Ndk Corp.

National Labor Relations Board - Board Decisions

Mar 19, 1986

278 N.L.R.B. 1035 (N.L.R.B. 1986)

NDK CORP.
NDK Corporation and United Food and Commercial
Workers Union , Local 1550, Chartered by the
United Food & Commercial Workers Interna-
tional Union, AFL-CIO-CLC. Cases 13-CA-
22550, 13-CA-22757, and 13-CA-22899
19 March 1986
DECISION AND ORDER
BY CHAIRMAN DOTSON AND MEMBERS
DENNIS AND JOHANSEN
On 5 March 1984 Administrative Law Judge
Arline Pacht issued the attached decision. The Re-
spondent filed exceptions, a supporting brief, and
answers to the cross-exceptions and brief filed by
the General Counsel. The Charging Party also filed
cross-exceptions and a supporting brief.
The National Labor Relations Board has delegat-
ed its authority in this proceeding to a three-
member panel.
The Board has considered the decision and the
record in light of the exceptions and briefs and has
decided to affirm the judge' s rulings , findings,' and
conclusions2 and to adopt the recommended
Order.
In affirming the judge's conclusion that the Re-
spondent violated Section 8(a)(5) and (1) of the Na-
tional Labor Relations Act, we rely solely on the
rationale of Gatliff. Coal Co. v. Cox, 152 F.2d 52
(6th Cir. 1945). National labor policy requires that
evidence of oral agreements be unavailing to vary
the provisions of a written collective-bargaining
agreement valid on its face. We agree that the Re-
spondent was bound by the terms of agreement it
entered into for the term of the agreement and that
it could not establish by parole testimony an oral
understanding that varied the terms'of the written
agreement.
AMENDED CONCLUSIONS OF LAW
The judge's Conclusion of Law 4 is modified by
deleting the word "certified" in line 2 and inserting
"recognized" in its place.
I The Respondent has excepted to some of the judge 's credibility find-
ings. The Board's established policy is not to overrule an administrative
law judge's credibility resolutions unless the clear preponderance of all
the relevant evidence convinces us that they are incorrect . Standard Dry
Wall Products, 91 NLRB 544 (1950), enfd . 188 F.2d 362 (3d Cir. 1951).
We have carefully examined the record and find no basis for reversing
the findings.
2 The General Counsel moved to strike the Respondent 's affirmative
defenses, alleging, inter alia, that Sec . 10(b) of the Act precludes intro-
duction of evidence bearing on the execution of a contract some 18
months before the first charge was filed . The judge , characterizing the
alleged illicit promise to ignore the contract as a continuing violation in-
volving separate and independent wrongs , allowed evidence of the ante-
cedent illegality to be introduced . We find it unnecessary to rely on this
analysis of the 10(b) issue , but nevertheless agree with her ultimate con-
clusion that the affirmative defenses were legally insufficient.
1035
ORDER
The rational Labor Relations Board adopts the
recommended Order of the administrative law
judge and orders that the Respondent, NDK Cor-
poration, Chicago, Illinois, its officers, agents, suc-
cessors, and assigns , shall take the action set forth
in the Order, except that the attached notice is sub-
stituted. for that of the administrative law judge.3
' We will issue a new notice to conform more fully with the judge's
recommended Order.
APPENDIX
NOTICE To EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
The National Labor Relations Board has found
that we violated the National Labor Relations Act
and has ordered us to post and abide by this notice.
WE WILL NOT fail or refuse to give effect to or
fully comply with the terms and conditions of em-
ployment set forth in the collective-bargaining
agreement entered into with United, Food and
Commercial Workers Union, Local 1550, on behalf
of employees in the following appropriate unit.
All employees of NDK corporation working
in the retail food store including employees
working in leased and/or licensed departments
and all concession departments within the
store but excluding employees in the meat de-
partment, and guards and supervisors as de-
fined in the Act.
WE WILL NOT fail or refuse to recognize and, on
request, to bargain collectively with the Union as
the exclusive bargaining representative of employ-
ees in the above-described unit.
WE WILL NOT unilaterally change the wages and
other terms and conditions of employment of our
employees in the above-cited appropriate unit with-
out prior notice to and consultation with the
Union.
WE WILL NOT fail or refuse to process griev-
ances or contribute to the Union's health and bene-
fit trust funds as required by the collective-bargain-
ing agreement with the Union.
WE WILL NOT deny reasonable access to repre-
sentatives of the Union to enable the Union to
properly represent employees in the above-de-
scribed unit, nor withhold our payroll books and
records from auditing by trustees of the Union's
fringe benefit funds.
278 NLRB No. 151
1036 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
WE WILL NOT in any like or related manner
interfere with, restrain, or coerce you in the exer-
cise of the rights guaranteed you by Section 7 of
the Act.
WE WILL recognize and, on request, bargain in
good faith with United Food and Commercial
Workers Union, Local 1550, as exclusive bargain-
ing representative of all employees in the above-de-
scribed appropriate unit with respect to rates of
pay, wages, hours, and other terms and conditions
of employment and, if an understanding is reached,
embody that understanding in a signed agreement.
WE WILL restore and comply fully with the
terms and conditions of the collective-bargaining
agreement with the Union which expired on 29
February 1984 until such time as a new agreement
or impasse in bargaining is reached.
WE WILL make employees whole for any wages
or other benefits they may have lost by virtue of
our failure to comply with the terms of the collec-
tive-bargaining agreement.
WE WILL make contributions to the Union's
fringe benefit funds on behalf of all those employ-
ees in the above-described unit for whom such con-
tributions previously were made or should have
been made had we fully adhered to the collective-
bargaining agreement.
