it denied the commission of the
alleged unfair labor practices.
On December 31, 1975, the parties executed a
stipulation of facts by which the parties waived a
hearing before an Administrative Law Judge and
agreed to submit the case to the Board for findings of
fact, conclusions of law, and Decision and Order,
based on a record consisting of the stipulation of
facts and the exhibits attached thereto.
On January 22, 1976, the Board approved the
stipulation of the parties and ordered the case
transferred to the Board, granting permission for the
filing of briefs. Thereafter, both the General Counsel
and the Respondent filed 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.
Upon the basis of the stipulation, the briefs, and
the entire record in this case, the Board makes the
following:
FINDINGS OF FACT
I. JURISDICTION
Respondent is a Wisconsin corporation engaged in
the manufacture of business forms at a plant and
offices located in Brookfield, Wisconsin. During the
past calendar year, Respondent purchased and
received goods valued in excess of $50,000 directly
I The parties also stipulated that by letter dated July 1, 1975, the Union
announced that the strike was over effective June 27, 1975, and made an
unconditional offer to return to work on behalf of those employees who
were still on strike; that eight named striking employees made individual
offers to return to work between June 27 and July 9, 1975; that in July 1975
Respondent requested four named striking employees to advise it of their
229 NLRB No. 176
from suppliers located outside the State of Wiscon-
sin.
Respondent admits, and we find, that Respondent
is engaged in commerce and in operations affecting
commerce as defined in Section 2(6) and (7) of the
Act. We also find that it will effectuate the purposes
of the Act to assert jurisdiction herein.
II. THE LABOR ORGANIZATION
The Respondent admits, and we find, that the
Union is a labor organization as defined in Section
2(5) of the Act.
III. ISSUE
The issue herein is whether the Respondent
violated Section 8(a)(1) and (3) of the Act by denying
vacation benefits to striking employees.
IV. THE UNFAIR LABOR PRACTICES
A. Facts
The material facts show that the Union is the
certified bargaining representative of separate units
of the Respondent's pressmen and production
employees. In October 1974, 20 of the Respondent's
50 employees struck in support of the Union's
contract demands. All the strikers were replaced by
March 1, 1975. In either January or February of that
year the Union requested the Respondent to give the
strikers vacation pay earned during 1974 up to the
time they had walked out. The Respondent failed or
refused at that time or anytime thereafter to extend
any vacation benefits to the strikers, relying at all
times on its established vacation policy to justify its
conduct.'
Under the Respondent's vacation policy employees
receive vacation benefits computed as follows:
during the first year vacation credit is "accumulated
on the basis of one day for every 10 weeks of work,
not to exceed five days vacation"; in the 2d, 6th, and
15th years the length of the vacation increases
respectively to 2, 3, and 4 weeks. However, an
employee must be on the "active payroll" on March
I to be entitled to any vacation benefits for the
previous 12 months.2 The Respondent does not and
has not, as the parties stipulated, paid pro rata
vacation benefits to employees discharged or other-
wise terminated before the March 1 "accrual date."
It is agreed that in conformity with the provisions of
the policy-and quite apart from the strikers in-
interest in future employment and none of them responded: and that in July
1975 six named striking employees terminated their employment voluntari-
ly. We find that these additional facts have no bearing on the issue herein.
2 Employees on approved leave on March I are still eligible for vacation
benefits earned during the previous year when and if they return to work.
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KNUTH BROS., INC.
volved in this proceeding-employees terminated
before March I of any given year have been held
ineligible for vacation benefits for the previous 12-
month period.3
B. Discussion
The General Counsel contends that the Employer's
policy and practice of refusing and failing to give any
pro rata accrued vacation benefits to employees who
were on strike and had been permanently replaced as
of March 1, 1975, is inherently destructive of
employee rights, and in any case is violative of the
Act, citing N.L.R.B. v. Great Dane Trailers, Inc., 388
U.S. 26, 34 (1967).
The Respondent argues that its refusal to pay pro
rata vacation benefits to strikers who were perma-
nently replaced prior to March 1, 1975, the accrual
date under the Company's existing vacation pro-
gram, was not discriminatory for the reason that
Respondent's vacation program does not provide for
pro rata vacation benefits and Respondent has never
paid pro rata benefits. Moreover, Respondent argues,
permanently replaced strikers are not, as a matter of
law, entitled to pro rata vacation benefits, unless
such benefits are provided for nonstriking employees
who are not on the payroll on their vacation accrual
dates.
