Prestige Bedding Cob., Inc.

National Labor Relations Board - Board Decisions

Jul 31, 1974

212 N.L.R.B. 690 (N.L.R.B. 1974)

690 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Prestige Bedding Company , Inc. and Velma Denton
and United Furniture Workers of America, Local
282,AFL-CIO
Local 282, United , Furniture , Workers of America,
AFL-CIO and United ,Furniture Workers Insurance
Fund and Richard A. Brackhahn , Attorney at Law.
Cases 26-CA-4516, 26-CA-4517, 26-CB-763-1,
and 26-CB-763-2
July 31, 1974
DECISION AND ORDER
BY CHAIRMAN MILLER AND MEMBERS FANNING
AND JENKINS
On September 4, 1973, Administrative Law Judge
Morton D. Friedman issued the attached Decision in
this proceeding. Thereafter, the General Counsel filed
exceptions and a supporting brief, and the Respon-
dent Employer filed its "Protective Exceptions" and
incorporated its brief to the Administrative Law
Judge.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the Na-
tional Labor Relations Board has delegated its au-
thority in this proceeding to a three-member panel.
The Board has considered the record and the at-
tached Decision in light of the exceptions and briefs
and has decided to affirm the rulings, findings, and
conclusions of the Administrative Law Judge only to
the extent consistent with the Decision herein.
We agree with the Administrative Law Judge that
the Respondent Employer violated Section 8(a)(l),
(2), and (3) of the Act and the Respondent Union
violated Section 8(b)(1)(A) and (2) of the Act by
maintaining a clause in their collective-bargaining
agreement which provided hospitalization, medical
care, and $1,000 death benefits "for each employee
who is a member of the Union and such other employ-
ees that the Company may desire to have covered
... ." However, we do not agree with the Adminis-
trative Law Judge's failure to provide for a remedy
which would dissipate, remove, or avoid the conse-
quences of the unfair labor practices of the Employer
and the Union.
The facts in the instant case, as set forth more fully
in the Decision of the Administrative Law Judge here-
in, are as follows. Insurance premiums were paid by
the Employer to the Respondent Insurance Fund (a
separate entity from the Employer and the Union) 1
only for those employees who were members of the
1 Cf J J Hagerty, Inc, 139 NLRB 633 (1962), enfd sub nom Local /38,
International Union of Operating Engineers v N L R B 321 F 2d 130 (C A 2,
1963).
Union. The fund refused to accept payments on this
basis beginning with the Employer's August 13, 1971,
remittance. The August payment and all of. the
Employer's subsequent uncashed checks were for-
warded by the Fund to the Union. This practice was
still in effect on June 9, 1972, when the Employer sent
a check to the Fund which was payment of the insur-
ance premium of employee Velma Denton, a union
member. From June 27 until July 7, 1962, Denton was
hospitalized. On July 19, 1972, Denton prepared a
claim for hospitalization benefits, had it count-
ersigned by the Union's president, and sent it to the
Fund. On August 10, 1972, the Fund rejected the
claim because "the employer has not been paying
premiums to the fund in accordance with the provi-
sions of the collective bargaining agreement." About
the same time, the Union forwarded to the Employer
the uncashed premium payments which the Union
had received from the Fund and had retained during
the past year. Denton's illness was terminal and she
died on March 13, 1973.
We are aware of the Employer's argument that the
insurance clause in question is broad enough to per-
mit not only union members, but all unit employees
to take advantage of insurance benefits offered by the
parties' collective-bargaining agreement. However,
we find it necessary to decide whether the wording in
the said insurance clause is unlawful, per se, since, in
fact, the Employer, by its own admission, unlawfully
tendered premium payments to the Fund only for
union members.
We are also aware of the Respondent Union's argu-
ment that it made several attempts to interpret or
change the said insurance clause in a manner which
would make insurance available to all bargaining unit
employees. However, we find no evidence that the
Union ever notified employees in the collective-bar-
gaining unit that the insurance clause was broad
enough to allow nonunion members to participate.
Because of this failure on the part of the Union and
because the Union's efforts to change the insurance
clause were, in fact, unsuccessful, the insurance plan,
insofar as unit employees knew, continued to be ad-
ministered only for members of the Union.
While the employees in the bargaining unit were
relying on the existence of the insurance plan which
had been negotiated for them by the Union, the
Union knew that the insurance plan, in effect, had
been canceled because of the Fund's refusal to accept
insurance premium payments only for union mem-
bers. Yet there is no evidence that any employee was
ever informed by the Union of the fact that insurance
premium payments were being sent by the Employer,
rejected by the Fund, and returned to the Union.
Instead of so infornung the employees in the bargain-
212 NLRB No. 104
PRESTIGE BEDDING COMPANY, INC. 691
ing unit, the Union allowed the employees to continue
to rely on union membership as a means of obtaining
medical care, hospitalization, and death benefits. The
fact that the Union's president countersigned Union
Member Denton's claim is but another indication that
the Union, despite its earlier attempts to include all
bargaining unit employees in the insurance plan, con-
tinued to participate in the plan which was, in fact,
being administered only for union members.
Based on the foregoing, we find that the Employer
and the Union, by participating in an insurance plan
which was available only for union members, thereby
restrained unit employees in their right to refrain from
becoming a union member. Accordingly, we find that
the Employer and the Union violated Section 8(a)(1)
and 8(b)(l)(A) of the Act, respectively.2 We further
find that the Employer and the Union, by giving more
remuneration (in the form of an insurance plan) to
union members than to nonunion members for the
work which unit employees performed, thereby dis-
criminated in regard to a term or condition of employ-
ment in a manner which would tend to encourage
membership in a labor organization. Therefore, we
find that the Employer and the Union violated Sec-
tion 8(a)(3) and 8(b)(2) of the Act, respectively. We
also find that the Employer, by making payments to
the Fund only for union members, compensated em-
ployees for union membership, thereby contributing
financial support to the Union. Thus, we find that the
Employer violated Section 8(a)(2) of the Act.
As a remedy for the foregoing violations, we have
recommended, in similar cases, that respondents per-
mit participation in insurance and other plans by em-
ployees who were not allowed to benefit in such plans
by reason of the respondents' unfair practices.' How-
ever, in the case at bar, such a remedy is not appropri-
ate since the Union has been decertified and the
insurance plan no longer exists. In any event, our
remedies have also provided that employees who are
adversely affected by insurance plans which are ad-
ministered in a discriminatory manner are entitled to
all the interest, emoluments, rights, and privileges in
such plans which would have accrued to the employ-
ees but for the discrimination.4 In applying the fore-
going precedent to the case at bar, we find that it
2 In view of our basis for this finding, we find it unnecessary to rely on a
theory of breach of duty of fair representation on the part of the Union as
set forth in Miranda Fuel Company, inc, 140 NLRB 181 (1962)
3 Local 138, international Union of Operating Engineers. AFL-CIO. 123
NLRB 1393, 1410-12 (1959), enfd 293 F 2d 187, 199 (CA 2, 1961), Bendix-
Westinghouse Automotive Air Brake Company, 185 NLRB 375. 378-379
(1970), enfd 443 F 2d 106 (C A. 6, 1971)
Dura Corporation, 156 NLRB 285, 289-290 (1965), enfd 380 F 2d 970
(C A 6, 1967), J J Hagerty, Inc 139 NLRB 633. 639, 643 (1962), enfd rub
nom Local 138, International Union of Operating Engineers v N L R B, 321
F 2d 130,137 (C A 2, 1963), Indiana Gas & Chemical Corporation, 130 NLRB
1488, 1491 ( 1961), Northeast Coastal, Inc , 124 NLRB 442 . 443, 444 (1959)
would effectuate the purposes of the Act to add to the
remedy which the Administrative Law Judge has set
forth in his Decision a remedy which would require
that the Employer and Union herein jointly and sev-
erally make whole the estate of Velma Denton for any
loss suffered by reason of the fact that she did not
receive hospitalization, medical care, or death bene-
fits from the Respondent Fund. Such a remedy is
justified, in our opinion, because Denton relied, to her
detriment, on an insurance provision in a collective-
bargaining agreement which had been negotiated for
her benefit by the Union and the Employer. More-
over, but for the discriminatory administration of the
insurance plan by the Employer and the Union, insur-
ance payments made on Denton's behalf would have
been accepted by the Fund and the negotiated plan
would have been in full force and effect during
Denton's illness and at the time of her death.
