Peerless Roofing Co., LTD.

National Labor Relations Board - Board Decisions

Jan 22, 1980

247 N.L.R.B. 500 (N.L.R.B. 1980)

DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Peerless Roofing Co., Ltd. and United Slate, Tile &
Composition Roofers, Damp & Waterproof Work-
ers Assoc., Local 221. Case 37-CA-1510
January 22, 1980
DECISION AND ORDER
BY MEMBEIRS JENKINS, PENEL.L.O, AND
TRUESI)AI.E
On August 21, 1979, Administrative Law Judge
Richard D. Taplitz issued the attached Decision in
this proceeding. Thereafter, Respondent filed excep-
tions and a supporting brief.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the
National Labor Relations Board has delegated its
authority in this proceeding to a three-member panel.
The Board has considered the record and the
attached Decision in light of the exceptions and brief
and has decided to affirm the rulings, findings,' and
conclusions of the Administrative Law Judge and to
adopt his recommended Order, as modified.2
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor
Relations Board adopts as its Order the recommended
Order of the Administrative Law Judge, as modified
below, and hereby orders that the Respondent,
Peerless Roofing Co., Ltd., Honolulu, Hawaii, its
officers, agents, successors, and assigns, shall take the
action set forth in the said recommended Order, as so
modified:
1. Substitute the following for paragraphs 2(c) and
(d):
"(c) Post at its Honolulu, Hawaii, facility copies of
the attached notice marked 'Appendix'2 ' Copies of the
notice, on forms provided by the Regional Director for
Region 20, after being duly signed by Respondent,
shall be posted by it immediately upon receipt thereof,
and be maintained by it for 60 consecutive days
thereafter, in conspicuous places, including all places
where notices to employees are customarily posted.
Reasonable steps shall be taken by Respondent to
insure that said notices are not altered, defaced, or
covered by any other material.
"(d) Notify the Regional Director for Region 20, in
writing, within 20 days from the date of this Order,
what steps Respondent has taken to comply here-
with."
' The Administrative Law Judge found that Respondent's cessation of
payments into various union funds was not reasonably encompassed in any of
Respondent's offers or positions during collective bargaining and, thus,
constituted a violation of Sec. 8(a)(5) and (1) of the Act. Since we agree with
2. Substitute the attached notice for that of the
Administrative Law Judge.
this finding, we conclude that it is unnecessary to pass on the Administrative
Law Judge's additional finding that, in any event. an impasse in the
negotiations did not occur until August 28. 1978.
The Administrative Law Judge inadvertently referred to Region 37 in his
recommended Order and notice Accordingly. we will modify the recom-
mended Order and notice to reflect the change to Region 20.
APPENDIX
NOTICE To EMPILOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
WE WlI.L NOT fail or refuse to make contribu-
tions on behalf of our employees in the unit
described below for May, June, July, and August,
1978, to the United Slate, Tile & Composition
Roofers, Damp & Waterproof WorkersAssoc.,
Local 221, health and welfare fund, pension fund,
annuity fund, vacation fund, holiday fund, and
apprentice and training fund. The bargaining unit
is:
All roofing department employees employed by
the Employer at its Honolulu, Hawaii, facility,
excluding office clerical employees, managerial
employees, supervisors, and guards as defined
in the Act.
WE WILL NOT fail or refuse to pay into those
funds, as liquidated damages, an additional sum
amounting to 10 percent of the contributions due
those funds.
WE WILL. NOT in any like or related manner
interfere with, restrain, or coerce employees in
the exercise of rights guaranteed to them in
Section 7 of the Act.
We wIl.l make contributions on behalf of our
employees in that bargaining unit for May, June,
July, and August, 1978, to that Union's health
and welfare fund, pension fund, annuity fund,
vacation fund, holiday fund, and apprentice and
training fund.
WE WILL. pay into those funds, as liquidated
damages, an additional sum amounting to 10
percent of the contributions due those funds.
PEERLESS ROOFING Co., LTD.
DECISION
STATEMENT OF THE CASE
RICHARD D. TAPI.ITZ, Administrative Law Judge: This
case was heard in Honolulu, Hawaii, on April 10, 1979. The
charge was filed on December 7, 1978, by United Slate, Tile
& Composition Roofers, Damp & Waterproof Workers
Assoc., Local 221, herein called the Union. The complaint
issued on January 26, 1979, alleging that Peerless Roofing
247 NLRB No. 72
500
Co., Ltd., herein called Respondent, violated Section 8(a)(5)
and (I) of the National Labor Relations Act, as amended.
