Pepsi Bottling Group, Inc.

National Labor Relations Board - Board Decisions

Apr 30, 2003

338 N.L.R.B. 1123 (N.L.R.B. 2003)

PEPSI BOTTLING GROUP 1123
Pepsi Bottling Group, Inc. and New England Joint
Board, R.W.D.S.U., AFL–CIO, Local Union No.
513. Case 1–CA–38036
April 30, 2003
DECISION AND ORDER
BY CHAIRMAN BATTISTA AND MEMBERS SCHAUMBER
AND WALSH
On June 15, 2001, Administrative Law Judge Richard
H. Beddow issued the attached decision. The Respon-
dent filed exceptions and a supporting brief, the General
Counsel filed an answering brief, and the Respondent
filed a reply brief.
The National Labor Relations Board has delegated 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 conclusions only
to the extent consistent with this Decision and Order.
This case involves employees in two bargaining units:
one at the Respondent’s Allston, Massachusetts facility,
and one at its Cranston, Rhode Island facility. The Un-
ion represents the employees in both units. The judge
found that the Respondent, in violation of Section 8(a)(5)
and (1), unilaterally changed the Allston and Cranston
unit employees’ terms and conditions of employment by
implementing a new 401(k) matching contribution for
the Respondent’s unrepresented employees without giv-
ing the Union notice and opportunity to bargain for this
benefit as to the unit employees. For the reasons stated
below, we reverse and dismiss the complaint.
I. FACTS
A. Allston and Cranston Collective-Bargaining
Agreements
The Respondent produces, distributes, and sells pack-
aged beverages. The Respondent was a division of Pep-
siCo, Inc. until April 1, 1999, when the Respondent spun
off from PepsiCo.
The Union represents the Respondent’s warehouse-
men, mechanics, drivers, and helpers at its Allston facil-
ity. Employees in the Allston unit are covered by a col-
lective-bargaining agreement in effect from June 1, 1999,
through May 31, 2002 (1999 Allston Agreement). The
1999 Allston Agreement was reached in late May 1999
and ratified by the union membership shortly thereafter.
It replaced a prior agreement that was in effect from June
1, 1995, through May 31, 1999 (1995 Allston Agree-
ment).
The Union also represents the Respondent’s produc-
tion workers, warehouse workers, mechanics, and drivers
at its Cranston facility. Employees in the Cranston unit
are covered by a collective-bargaining agreement in ef-
fect from May 1, 1999 through April 30, 2003 (1999
Cranston Agreement). The 1999 Cranston Agreement
was reached in late April and ratified by the union mem-
bership shortly thereafter. It replaced a prior agreement
in effect from May 1, 1995 through April 30, 1999 (1995
Cranston Agreement).
B. The Respondent’s Benefits Plans
The Respondent offers a number of different benefits
plans. Greg Heaslip, the Respondent’s director of bene-
fits, testified that the Respondent has a “Benefits Plus”
Plan informally known as the “Flexible Benefits Plan.”
Benefits Plus is a cafeteria-style plan that allows em-
ployees to choose from among different benefits options.
According to an April 1999 Benefits Plus Plan docu-
ment, the component plans of Benefits Plus are certain
health insurance, accident insurance, and disability plans.
The Respondent also offered a 401(k) plan, but the Bene-
fits Plus Plan document does not list the 401(k) plan as a
component plan of Benefits Plus. The Respondent’s
health, accident, and disability plans, as well as its 401(k)
plan and various other benefits, are summarized in the
Respondent’s 1999 and 2000 “benefits books,” which the
Respondent distributed to its employees.
Both the 1999 Cranston Agreement and the 1999 Alls-
ton Agreement address benefits. The 1999 Cranston
Agreement provides in relevant part: “Effective January
1, 1996, the Company shall implement the Flexible
Benefits Plan as described in negotiations including the
‘401(k)’ plan.” The 1999 Allston Agreement provides in
relevant part: “Effective January 1, 1996, all eligible em-
ployees shall be covered under the Company’s Flexible
Benefits Plan as described during negotiations.” Each of
these provisions also appeared verbatim in the preceding
1995 agreement.
C. The 401(k) Matching Contribution
Prior to the April 1 spinoff, the Respondent’s employ-
ees participated in a PepsiCo stock option program, but
the program was discontinued because of the spinoff.1
Shortly after the spinoff, the Respondent began evaluat-
ing options for employee ownership of the Respondent’s
stock. The Respondent decided to recommend a 401(k)
matching program under which the Respondent’s match-
ing contributions would be paid in the Respondent’s
stock. The Respondent’s board of directors approved the
matching program in October 1999. In a December 1999
letter, the Respondent notified employees of the new

