Raymond Prats Sheet Metal Co., Inc.

National Labor Relations Board - Board Decisions

Jul 31, 1987

285 N.L.R.B. 194 (N.L.R.B. 1987)

194 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
Raymond Prats Sheet Metal Co., Inc. and Sheet
Metal Workers' International Association,
Local Union No. 11. Case 15-CA-10027
31 July 1987 `
DECISION AND ORDER
By CHAIRMAN DOTSON AND MEMBERS
BABSON AND CRACRAFT
Upon an unfair labor practice charge filed on 8
July 1986 by the Union, Sheet Metal Workers'
International Association, Local Union No. 11, the
General Counsel of the National Labor Relations
Board `issued a complaint on 13 August 1986
against the Respondent, Raymond Prats Sheet
Metal Company, Inc., alleging that it violated Sec-
tion 8(a)(1) and (5) of the National Labor Relations
Act. Copies of the complaint and notice of hearing
were served on the Respondent. The Respondent
filed a timely answer and amended answer denying
the commission of any unfair labor practices and
asserting certain affirmative defenses.
On 20 October 1986 the parties jointly moved
the Board to transfer the proceeding to the Board
without benefit of a hearing before an administra-
tive law judge and they submitted a proposed
record consisting of the formal papers and the par-
ties' stipulation of facts with attached exhibits. On
10 December 1986 the Board issued an order grant-
ing the motion, approving the stipulation, and
transferring the proceeding to the Board. On 20
January -1987 the Respondent filed its brief to the
Board and on 9 February 1987 the General Coun-
sel filed its brief.
On the record in this case, the Board makes the
following findings.
1. JURISDICTION
The Respondent is a Louisiana corporation en-
gaged in the business of sheet metal fabrication
with an office and shop facility in New Orleans,
Louisiana, from which it is engaged in sheet metal
work at various jobsites in the New Orleans, Lou-
isiana area . The Respondent during the past 12
months has derived gross revenues in excess of
$50,000 from subcontracting duct work and air-
conditioning duct work to corporations engaged in
the mechanical contractor and construction busi-
ness in the New Orleans and Metairie, Louisiana
areas. Accordingly, we find that the Respondent is
an employer engaged in commerce within the
meaning of Section 2(6) and (7) of the Act.
II. LABOR ORGANIZATION
The parties stipulated and we fmd that the Union
is a labor organization within the meaning of Sec-
tion 2(5) of the Act.
III. THE UNFAIR LABOR PRACTICES
A. Issue
The issue is whether the Respondent, since on or
before 8 January 1986, violated Section 8(a)(1) and
(5) of the Act by failing and refusing to pay fringe
benefit trust fund contributions required by the col-
lective-bargaining agreement for its employees rep-
resented by the Charging Party.
B. Facts
The Respondent is engaged in the business of
sheet metal fabrication. Since about 1978, the
Union was certified as the exclusive collective-bar-
gaining representative in the following unit:
All employees employed by Respondent, in-
cluding but not limited to those engaged in the
(a) manufacture, fabrication, assembling, han-
dling, erection, installation, dismantling, condi-
tioning, adjustment, alteration, repairings, and
servicing of all ferrous or nonferrous metal
work and all other materials used in lieu there-
of and all air-veyor systems and airhandling
systems regardless of material used including
the setting of all equipment and all reinforce-
ments in connection therewith; (b) all lagging
over insulation and all duct lining; (c) testing
and balancing of all airhandling equipment and
duct work; (d) the preparation of all shop and
field sketches used in fabrication and erection,
including those taken from original architec-
tural and engineering drawings or sketches;
and (e) all other work included in the jurisdic-
tional claims of Sheet Metal Workers' Interna-
tional Association.