Issues
Respondent's collective-bargaining agreement with the
Union expired on April 30, 1978. The principal issue herein
is whether Respondent violated Section 8(a)(5) and (1) of the
Act by refusing to pay contributions on behalf of its
employees into pension, welfare, and similar trust funds for
the months of May through August 1978. Subsidiary
questions are whether payment of liquidated damages called
for by the expired contract would be appropriate and
whether Respondent has an obligation to pay the Union
dues on behalf of its employees for that period.
All parties were given full opportunity to participate, to
introduce relevant evidence, to examine and cross-examine
witnesses, to argue orally, and to file briefs. Briefs, which
have been carefully considered, were filed on behalf of the
General Counsel and Respondent.
Upon the entire record' of the case and from my
observation of the witnesses and their demeanor, I make the
following:
FINDINGS OF FACT
1. THE BUSINESS OF RESPONDENT
Respondent, a Hawaii corporation with its place of
business in Honolulu, Hawaii, is engaged in the repair and
construction of roofs. During the past calendar year Respon-
dent purchased and received goods valued in excess of
$50,000 from suppliers located in Hawaii, who in turn
purchased and received those goods directly from suppliers
located outside Hawaii. The complaint alleges, the answer
admits, and I find that Respondent is an employer engaged
in commerce within the meaning of Section 2(6) and (7) of
the Act.
II. THE LABOR ORGANIZATION INVOLVED
The Union is a labor organization within the meaning of
Section 2(5) of the Act.
' The transcript of the record is hereby corrected by insertion of the word
"not" after the word "would" on p. 103, I. 2.
' The parties stipulated, and I find, that at least until the latter part of
August or the beginning of September 1979 the Union represented a majority
of employees in the appropriate unit.
' The complaint alleges, the answer admits, and I find that the following
unit is appropriate for bargaining:
All roofing department employees employed by the Employer at its
Honolulu, Hawaii, facility, excluding office clerical employees, manageri-
al employees, supervisors, and guards as defined in the Act.
The various funds are created by certain written documents which are
incorporated by reference into the contract.
' Payments were also required to a credit union, but those payments were
made, and no issue is raised as to them.
' Consistent with his position taken during the hearing, counsel for the
General Counsel stated in his brief:
The Charging Party has stated that the only remedy it seeks is that
Respondent be ordered to pay the amounts owed into the various trust
funds, that liquidated damages be paid, and that dues deducted during
May through August 1978 be forwarded to the Union. Thus, the
Charging Party stated that it does not seek the additional remedial action
of having the company ordered by the Honorable Administrative Law
Judge to bargain with the Union in regard to the terms and conditions of
employment. In light of the position taken by the Charging Party in
PEERLESS ROOFING CO., LTD.
111. THE A.LEGED UNFAIR LABOR PRACTICES
A. Background
Respondent and the Union began a collective-bargaining
relationship in about 1959.: Through Respondent's member-
ship in the Hawaiian Roofing Contractors Association,
herein called the Association, Respondent was bound by a
series of collective-bargaining contracts, the latest of which
expired on April 30, 1978. By letter dated March 14, 1978,
Respondent withdrew from the Association and thereafter it
negotiated on an individual basis.'
On February 22, 1978, Respondent notified the Union of
its intent to terminate the collective-bargaining agreement.
Beginning on April 20, 1978, Respondent and the Union met
to negotiate a new contract, but they were unable to reach
agreement. On September 6, 1978, the Union called a strike
and began picketing. In the latter part of August or early
September 1978 a majority of the employees of Respondent
who were members of the Union resigned from the Union
and returned to work. The other employee members of the
Union who did not resign from the Union did not return to
work, and since on or about September 6, 1978, Respondent
has not employed any members of the Union. Picketing that
had been taking place at Respondent's premises ended in
early November 1978.
The collective-bargaining agreement that expired on April
30, 1978, required that Respondent make contributions to
the Union's health and welfare fund, pension fund, annuity
fund, vacation fund, holiday fund, and apprentice and
training fund.' In addition, the contract required Respon-
dent to make payroll deductions to cover membership dues
of employees and to pay that money to the Union.' After the
expiration of the contract, Respondent ceased making
payments to those funds and ceased paying dues on behalf of
the employees. Payments were not made for the months of
May, June, July, and August, 1978. The parties stipulated
that payments to the trust funds are not sought for the
period after August 30, 1978.'
B. The Demands for Payment
Section 19(c)(4) of the expired contract provides:
Employer contributions to the various Trust Funds as
provided for in this Agreement shall be computed on a
monthly basis and shall be paid or postmarked by the
20th day of the month immediately following the
regard to the limited relief sought, Counsel for the General Counsel
informed the Honorable Administrative Law Judge that the remedy
sought by the General Counsel was in accordance with the position of the
Charging Party. Thus, General Counsel requests the Honorable Admin-
istrative Law Judge order Respondent to pay into the trust funds the
money due for the months of May through August, that liquidated
damages be paid, and that dues for May through August be forwarded
and that the Board's interest attached to the amounts owed.
