Motor Car Dealer Association of Greater Kansas City

National Labor Relations Board - Board Decisions

Aug 31, 1976

225 N.L.R.B. 1110 (N.L.R.B. 1976)

1110 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Motor Car Dealers Association of Greater Kansas
City and Teamsters Local No. 552, affiliated with
the International Brotherhood of Teamsters , Chauf-
feurs, Warehousemen and Helpers of America and
District Lodge No. 71, International Association of
Machinists and Aerospace Workers, AFL-CIO
(Jointly). Case 17-CA-6860
August 31, 1976
DECISION AND ORDER
By CHAIRMAN MURPHY AND MEMBERS FANNING
AND PENELLO
On April 20, 1976, Administrative Law Judge
James L. Rose issued the attached Decision in this
proceeding. Thereafter, the General Counsel filed ex-
ceptions and a supporting brief, and Respondent
filed a brief in support of the Administrative Law
Judge's Decision.
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 au-
thority in this proceeding to a three-member panel.
The Board has considered the record and the at-
tached Decision in light of the exceptions and briefs
and has decided to affirm the rulings, findings, and
conclusions of the Administrative Law Judge to
adopt his recommended Order.
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor Re-
lations Board adopts as its Order the recommended
Order of the Administrative Law Judge and hereby
orders that the complaint be, and it hereby is, dis-
missed in its entirety.
DECISION
STATEMENT OF THE CASE
JAMES L. ROSE, Administrative Law Judge: This matter
came on for hearing at Kansas City, Kansas, on February
26, 1976, upon the Regional Director's complaint alleging,
in general terms, that Motor Car Dealers Association of
Greater Kansas City had breached its obligations to bar-
gain in good faith in violation of Section 8(a)(5) of the
National Labor Relations Act, as amended, 29 US C.
§ 151, et seq by: (a) unilaterally changing a term or condi-
tion of employment during the existence of a collective-
bargaining relationship; and (b) having agreed to a partic-
ular contract clause during negotiations, reneging on that
agreement.
Upon the record as a whole, including my observation of
the one witness who testified, arguments and briefs of
counsel, I make the following-
FINDINGS OF FACT I
1. JURISDICTION
The Motor Car Dealers Association of Greater Kansas
City is a trade association whose members include many, if
not most, of the new- and used-car dealers operating in the
greater Kansas City area. Among other things, the Associa-
tion handles collective-bargaining negotiations on behalf
of its members through its Labor Committee; however, it
does not appear that bargaining is on a multiemployer ba-
sis. Rather, the Respondent contends, and the record sug-
gests, that the Labor Committee simply acts as a bargain-
ing agent for those who wish to have it do so, which does
not include all of the Association members. In any event,
the Labor Committee has represented members of the As-
sociation in collective bargaining for a number of years. I
find therefore that the Association is an employer within
the meaning of Section 2(2) of the Act because it is a per-
son within the meaning of Section 2(1) which acts as an
agent for employers.
The Respondent admits, and I find, that Association
members together have gross sales in excess of $500,000
annually and receive goods, products, and materials origi-
nating outside the States of Missouri and Kansas in excess
of $50,000 annually. I accordingly find that the Respon-
dent is an employer engaged in commerce within the
meaning of Section 2(2), (6), and (7) of the Act.
At the hearing, the Respondent's counsel "appeared spe-
cially" and argued that the Association was not a proper
party. Counsel take the position that the appropriate par-
ties to this proceeding would be the individual employers
who actually sign contracts with the Unions in question.
The General Counsel, on the other hand, did not wish to
amend the complaint to include as parties to respondent
any of the individual employers. He further stated that the
remedial order sought would run only to the Association.
The Association, as an employer and as the bargaining
agent for its members, is clearly an appropriate party to
this proceeding, e.g., Southwestern Colorado Contractors As-
sociation and its Members, 153 NLRB 1141 (1965), enfd.