At all times material, the Union, by virtue of Sec-
tion 9(a) of the Act, has been the exclusive repre-
sentative of the employees in the unit. This recog-
nition has been embodied in a collective-bargaining
agreement which was effective from its terms from
1 August 1982 through 30 April 1984 and extended,
by agreement of the parties to 30 April 1987. The
collective-bargaining agreement also contained an
addendum, article VIII-A, section 2, which pro-
vided for the amount of wage and fringe benefits
to be paid to the unit employees. Since about 8
January 1986, the Respondent has failed and re-
fused to pay fringe benefit contributions for its unit
employees as set forth in the addendum, article
285 NLRB No. 27
RAYMOND PRATS SHEET METAL CO.
VIII-A, section 2, of the collective -bargaining
agreement.
On 13 November 1984 the New Orleans Sheet
Metal Workers Health & Welfare Fund , the New
Orleans Sheet Metal Workers Pension & Retire-
ment Fund, the New Orleans Sheet Metal Workers
Apprenticeship and Training Committee Fund, the
New Orleans Sheet Metal Vacation and Holiday
Fund , and the New Orleans Sheet Metal Workers
Contractor Industry Fund , Inc., filed a civil action
in the United States District Court for the Eastern
District of Louisiana against the Respondent. On
13 August 1985 a consent judgment was entered
into by the plaintiffs and defendant , Raymond S.
Prats Sheet Metal, Inc., whereby the court ordered
the defendant to pay to the plaintiffs the sum of
$83,352 . 30, and in addition , ordered that the de-
fendant make monthly contributions to plaintiffs'
funds in a timely fashion as required by the collec-
tive-bargaining agreement . The Union was not a
party to the consent judgment.
Subsequently, on 25 February 1986, the same
parties filed another action against the Respondent
in the United States District Court for the Eastern
District of Louisiana . On 30 May 1986 a judgment
was entered in that action , whereby the court or-
dered the defendant to pay to the plaintiffs the sum
of $23 , 898.24 , plus a reasonable attorney 's fee. The
Union was not a party to the judgment.
C. Contentions of the Parties
The Respondent contends that the failure to pay
the fringe benefit contributions resulted from the
Respondent 's inability to pay due to the deteriora-
tion of business conditions in the area. The Re-
spondent urges the Board to adopt Chairman Dot-
son's dissenting position in Rapid Fur Dressing, 278
NLRB 905 (1986), and find that since its poor fi-
nancial condition renders it unable to make the re-
quired contributions , such conduct is merely a vio-
lation of the collective -bargaining agreement and
does not give rise to a violation of Section 8(a)(1)
and (5) of the Act. The Respondent urges that in
none of the cases in which the Chairman has posit-
ed his position since Rapid Fur has there been any
evidence that the trustees of the funds for whom
the charging party-unions were seeking to collect
delinquent contributions had secured judgments
against the respondent -employer and that allowing
the Charging Party to relitigate what has already
been decided by the district court would constitute
a wasteful expenditure of the Board 's scarce re-
sources.
The Respondent also contends that the claims
raised by the Charging Party are barred by the
doctrines of res judicata and collateral estoppel be-
195
cause the only issues present in the Board proceed-
ing-whether there exists a valid collective-bar-
gaining agreement between the Charging Party and
the Respondent and whether the Respondent hon-
ored its obligations to remit funds to the various
fringe benefit trust funds-were also present in the
Section 301 proceeding in district court . While the
Charging Party may be a different legal entity than
the fringe benefit funds , the doctrine of res judicata
is still applicable to the Charging Party , since it is
acting as the "privy" of the trust funds . Since the
Board's remedial purpose is to "make whole" a
charging party, the "statutory remedy" that the
Board provides is identical to the "contractual
remedy" the court would provide under Section
301 of the Act. Finally , the Respondent maintains
that the General Counsel 's request for a visitatorial
clause should be denied because no showing has
been made that its inclusion is necessary to effectu-
ate compliance with any remedial order.
The General Counsel argues that the Respond-
ent's actions are in derogation of its bargaining ob-
ligation under Section 8 (d) of the Act. It contends
that the Respondent is bound to the terms and con-
ditions of the contract and that the Respondent's
alleged poor financial condition is not a lawful
basis for its failure to make fringe benefit contribu-
tions . For these reasons the General Counsel as-
serts that the Respondent violated Section 8(a)(1)
and (5) of the Act.