WE WILL, on request, permit the trustees of the
Union's fringe benefit funds to audit our payroll
books and records.
NDK CORPORATION
Melvyn Basan, Esq., for the General Counsel.
Michael Harvey, Esq., of Wheaton, Illinois, for the Re-
spondent.
Robert Karmel, Esq. (Carmel and Rosenfeld), of Chicago,
Illinois, for the Charging Party.
DECISION
STATEMENT OF THE CASE
ARLINE PAcHT, Administrative Law Judge. The hear-
ing in this matter was held in Chicago , Illinois, from July
11 through 14, 1983. Upon charges filed on September
14 and November 29, 1982, and January 21, 1983, by
United Food and Commercial Workers Union, Local
1550 (the Union or Local 1150) against NDK Corpora-
tion (Respondent or NDK), complaints issued on Octo-
ber 29 and December 29, 1982, and February 11, 1983,
respectively, alleging that Respondent violated Section
8(a)(1) and (5) of the National Labor Relations Act (the
Act) by withdrawing recognition from the Union and re-
pudiating its obligations under the collective-bargaining
agreement by unilaterally changing employees' terms and
conditions of employment through such acts as refusing
to process grievances, refusing to contribute to various
union trust funds, making its records available for an
audit as requested by trustees of those funds, and deny-
ir-g union representatives access to its facility. An order
consolidating cases issued on February 25, 1983. Re-
spondent filed timely answers to the substantive allega-
tions in each complaint and also posed certain affirmative
defenses which were twice amended. Thereafter, counsel
for the General Counsel (the General Counsel) filed a
Motion to Strike Portions of Answers and Partial Sum-
mary Judgment on April 5, 1983. Pursuant to an Order
to Show Cause, Respondent filed a response on May 26,
1983. On July 6, 1983, the chief administrative law judge
issued an order granting in part and denying in part
motion to strike and for partial summary judgment.
All parties were given full opportunity to participate,
to introduce relevant evidence, to examine and cross-ex-
amine witnesses, and to argue orally.
On the entire record, including consideration of the
briefs submitted by the General Counsel, the Charging
Party, and the Respondent and on observation of the
witnesses and their demeanor, I make the folowing
Ruling on the 10(b) issue
In substance, the complaints in this case allege that the
Respondent wholly repudiated its duty to comply with
the terms and conditions of employment set forth in its
current collective-bargaining agreement with the Union.
The Respondent admits that it ceased all compliance
with the contract as of July 1982 but justifies its conduct
on the grounds that the contract was fraudulently pro-
cured through the false representations of a union agent.
Specifically, Respondent contends that Respondent's
president, Nick Kladis, agreed to execute a written col-
lective-bargaining agreement on May 11, 1981, on the as-
surances of Local 1550's secretary-treasurer, Robert
Reynolds, that the Union would not demand compliance
with the contract. Contrary to these assurances, the
Union subsequently attempted to obtain strict adherence
to the agreement. Consequently, Respondent argues that
the contract is illegal and may not be enforced because
of the parties' in pan delicto relationship or, alternative-
ly, because Respondent's consent to executing the agree-
ment was fraudulently induced. The General Counsel
moved to strike the Respondent's affirmative defenses al-
leging, inter alia, that Section 10(b) of the Act precludes
evidence bearing on a contract executed some 18 months
before the first charge was filed herein. i
By Order of July 6, 1983, the chief administrative law
judge denied in part the motion to strike thereby permit-
ting Respondent to "offer evidence at the hearing in sup-
port of its affirmative claims in defending allegations that
it violated Section 8(a)(1) and (5) of the Act" but specifi-
cally ruled that the Order was without prejudice. Ac-
cordingly, the General Counsel ' and the Charging Party
moved to dismiss the Respondent's affirmative defenses
at the hearing and renewed their arguments in posttrial
briefs. On careful -consideration of the parties' arguments
and of the precedents which control this problem, I con-
clude that the evidence adduced by the Respondent in
i Sec 10(b) of the National Labor Relations Act sets forth a 6-month
statute of limitations That section reads in pertinent part "no complaint
shall issue based upon any unfair labor practice occurring more than 6
months prior to the filing of a charge with the Board "
NDK CORP.
support of its affirmative defenses was properly received.
A separate question as to whether those defenses are le-
gally sufficient is resolved below in the discussion - section
of this decision.
An analysis of the 10(b) issue starts with a close exami-
nation of Machinists Local 1424 (Bryan Mfg.) v. NLRB,
362 U.S. 411 (1960), the case on which the General
Counsel and the Charging Party chiefly rely. In Bryan,
the parties signed their first collective -bargaining agree-
ment in 1954 at a time when the union did not enjoy ma-
jority support. Charges were filed 12 months later with
the Board alleging that the union 's lack of majority
status at the time of the contract 's execution tainted the
successor agreement so that continued enforcement of
the recognition and union -security clauses was unlawful.
On these facts, the Supreme Court held that the com-
plaint issued by the General Counsel against the union
and the employer was time-barred. Id. at 415. The Court
explained that Section 10(b) proscribes the issuance of a
complaint where a collective-bargaining agreement and
its enforcement are both perfectly lawful on the face of
things, and an unfair labor practice cannot be made out
except by reliance on the agreement's original unlawful
execution , an event which, by its staleness , cannot itself
give rise to an unfair labor practice . Id. at 419.
Here, the General Counsel and the Charging Party
argue that as in Bryan the collective-bargaining agree-
ment executed by the Respondent and the Union on May
1, 1981, is facially valid . Their argument continues that
even if the parties struck an illegal deal they did so 18
months before charges were filed by the Union. There-
fore, they reason that because NDK's refusal to abide by
a facially lawful agreement depends on an act (the illicit
promise to ignore the contract) which predated the
charges by more than 6 months, evidence of that ante-
cedent illegality is time-barred by Section 10(b).