The General Counsel would point out that the Honorable Administra-
tive Law Judge may limit his remedial order based on the Union's request
and should do so without drawing any inference regarding the position of
the Union as the bargaining agent for Respondent's employees passed
August 1978. The fact that the majority of the employees resigned from
the Union in September does not call for the conclusion that the Union is
no longer the collective-bargaining representative of Peerless employees
or that if the Union requested additional bargaining, Peerless could
refuse based upon any finding in this case. In fact, this case would not
present the issue of Peerless' continued obligation to bargain with the
Union and the limited remedy sought by the Charging Party should not
serve as a basis for any inference that the Union no longer represents
employees of Peerless
501
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
month in which they accrued. A transmittal form as
provided by the Trust Fund and/or Administrative
Office shall be completed by the Employer and shall
accompany each such payment.
Respondent submitted the transmittal forms for May, June,
July, and August, 1978, but the form was not accompanied
by any remittance.' Under the provisions of the contract the
payments for May 1978 were not due until June 20, 1978.
On September 28, 1978, Samuel Mokuahi, the Union's
business manager, wrote to Respondent's president and
owner, John Hoogs, stating that the Union had received
Respondent's transmittal reports for May, June, and July,
1978, and asking when payment could be expected. As of
that date the transmittal report for August had not been
received by the Union. By October 5, 1978, the August
transmittal form had been received. On that date the board
of trustees of the trust funds wrote to Hoogs, saying that the
transmittals for May through August were overdue and that
Respondent was responsible for liquidated damages in the
amount of 10 percent of the amount due each fund, or $20,
whichever was larger. The letter went on to state that, if
payments were not received, economic action would be
taken and the account referred to an attorney, with
Respondent being held responsible for attorney's fees and
court costs. On October 10, 1978, the Union's attorney,
Christopher McKenzie, wrote to Hoogs saying that he had
been asked to pursue collection for the amounts due for
May, June, and July, 1978. On October 24, 1978, Respon-
dent's attorney, Barry W. Marr, wrote in reply to McKen-
zie's letter stating that Respondent's obligation to make
payments to the Roofers Union ceased with the expiration of
the contract on April 30, 1978.
Respondent has not made the payments for May through
August 1978. However, for those months, the various funds
continued to give coverage to the employees. The funds had
reserves for that purpose, and coverage was continued while
they tried to collect the money from Respondent.
The Union did not receive dues either from the employees
or from Respondent for May through August 1978. The
dues were listed on the transmittal forms, but there is no
other evidence in the record to indicate whether or not
Respondent checked off those dues from the employees'
wages.
Hoogs testified that he sent the transmittal forms for May
through August because he hoped there was a chance the
Union would agree to a dual rate of pay which would give
relief for reroofing residential work. That type of work is
discussed more fully below. Hoogs averred that he did not
intend to pay any of the funds unless agreement was reached
on that issue.
' The forms show the name of the employee, the hours worked, the dues,
the vacation allowance, the credit union, and amounts for health and welfare,
training, pension, and annuity. The total remittance due shown on the forms
was: for May $4,390.63; for June S8,074.13; for July $6,381.50; and for
August $7,308.55.
' Hoogs had given Sweetow full authority to negotiate on behalf of
Respondent.
' Respondent's primary business involves reroofing. About 50 to 60 percent
of that reroofing is on residential property. Residential reroofing requires the
preparation of old roofs and the installation of new roofs on housing. The
residential reroofing business is highly competitive, and there are a large
number of nonunion concerns doing that work. Those concerns pay
C. The Negotiating Meetings
The first negotiating session took place on April 20, 1978.
Several independent employers met with Union Business
Manager Mokuahi. Respondent President Hoogs and Re-
spondent Labor Relations Consultant Mike Sweetow' were
there. Mokuahi started the meeting by telling Respondent's
representatives and the others about the progress of the
negotiations that were then going on with the Association.
Sweetow told Mokuahi that Respondent needed relief with
regard to residential reroofing work.' Mokuahi replied that
the Union had agreed to a most-favored-nations clause for
the Association's contract, ° and that that clause was going
to stand in the way of the Union's accepting anything that
was different. At the April 20 meeting, and at all subsequent
meetings, the Union took the position that it could not agree
on a lower rate for residential reroofing because of the most-
favored-nations clause. The Union never changed that
position.