The General Counsel also contends that the prin-
ciples of res judicata and collateral estoppel do not
apply since the issues raised by this complaint are
not the same as those that could have been raised
before the court . Further, the Charging Party is a
different legal entity than the benefit funds whose
interests may be divergent from those of the
Charging Party because , inter alia , the trustees of
benefit funds are generally composed of both em-
ployer and union representatives . Moreover, any
remedy provided by a court to the benefit funds
would not include a notice to employees or any
other statutory remedy that the Board would pro-
vide as a part of its order. The General Counsel
also submits that the remedial order in this case
should contain a visitatorial provision authorizing
the Board to engage in discovery if necessary to
monitor compliance with the Board 's order.
D. Analysis and Conclusions
Initially , we reject the Respondent 's argument
that the claims raised by the Charging Party are
barred by the doctrines of res judicata and collater-
al estoppel. The cause of action and the issues de-
cided by the district court are not the same as
those presented for the Board 's resolution . The dis-
196 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
trict court litigation in which the Board and the
Charging Party were not parties, involved a Sec-
tion 301 suit, 29 U.S.C. § 185. The court decided
the issue whether the Respondent was required to
make contractual payments into various trust funds,
even though it was allegedly financially unable to
make these payments. The issue now before the
Board that could not have been raised in the court
proceeding initially is whether the Respondent's re-
fusal to make such payments constitutes a violation
of Section 8(a)(1) and (5) of the Act. Accordingly,
the Board is not precluded from addressing the
merits of this case.'
Since about 8 January 1986, the Respondent has
admittedly failed to make contractually required
fringe benefit payments. Moreover, the Respondent
has refused continually to make these payments
even though on 13 August 1985 and on 30 May
1986, a consent judgment and a judgment, respec-
tively, were entered by the United States District
Court for the Eastern District of Louisiana order-
ing that such payments be made. The Respondent's
only defense for not making these payments is a
claim that it is unable to do so due to its deteriorat-
ing financial condition. Such an economic necessity
claim, even if proven, does not constitute an ade-
quate defense to an allegation that an employer has
unlawfully failed to abide with provisions of a col-
lective-bargaining agreement. International Distribu-
tion Centers, 281 NLRB 742 (1986); NLRB v.
Manley Truck Line, 779 F.2d 1327 (7th Cir. 1985),
enfg. 271 NLRB 679 (1984); Oak Cliff-Golman
Baking Co,, 207 NLRB 1063 (1973), enfd. 505 F.2d
1302 (5th Cir. 1974), cert. denied 423 U.S. 826
(1975). Accordingly, we find that the Respondent
has violated Section 8(a)(5) and (1) by failing to
make the contractually required payments to fringe
benefit funds.
CONCLUSIONS OF LAW
1. Raymond Prats Sheet Metal Co., Inc. is an
employer engaged in commerce within the mean-
ing of Section 2(6) and (7) of the Act.
2. Sheet Metal Workers' International Associa-
tion, Local Union No. 11 is a labor organization
within the meaning of Section 2(5) of the Act.
3. The appropriate collective-bargaining unit is:
All employees employed by Respondent, in-
cluding but not limited to those engaged in the
(a) manufacture, fabrication, assembling, han-
dling, erection, installation, dismantling, condi-
tioning, adjustment, alteration, repairings, and
servicing of all ferrous or nonferrous metal
1 In view of this finding we need not address the General Counsel's
alternative contentions
work and all other materials used in lieu there-
of and all air-veyor systems and airhandling
systems regardless of material used including
the setting of all equipment and all reinforce-
ments in connection therewith; (b) all lagging
over insulation and all duct lining; (c) testing
and balancing of all airliandling equipment and
duct work; (d) the preparation of all shop and
field sketches used in fabrication and erection,
including those taken from original architec-
tural and engineering drawings or 'sketches;
and (e) all other work included in the, jurisdic-
tional claims of Sheet Metal Workers' Interna-
tional Association.
