R.E.C. Corp.

National Labor Relations Board - Board Decisions

Oct 11, 1989

296 N.L.R.B. 1293 (N.L.R.B. 1989)

R.E.C. CORP.
R.E.C. Corporation and District Lodge No. 15 of the
International Association of Machinists and
Aerospace Workers, AFL-CIO. Cases 2-CA-
22108 and 2-CA-22658
October 11, 1989
DECISION AND ORDER
BY CHAIRMAN STEPHENS AND MEMBERS
HIGGINS AND DEVANEY
On March 14, 1989, Administrative Law Judge
Eleanor MacDonald issued the attached decision.
The Respondent , the General Counsel , and the
Charging Party filed exceptions and supporting
briefs.
The National Labor Relations Board has delegat-
ed its authority in this proceeding to a three-
member panel.
The Board had considered the decision and the
record in light of the exceptions and briefs and has
decided to affirm the rulings, findings,' and conclu-
sions and to adopt the recommended Order as
modified.
1. The judge found, and we agree , that the Re-
spondent violated Section 8(a)(1) of the Act by
laying off unit employees because they refused to
reopen the parties' collective-bargaining agreement
and agree to midterm modifications.
The issue is one of the Respondent 's motivations
for the layoff. Thus, as set forth in Wright Line,2
the General Counsel was obligated to make a
prima facie showing sufficient to support the infer-
ence that protected conduct was a motivating
factor in the Employer 's decision . Once that was
established, the burden shifted to the Employer to
demonstrate that the same action would have taken
place even in the absence of protected conduct.
Here, the General Counsel met her burden. The
employees ' conduct in refusing to reopen the con-
tract was clearly protected. The Respondent had
knowledge of that conduct. The record amply
demonstrates the Respondent 's animus toward the
' The Respondent asserts that the judge's credibility resolutions, find-
ings of fact , and conclusions of law are the result of bias After a careful
examination of the entire record , we are satisfied that this allegation is
without merit There is no basis for finding that bias and partiality existed
merely because the judge resolved important factual conflicts in favor of
the General Counsel 's witnesses . As the Supreme Court stated in NLRB
v Pittsburgh Steamship Co, 337 U.S 656 , 659 (1949), "[T]otal rejection of
an opposed view cannot of itself impugn the integrity or competence of a
trier of fact " Further , it is the Board 's established policy not to overrule
a judge 's credibility resolutions unless the clear preponderance of all the
relevant evidence convinces us that they are incorrect . Standard Dry
Wall Products, 91 NLRB 544 ( 1951), enfd 188 F 2d 362 (3d Cir. 1951).
We find no basis for reversing the findings Further , we find no basis for
the Respondent 's request that the hearing be reopened, and accordingly
the Respondent 's request is denied
2 251 NLRB 1083 ( 1980), enfd 662 F 2d 899 (1st Cir. 1981), cert.
denied 455 U S. 989 ( 1982), approved in NLRB v Transportation Manage-
ment Corp , 462 U S 393 (1983)
1293
Union's and the employees ' refusal to reopen the
contract, and the layoffs followed shortly after the
protected conduct occurred . Accordingly , an infer-
ence is warranted that the employees ' protected
conduct was a motivating factor in the Employer's
decision to lay off unit employees.
In its defense , the Respondent contended that
economic reasons caused it to lay off employees.
However , in agreement with the judge, we find
that the Respondent failed to adduce evidence es-
tablishing that the layoff was a result of economic
factors . Accordingly , we find that the Respond-
ent's layoff of employees violated Section 8(a)(1) of
the Act.
2. The judge found, inter alia , that the Respond-
ent violated Section 8(a)(5) and (1) of the Act by
making unilateral changes in its employees' terms
and conditions of employment during the term of
the parties' contract. To remedy these violations,
the judge ordered , inter alia , that the employees be
made whole for any loss of wages and benefits
from the date of the unilateral changes until the ex-
piration of the parties' collective-bargaining agree-
ment . In their exceptions , the General Counsel and
the Charging Party urge that the make-whole
remedy should extend from the date of the unilat-
eral changes until either a successor contract is
agreed on or the parties' good -faith bargaining
leads to impasse . We find merit in these exceptions.
