R. J. Smith Construction Co., Inc.

National Labor Relations Board - Board Decisions

Jun 28, 1971

191 N.L.R.B. 693 (N.L.R.B. 1971)

R. J. SMITH CONSTRUCTION CO.
R. J. Smith Construction Co., Inc . and Local No. 150,
International Union of Operating Engineers, AFL-
CIO. Case 25-CA-3390
June 28, 1971
DECISION AND ORDER
On March 9, 1970, Trial Examiner Sydney S. Asher
issued his Decision in the above-entitled proceeding,
finding that Respondent had engaged in certain unfair
labor practices and recommending that it cease and
desist therefrom and take certain affirmative action, as
set forth in the attahced Trial Examiner's Decision. He
further found that Respondent had not engaged in cer-
tain other unfair labor practices alleged in the com-
plaint and recommended that such allegations be dis-
missed. Thereafter, the General Counsel and the
Charging Party filed exceptions and supporting briefs.
The Board has reviewed the rulings of the Trial Ex-
aminer made at the hearing and finds that no prejudi-
cial error was committed. The rulings are hereby
affirmed. The Board has considered the Trial Ex-
aminer's Decision, the exceptions, the briefs, and the
entire record in the case, and hereby adopts the
findings, conclusions, and recommendations of the
Trial Examiner as modified herein.
The record shows that Respondent is engaged in
general grading and excavating operations on various
types of projects such as private homes, apartment
buildings, industrial projects, and airports. It appar-
ently enjoys a fairly stable complement of employees
and has a fairly modest turnover. When the need arises,
Respondent hires additional help for a particular
project.
On March 11, 1964, Respondent and Local No. 150,
International Union of Operating Engineers, AFL-
CIO, the Charging Party herein, entered into a memo-
randum of agreement covering Respondent's equip-
ment operators by which Respondent agreed to abide
by an existing agreement entered into between Indiana
Highway Contractors, Inc., an association of employ-
ers engaged in heavy and highway construction work,
and a number of local unions including Local 150.
Respondent put none of the wage rates of the associa-
tion contract in effect, and, as it subsequently indicated,
it had had no intention of doing so at the time it ex-
ecuted its memorandum agreement. The Union made
no efforts to compel Respondent's compliance. The as-
sociation contract expired by its terms on January 1,
1966, and with it Respondent's agreement with the
Union. The parties seemingly were unaware of that
fact, and apparently maintained their relationship,
such as it was, in the belief that their initial contract
was still in effect.
191 NLRB No. 135
693
In the fall of 1968, Respondent's President Smith
and Union Representative Rainey discussed a new
agreement. No issue as to the Union's representative
status was at this time, anymore than before, raised by
Respondent, nor was the Union's demand for a new
agreement based on any claim that it represented a
majority of Respondent's equipment operators. On Oc-
tober 8, 1968, Respondent and the Union signed two
memoranda of agreement adopting the terms and con-
ditions of employment of master agreements contained
in a single document executed by the Union and two
separate associations, the General Building Contrac-
tors Association, and the Sewer, Tunnel and Subway
Contractors, both of South Bend and Mishawaka, In-
diana.
There is some indication that these master agree-
ments of the associations were renewals of prior agree-
ments. They were effective through May 31, 1969, and
from year to year thereafter subject to termination on
written notice. The agreements subsequently were spe-
cifically extended to May 31, 1970. It appears that at
least one of the contracts contained a clause recogniz-
ing the Union as exclusive bargaining representative
and a union-security clause requiring membership in
the Union as a condition of employment after a period
of employment of 7 days.
The wage rates specified in the new association con-
tracts were higher than those prevailing among Re-
spondent's employees but, for some 7 months following
the execution of the formal contracts, Respondent nei-
ther brought its rates into conformity with the contract
rates nor contributed to the employees' welfare and
other funds. In November, 1968, without prior notice
or bargaining with the Union, Respondent raised the
wages of its equipment operators although still not to
contract level. In May 1969, after having unlawfully
discharged the only two union members among its em-
ployees and then reinstated them (the subject of the
8(a)(3) charges herein), Respondent extended the con-
tractual wages and terms of employment to those two
employees but not to its nonunion employees.
The complaint alleged, in material part, that Re-
spondent had violated Section 8(a)(1) and (5) and 8(d)
by refusing to bargain collectively with the Union as
the exclusive representative of its employees in an ap-
propriate unit and by unilaterally changing existing
wage rates as set forth in the agreement' of the parties.
The Trial Examiner found that Respondent had not
violated Section 8(d) or 8(a)(5) of the Act on the
ground, principally, of the General Counsel's conces-
sion that at no time during the parties' contractual
relationship had the Union been the majority represent-
ative of Respondent's employees.
The General Counsel and the Charging Party except
to the Trial Examiner's finding and contend that Sec-
tion 8(a)(5) should be construed so as to prohibit Re-
694 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
spondent's alleged repudiation of the contract on
grounds that the contract was validly executed under
Section 8(f). That is, they assert that the majority status
of a union which executes a prehire contract valid un-
der Section 8(f) is fully as immune from challenge dur-
ing the contract term as is the majority status of a union
which has gained recognition and secured a contract
after traditional demonstration of its majority support.