On April 21, 1978, Sweetow had an informal meeting with
Mokuahi. Sweetow said that Respondent was determined to
get a reduced rate for residential reroofing, and he gave
Mokuahi a detailed written proposal which included a
provision for a class II union card for residential reroofers
who would be paid a reduced rate. Mokuahi replied that he
did not see how it would work and that, if he did agree to it,
he would be stuck with it with the other roofers and the
general contractors.
The next meeting was on April 25, 1978. Mokuahi again
detailed the progress of the Association's negotiations.
Sweetow said that he could probably live with that contract,
but that he needed relief on residential reroofing work.
Mokuahi asked for a specific proposal in writing. Sweetow
submitted that written proposal at the next meeting which
was on April 28, 1978. That proposal dealt only with
reroofing problems. It provided, among other things, that
residential reroofers be given a class II union card and be
paid a substantially reduced rate in situations where the
value on the reroofing job was under a certain amount.
Mokuahi again raised the problem of the most-favored-
nations clause. He said that his men would never buy
Respondent's proposal and that it was unacceptable. Moku-
ahi also said that he did not think his men were going to
work without a contract, that Respondent had not given the
Union a proposal that would make the men work, and that
the men had already turned down the type of proposal that
had been offered. However, he also told them that he would
take the Company's proposal back to the union committee.
Later, Mokuahi told the committee that they had the most-
favored-nations clause with the Association, and if they
approximately half the hourly wages paid by union reroofers. The reroofing
business has been in a state of depression for a number of years and many
residential reroofing concerns have gone out of business. In the past Hoogs
often urged the Union to organize the nonunion reroofers so as to improve his
competitive position. Most of the Association's members are roofers in new
construction, who primarily perform commercial and government work
rather than residential reroofing. Hoogs withdrew from the Association
because he believed that he did not share a community of interest with its
members.
'" Under that clause the Union would be obligated to give a lower rate to all
the Association's members if it gave that rate to Respondent.
502
PEERLESS ROOFING CO., LTD.
agreed to Respondent's proposal it would mean reopening a
new classification and an entirely new contract.
On April 29, 1978, the Union ratified a contract with the
Association.
By letter dated May 1, 1978, Sweetow, on behalf of
Respondent, offered "those same wages, fringes, and lan-
guage changes as were agreed to by the Hawaii Roofing
Contractors Association" with "one additional consider-
ation in the form of some agreed upon proviso which gives
the company relief in the re-roofing category." The letter
went on to mention the Company's proposals of April 21
and 28, and stated that relief of some sort was needed if the
Company were to survive its nonunion competition. An
additional option was mentioned which would include
putting residential reroofing on a voluntary performance
basis at 45 percent of scale, but with full benefits. The letter
went on to state:
If we are unable to have relief either by our proposal
of April 21 and 28 which provides a new classification
of re-roofer at lower pay and benefits and a guaranteed
ratio of current journeymen at full pay and benefits on
every qualifying job or, the concept proposal contained
in the preceding paragraph, we must have one of them
or we are unfortunately at an impasse as far as I can see.
I sincerely hope we are able to work this out as
suggested above. We don't want a strike, but we must
take this course simply to survive.
The Union did not reply to that letter.
On May 15, 1978, Sweetow met informally with Mokuahi.
They discussed matters that had been raised at previous
meetings, but no agreement was reached."
Sometime after May 1, 1978, Respondent reduced the
wage scale of its residential reroofing employees. It is not
contended that that reduction violated the Act.
The parties met again on August 14, 1978. This time a
Federal mediator was present. They rehashed matters that
had previously been discussed. Sweetow showed some
flexibility with regard to different approaches that could give
Respondent relief with regard to residential reroofing work.
Mokuahi emphasized the difficulties flowing from the most-
favored-nations clause in the Association's contract. During
the course of that meeting Sweetow suggested the possibility
of setting up a separate local to try to take care of the
problem. Under that plan, employees working in the
separate local would be paid based on a lower classification.
The separate local would be a sublocal of the Union and its
members would only do residential reroofing work. Moku-
ahi said that he would try to bring in an International
representative to discuss the matter with Respondent.
The following day, August 15, 1978, Sweetow wrote to
Mokuahi about the prospective meeting with the interna-
tional representative and described the benefits to the
industry that could arise from his proposals.
An international representative came to Hawaii from the
mainland and a meeting was held on August 23, 1978. A
second meeting was held with the international representa-
tive on August 28. After discussing the matter with
Respondent's representatives, Mokuahi said that the union
" This finding is based on the credited testimony of Mokuahi. Sweetow had
no recollection of such a meeting, Findings relating to the other meetings are
based on a composite of the testimony of Sweetow and Mokuahi.
was not going to go for a separate local, that it looked like
they could not come to an agreement, and that they were at
an impasse. There were no meetings thereafter. The Union
began to strike and picket on September 6, 1978.