In providing the remedy that we do, we are not
determining private rights in contract or in tort,' but
are merely seeking to provide a remedy which will
dissipate, remove, or avoid the consequences of the
unfair labor practices which we have found.,' Nor are
we condoning the unfair labor practices committed by
the Employer and the Union by providing a remedy
which allows the estate of Denton, a union member,
to obtain benefits from an insurance plan which was
administered only for union members. In this regard,
we note that the remedy which we provide is no differ-
ent, basically, than remedies we have granted in cases
which have involved wage increases which have been
unlawfully promised or granted to a selected group of
employees. In those cases, although we have not con-
doned the wage increases which were unlawfully
promised or granted by a respondent, we have not
required the respondent to revoke, rescind, or discon-
tinue the wage increase or other terms or conditions
of employment previously promised or granted.'
Likewise, in the case at bar, we do not require that the
Employer and the Union revoke, rescind, or discon-
tinue insurance benefits promised or granted in the
collective-bargaining agreement to union members.
Instead, we find that it would effectuate the purposes
of the Act to order that Velma Denton' s estate be
made whole for any financial loss suffered by reason
of the Employer's and the Union's failure to provide
the insurance coverage and benefits set forth in the
3 See Gediman v A nheuser Busch , Inc, 299 F 2d 537, 541-544 (CA 2,
1962), reversing 193 F Supp 72 (D C N Y , 1961), and Branch v White, 239
F 2d 665, 670, 671 (N J Sup Ct, 1968)
6 See Jacobsen v Luckenbach Steamship Co, 201 F Supp 883 , 888 (D C.
Ore, 1961), and cases therein cited
r Yale Rubber Manufacturing Company, 193 NLRB 141 ( 1971), Spotlight
Company, Inc, 188 NLRB 819, 820 (1971), enfd 462 F 2d 18 (C A 8, 1972);
and see Bisso Towboat Company, 192 NLRB 885, 886 ( 1971), wherein the
entire collective -bargaining agreement was set aside, but the Respondent was
not required to depart from the level of benefits for employees then in effect
692 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
collective-bargaining agreement for Velma Denton at
the time of her illness and death.'
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor Rela-
tions Board hereby orders that:
A. The Respondent Employer, Prestige Bedding
Company, Inc., Memphis, Tennessee, its officers,
agents, successors, and assigns, shall:
1. Cease and desist from:
(a) Including in its collective-bargaining contracts
with the Respondent Union, United Furniture Work-
ers of America, Local 282, AFL-CIO, or any other
labor organization certified as representative of its
employees, any provisions which require membership
in such union as a condition for participation in any
insurance or other welfare benefits.
(b) Unlawfully assisting United Furniture Workers
of America, Local 282, AFL-CIO, by including in its
collective-bargaining contract with the said Union, or
with any other labor organization certified as repre-
sentative of its employees, any such provisions as
aforesaid.
(c) Discriminating against any of its employees by
including in its collective-bargaining contract with
United Furniture Workers of America, Local 282,
AFL-CIO, or with any other labor organization certi-
fied as representative of its employees, any provisions
which require membership in such union as a condi-
tion for participation in insurance benefits or any
other welfare benefits.
(d) In any other like or related manner interfering
with, restraining, or coercing its employees in the ex-
ercise of their right to self-organization, to form labor
organizations, to join or assist any labor organization,
to bargain collectively through representatives of their
own choosing, to engage in concerted activities for the
purpose of collective bargaining or other mutual aid
or protection, or to refrain from any and all such
activities.
2. Take the following affirmative action which will
effectuate the policies of the Act:
(a) Jointly and severally with the above-named Re-
8 Chairman Miller concurs in the result and, while not in basic dis-
agreement with the rationale set forth, would add thereto that Velma Denton
became the innocent victim on a dispute between the parties which arose
solely because of their mutual culpability in having limited insurance cover-
age to an improper class But for the dispute thus unlawfully created, it is
clear that Denton would have received the benefits , and, in order to restore
the status quo which would have otherwise obtained , the remedy herein
adopted is, in the Chairman 's view , proper Any other member of the bar-
gaining unit who can be shown to have suffered losses as a result of the
unlawful conduct of the parties is eligible for like consideration as set forth
in the test of our remedial order in the interest of, so far as possible , restoring
the status quo ante
spondent Union, and in the manner set forth in the
section of the Administrative Law Judge's Decision
entitled "The Remedy" make whole any employees
who may have suffered a loss of insurance benefits by
reason of the discrimination against them.
(b) Jointly and severally with the Respondent
Union make whole Velma Denton's estate for any loss
suffered to Velma Denton or her estate, by reason of
the failure of Velma Denton or her estate to receive
the coverage and benefits set forth in the insurance
clause of the Respondent Employer's and the Respon-
dent Union's collective-bargaining agreement, by
payment to Velma Denton's estate of a sum of money
equal to the amount of insurance benefits Velma Den-
ton or her estate would have received but for the
unfair labor practices of the Respondent Employer,
together with 6-percent interest thereon, in accor-
dance with Isis Plumbing & Heating Co., 138 NLRB
716 (1962).
(c) Jointly and severally with the Respondent
Union make whole any other employee who was for-
merly in the bargaining unit of the Respondent Union
or the estate of any other such employee for any loss
suffered to such employee or estate by reason of the
failure of such employee or estate to receive the cover-
age and benefits set forth in the insurance clause of
the Respondent Employer's and the Respondent
Union's collective-bargaining agreement , by payment
to such employee or estate of a sum of money equal
to the amount of insurance benefits such employee or
such estate would have received but for the unfair
labor practices of the Respondent Employer, together
with 6-percent interest thereon, in accordance with
Isis Plumbing & Heating Co., supra.
(d) Preserve and, upon request, make available to
the Board or its agents, for examination and copying,
all payroll records, social security payment records,
and all reports and records necessary to analyze the
amount of insurance payments due under this Order.
(e) Post at its plant in Memphis, Tennessee, copies
of the attached notice marked "Appendix A." 9 Cop-
ies of said notice, on forms provided by the Regional
Director for Region 26, after being duly signed by
Respondent Employer's representative, shall be post-
ed by Respondent Employer immediately upon re-
ceipt 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 Employer to insure that said notices
are not altered, defaced, or covered by any other ma-
9 In the event that this Order is enforced by a Judgment of a United States
Court of Appeals, the words in the notice reading "Posted by Order of the
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 "
PRESTIGE BEDDING COMPANY, INC. 693
terial.
(f) Notify the Regional Director for Region 26, in
writing, within 20 days from the date of this Order,
what steps the Respondent Employer has taken to
comply herewith.
B. The Respondent Union, United Furniture
Workers of America, Local 282, AFL-CIO, its offi-
cers, agents, and representatives, shall:
1. Cease and desist from:
(a) Including in its collective-bargaining contracts
with the Respondent Employer, Prestige Furniture
Company, Inc., or with any other employer, any pro-
visions which require membership by employees in
the Respondent Union as a condition for participa-
tion in the insurance and other welfare benefits.
(b) Discriminating against any employees of the
Respondent Employer, Prestige Bedding Company,
Inc., by entering into and maintaining a collective-
bargaining agreement containing provisions requiring
membership by said employees in the Respondent
Union in order to participate in the insurance or other
welfare benefits.
(c) In any other manner interfering with, restrain-
ing, or coercing employees in the exercise of their
rights under Section 7 of the Act.
2. Take the following affirmative action necessary
to effectuate the policies of the Act:
(a) Jointly and severally with the above-named Re-
spondent Employer, and in the manner set forth in the
section of the Administrative Law Judge's Decision
entitled "The Remedy" make whole any employees
who may have suffered loss of insurance payments by
reason of the discrimination against them.
(b) Jointly and severally with the Respondent Em-
ployer make whole Velma Denton's estate for any loss
suffered to Velma Denton or her estate, by reason of
the failure of Velma Denton or her estate to receive
the coverage and benefits set forth in the insurance
clause of the Respondent Union's and the Respon-
dent Employer's collective-bargaining agreement, by
payment to Velma Denton's estate of a sum of money
equal to the amount of insurance benefits Velma Den-
ton or her estate would have received but for the
unfair labor practices of the Respondent Union, to-
gether with 6-percent interest thereon, in accordance
with Isis Plumbing & Heating Co., supra.