In our view, that argument finds no support either in
the statute itself or in the history of its enactment.
The legislative history makes clear that Section 8(f)
was enacted to immunize employers in the building and
construction industry from the strictures of Section
8(a) of the Act in situations where they recognize and
enter into agreements with an unassisted labor organi-
zation whose majority status has not previously been
established under the provisions of Section 9 of the Act.
Thus, as stated in the Report of the House of Repre-
sentatives Committee on Education and Labor:'
In the building and construction industry it is
customary for employers to enter into collective-
bargaining agreements for periods of time running
into the future, perhaps 1 year or in many in-
stances as much as 3 years. Since the vast majority
of building projects are of relatively short dura-
tion, such labor agreements sometimes apply to
jobs which have not been started. The practice of
signing such agreements for future employment, is
not entirely consistent with Wagner Act rulings of
the NLRB that exclusive bargaining contracts can
lawfully be concluded only if the union makes its
agreement after a representative number of em-
ployees have been hired. One reason for this prac-
tice is that it is necessary for the employer to know
his labor costs before making the estimate upon
which his bid will be based. A second reason is
that the employer must be able to have available
a supply of skilled craftsmen ready for quick refer-
ral. The committee has decided that the object of
validating the prehire agreement in the building
and construction industry is sound and has chosen
to accomplish this object by providing that a pre-
hire agreement in that industry shall not constitute
an unfair labor practice under the act. [Emphasis
supplied.]
The language of the section, as enacted, clearly sug-
gests the limits of its effect:
It shall not be an unfair labor practice under
subsections (a) and (b) of this section for an em-
ployer engaged primarily in the building and con-
struction industry to make an agreement covering
employees engaged (or who, upon their employ-
ment, will be engaged) in the building and con-
' H. R. Rep. No. 741, 86th Cong ., 1st Sess ., I Leg. Hest 759, 777 (1959).
See Ruttman Construction Co., 191 NLRB No. 136.
struction industry with a labor organization of
which building and construction employees are
members (not established, maintained, or assisted
by any action defined in section 8(a) of this Act as
an unfair labor practice) because (1) the majority
status of such labor organization has not been es-
tablished under the provisions of section 9 of this
Act prior to the making of such agreement, or (2)
such agreement requires as a condition of employ-
ment, membership in such labor organization after
the seventh day following the beginning of such
employment or the effective date of the agreement,
whichever is later, or (3) such agreement requires
the employer to notify such labor organization of
opportunities for employment' with such em-
ployer, or gives such labor organization an oppor-
tunity to refer qualified applicants for such em-
ployment, or (4) such agreement specifies
minimum training or experience qualifications for
employment or provides for priority in opportuni-
ties for employment based upon length of service
with such employer, in the industry or in the par-
ticular geographical area : Provided, That nothing
in this subsection shall set aside the final proviso
to section 8(a)(3) of this Act: Provided further,
That any agreement which would be invalid, but
for clause (1) of this subsection, shall not be a bar
to a petition filed pursuant to section 9(c) or 9(e).
The final proviso supplies an unmistakable guide to
Congress' desire to immunize from liability only the
preliminary contractual steps which precede an em-
ployer's acquisition of a work force on a project in that
it expressly permits the testing of the signatory union's
majority status at any time after employees have been
hired and an election might, therefore, be conducted.
Thus, the proviso constitutes a statutory safeguard
against just the sort of irresponsibly imposed minority
union representation which this record reveals. Inas-
much as Congress clearly intended to permit a test, by
petition, of majority status and unit appropriateness at
any time during the contract, it would be anomalous,
indeed, to hold that Section 8(f) prohibits examination
of those questions in the litigation of refusal-to-bargain
charges.
We find, further, that there is no merit in the excep-
tion based on Local Lodge No. 1424 International As-
sociation of Machinists [Bryan Mfg. Co.] v. N.L.R.B.,
362 U.S. 411(1960), that Respondent was precluded by
Section 10(b) from asserting that the October 1968
contract was executed at a time when the Union did not
enjoy majority support. It is true that, in the normal
case, an employer-respondent in an 8(a)(5) case may
not go behind the 10(b) period to show that a contract,
apparently regular and continuing on its face, was ex-
ecuted at a time when the union was not the majority
R. J. SMITH CONSTRUCTION CO. 695
representative.' The reason for this rule is that a con-
tract, regular on its face, carries with it an irrebuttable
presumption-absent, perhaps, unusual circumstances
-of continuing majority status of the union.' Thus,
since the contract standing alone carries with it a con-
tinued requirement of union recognition, to go behind
the 10(b) period to show that when the contract was
executed the union failed to represent a majority runs
directly counter to the teachings of Bryan.'
