Olive Mechanical Contractors, Inc.

National Labor Relations Board - Board Decisions

Sep 9, 1986

281 N.L.R.B. 395 (N.L.R.B. 1986)

OLIVE MECHANICAL CONTRACTORS
Olive Mechanical Contractors , Inc. and United As-
sociation of Journeymen and Apprentices of the
Plumbing and Pipefitting Industry of the United
States and Canada, AFL-CIO, Local Union No.
349. Case 39-CA-2797
9 September 1986
DECISION AND ORDER
BY CHAIRMAN DOTSON AND MEMBERS
JOHANSEN AND BABSON
On 14 May 1986 Administrative Law Judge
Harold B. Lawrence issued the attached decision.
The General Counsel filed limited 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 brief and has
decided to affirm the judge's rulings, findings, and
conclusions and to adopt the recommended
Order.'
ORDER
The National Labor Relations Board adopts the
recommended Order of the administrative law
judge and orders that the Respondent, Olive Me-
chanical Contractors, Inc., New Haven, Connecti-
cut, its officers, agents, successors, and assigns,
shall take the action set forth in the Order.
1 No exceptions were filed to the judge's conclusion that the Respond-
ent violated Sec. 8(aX5) and (1) of the Act. The General Counsel excepts
only to the judge's failure to include in the Order a visitatorial clause au-
thorizing the Board , for compliance purposes, to obtain discovery from
the Respondent under the Federal Rules of Civil Procedure under the su-
pervision of the United States court of appeals enforcing this Order.
Under the circumstances of this case, we rind it unnecessary to include
such a clause.
Peter W. Gallaudet Esq., for the General Counsel.
Anthony M. Ciarlone, President (Olive Mechanical Contrac-
tors), of New Haven , Connecticut , for the Respondent.
Robert M. Cheverie, Esq. (Ashcroft & Gerel), of Hartford,
Connecticut , for the Charging Party.
DECISION
STATEMENT OF THE CASE
HAROLD B. LAWRENCE, Administrative Law Judge.
This case was heard by me at Hartford, Connecticut, on
6 February 1986. The charge was filed 8 October 1985
by United Association of Journeymen and Apprentices
of the Plumbing and Pipefitting Industry of the United
States and Canada, AFL-CIO, Local Union No. 349 (the
Union). On 18 November 1985 a complaint was issued
which alleged that Respondent violated Section 8(axl)
and (5) of the National Labor Relations Act (the Act) by
refusing to meet and bargain with the Union despite
395
written requests to do so made after the expiration, on 31
July 1985,1 of a collective-bargaining agreement between
Respondent and the Union; by implementing changes in
wages, rates of pay, hours of employment, and other
terms and conditions of employment, including cessation
of health and welfare and pension contributions, without
affording the Union an opportunity to negotiate with re-
spect to same; and by refusing to furnish payroll records
requested by the Union.
The Respondent's president, Anthony Ciarlone, inter-
posed an answer which, as modified at the hearing, in
substance admits the factual allegations but denies that
Respondent had committed any wrongdoing or statutory
violation.
The parties were afforded full opportunity to be heard,
to call, examine, and cross-examine witnesses, and to in-
troduce relevant evidence. A posthearing brief has been
filed by the General Counsel, and Respondent, which ap-
peared at the hearing by its president, Anthony Ciarlone,
without the aid of legal counsel, has filed posthearing
statement in the form of a letter.
On the entire record, including my observation of the
demeanor of the witnesses, and after consideration of the
brief filed by the General Counsel and the statement filed
by Respondent, in letter form, I make the following
FINDINGS OF FACT
I. JURISDICTION
There is no issue concerning jurisdiction, Respondent
having admitted the material facts alleged with respect
thereto. At the pertinent times, Respondent, a Connecti-
cut corporation based in New Haven, Connecticut, was
engaged in the construction industry as a mechanical
subcontractor providing plumbing and heating services,
and during the 12-month period ending 31 October, Re-
spondent had provided services valued in excess of
$50,000 to general contractors engaged in interstate com-
merce. Accordingly, I find that Respondent was and is
an employer engaged in commerce within the meaning
of Section 2(2), (6), and (7) of the Act and that the
Union was and is a labor organization within the mean-
ing of Section 2(5) of the Act.
