Onan Corp.

National Labor Relations Board - Board Decisions

Apr 7, 2003

338 N.L.R.B. 913 (N.L.R.B. 2003)

ONAN CORP. 913
Onan Corporation, a wholly owned subsidiary of
Cummins, Inc. and International Automobile,
Aerospace & Agricultural Implement Workers
of America. Case 18–RC–16729
April 7, 2003
DECISION AND CERTIFICATION OF RESULTS
OF ELECTION
BY CHAIRMAN BATTISTA AND MEMBERS LIEBMAN
AND ACOSTA
The National Labor Relations Board, by three-member
panel, has considered objections to a rerun election held
on September 26 and 27, 2001, and the hearing officer’s
report recommending disposition of them.1 The election
was conducted pursuant to a Stipulated Election Agree-
ment. The tally of ballots shows 296 for and 413 against
the Petitioner, with 6 challenged ballots, an insufficient
number to affect the results.
The Board has reviewed the record in light of the ex-
ceptions and briefs, and has decided to affirm the hearing
officer’s rulings, findings, and conclusions only to the
extent consistent with this Decision and Certification of
Results of Election. Contrary to the hearing officer and
our dissenting colleague, we overrule the Petitioner’s
objection, which alleged that the Employer interfered
with the rerun election by informing bargaining unit em-
ployees, shortly before that rerun election, that it had
settled certain employee-initiated litigation regarding its
pension plan. Accordingly, we certify the election re-
sults.
I. FACTUAL BACKGROUND
This case centers around a longrunning class action
lawsuit brought by current and former Onan employees
over changes to the Fridley plant’s pension plan (the
pension litigation).2 On July 13, 2001, the Board set
aside the first election at the Fridley plant, partly because
of the announcement, 6 days before the election, of the
Employer’s willingness to seek a settlement of the class
action litigation. This conduct was found to be objec-
tionable as an ill-timed offer of benefit. Onan Corp., 334
NLRB 531 (2001).3 Following the Board’s Order, a re-
run election was scheduled for September 26 and 27.
Approximately 1 month before the Board issued its
decision to set aside the first election, the IRS indicated
tentative approval of a settlement of a related pension
litigation suit between the IRS and the Employer. This