Such is not the case with an 8(f) agreement. As previ-
ously described, an 8(f) agreement, because of its pre-
hire nature, need not be made with a majority union to
be legal. For this reason, there is no basis, either in logic
or in policy, to extend to the union which is party to
such a contract an irrebuttable presumption of majority
status. Indeed, we conclude that any such presumption
would be irreconcilable with the final proviso to Section
8(f). It is, of course, necessary sometimes to go behind
the 10(b) period to see what kind of contract is involved
in a particular case-just as it might be necessary to
take an employer's operations for an entire year, in-
cluding 6 months behind the 10(b) period-to see
whether it is engaged in commerce and within the
Board's jurisdictional standards. However, once that is
accomplished and it is determined the particular con-
tract under scrutiny is validated by Section 8(f) rather
than by Section 9(c)(e)---one to which no irrebuttable
presumption of majority can be attached'-that is the
end of the pre-10(b) inquiry. No actual "defense" in
such a situation is predicated on pre-10(b) events.
In the present case, the evidence which serves the
Employer as a defense is not the pre-10(b) evidence, but
rather the General Counsel's concession that at the
time of the Respondent's repudiation-indeed at all
times-the Union failed to enjoy majority support.
Thus, whatever presumption might arise from this 8(f)
contract has clearly been rebutted by fresh, current
evidence of little or no employee support for this
Union. Thus, without reference to pre-10(b) evidence,
we have determined that the contract here was not
enforceable through 8(a)(5) proceedings.
ORDER
Pursuant to Section 10(c) of the National Labor Re-
lations Act, as amended, the National Labor Relations
Board adopts as its Order the Recommended Order of
the Trial Examiner and hereby orders that Respondent,
Barrington Plaza & Tragntew, Inc., 185 NLRB No. 132.
Heaton Furniture Company, 111 NLRB 342
See also Blue Diamond Coal Co., 166 NLRB 271, enfd sub nom.
N.LR.B. v District30, Mine Workers, 422 F.2d 115 (C.A. 6); Roman Stone
Construction, 153 NLRB 659
5 It is possible that, in some situations, at least a rebuttable presumption
of majority will arise from an 8(f) contract. This might occur, for example,
when a union-security agreement is present in the 8(f) contract and has been
enforced. That is not the case here.
R. J. Smith Construction Co., Inc., Elkhart, Indiana,
its officers, agents, successors, and assigns. shall take
the action set forth in the Trial Examiner's Recom-
mended Order.
MEMBERS FANNING AND BROWN, dissenting: ,
Unlike our colleagues, we would find that Respond-
ent violated Section 8(a)(5) and (1) of the Act by unilat-
erally changing existing wage rates as set forth in the
current collective-bargaining agreement with the
Union through Respondent's failure to implement the
contract's wage provisions. However, because of the
nature of our colleagues' holding, and its broad impact,
we are impelled to comment more specifically. For in
the name of industrial stability and congressional intent
they would grant a license to avoid a contractual obli-
gation by unilaterally abrogating an existing "prehire"
contract.
There is no question about the fact that the Union
had a valid prehire contract with Respondent, and our
colleagues do not contend otherwise, the sole defense to
finding a refusal to bargain being concededly that at no
time during the parties' contractual relationship had
the Union been the majority representative of Respond-
ent's employees. However, with all due respect, this
begs the very question before us, namely, whether and
to what extent Section 8(a)(5) and 8(b)(3) apply to the
construction industry inasmuch as every Section 8(f)
prehire contract is by definition one in which "the
majority status of such labor organization has not been
established under the provisions of section 9 of this Act
prior to the making of such agreement."
Our colleagues, in effect, conclude that a prehire
agreement, although validly executed for a fixed term
of years, is effective only so long as both parties wish
to adhere to it and may be ignored with impunity, as
it was in the instant case, by either party at any time
without thereby offending either Section 8(a)(5) or Sec-
tion 8(b)(3) of the Act. The majority opinion offers no
legal precedent for this novel and sweeping conclusion,
but asserts that Congress, in enacting Section 8(f),
merely meant:
... to immunize employers in the building and
construction industry from the strictures of Sec-
tion 8(a) in situations where they recognize and
enter into agreements with an unassisted labor or-
ganization whose majority status has not previ-
ously been established under the provisions of Sec-
tion 9 of the Act.
In declining to find that a rejection of such agreement
is a refusal to bargain, our colleagues are saying that
Congress permitted such prehire contracts without in-
tending them to have any effect.
It is clear from the legislative history that Congress
in enacting Section 8(f) recognized the special needs of
the building and construction industry and sought to
696 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
accommodate those needs to the basic policies of the
Act by permitting prehire agreements , which otherwise
would be unlawful under Section 8(a)(5) and 8 (b)(3).
Congress thus placed employers and unions in that
industry in a privileged position by granting them a
right not available to employers and labor unions in
other industries . Congressional proponents and oppo-
nents of that provision both acknowledged that Section
8(f) was a "bonus" to this industry . Our colleagues,
however, now urge that Section 8 (f), instead of giving
a special privilege , in fact renders the permitted prehire
contracts meaningless and unenforceable . In our opin-
ion such result is antithetical to stated congressional
intent and is all the more illogical when it is urged in
the name of effectuating a statutory policy of promot-
ing industrial peace and stability . We find it impossible
to perceive how this statutory objective is served if
collective-bargaining agreements lawfully entered into
may be terminated or modified during their term at the
whim of either party . Rather, stability in labor-man-
agement relations can only be achieved if contracting
parties are required to adhere to their lawful agree-
ments.