(c) Jointly and severally with the Respondent Em-
ployer make whole any other employee who was for-
merly in the bargaining unit of the Respondent Union
or the estate of any such employee for any loss suf-
fered to such employee or estate by reason of the
failure of such employee or estate to receive the cover-
age and benefits set forth in the insurance clause of
the Respondent Union's and the Respondent
Employer's collective-bargaining agreement , by pay-
ment to such employee or estate of a sum of money
equal to the amount of insurance benefits such em-
ployee or such estate would have received but for the
unfair labor practices of the Respondent Union, to-
gether with 6-percent interest thereon, in accordance
with Isis Plumbing & Heating Co., supra.
(d) Post at conspicuous places at all of the Respon-
dent Union's business offices and meeting halls copies
of the attached notice marked "Appendix B." 10 Cop-
ies of said notice, on forms provided by the Regional
Director for Region 26, after being duly signed by
Respondent Union's authorized representative, shall
be posted by Respondent Union immediately upon
receive thereof, and he maintained by it for 60 consec-
utive days thereafter, in conspicuous places, including
all places where notices to members are customarily
posted. Reasonable steps shall be taken by Respon-
dent Union to insure that said notices are not altered,
defaced, or covered by any other material.
(e) Mail to the Regional Director for Region 26,
signed copies of the attached notice marked "Appen-
dix B," for posting, by the Respondent Employer at
its plant in Memphis, Tennessee, in places where no-
tices to employees are customarily posted. Copies of
said notice, on forms provided by the Regional Direc-
tor, shall, after being duly signed by an authorized
representative of the Respondent Union, be returned
forthwith to the Regional Director for disposition by
him.
(f) Notify the Regional Director for Region 26, in
writing, within 20 days from the date of this Order,
what steps Respondent Union has taken to comply
herewith.
10 See In 8
APPENDIX A
NOTICE To EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
WE WILL NOT include or maintain in any collec-
tive-bargaining agreement with United Furniture
Workers of America, Local 282, AFL-CIO, or
any other labor organization certified as the bar-
gaining representative of our employees, any pro-
visions which require membership in such union
as a condition for participation in insurance or
other welfare benefits.
WE WILL NOT by such inclusion in any collec-
tive-bargaining agreement discriminate against
694 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
any of our employees.
WE WILL NOT in any other like or related man-
ner interfere with, restrain, or coerce any of our
employees in the exercise of their rights to self-
organization, to form labor organizations, to join
or assist any labor organization, to bargain col-
lectively through representatives of their own
choosing, to engage in concerted activities for the
.purpose of collective bargaining or other mutual
aid or protection, or to refrain from any or all
such activities.
WE WILL NOT unlawfully assist in the organiza-
tion of our employees on behalf of United Furni-
ture Workers of America, Local 282, AFL-CIO,
or any other labor organization, by entering into
or maintaining a collective-bargaining agreement
with provisions which require membership in
such union as a condition for participation in any
insurance or other welfare benefits.
WE WILL NOT encourage membership in the
United Furniture Workers of America, Local
282, AFL-CIO, by discriminating against any
employee for not being a member.
WE- WILL make whole, jointly - and severally
with the aforesaid Union, Velma Denton's estate
for any loss suffered to Velma Denton or her
estate, by reason of the failure of her or her estate
to receive the coverage and benefits set forth in
the insurance clause of the collective-bargaining
agreement negotiated by us and the aforesaid
Union, by payment to the said estate of a sum of
money equal to the amount of insurance benefits
Velma Denton or her estate would have received
but for our unfair labor practices, with interest
thereon at 6 percent.
WE WILL make whole, jointly and severally
with the aforesaid Union, any other employee
who was formerly in the bargaining unit of the
said Union or the estate of any other such em-
ployee by reason of the failure of such employee
or estate to receive the coverage and benefits set
forth in the insurance clause of the collective-
bargaining agreement negotiated by us and the
said Union, by payment to such employee or
estate of a sum of money equal to the amount of
insurance benefits such employee or estate would
have received but for our unfair labor practices,
with interest thereon at 6 percent.
PRESTIGE BEDDING COMPA-
NY, INC.
Dated By
(Representative) (Title)
This is an official notice and must not be defaced
by anyone. -
This notice must remain posted for 60 consecutive
days from the date of posting and must not be altered,
defaced, or covered by any other material.
Any questions concerning this notice or compli-
ance with its provisions may be directed to the,
Board's Office, Clifford, Davis Federal Building,
Room 746, 167 North Main Street, Memphis, Tennes-
see 38103, Telephone 901-534-3161.
APPENDIX B
NOTICE To MEMBERS
POSTED BY ORDER OF THE
NATIONAL LABOR, RELATIONS BOARD
An Agency of the United States Government
WE WILL NOT cause Prestige Bedding Company,
Inc., or any other employer, to discriminate
against any employee on the basis of their non-
membership in our Union.
WE WILL NOT enter into or maintain any collec-
tive-bargaining agreement with the said Compa-
ny, or any other employer, which would include
any provision which requires membership in our
Union as a condition for participation in insur-
ance or other welfare benefits.
WE WILL make whole, jointly and severally
with the aforesaid Company, Velma Denton's es-
tate for any loss suffered to Velma Denton or her
estate, by reason of the failure of her or her estate
to receive the coverage and benefits set forth in
the insurance clause of the collective-bargaining
agreement negotiated by us and the said Compa-
ny, by payment to the said estate of a sum of
money equal to the amount of insurance benefits
Velma Denton of her estate would have received
but for our unfair labor practices, with interest
thereon at 6 percent.
WE WILL make whole, jointly and severally
with the aforesaid Company, any other employee
who was formerly in our bargaining unit or the
estate of any other such employee for any loss
suffered to such employee or estate by reason of
the failure of such employee or estate to receive
the coverage and benefits set forth in the collec-
tive-bargaining agreement negotiated by us and
the said Company, by payment to such employee
or estate of a sum of money equal to the amount
of insurance benefits such employee or estate
would have received but for our unfair labor
practices, with interest thereon at 6 percent.
PRESTIGE BEDDING COMPANY, INC. 695
Dated By
This is an official
by anyone.
UNITED FURNITURE WORK-
ERS OF
AMERICA , LOCAL 282,
AFL-CIO
'(Labor Organization)
(Representative ) (Title)
notice and must not be defaced
This notice must remain posted for 60 consecutive
days from the date of posting and must not be altered,
defaced, or covered by any other material.
Any questions concerning this notice or compli-
ance with its provisions may be directed to the
Board's Office, Clifford Davis Federal Building,
Room 746, 167 North Main Street, Memphis, Tennes-
see 38103, Telephone 901-534-3161.
DECISION
STATEMENT OF THE CASE
MORTON D. FRIEDMAN, Administrative Law Judge: Upon
an original charge filed on October 10, 1972, and a first
amended charge filed November 14, 1972, by Velma Den-
ton, an individual, herein referred to as Denton, in Case
26-CA-4516 and an original charge filed on October 10,
1972, and a first amended charge filed on November 14,
1972, by United Furniture Workers of America, Local 282,
AFL-CIO, herein called the Union or Local 282, in Case
26-CA-4517, the Regional Director for Region 26 of the
National Labor Relations Board, herein called the Board,
issued an order consolidating cases and consolidated com-
plaint on November 28, 1972, against Prestige Bedding
Company, Inc., herein called Prestige or the Company, al-
leging violations of Section 8(a)(I),(2),(3), and (5) of the
National Labor Relations Act, herein called the Act.
Upon a charge filed on November 20, 1972, in Case 26-
CB-763-1 and a separate charge filed the same day in Case
26-CB-763-2 by Richard A. Brackhahn, attorney for the
Company, the said Regional Director issued an order con-
solidating cases and consolidated complaint on April 30,
1973, against Local 282 and United Furniture Workers In-
surance Fund, herein called the Fund, alleging violations of
Section 8(b)(1)(A) and (2) of the Act.
Also, on April 30, 1973, the said Regional Director issued
as amended consolidated complaint in Cases 26-CA-4516
and 4517 against the Company, deleting the allegations of
violation of Section 8(a)(5) of the Act, but retaining the
allegations of Section 8(a)(1), (2), and (3). On the same day
the said Regional Director issued an order consolidating
for hearing Cases 26-CA-4516, 4517- and 26-CB-763-1
and -763-2.