H. THE ALLEGED UNFAIR LABOR PRACTICES
A. The Facts Adduced at the Hearing
There is almost no dispute concerning the facts per-
taining to the dealings between Respondent and the
Union. Respondent and the Union have been parties to a
succession of collective-bargaining agreements over a
period of many years and the relations between them
have been good. However, in 1985 Respondent suffered
financial reverses and defaulted in payment of contribu-
tions required to be made to certain union funds by the
subsisting collective-bargaining agreement. The Union,
unable to effectuate collection, pulled its members off
Respondent's jobs. The Union thereafter ascertained that
1 All dates hereinafter mentioned are in 1985 except as otherwise
stated.
281 NLRB No. 61
396 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Respondent was continuing in business on other jobs and
was employing nonunion labor on the new work , at rates
of pay below union scale and without making contribu-
tions as required by the collective-bargaining agreement.
The collective-bargaining agreement expired on 31
July. On 22 August the Union sent Respondent a written
request to bargain on a new contract . Respondent did
not reply . On 23 September , having already been ap-
proached by at least one nonunion current employee of
Respondent who wished to join the Union, the Union
sent Respondent another request to bargain on a contract
and, in addition , a request for inspection of Respondent's
payroll records for the period from and after 1 August.
Respondent failed to comply with the request.
Ciarlone had a simple and unequivocal explanation for
failing to respond to the Union's demands . He testified
that he has been operating on the very brink of bank-
ruptcy and there simply was no point to his sitting down
with the Union because, despite his prounion sympathies,
he was in no position to enter into any kind of an agree-
ment with the Union . He could not pay the arrearages in
the contributions , and he assumed that until he did the
Union would not permit its members to return to work
on his jobs.
B. Conclusion
The evidence introduced by both sides establishes a
clear case of failure and refusal to bargain . Respondent's
refusal to discuss its problems with the Union is not ex-
cused by the fact that it prejudged the Union's response
to the presentation which it would make (assuming ar-
guendo that that was really its reason). Respondent's
president has in effect said that it will not negotiate with
the Union until conditions are such as are, in its own
judgment, sufficiently propitious for bargaining. Ciar-
lone's own testimony thus establishes willful refusal to
bargain.
Assuming that Ciarlone testified truthfully when he as-
serted that he believed that entering into a contract with
the Union would be futile because it would destroy his
business, such an argument furnishes no defense in this
case . Had he actually negotiated on the basis that giving
in to any of the Union's demands would have been im-
possible, that would not have been good-faith bargaining
in an attempt to reach an agreement . He would have
been in violation of Section 8(a)(5) of the Act. Excelsior
Pet Products, 276 NLRB 759 (1985). If that is so, then
certainly he violated the Act by refusing to talk to the
Union at all.
Actually, Ciarlone presented no proof to support his
assertions regarding the dire economic straits of the busi-
ness. Although the Board has recognized that unusual
circumstances ought to be taken into account in connec-
tion with the obligation to bargain , it has defined such
circumstances as situations so serious that the employer's
continued existence as a viable business entity is in doubt
and has insisted that evidence be presented to establish
the existence of such circumstances . A sharp decline in
business is not enough; proof must be presented that the
very existence of the company is in question . Custom
Sheet Metal Co., 243 NLRB 1102, 1110 (1979).