Of course a prehire agreement must be entered into
voluntarily by both parties .b However , once lawfully
entered into , a valid prehire agreement differs from
other bargaining agreements only in the fact that, un-
der the second proviso to Section 8 (f), it is not a bar to
a representation petition filed under Section 9(c) or
9(e). There is no indication that Congress intended by
Section 8(f) to modify or abrogate the existing law with
respect to good-faith bargaining . Senator Morse, one of
the bill's sponsors and a Senate conferee , in answering
critics ' claims that the proposed amendment (Section
8(f)) weakened right-to-work laws , stated : "The fact is
that any weakening of the right to work laws is specifi-
cally provided against . The fact is that these sections are
aimed to make no change in existing law but to make
clear that the prehire agreement is permissible in the
industry. "' [Emphasis supplied.]
For all the foregoing reasons , we would find that by
repudiation of its contract, Respondent ignored its
statutory obligation to recognize and bargain with the
Union as the exclusive representative of all employees
in the unit in violation of Section 8(a)(5) and (1) of the
Act. This conclusion is fully consonant with the letter
and spirit of the Act and is in accord with Board prece-
dent.e
6 See, e g ., the colloquy between Senator Holland and Senator Kennedy,
II Leg Hist . 1715 (1 and 2), Labor-Management Reporting and Disclosure
Act of 1959 (1959); 1 Leg Hist. 946.
II Leg. Hist 1327(1), LMRDA, 1959.
Otifield Maintenance Co., Inc., 142 NLRB 1384.
TRIAL EXAMINER'S DECISION
SYDNEY S. AsHER, Trial Examiner: On April 23, 1969,
Local 150, International Union of Operating Engineers,
AFL-CIO, herein called the Union , filed charges against R.
J. Smith Construction Co., Inc., Elkhart, Indiana, herein
called the Respondent. Amended charges and second
amended charges were filed on June 13 and June 30, 1969,
respectively. On June 30, 1969, the General Counsel of the
National Labor Relations Board issued a complaint to which
the Respondent filed a timely answer. On July 28, 1969, the
General Counsel issued an amendment to complaint. As
amended, the complaint alleges that since on or about Octo-
ber 23, 1968, the Respondent interfered with, restrained, and
coerced its employees in the exercise of rights guaranteed
them in Section 7 of the Act; that the Respondent discharged
its employees Delvin Slabaugh and Richard Slabaugh on or
about April 17, 1969, and thereafter failed and refused to
reinstate them until May 1, 1969, because they "joined and
assisted the union and engaged in ... concerted activities;"
that on or about October 8, 1968, the Respondent and the
Union entered into a collective -bargaining agreement effec-
tive through May 31, 1970, which is still in full force and
effect; that since October 8, 1968, the Union has been the
exclusive bargaining representative of all employees in an
appropriate unit; that since October 23, 1968, the Respondent
has refused to bargain collectively with the Union as the
exclusive representative of these employees; and that on or
about October 23, 1968, the Respondent unilaterally changed
existing wage rates as set forth in the collective -bargaining
agreement and thereby modified said agreement . It is alleged
that this conduct violated Section 8(a)(1),(3),(5), and (d) of
the National Labor Relations Act, as amended, (29 U.S.C.,
Sec. 151, et seq.), herein called the Act. The complaint re-
quests that the Respondent be required to reimburse each
unit employee for the difference between what he had been
paid since October 23, 1968, and what he would have been
paid had the Respondent adhered to the wage rates set forth
in the agreement. Thereafter the Respondent filed an answer
denying many of the allegations of the complaint, as
amended. The answer admits that the Respondent discharged
Delvin Slabaugh and Richard Slabaugh on or about April 17,
1969, and alleges that they were rehired thereafter and have
been paid in full. The answer furhter admits that the Re-
spondent signed a contract with the Union covering the
period June 1, 1966, through May 31, 1969, but asserts that
its signature thereon "was the result of coercion, duress, and
undue influence" and is therefore invalid.
Upon due notice, a hearing was held before me on Septem-
ber 16 through 19, 1969, both dates inclusive, in Goshen,
Indiana.' All parties were represented and participated fully
in the hearing. At the beginning of the hearing the General
Counsel amended the complaint with regard to the jurisdic-
tional facts, and the Respondent orally denied that part of the
complaint, as amended. At the close of the hearing, the Re-
spondent moved for the dismissal of the complaint because of
lack of adequate proof. Ruling on this motion was reserved.
For reasons stated hereafter, the motion is now granted in
part and denied in part. After the close of the hearing the
General Counsel and the Union filed briefs. These have been
duly considered.