Thereafter, on May 15, 1973, a second amended charge
in Case 26-CA-4516 and 4527 was filed by Local 282 and,
thereafter, on May 16, 1973, the said Regional Director
issued an amendment to the amended consolidated com-
plaint in these cases reciting the said second charge which
alleged independent allegations of violation by the Compa-
ny of Section (a)(l) of the Act.
The duly filed answers and amended answers of the Re-
spondents, while admitting the jurisdictional and certain
factual allegations of the complaints and amended com-
plaints, denied the commission of any unfair labor practic-
es.
Pursuant to notice, a hearing in this case was held before
me at Memphis, Tennessee, on June 28 and 29, 1973. All
parties were represented and were afforded full opportunity
to be heard, to introduce relevant evidence, to present oral
agrument, and to file briefs. Oral argument was waived
except for a brief statement by counsel for the Company.
Briefs were filed by counsel for the General Counsel and
for each of the Respondents.
Upon the entire record,' including my observation of the
witnesses, and after due consideration of the briefs filed by
the various parties, I make the following:
FINDINGS OF FACT
I THE BUSINESS OF THE COMPANY
The Company, a corporation with a plant and place
business at Memphis, Tennessee, where it is engaged in the
manufacture of bedding, during the year immediately pre-
ceding the issuance of the original complaint herein, a repre-
sentative period, shipped goods of a value in excess of
$50,000 directly to points located outside the State of Ten-
nessee, and received materials and supplies of a value in
excess of $50,000 directly from points outside the State of
Tennessee. It is admitted, and I find, that the Company is
an employer engaged in commerce within the meaning of
Section 2(6) and (7) of the Act.
It is admitted by all parties, and I find, that the Union is
a labor organization within the meaning of Section 2(5) of
the Act. i
ii THE UNFAIR LABOR PRACTICES
A. Introduction and Issues
The Company and the Union entered into and allegedly
maintained a collective-bargaining agreement containing
an insurance clause allegedly violative of the Act in that the
clause provided for insurance coverage for members of the
Union only. An employee of the Company, Velma Denton,
who was also a member of the Union, became ill, was un-
able to work, and thereafter filed a claim with the Fund,
which was created by the International Union of which the
Local Union, Respondent herein, is an affiliate. The Fund
i Counsel for the General Counsel has moved for certain corrections to be
made in the transcript of the proceedings I find that the motion is well taken
and, accordingly, the transcript is corrected in the respects requested by
counsel for the General Counsel
696 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
refused payment for reasons hereinafter set forth in detail.
The complaint, in substance, alleges that the refusal to
honor Denton's claim and other hereinafter detailed actions
of the Company, the Local, and the Fund, by reason of the
fact that the insurance clause of the contract between the
Company and the Union was unlawful and constituted dis-
crimination against Velma Denton and that therefore the
Company violated Section 8(a)(1) and (3) of the Act, and
the Union and the Fund violated Section 8(b)(l)(A) and (2)
of the Act. Additionally, the complaint alleges that the
Company unlawfully assisted the Union in violation of Sec-
tion 8(a)(2) of the Act.
Thus, the principal issues of the cases are (1) whether the
contract was unlawful and violative of the Act and (2)
whether Velma Denton and other unnamed employees suf-
fered discrimination by reason of the unlawful contract and
the actions of the parties with regard thereto. There are
other subsidiary issues raised by the motions and the plead-
ings, which are discussed below in conjunction with the
disposition of the principal issues.
B. The Facts
The Union was certified as the bargaining representative
of the Company's production and maintenance employees
on May 1, 1967 2
Sometime thereafter, probably around the first part of
July 1967, the Company and the Union entered into a col-
lective-bargaining agreement containing an insurance
clause which clause was renewed intact upon the renewal of
the collective-bargaining contract dated July 22, 1970, effec-
tive through July 22, 1973. It is this insurance clause which
the General Counsel maintains is unlawful. The clause, as
renewed on July 22, 1970, reads in pertinent part as follows-
Commencing August 1, 1970, the Company agrees to
pay to the trustees of the United Furniture Workers
Insurance Fund, 700 Broadway, New York, New York
10003, and their successors in trust, a sum equal to $12
per month, for each employee who is a member of the
Union and such other employees that the Company
may desire to have covered by the insurance benefits
outlined below. . .
Notwithstanding anything else to the contrary in this
agreement, the provisions of this article shall not be
subject to the grievance and arbitration procedure of
this agreement.
On July 19, 1967, LeRoy Clark, one of the individuals
who negotiated the original 1967 contract, and who was
also a union representative and since 1970 president of the
Union, sent a letter to Gerald J. Finney, president of the
Company, which read, in pertinent part, "Regarding the
insurance premium for the employees of your plant, please
be advised that the Company is to make payment of $8.75
per month, per employee beginning with July 1967.. .. "
Despite this letter, the Company sent to the Fund during
2 Case 26-RC-2887
the entire period of the initial agreement of 1967, and from
the date of the second agreement effective July 22, 1970,
until July 1972, when there were no longer any members of
the Union in the Company's employ, insurance premiums
only for those employees who were members of the Union.
Thus matters stood until some time in 1971, when, accord-
ing to the credited testimony of Union President Clark,
Abraham Zide, director of the Fund, telephoned Clark and
asked the latter why the Company had been paying insur-
ance premiums on only three or four employees. It should
be noted that at this time the Company had approximately
14 to 18 employees. In the telephone conversation, Clark
informed Zide that Clark did not know why the money was
being sent for only three or four employees but promised
Zide that he would call the Company to find the answer.
Accordingly, Clark called Gerard Finney, the Company's
president, and asked why the Company was paying premi-
ums for only three or four employees. Finney told Clark
that he was only paying for those people who were mem-
bers of the Union Clark then told Finney that this was not
proper and that Finney was supposed to pay for all em-
ployees. Finney replied "Well look at your contract." It
was at that point, according to Clark, that Clark did look at
the contract which stated that payments were to be made
for union members only Clark then told Finney that this
was wrong. However, Finney was adamant After this con-
versation, Clark called Zide in New York and told him
what was happening. According to Clark, Zide took the
position that he was not going to be a party to an illegal
contract.3 According to Clark, these conversations took
place some time in September or October 1971
After these calls to Finney and to Zide, Clark again called
Finney to attempt to convince the latter that Finney should
pay premiums for all employees. According to Clark, he
explained to Finney that he, Clark, had not been aware that
the contract said what it did because Clark, who had partici-
pated in the negotiations, felt that the Union had agreed to
an open contract insofar as availability of insurance to all
members of the bargaining unit was concerned Finney,
however, still remained adamant and replied that he was
going to pay only what the contract called for. However,
Finney did promise that he would check with his lawyer,
and that he would call Clark again after speaking to counsel.
But, according to Clark, Finney never returned the call. As
a result, sometime later Clark called Finney again and again
Finney stated his position to the effect that he was only
going to pay what the contract called for on its face.'
J Although Clark testified that Zide then wrote directly to the Company,
telling it that it should pay premiums for all employees, this alleged letter was
never introduced into evidence and Finney testified that no such letter was
ever received
All of the foregoing from the testimony of Clark, which is credited with
regard to the conversations However, I do not credit Clark to the effect that
he was unaware of the wording of the contract limiting the application of the
insurance to members only Although Finney denied that he ever received
any calls from Clark during 1971, he did admit, on cross-examination, that
he did receive a telephone call from Clark to the effect that the Union desired
the Company to pay premiums for all members of the unit sometime, proba-
bly a few weeks at the most, before receiving a letter from the Union's
attorney to the effect that the contract, as drawn, was not lawful I do not
credit Finney's denial that he received the telephone calls from Clark because
on direct examination Finney stated that the first time that he was aware of
PRESTIGE BEDDING COMPANY, INC.
To further fix the date when these conversations oc-
curred, notice is taken that beginning with the Company's
remittance to the Fund on August 13, 1971, the Fund re-
fused to accept the Company's checks. Therefore, the con-
versations between Clark and Zide and Clark and Finney
undoubtedly occurred within the period of August, Septem-
ber, or October of 1971 This gives further credence to the
fact, as claimed by Clark, that he had conversations with
Finney regarding the illegality of the contract at about that
time.
As noted, from August 1971, with perhaps one exception,
the Fund refused to accept any of the checks submitted by
the Company in payment for the insurance of company
employees who were members of the Union. Instead, the
Fund sent these uncashed checks to Clark at the union
headquarters. Clark accumulated the same until some time
in July or August 1972, when he returned them to Finney.