Their argument fails to take into account a critical dis-
tinction between the facts in Bryan and those alleged by
the Respondent. Respondent 's defense does not hinge
solely on a covert understanding between Kladis and
Reynolds . Rather, separate and independent wrongs may
be asserted based on the ongoing implementation of their
illicit understanding . Indeed , Respondent's decision to
defend on the ground of an allegedly fraudulent misrep-
resentation did not become available to it until' the
summer of 1982 when the Union allegedly reneged on its
unlawful promise and began to demand literal compli-
ance with the collective-bargaining agreement . Thus, Re-
spondent's defense depends not only on a purportedly il-
legal promise which occurred outside the 10(b) period,
but also on continuing unlawful events which occurred
within the statutory timeframe.
Under such circumstances , the Supreme Court ruled
that the 10(b) proscription would not obtain. Where con-
tinuing violations are involved , that is, "where occur-
rences within the 6-month limitation period in and of
themselves may constitute , as a substantive matter, unfair
labor practices ," the Court ruled that "early events may
be utilized to shed light on the true character of matters
occurring within the limitation period ; and for that pur-
pose Section 10(b) ordinarily does not bar such eviden-
tiary use of anterior events ." Id. at 416.
1037
The situation in the instant case falls into this second
category . of cases identified in Bryan for the ongoing ille-
gal acts alleged by the Respondent do not necessarily
depend on proof of an anterior unlawful event but could
"in and of themselves . . . constitute . . . unfair labor
practices ." Accordingly, I conclude , as did Judge
Welles, that Respondent could introduce evidence of an
otherwise time-barred event in an effort to expose pur-
ported wrongs committed within the 10(b) period. 2
However, this does not mean to say that Respondent's
affirmative defenses are legally sufficient to withstand
other challenges.
FINDINGS OF FACT
1. JURISDICTION
Respondent , NDK Corporation, an Illinois corporation
with its principal place of business located at 4301 South
Lake Park Avenue, Chicago, Illinois, is now and has
been at all times material herein engaged in operating a
retail food store . 3 During the past calendar year, a repre-
sentative period, Respondent derived gross revenues in
excess of $500,000 from such business activity and pur-
chased and received at its facility goods valued in excess
of $5000 directly from points located outside the State.
Accordingly, I find that the Respondent is now and has
been at all material times herein an employer engaged in
commerce within the meaning of Section 2(2), (6), and
(7) of the Act.
I also find that the Union is now and has been at all
material times herein a labor organization within the
meaning of Section 2(5) of the Act.4
2 In Barrington Plaza & Tragniew, 185 NLRB 962, 964 (1970), the
Board relied on Bryan Mfg., supra, to hold that the statutory policy of
Sec. 10(b) precludes the resurrection of legally defunct unfair labor prac-
tices by an employer defending against allegations of violating Sec.
8(a)(5). It follows that Bryan also stands for the proposition that Sec.
10(b) does not apply where an employer 's defense invokes proof of an
event antedating the 6-month period if it sheds light on events occurring
within the 10(b) timeframe. See also B. C. Hawk Chevrolet, 226 NLRB
527, 529 (1976), affd. 582 F.2d 591 (9th Cir. 1978).
8 Respondent also is known as One Stop Food & Liquor.
* In its answer to the consolidated complaints, Respondent neither ad-
mitted nor denied the jurisdictional allegations and the status of the
Union as a labor organization . However, the Order of July 6, 1983, held
that Respondent's answers were admissions pursuant to Sec . 102.20 of the
Board's Rules and Regulations.
Respondent also entered denials to pars . V, VI, and VII of the com-
plaint bearing on the Union 's status as exclusive bargaining representative
and the appropriateness of the bargaining unit. In his pretrial Order,
Judge Welles ruled that challenges to these allegations were barred by
Sec. 10(b) of the Act, but permitted Respondent the opportunity to prof-
fer other evidence at the hearing which might be relevant to these issues.
No such proffer was made . Accordingly, I find that Respondent effec-
tively admitted that Local 1550 is the designated collective-barganing
representative of NDK employees in the following appropriate unit:
All employees of NDK corporation working in a retail food store
including employees . working in leased and/or license departments
and all consession departments within the store but excluding em-
ployes in the meat department , and guards and supervisors as defined
in the Act.
1038 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
11. THE ALLEGED UNFAIR LABOR PRACTICES
A. The General Counsel's Case in Chief
It is uncontroverted that the Respondent and Local
1550 have been parties to successive collective-bargain-
ing agreements since at least the late 1960s.5 It is also un-
disputed that the current agreement, effective from
March 1, 1981, to February 29, 1984, was signed by
NDK President Kladis and the Union's secretary-treasur-
er, Reynolds, on May 1, 1981, and that the Respondent
repudiated this contract and has failed to implement any
of its terms since July 1982. The parties agree on little
else in this case. Specifically, they diverge sharply about
the events which preceded the execution of the current
agreement and the consequences which flow therefrom.
Several witnesses attested to the fact that throughout
the parties' lengthy dealings, the Respondent's adherence
to the contract was less than satisfactory.6 Reynolds, for
one, conceded that he was aware of Respondent's cava-
lier disregard for some of its contractual commitments.