I The Respondent brought suit against the Board's Regional Director in
a United States District Court to enjoin the hearing The application for
injunction was dismissed on September 12, 1969. R. J. Smith Construction
Ca, Inc, v. Little, 72 LRRM 2241 (D C.N D. Ind.)
R. J. SMITH CONSTRUCTION CO.
Upon the entire record in this case' and from my observa-
tion of the witnesses, I make the following:
FINDINGS OF FACT
A. The Respondent
The Respondent is, and at all material times has been, an
Indiana corporation with its place of business located near
Elkhart, Indiana. It is engaged in general grading and ex-
cavating for various types of projects, such as private homes,
industrial projects, apartment buildings, and airports. It en-
joys a fairly stable complement of employees and a fairly
modest labor turnover. When circumstances require, the Re-
spondent hires extra help for a particular project.'
Between January 1 and August 5, 1969, the Respondent
performed work within the State of Indiana for McCullough
Construction Company, herein called McCullough, valued at
more than $53,000. McCullough is, and at all material times
has been, an Indiana Corporation engaged in general con-
struction, with its principal office at Elkhart, Indiana. During
1968 McCullough purchased goods from outside the State of
Indiana valued at more than $190,000. Between January 1
and September 16, 1969, McCullough purchased goods out-
side the State of Indiana valued at more than $130,000. Dur-
ing the first 6 months of 1969, McCullough completed con-
tracts under which it performed work outside the State of
Indiana valued at more than $350,000.4
In the light of the above-described facts it is found that the
Respondent is, and at all material times has been, engaged in
commerce and activities affecting commerce and has been
engaged primarily in the building and construction industry.
It is further found that the Respondent's operations meet the
Board's jurisdictional standards and that it would effectuate
the policies of the Act for the Board to exercise jurisdiction
in this case.
B. The Union
The Union represents employees in the construction indus-
try through collective-bargaining and negotiations with their
employers and, on their behalf, enters into collective-bargain-
ing agreements concerning wages, hours, and other working
conditions. Employees participate in the Union's affairs. It is
accordingly found that the Union is, and at all material times
has been, a labor organization as defined in the Acts
C. The Setting
On March 11, 1964, the Respondent and the Union entered
into a collective-bargaining contract governing the working
conditions of the Respondent's equipment operators, effective
through December 31, 1965.6 The Respondent did not alter
its way of doing business as a result of executing the contract,
and the relationship between the parties during this period
was not entirely harmonious.
During the hearing the Trial Examiner rejected G C. Exhs. 7-A
through 7-K. The reporter erroneously stamped these exhibits as having
been received in evidence. The reporter's stamp on these exhibits is hereby
amended to reflect the correct fact that these exhibits were rejected
' The findings of fact in this paragraph are based on the undenied tes-
timony of R. J. Smith, president of the Respondent
° The findings of fact regarding McCullough are based on the undenied
testimony of Fredrick P. Nye, McCullough's controller.
5 The findings of fact regarding the Union are based on the undenied
testimony of Leon Rainey, business representative of the Union
6 R. J. Smith, president of the Respondent, who signed the contract on
the Respondent's behalf, testified that he did so with no intention of paying
the wage rates prescribed therein In short, without disclosing his design to
the other contracting party, Smith sought to obtain benefits from the agree-
ment without undertaking its obligations.
697
From the day after the 1964 contract expired on January
1, 1966, to October 8, 1968, no contract existed between the
parties, although for some time both parties apparently be-
lieved, mistakenly, that the 1964 contract was still in effect.
During this period disagreements and misunderstandings be-
tween the Respondent and the Union persisted. In the fall of
1968 R. J. Smith, the Respondent's president, discussed a
new contract with Leon Rainey, a representative of the
Union. However, Rainey never claimed majority status for
the Union. On October 8, 1968, two new collective-bargain-
ing contracts covering the Respondent's operators were ex-
ecuted by the Union and the Respondent, effective through
May 31, 1969, and from year to year thereafter until ter-
minated on 3 months' written notice.' At least one of the
contracts contained a clause whereby the Respondent recog-
nized the Union as the exclusive bargaining representative for
all its operators and also contained a valid union-security
clause. Prior to the effective date of these contracts, the wage
rates of the Respondent's equipment operators had been sub-
stantially lower than those required by the contracts. For a
time after the contracts were signed, the Respondent did not
change any working conditions of its equipment operators.
D. Events Within 6 Months of
Service of the Charges
Beginning on November 1, 1968, and from time to time
thereafter, the Respondent raised the pay rates of many of its
equipment operators. According to the undenied and cred-
ited testimony of R. J. Smith, president of the Respondent,
these individual wage increases were granted by the Respond-
ent without prior notice to, or bargaining with, the Union.
None of these individual raises brought the hourly rate of any
of the operators up to those set forth in the contracts of
October 8, 1968.