1 The Petitioner filed two objections, but withdrew Objection 2.
2 The litigation affects approximately half of the voting unit employ-
ees, as well as some retirees and nonunit employees at this plant.
3 Neither Chairman Battista nor Member Acosta was a member of
the Board at that time.
settlement paved the way for more fruitful settlement
discussions in the class action pension litigation.
On September 17, the Employer and the pension litiga-
tion class plaintiffs entered into a settlement agreement
in this class action.4 There is no evidence or assertion
that the Employer timed the settlement to influence the
election’s outcome. The Employer announced the set-
tlement to all employees during on-the-clock meetings
that same day.
The district court judge, in an Order dated September
18, preliminarily approved the settlement agreement and
ordered the plaintiff’s attorney to provide class members
with notice of the settlement, as required by Rule 23 of
the Federal Rules of Civil Procedure. Additionally, on
September 18, during meetings with some employees,
the Employer announced that copies of the settlement
agreement were available for the employees. On Sep-
tember 19, the Employer posted the district court order as
well as a summary memo informing employees about the
terms of the settlement, and again notifying them that
they could pick up a copy of the settlement agreement.
The Employer also mailed copies of the memo and court
order to all active employees.
II. ANALYSIS
At the outset, it is important to identify the narrow is-
sue before us. The issue is not whether the settlement
was entered into for the purpose of influencing the elec-
tion. Nor is there an issue as to whether the settlement
was timed to influence the election. Our dissenting col-
league raises neither issue. Rather, she contends only
that the announcement of the settlement was timed to
influence the election.
The Board has held that during a union organizing
campaign, employers must act as they would in the ab-
sence of a union campaign. Waste Management of Palm
Beach, 329 NLRB 198 (1999); American Sunroof Corp.,
248 NLRB 748, (1980). The employer has the burden of
showing that benefits granted during an election cam-
paign are consistent with past practice. Waste Manage-
ment, supra at 198, American Sunroof, supra at 748–49.
We find that the Employer has met this burden.
The record evidence in this case shows that the Em-
ployer had a pattern of announcing developments in the
pension litigation to its employees as they occurred.
During employee meetings, the Employer repeatedly
answered employees’ questions about the litigation. Ad-
ditionally, the Employer contemporaneously notified
employees of important developments in the litigation,
4 Under the agreement, either party could void the agreement if the
Internal Revenue Service and the district court judge did not approve it
by January 15, 2002.
338 NLRB No. 139
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 914
such as the resolution of certain claims on summary
judgment.
This pattern is sufficient to show that the Employer
would have announced the settlement of the pension liti-
gation regardless of whether there was an ongoing union
organizing campaign. Under Board precedent, this is all
that the Employer was required to show. The hearing
officer, however, placed an undue burden on the Em-
ployer by insisting that the Employer show that it was
required to make the announcement. The hearing officer
and the Petitioner emphasize the fact that the district
court required only that the plaintiffs’ attorney notify
class members. However, the Employer does not need to
show that it was required to make the announcement;
rather it must show only that it would have made the
announcement absent a union campaign. Adams Super
Markets Corp., 274 NLRB 1334, 1335 (1985) (finding
that the employer’s unobjectionable announcement was
“for legitimate reasons and not because of the Union’s
campaign”); American Sunroof Corp., supra at 748, 749
(holding that the announcement of a new pension plan
was unobjectionable because there was no evidence that
the employer accelerated the announcement because of
the union).
The dissent contends that the hearing officer did not
require the Employer to demonstrate that it was obligated
to make the announcement concerning the settlement.
The dissent relies on the fact that the hearing officer dis-
cussed this issue when distinguishing the instant case
from American Sunroof Corp., supra. The Employer
relied on that case, and the hearing officer distinguished
it. The hearing officer’s whole point was that the em-
ployer, in American Sunroof, was required to give the
notice and the Employer here was not. Further, our col-
league has overlooked the hearing officer’s subsequent
statement that “Probative and credible evidence shows
the district court Order did not require the Employer
[here] to notify employees regarding the terms of the
settlement agreement.” This statement clearly shows that
the hearing officer believed that the Employer had to
show that it was required to make the announcement.
This case is unlike the case arising from the first elec-
tion. Onan Corp., 334 NLRB at 531. In that case, the
timing of the Employer’s announced willingness to seek
a settlement of the pension litigation was wholly within
the control of the Employer. That is, the Employer could
decide, whenever it wanted to, that it was willing to seek
a settlement. By contrast, the instant case involves the
fact of settlement, a matter obviously not wholly within
the control of the Employer. The settlement occurred on
September 17, and the Employer acted promptly to get
the word out. There is no evidence, nor even any asser-
tion, that the Employer timed the settlement in order to
influence the election’s outcome. Concededly, the an-
nouncement of the settlement was within the control of
the Employer. However, as discussed above, the an-
nouncement was consistent with the past practice of
keeping employees up-to-date on the litigation.
Further, because there has been no allegation that the
decision to enter into the settlement or that the timing of
the settlement was objectionable, and because of the past
practice of keeping employees promptly informed, it
stands to reason that the announcement of such a non-
objectionable factual event was likewise not unlawful.
This conclusion finds support in Board precedent. The
Board has found that the announcement of a lawfully
granted benefit, even if immediately prior to an election,
is not necessarily unlawful. Cardivan Co., 271 NLRB
563, 563–564 (1984) (holding that the announcement of
lawfully granted benefits was unobjectionable).
Our colleague finds that the Employer failed to estab-
lish that the timing of its announcement of the proposed
settlement of the pension litigation was unrelated to the
rerun election. She emphasizes the fact that the Em-
ployer did not simply announce the settlement but also
held meetings announcing the settlement’s details. She
also relies on the fact that the Employer included non-
members of the plaintiff class in these meetings. We
disagree with these contentions.
First, as detailed above, the Employer constantly
communicated with the employees regarding the status
of the lawsuit, informing them of significant develop-
ments immediately after they occurred. Thus, the Em-
ployer’s announcement of the settlement as soon as it
occurred on September 17 was consistent with its past
communications and, therefore, the timing was unrelated
to the rerun election. Further, this is the type of an-
nouncement that an employer would normally make. In
this case, the Employer had a legitimate motive to per-
suade employee class members to support the settlement.
By generating support for the class action settlement, the
Employer could promote a quick settlement hearing, with
minimal objections or delays.
As to our colleagues’ second contention, we believe
that the Employer had legitimate business reasons for
explaining the terms of the settlement to all of its em-
ployees. There was substantial record evidence that the
pension lawsuit was a source of concern among all em-
ployees at the Fridley plant. Employees frequently in-
quired about the lawsuit’s status and believed that it
should be settled. Thus, it was reasonable for the Em-
ployer to assume that all employees would be interested
in the settlement terms, including the impact of the set-
tlement on their retirement benefits. Finally, the evi-
ONAN CORP. 915
dence shows that the Employer wanted to provide em-
ployees with information about the settlement before any
rumors about it began to circulate.
With respect to the fact that nonmembers of the class
were invited to the meetings, we note that the proposed
settlement of the litigation involved changes to the Em-
ployer’s current pension plan. Although these non-
members may not receive benefits from the settlements,
they are covered by the plan. Accordingly, changes to
the plan would affect them in the future. Further, even
for employees who are no longer in the plan, the con-
templated settlement would include changes that would
affect any employee who was in the plan as of January 1,
1989. In sum, the fact that employee-nonmembers of the
class were invited to the meetings is not indicative of an
attempt by the Employer to link the settlement an-
nouncement to the rerun election.
In sum, we find that the Employer did not engage in
objectionable conduct by announcing the settlement of
the pension litigation to all employees. Accordingly, we
shall issue a certification of results of election.
CERTIFICATION OF RESULTS OF ELECTION
IT IS CERTIFIED that a majority of the valid ballots have
not been cast for International Automobile, Aerospace
and Agricultural Implement Workers of America and that
it is not the exclusive representative of these bargaining
unit employees.