Generally, an employer has a statutory obliga-
tion to continue to follow the terms and conditions
of employment governing the employer-employee
relationship in an expired contract until a new
agreement is concluded or good -faith bargaining
leads to impasse . See, e.g., Cisco Trucking Co., 289
NLRB 1149 (1988); see also Hen House Market No.
3, 175 NLRB 596 (1969), enfd. 428 F.2d 133 (8th
Cir. 1970). Thus, here, as no successor agreement
was concluded , and no lawful impasse reached, the
Respondent's obligation to adhere to the terms
originally established by the expired contract was
not extinguished . It follows, as urged by the Gen-
eral Counsel and the Charging Party , that the Re-
spondent should be ordered to make whole em-
ployees for any losses from the date of the Re-
spondent's unlawful unilateral changes until a new
contract is reached or good -faith bargaining leads
to impasse.3
a The Board has held that dues-checkoff provisions do not survive the
expiration of a contract See, e g., Robbins Door & Sash Co, 260 NLRB
659 (1982), and Peerless Roofing Co, 247 NLRB 500 , 505 (1980) Thus,
the Respondent 's obligation to deduct dues ended at the contract 's expi-
ration . However . if the Respondent in fact deducted dues after the con-
tract 's expiration , then those moneys deducted must be returned to the
employees. See Peerless Roofing Co , supra at 606 fn. 17.
296 NLRB No. 163
1294 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
ORDER APPENDIX
The National Labor Relations Board adopts the
recommended Order of the administrative law
judge as modified below and orders that the Re-
spondent , R.E.C. Corporation , Mt. Vernon, New
York, its officers , agents, successors , and assigns,
shall take the action set forth in the Order as modi-
fied.
1. Substitute the following for paragraph 1(b).
"(b) Failing and refusing to abide by the collec-
tive-bargaining agreement with the Union after Oc-
tober 1986 , including failing to make payments to
International Association of Machinists District
No. 15 Welfare Fund and the District No. 15 Pen-
sion Fund , failing to pay wages and holidays, and
failing , until October 10, 1987 , to remit to the
Union dues that the Respondent deducted for unit
employees pursuant to dues-checkoff authorizations
as provided for in the collective-bargaining agree-
ment."
2. Substitute the following for paragraphs 2(b)
and (c).
"(b) Make whole the employees for their loss of
earnings and benefits due to the Respondent 's fail-
ure to abide by the collective -bargaining agreement
after October 1, 1986, as set forth in Ogle Protection
Service, 183 NLRB 682 ( 1970), and for their loss of
earnings and other benefits due to their unlawful
layoff by the Respondent in the manner set forth in
the remedy portion of the judge 's decision , includ-
ing transmitting the contributions owed to Interna-
tional Association of Machinists District No. 15
Welfare Fund and the District No. 15 Machinists
Pension Fund and reimbursing employees for any
medical and dental expenses ensuing from the Re-
spondent's unlawful failure to make such contribu-
tions after October 1, 1986. This shall include reim-
bursing employees for contributions they them-
selves may have made for the maintenance of the
Welfare and Pension Funds after the Respondent
unlawfully failed to contribute , for any premiums
they may have paid to third-party insurance com-
panies for medical and dental coverage, and for
any medical or dental bills employees have paid di-
rectly to health care providers that the Welfare
Fund would have covered.
"(c) Reimburse the Union for any loss of dues
occasioned by the Respondent 's failure, from on or
about October 23, 1986 , until the contract 's expira-
tion , to deduct dues pursuant to checkoff authori-
zations and to remit the same to the Union as re-
quired by the collective-bargaining agreement and
reimburse employees for dues, if any, deducted
after the contract 's expiration."
3. Substitute the attached notice for that of the
administrative law judge.
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.
Section 7 of the Act gives employees these
rights.
To organize
To form, join, or assist any union
To bargain collectively through representa-
tives of their own choice
To act together for other mutual aid or pro-
tection
To choose not to engage in any of these
protected concerted activities.
WE WILL NOT refuse to bargain collectively with
District Lodge No. 15 of the International Associa-
tion of Machinists and Aerospace Workers, AFL-
CIO as the representative of our employees in the
appropriate unit described as follows:
All production and maintenance employees
employed by the Employer at its facility ex-
cluding office clerical employees , guards and
supervisors as defined in the Act.