On April 17, 1969, the Respondent discharged Delvin Sla-
baugh and Richard Slabaugh. They were reinstated on May
1, 1969, at wages of $6.20 per hour, the rate specified in the
contracts of October 8, 1969. They receive time and a half for
overtime, and the Respondent makes welfare payments in
their behalf as required by the agreements. They are the only
union members among the Respondent's nonsupervisory op-
erators. None of the Respondent's other rank-and-file opera-
tors currently receives the pay rate prescribed in the con-
tracts, nor enjoys the fringe benefits accorded the Slabaughs.8
E. The Refusal to Bargain
1. Positions of the parties
The General Counsel and the Union contend that, the
parties being in the construction industry, the contracts of
October 8, 1968, are valid without proof of the Union's
majority status at that time and form a basis for the Respond-
ent's statutory obligation to recognize and bargain with the
Union as the exclusive representative of all employees in the
unit. They also argue that the Respondent unilaterally
changed working conditions by failing, within 6 months of
service of the charges, to put the contracts' requirements into
effect and by unilaterally granting wage increases to in-
dividual employees. The Respondent defends on the ground
' Again, Smith, who signed both documents as the Respondent 's repre-
sentative , testified that he then had no intention of paying the wages called
for by the agreements . Once more , his undisclosed aim was to reap the
contracts' benefits without assuming their burdens.
6 The legality of this arrangement is not before me for decision . On this
matter, the parties are referred to Gaynor News Company, Inc v.
N.L.R.B., 347 U.S. 17, and N.L.R.B. v. Miranda Fuel Co., Inc., 326 F.2d
172 (C.A. 2).
698 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
that the contracts of October 8, 1968 , were entered into by 4. The applicability of Section 8(f)(1)
the Respondent solely because of the Union's coercion, du-
ress, and undue influence and are therefore invalid.
2. The alleged appropriate unit and
the Union's lack of majority
The complaint alleges, and the General Counsel and the
Union maintain, that all hourly paid and salaried operators
of equipment employed by the Respondent in certain Indiana
counties, including mechanics, but excluding hand laborers
and supervisors, constitute an appropriate bargaining unit.
The Respondent would limit the unit to hourly paid operators
in the specified counties, thereby excluding not only hand
laborers and supervisors but also mechanics and salaried
equipment operators.
I find it unnecessary to determine the unit placement of the
two disputed categories; namely, mechanics and salaried op-
erators. Whatever the exact limits of the, unit may be, it is
clear, and the General Counsel and the Union appear to
concede, that at no material time has the Union represented
a majority of the Respondent's employees in an appropriate
unit.
3. The effect of Section 10(b)
Section 10(b) of the Act provides, in pertinent part:
... no complaint shall issue based upon any unfair labor
practice occurring more than six 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 ...
The General Counsel, in his brief, urges that:
... under Bryan Mfg. Co., 262 U.S. 411, the contract
having been executed in October 1968, majority status
cannot be attacked after April 1969.. .
I am of the opinion that this position misconstrues the
holding of the majority of the United States Supreme Court
in Bryan Mfg. Co.. There an employer and a minority union
signed a contract containing a union-security clause. More
than 6 months after the contract's execution, charges were
filed against the contracting parties alleging violation of Sec-
tion 8(a)(1), (2) and (3) by the employer and Section
8(b)(1)(A) and (2) by the union for executing and maintaining
the contract. The Court majority held "that the complaints
against these petitioners are barred by time."' Thus, the
Court recognized the function of Section 10(b) as a statute of
limitations-to protect the person against whom a charge is
made from accusations based on events now stale. But here
the General Counsel attempts the reverse. Instead of shield-
ing the party charged, the General Counsel would have the
provisions of Section 10(b) used to arm the Charging Party
with a weapon not otherwise available to him and to hinder
the party charged from raising a particular defense. A statute
of limitations is not, I believe, designed to thus thwart an
otherwise valid defense. It is accordingly found that here the
Union's lack of majority on October 8, 1968, and at all times
since, is a fact which, notwithstanding the provisions of Sec-
tion 10(b) of the Act, may be considered in determining
whether the Respondent has violated Section 8(a)(5) of the
Act.
' 362 U.S. 415.
Section 8(a)(5) of the Act, with which we are here con-
cerned, provides that it shall be an unfair labor practice for
an employer:
to refuse to bargain collectively with the representative
of his employees, subject to the provisions of section
9(a).
Section 8(f) was added to the Act in 1959 to provide relief
in certain problem situations which Congress considered
peculiar to the building and construction mdustry.10 In perti-
nent part, it reads:
It shall not be an unfair labor practice under subsec-
tions (a) and (b) of this section for an employer engaged
primarily in the building and construction industry to
make an agreement covering employees engaged (or
who, upon their employment, will be engaged) in the
building and construction industry with a labor organi-
zation of which building and construction employees are
members (not established, maintained, or assisted by an
action defined in Section 8(a) of this Act as an unfair
labor practice) because (1) the majority status of such
labor organization has not been established under the
provisions of section 9 of this Act prior to the making
of such agreement ... Provided further, that any agree-
ment which would be invalid but for clause (1) of this
subsection, shall not be a bar to a petition filed pursuant
to section 9(c) or 9(e).