1 The General Counsel does not allege that discontinuance of the
stock option program was unlawful.
338 NLRB No. 174
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1124
401(k) match, which would take effect in January 2000.
The letter stated in part:

All non-union employees with at least one year of ser-
vice will automatically be eligible for the match begin-
ning in January. For our union employees, we hope to
be able to extend this benefit to you in the future, sub-
ject to negotiations between PBG and your union.

There is no evidence in the record that the Union ever re-
quested bargaining over obtaining the 401(k) match for
Allston and Cranston unit employees.
II. PROCEDURAL BACKGROUND AND JUDGE’S DECISION
The complaint alleges in substance that the Respon-
dent unlawfully modified the 1999 Allston and Cranston
Agreements in violation of Section 8(d) and 8(a)(5) of
the Act. Specifically, the complaint alleges that the Re-
spondent “failed to continue in effect all the terms and
conditions” of the Allston and Cranston collective-
bargaining agreements by “failing and refusing to apply
the PBG Matching Contribution Provision of the PBG
401(k) Plan Provision of the Respondent’s flexible bene-
fits plan.”
At the hearing, counsel for the General Counsel called
no witnesses, but introduced several documents, includ-
ing the 1995 and 1999 Allston and Cranston Agreements
and the Respondent’s benefits books. The Respondent
called two witnesses: Greg Heaslip, its director of bene-
fits, and Christopher Luman, its former senior labor rela-
tions manager. Heaslip testified about the implementa-
tion of the matching contribution, and Luman testified
generally about the timing of negotiations of the 1999
Cranston and Allston Agreements. Neither the testimony
nor the documents included any evidence about what the
parties discussed during negotiations for the 1995 or
1999 Allston or Cranston Agreements or what the parties
intended the provisions of those agreements regarding
the 401(k) plan and Flexible Benefit Plan to mean.
The judge found that Respondent violated Section
8(a)(5) and (1), but not on the basis alleged in the com-
plaint. Rather, based on his reading of the 1999 Allston
and Cranston Agreements, the judge found that the Re-
spondent unilaterally changed terms and conditions of
employment “by changing unit employees’ rights to par-
ticipate in the 401(k) provisions of the Employer’s Flexi-
ble Benefits Plan without giving the Union notice and the
opportunity to bargain.” Accordingly, the judge found
that the Respondent violated Section 8(a)(5) and (1).
III. ANALYSIS
We find that the complaint must be dismissed. First,
we find that the violation found by the judge—that the
Respondent unilaterally changed unit employees’ terms
and conditions of employment—was not alleged in the
complaint or litigated at the hearing. Second, we find
that the General Counsel failed to prove the violation
alleged in the complaint, that the Respondent failed to
continue in effect all the terms of the Allston and Cran-
ston collective-bargaining agreements.
A. Unilateral Change Without Notice and Opportunity
to Bargain was not Alleged or Litigated
As stated above, the judge found that the Respondent
violated Section 8(a)(5) and (1) by unilaterally changing
terms and conditions of employment without notice to
the Union and an opportunity to bargain. We disagree.
The unilateral change violation found by the judge was
neither alleged nor litigated. The violation alleged in the
complaint and litigated by the parties was the repudiation
of a contractual obligation to provide the 401(k) match-
ing contribution to unit employees. “It is well estab-
lished that a violation of the Act cannot be properly
found where the violation was not alleged in the com-
plaint and the issue was not fully litigated at the hear-
ing.” Liquor Industry Bargaining Group, 333 NLRB
1219, 1223 (2001), enfd. 50 Fed. Appx. 444 (D.C. Cir.
2002) Accordingly, we reverse the judge’s finding that
the Respondent unilaterally changed employee terms and
conditions of employment in violation of Section 8(a)(5)
and (1).
Under Board precedent, an employer may not provide
a new benefit to unrepresented employees and then re-
fuse to bargain with the Union about providing the bene-
fit to represented employees. See, e.g., Empire Pacific
Industries, 257 NLRB 1425 (1981). However, the com-
plaint does not allege, and the parties did not litigate,
such a violation.2 Therefore, a violation of the Act can-
not be found under the principles outlined in Empire Pa-
cific, supra.