WE WILL NOT refuse to apply the collective-bar-
gaining agreement and WE WILL NOT fail to make
payments to the Welfare and Pension Funds, nor
fail to make payments required by the agreement
for wages and holidays , and until October 10, 1987,
for union dues.
WE WILL NOT unilaterally implement a hospitali-
zation insurance plan, a wage increase , nor a life
insurance plan, but we will not rescind any benefits
we have already instituted.
WE WILL NOT bypass the Union and deal direct-
ly with our employees.
WE WILL NOT lay off our employees in retalia-
tion for rejecting our contract modification propos-
als.
WE WILL NOT demand as a condition of signing
a new collective-bargaining agreement that the
Union agreed to retroactive modifications of the
prior collective-bargaining agreement.
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, on request, bargain with the Union
and put in writing and sign any agreement reached
R.E.C. CORP.
on terms and conditions of employment for our
employees in the bargaining unit.
WE WILL make whole our employees for their
loss of earnings and other benefits due to our fail-
ure to apply the collective -bargaining agreement
after October 1, 1986, and for their unlawful lay-
offs plus interest.
WE WILL pay the contributions we owe to the
Welfare and Pension Funds and WE WILL reim-
burse the employees for any expenses resulting
from our failure to make such contributions.
WE WILL reimburse the Union for any loss of
dues resulting from our unlawful failure to check
off and remit dues to the Union from on or about
October 23 , 1986, until the expiration of the con-
tract and WE WILL reimburse employees for any
dues deducted after the expiration of the contract.
R.E.C. CORPORATION
Polly Chill, Esq., for the General Counsel.
Robert £ Brinker, of Mount Vernon , New York , for the
Respondent.
Larry Cary, Esq. (Yladeck, Waldman, Elias and Enael-
hard, P.C.), of New York, New York , for the Charg-
ing Party.
DECISION
STATEMENT OF THE CASE
ELEANOR MACDONALD , Administrative Law Judge.
This case was tried in New York, New York , on Sep-
tember 6, 7, 8, and 9, 1988 . The consolidated complaint
alleges that Respondent violated Section 8(a)(1), (3), and
(5) of the Act, by the following:
1. Since October 1, 1986, repudiating the collec-
tive bargaining agreement between Respondent and
the Union , ceasing to make contributions to the
Welfare and Pension Funds and failing to imple-
ment a general wage increase of 25 cents per hour
to unit employees;
2. Since October 23 , 1986, failing to deduct and
remit Union dues and unilaterally implementing a
hospitalization insurance plan for unit employees;
3. Since October, 1986 , failing to pay wages, holi-
days and vacation specified in the collective bar-
gaining agreement and on November 27 and 28,
1986, refusing to make holiday payments;
4. On March 1, 1987, unilaterally implementing a
wage increase among unit employees;
5. On March 25, 1987, announcing a unilateral
life insurance plan for unit employees;
6. On October 10, 1986 , laying off unit employees
for varying periods of time to avoid making welfare
fund payments and in retaliation against them for
rejecting Respondent 's mid-term modification pro-
posals;
7. Bypassing the Union and dealing directly with
the unit employees concerning the wage increase,
1295
medical insurance , Union dues , pension contribu-
tions, individual employment arrangements, holi-
days and life insurance;
8. On September 2 and October 6 and 9, 1987,
demanding as a condition of consummating a collec-
tive bargaining agreement that the Union accept all
of Respondent's unilateral mid-term modifications of
the contract and causing an impasse over this per-
missive subject of bargaining.
Respondent denies some of the allegations of the com-
plaint.
On the entire record , including my observations of the
demeanor of the witnesses , and after due consideration of
the briefs filed by the parties, I make the following'
FINDINGS OF FACT
1. JURISDICTION
Respondent, a New York corporation located in Mt.
Vernon, New York, is engaged in the manufacture and
nonretail sale of industrial fasteners. The parties agree
and I find that Respondent is an employer engaged in
commerce within the meaning of Section 2(2), (6), and
(7) of the Act and that the Union is a labor organization
within the meaning of Section 2(5) of the Act.