During the course of negotiations no representative of
Respondent ever proposed to the Union that contributions
to the various funds be eliminated. The new contract with
the Association provides for payment to those funds as well
as the payment of dues.
D. Analysis and Conclusions
1. The payments into the funds
As the Board held in Harold W. Hinson, d/b/a Henhouse
Market No. 3, 175 NLRB 596 (1969), enfd. 428 F.2d 133
(8th Cir. 1970):
The pension, health, and welfare plans provided for by
the expired contract constituted an aspect of employee
wages and a term and condition of employment which
survived the expiration of the contract and could not be
altered without bargaining.
An employer meets its bargaining duty with regard to
unilateral changes where the union has waived bargaining on
the issue or the unilateral change is consistent with a rejected
offer the company made to the union after bargaining has
reached an impasse. Allen W. Bird, II, receiverfor Caravelle
Boat Company. a corporation, and Caravelle Boat Company,
227 NLRB 1355 (1977); The Royal Himmel Distilling
Company, 203 NLRB 370 (1973). There is no contention or
evidence that the Union waived its right to bargain with
regard to payments into the various funds. Even if an
impasse does exist, a unilateral change cannot be made
unless it is reasonably encompassed by the employer's
preimpasse proposal. Ace Galvanizing, Inc., 217 NLRB 144
(1975). As the United States Supreme Court held in
N.L.R.B. v. Crompton-Highland Mills, Inc., 337 U.S. 217,
226 (1949), an employer cannot make unilateral changes
"substantially different from . . . any which the employer
has proposed during its negotiations." The controlling law is
succinctly set forth in Taft Broadcasting Co.. WDAF AM-
FM TV. 163 NLRB 475, 478 (1967), enfd. 395 F.2d 622
(D.C. Cir. 1968), where the Board held:
An employer violates his duty to bargain if, when
negotiations are sought or are in progress, he unilateral-
ly institutes changes in existing terms and conditions of
employment.' On the other hand, after bargaining to an
impasse, that is, after good-faith negotiations have
exhausted the prospects of concluding an agreement, an
employer does not violate the Act by making unilateral
changes that are reasonably comprehended within his
pre-impasse proposals.'
Whether a bargaining impasse exists is a matter of
judgment. The bargaining history, the good faith of the
parties in negotiations, the length of the negotiations,
the importance of the issue or issues as to which there is
disagreement, the contemporaneous understanding of
the parties as to the state of negotiations are all relevant
503
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
factors to be considered in deciding whether an impasse
in bargaining existed.
'N.LR.B. v. Beene Katz, etc.. d/b/a Williamsburg Steel Products Co..
369 U.S. 736(1962).
^N.L.R.B. v. Intracoastal Terminal. Inc.. et al., 286 F.2d 954 (5th Cir.
1961).
In the instant case, it is immaterial whether or not the
parties had reached an impasse because the Company's
unilateral change relating to the cessation of payments into
the funds was not reasonably encompassed in any of the
negotiations. During negotiations Respondent never pro-
posed that payments into the funds be ended and Respon-
dent never bargained or offered to bargain about such a
change.
Respondent raises a number of separate defenses. It
contends that the May payments are barred by the 6-month
limitation contained in Section 10(b) of the Act. The charge
was filed on December 7, 1978, and therefore violations
prior to June 7, 1978, cannot be reached. However, the May
payments were not due until June 20, 1978. The expired
contract provided that contributions to the trust funds shall
be paid or postmarked by the 20th day of the month
immediately following the month in which they accrued.
The Union could not claim or demand payment of the funds
until they were due, and they were due less than 6 months
prior to the filing of the charge. The charge was therefore
timely under Section 10(b) of the Act.
Respondent argues that it should not be required to pay
into the various funds because such payments would be
illegal under Section 302 of the Act."
Moglia v. Geoghegan, 403 F.2d 110 (2d Cir. 1968), cert.
denied 394 U.S. 919 (1969), held that employer payments to
a union pension fund were lawful only when the employer
had a written agreement with the union as required by
Section 302. In that case the employer had never entered
into a collective-bargaining contract or a pension trust
agreement with the union. The case involved litigation
between private parties and was not keyed to unfair labor
practices. No attempt was made to integrate Section 302
with Section 8(a)(5) of the Act. Both Section 302 and
Section 8(a)(5) are part of the same statute. One section of a
statute will not be lightly construed to nullify another
section. As is indicated above, the Board has long held that
Section 8(aX5) of the Act requires post-contract payments
into trust and other funds and does not permit unilateral
changes which result in a cessation of such payments prior
to bargaining and impasse. In Harold W. Hinson, d/b/a Hen
House Market No. 3 v. N.L.R.B., 428 F.2d 133, 137 (8th
Cir. 1970), the Eighth Circuit agreed with the Board's
approach, and held:
The spirit of the National Labor Relations Act and the
more persuasive authorities stand for the proposition
that, even after expiration of a collective bargaining
" In any event I find that an impasse was not reached until August 28,
1978. While the Union never deviated from its original proposals, Respondent
kept formulating new and sometimes ingenious proposals that would provide
relief with regard to pay for residential reroofing employees. Negotiations
continued on those various proposals through August 28, 1978, and the Union
even brought in an International representative to assist in negotiations during
the last two bargaining sessions. Although the negotiations did not result in an
agreement, the parties had not exhausted the prospect of concluding an
agreement until the last bargaining session which was on August 28, 1978.