N L R.B v. Southwestern Colorado Contractors Association,
379 F.2d 360 (C.A. 10, 1967).
Whether a remedial order, however, could be directed
against any of the Association members who were not
named as respondents nor given notice and an opportunity
to appear at the hearing is doubtful Cab Service and Parts
Corporation and Checker Motor Sales Corporation, Subsid-
iaries of Checker Motors Corporation, 207 NLRB 217
(1973). This, however, need not be decided in view of the
General Counsel's determination not to seek a remedial
1 At the close of the General Counsel's case, the Respondent moved to
dismiss, which motion was taken under advisement, and is hereby denied
The issue for decision is whether the General Counsel has proved the allega-
tions in the complaint, not whether, resolving all inferences in favor of the
General Counsel, a prima facie case has been made The facts, however, are
undisputed, the Respondent having rested without calling any witnesses
225 NLRB No. 168
MOTOR CAR DEALERS ASSN.
order running to any of the employer-members of the As-
sociation and in view of my findings, infra, recommending
that the complaint be dismissed in its entirety.
II. THE LABOR ORGANIZATIONS INVOLVED
Teamsters Local No 552, affiliated with the Internation-
al Brotherhood of Teamsters, Chauffeurs, Warehousemen
and Helpers of America and District Lodge No 71, Inter-
national Association of Machinists and Aerospace Work-
ers, AFL-CIO, jointly bargain with the Association on be-
half of their respective members In addition, Teamsters
Local No. 552 represented, in the negotiations here, mem-
bers of Teamsters Local No. 498, affiliated with the Inter-
national Brotherhood of Teamsters, Chauffeurs, Ware-
housemen and Helpers of America.
The Respondent admits, and I find, that the Charging
Parties as well as Teamsters Local 498 are labor organiza-
tions within the meaning of Section 2(5) of the Act.
III. THE ALLEGED UNFAIR LABOR PRACTICES
The Labor Committee of the Association has negotiated
with the Unions on behalf of its members for a number of
years, and contracts have been executed. The most recent
contract by its terms was effective from on or about Octo-
ber 19, 1972, through October 18, 1975. In early September
1975, the Labor Committee and representatives of the
Charging Parties met to negotiate a new collective-bargain-
ing agreement, with the Labor Committee submitting the
names of 48 employers on whose behalf it was negotiating.
In the 1972-75 agreement, article 18:00 deals with health
and welfare benefits. Specifically, paragraph 18:01, in per-
tinent part, states:
Effective November 1, 1972, and for the duration of
this Agreement, the Employer agrees to pay into a
Trust Fund designated Motor Car Dealers Associa-
tion of Greater Kansas City Health and Welfare
Fund, a sum sufficient to pay for the continuance of
all benefits provided by the 1969-72 Agreement, plus
the changes enumerated hereafter .. .
Article 18:02 sets forth nine separate items of medical
coverage, and in addition states in pertinent part:
The 1969-72 Insurance plus changes # 4, 5, 6, 7, 8,
and 9 shown above for dependents of employees
working in classifications covered by this Agreement
will be available to said employees at a sum of no
more than $7.64 per week.
Thus, each employer agreed to pay for certain enumerat-
ed health and welfare coverage for its employees, which
was a continuation of the past practice, though the cover-
age limits had changed. In addition, each employer agreed
to make the same coverage available to dependents
through the trust, but the employee would have to pay for
the dependent coverage. By the contract's literal terms, the
employers also agreed that the cost for dependent coverage
would be no more than $7.64 per week or $33.10 per
month.
During negotiations, the Labor Committee submitted a
proposed increase in the health and welfare coverage, with
an attendant increase in cost per month-from $21.75 to
$32 per month for employees and from $32.50 to $49.65
per month for dependents. The union negotiators asked if
the companies would agree to pay the cost of covering de-
pendents, to which the Association said no. The Associa-
tion argued that, as only about 50 percent of the employees
opted for dependent coverage, the cost to the companies
would outweigh the benefit to the employees.