In any event, by the spring of 1972, the matter had caused
such consternation that Clark requested the Union's coun-
sel to send a letter to the Company to the effect that what
the Company was doing with regard to the insurance was
unlawful. This letter, dated March 14, 1972, requested that
the Company make insurance payments for all employees,
including nonmembers of the Union. The letter also insisted
that under the above set forth insurance article of the collec-
tive-bargaining agreement the Company was obligated to
sent to the trustees of the Fund the sum of $12 per month
for each employee.
In reply, counsel for the Respondent on April 6, 1972,
sent a letter to counsel for the Union in which it was stated
that article XII, the insurance clause of the contract, con-
tained the language initially negotiated and agreed on in
July of 1967. In that letter , the Company's counsel claimed
that the clause , as written, was not unlawful and, in fact,
provided for the Company to pay insurance premiums to
the Fund for any employee who desired to have the Compa-
ny do so.
It should be noted, that in connection with all of the
foregoing, Finney testified that he was unaware of the fact
that the Fund was refusing to deposit the Company's
monthly checks in payment for the insurance for members
of the Union who were employees of the Company Finney
explained this by stating that there were many checks of all
kinds issued by the Company that were outstanding at any
one period of time and that he would not have known of
them unless the matter was called to his attention by his
office staff.
Thus matters stood until the month of June 1972. On June
9, 1972, the Company sent a check in the sum of $24 to the
Fund which represented payment for the two remaining
members of the Union, Velma Denton and another employ-
ee member.5
The record also shows that dues were deducted, pursuant
to authorization by Denton, for the month of June 1972,
which indicated that for that month, at least, Denton was
the fact that the Union wanted him to pay premiums for all employees was
the receipt of a letter from the Union's counsel in March. 1972 This, by
Finney's own admission on cross-examination, was not correct
5 Tennessee being a "right to work " state, the agreement between the
Company and the Union did not contain union-security provisions Howev-
er, the agreement did provide for dues-deduction authorizations
697
a member of the Union.
On June 27, 1972, Denton became ill and entered the
hospital in Memphis where she remained as a patient until
her discharge on July 6. There is some confusion in the
record as to whether at that time Denton left her employ
with the Company. The Company's payroll record for Den-
ton, which was introduced in evidence, shows that Denton
worked for a number of hours during the pay period ending
July 7, 1972. However, the testimony of both Clark for the
Union, and Finney for the Company, indicates that Denton
did not return to work after she became ill on June 27.
Additionally, the Company in its brief, concedes that Den-
ton left the Respondent's employ on the day she became ill.
Although Denton was admitted to the hospital on June
27 for what was thought to be a heart condition, it was
discovered during the period of her hospital confinement
that she had an incurable malignancy and that her illness
was, therefore, terminal. Nevertheless, on July 19, 1972,
Denton filed a claim for insurance benefits with the Fund
for the period of her hospitalization. This claim was coun-
tersigned by LeRoy Clark as president of the Union and
was then sent to the Fund in New York. By letter dated
August 10, 1972, Abraham Zide, director of the Fund, noti-
fied Denton that her claim for insurance benefits was re-
jected due to the fact that "the employer has not been
paying premiums to the Fund in accordance with the pro-
visions of the collective-bargaining agreement." At approx-
imately the same time, Clark returned to the Company all
of the undeposited checks which the Company had sent to
the Fund beginning with August 1971, and which Clark
had, in turn, received from the Fund which refused to de-
posit the same.
As noted above, Denton's illness was terminal and she
died on March 13, 1973. However, before her death, Denton
filed the charges and amended charges against the Compa-
ny on the dates heretofore set forth.
C. Preliminary and Subsidiary Issues
1. The 10(b) defense
At the outset of the hearing herein, counsel for the Com-
pany moved that the consolidated amended complaint
against the Company be dismissed on the ground that the
matters alleged in the complaint as violative occurred or
had their beginnings more than 6 months before the filing
of the charges by Denton and by the Union, and that,
therefore, the complaint is barred by Section 10(b) of the
Act.'
With regard to the charges filed by the Union, the original
charge and the first amended charge alleged violations of
Section 8(a)(5) of the Act in that the Respondent refused to
bargain with the Union to change the text of the agreement
above-mentioned and also that the Respondent by paying
premiums only for the members of the Union unilaterally
changed the terms and conditions of the contract. However,
6 Section 10(b) of the Act reads in pertinent part
Provided, that no complaint shall issue based upon any unfair labor
practice occurring more than 6 months prior to the filing of the charge
with the Board and the service of a copy thereof upon the person against
whom such charge is made .
698 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
as the Respondent admits in its own brief, the complaint
does not allege any violations of Section 8(a)(5) of the Act
and therefore the 10(b) defense as to the refusal to bargain
charges has no validity. What remains, as a basis for the
complaint with regard to charges filed by the Union, is the
second amended charge which merely alleges violations of
Section 8(a)(1) of the Act in the language of the statute.
Inasmuch as the Respondent is alleged in the complaint to
have interfered with, restrained, and coerced not only Vel-
ma Denton, but other employees, in their Section 7 rights
in that it continued to insist on its interpretation of the
contract and on enforcing the agreement as written at all
times up to and including the date of the hearing herein, the
first amended charge was timely filed and the limitations of
Section 10(b) are, therefore, not applicable.
With regard to the charges filed by Velma Denton, which
charges form the basis for the amended consolidated com-
plaint herein against the Company, the original charge was
filed on October 10, 1972. Here again, the gravamen of the
complaint is the maintaining of the allegedly, unlawful con-
tract clause in force and effect and the allegedly unlawful
conduct which ensued therefrom, as a result of which Velma
Denton was discriminated against and which also constitut-
ed unlawful assistance to the Union. The Company, as not-
ed above , insisted upon maintaining in force and effect the
allegedly unlawful clause up to and including the date of the
hearing herein. Therefore, the effect of this action on the
part of the Company, if the theory of the complaint is adopt-
ed, was that Velma Denton was allegedly discriminated
against during July and August of 1972. Therefore, the orig-
inal charge which was filed October 10, 1972, fell well within
the 10(b) period. Moreover, since the Company insisted that
the contract was still in force and effect as late as June 1972,
the charge was timely filed.
The Company contends that the contract in question was
entered into more than 6 months prior to the filing of the
charge; that, therefore, the date of the execution of the
contract is the governing date and that the complaint being
based on a charge filed more than 6 months after the effec-
tive date of the contract, must be dismissed. In support of
its argument , the Respondent cites, among other cases, the
decision of the Supreme Court in Local Lodge No. 1424,
International Association of Machinists, AFL-CIO, et al.
[Bryan Manufacturing Co.] v. N.L.R.B., 362 U.S.411 (1960),
in which the Supreme Court held, in substance, that where
an employer and a union entered into a collective -bargain-
ing agreement containing a union -shop clause at a time
when the union was not a majority representative of the
company's employees, a charge filed after the union had
become a majority representative and more than 6 months
after the execution of the contract would not support a
complaint because barred by Section 10(b) of the Act. How-
ever, in the cited case , although the unlawful assistance to
the union which was rendered by execution of the union-
security clause at a time when the union was not a majority
representative of the company's employees occurred more
than 6 months before the filing of the charge, the contract,
itself, was lawful on its face and , in effect , the unfair labor
is alleged in the complaint to be unlawful on its face, and
if the theory of the General Counsel has merit, then the
continued maintenance and adherence to the clause consti-
tutes the alleged unfair labor practice which continued up
to and even after the filing of the charge and the complaint.
Accordingly, the limitations set by Section 10(b) of the Act
are not applicable. This is also true with regard to the allega-
tion of the Company's unlawful assistance to the Union. In
the Bryan case, by the time that the charge was filed the
union had achieved majority status and had been the major-
ity representative of the respondent's employees for more
than 6 months prior to the filing of the charge. Accordingly,
the alleged assistance violation was barred by the statute.
However, in the case at bar, the alleged unlawful wording
of the contract in question, which allegedly constituted the
unlawful assistance , continued on and-was still being effec-
tuated as of the time of the filing of the charge and the
issuing of the complaint. Accordingly, the charge and the
complaint are not time-barred?