2 We note that the judge’s decision erroneously suggests that the par-
ties litigated the issues of whether the Union requested bargaining over
providing the 401(k) match to the Allston and Cranston unit employees
and whether the Respondent refused to bargain over the matching con-
tribution. Thus, in sec. II of his decision, in discussing the Respon-
dent’s implementation of the 401(k) match, the judge found as follows:
The Union then protested this exclusion of its members from
the 401(k) matching contribution portion of the Benefits Plan. In
March 2000, the Union and Respondent met in an unsuccessful
attempt to resolve the matter and the Respondent adhered to its
position that it would not include the unit employees in the 401(k)
matching contribution portion as part of the Benefits Plan.
Although these statements appear in the General Counsel’s posthearing
brief, we find no record support for them.
Likewise, in the section of his decision entitled “Discussion,” the
judge stated that an employer may not provide a benefit to nonunion
employees while “simultaneously precluding the bargaining representa-
tive from negotiating on that issue.” The record does not show, how-
ever, that the Respondent precluded the Union from bargaining over the
matching contribution.
PEPSI BOTTLING GROUP 1125
B. Contractual Entitlement to 401(k) Match
was not Proven
We further find that the General Counsel failed to
prove the violation alleged in the complaint and litigated
by the parties. The complaint alleges that the Respon-
dent “failed to continue in effect all the terms and condi-
tions” of the Allston and Cranston collective-bargaining
agreements by “failing and refusing to apply the PBG
Matching Contribution Provision of the PBG 401(k) Plan
Provision of the Respondent’s flexible benefits plan,”
thereby violating Section 8(a)(5) and (1). As explained
below, we find that the Cranston and Allston Agreements
are ambiguous. Because there is no extrinsic evidence in
the record showing the parties’ intent, we find that the
General Counsel failed to prove that entitlement to the
401(k) matching contribution was a term or condition of
either the 1999 Cranston Agreement or the 1999 Allston
Agreement. Therefore, we conclude that he failed to
prove that the Respondent violated Section 8(a)(5) and
(1) by failing to continue in effect all the terms of these
agreements.
1. Cranston Agreement
The 1995 and 1999 Cranston Agreements state: “Ef-
fective January 1, 1996, the Company shall implement
the Flexible Benefits Plan as described in negotiations
including the ‘401(k)’ plan.” We find this provision am-
biguous as to the 401(k) benefits required for Cranston
unit employees, and there is no evidence in the record
that explains what the parties intended by this term. The
1995 and 1999 Cranston Agreements, which were nego-
tiated before the 401(k) match existed, of course do not
expressly provide for participation in a 401(k) match.
There is no evidence of what took place during negotia-
tions for either agreement. The 1995 and 1999 Cranston
Agreements require only that the Respondent implement
“the ‘401(k)’ plan” as of January 1, 1996, and reference
discussions during negotiations. To find that the Cran-
ston employees are entitled to participate in the 401(k)
match implemented in 2000, we would have to conclude
(1) that the term “as described in negotiations” does not
limit Cranston unit employees to the 401(k) benefits ex-
tant at the time of those negotiations and (2) that the
Agreement means that Cranston unit employees would
participate not only in “the ‘401(k)’ plan” the Respon-
dent was required to implement as of January 1, 1996,
but also in a new, later 401(k) benefit that did not exist at
the time the agreement was negotiated. If anything, the
language of the 1999 Cranston Agreement suggests oth-
erwise—that the Respondent was required to implement
a particular plan as of January 1996, which undisputedly
did not include a matching contribution at that time.
Of course, it is possible that the parties discussed the
401(k) plan during negotiations and agreed that, in the
future, the Respondent would implement for unit em-
ployees whatever new 401(k) benefits it implemented for
nonunion employees. As of January 2000, those benefits
would include a matching contribution. It is also possi-
ble that the phrase “as described in negotiations” simply
recognizes that the Flexible Benefits Plan and 401(k)
plan were discussed in negotiations, but is not intended
to alter or limit benefits in any way. There is no evi-
dence in the record, however, to prove that either of these
explanations, or any other explanation, is correct. Ac-
cordingly, we cannot find that the 1999 Cranston
Agreement entitled unit employees to the 401(k) match-
ing contribution, and we cannot conclude that the Re-
spondent violated the Act by failing to continue in effect
the terms of the Cranston Agreement.
2. Allston Agreement
The 1999 Allston Agreement states: “Effective Janu-
ary 1, 1996, all eligible employees shall be covered un-
der the Company’s Flexible Benefits Plan as described
during negotiations.” As with the Cranston Agreement,
we find this provision ambiguous as to the 401(k) bene-
fits required for Allston unit employees.
The agreement does not even mention a 401(k) plan.
The judge appeared to read an entitlement to 401(k)
benefits into this provision by finding that the Respon-
dent’s 401(k) plan was part of the Flexible Benefits Plan.
We disagree that the record evidence proves this.3 Even
assuming it did, however, a finding that the 401(k) plan
was part of the Flexible Benefits Plan would not prove
that the Allston employees were entitled to the matching
contribution. The Allston Agreement provides only that
employees are covered under the Flexible Benefits Plan