However, he claimed that his knowledge of noncompli-
ance came from complaints filed from time to time by
aggrieved employees. In support of his testimony, the
General Counsel produced documents showing that-from
1976 to 1981, some five employees had grievances re-
solved on such matters as hospitalization and/or backpay
benefits for backpay. However, once these individual
matters were settled Reynolds said he made no further
effort to determine whether similar problems affected
other employees. As he explained, "we don't go out
witch hunting." Accordingly, Reynolds, as well as an-
other business agent who serviced the NDK contract be-
tween 1976 and 1979, Marvin McKeever, disclaimed any
knowledge that Respondent was defaulting on its con-
tractual obligations in wholesale fashion. Further, Reyn-
olds flatly denied ever having entered into an agreement
with Kladis to ignore the collective-bargaining agree-
ment.
To the contrary, Reynolds testified that after the expi-
ration of the 1979 labor contract he attempted unsuccess-
fully to negotiate a new agreement with NDK which
provided for higher wages. Even without a successor
agreement in place, the parties continued to resolve em-
ployee grievances over the next several years. According
to Reynolds, hard, genuine bargaining finally occurred in
1981 which led to the execution of the current agree-
ment. Thus, Reynolds testified that initially he tried to
persuade Kladis to accept the Union's master agreement
with the Independent Food Retailers Association. When
Kladis resisted, Reynolds called a meeting of employees
and obtained their suggestions for contract modifications.
He then submitted to Kladis a proposal which reflected
the employees' suggestions. After two negotiating ses-
5 In pleadings filed in 1981 with the District Court for the Northern
District of Illinois, Respondent alleged, inter alia, that it has had an ongo-
ing collective-bargaining relationship for over 12 years with the Union
6 The Union's past difficulties with the Respondent are partially docu-
mented in a series of judicial rulings stemming from actions for arrear-
ages due to the health, welfare, and pension trust funds bought by the
trustees of those funds. See, e g, Owen v. One Stop Food 359 F. Supp. 243
(N.D 111 1973), Riordan v. One Stop Food, 372 F.Supp 644 (N D. Ill
1974), Wishnick Y. One Stop Food, 359 F Supp. 239 (N D. 111 1973).
sions, Kladis agreed, inter alia, to a 5-cent-per-hour wage
increase in each of 3 years and a 5-cent-per-hour increase
in trust fund contributions. At this juncture, believing
that the parties had reached a consensus, Reynolds met a
second time with the employees who approved the con-
tract proposal as revised.
However, Kladis balked at signing the contract. The
Union reacted to his recalcitrance by filing an unfair
labor practice charge with the Board on May 7, 1981,
accusing the Respondent of violating Section 8(a)(5) of
the Act by failing to execute the agreement. When the
parties met next on May 11, Reynolds told Kladis that a
charge had been filed. It was on this date that Kladis
signed the collective-bargaining agreement. Thereafter,
the Union withdrew the charge.
B. Respondent's Version
Kladis' version of the circumstances leading to the
execution of the current labor contract differs radically
from Reynolds. The NDK president testified that he,
Reynolds, and some unnamed union representatives had
understandings dating from the early 1970s that the
Union would ignore NDK's failure to abide by the terms
of its written collective-bargaining agreements. As Kladis
explained it, the contract was not without any effect;
rather, his understanding with Reynolds was that some
terms of the agreement 'would be applied, but not only to
a part of the NDK work force, that is, to the cashiers
but not to the stockclerks. Kladis maintained that the
Union was interested only in numbers; as long as Re-
spondent paid a sum of money representing dues owed
for 30 individuals and contributed a net sum to the union
trust'funds covering 15 persons, the Union, for all practi-
cal purposes, would ignore its noncompliance with nu-
merous other aspects of the contract. By way of exam-
ple, Kladis pointed out that employees received only 2
weeks' paid vacation whereas the agreement entitled
them to' 4 paid weeks.
Kladis acknowledged that Reynolds pressed him to
sign a new collective-bargaining agreement on a half
dozen occasions in early 1981. However, Kladis told
Reynolds he was hesitant to do so because he was em-
barking on a costly business expansion program and
feared that he might be held strickly to the terms of the
labor contract in spite of Reynolds' represenations to the
contrary. Reynolds 'assuaged his doubts with the promise
that their former covert agreement would continue so
that dues and trust fund payments would be required for
only a limited number of employees. Kladis testified that
he signed the collective-bargaining agreement on May 11
after having received a copy of the Union's 8(a)(5)
charge. However, the record shows that Kladis did not
receive his copy until the day after he executed the
agreement. Kladis also denied having ever seen or re-
viewed the Union's contract proposal. In addition, he in-
sisted that he had never read the current contract or any
of the former agreements on which his signature ap-
pears.7 ,
7 Kladis identified the signature on the contract as his own but implied
it might have been reproduced by a stamp. His suggestions that he nei-
Continued
NDK CORP.
The Respondent adduced testimony from several wit-
nesses to support Kladis' assertions about his conspiracy
with the Union . Respondent's former bookkeeper Steven
Barzelis testified that from 1971, when he first began
working for NDK, until 1982 when he retired, he was
aware that the Company was not complying with the
union contract . On more than one occasion , Kladis ex-
pressly informed him that he had an agreement with
Reynolds not to follow the contract . Even if Kladis had
not been so candid , Barzelis knew of and engaged in
conduct inconsistent with faithful adherence to the col-
lective-bargaining agreement . In his capacity as book-
keeper, Barzelis was responsible for all records and pay-
ments . Consequently , each month he received from the
trustees of the various pension funds a printed form list-
ing 15 names of NDK employees who obstensibly were
entitled to coverage under the funds . Barzelis was sup-
posed to report the hours worked for each employees
listed , to add or delete names of employees who were
hired or terminated during the reporting period, and to
return the form to the Union with a check in the appro-
priate amount . Barzelis complied only partially with
these requirements . Thus, he related that although he did
return the form with a monthly contribution, he did not
add or delete names of employees who were terminated
or hired during the particular reporting period. More-
over, among the persons identified on the trust fund
form were "Kladis" and "Barzelis," both of whom, as
members of management , were excluded from the bar-
gaining unit . Further, as Barzelis testified , the Respond-
ent employed approxiamtely 50 full - and part-time em-
ployees. It was apparent , therefore , that the list did not
identify all the employees entitled to trust fund coverage.