I am not ignoring the difficulty of Respondent's finan-
cial predicament . However, there is no inconsistency be-
tween consideration of an employer's financial circum-
stances and insistence on his adherence to his collective-
bargaining obligations to the extent appropriate. The
types of circumstances which will excuse collective bar-
gaining are extreme . They have been demonstrated, for
example, in cases involving an employer 's attempt to
withdraw from a multiemployer association which is ne-
gotiating with a union : it has been permitted in cases in-
volving relocation outside the area ; efforts to obtain help
from the union in an effort to surmount the employer's
economic travails; status as a debtor -in-possession under
the Bankruptcy Act; and so forth . See U.S Lingerie
Corp., 170 NLRB 750 (1968). Ciarlone seeks to excuse
his conduct on the bare assertion that he was suffering
economic hardship . That is not enough.
The terms and conditions of a collective-bargaining
agreement remain in effect after its expiration pending
the negotiation of a new contract with a union which
represents, or is presumed to represent, a majority of the
employees in the bargaining unit . Respondent was there-
fore obligated to continue making deductions for the
union funds pursuant to the expired collective -bargaining
agreement . The Union was entitled to inspect the payroll
records to ascertain the amounts owing. Therefore, the
Union was clearly within its rights in demanding (1) that
Respondent negotiate, and (2) that the payroll records
after 1 August be disclosed. The Union presumptively
continued to have the same majority among the replace-
ment hirees employed by Respondent that it had had
prior to its strike.
I am therefore quickly led to the conclusion that Re-
spondent violated Section 8(a)(1) and (5) of the Act
when it refused to meet and bargain with the Union and
when it implemented , without bargaining with the
Union, changes in wages, rates of pay, and other terms
and conditions of employment , and by refusing to furnish
the Union with information which the Union requested
(the payroll records).
The General Counsel took the position that, although
no charge was brought as a result of it, Respondent had
violated the Act in committing the initial default in pay-
ment of contributions to the union health and welfare
and pension funds which resulted in the strike, and was
committing further violation of the Act, on which the
present charge and complaint are based , by refusing to
make the contributions since expiration of the collective-
bargaining agreement . The issue in this regard is whether
the failure to make payment is something more than a
default in meeting the contractual obligations imposed by
the expired collective -bargaining agreement, which con-
tinue into the posteffective era. Respondent concedes its
liability for the amount of the unpaid contributions, as-
serting that the money was not there and that Respond-
ent consequently defaulted in payment. The Union has
unsuccessfully demanded inspection of the payroll
records for the period after 1 August to determine the
amount owing for contributions to union funds. The
other violations of the Act which I have found to have
been committed by Respondent compel an inference that
OLIVE MECHANICAL CONTRACTORS
more is involved in its refusal to make payment than
simple contractual default. The Board has acknowledged
"that a breach of contract is not ipso facto an unfair labor
practice." Oak Cliff-Golman Baking Co., 207 NLRB
1063, 1064 (1973). See United Packinghouse Workers of
America Local 49 (Wilson & Co.), 89 NLRB 310 (1950),
and American Vitrified Products Co., 127 NLRB 701
(1960). Repudiation, however, is something else, and
there is no question that financial hardship does not justi-
fy repudiation or modification of the terms of a collec-
tive-bargaining agreement. Phoenix Air Conditioning, 231
NLRB 341 (1977); Inland Cities, 241 NLRB 374, 379
(1979), enfd. 618 F.2d 117 (9th Cir. 1980). Ciarlone's ces-
sation of fund contributions is colored by his refusal to
abide by other contractual and legal requirements, such
as a duty to furnish information needed by the Union in
order to function effectively. It is on an equal footing
with Ciarlone's deliberate circumvention of the Union in
matters pertaining to contract negotiations, wage rates,
and hiring practices. Ciarlone's protestations of longterm
union sympathy do not conceal the union animus demon-
strated by his antiunion behavior. In Henhouse Market
No. 3 v. NLRB, 428 F.2d 133 (8th Cir. 1970), enfg. 175
NLRB 596 (1969), the Court commented (428 F.2d at
137):
The spirit of the National Labor Relations Act and
the more persuasive authorities stand for the propo-
sition that, even after expiration of a collective bar-
gaining contract, an employer is under an obligation
to bargain with the Union before he may permissi-
bly make any unilateral change in those terms, and
conditions of employment comprising mandatory
bargaining subjects within the meaning of Section
8(d) of the Act.