II. ALLEGED UNFAIR LABOR PRACTICES
A. Credibility of the Witnesses
Joseph Armao , the business representative for the
Union testified in a straightforward and cooperative
manner . I shall credit his testimony . Sheldon Engelhard,
Esq. testified in a credible manner . I shall rely on his tes-
timony.
Robert Brinker, the president of Respondent , testified
at length about the relevant events and he introduced
substantial documentary evidence . Brinker testified that
he had not discussed the testimony of Thomas Chambers,
an employee of Respondent and a witness for the Gener-
al Counsel , with Chambers before his appearance at the
hearing herein . However, Brinker also proferred a sworn
statement by Chambers and two other unit employees
which was prepared in July 1988, and notarized on
August 30, 1988, several days before the commencement
of the instant hearing . In that statement , Chambers and
the other employees purportedly describe the bargaining
of October 9, 1987, in a manner totally consistent with
Brinker's version of that bargaining session . Brinker
denied that the statement had anything to do with Cham-
bers' testimony even though , at the instant hearing,
Brinker himself questioned Chambers about the events
described in the statement. At first Brinker testified that
he had obtained the sworn statement from Chambers.
Then he stated that he helped Chambers draft the state-
ment . Finally, Brinker said that he drafted the statement
in his own hand and had it typed in his office . Based on
my observation of Brinker , and on his manner of testify-
' General Counsel's motion to amend the consolidated complaint to
delete the allegations relating to the failure to make holiday payments on
November 27 and 28 , 1986, is hereby granted
1296 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
ing about the sworn statement , I find that Brinker is not
a credible witness and I shall not rely on his testimony
where it is contradicted by other credible evidence.
Thomas Chambers testified at length . When confront-
ed with a sworn statement which he gave to Brinker,
Chambers testified inaccurately about who drafted it,
who typed it, how it was notarized , and his understand-
ing of the matter contained therein . Further, Chambers
testified inaccurately about discussing his testimony with
other persons before the instant hearing . I do not credit
Chambers ' testimony and I shall not rely on it.
B. Background
The evidence shows that the Union has had a series of
collective-bargaining agreements with Respondent since
the early 1950s . The last such agreement had a term
from December 21, 1984, to September 30, 1987.
The agreement provided , inter alia , that the Company
would make certain contributions to the International
Association of Machinists District No. 15 Welfare Fund
and certain contributions to the District No. 15 Machin-
ists Pension Fund . In 1986, the IRS informed the District
No. 15 Machinists Pension Fund trustees that the Pen-
sion Fund was underfunded . As a result , the trustees of
the Pension Fund called a meeting of the employers who
were obligated to make contributions to the Fund and
told them that the Fund's actuaries had determined that
contributions had to be increased by 65 percent in order
to satisfy the IRS. On April 18 , 1986, Sheldon Engel-
hard , Esq., a member of the firm that is counsel to the
Pension Fund , wrote to the IRS and stated that in return
for a funding waiver lasting a certain time the "parties
have decided to take the drastic measure of requesting
all employers to reopen already operating agreements to
increase pension contribution rates effective July 1,
1986." On June 19, 1986, the Pension Fund sent a notice
to Respondent advising that effective July 1, 1986, its
monthly contribution would increase by 65 percent. It
does not appear that any formal request to reopen the
collective-bargaining agreement between Respondent
and the Union was ever made by the Union.
In July 1986, Robert Brinker, the owner and president
of Respondent , asked the Union to reopen the collective-
bargaining agreement. Brinker met with Engelhard,
Armao, and an employee committee in Engelhard's
office in July 1986 . Brinker asked that the wage increase
due pursuant to the contract on October 1, 1986, be used
instead for the increased pension contributions . Brinker
stated that Respondent had been losing money for 5
years and that he needed relief on labor costs . Engelhard
gave it as his opinion that any reopening of the contract
for the purpose of negotiating away benefits contained
therein had to be approved by the unit employees. The
Union later met with the employees of Respondent and
put Brinker 's proposition to them . The employees reject-
ed Brinker 's proposal to reopen the contract.