4. Since about 1978 the above-named labor orga-
nization has been and is now the exclusive repre-
sentative of all employees in the appropriate unit
for purposes of collective bargaining within the
meaning of Section 9(a) of the Act.
5. The Respondent has committed unfair labor
practices within the meaning of Section 8(a)(1) and
(5) by failing and refusing to transmit fringe benefit
trust fund contributions as set forth in the adden-
dum, article VIII-A, section 2, of the collective-
bargaining agreement.
6. The aforesaid unfair labor practices are unfair
labor practices affecting commerce within the
meaning of Section 2(6) and (7) of the Act.
REMEDY
Having found that the Respondent has engaged
in certain unfair labor practices, we shall order it
to cease and desist and to take certain affirmative
action designed to effectuate the policies of the
Act. 2
We have found that the Respondent violated
Section 8(a)(5) and (1) of the Act by failing to
transmit fringe benefit trust fund contributions re-
quired by the collective-bargaining agreement ef-
fective from 1 August 1982 to 30 April 1984,
which expiration date was by mutual agreement ex-
tended to 30 April 1987. In order to remedy these
unfair labor practices, we shall order the Respond-
ent to transmit the fringe benefit trust fund contri-
butions it awes to the appropriate funds.3 We shall
2 As noted above the General Counsel requests that the Order include
a visitatorial clause authorizing the Board for compliance purposes, to
obtain discovery from the Respondent under the Federal Rules of Civil
Procedure under the supervision of the United States court of appeals en-
forcing this Order. Under the circumstances of this case, we find it un-
necessary to include such a clause
a The'collective-bargaining agreement provides for employer contribu-
tions to the New Orleans Sheet Metal Contractors' Industry Fund Inas-
much as industry advancement funds are permissive, nonmandatory sub-
jects of bargaining, it is not an unfair labor practice for an employer uni-
laterally to discontinue its contributions to such a fund See FML.
Supply, 258 NLRB 604 fn. 3 (1981); Finger Lakes Plumbing Co., 254
NLRB 1399 (1981): Accordingly, we shall not require the Respondent to
make delinquent and future contributions to that fund.
RAYMOND PRATS SHEET METAL CO
also order the Respondent to make the unit em-
ployees whole for any loss they may have suffered
as a result of its failure to make the contractually
required fringe benefit contributions, Kraft Plumb-
ing, 252 NLRB 891 (1980), enfd. mem. 661 F.2d
940 (9th Cir. 1981), such amounts to be computed
in the manner set forth in Ogle Protection Service,
183 NLRB 682 (1970), enfd. 444 F.2d 502 (6th Cir.
1971), plus interest, as computed in New Horizons
for the Retarded, 283 NLRB 1173 (1987).4
ORDER
The National Labor Relations Board orders that
the Respondent, Raymond Prats Sheet Metal Co.,
Inc., New Orleans, Louisiana, its officers, agents,
successors, and assigns, shall
1. Cease and desist from
(a) Refusing to bargain collectively with the
Union by failing and refusing, without prior notice
to or consent of the Union, to make contractually
required fringe benefit trust fund payments.
(b) In any like or related manner interfering
with, restraining, or coercing employees in the ex-
ercise of the rights guaranteed them by Section 7
of the Act.
2. Take the following affirmative action neces-
sary to effectuate the policies of the Act.
(a) Pay all delinquent fringe benefit trust fund
contributions and reimburse employees for any
losses directly attributable to the withholding of
such contributions under the parties' trust fund
agreements in the manner set forth in the remedy
section of this decision. The appropriate unit is:
All employees employed by Respondent, in-
cluding but not limited to those engaged in the
(a) manufacture, fabrication, assembling, han-
dling, erection, installation, dismantling, condi-
tioning, adjustment, alteration, repairings, and
servicing of all ferrous or nonferrous metal
work and all other materials used in lieu there-
of and all air-veyor systems and airhandling
systems regardless of material used including
the setting of all equipment and all reinforce-
ments in connection therewith; (b) all lagging
over insulation and all duct lining ; (c) testing
and balancing of all airhandling equipment and
duct work; (d) the preparation of all shop and
field sketches used in fabrication and erection,
including those taken from original architec-
tural and engineering drawings or sketches;
and (e) all other work included in the jurisdic-
4 We leave to the compliance stage the question whether the Respond-
ent must pay additional sums into the appropriate fund in order to satisfy
this "make-whole" remedy Merryweather Optical Co, 240 NLRB 1213
(1979)
197
tional claims of Sheet Metal Workers' Interna-
tional Association.
