Maraldo Asphalt Paving, Inc.

National Labor Relations Board - Board Decisions

Feb 15, 1985

274 N.L.R.B. 98 (N.L.R.B. 1985)

98 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Maraldo Asphalt Paving, Inc. and Local 324, Inter-
national Union of Operating Engineers, AFL-
CIO. Case 7-CA-18836
15 Febuary 1985
ORDER DENYING MOTION
BY CHAIRMAN DOTSON AND MEMBERS
HUNTER AND DENNIS
On 20 April 1982 the National Labor Relations
Board issued a Decision and Order' in this pro-
ceeding in which the Board found that the Re-
spondent violated Section 8(a)(5) and (1) of the Act
by unilaterally ceasing to make payments to the
Operating Engineers Fringe Benefit Fund as re-
quired by the parties' collective-bargaining agree-
ment. On 9 November 1982 the United States
Court of Appeals for the Sixth Circuit entered its
judgment enforcing the Board's Order.2
A controversy having arisen over the amount of
fringe benefit contributions due under the Board's
Order, as enforced by the court, the Regional Di-
rector for Region 7, on 30 April 1984, issued and
duly served on the Respondent a backpay specifi-
cation and notice of hearing alleging the amount of
payments due the Operating Engineers Fringe Ben-
efit Fund, and notifying the Respondent that it
should file a timely answer complying with the
Board's Rules and Regulations. The specification
alleges in part that the Respondent is liable for
fringe benefit contributions for the periods of June
through December 1982 and July through Septem-
ber 1983. The specification also states that the Re-
spondent filed for bankruptcy under Chapter 11 on
3 ,August 1983 (Case No. 83-03513-6) and asserts
that the fringe benefit contributions should be ac-
corded priority under the Bankruptcy Act. The
Respondent failed to file an answer to the backpay
specification.
On 22 May 1984 the Regional Attorney advised
the Respondent that it had not filed an answer to
the backpay specification and that unless it filed an
answer by 6 June 1984, a motion for default judg-
ment would be filed with the Board. The Respond-
ent did not file an answer.
On 12 July 1984 the General Counsel filed a
Motion for Default Judgment. On 17 July 1984 the
Board issued an order transferring the proceeding
to the Board and a Notice to Show Cause why the
motion should not be granted. The Respondent did
not file a response.
1 261 NLRB 225 (1982) Chairman Dotson did not participate in the
underlying case In light of the Respondent 's failure to file an answer in
that case , the Chairman regards the earlier proceeding as being essentially
a default judgment which is without precedential value
2 Enfd mem 708 F 2d 726 (1982)
Ruling on Motion for Default Judgment
In NLRB v. Bildisco & Bildisco, 104 S.Ct. 1188
(Feb. 22, 1984), the Supreme Court held that
"[fjrom the filing of a petition in bankruptcy until
formal acceptance, a collective-bargaining agree-
ment is not an enforceable contract within the
meaning of NLRA Sec. 8(d)." The Board applied
Bildisco in a summary judgment proceeding in
Earle Equipment Co., 270 NLRB 827 (1984). There,
the Board held that an investigation by the Region-
al Director into the circumstances surrounding the
filing of a bankruptcy petition was necessary even
though the respondent failed to file an answer to
the complaint. The record in that case revealed
that the respondent was a debtor in Chapter 11
proceedings, but there was no evidence as to the
date of the bankruptcy petition, the timing of the
alleged violations, or the respondent's and Bank-
ruptcy Court's treatment of the collective-bargain-
ing agreement. Similarly, in Princess Pastries, 271
NLRB 758 (1984), the Board remanded the pro-
ceeding for further investigation of the filing of the
bankruptcy petition and its effects on the collec-
tive-bargaining agreement.
In the present case the backpay specification
seeks payments to the Operating Engineers Fringe
Benefit Fund for the third and fourth quarters of
1982 and the third quarter of 1983. The specifica-
tion reveals that the Respondent filed a bankruptcy
petition under Chapter 11 on 3 August 1983, a date
arising in the third quarter of 1983. The General
Counsel's motion does not indicate whether or
when the Respondent formally accepted the collec-
tive-bargaining agreement after filing the petition
Further, the motion does not show whether the
Bankruptcy Court permitted the Respondent's re-
jection of the contract. In view of the bankruptcy
petition, the Respondent's liability for fringe benefit
payments during the third quarter of 1983 cannot
be determined on this record. Accordingly, we find
that in light of Bildisco further investigation into
the circumstances surrounding the filing of the