On consideration, the Unions determined to take the ad-
ditional money reflected by the increased coverage, which
amounted to approximately 6 cents an hour, and move it
into pension benefits. This was done with the parties reach-
ing a final agreement whereby, in the second and third
years of the contract, an additional nickel per hour per
employee would go into the pension fund.
Prior to the expiration of the 1972-75 contract and dur-
ing negotiations, the parties signed an agreement extending
the 1972-75 contract through midnight October 26, 1975.
Then the parties had two final bargaining sessions, one
on October 22 and the other on October 24. It was at the
October 24 session that they reached a final tentative
agreement, remaining only for the Unions to seek ratifica-
tion from their membership.
Sometime during that week, either at the October 22 or
24 meeting, Richard C. Shull, the chairman of the Labor
Committee and the Association's principal spokesman, was
advised by the Association's executive vice president that
effective November 1 the cost of health and welfare insur-
ance,2 both to employers and to employees having depen-
dent coverage, would be increased due to the unfavorable
experience the previous year. Neither Shull, nor apparently
anyone else on behalf of the Association, commented to
the Unions about this increased cost for the same coverage
as outlined in the 1972-75 contract.
On Sunday, October 26, John Hams, a representa-
tive of the Machinists, called Shull to say that his members
had ratified the agreement.
On October 27, the Association put out an information
sheet to its members which included the material provi-
sions of the new contract, particularly including the pay
rates, hours, jury pay, and the like. Included in this infor-
mation sheet was a statement to the effect that effective
November 1, 1975, the new monthly health and welfare
cost for employees would be $25.50 (up from $21.75) and
the new monthly cost for dependents would be $42.20 (up
from $32.50).
J. B. McGinness, a representative of Teamsters Local
No. 552 and apparently the principal spokesman for the
Unions, called Shull on Tuesday, October 28, concerning
this matter of increased cost of the health and welfare cov-
erage. In substance, McGinness stated that his Union had
not met to ratify the contract and that, in any event, there
was apparently a misunderstanding as the Union was not
aware that the cost to employees for dependents was going
to go up. McGinness then asked Shull if the Companies
intended to pay the increased cost, and Shull said no.
2 There is no evidence concerning how the plan is funded However, since
the term "insurance" is used in the contract , it seems reasonable that the
Fund buys commerical insurance coverage, rather than self-insuring
1112 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
On November 12, at the request of the Unions, the par-
ties met at the offices of the Federal Mediation and Concil-
iation Service concerning the matter of increased cost for
dependent health and welfare coverage. There was discus-
sion at this meeting but no agreement that the employers
would either reduce the cost for dependent coverage or pay
for the increased cost. Accordingly, the Unions stated that
they would seek to remedy the situation through the Na-
tional Labor Relations Board, and there have apparently
been no discussions subsequently nor have the parties exe-
cuted a new contract.
Presumably, the parties are, and have been, operating
under the terms of the tentatively agreed-to contract which
provides, among other things, for increased wages and ben-
efits to Machinists over 3 years of $1.16 per hour and for
employees represented by the Teamsters, an increase of
$.95 per hour over the 3-year period.
On these facts, the General Counsel argues that the Re-
spondent has violated its statutory duty to bargain, both by
reneging on an agreed-to contract during negotiations and
by unilaterally changing a term or condition of employ-
ment-that is, changing an economic benefit without giv-
ing the Unions appropriate notice and an opportunity to
negotiate concerning the change.
Analysis
It is well settled that, once a bargaining relationship has
been established, the employer may not alter something
which is a mandatory subject of bargaining as defined in
Section 8(d) (wages, hours, and other terms and conditions
of employment) without first giving the union an opportu-
nity to bargain about the contemplated change. N.L R B. v.
Benne Katz, et al., d/b/a Williamsburg Steel Products Com-
pany, 369 U.S. 736 (1962). To change unilaterally an item
which is a mandatory subject of bargaining under Section
8(d) is legally tantamount to a refusal to bargain.