2. The "improper 'party in interest" defense
Counsel for the Company, also at the outset of the hear-
ing, moved to dismiss the complaint against the Company
on the basis that the Charging Party, Velma Denton, had
died and that her estate was the proper party, but had not
been substituted. He further contended that with the death
of the Charging Party, the charge became a nullity and,
therefore , the complaint must be dismissed since the com-
plaint is based upon the charge. I find no merit in this
contention.
It is true that the Act requires a charge before the General
Counsel may issue a complaint. However, there is no re-
quirement as to who may file the charge. It has long been
held that the charge is not proof and is certainly not a
pleading. It merely sets in motion the machinery of an in-
quiry. "When the Board complaint issues, the question is
only the truth of its accusations. The charge does not even
serve the purpose of a pleading." 8 Accordingly, when Den-
ton died the complaint and the charge did not become
nullities. The charge and amended charges filed by Denton
merely gave notice to the General Counsel and to other
parties that a possible unfair labor practice or practices had
been committed and that an inquiry was in order. Addition-
ally, the only necessary parties to the action under the
amended Act are the Respondents and the General Coun-
sel.
Moreover, the Act does not contemplate nor does it seek
redress for private wrongs. An unfair labor practice is a
public wrong which requires a public remedy. The mere fact
that in order to properly remedy a discriminatory action
under the Act the Board requires monetary reimbursement
to make a discriminatee whole , is not the result of a private
action at law, but merely one of the means by which a public
wrong is remedied. In connection therewith, the Board has
long held that a Respondent who has discriminated against
an individual who has died after the discriminatory act will
practice , which was the execution of the contract, was ,
barred b
For the reasons thus cited , I find the other cases cited by the Company
y Section 1 0(b). to inapplicable and inapposite
However , in the case at bar, the contract insurance clause 8 N L R.B v. Indiana & Michigan Electric Company, 318 U.S 9.
PRESTIGE BEDDING COMPANY, INC. 699
be ordered to make whole the discriminatee's estate for any
loss the discriminatee may have suffered?
3. The motion to defer to the grievance and arbitration
procedures of the contract
Counsel for the Company moves that the matters at issue
herein be deferred to the grievance and arbitration proce-
dures of the collective-bargaining agreement between the
Company and the Union. However, the subject matter of
the complaint springs from the allegedly unlawful insurance
clause, as noted above. Also, as set forth above, the insur-
ance article of the contract specifically provides that the
provisions of that article shall not be subject to the griev-
ance and arbitration procedures of the agreement. Notwith-
standing, counsel for the Company argues that the Board's
policy with regard to deferral to arbitration has progressed
to a point that, despite the foregoing contractual prohibition
against arbitration concerning the insurance clause, the
Board would not hesitate to defer to arbitration in this case
However, a search of the Board's decisions with respect to
deferral provides no precedent where the Board has defer-
red despite a specific contractual prohibition against defer-
ral.
Additionally, the proceedings herein concern litigation of
alleged unfair labor practices committed by both the Em-
ployer and the Union. Thus, the Union must necessarily be
disqualified from representing an employee or an ex-
employee's estate in an arbitration proceeding because it
could not be expected to fairly represent such employee in
an arbitration proceeding against itself. Accordingly, even
if it were not for the specific prohibition contained in the
agreement against deferral to arbitration with regard to the
insurance article of the contract, the very circumstances of
the case present a bar to the utilization of arbitration.
Therefore, the Respondent's motion to defer to the griev-
ance and arbitration procedures of the contract is hereby
denied.
4. The agency issue
The complaint alleges, and counsel for the General Coun-
sel contends, that the Fund is an agent of the Union and of
the Company for the purposes of fixing liability for the
alleged unfair labor practices contained in both of the con-
solidated complaints herein. In order to resolve this ques-
tion it becomes necessary to examine the organization of the
Fund, insofar as the record reveals such organization, and
also to assess the relationship between the Fund, the Union,
and the Company as contained in the collective-bargaining
agreement between the Company and the Union.
The only testimony with regard to the organization of the
Fund is that of LeRoy Clark, the president of the Union. In
addition to being president of the Union, Clark is also a vice
president of United Furniture Workers of America Nation-
al Union and also a trustee of the Fund. He testified, and
documentary evidence shows, that the Fund is located in
the same building in the City of New York as is the national
9 See Dayton Coal and Iron Corp, 101 NLRB 672, Mastro Plastics Corpora-
tion , 136 NLRB 1342, enfd 354 F 2d 170 (C A 2. 1965).
headquarters of the National Union of which the Union
herein is an affiliate. However, the Fund has separate of-
fices in the same building. The Fund is an entirely separate
entity from the National Union except that some of the
trustees of the Fund are also officers of the National Union.
The Fund was instituted for the purpose of providing van-
ous types of insurance benefits for members of the Fund
who, according to Clark, would be any employees of any
employer who contributes money to the Fund to pay the
premiums. The types of insurance are reimbursement for
hospitalization, medical care, and $1,000 in death benefits.
There are qualifications for entitlement to these benefits
which are set forth in a pamphlet issued by the Fund and
which was received in evidence. According to this booklet,
"The United Furniture Workers Insurance Fund has devel-
oped this program to provide benefits directly for its cov-
ered members and their dependents. No other persons or
third parties are intended to be benefited by this program,
and no such person may make claim to or sue for any of the
benefits or monies herein specified. This program of bene-
fits is financed through contributions made to the Fund by
employers under the terms of their collective bargaining
agreements with local unions of the United Furniture
Workers of America, AFL-CIO. Eligible members shall be
covered for benefits only so long as contributions are re-
ceived from employers under the terms of their collective
bargaining agreements."
According to Clark, the term "members," as noted above,
refers not to members of the Union but to any employees
of any employer who contracts with any local affiliate of the
National Union to pay premiums to the Fund on behalf of
his employees. Additionally, Clark testified that employers
who contract with various locals located in "right to work
states" pay premiums to cover all their employees, regard-
less of the employees' membership or lack of membership
in the locals.
According to Clark, whom I credit in this respect, the
local has no control over the Fund. Nor has the Fund any
control over the local. In negotiating agreements with em-
ployers, the Respondent Union herein may or may not use
the Fund as the negotiated insurance carrier for the employ-
ees of the particular employer with whom it is negotiating.
In other words, it is not obligatory for any local of the
National Union to use the Fund as an insurance carrier of
the individuals whom the local may represent. Additionally,
the local may place insurance with any insurance carrier
that the employer and the local may agree upon. Further-
more, even if, as in the instant case, the Fund is chosen as
the carrier, the local union does not in any way aid or assist
in the administration of the Fund or in making claims to the
Fund except on a voluntary basis as a service to the employ-
ees whom it represents. Thus, an employee may obtain a
claim form from either the employer, the Fund, or the
Union. The Union has an insurance clerk who will assist an
employee whom it represents in filling out a form and, in
fact, usually does, and although the form is submitted to the
Union, which then registers it and sends it on to the Fund,
even this is not necessary and the claimant may send the
claim directly to the Fund. While it is true that Clark is a
trustee of the Fund and a national vice president, as well as
president of the Local Union, his functions as a trustee are
700 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
separate and distinct from his functions as president of the
Respondent Union herein and as a national officer. It
would seem from Clark's testimony that one was not depen-
dent on the other.
Moreover, the Union here involved does not dictate fund
policy, nor is there any evidence in the record that it partici-
pates in any way in the delineation of the powers of the
trustee or in the manner in which the Fund is operated.
While it is true, as argued by counsel for the General
Counsel, that the insurance is placed with the Fund solely
by reason of the contract negotiated between the Company
and the Union, and that the Fund's authority to act as the
insurance carrier is derived solely from the contract be-
tween the Respondents herein, I cannot conclude that this
relationship, and the fact that the Fund has been selected
as the carrier in the contract, establishes the Fund as an
agent of the Union or of the Company within the meaning
of Section 2(13) of the Act.
General Counsel cites, in support of his position that the
Fund is an agent of the Union and of the Company, cases
in which the particular union involved and the employers
involved set up an insurance fund in which the parties to the
agreement not only created the fund themselves, but, also,
by such agreement, established the authority and the limits
of authority of the trustees'of the fund and generally super-
vised and overlooked the operation of the fund -mutually
created. In the case at bar, the Fund is an entirely indepen-
dent organization set up by the National Union of which the
Respondent Union herein is but an affiliate and, moreover,
acts in its capacity as insurance carrier for the employees
involved in much this same way that any independent insur-
ance carrier would act. There is no control by either the
Company or the Respondent Union over the Fund, the
authority of its trustees , or the manner in which the Fund
is administered. Accordingly, I find and conclude that the
Fund is not an agency of either the Company or the Union
within the meaning of the Act. Rather, its position with
relation to the Respondents herein is more nearly that of an
independent insurance carrier. Therefore, any unfair labor
practices committed by the Respondents herein cannot be
imputed to the Fund.