MEMBER LIEBMAN, dissenting.
In a series of on-the-clock meetings, 9 days before a
rerun election, the Employer announced to all its em-
ployees that it had settled a longstanding class-action
lawsuit affecting the pensions of certain active employ-
ees and retirees. The Employer’s announcement empha-
sized that the retirement benefits of active employees and
retirees would increase by $7.7 million and $19 million,
respectively. My colleagues concede that the timing of
the announcement was within the Employer’s control,
but find that the Employer established that the timing of
the announcement was unrelated to the impending rerun
election. I disagree.
I. BACKGROUND
This is not the first time the Employer has interfered
with the Board’s election processes. The Board set aside
the initial representation election at the Employer’s facil-
ity because of the Employer’s objectionable conduct,
which included an announcement several days prior to
the election that it was willing to settle the litigation over
the pension-offset issue. See Onan Corp., 334 NLRB
531 (2001). The Board ordered the rerun election that is
the subject of this case.
The rerun election was scheduled for September 26–
27, 2001.1 In captive audience meetings on September
17, the Employer announced to all its active employees
that it had tentatively settled the pension-offset litigation
earlier the same day. The Employer made no effort to
inform the affected retirees of the proposed settlement.
On September 18, the district court issued an order
preliminarily approving proposed class action settlement
and authorizing mailing of notice of proposed class ac-
tion settlement and hearing. The court’s order authorized
the plaintiffs to inform the class of the proposed settle-
ment and scheduled a settlement hearing for December
14. The same day, the Employer held additional “infor-
mational” meetings with active employees to impress
upon them the benefits of the proposed settlement. Once
again, the Employer did not attempt to inform the af-
fected retirees of the proposed settlement.
On September 19, the Employer posted at the facility a
memorandum outlining the proposed settlement and cop-
ies of the court’s order. The Employer also mailed the
memorandum and the order to all its active employees.
The Employer did not send this mailing to the affected
retirees, notwithstanding that it routinely mailed the re-
tirees other benefit-related information.
The Petitioner lost the rerun election the following
week.
II. ANALYSIS
The Board will infer that an announcement or grant of
benefits during the critical period preceding an election is
coercive. The employer, however, may rebut the infer-
ence by establishing an explanation other than the pend-
ing election for the timing of the announcement or be-
stowal of the benefit. See Star, Inc. Lighting the Way,
337 NLRB 962 (2002). Contrary to my colleagues, I
find that the Employer has failed to establish that the
timing of its announcement of the proposed settlement
was unrelated to the impending rerun election.
To begin, the hearing officer properly stated that it was
the Employer’s burden to establish “that the announce-
ment would have been forthcoming at the time made
even if there were not a union campaign.” Thus, con-
trary to the majority, the hearing officer did not impose
any “undue burden” upon the Employer.2