[I]t is clear that payments by petitioner into the
Union's health, welfare, and retirement benefit
funds fall within the ambit of that mandatory classi-
fication. [Citations and footnotes omitted.]
CONCLUSIONS OF LAW
1. Olive Mechancial Contractors, Inc. is an employer
engaged in commerce within the meaning of Section
2(2), (6), and (7) of the Act.
2. United Association of Journeymen and Apprentices
of the Plumbing and Pipefitting Industry of the United
States and Canada, AFL-CIO, Local Union No. 349 is a
labor organization within the meaning of Section 2(5) of
the Act.
3. The following employees of Respondent constitute a
unit appropriate for the purposes of collective bargaining
within the meaning of Section 9(b) of the Act:
All journeymen plumbers and pipefitters and ap-
prentices employed by the Employer at' its New
Haven, Connecticut facility, but excluding all other
employees, and guards, professional employees and
supervisors as defined in the Act.
4. Respondent violated Section 8(a)(5) and (1) of the
Act.
397
(a) By failing and refusing to meet and bargain with
the Union as the exclusive collective-bargaining repre-
sentative of the employees in the above-described appro-
priate unit.
(b) By implementing changes in wages, rates of pay,
hours of employment , and other terms and conditions of
employment of employees in the unit.
(c) By failing and refusing to furnish the Union with
its payroll records for the period from and after 1
August 1985.
(d) By failing and refusing to make contributions to
union funds as required by the collective -bargaining
agreement.
5. The unfair labor practices found above affect com-
merce within the meaning of Section 2(6) and (7) of the
Act.
THE REMEDY
Having found that Respondent has engaged in unfair
labor practices, I find it necessary to order it to cease
and desist therefrom and to take certain affirmative
action designed to effectuate the policies of the Act. Re-
spondent having refused to bargain collectively with the
Union representing its employees in the respects which I
have indicated, I will recommend that Respondent be di-
rected to negotiate with the Union, restore wages and
working conditions to the standards prescribed in the re-
cently expired collective-bargaining agreement, furnish
the Union with its payroll records for the period since 1
August, and make good the arrearages in fund contribu-
tions.
In the recommended Order, I have provided for retro-
active restoration of the terms and conditions of employ-
ment to those which existed under the expired contract,
in line with the well-settled principle that such terms
remain in effect pending the negotiation of a new con-
tract. No other provision is feasible herein because if res-
toration were directed only as of the date of the Order
herein or as of some intermediate date, a precedent
would be set for awarding windfalls to deliberately recal-
citrant employers, which would profit by their refusal to
negotiate until ordered to do so. I am cognizant of the
possibility, if not the likelihood, that compliance with
such a direction may prove difficult or even beyond the
current financial capabilities of Respondent. This, how-
ever, is a matter for negotiation between Respondent and
the Union. The feasibility of waiver or modification or
other adjustment of Respondent's liabilities is a matter
for consideration by the parties, not by me. I am con-
cerned only with Respondent's deliberate and egregious
violations of the Act.
On these findings of fact and conclusions of law and
on the entire record, I issue the following recommend-
ed2
2 If no exceptions are filed as provided by Sec. 102.46 of the Board's
Rules and Regulations , the findings, conclusions, and recommended
Order shall, as provided m Sec. 102.48 of the Rules, be adopted by the
Board and all objections to them shall be deemed waived for all pur-
loses
398 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
ORDER
The Respondent, Olive Mechanical Contractors, Inc.,
New Haven, Connecticut, its officers, agents, successors,
and assigns, shall
1. Cease and desist from
(a) Refusing to meet and bargain collectively with
United Association of Journeymen and Apprentices of
the Plumbing and Pipefitting Industry of the United
States and Canada, AFL-CIO, Local Union No. 349 as
the exclusive collective-bargaining representative of the
employees in the following appropriate unit:
All journeymen plumbers and pipefitters and ap-
prentices employed by the Employer at its New
Haven, Connecticut facility, but excluding all other
employees, and guards, professional employees and
supervisors as defined in the Act.