Similarly, Barzelis was responsible for Respondent's
compliance with the dues-checkoff provisions of the col-
lective-bargaining agreement . Each month from the time
of his employment to August 1981, a business agent ap-
peared at the store and presented him with a computer-
ized list of some 30 names for whom dues were owned.
Here too, Barzelis failed to delete or add names to the
list unless , on a rare occasion , a business agent identified
a new employee he had seen at work . When this oc-
curred , Barzelis simply deleted one name and substituted
the name of the newly observed employee . As a conse-
quence of his bookkeeping duties, Barzelis was well
aware not only of a discrepency between the number of
employees listed on the union forms and the number of
employees on Respondent 's payroll but also that the list
did not accurately reflect the true identity of persons on
the NDK staff. In fact, even a superficial glance at some
of the lists entered into evidence reveal that the same 15
names are repeated on the Union 's trust fund forms.
Barzelis further testified , as had Kladis , that employees
were paid for only 2 rather than 4 weeks ' vacation. He
added that employees also were not given holiday or
sick pay benefits to which they were entitled under the
ther signed nor read the agreement must be rejected . Kladis impressed
me as a shrewed entrepreneur ; he knew there was a risk in signing the
agreement. Further , his testimony reveals he was familiar with a number
of the contract 's terms . Given these considerations , his attempts to por-
tray himself as an unsophisticated businessman who would sign a contract
without knowing its contents are simply incredible.
1039
union contract . Barzelis acknowledged that grievances
filed by individual employees were voluntarily settled
from time to time but, in his view, resolution of such
matters was a rare exception to the general rule of non-
compliance with the collective-bargaining agreement.
The Respondent also called as a witness , Herman
Owens, a former business agent , who serviced the NDK
contract from 1979 until he was dismissed by Local 1550
on April 30, 1982 . Owens appeared to be extremely re-
luctant to testify adversely to his former employer.
When Respondent asked if he recalled whether the
NDK collective -bargaining agreement was being proper-
ly enforced he maintained that he had no present recol-
lection . Even after he was shown his affidavit taken by
Respondent shortly after his termination from the Union,
Owens still did not recall having stated anything which
would cast Local 1550 into an improper light . Yet, that
affidavit states in pertinent part that "Ron Luesmann,
Robert Reynolds and others knew that the contract with
One Stop was not being followed . . . . The contract
... was never followed during the period 1979 to
1982. . . . I was told to go along with the program op-
erating at [the store] . . . by Reynolds . I was not to rock
the boat . I was told that Local 1550 had 30 members at
One Stop and that I should not interfere with enforce-
ment of that contract as long as I maintain 30 members."
Owens' affidavit offered the following insight into Reyn-
olds' behavior : "Reynolds told me . . . that it was not
what you call a full fledged contract , it is a matter of
maintaining 30 members in the store and there were
some problems so far as trying to get all the members in
the Union so it is better to have 30 than to have none."
C. Events Subsequent to May 1, 1981
Following execution of the contract , the Respondent
continued its practice of complying in a limited fashion
with the agreement . Thus, the record shows that until
July 1982, NDK contributed monthly to the Union's
trust funds and, in fact, raised the amount of the pay-
ments by 5 cents an hour as negotiated in the agreement,
but these amounts were paid solely on behalf of the 15
names identified on the trust fund forms . Until August
1981, Respondent continued to pay dues to the Union for
only the 30 enumerated individuals . In an effort to ex-
plain why they failed to detect the disparity between the
number of persons identified on these forms and the
number of employees actually working for the Respond-
ent, Union Business Agents McKeever and Owens point-
ed out that many of the employees worked part time or
on varying shifts. Therefore, they had to rely on the Re-
spondent to identify eligible employees . Owens added
that whenever he asked to see Respondent's books to
verify the number of employees on the work force, Bar-
zelis invariably equivocated claiming that the records
were unavailable . In August 1981, the Union decided to
collect dues directly from the NDK employee members.
Reynolds testified that this revision came about after he
learned from NDK personnel that the Respondent was
not deducting dues from their wages.
For a period of time after the contract was signed in
1981 and until early 1982, the parties also continued to
1040 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
handle individual complaints of employees much as they
had in the past. Owens testified that when an-)employee
brought a problem to his attention concerning overtime
or holiday pay, for example, he would relay this infor-
mation by memo to Reynolds or McKeever. They, in
turn, would resolve the problem informally with Kladis.
Owens explained that he did not attempt to present
grievances directly to Kladis because Reynolds had as-
sured him that the NDK president simply would ignore
them.
D. Enforcement of the Collective-Bargaining
Agreement
In the spring of 1982, the Union began seeking strict
compliance with the collective-bargaining agreement. As
a result, the Union's relationship with the Respondent
deteriorated rapidly. On March 17, 1982, Owens submit-
ted to Kladis a written grievance concerning Respond-
ent's failure to adjust rates of pay for some 13 employ-
ees. Following Owens' dismissal , his successor Emmit
Lee Jr. resubmitted Owens' letter to Kladis on June 7
and suggested that the arbitration provisions of the col-
lective-bargaining agreement would be invoked if NDK
failed to respond promptly. On the same date, Lee sent
Kladis additional letters on behalf of various employees
which raised a variety of contractual violations including
vacations due, sick leave pay, and premium time for
Sunday work.