With respect to the contention that Respondent's
conduct violated Section 8(a)(3), there is no evidence
that the Respondent applied its established vacation
policy to the replaced strikers and thus refused their
request for vacation pay because they had engaged in
the strike. Consequently, as the replaced strikers were
treated in the same manner as other employees
terminated prior to March I of any given vacation
year and as there is no specific evidence of an intent
to discriminate against them because of their
engaging in the strike, we find that there is no basis
for holding that the Respondent violated that section
of the Act in denying the strikers any vacation
benefits for the vacation year ending March 1, 1975.
However, the record does fully demonstrate that
though the replaced strikers were not denied vaca-
tion benefits because of their protected concerted
3 We note that on different days in December 1974 strikers Don Weber
and Bernice Butz voluntarily terminated their employment.
4 We do not agree with our dissenting colleague that Respondent's
vacation policy being nondiscriminatory in its inception and application
was therefore a "legitimate and substantial business justification" for its
conduct within the meaning of the Supreme Court's opinion in N. LR.B. v.
Great Dane Trailers, Inc.. supra. Rather, to come within the intent of that
language the policy must serve some substantial consequential business or
economic purpose. However, there is in the record before us no evidence
that it was established to serve such purpose or that it in fact does so. As a
result, we see no merit in our colleague's claim that his position is supported
by the Court's Great Dane opinion.
I The Respondent cites N.L.R.B. v. Alamo Erpress, Inc., and Alamo
Cartage Companr, 420 F.2d 1216 (C.A. 5, 1969), and Glomac Plastics, Inc.,
activities, that is, the denial was not keyed uniquely
and purposely to those activities, they nevertheless
were denied such benefits as a consequence of their
having engaged in such lawful activities; that is, the
Respondent's vacation policy in effect provides that
an employee who engages in a lawful economic strike
loses his accumulated vacation pay if the Employer
chooses to replace him before March 1. The policy is,
thus, a clear threat of economic loss to employees for
engaging in protected concerted activities, and its
application to the replaced economic strikers in this
proceeding violated, we find, Section 8(a)(1) of the
Act.4
It is contended, however, that, as the Respondent
under its established policy did not pay pro rata
vacation benefits, the strikers had accumulated no
vacation benefits at the time they were replaced, and,
thus, being entitled to nothing, lost nothing with the
Respondent's refusal to pay them the demanded
benefits.
To be sure, the parties stipulated that the Respon-
dent has not paid pro rata vacation benefits, but in
the context here that stipulation clearly relates to the
policy and practice of not paying vacation benefits to
individuals who are off the active payroll at the close
of March I of the vacation year. The stipulation
supplies no support for the conclusion that an
employee does not accumulate vacation benefits for
time worked or is refused such benefits if he is on the
active payroll on March I but has not worked the full
vacation year. Rather, under the vacation policy, the
benefits specifically accumulate during the first year
of employment at the rate, as set forth above, of I
day of vacation for each 10 weeks worked. 5 Conse-
quently, we conclude that the replaced strikers were
denied vacation benefits not because they had not
accumulated such benefits during the 1974-75
vacation year, but solely because they were not on
the active payroll on March 1, 1975. Thus, the
Respondent's applying the "cut-off" provision to the
replaced strikers did result in their losing economic
benefits as a consequence of their engaging in
activity protected by the statute and, therefore, was
unlawful for the reasons stated above.6
194 NLRB 406 (1971), in support of its position. However, those cases are
not in point here, for, in both, employees had to work a full year to be
entitled to any vaction pay. See Alamo Express, supra at 1220, where the
court stated: "In this case, the Company's policy and practice do not
provide for vacation pay for any period short of a full year's employment."
The principle of those cases would have been applicable here if the replaced
strikers had worked less than 10 weeks during the relevant vacation year, for
then they indeed would have been entitled to no benefits and so would have
lost nothing in being denied any such benefits.
6 As employees Don Weber and Bernice Butz voluntarily quit their
employment in December 1974, their failure to qualify for vacation benefits
resulted from such action and was not a consequence of their having
engaged in a lawful strike. Thus, the refusal to pay them vacation benefits
was not unlawful.
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DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Having found that Respondent discriminatorily
withheld accrued vacation benefits from certain
employees who were on strike on March 1, 1975, we
shall require it to pay to each such employee the
vacation benefits so withheld. The amount due to
each such employee shall bear interest at the rate of 6
percent per annum from the date such vacation pay
was payable.
Respondent also shall, upon request, make avail-
able to the Board or its agents, for inspection and
reproduction, all books and records necessary or
helpful in computing the amount of vacation benefits
due.
Upon the basis of the foregoing findings of fact,
and upon the entire record in the case, we make the
following:
CONCLUSIONS OF LAW
1. Respondent is an employer within the meaning
of Section 2(2) of the Act, and is 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 benefits from its
striking employees, Respondent engaged in and is
engaging in unfair labor practices proscribed by
Section 8(a)(l) and (3) of the Act.