It is true that the contracting employer here is engaged
primarily in the building and construction industry, that the
contracts of October 8, 1969, covered employees in that in-
dustry, and that the contracting union included such em-
ployees in its membership. However, it does not necessarily
follow that Section 8(f)(1) is applicable to the contracts of
October 8, 1968. In Bricklayers & Masons International
Union Local No 3 (Eastern Washington Builders), 162 NLRB
476, 478 the Board stated:
one of the most frequently cited portions of the legisla-
tive history of Section 8(f) reveals that the Congress
envisioned its prehire provisions as applying only to the
situation where the parties were attempting to establish
a bargaining relationship for the first time. [Emphasis
supplied].
The Board held that the union there "had for many years
been the recognized bargaining agent of the employees" and
that consequently "the tests to be applied in determining the
fulfillment of the bargaining obligations of the parties herein
are those generally used under Section 8(a)(5)." This decision
was affirmed by the United States Court of Appeals for the
Ninth Circuit." Similarly, in the instant case, the Respondent
and the Union had previously had contractual relations and
were not on October 8, 1968, "attempting to establish [their]
bargaining relationship for the first time." It follows, and I
find, that under the Board's Bricklayers & Masons doctrine,
Section 8(f)(1) is not applicable to those contracts. Therefore,
as the Union was not under a statutory obligation to bargain
with it. The allegations that the Respondent refused to bar-
gain in violation of Section 8(a)(5) accordingly cannot
stand.12
10 See 1 Legislative History of the Labor-Management Reporting and
Disclosure Act of 1959 423-5, 777-78; 2 Id. 1577-8, and Zidell Explora-
tions, Inc., 175 NLRB No. 137
" 405 F.2d 469 (C.A. 9). In Dallas Building and Construction Trades
Council (Dallas County Construction Employers' Association, Inc.), 164
NLRB 938, 943, the Board cited Bricklayers & Masons with approval.
" In this posture of the case, I deem it unnecessary to rule on the Re-
spondent's defense of duress. Nor do I feel called on to decide whether
Section 8(f)(1) should be applied to an employer, such as the Respondent
R. J. SMITH CONSTRUCTION CO. 699
F. The Discriminatory Discharges
As has already been found , the Respondent discharged
Delvin Slabaugh and Richard Slabaugh on April 17, 1969,
and thereafter failed and refused to reinstate them until May
1, 1969. The complaint alleges, and the Respondent does not
deny, that they were discharged and denied reinstatement
until May 1, 1969, because they joined and assisted the Union
and engaged in concerted activities . It is therefore found that,
by such conduct, the Respondent violated Section 8(a)(1) and
(3) of the Act.
Upon the basis of the above findings of fact, and upon the
entire record in this case , I make the following:
CONCLUSIONS OF LAW
1. R. J. Smith Construction Co., Inc., is, and at all material
times has been, an employer within the meaning of Section
2(6) and (7) of the Act.
2. Local No . 150, International Union of Operating Engi-
neers, AFL-CIO, is, and at all material times has been, a
labor organization within the meaning of Section 2(5) of the
Act.
3. By discriminatorily discharging Delvin Slabaugh and
Richard Slabaugh on April 17, 1969, and thereafter failing
and refusing to reinstate them until May 1, 1969, thereby
discouraging membership in the above -named labor organi-
zation, the Respondent has engaged in and is engaging in
unfair labor practices within the meaning of Section 8(a)(3)
of the Act.
4. By the above-described conduct, thereby interfering
with , restraining , and coercing its employees in the exercise
of rights guaranteed them in Section 7 of the Act, the Re-
spondent has engaged in and is engaging in unfair labor prac-
tices within the meaning of Section 8(a)(1) of the Act.
5. The above-described unfair labor practices tend to lead
to labor disputes burdening and obstructing commerce and
the free flow of commerce and constitute unfair labor prac-
tices affecting commerce within the meaning of Section 2(6)
and (7) of the Act.
6. The General Counsel has not established that the Re-
spondent failed or refused to bargain with the above-named
labor organization within the meaning of Section 8 (a)(5) of
the Act.
THE REMEDY
As the unfair labor practices found to have been committed
by the Respondent are persuasively related to other unfair
labor practices proscribed by the Act, the danger of their
commission in the future may reasonably be anticipated from
the Respondent 's past conduct." It will therefore be recom-
mended that the Respondent cease and desist, not only from
the unfair labor practices found , but also from in any other
manner infringing upon the rights of its employees guaran-
teed in Section 7 of the Act.
It has been found that the Respondent discriminatorily
discharged Delvin Slabaugh and Richard Slabaugh on April
17, 1969, and that it reinstated them on May 1, 1969. It will
accordingly be recommended that the Respondent, to the
extent that it has not already done so, make them whole for
any losses they may have suffered by reason of the discrimina-
herein, who maintains a more-or-less permanent complement of employees
and therefore is not typical of most employers in this industry See Decision
of Trial Examiner Robert Cohn in David F. Irvin and James B. McKelvey,
partners, d/b/a/ The Irvin -McKelvey Company, 194 NLRB No 8.