contract, an employer is under an obligation to bargain
with the Union . . . before he may permissibly 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 .... It
is clear that payments by petitioner into the Union's
health, welfare, and retirement benefit funds fall within
the ambit of that mandatory classification.
That court also held that the trust agreement underlying the
expired contract was a sufficient "written agreement with
the employer" to meet the requirements of Section 302.
In SAC Construction Company, 235 NLRB 1211 (1978),
and Waynec Olive Knoll Farms. Inc., d/b/a Waynes Dairy,
223 NLRB 260 (1976), administrative law judges considered
and rejected similar defenses related to Section 302. In both
cases, the Board affirmed the administrative law judges'
decisions. In conformity with those decisions, I find that
Respondent's Section 302 defense is not viable.
For the reasons set forth above, I find that Respondent
violated Section 8(a)(5) and (1) of the Act by failing and
refusing to make contributions on behalf of its employees for
May, June, July, and August, 1978, to the Union's health
and welfare fund, pension fund, annuity fund, vacation fund,
holiday fund, and apprenticeship and training fund.
2. The liquidated damages
Section 19(C)(3) of the recently expired contract provides
for liquidated damages as follows:
When an Employer's monthly contribution to any of
the Trust Funds provided for under this agreement is
not paid, or postmarked and mailed by the 20th day of
the month immediately following the month in which
said contributions accrued, such contribution is delin-
quent. An Employer responsible for such delinquent
contribution shall pay damages to each such Fund in
the amount of 10 percent of such delinquent contribu-
tion or $20, whichever is greater, for each and every
month that the contribution is delinquent. Such amount
shall be due and payable as liquidated damages, and not
as a penalty, upon the day immediately following the
date of such contribution becomes delinquent and shall
be in addition to the total amount of the delinquent
contribution.
In Clerks and Checkers Local No. 1593, International
Longshoremen's Association, AFL-CIO (Caldwell Shipping
Company), 243 NLRB 8 (1979)," the Board found that trust
funds were entitled to be compensated "for administration
costs and other expenses and loss of interest incurred by the
Fund as a result of its acceptance of the retroactive fringe
benefit payments." The Board held [id. at 9, fn. 4]:
Because the provisions of employee benefit fund
agreements are variable and complex, the Board does
' Sec. 302(c)(5) provides in relevant part that it is unlawful for an employer
to pay money to union established pension and other funds unless "the
detailed basis on which such payments are to be made is specified in a written
agreement with the employer .... "
" See also Fitzpatrick Electric. Inc., 242 NLRB 739 (1979); B. G. Costich d
Sons, Inc.. 243 NLRB 79 (1979).
504
PEERLESS ROOFING CO., LTD.
not provide for interest at a fixed rate on fund payments
due as part of a "make-whole" remedy. We therefore
leave to further proceedings the question of how much
interest Respondent must pay into the benefit fund in
order to satisfy our "make-whole" remedy. These
additional amounts may be determined, depending
upon the circumstances of each case, by reference to
provisions in the documents governing the fund at issue
and, where there are no governing provisions, to
evidence of any loss directly attributable to the unlawful
action, which might include the loss of return on
investment of the portion of funds withheld, additional
administrative costs, etc., but not collateral losses. See
Merryweather Optical Co., 240 NLRB 1213, fn. 7
(1979).
In the instant case, the documents governing the fund
show that liquidated damages of 10 percent are to be paid to
the fund." Those documents show an agreed upon method
for determining the additional costs to the funds and it is
appropriate that the remedy herein take that agreement into
consideration. I shall therefore recommend that Respondent
be ordered to pay the various funds not only the amount
due, but an additional 10 percent of that amount as
liquidated damages.'"
3. The payment of dues
The contract contains both a union-security and a dues-
checkoff clause. The checkoff clause provides in part that,
upon receipt of an appropriate form authorizing deduction,
union dues shall be deducted by the employer and transmit-
ted monthly to the Union. The transmittal reports that
Respondent submitted to the Union for May, June, July, and
August showed amounts for dues. Those amounts were
never paid. The contract expired on April 30, 1978, and the
dues were not paid thereafter. There is no evidence in the
record to indicate whether in fact the dues were deducted
from the employees' pay. The question presented is whether
Respondent had a statutory obligation to pay the Union
those dues.