1 All dates are 2001, unless stated otherwise.
2 The majority wrongly accuses the hearing officer of demanding
that the Employer establish that it was “required” to make its an-
nouncements when it did. The hearing officer subsequently observed
that the Employer “had no requirement to notify its employees of the
pension settlement agreement,” but she only made this observation in
distinguishing cases relied upon by the Employer, including, for exam-
ple, American Sunroof Corp., 248 NLRB 748 (1980) (employer estab-
lished that it was required to notify employees of new pension plan to
receive tax deductions).
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 916
Rather, applying the appropriate standard, the hearing
officer properly found that the Employer failed to estab-
lish that its announcement of the proposed settlement
was unrelated to the rerun election. As my colleagues
concede, the timing of the announcement was within the
Employer’s control. The Employer thus chose to make
its announcement the week before the rerun election, less
than 3 months after the Board set aside the initial election
based on the Employer’s similar announcement that it
was willing to settle the pension litigation. The Em-
ployer offered no persuasive justification for the timing
of the announcement. Accordingly, the hearing officer
properly recommended that the Board set aside the rerun
election.
“My colleagues rightly acknowledge that, even if the
Employer’s decision to settle the lawsuit, or the timing of
the settlement, was not objectionable, the Employer’s
announcement of the settlement still might be objection-
able. As the Board recently made clear, “an employer
cannot time the announcement of the benefit in order to
discourage union support, and the Board may separately
scrutinize the timing of the benefit announcement to de-
termine its lawfulness.” Mercy Hospital Mercy South-
west Hospital, 338 NLRB 545 (2002) (emphasis added)
(timing of announcement of wage increase was objec-
tionable, even though wage increase itself was lawful).3
Turning to the circumstances of this case, then, the ma-
jority asserts that the Employer showed it had a past
practice of announcing developments in the pension liti-
gation, and that its September 17–19 announcements
were consistent with this practice. (Presumably, my col-
leagues would not regard the Employer’s prior objec-
tionable conduct as reflecting this practice, too.) The
evidence, however, shows that the Employer was not
merely advising members of the plaintiff class that a set-
tlement of the pension litigation was in the offing.

3 Thus, in Cardivan Co., 271 NLRB 563, 563–564 (1984), cited by
the majority, the Board, although holding that an employer’s an-
nouncement of lawfully granted benefits was not objectionable, relied
on all the circumstances surrounding the announcement—not the bare
proposition that if the granting of the benefit was lawful then any an-
nouncement also was lawful.
Instead, the Employer’s announcements emphasized
the substantial financial benefits at stake: that active em-
ployees and retirees stood to gain $7.7 and $19 million,
respectively, in retirement benefits. As the Petitioner
points out, moreover, the Employer announced these
benefits to its entire work force, even though only about
half the active employees were members of the plaintiff
class. At the same time, the Employer made no effort to
inform the affected retirees of the proposed settlement,
even though it routinely communicated with them re-
garding other benefit-related matters. These facts belie
the Employer’s claim that it was simply apprising af-
fected employees and retirees of a development in the
pension litigation. Such notification, of course, was im-
minent in any event, by means of the court-approved
notice from the plaintiff class representatives.
The majority also suggests that the Employer had a le-
gitimate motive in making the announcement: to per-
suade employee class members to support the settlement
to ensure a quick settlement hearing with minimal objec-
tions or delays. That suggestion raises further questions:
If the Employer was trying to build support for the set-
tlement, then why did it not contact the affected retirees?
Why did it idle nonmembers of the plaintiff class, by
including them in captive audience meetings to explain
the benefits of a settlement they had no standing to chal-
lenge? In any case, why did the Employer announce the
proposed settlement the week before the September 26-
27 rerun election—preempting the court-authorized no-
tice from the plaintiff class representatives, who had the
same interest in winning approval of the settlement—
when the settlement hearing was scheduled for December
14, nearly 3 months later? The Employer has not an-
swered any of these questions.
It was the Employer’s burden to establish a legitimate
explanation for the timing of its announcement. Because
the Employer has failed to rebut the inference that its real
motive here was—as it was prior to the initial election—
to influence the outcome of the impending rerun election,
I would adopt the hearing officer’s recommendation to
set aside the election and direct a second rerun election.