Michael Harvey, Respondent's counsel, replied by
letter of June 12, 1982, and requested a meeting to dis-
cuss the matters raised in these letters. Reynolds was
vague as to whether such a meeting was held. In any
event, the parties failed to reconcile their differences.
Subsequently, by letters dated July 19 and 22, 1982, the
Union's attorney notified the Respondent and the Ameri-
can Arbitration Association that it was invoking the arbi-
tration provision of the collective-bargaining agreement
with respect to wage rates, vacations, sick leave pay, and
Sunday premium pay.
The Company responded to the Union's efforts to
compel obedience to the collective-bargaining agreement
in two ways. First, Respondent halted even the minimal
steps it was taking to abide by the agreement. Next, in
August, Respondent moved for an injunction and reci-
sion of the collective-bargaining agreement in the United
States District Court for the Northern District of Illinois
alleging, as it does in this litigation, that the contract was
fraudulently procured and that the parties had an in pari
delicto relationship. The district court dismissed the
complaint for want of jurisdiction. That ruling was af-
firmed by the Court of Appeals for the Seventh Circuit
on June 17, 1983. Thereafter, Respondent filed an identi-
cal suit in the Circuit Court of Cook County which was
still pending at the time of the instant hearing.
On October 25, 1982, the director of the Union's trust
funds wrote to NDK requesting an audit of the corpo-
rate books to verify the validity of the Respondent's con-
tributions to the funds. Respondent's counsel replied on
November 8 that in view of the position taken in civil
litigation that the contract was invalid, no further contri-
butions to the funds would be forthcoming.
The final encounter between the parties, short of these
proceedings, came on November 18, 1982, when the
Union's business agent, Lee, accompanied by his supervi-
sor, McKeever, visited Respondent's facility. As they
walked through the shop talking to employees, a security
guard followed by several policemen ordered them to
leave. After Lee telephoned a union attorney for advice
about the situation, the two men left the store peaceably.
Based on this incident the Union filed a charge with the
Board asserting that NDK was refusing union business
agents access to its facility contrary to the provisions of
the parties' collective-bargaining agreement.
Kladis acknowledged that he was in the store at the
time that this incident occurred, but denied knowing
which of his supervisors might have initiated the direc-
tive leading to the expulsion of the union agents. He
speculated that the men provoked their own ejection by
waving a contract in the air and calling him a "honkie
white man."8 Respondent further takes the position that
the expulsion was justified because Lee attempted to en-
courage the employees to strike. This accusation rests on
the testimony of another NDK employee, Jerome
Powers, who stated that while in the store, Lee engaged
him in a brief conversation and asked "if he was going to
walk." Powers indicated that he would not engage in a
walkout and, in fact, one did not ensue.
Discussion
To recapitulate , Respondent admitted that it entered
into a collective-bargaining agreement effective from
1981 to 1984 and that as of July 1982 it ceased comply-
ing with any terms of that agreement . Without more, Re-
spondent 's admissions provide the proof requisite to es-
tablishing the General Counsel 's prima facie case. In the
absence of a compelling defense, then , there can be no
question that Respondent unlawfully repudiated its con-
tract midterm and unilaterally altered the employees'
terms and conditions of employment by such conduct as
failing and refusing to contribute to the fringe benefit
funds, to arbitrate grievances, or to permit an audit of its
business records. Such conduct clearly violated Section
8(a)(5) and (1) of the Act. See F.M.L. Supply, 258 NLRB
604 (1981 ); Pacific Intercom Co., 255 NLRB 184 (1981),
affd . 679 F.2d 900 (9th Cir. 1982);, Detroit Cabinet & Door
Co., 247 NLRB 1415, 1417 fn. 1 (1980).
Respondent also admits that union agents were ejected
from its facility although such access is specifically guar-
anteed by the parties' collective-bargaining agreement.
The Respondent suggests that its violation of the con-
tract was triggered by the Union's own breach in that
the Union authorized an unlawful strike. I find that the
evidence in the record bearing on this incident is suffi-
cient to establish any unlawful activity by the Union.
Even assuming Powers' testimony is credited , a business
agent's isolated remark to a single employee does not
begin to prove that the Union attempted to instigate an
unlawful work stoppage . Moreover, there is not a shred
of evidence that either union agent who visited the store
on the date in question threatened anyone with bodily
s Both Lee and McKeever are black men.
NDK CORP.
harm. Thus, Respondent 's barring access to union agents
constitutes an additional violation of Section 8(a)(5) and
(1) of the Act. See Campo Slacks, Inc., 250 NLRB 420,
429 (1980).
As set forth above, Respondent defends its conduct
principally on the grounds that its consent to executing
the collective-bargaining agreement was unlawfully in-
duced by Reynolds' false representations that the con-
tract would not be enforced . If Respondent 's affirmative
defenses are legally sufficient , then it will not be held
liable for repudiating its collective -bargaining agreement.
Therefore, it is necessary to determine whether these de-
fenses have merit . A review of the prevailing case law
convinces me they do not.
Well-established Federal labor policy favors the en-
forcement of written collective -bargaining agreements.
See Respondent Employees Welfare Fund v. Rhodes, 99
LRRM 2869 , 2870 (Wash . S.C. 1978). In implementing
this policy, courts accord labor contracts a special, pro-
tected status and do not judge them by the general prin-
ciples applicable to common law contracts . See Gatliff
Coal Co. v. Cox, 152 F.2d 52 (6th Cir . 1945); Restaurant
Employees v. Rhodes, supra at 2870 . In the seminal case,
Gatliff Coal Co. v. Cox, supra, an employer resisted em-
ployees' claims for overtime pay under their labor con-
tract on the ground that he and the union business agent
had an oral understanding not to enforce the contract.