Further, "even after expiration of a collective-bargaining
contract, an employer is under an obligation to bargain
with the Union before he may permissibly make any unila-
teral change in those terms and conditions of employment
comprising mandatory subjects within the meaning of Section
8(d) of the Act." Harold W. Hinson, d/b/a Hen House Mar-
ket No. 3 v. N L.R.B, 428 F.2d 133, 137 (C.A. 8, 1970).
It follows, of course, that a company does not violate
Section 8(a)(5) in this respect where there has in fact been
no change from the status quo, or where the change does
not relate to a mandatory subject of bargaining. Thus, to
prove a violation, the General Counsel must prove that the
Respondent initiated a change from the status quo affect-
ing a mandatory subject of bargaining without first giving
the Unions a reasonable opportunity to bargain concerning
it. Failure to establish these facts by a preponderance of
the evidence necessarily requires dismissal of the allega-
tion.
There is no issue here of bad-faith negotiating or an ac-
tual refusal to bargain. In fact the parties did negotiate on
the matter of health and welfare coverage, and the costs of
such to be borne by the employers.
The General Counsel contends that the Respondent uni-
laterally changed the cost to employees of health and wel-
fare coverage; and it did so after having agreed to maintain
the 1972-75 health and welfare terms in the new contract.
Upon the record before me, I cannot find that the Re-
spondent in fact changed the terms of the health and wel-
fare article set forth in the 1972-75 contract. Therefore the
Respondent neither unilaterally altered an economic con-
dition of employment, nor did it renounce a contract term
to which it had agreed.
This determination necessarily must be based in part
upon an interpretation of the health and welfare article in
the 1972-75 contract. Obviously, a finding that the status
quo has or has not been changed requires a finding of what
the status quo is The same applies to the assertion that the
Respondent renounced its agreement to continue the 1972-
75 health and welfare article.
It is clear from the contract that the employers under-
took to pay the total cost for employees of certain predeter-
mined items of health care. The contract also states that
the employers will make the trust fund available for depen-
dent participation and will make to the trust fund the ap-
propriate employee contribution on behalf of his depen-
dents but the employee must make the payment. At no time
under the 1972-75 agreement, or its predecessor agree-
ments, or during negotiations for the new agreement, did
the Association or any employer ever agree to make any
part of any payment to the health and welfare trust fund
on behalf of employees' dependents.
Indeed, during negotiations the Unions specifically
asked that the employers pay for dependent coverage, and
this was rejected.
The question then arises concerning the $7.64 per week
phrase in the contract and what it means, if anything. The
General Counsel implicitly argues that this $7.64 phrase
means that, should the cost of the indicated coverage go
above $7.64 per week, the employers would absorb it. But
there is no evidence to support such a conclusion and such
is not required by the language of the contract. Rather, the
language here reads more like a bid or estimate proffered
by the Fund (or an insurance company) and included for
information purposes rather than a promise by the employ-
ers to pay if the cost were to run more.
In addition, the Respondent's adamant refusal to in-
clude payment of any part of the dependent coverage sup-
ports the contrary conclusion-that the employers would
not pay for dependent coverage even if it cost more than
$7.64 per week. The language of the contract is just not
specific enough to infer that the employers meant to pay
for such cost of dependent coverage as would exceed $7.64
per week.
Alternatively, the General Counsel may be taking the
position that the Association guaranteed that certain item-
ized levels of medical coverage would be available to em-
ployees for their dependents at a cost of no more than
$7.64 per week. Such an interpretation flies in the face of
reality. Stating the obvious, the cost of health insurance in
1975 was up from 1972, a fact of which I will take adminis-
trative notice. Neither the Association nor the individual
employers were in a position to guarantee that the cost of
health care would remain static throughout the period
1972-75, or, as the General Counsel seems to argue, even
beyond October 1975. The cost of medical care is not, and
MOTOR CAR DEALERS ASSN
was not, something which the Association could control.