D. Discussion, Analysis and Concluding Fundings with
Regard to the Principal Issues
As above stated, the principal issues presented by the
complaints, answers, and various contentions of the parties
are whether (a) the agreement between the parties contained
an unlawful "members only" insurance clause, (b) whether,
by reason of the various activities of the parties with relation
to this insurance clause, Velma Denton and possibly other
employees suffered discrimination, and (c) whether this in-
surance clause constituted unlawful assistance to the Union
by the Company.
For primary consideration is the contract itself and the
wording of the insurance clause . As heretofore set forth, the
clause reads in pertinent part, "The Company agrees to pay
... $12 per month, for each employee who is a member of
the Union and such other employees that the Company may
desire to have covered by the insurance benefits outlined
below."
Counsel for the Company argues that the wording above
set forth permits not only union members but also employ-
ees other than members of the Union to take advantage of
the insurance benefits offered by the contract. However, the
wording is clearly such that it permits only those employees
whom the Employer would place under the aegis of the
insurance clause and does not permit any member of the
certified unit to freely elect to take advantage of the insur-
ance offering without the Respondent Company's permis-
sion . Moreover, Finney testified that in the entire duration
of the two contracts which contained this clause, from July
1967 until the hearing date, no employee other than mem-
bers of the Union were ever covered by the insurance of-
fered in the clause. Nor did Finney testify that the Company
would have paid premiums for any but Union members.
At the hearing, the Union's president, Clark, testified that
the insurance clause contained in the contract, as set forth
above, was not the clause negotiated and did not reflect the
true understanding of the parties. According to Clark, the
understanding was that all employees in the unit were to be
permitted to take advantage of the insurance offered by the
Fund and that there was no intention to limit the insurance
coverage to members of the Union.
I do not accept this testimony for the reason that it consti-
tutes parol'evidence to explain the terms of a contract where
the language of the contract speaks for itself. There are no
ambiguities presented by the above-recited clause. It clearly
states that the insurance is available and that the Company
will make contributions for members of the Union only.
The Board has long held that it will not accept parol evi-
dence to establish modification of written agreements. The
Board has stated "under the parol evidence rule, it is pre-
sumed that all oral understandings on the same subject
matter are merged in the final agreement of the parties." 10
Accordingly, I find and conclude that the insurance
clause in question was a "members only" clause. Where, as
here, there is a certified union which, under Board law, must
represent equally all of the employees in the unit for which
it is certified, a "members only" contract is unlawful. Here
there was a discriminatory withholding of benefits from a
segment of unit employees because of their nonmembership
in the union and, therefore, the clause is clearly violative of
the Act." Accordingly, by maintaining in force and effect
and by giving effect to the "members only" insurance
clause , above recited, the Union violated Section 8(b)(1)(A)
and (2) of the Act and the Respondent violated Section
8(a)(l) and (3) of the Act.
Additionally, the complaint alleges that the maintenance
of the above agreement constituted unlawful assistance by
the Company to the Union in violation of Section 8(a)(2) of
the Act. Both Respondents argue that this is a very bizarre
effect inasmuch as, according to counsel for the Union, the
Company regarded the Union much the same as an individ-
ual might regard cancer. Both Respondents cite the fact that
10 Peterson & Lythe, 60 NLRB 1070, fn 1; Electro Metallurgical Co, 72
NLRB 1396, Jersey Corp, 112 NLRB 660 (refusing offer of parol evidence
to establish modification of written union-secunty contract).
11 Radio Officers Union of the Commercial Telegraphers Union, A.F.L (Gay-
nor News Co) v. NLRB , 347 U.S 17; Jandell Furs, 100 NLRB 1390,
1392-93
PRESTIGE BEDDING COMPANY, INC.
there could not have been assistance in view of the fact that
the Union, instead of gaining membership, lost membership
over the years of the duration of the contract and that, in
fact, by July 1972, no members of the Union remained in
the Company's employ. The Company also cites the fact
that since then a decertification petition has been filed and
that the Union lost the election held pursuant thereto i2
However, it is not the success of the assistance which de-
termines whether a violation has been committed, but the
act of assistance itself. It should be noted that the
Company's plant is located in Memphis, Tennessee. Ten-
nessee is a right-to-work state. Consequently, the parties
could not have entered into a collective-bargaining agree-
ment containing a union-shop clause. Accordingly, the
holding out of the offer of free hospitalization and life insur-
ance only to members of the Union constituted an induce-
ment to employees who were not contractually required to
do so to join the Union. Whether this was a contempleted
result or was unintended by the Respondents when they
signed the contract containing the members-only insurance
clause is immaterial. The fact is that the implied promise of
free insurance was inducement to the employees to join the
Union and, therefore, constituted unlawful assistance. Ac-
cordingly, by insisting in maintaining the insurance clause,
as written, up to and including the date of the hearing
herein, the Respondent Company violated Section 8(a)(2) of
the Act.
I have above found that the maintenance of the insurance
clause in the collective bargaining agreement constituted
interference, coercion and restraint on the part of both the
Company and the Union, and also constituted discrimina-
tion within the meaning of Section 8(b)(2) and Section
8(a)(3) of the Act. This, of course, was with regard to all of
the Respondent's employees who were not members of the
Union during the period of the contract. The complaint
alleges also, however, that Velma Denton, a member of the
Union, was discriminated against by the acts of the parties.
As recited heretofore, sometime in 1971, probably around
August of that year, Abraham Zide, director of the Fund,
called to the attention of Union President Clark the fact that
the Company was remitting premium payments only for
two or three employees. Zide wanted to know why this was
being done and reminded Clark that the Fund would have
no part of an arrangement which was discriminatory.
Thereafter, Zide on behalf of the Fund refused to deposit
or cash the premium checks remitted by the Company to the
Fund for members of the Union only. It is unnecessary to
recite here again the correspondence and conversations that
followed between Clark and Finney and between counsel
for both Respondents.
At any rate, Denton, while still an employee of the Re-
spondent and still a member of the Union, contracted a
fatal illness and was hospitalized on June 27, 1972. Thereaf-
ter, she made claim for hospitalization and other charges
pursuant to the benefits under the Fund, which claim the
Fund received on August 7, 1972. Thereafter, by letter dated
August 10, 1972, Fund Director Zide wrote Denton a letter
12
Case 26-RD-252 in which the Regional Director issued a tally of ballots
showing that of the 14 votes case, I I were against the Union and only 3 votes
were cast for the Union
701
refusing payment on the basis that the Company had not
been paying premiums to the Fund in accordance with the
provisions of the collective-bargaining agreement. This, is
the only basis upon which there was a refusal to pay the
claim.
Denton remained permanently disabled and never did
return to her employment with the Company. Eventually,
Denton died on March 13, 1973. Her death, under the bene-
fits ordinarily available from the Fund, would have paid to
her heirs the sum of $1,000 as and for life insurance in
addition to other benefits had it not been for the Fund's
refusal to pay for the reasons above set forth.