4. The aforesaid unfair labor practices affect
commerce within the meaning of Section 2(6) and (7)
of the Act.
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor
Relations Board hereby orders that the Respondent,
Knuth Bros., Inc., Brookfield, Wisconsin, its officers,
agents, successors, and assigns, shall:
1. Cease and desist from:
(a) Withholding vacation benefits from, or in any
other manner discriminating against, its employees in
regard to hire or tenure of employment, or any term
or condition of employment, to encourage or
discourage membership in any labor organization.
(b) In any other manner interfering with, restrain-
ing, or coercing its employees in the exercise of their
rights guaranteed by Section 7 of the Act.
2. Take the following affirmative action which
the Board finds is necessary to effectuate the policies
of the Act:
(a) Forthwith pay to Bill Gerloff, Michael Vilkoski,
Dan Perkins, Dennis Szymanski, Larry Beck, Law-
T 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
rence Steinacker, Melvin Wright, Chris Weber,
George Lucas, Frank Mollet, Doris Gazzana, Gary
Kohlman, Chuck Spransey, Beno Giombi, Dennis
Chiesa, Bob Mertens, Rich Rekowski, and Steve Hitz
vacation benefits due them for the year ending
March 1, 1975.
(b) Preserve and, upon request, make available to
the Board or its agents, for examination and copying,
all payroll records, social security payment records,
timecards, personnel records and reports, and all
other records necessary to deterime the identity of
the employees to whom vacation pay is due as
provided herein, and to analyze the amounts due.
(c) Post at its plant in Brookfield, Wisconsin,
copies of the attached notice marked "Appendix." 7
Copies of said notice, to be furnished by the
Regional Director for Region 30, after being duly
signed by its representative, shall be posted immedi-
ately upon receipt thereof, and be maintained by it
for 60 consecutive days thereafter, in conspicuous
places, including all places where notices to employ-
ees 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.
(d) Notify the Regional Director for Region 30, in
writing, within 20 days from the date of this Order,
what steps Respondent has taken to comply here-
with.
MEMBER WALTHER, dissenting:
I would find that Respondent's denial of vacation
benefits to striking employees is lawful under the
circumstances of this case. Accordingly, I dissent.
The Supreme Court has established the principles
by which, inter alia, the lawfulness of an employer's
denial of vacation benefits are to be measured in
N.L.R.B. v. Great Dane Trailers, Inc., 388 U.S. 26, 34
(1967). In that case the Court established two guiding
rules:
First, if it can reasonably be concluded that the
employer's discriminatory conduct was "inherent-
ly destructive" of important employee rights, no
proof of an antiunion motivation is needed and
the Board can find an unfair practice even if the
employer introduces evidence that the conduct
was motivated by business considerations. Sec-
ond, if the adverse effect of the discriminatory
conduct on employee rights is "comparatively
slight," an antiunion motivation must be proved
to sustain the charge if the employer has come
Judgment of the United States Court of Appeals enforcing an Order of the
National Labor Relations Board."
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KNUTH BROS., INC.
forward with evidence of legitimate and substan-
tial business justifications for the conduct.
The Court found that the employer in that case
violated the Act since the employer produced no
evidence of legitimate motives for its discriminatory
conduct.
We have applied the principles of Great Dane
Trailers in a case analogous to the instant matter. In
Glomac Plastics, Inc., 194 NLRB 406 (1971), the
employer had a policy of granting vacation benefits
only to employees who had worked a full 12 months
preceding May 30 of any given year. On April 20,
before the close of the vacation year, the employees
went on strike. The employer denied vacation pay to
the strikers. The Board adopted the Trial Examiner's
finding that the denial of a vacation pay to strikers
was not unlawful.
The decision in Glomac emphasized that the
withholding of vacation benefits from striking
employees in Great Dane Trailers was unlawful only
because those benefits had already accrued:
But in Great Dane Trailers the decisive fact was
that the rights of the strikers to vacation pay had
accrued before they went on strike, so that
denying such employees their accrued rights
(unless they abandoned the strike by a certain
date) necessarily constituted discrimination as
between them and the employees who had not
struck or who had returned to work, and violated
the statute as destructive of the rights of employ-
ees to strike regardless of the absence or proof of
a specific antiunion motivation. [194 NLRB at
412.1
The Board found that the strikers in Glomac were not
entitled to vacation benefits specifically because the
benefits had not accrued as of the time the employees
went on strike.