It is clear that the union-security clause, which required
union membership as a condition of continued employment,
did not survive the contract. As the Board held in Trico
Products Corporation, 238 NLRB 1306, 1308 (1978):
Although most terms and conditions of employment
continue during the hiatus period after the expiration of
a collective-bargaining agreement, a union-security
clause does not survive absent a contractual provision
continuing the agreement, Bethlehem Steel Company
(Shipbuilding Division), 133 NLRB 1347 (1961) [en-
forcement denied on other grounds 320 F.2d 615 (3d
Cir. 1963)].
In Bethlehem Steel, which was cited in the Trico Products
case, the Board adopted a decision of an administrative law
judge that equated a union-security clause with a checkoff
" The 10 percent would be substantially greater than the flat $20 also
mentioned in the contract.
'" The contract is somewhat ambiguous where it speaks of 10-percent
damages "for each and every month that such contribution is delinquent." I
interpret this to mean that 10 percent is due on the amounts owing for May.
June, July. and August or 10 percent on the entire sum due If it were
clause, and found that neither survived the expiration of the
contract. In a supplemental decision in Bethlehem Steel
reported at 136 NLRB 1500, 1501, 1502 (1962), the Board
held:
We continue to believe that Respondent did not violate
the Act when it ceased giving effect to the contract
provisions which required employees to join the Union
30 days after hire and discontinued the checkoff of
union dues.
Notwithstanding the fact that union security and
checkoff are compulsory subjects of bargaining, and
that Respondent acted unilaterally with respect to
them, we find nothing unlawful in Respondent's action
here. The acquisition and maintenance of union mem-
bership cannot be made a condition of employment
except under a contract which conforms to the proviso
to Section 8(a)(3). So long as such a contract is in force,
the parties may. consistent with its union-security
provisions, require union membership as a condition of
employment. Howevet, upon the termination of a
union-security contract, the union-security provisions
become inoperative and no justification remains for
either party to the contract thereafter to impose union-
security requirements. Consequently, when, upon expi-
ration of its contracts with the Union, the Respondent
refused to continue to require newly hired employees to
join the Union after 30 days of employment, it was
acting in accordance with the mandate of the Act.
Similar considerations prevail with respect to Re-
spondent's refusal to continue to check off dues after
the end of the contracts. The checkoff provisions in
Respondent's contracts with the Union implemented
the union-security provisions. The Union's right to such
checkoffs in its favor, like its right to the imposition of
union security, was created by the contracts and
became a contractual right which continued to exist so
long as the contracts remained in force.
The Third Circuit Court of Appeals agreed with that
portion of the Board's Decision which is relevant herein. In
Bethlehem Steel, sub nom. Industrial Union of Marine and
Shipbuilding Workers of America, AFL-CIO v. N.L.R.B..
320 F.2d 615 (3d Cir. 1963), the court held at 619:
The Board concluded that Bethlehem did not violate
the statute when, upon the expiration of the 1956
agreement, it discontinued enforcement of the union
shop and checkoff. . .. we agree with the reasoning of
the Board. The right to require union membership as a
condition of employment is dependent upon a contract
which meets the standards prescribed in Section 8(a)(3).
The checkoff is merely a means of implementing union
security. Since there was no contract in existence when
the company discontinued these practices, its action
was in conformity with the law.
interpreted to mean that each month's delinquency required a 10-percent
additional payment every month thereafter until paid (or 120-percent
additional payment per year if one month's delinquency was not paid for a
year) then that would amount to a penalty rather than a remedy and the
additional payment would have to he determined in a backpay hearing under
the guidelines el forth i ( Caldwell Slhippi,/g Co.. uipra.
S05
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
In conformity with those cases I find that Respondent did
not violate the Act by refusing to make dues payments to the
Union after the expiration of the contract."
IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES
UPON COMMERCE
The activities of Respondent set forth in section III,
above, occurring in connection with its operations described
in section 1, above, have a close, intimate, and substantial
relationship to trade, traffic, and commerce among the
several States and tend to lead to labor disputes burdening
and obstructing commerce and the free flow of commerce.
v. THE REMEDY
Having found that Respondent has engaged in certain
unfair labor practices, I recommend that it be ordered to
cease and desist therefrom and take certain affirmative
action designed to effectuate the policies of the Act.