3 Although the similar provision in the Cranston Agreement, quoted
above, suggests that the 401(k) plan is part of the Flexible Benefits
Plan, Greg Heaslip, the Respondent’s director of benefits, testified that
it was not. He testified that the formal name for the Flexible Benefits
Plan was “Benefits Plus.” The April 6, 1999 Benefits Plus Plan docu-
ment introduced into evidence makes no reference to the 401(k) plan.
The judge found that the 401(k) plan was part of the Flexible Benefits
Plan, apparently because the eligibility provisions in the July 1999
401(k) plan document contain a general statement that employees eligi-
ble for Benefits Plus are also eligible for the 401(k) plan. The 401(k)
plan document then qualifies this statement, however, by listing certain
categories of employees who are eligible for the 401(k) plan but not for
Benefits Plus, and vice versa. That is, eligibility for the 401(k) plan is
not necessarily coextensive with eligibility for Benefits Plus. To the
extent that the judge also relied on the inclusion of the 401(k) plan in
the 1999 and 2000 benefits books as proof that the 401(k) plan was part
of Benefits Plus, we disagree. The benefits books are compilations of
summaries of numerous different benefit plans, some of which are part
of Benefits Plus, and some of which are not. Therefore, we cannot
conclude that the evidence proves that the 401(k) plan was part of the
Flexible Benefits Plan.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1126
“as described in negotiations.” As with the Cranston
Agreement, there is no evidence of what took place dur-
ing negotiations or what the parties intended this term to
mean. “As described during negotiations” could simply
be descriptive, a recognition that the parties did discuss
the Flexible Benefits Plan during negotiations. It could,
however, be limiting, meaning that unit employees are
entitled to participate in the Flexible Benefits Plan only
to the extent described during negotiations. Accordingly,
we cannot find that the Allston Agreement entitled unit
employees to the 401(k) matching contribution.
Therefore, with respect to the 1999 Cranston and Alls-
ton Agreements, we find that the evidence does not prove
that the Respondent violated Section 8(a)(5) and (1) as
alleged in the complaint. Accordingly, we dismiss the
complaint.
ORDER
The complaint is dismissed.