The Sixth Circuit , adopting verbatim the district court's
opinion, dealt with this defense as follows:
In utilizing collective-bargaining agreements to im-
plement a National labor policy designed to remove
certain recognized sources of industrial strife by en-
couraging friendly adjustment of industrial disputes
as to wages, hours of work and other conditions of
employment, upon a plane of equality of bargaining
power between employers and employees , the Na-
tional Labor Relations Act, in the public interest,
has given such collective-bargaining agreements a
more secure and stable position in our national
economy than that of ordinary common law con-
tracts which may be altered at pleasure [,] by render-
ing ineffectual and unavailable any collateral agree-
ments between individual members of the collec-
tive-bargaining group designed to obtain a diminu-
tion of the obligations of a particular employer or
abridgement of the benefits accruing to particular
employees under the collective-bargaining agree-
ment, regardless of the circumstances that may be
relied upon to justify them or the terms thereof.
It thus appears that the National Labor Relations
Act clearly precludes defendant 's reliance upon the
prior or contemporaneous oral agreement upon
which its defense to these actions is based.
Numerous cases since Gatliff Coal consistently have
taken the position "that misrepresentation , whether inno-
cent or fraudulent , cannot be relied upon to alter the ob-
ligations of a written collective-bargaining agreement."
Restaurant Employees Y. Rhodes, supra at 2871 , and cases
cited therein . In light of these precedents , it is clear that
the Respondent may not hide behind its affirmative de-
1041
fences to elude its obligations under the collective-bar-
gaining • agreement . If the purposes of the Act are to be
served , it is the parties' signed and facially valid collec-
tive-bargaining agreement which warrants insulation
from attack and the sham agreement which must be nul-
lified . To reach any other result would not only under-
mine Federal labor policy; it would work a disservice to
the NDK employees , the very beneficiaries of that con-
tract whose interests the Act was initially designed to
protect.
Respondent 's affirmative defenses have no greater
merit even if judged against more stringent common law
principles . Under such standards, the analysis starts with
the recognition that the collective -bargaining agreement
at issue here is perfectly valid on its face . Adherence to
the terms of this contract would be equally valid. What
is alleged as illegal by the Respondent is its collateral un-
derstanding with the Union that the labor contract
would not be wholly enforced . However, the Respond-
ent admits that it is as guilty as the Union by participat-
ing in this illicit understanding . In other words, Respond-
ent admits it shared an in pari delicto relationship with
certain union officials . However, it is a fundamental pre-
cept of contract law that no party which is in pari de-
licto may obtain legal redress . See 6A Corbin Contracts,
1534, 1536 (2d ed . 1962). See, e.g., Kansas City Operating
Corp. Y. Durwood, 278 F.2d 354 (8th Cir. 1960). Simply
put, the law will not aid a wrongdoer even if another
equally guilty offender escapes punishment. See 6A
Corbin, supra.
Respondent is on no safer ground in invoking a de-
fense of fraudulent misrepresentation , namely, that Reyn-
olds promised that the Union would not demand compli-
ance with the collective-bargaining agreement . To estab-
lish such a defense , the supplier of misinformation must
know his statement is false and intend it to mislead. Fur-
ther, the recipient must have a legitimate right to rely on
the representation. Prosser, Law of Torts, 100-103 (3d ed.
1964). Neither of these elements are satisfied in the in-
stant case . The record shows that the Union's efforts to
obtain strict compliance with the contract did not begin
until the spring of 1982 . Therefore, even assuming the
truth of Kladis' story , no case can be made that Reyn-
olds purposefully misled him at the time he made his rep-
resentation in May 1981. Further , one who is in pari de-
licto had no justifiable right to rely on a promise which
has an illegal purpose . This is particularly true where the
misrepresentation is made with the intent to undermine
the rights and interests of third persons . 6A Corbin, Con-
tracts, supra.
In sum , neither the case law which construes Federal
labor policy nor conventional common law principles
permit Respondent to escape liability for its wrongdoing.
The Respondeni had offered no viable defense to excuse
its repudiation of a legally binding collective -bargaining
agreement . Accordingly, its renunciation of that agree-
ment and its unilateral alteration of the terms and condi-
1042 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
tions of employment, violate Section 8(a)(1) and (5) of
the Act.9
CONCLUSIONS OF LAW
1. The Respondent, NDK Corporation, is an employer
engaged in commerce within the meaning of Section 2(6)
and (7) of the Act.
2. The Union is a labor organization within the mean-
ing of Section 2(5) of the Act.
3. All employees of NDK Corporation working in a
retail food store including employees working in leased
and/or licensed departments and all concession depart-
ments within the store, but excluding employees in the
meat department, and guards and supervisors as defined
in the Act constitute a unit appropriate for the purposes
of collective bargaining within the meaning of Section
9(b) of the Act.
4. Since at least 1970, by virtue of the successive col-
lective-bargaining agreements with the Respondent, the
Union has been and now is the certified and exclusive
representative of all employees in the appropriate unit
defined above in paragraph 3 for the purpose of collec-
tive bargaining within the meaning of Section 9(a) of the
Act.
5. Respondent has engaged in unfair labor practices
within the purview of Section 8(a)(5) and (1) of the Act
by withdrawing recognition from refusing to bargain
with the Union as the bargaining representative of its
employees in the appropriate unit described above in
paragraph 3.