(c) Preserve and, on request, make available to
the Board or its agents for examination and copy-
ing, all payroll records, social security payment
records, timecards, personnel records and reports,
and all other records necessary to analyze the
amount of backpay due under the terms of this
Order.
(d) Post at its facility in New Orleans, Louisiana,
copies of the attached notice marked "Appendix."5
Copies of the notice, on forms provided by the Re-
gional Director for Region 15, after being signed
by the Respondent's authorized representative,
shall be posted by the Respondent immediately
upon receipt and maintained for 60 consecutive
days in conspicuous places including all places
where notices to employees are customarily posted.
Reasonable steps shall be taken by the Respondent
to ensure that the notices are not altered, defaced,
or covered by any other material.
(e) Notify the Regional Director in writing
within 20 days from the date of this Order what
steps the Respondent has taken to comply.
CHAIRMAN DOTSON, dissenting.
For the reasons set forth in my dissent in Rapid
Fur Dressing, 278 NLRB 905 (1986), I dissent from
the majority's finding that the Respondent violated
Section 8(a)(5) and (1) of the Act by failing to
make fringe benefit contributions to various trust
funds pursuant to its contract with the Union.
There is no evidence that the Respondent has en-
gaged in conduct reflecting a repudiation of the
collective-bargaining agreement in any way tanta-
mount to a violation of the Act or has otherwise
refused to bargain.
By finding a violation in these circumstances, the
Board is once again allowing itself to be used as a
collection agency for the Charging Party. This is
particularly true in this case, since there are two
outstanding judgments against the Respondent en-
tered by the United States District Court for the
Eastern District of Louisiana involving Section 301
suits. The trust funds may seek to collect the delin-
quent contributions through the appropriate judi-
cial processes. Accordingly, I would find that the
Respondent has not committed an unfair labor
practice by failing to submit fringe benefit contri-
butions pursuant to the contract.
S If 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 Nation-
al 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 "
198 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
APPENDIX
NOTICE To EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
The National Labor Relations Board has found
that we violated the National Labor Relations Act
and has ordered us to post and abide by this notice.
WE WILL NOT refuse to bargain with the Sheet
Metal Workers' International Association, Local
Union No . 11 by failing to make contractually re-
quired fringe benefit trust fund contributions.
WE WILL NOT in any like or related manner
interfere with , restrain , or coerce you in the exer-
cise of the rights guaranteed you by Section 7 of
the Act.
WE WILL transmit to the various funds those
contributions that we withheld with interest, re-
quired under the terms of the addendum, article
VIII-A, section 2, of the collective-bargaining
agreement.
WE WILL make whole our employees in the unit
for any losses directly attributable to our withhold-
ing of the contributions, with interest . The appro-
priate unit is:
All employees employed by Respondent, in-
cluding but not limited to those engaged in the
(a) manufacture, fabrication, assembling, han-
dling, erection, installation, dismantling, condi-
tioning, adjustment, alteration, repairings, and
servicing of all ferrous or nonferrous metal
work and all other materials used in lieu there-
of and all air-veyor systems and airhandling
systems regardless of material used including
the setting of all equipment and all reinforce-
ments in connection therewith ; (b) all lagging
over insulation and all duct lining ; (c) testing
and balancing of all airhandling equipment and
duct work; (d) the preparation of all shop and
field sketches used in fabrication and erection,
including those taken from original architec-
tural and engineering drawings or sketches;
and (e) all other work included in the jurisdic-
tional claims of Sheet Metal Workers' Interna-
tional Association.
RAYMOND PRATS SHEET METAL CO.,
INC.