Michael Fitzsimmons, Esq., for the General Counsel.
Richard R. Boisseau, Esq., of Atlanta, Georgia, for the Respon-
dent.
Christina D. Duddy, Esq., of Boston, Massachusetts, for the
Charging Party.
DECISION
STATEMENT OF THE CASE
RICHARD H. BEDDOW, Administrative Law Judge. This mat-
ter was heard in Boston, Massachusetts, on April 10, 2001.
Subsequent to an extension in the filing date. Briefs were filed
by the General Counsel and the Respondent (the Charging
Party by letter dated May 22, 2001, adopted the brief filed by
the General Counsel). The proceeding is based upon a charge
filed March 31, 2000,1 by New England Joint Board
R.W.P.S.U., AFL–CIO, Local Union No. 513. The Regional
Director’s complaint dated November 27, 2000, alleges that
Respondent Pepsi Bottling Group, Inc. (Respondent) violated
Section 8(a)(1) and (5) of the National Labor Relations Act (the
Act) by failing and refusing to apply the matching contribution
provision of its 401(k) plan provision of its Flexible Benefits
Plan to the Charging Party’s Allston and Cranston bargaining
units.
On a review of the entire record in this case and from my ob-
servation of the witnesses and their demeanor, I make the
following

FINDINGS OF FACT
I. JURISDICTION
Respondent is engaged in the production, distribution, and
sale of packaged beverages at Allston, Massachusetts, and
Cranston, Rhode Island, and it annually purchases and receives
goods and materials valued in excess of $50,000 directly from
points outside Massachusetts and Rhode Island. It admits that
1 All following dates will be in 1999 unless otherwise indicated.
it is an employer engaged in operations affecting commerce
within the meaning of Section 2(2), (6), and (7) of the Act and
it also admits that the Union is a labor organization within the
meaning of Section 2(5) of the Act.
II. THE ALLEGED UNFAIR LABOR PRACTICES
Prior to April 1, 1999, the entity that is now Pepsi Bottling
Group, Inc. (PBG) existed as The Pepsi-Cola Company, which
was a division of PepsiCo, Inc. As a division of PepsiCo, the
Pepsi-Cola Company provided certain of its employees with
benefits under various PepsiCo benefit plans. Among these
benefits was the PepsiCo Flexible Benefits Plan (also known as
Flex or Benefits Plus), which was a cafeteria-style plan that
allowed employees to chose from among different options of
insurance benefits to suit their particular needs.
The PepsiCo Flexible Benefits Plan, 401(k) plan (as well as a
stock option plan) were described for employees in a unified
summary plan description called the benefits book. The 1999
benefits book for The Pepsi-Cola Company indicated that un-
ionized employees were eligible for participation in the 401(k)
plan if they were covered by a collective-bargaining agreement
that provided for participation in that benefit but it has no com-
pany-match provision calling for employer contributions to
employees’ 401(k) accounts.
Since at least 1995, the Union has represented employees in
the Cranston unit and the Allston unit. Similar but separate
collective-bargaining agreements (the “1995 Cranston Con-
tract” and the “1995 Allston Contract”) were in effect at each
facility from 1995 until spring 1999. The Allston agreement
covers a unit of approximately 60 warehousemen, mechanics,
drivers, and helpers employed at the Allston facility and is in
effect from June 1, 1999, to May 31, 2002. This agreement
follows an agreement that was effective from June 1, 1995, to
May 31, 1999. The Cranston agreement covers a unit of ap-
proximately 140 production workers, warehouse workers, me-
chanics, and drivers employed at the Cranston facility and is in
effect from May 1, 1999, to April 30, 2003. This agreement
follows an agreement that was effective from May 1, 1995, to
August 30, 1999.
The 1995 Allston agreement incorporated the Respondent’s
Flexible Benefits Plan as follows:

Effective January 1, 1996, all eligible employees shall be cov-
ered under the Company’s Flexible Benefits Plan, as de-
scribed during negotiations.