6. Respondent violated Section 8(a)(5) and (1) of the
Act by repudiating its collective-bargaining agreement
with the Union and unilaterally altering its employees
terms and conditions of employment through such acts
as failing and refusing to process grievances, failing to
contribute on behalf of all members of the appropriate
bargaining unit to the Union's health benefit and pension
funds, denying union representatives access to its facility,
and refusing to make its payroll records available for
audit by trustees of the union benefit and pension funds,
as required by the collective-bargaining agreement.
7. The conduct cited in paragraphs 5 and 6 above are
unfair labor practices affecting commerce within the
meaning of Section 2(6) and (7) of the Act.
THE REMEDY
Having found that the Respondent violated Section
8(a)(1) and (5) of the Act, it shall be ordered to cease
and desist therefrom and take certain affirmative action
designed to effectuate the policies of the Act. Specifical-
ly, Respondent shall be ordered to implement and adhere
to the terms and conditions of the parties' collective-bar-
gaining agreement effective from March 1, 1981, to Feb-
ruary 29, 1984, until such time as a new agreement or
impasse is reached. Respondent shall be ordered to make
whole the employees in the unit found appropriate above
for any loss of wages or other benefits which they may
have sustained as a result of Respondent's unlawful repu-
diation of that agreement. Respondent also shall be or-
dered to pay all contributions owed to the health benefit
and pension funds and all other fringe benefits to which
the employees are entitled under the terms of the just-
expired agreements. In addition, Respondent shall be or-
dered to process grievances as required by the agree-
ment, to grant union representatives access to its facility,
and to make its payroll records available for an audit by
the trustees of the union funds. Finally, on request, the
Respondent shall be required to bargain in good faith
with the Union and, if an understanding is reached, to
embody the understanding in a signed agreement.
On these findings of fact and conclusions of law and
on the entire record, I issue the following recommend-
edlo
ORDER
The Respondent , NDK Corporation , Chicago, Illinois,
its officers , agents, successors , and assigns, shall
1. Cease and desist from
(a) Failing or refusing to give effect to and fully
comply with its collective -bargaining agreement with the
United Food and Commercial Workers Union, Local
1550 , chartered by the United Food and Commercial
Workers International Union , AFL-CIO-CLC.
(b) Failing and refusing to process grievances or to
contribute to the fringe benefit funds established by the
collective-bargaining agreement between the Respondent
and the Union and refusing to allow an audit as request-
ed by the trustees of the fringe benefit funds.
(c) Refusing to recognize or bargain collectively with
the Union concerning rates of pay, wages , hours, and
other terms and conditions of employment in the follow-
ing appropriate bargaining unit:
All employees of NDK corporation working in the
retail food store including employees working in
leased and/or licensed departments and all conces-
sion departments within the store but excluding em-
ployees in the meat department , and guards and su-
pervisors as defined in the Act.
(d) Refusing reasonable access to union agents to its
facility pursuant to the collective -bargaining agreement
so as to enable the Union to properly represent the em-
ployees in the above -described unit.
(e) Instituting unilateral changes in the terms and con-
ditions of employment of its employees without first no-
tifying and bargaining with the Union during the effec-
tive term of the parties' collective-bargaining agreement.
(f) In any like or related manner interfering with, re-
straining , or coercing employees in the exercise of the
rights guaranteed them by Section 7 of the Act.
2. Take the following affirmative action necessary to
effectuate the policies of the Act.
10 If no exceptions are filed as provided by Sec 102.46 of the Board's
Rules and Regulations , the findings , conclusions , and recommended
s Based on the foregoing conclusions, I expressly do not reach the Order shall, as provided in Sec 102 48 of the Rules, be adopted by the
question of whether or not the parties actually entered into the illicit Board and all objections to them shall be deemed waived for all pur-
agreement as alleged by the Respondent poses
NDK CORP.
(a) On request , recognize and bargain in good faith
with the Union as the exclusive bargaining representative
of the employees in the above-described appropriate bar-
gaining unit with respect to rates of pay, wages , hours of
work, and other terms and conditions of employment
and, if an understanding is reached , embody the under-
standing in a signed agreement.
(b) Restore and place in effect all terms and conditions
of employment provided by the parties' collective-bar-
gaining agreement which expired on February 26, 1984,
until such time as a new agreement or impasse is
reached ; provided that nothing in this Order shall require
Respondent to rescind or cancel any benefit it may have
instituted unless the Union so requests.
(c) Make employees whole for any wages or other
benefits they may have lost as a result of the Respond-
ent's failure to abide by the collective-bargaining agree-
ment which expired on February 29, 1984 , and make all
payments owed to the various fringe benefit funds as re-
quired by that agreement.
(d) Allow an audit of all payroll books and records as
requested by the trustees of the Union 's benefit funds.
(e) Grant to representatives of the above -named Union
reasonable access to Respondent 's facility to enable the
Union to properly represent the employees in the above-
described unit.
1043
(t) Preserve and, on request , make available to the
Board or its agents for examination and copying , all pay-
roll records , social security payment records , timecards,
personnel records and reports , and all other records nec-
essary to analyze the amount of backpay due under the
terms of this Order.
(g) Post at its facility at 4301 South Lake Park
Avenue, Chicago, Illinois, copies of the attached notice
marked "Appendix ." " t Copies of the notice, on forms
provided by the Regional Director for Region 13, after
being signed by the Respondent 's authorized representa-
tive, shall be posted by the Respondent immediately
upon receipt and maintained for 60 consecutive days in
conspicuous places including all places where notices to
employees are customarily posted . Reasonable steps shall
be taken by the Respondent to ensure that the notices
are not altered , defaced, or covered by any other materi-
al.
(h) Notify the Regional Director in writing within 20
days from the date of this Order what steps the Re-
spondent has taken to comply.
i i If 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 Nation-
al 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."