bankruptcy petition is necessary.3 We shall there-
fore deny the General Counsel's Motion for De-
fault Judgment and remand the case to the Region-
al Director.
ORDER
It is ordered that the General Counsel's Motion
for Default Judgment is denied.
IT IS FURTHER ORDERED that this case be re-
manded to the Regional Director for Region 7 for
further appropriate consistent action.
s See Edward Cooper Painting, 273 NLRB No 224 (Feb 12, 1985)
274 NLRB No. 18
MARALDO ASPHALT PAVING
MEMBER HUNTER, dissenting
Contrary to my colleagues, I would grant the
General Counsel's Motion for Default Judgment
and would order the Respondent to make whole
the employees by paying on their behalf to the var-
ious union trust funds the sums set forth in the
backpay specification.
In the underlying unfair labor practice proceed-
ing,' the Board on 20 April 1982 found that the
Respondent violated Section 8(a)(5) and (1) of the
Act since August 1980 by unilaterally ceasing to
make contractually required payments to the
Union's fringe benefit funds. Thereafter, on 9 No-
vember 1982 the United States Court of Appeals
for the Sixth Circuit enforced the Board's Order.'
On 30 April 1984 the Regional Director for Re-
gional 7 issued a backpay specification alleging that
the Respondent is liable for certain fringe benefit
payments for June through December 1982 and
July through September 1983. The backpay specifi-
cation also alleged that the Respondent filed a
Chapter 11 bankruptcy petition on 3 August 1983.
Subsequently, the Respondent having failed to file
an answer to the backpay specification, the General
Counsel filed a motion for default judgment. My
colleagues, noting that the backpay specification al-
leges that the Respondent is liable for fringe benefit
fund payments for August and September 1983
covering periods after the Respondent filed its
bankruptcy petition, and relying on NLRB v. Bil-
disco,3 deny the General Counsel 's motion and
remand this proceeding to the Regional Director
for further investigation of the circumstances sur-
rounding the filing of the bankruptcy petition.
For the reasons fully explicated in my dissent in
Edward Cooper Painting, 273 NLRB No. 224 (Feb.
12, 1985), I would grant the General Counsel's
1 261 NLRB 225 (1982)
x Enfd mem 708 F 2d 726 (1982)
3 104 S Ct 1188 (1984)
99
Motion for Default Judgment . Thus, as more fully
stated in my dissent in that case, while Bildisco es-
tablishes some limitation on the Board 's jurisdiction
to adjudicate unfair labor practices which occur
after the date of the filing of the bankruptcy peti-
tion , it does not in my view establish a limitation
on the Board ' s authority to adjudicate prepetition
unfair labor practices . I further stated that , while a
remedial award in cases involving prepetition
unfair labor practices ultimately may become a
monetary claim against a debtor 's estate subject to
a determination of allowability by the bankruptcy
court , it is appropriate for the Board to issue a
remedy in such cases since the remedy is aimed at
rectifying past violations and there is no reason to
cut off the Board 's normal remedy as of the date of
the filing of the bankruptcy petition .4 Accordingly,
and since the violations found against the Respond-
ent here occurred prior to the filing of the bank-
ruptcy petition , I see no basis for remanding this
proceeding for further investigation into the cir-
cumstances surrounding the filing of the bankrupt-
cy petition .5 Rather, contrary to my colleagues, I
would grant the General Counsel ' s Motion for De-
fault Judgment and would find the Respondent
liable for the sums set forth in the backpay specifi-
cation . I therefore dissent.
4 Furthermore , as noted above , the court of appeals previously has en-
forced the Board's Order in the underlying unfair labor practice proceed-
ing and thereby has determined that a make-whole remedy is appropriate
The Board has not moved the court of appeals to remand the unfair labor
practice proceeding for reconsideration of the remedy Accordingly, to
the extent that my colleagues ' remand of this backpay proceeding ulti-
mately may result in cutting off the make -whole remedy, my colleagues
are dealing with matters which lie within the court's , not the Board's, ju-
risdiction
5 The cases relied on by my colleagues and in which I participated are
inapposite to the present case Thus , in Earle Equipment Co, 270 NLRB
827 (1984), there was no indication as to whether the alleged violations
occurred before or after the date of the filing of the petition for bank-
ruptcy and Princess Pastries, 271 NLRB 758 (1984), involved inter alia a
violation which allegedly occurred after the filing of the pe t ition for
bankruptcy