13 It is well established that a discriminatory discharge of an employee
because of his union activities goes to the very heart of the Act A. J
Krajewski Manufacturing Co., Inc.., 180 NLRB No 173
tion against them , by payment to each of them of a sum of
money equal to that which he would normally have earned
from the date of his discharge on April 17 , 1969 , to the date
of his reinstatement on May 1, 1969 , less his net earnings
during such period, including 6 percent interest as set forth
in Isis Plumbing & Heating Co., 138 NLRB 716.
It will also be recommended that the Respondent preserve
and make available to the Board , upon request, all records
necessary to compute the amount of backpay due hereunder,
if any, and post appropriate notices. It will further be recom-
mended that the complaint be dismissed , insofar as it alleges
that the Respondent violated Section 8(a)(5) of the Act.
Upon the basis of the above findings of fact and conclusions
of law, and upon the entire record in this case , I make the
following:
RECOMMENDED ORDER
It is recommended that R. J. Smith Construction Co., Inc.,
Elkhart, Indiana, its officers, agents, successors, and assigns,
shall:
1. Cease and desist from:
(a) Discouraging membership in Local No . 150, Interna-
tional Union of Operating Engineers, AFL-CIO, or any
other labor organization , by discharging any of its employees
or otherwise discriminating against them in regard to their
hire or tenure of employment or any term or condition of
employment.
(b) In any other manner interfering with , restraining, or
coercing its employees in the exercise of rights protected by
Section 7 of the Act.
2. Take the following affirmative action , which it is found
will effectuate the policies of the Act:
(a) To the extent that it has not already done so, make
whole Delvin Slabaugh and Richard Slabaugh for any loss of
pay they may have suffered by reason of the Respondent's
discrimination against them , with interest thereon at the rate
of 6 percent per annum.
(b) Preserve and, upon request , make available to the
Board or its agents, for examination and copying , all payroll
records, Social Security payment records, timecards , person-
nel records and reports, and all other records necessary to
analyze the amount of backpay due under the terms of this
Recommended Order.
(c) Post at its plant in Elkhart, Indiana, copies of the
attached notice marked "Appendix ." 10. Copies of the said
notice, on forms provided by the Regional Director for Re-
gion 25 , after being duly signed by the Respondent 's repre-
sentative, shall be posted by the Respondent immediately
upon receipt thereof, and be maintained by it for 60 consecu-
tive days thereafter , in conspicuous places, including all
places where notices to employees are customarily displayed.
Reasonable steps shall be taken by the Respondent to insure
that said notices are not altered, defaced, or covered by any
other material.
14 In the event no exceptions are filed as provided by Section 102.46 of
the Rules and Regulations of the National Labor Relations Board, the
findings, conclusions , recommendations, and Recommended Order herein
shall, as provided in Section 102.48 of the Rules and Regulations, be
adopted by the Board and become its findings , conclusions, and order, and
all objections thereto shall be deemed waived for all purposes . In the event
that the Board 's Order is enforced by a Judgment of a United States Court
of Appeals , the words in the notice reading "Posted by Order of the Na-
tional Labor Relations Board" shall be changed to read "Posted Pursuant
to a Judgment of the United States Court of Appeals Enforcing an Order
of the National Labor Relations Board "
700 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
(d) Notify the said Regional Director, in writing, within 20
days from the receipt of this Decision, what steps have been
taken to comply herewith."
IT IS FURTHER RECOMMENDED that the complaint herein
be dismissed insofar as it alleges that the Respondent violated
Section 8(a)(5) of the Act.
" In the event that this Recommended Order is adopted by the Board,
this provision shall be modified to read- "Notify said Regional Director, in
writing, within 10 days from the date of this Order, what steps the Respond-
ent has taken to comply herewith."
APPENDIX
NOTICE To EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
WE WILL NOT discourage membership in Local No.
150, International Union of Operating Engineers, AFL-
CIO, or any other union, by discharging any of our
employees or otherwise discriminating against them
with regard to their job tenure or working conditions.
WE WILL NOT in any other manner interfere with,
restrain, or coerce our employees in the exercise of their
right to self-organization, to join or assist any union, to
bargain collectively through representatives of their own
choosing, to engage in mutual aid or protection, or to
refrain from such activities, except to the extent that
such rights may be affected by an agreement requiring
union membership as a condition of employment, as
authorized in Section 8(a)(3) of the National Labor Re-
lations Act, as amended.
WE WILL, to the extent that we have not already done
so, pay Delvin Slabaugh and Richard Slabaugh the
wages they lost because of the discrimination against
them, with 6 percent interest.
Our employees are free to become or remain, or to refrain
from becoming or remaining, members of any union, except
to the extent that such right may be affected by an agreement
requiring union membership as a condition of employemnt,
as authorized in Section 8(a)(3) of the Act, as amended.
Dated By
R. J. SMITH
CONSTRUCTION
Co., INC.
(Employer)
(Representative) (Title)
This is an official notice and must not be defaced by any-
one.
This notice must remain 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 compliance with
its provisions may be directed to the Board's Office, 614 ISTA
Center, 150 West Market Street, Indianapolis, Indiana, Tele-
phone 317-633-8921.