Counsel for the General Counsel contends that since
Denton was a member of the Union at the time that she
made her claim and contracted her final illness, the failure
of the Fund to pay her, which was the ultimate result of the
entering into and maintaining of the unlawful insurance
clause, constituted discrimination against Denton by the
Union, the Fund, and the Company.13
The General Counsel bases his theory that there was
discrimination against Denton and Denton's estate, even
though Denton was a member of the Union, and not one
of those excluded by the contract from the benefits of the
Fund, because the Respondents, in entering into an agree-
ment which discriminated against some of the Company's
employees, set in motion the series of events which eventu-
ally caused Denton and Denton's estate to lose the benefits
of the insurance. The General Counsel claims that the insur-
ance provisions of the contract establish the level of employ-
ment benefits in the unit, and that the Respondent Union,
as the certified representative of the employees in the unit,
owed all of the employees in the unit the duty of fair repre-
sentation free of arbitrary, invidious, or unfair consider-
ations.14 The General Counsel goes on from there and
argues that by agreeing to, and maintaining the contract
provision as cited above, which gave benefits to one class
of unit employees while denying such benefits to another
class of unit employees, the Union applied an arbitrary and
unfair distinction in the performance of its representative
duties. Then, the General Counsel's argument continues, it
was, in part, the Union's failure to provide fair representa-
tion that resulted in the effective cancellation of the insur-
ance benefits for all employees including union member
Denton. Therefore, according to the General Counsel, the
Union and the Company should be held liable for any loss
of benefits flowing from the maintenance of the discrimina-
tory provisions of the contract and the interrelated cancella-
tion of benefits. Otherwise put, Denton, although a member
13 Both Finney and Clark were unsure whether Denton was a member of
the Union after July 1, 1972 However, the General Counsel introduced into
evidence a pretrial affidavit signed by Denton and sworn to before counsel
for the General Counsel, which affidavit was received conditionally upon a
later showing by the General Counsel that the receipt of such affidavit was
proper as an exception to the hearsay rule The Board has held that it will
consider as evidence statements of deceased persons Accordingly, the re-
ceipt in evidence of Denton's investigatory affidavit, which was properly
authenticated, is hereby reaffirmed, and so much of that affidavit as alleges
that Denton was a member of the Union at the times material herein is
accepted as proof of that fact This is so because the affidavit is somewhat
corroborated by the testimony of Finney and Clark See West Texas Utility
Co , 94 NLRB 1638, enfd 195 F 2d 519 (C A 5, 1952), Chun King Sales, Inc,
126 NLRB 851, 864-865, Pasadena Bowling Center, 150 NLRB 729, 733-734
14 See Miranda Fuel Co, 140 NLRB 181
702 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
of the Union, suffered loss of benefits because of the Fund's
refusal to permit the implementation of the parties' unlaw-
ful contractual provision providing for the payments of in-
surance premiums by the Company for insurance benefits
only for union members.
As found above, I agree with the General Counsel's con-
tention that the employees of the Company who were mem-
bers of the unit represented by the Union, but who were
deprived of insurance benefits by reason of their nonmem-
bership in the Union, were discriminated against and that,
therefore and thereby, the Company and the Union both
violated the Act. However, I cannot apply this theory as it
relates to Denton and Denton's heirs. I cannot consider the
entire sequence of events as "one ball of wax" so as to find
that the parties discriminated against Denton. I have here-
tofore excluded the Fund as an agent of the Union and
thereby cannot 'find" that the Fund contributed, under the
Act, to any discrimination against Denton, or for that mat-
ter, against any of the Company's employees. However, I
find too farfetched the theory that the contract which,
although unlawful, but which provided insurance for the
benefit of members of the Union such as Denton, could
have been the cause of Denton' s loss of insurance benefits
and thereby could have caused discrimination within the
meaning of the Act against Denton.
It should be noted that the Company completely com-
plied at all times, and, indeed, insisted upon complying with
the exact terms of the insurance clause up to and including
the last moment that Denton worked for the Company.
Moreover, the Company tendered to the Fund premium
payments on Denton's behalf during the entire period of
Denton's employment. Therefore, I cannot consider the re-
fusal of the Fund, which I have found not to be an agent
of either the Company or the Union, to accept the tendered
payments or pay the Denton claim, to be an act for which
the Company can be held accountable as principal, or that
the Company's entry into the unlawful clause and the action
taken by the Fund constituted discrimination against Den-
ton by the Company.
With regard to the actions of,the Union herein, it is clear
that from the moment the Fund called Clark's attention to
the unlawful aspect of the insurance clause of the collective-
bargaining agreement, the Union made attempt after at-
tempt to correct this clause. The fact that the independent
Fund refused to accept the payment which thereby resulted
in Denton's monetary loss was not the direct result of the
Union's actions . It is true that this is not a tort case of
negligence and the Board does not apply, and is not obligat-
ed to apply, the rule of proximate cause. However, there is
an analogy here, and I cannot find that the entry into or
maintenance of the unlawful clause was the proximate
cause of the failure of Denton to receive insurance benefits
from the Fund. The insurance clause was written, main-
tained, and complied with for the benefit of employees in
Denton's class, i.e., members of the Union. The fact that the
actions of an independent third party, the Fund, prevented
the payment of the benefits provided for, cannot be the
basis for ascribing to the Union or the Company's discrimi-
nation against Denton or Denton's estate.
The foregoing conclusion has been arrived at with some
misgiving. Denton was a factory worker who earned but a
minimal hourly salary. Additionally, there is indication in
the record that Denton was forced to apply for assistance
to the Department of Public Welfare during the period of
her terminal illness.15 Under these circumstances, it would
be very satisfactory to the undersigned to be able to order
the Fund, the Company, and the Union to pay to Denton's
estate the amounts which would ordinarily have been due
under the insurance clause of the collective-bargaining
agreement and under the benefits offered by the Fund to its
members. However, the remedial powers and authority
vested in the Board are limited to the remedying of public
wrongs encompassed by the Act and not to private wrongs.
If there exists a forum to which the estate of Velma Denton
can turn to collect the insurance benefits allegedly due from
the Fund, the Board is not that forum. Accordingly, I am
constrained to dismiss the complaint insofar as it alleges
discrimination within the meaning of the Act by any of the
Respondents against Velma Denton or her estate.
III THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE
The activities of the Respondents, set forth above, have
a close, intimate and substantial relation to trade, traffic,
and commerce among the several States and tend to lead to
labor disputes burdening and obstructing commerce and
the free flow thereof.
IV. THE REMEDY
Having found that the Company has engaged in unfair
labor practices within the meaning of Section 8(a)(1), (2),
and (3) of the Act, and that the Union has engaged in unfair
labor practices within the meaning of Sections 8(b)(1)(A)
and (2) of the Act, I shall recommend an order that they
cease and desist therefrom and take such affirmative action
as will effectuate the purposes of the Act.
Although the contract containing the unlawful insurance
clause expired on July 22, 1972, and although in an election
held in June 1973, the Union lost the election and is no
longer the representative of any of the employees in the unit
for which it was originally certified, Board precedent would
require that a cease and desist order and other remedial
actions shall be ordered and that the matter has not become
moot since the Respondents violated the Act by the original
exclusion from the insurance benefits nonmembers of the
Union. The discontinuance of the illegal conduct does not
render the violation moot.16
The General Counsel has requested that the Respondents
be ordered to excise the unlawful condition of article XII of
the contract. However, since the contract has now expired
and the Union is no longer the bargaining representative of
Respondents' employees, excision will not be ordered.
The record does not reveal any specific employee who has
been deprived of insurance benefits by reason of the dis-
criminatory conduct of the Company and the Union. How-
ever, inasmuch as there may be some employees who were
discriminated against, it will be ordered that the Company
15 Letter of Dr Wade T Murdock, dated July 9, 1973, received in evidence
as Joint Exh 8
16 Salant & Salant, Inc., 87 NLRB 215; Jandel Furs, 100 NLRB 1390, 1392.
PRESTIGE BEDDING COMPANY, INC. 703
and the Union jointly and severally make whole any em-
ployee who suffered such loss within a period of 6 months
prior to the filing of the original charges herein.
CONCLUSIONS OF LAW
1. Prestige Bedding Company, Inc., is an employer en-
gaged in commerce within the meaning of Section 2(6) and
(7) of the Act.
2. United Furniture Workers of America , Local 282,
AFL-CIO, is a labor organization within the meaning of
Section 2(5) of the Act.
3. United Furniture Workers Insurance Fund is not a
labor organization within the meaning of Section 2 (5) of the
Act, nor is it an agent of either the Company or the Union
within the meaning of Section 2 (13) of the Act.
4. By entering into and maintaining in force and effect
a collective -bargaining agreement containing a clause pro-
viding for insurance benefits for members only, the Compa-
ny has violated Section 8(a)(1) and (3) of the Act and the
Union has violated Section 8(b)(1)(A) and (2) of the Act.
5. By entering into and maintaining the aforesaid agree-
ment containing the unlawful insurance clause , the Compa-
ny has unlawfully assisted the Union in violation of Section
8(a)(2) of the Act.
6. The refusal of the Fund to pay insurance benefits to
Velma Denton, and the estate of Velma Denton, did not
constitute discrimination within the meaning of the Act
against the said Velma Denton, a union member, by either
the Company or the Union
7. The aforesaid unfair labor practices are unfair labor
practices affecting commerce within the meaning of Section
2(6) and (7) of the Act.
[Recommended Order omitted from publication.]