(b) Failing or refusing to furnish the Union with its
payroll records from and after 1 August 1985.
(c) Implementing changes in wages, rates of pay, hours
of employment and other terms and conditions of em-
ployment of employees in the unit from those prevailing
prior to 1 August 1985.
(d) In any like or related manner failing to comply
with its obligation to bargain collectively with the Union
in good faith.
2. Take the following affirmative action designed to ef-
fectuate the policies of the Act.
(a) On request, meet with and bargain collectively
with United Association of Journeymen and Apprentices
of the Plumbing and Pipefitting Industry of the United
States and Canada, AFL-CIO, Local Union No. 349
concerning rates of pay, hours of employment, and other
terms and conditions of employment of employees in the
unit.
(b) Furnish the Union, with reasonable promptness, its
payroll records for the period from and after 1 August
1985.
(c) Restore wages, rates of pay, hours of employment,
and other terms and conditions of employment to the
levels which prevailed under the collective-bargaining
agreement which expired 31 July 1985, retroactive to 1
August 1985.
(d) Pay all sums owing for fund contributions as re-
quired by the collective-bargaining agreement.
(e) Post at its facilities at New Haven, Connecticut,
copies of the attached notice marked "Appendix."3
Copies of the notice, on forms provided by the officer in
charge for Subregion 39, after being signed by the Re-
spondent's authorized representative, shall be posted by
the Respondent immediately upon receipt and maintained
for 60 consecutive days in conspicuous places including
s 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."
all places where notices to employees are customarily
posted. Reasonable steps shall be taken by the Respond-
ent to ensure that the notices are not altered, defaced, or
covered by any other material.
(f) Notify the officer in charge for Subregion 39 in
writing within 20 days from the date of this Order what
steps the Respondent has taken to comply.
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 or-
dered us to post and abide by this notice.
WE WILL NOT refuse to meet and bargain collectively
with United Association of Journeymen and Apprentices
of the Plumbing and Pipefitting Industry of the United
States and Canada , AFL-CIO, Local Union No. 349 as
the exclusive collective-bargaining representative of the
employees in the following appropriate unit:
All journeymen plumbers and pipefitters and ap-
prentices employed by the Employer at its New
Haven, Connecticut facility, but excluding all other
employees, and guards, professional employees and
supervisors as defined in the Act.
WE WILL NOT fail or refuse to furnish the Union with
our payroll records from and after 1 August 1985.
WE WILL NOT implement changes in wages, rates of
pay, hours of employment, and other terms and condi-
tions of your employment from those which existed on
31 July 1985.
WE WILL NOT in any like or related manner fail to
comply with our obligation to bargain collectively with
the Union in good faith.
WE WILL, on request, meet with and bargain collec-
tively with United Association of Journeymen and Ap-
prentices of the Plumbing and Pipefitting Industry of the
United States and Canada , AFL-CIO, Local Union No.
349 concerning rates of pay, hours of employment, and
other terms and conditions of your employment.
WE WILL furnish the Union, with reasonable prompt-
ness, our payroll records for the period from and after I
August 1985.
WE WILL make payment of all sums owing for union
fund contributions in accordance with our collective-bar-
gaining agreement with the Union.
WE WILL restore wages, rates of pay, hours of em-
ployment, and other terms and conditions of employment
to the levels which prevailed under the collective-bar-
gaining agreement which expired 31 July 1985, retroac-
tive to 1 August 1985.
OLIVE MECHANICAL CONTRACTORS, INC.