Having found that Respondent violated Section 8(a)(5)
and (I) of the Act by failing and refusing to make
contributions on behalf of its bargaining-unit employees for
May, June, July, and August, 1978, to the Union's health
and welfare fund, pension fund, annuity fund, vacation fund,
holiday fund, and apprentice and training fund, I recom-
mend that Respondent be ordered to make those payments.'"
As a further remedy, I also recommend that Respondent be
ordered to pay into those funds, as liquidated damages, an
additional sum amounting to 10 percent of the contributions
due those funds.
CONCLUSIONS OF LAW
I. Respondent 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 meaning
of Section 2(5) of the Act.
3. The following unit is appropriate for the purposes of
collective bargaining:
All roofing department employees employed by the
Employer at its Honolulu, Hawaii facility, excluding
office clerical employees, managerial employees, super-
visors, and guards as defined in the Act.
4. During May, June, July, and August, 1978, the Union
was the exclusive collective-bargaining representative of the
employees of Respondent in the bargaining unit set forth
above. '9
5. Respondent violated Section 8(a)(5) and (1) of the Act
by failing and refusing to make contributions on behalf of
" If Respondent did deduct dues from the wages of its employees, those
employees are entitled to have that money returned to them by Respondent.
" As is more fully set forth in sec. III, A, of this Decision, the Charging
Party does not seek an order requiring Respondent to bargain with it.
Respondent was put on notice at the beginning of the hearing that, with
regard to contributions to the trust funds, payment was sought only for May,
June, July, and August. In his post-trial brief the General Counsel also
requests a limited remedy. In compliance with that request. I shall not
recommend that Respondent be ordered to bargain with the Union or that
Respondent be ordered to pay the funds for months after August 1978.
" This finding does not imply that the Union ceased to be the bargaining
representative of those employees after August 1978. No finding is made in
that regard.
the employees in the unit set forth above for May, June,
July, and August, 1978, to the Union's health and welfare
fund, pension fund, annuity fund, vacation fund, holiday
fund, and apprentice and training fund.
6. The aforesaid unfair labor practices are unfair labor
practices affecting commerce within the meaning of Section
2(6) and (7) of the Act.
Upon the foregoing findings of fact, conclusions of law,
and upon the entire record, and pursuant to Section 10(c) of
the Act, I hereby issue the following recommended:
ORDER2"
The Respondent, Peerless Roofing Co., Ltd., Honolulu,
Hawaii, its officers, agents, successors, and assigns, shall:
I. Cease and desist from:
(a) Failing and refusing to make contributions on behalf of
its employees in the unit described below for May, June,
July, and August, 1978, to the United Slate, Tile &
Composition Roofers, Damp & Waterproof Workers Assoc.,
Local 221 health and welfare fund, pension fund, annuity
fund, vacation fund, holiday fund, and apprentice and
training fund. The bargaining unit is:
All roofing department employees employed by the
Employer at its Honolulu, Hawaii, facility, excluding
office clerical employees, managerial employees, super-
visors, and guards as defined in the Act.
(b) Failing and refusing to pay into those funds, as
liquidated damages, an additional sum amounting to 10
percent of the contributions due to those funds.
(c) In any like or related manner interfering with,
restraining, or coercing employees in the exercise of rights
guaranteed them in Section 7 of the Act.
2. Take the following affirmative action to effectuate the
policies of the Act:
(a) Make contributions on behalf of its employees in that
bargaining unit for May, June, July, and August, 1978, to
said Union's health and welfare fund, pension fund, annuity
fund, vacation fund, holiday fund, and apprenticeship and
training fund.
(b) Pay into those funds, as liquidated damages, an
additional sum amounting to 10 percent of the contributions
due those funds.
(c) Post at its Honolulu, Hawaii, facility copies of the
attached notice marked "Appendix."2' Copies of said notice,
on forms provided by the Regional Director for Region 37,
after being duly signed by it, shall be posted by it
immediately upon receipt thereof, and be maintained by it
for 60 consecutive days thereafter, in conspicuous places,
including all places where notices to employees are custom-
"' In the event no exceptions are filed as provided by Sec. 102.46 of the
Rules and Regulations of the National Labor Relations Board, the findings,
conclusions, and recommended Order herein shall, as provided in Sec. 102.48
of the Rules and Regulations, be adopted by the Board and become its
findings, conclusions, and Order, and all objections thereto shall be deemed
waived for all purposes.
" In the event that this Order is enforced by a Judgment of a United States
CoLrt of Appeals, the words in the notice reading "Posted by Order of the
National 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."
506
PEERLESS ROOFING CO., LTD.
arily posted. Reasonable steps shall be taken by it to ensure
that said notices are not altered, defaced, or covered by any
other material.
(d) Notify the Regional Director for Region 37, in writing,
within 20 days from the date of this order, what steps it has
taken to comply herewith.
507