The 1995 Cranston agreement also incorporated the Benefits
Plan as follows:

Effective January 1, 1996, the Company shall implement The
Flexible Benefits Plan as described in negotiations, including
the 401(k) plan.

The Union and Respondent entered into the existing agree-
ment for the Cranston unit on May 1, 1999. The reference to
the inclusion of the Benefit Plan was unchanged from the pre-
ceding agreement. The Union and Respondent entered into the
existing agreement for the Allston unit, dated June 1, 1999, also
reference to the inclusion of the Benefit Plan and was un-
changed from the preceding agreement.
PEPSI BOTTLING GROUP 1127
The January 1, 1999 benefits book distributed to the Allston
and Cranston unit employees is approximately 200 pages in
length and covers health care, life and accident insurance, dis-
ability protection, and future financial security, including Re-
spondent’s save up 401(k) savings plan which provides em-
ployees with the opportunity of making tax deferred contribu-
tions.
After the spinoff of PBG from PepsiCo, Inc. on April 1,
1999, PBG employees could not participate in the PepsiCo
stock option program and in mid May Kevin Cox, the head of
human resources at PBG, assigned the development of such a
program for PBG to Greg Heaslip, the director of benefits.
At subsequent meetings of managers other options were pro-
posed and discussed and at the end of August a senior man-
agement team decided to recommend a 401(k) company match
program, pursuant to which the Company’s matching contribu-
tions would be paid in PBG stock. The recommended program
was submitted to the PBG board of directors, which approved it
in the middle of October.
The 401(k) company match program was kept confidential
until it was approved by the board of directors, assertedly so as
not to create unfounded expectations among employees. In the
second half of October PBG communicated the new benefit to
its human resources managers and in December the Respondent
announced the 401(k) company match benefit in a letter to all
employees. This letter stated that eligible nonunion employees
would be covered by the 401(k) company match program be-
ginning in January 2000 and that the Company hoped to be able
to extend the benefit to union represented employees in the
future “subject to negotiations between PBG and your union.”
The Respondent also issued a 2000 edition of the benefits
book, which did not contain any mention of the 401(k) com-
pany match program, however, the PBG 401(k) plan was sum-
marized. The 2000 benefits book briefly identified which em-
ployees were eligible for participation in the PBG 401(k) plan
and stated that “certain union employees” may participate in the
plan.
The notification indicated that, effective January 1, 2000, it
was providing a 401(k) matching contribution as part of the
Benefit Plan. This new portion of the Benefit Plan provided for
a 50-percent matching contribution for up to 4 percent of salary
for employees with less than 10 years of service and a 100-
percent match for up to 4 percent of salary for those with more
than 10 years service. The announcement also stated that em-
ployees covered by a collective-bargaining agreement (such as
those in the Allston and Cranston units), were not eligible for
the benefit unless and until it was specifically agreed to by
Respondent in collective bargaining.
Thereafter, the 401(k) company match program benefit was
described in a Prospectus dated March 15, 2000, which de-
scribed the eligibility of employees for participation in the
401(k) plan generally and the eligibility of employees for the
company match provision. With respect to participation in the
plan generally, the Prospectus indicated that any employee
whose conditions of employment were determined by collective
bargaining with a union was eligible to participate in the plan if
inclusion in the plan had been specifically provided for in the
applicable collective-bargaining agreement and with respect to
eligibility for the company match benefit, the Prospectus indi-
cated that any employee whose conditions of employment were
determined by collective bargaining with a union was eligible
for the matching contributions if the employee’s right to the
company match had been specifically provided for in the appli-
cable collective-bargaining agreement.
The Union then protested this exclusion of its members from
the 401(k) matching contribution portion of the Benefits Plan.
In March 2000, the Union and Respondent met in an unsuccess-
ful attempt to resolve the matter and the Respondent adhered to
its position that it would not include the unit employees in the
401(k) matching contribution portion as part of the Benefits