In short, the health and welfare article, as it relates to the
cost of dependent coverage, at best is ambiguous. The
General Counsel brought forth no evidence to explain the
ambiguity. Therefore, I must find that the evidence does
not preponderate in the General Counsel's favor with re-
gard to the interpretation of this article.
In fact, such evidence as there is tending to explain the
ambiguity is contra to the General Counsel's position. In
the 1969-72 contract, dependent coverage was available at
a cost of "no more than $23.30 per month," ($5.38 per
week). The coverage was increased in the 1972 contract, as
well as the costs-both for employees and for dependents.
The employers again did not agree to pay any amount of
the costs for dependent coverage. Such was passed on to
the employees. To that extent, this matter is similar to A-V
Corporation, 209 NLRB 451 (1974), where the Board held
that passing along increased costs of health insurance to
employees was not a unilateral change, absent evidence
that the employer had agreed to absorb such increases.
It may well be the Unions felt that as part of the agreed-
to contract, in addition to the $1 16 and $ 95 per hour,
respectively, the employers also agreed to guarantee that
employees could have dependent health care coverage for
$7.64 per week. And in the event the cost of the specific
coverage would go up, the employers would absorb the
increase. While such staggers credulity, if this were the
case, and this is the most favorable possible interpretation
of the facts presented by the General Counsel, at best there
was a misunderstanding. The parties never reached a true
meeting of the minds with regard to the health and welfare
article.
That the parties did not reach a true meeting of the
minds, of course, is not an unfair labor practice. Perhaps
upon learning that the cost of health insurance would be
increased, not only to employers but also to employees, the
Association's negotiators should have advised the Unions.
That failure, however, is not alleged to be evidence of bad
faith or to constitute a refusal to bargain, and I find it is
not.
A final note is that upon receiving notification from the
trust fund that the cost of coverage was to increase, the
Association advised the member employers, who apparent-
ly without hesitation increased their contributions on be-
half of the employees by $3.75 per month. This amounts to
something in excess of $.02 per hour per employee-not
substantial but nevertheless more than the parties had ne-
gotiated The point here is that the Association and its
members, with regard to the health and welfare matter,
have in fact kept their part of the agreement; namely, to
1113
pay for employee coverage They never did agree to pay
any amount for dependent coverage . Thus, the allegation
that there has been a change in a wage benefit and/or that
the Association reneged on an agreed -to contract provision
has not been factually established . I shall recommend that
the complaint be dismissed in its entirety.
CONCLUSIONS OF LAW
I The Respondent is an employer engaged in commerce
within the meaning of Section 2(2), (6), and (7) of the Act.
2. Teamsters Local Nos. 552 and 498, affiliated with the
International Brotherhood of Teamsters, Chauffeurs,
Warehousemen and Helpers of America and District
Lodge No 71, International Association of Machinists and
Aerospace Workers, AFL-CIO, are labor organizations
within the meaning of Section 2(5) of the Act.
3. All employees employed by each employer signatory
to the contract in its respective service and parts depart-
ments, including any full-time garage employees but ex-
cluding office clerical employees, auto and truck salesmen,
control tower operators, testers and supervisors as defined
in the Act, constitute a unit appropriate for purposes of
collective bargaining within the meaning of Section 9(b) of
the Act.
4. The Respondent did not unilaterally alter a term or
condition of employment relating to the cost of health and
welfare coverage of dependents of unit employees or repu-
diate an agreed-to term of the contract proposal following
collective-bargaining negotiations with respect to the
health and welfare plan available to dependents of unit
employees
5. The General Counsel has not proved by a preponder-
ance of the evidence that the Respondent violated Section
8(a)(5) or (1) of the Act as alleged in the complaint.
Upon the foregoing findings and conclusions and the
entire record, and pursuant to Section 10(c) of the Act,
there is hereby issued the following recommended:
ORDER3
It is hereby ordered that the complaint herein be, and it
hereby is, dismissed in its entirety-
3 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 the 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
waived for all purposes