The principles in Great Dane Trailers and their
application in Glomac Plastics are dispositive of the
instant matter. As in Glomac, the Respondent in the
instant matter has a lawful nondiscriminatory policy
promulgated prior to the advent of union organiza-
* Since the policy is nondiscriminatory in its promulgation and effect. it
clearly is not "inherently destructive" of employee rights, the "first"
category established by the Supreme Court.
9 In attempting to distinguish the instant case from Glomac Plastics,
supra, and N.L.R.B. v. Alamo Express, Inc.. 420 F.2d 1216(C.A. 5, 1969), my
colleagues set forth what I consider to be a distinction without a difference.
In the two latter cases, employees accrued no vacation pay unless they
worked a full year prior to the accrual date, while here they accrue no
vacation pay unless they are on the active payroll on the accrual date. It is
true that Respondent's policy, being more liberal toward new employees,
provides that those with less than a year's service will accumulate vacation
credit at the rate of I day for each 10 weeks of work, but it is clear that such
provision pertains only to the method for calculating the amount of vacation
pay-not to its accrual. For, they also will accrue no vacation pay unless
they are on the accrual date's payroll.
tion requiring employees to be on the active payroll
as of a given date before vacation benefits accrue.
Here, as in Glomac, vacation benefits had not yet
accrued when the employees struck. The policy
applies to all employees whether they have quit, been
terminated, or are on strike on the designated date.
The striking employees were denied benefits for
failure to comply with this nondiscriminatory poli-
cy-not for engaging in protected strike activity.
My colleagues in the majority concede that
Respondent's policy was nondiscriminatory, and,
indeed, it was promulgated prior to the advent of
union organizational activity among Respondent's
employees. But, they then go on to maintain that
such policy was nevertheless unlawful because it had
the effect of denying vacation benefits to permanent-
ly replaced strikers as a "consequence" of their
lawful participation in strike activity. The simple
answer to that contention is that the principles set
down by the Court in Great Dane Trailers, supra,
sanction the Respondent's conduct herein provided
that legitimate and substantial business justifications
therefor are supplied and there is no evidence of
antiunion motivation. 8 Here, in my view, Respon-
dent's business justification is amply established by
uncontroverted evidence that-even before the ad-
vent of the Union-it has consistently maintained
and applied its vacation accrual policy in a nondis-
criminatory manner. And Respondent's lack of
antiunion motivation in this regard is conceded.
My colleagues further contend that the Respon-
dent unlawfully denied pro rata vacation benefits not
because they had not accumulated but rather
because the striking employees were not on the active
payroll on the accrual date. Application of the
accrual date, the majority argues, had the effect of
discriminating against employees for engaging in
protected activity. Again, the simple reply is that the
Respondent has supplied a substantial business
justification-application of its lawful nondiscrimi-
natory policy-for denying the vacation benefits to
the strikers.9
I would find that the Respondent's denial of
vacation benefits to the employees herein is not
I disagree with the contention of my colleagues that the Respondent's
vacation policy does not serve "some substantial consequential business or
economic purpose." Given the context of modern American industrial
society, I view it as self-evident that the vacation policy of an employer-if
nondiscrnminatory and promulgated in the regular course of its business-
serves just such a purpose. For, the legitimate business and economic
purpose involved in the establishment of coherent vacation policies is
universally recognized as an inherent ingredient in the overall personnel
practices of most business organizations in this country. If, however, my
colleagues are contending that the particular vacation policy herein can only
be justified on the basis of record evidence establishing a quantifiable
business or economic effect upon Respondent's operations, then, I believe,
they are seeking to intrude upon an area of business judgment which, in the
circumstances of this case, is beyond the purview of this Board's authority.
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DECISIONS OF NATIONAL LABOR RELATIONS BOARD
violative of the Act and therefore I would dismiss the
complaint in its entirety.
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 benefits from,
or in any other manner discriminate against, our
employees in regard to hire or tenure of employ-
ment, or any term or condition of employment, to
encourage or discourage membership in any
union.
WE WILL NOTin any other 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
purposes of collective bargaining or other mutual
aid or protection, or to refrain from any or all
such activities.
WE WILL forthwith pay to Bill Gerloff, Michael
Vilkoski, Dan Perkins, Dennis Szymanski, Larry
Beck, Lawrence Steinacker, Melvin Wright, Chris
Weber, George Lucas, Frank Mollet, Doris
Gazzana, Gary Kohlman, Chuck Spransey, Beno
Giombi, Dennis Chiesa, Bob Mertens, Rick
Rekowski, and Steve Hitz vacation benefits due
them for the year ending March 1, 1975, with
interest thereon at the rate of 6 percent per
annum.
KNUTH BROS., INC.
1208