Plan. Thereafter, in May 2000, the Respondent benefits direc-
tor sent all employees a letter with enclosures including the
401(k) plan prospectus. The Respondent notes that because the
PBG 401(k) plan gave employees the opportunity to make in-
vestment decisions, PBG was required by law to prepare a Pro-
spectus and submit it to all employees who were eligible to
participate in that plan.
Discussion
Once a union has been selected to represent an appropriate
unit of employees, the employer may not make decisions re-
garding any term and condition of employment without first
notifying the union and providing with the opportunity to bar-
gain and it will be found in violation of Section 8(a)(1) and (5)
of the Act by unilaterally implementing changes in a mandatory
subject of bargaining such as reducing matching contributions
to an employees’ 401(k) retirement plan, see Britt Metal Pro-
cessing, Inc., 322 NLRB 421 (1996), or eliminating a bonus
program or other earning opportunities, see Frank Leta Honda,
321 NLRB 482 (1996).
It is well settled that the real harm in an employer’s unilat-
eral implementation of terms and conditions of employment is
to the Union’s status as bargaining representative, in effect
undermining the Union in the eyes of the employees. See
NLRB v. C & C Plywood Corp., 385 U.S. 421, 430 fn. 15
(1967). Here, the damage to the Union’s authority as bargain-
ing representative is highlighted by Benefits Manager Heaslip’s
May 2000, letter to employees which encouraged employees to
read through enclosed materials to learn about the plan while at
the same time, precluding unit employees from the chance to
participate and telling them (in the prospectus), that it was be-
cause it was not included in the Union’s bargaining agreement.
Here, the terms and conditions of employment in the existing
collective-bargaining agreements stated that Allston unit plant
employees “shall be covered under the Company’s Flexible
Benefits Plan, as described during negotiations” and that the
Company shall implement the Flexible Benefits Plan as de-
scribed in negotiation, including the 401(k) plan.” The Benefit
Plan described in the prior benefits book distributed to all em-
ployees including an unchanged 401(k) savings plan that did
not provide for any matching company contributions.
Here, I conclude that the language of the applicable 1995 and
1999 agreements means that the Allston and Cranston unit em-
ployees would participate in the same flexible benefit plan gen-
erally available to other employees. Thus, when the Respon-
dent’s unilateral introduced an employer contribution 401(k)
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1128
plan and refusal to extend this contribution benefit to employ-
ees of the Allston and Cranston units, it represented a material
change in the terms of the existing contractual agreements.
There was no notification to the Union of these changes and
there was no offer of an opportunity to bargain over the
changes. Otherwise the fact that that changes did not directly
diminish any existing company contribution as in the Britt case,
supra, does not negate the Respondent’s failure to take those
steps.
As pointed out by the Respondent, the General Counsel did
not present any witnesses to elaborate on the contract phrase
“as described during negotiations.” Clearly, there is no conten-
tion that the past negotiations described any plan company
contributions to a 401(k) plan and any such evidence regarding
benefits in general would not be relevant and would not alter
the corroborative description of benefits including the Flexible
Benefits Plan listed in past annual benefits books, which in-
cluded the relevant employee paid 401(k) plan only. Under
these circumstances, the General Counsel is not required to
show, as suggested by the Respondent, that the Company was
contractually obligated to provide unit employees with a com-
pany match 401(k) benefit plan. The issue here is the unilateral
and disparate implementation of benefit changes to various
employees without notice or an opportunity to bargain, see
Garney Morris, Inc., 313 NLRB 101, 122 (1993).
The Respondent also argues that any 401(k) plan is not part
of the “Flexible Benefits Plan” referred to in the Allston unit
contract. The Respondent’s director of benefits described the
benefits books as a combined summary plan description of
various benefits. He also described the Flexible Benefits Plan
as a cafeteria style benefit which also goes under the name
“Benefits Plus,” but be asserted that the 401(k) plan was sepa-
rate from the “Benefits Plus” or “Flex” plan effective April 6,
1999. He agreed, however, that as of April 1999, the Respon-
dent had a single 401(k) program. That program (R. Exh. 2),
provides as follows:

2.1 Eligibility for Participation
(a) Eligible Employees—The following Employees
shall be eligible to participate in the Plan:
(i) Any Employee entitled to enroll in their Em-
ployer’s Benefits Plus program; or——

Also, Respondent’s witness Luman (who formerly was a
senior labor relations manager for the Company), noted that he
participated as either a negotiator or chief negotiator in the
negotiation of both of the applicable agreements, however, the
Respondent’s counsel failed to ask him about the contract
phrase “as described during negotiation.” The failure to exam-
ine a favorable witness regarding any factual issue upon which
that witness would likely have knowledge gives rise to the
“strongest possible adverse inference against Respondent ‘re-
garding any such fact,’” see Flexsteel Industries, 316 NLRB
745, 758 (1995). Accordingly, I conclude that the inclusion of
that phrase in the contract is not shown to raise any relevant
ambiguity and I therefore find that the Allston unit employees,
by virtue of the contractual language referring to their coverage
under the Company’s Flexible Benefits Plan and the Cranston
unit employees under that language and the specific inclusion
of the “401(k) plan,” were contractually entitled to be eligible
for participation in the existing nonemployer contributory
401(k) plan.
In summation, I find that an employer who is party to an ex-
isting bargaining agreement which provides for eligibility in a
401(k) plan cannot then unilaterally exclude one subclass of its
employees (here, its Local 513 unit employees covered by a
collective-bargaining agreement), for not having negotiated a
revised benefit while, at the same time unilaterally implement-
ing the new benefit for other employees and simultaneously
precluding the bargaining representative from negotiating on
that issue.
Here, despite the existence of contractual rights to receive
benefits which included voluntary participation in a 401(k)
plan, the Respondent failed to notify to the Union of its planned
changes and it did not offer an opportunity to bargain about
them before it unilaterally implemented a new 401(k) plan that
excluded unit employees from eligibility. These actions are
inconsistent with the Respondent’s bargaining obligation and
they also have undermined the status of the Union as bargain-
ing representative of unit employees. Accordingly, I find that
the Respondent is shown to have failed to bargain in good faith
and has violated Section 8(a)(1) and (5) of the Act, as alleged.
CONCLUSIONS OF LAW
1. 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 and is the exclusive collective-
bargaining representative of appropriate units of employees at
the Employer’s Allston, Massachusetts and Cranston, Rhode
Island facilities.
3. By unilaterally making changes in terms and conditions
of employment by changing unit employees’ rights to partici-
pate in the 401(k) provisions of the Employer’s Flexible Bene-
fits Plan without giving the Union notice and the opportunity to
bargain about the subject, the Respondent has violated Section
8(a)(1) and (5) of the Act.
REMEDY
Having found that the Respondent has engaged in unfair la-
bor practices, it is recommended that the Respondent be or-
dered to cease and desist therefrom and to take the affirmative
action described below which is designed to effectuate the poli-
cies of the Act.
Having found that the Respondent failed to notify and bar-
gain with the Union as the employees’ 401(k) plan, the Re-
spondent is ordered to bargain in good faith with the Union. In
addition, the Respondent is ordered to make whole with inter-
est, unit employees for the lost opportunity to make contribu-
tions to the matching 401(k) plan. Any additional amount the
Respondent must pay shall be determined in the manner set
forth in Ogle Protection Service, 183 NLRB 682 (1970), enfd.
444 F.2d 502 (6th Cir. 1971), with interest as computed in New
PEPSI BOTTLING GROUP 1129
Horizons for the Retarded, 283 NLRB 1173 (1987).2 The
Company shall be required to preserve and make available to

2 Under New Horizons, interest is computed at the “short-term Fed-
eral rate” for the underpayment of taxes as set out in the 1986 amend-
ment to 26 U.S.C. § 6621. Interest accrued before 1 January 1997 (the
effective date of the amendment) shall be computed as in Florida Steel
Corp., 231 NLRB 651 (1977).
the Board or its agents, or request, payroll and other records to
facilitate the computation of this make whole remedy.
Otherwise, it is not considered necessary that a broad order
be issued.
[Recommended Order omitted from publication.]