In October 1986, Brinker again met in Engelhard's
office with Armao and the employee committee . Brinker
again asked to reopen the contract so that he could
obtain relief based on the weak financial situation of the
company and in order to deal with the request for in-
creased pension contributions. Brinker proposed to the
committee that the pension contribution be reduced, that
the 25-cent wage increase due October 1 be reduced to
15 cents, and that the employees give up vacation days,
sick days , and holidays so that wages could be increased
accordingly . Engelhard told Brinker not to approach the
unit members directly but to go through Armao and the
Union . He told Brinker that it was up to the employees
whether they wanted to reopen the contract. In the
event, the employees did not agree to reopen the con-
tract.
C. The Unilateral Changes
It is undisputed that Respondent did not grant the
wage increase due to the employees on October 1, 1986,
ceased making contributions to the Welfare Fund and
the Pension Fund on October 1, 1986, and as of October
23, 1986, Respondent ceased deducting union dues from
unit employees ' wages and remitting dues to the Union.2
Respondent also admits that about October 23 , 1986, it
unilaterally implemented a hospitalization insurance plan
for unit employees, that on March 1, 1987, it unilaterally
implemented a wage increase among its employees and
that about March 25, 1987, it announced that it would
unilaterally implement a life insurance plan for unit em-
ployees.
Brinker testified that he stopped deducting and remit-
ting Union dues to try to force the Union to reopen the
contract . Brinker stated that Armao would not talk to
him, a claim that is abundantly refuted on the record
herein . Brinker testified that he made unilateral changes
because the Union refused to reopen the contract.
D. The Layoff
Respondent admits that on October 10, 1986, it laid off
all of its unit employees . 3 Respondent denies that it ef-
fectuated the layoff in order to retaliate for the Union's
refusal to renegotiate the collective-bargaining agreement
and in order to avoid its obligation to make payments to
the Welfare Fund and the Pension Fund . However,
Brinker testified that he hoped the men would agree to
change the contract so that he could cut costs , but that
the men would not agree to anything. Conditions got so
bad that Brinker told the men there had to be a layoff.
Brinker stated that during the layoff, he shipped from in-
ventory and he himself ran a machine . The fact that
Brinker had to run a machine shows that there was work
available and that Brinker did not lay off all the employ-
ees for lack of work as he claimed . I note that although
Brinker presented certain annual financial statements, he
presented no detailed facts tending to support his claim
that on October 10, 1986, when he effectuated the layoff
he was compelled by economic necessity.
E. Dealing Directly with the Employees
In late February 1987, Brinker distributed to the unit
employees a document which stated that effective March
2 The Union filed a grievance over the failure to pay the wage increase
but no award had been rendered at the time of the hearing herein.
a Respondent began recalling its employees within a few weeks , and all
except those who retired or became disabled have been recalled.
R.E.C. CORP.
1, 1987, a raise would be given , there would be 9-1/2
holidays, additional holidays could be taken as sick days,
Respondent would pay for a $5000 life insurance policy
and Respondent would pay for Blue Cross and employ-
ees could pay for Blue Shield on their own .4 Brinker tes-
tified that Armao would not talk to him , so he talked to
unit employee Chambers and the other men; he gave
them suggestions on how to cut costs . He stated that he
hoped the men would agree to change the contract so he
could cut costs . The testimony of unit employees Ru-
dolfo Perez and Michael Pugliese, which is undisputed,
shows that Brinker spoke to each of them when they re-
turned from the layoff and discussed the changes he was
making in insurance, holidays, dues deduction , and vaca-
tion . Both in individual meetings and in shop meetings
with unit employees, Brinker dealt directly with the em-
ployees concerning all of the above listed conditions of
employment in the absence of the union representative.
F. The Negotiations
In March 1987 , Brinker called Armao and again asked
to meet to discuss reopening the collective -bargaining
agreement . The parties met on April 8, 1987, and Brinker
once again asked to reopen the contract .5 Armao replied
that the unit members had already rejected this request.
After the meeting , Brinker sent Armao a letter submit-
ting Respondent 's economic changes and asking Armao
to call him as soon as possible. The changes listed were
elimination of the Pension and Welfare Fund contribu-
tions, reduction of paid holidays to 9-1/2, and employer-
provided Blue Cross insurance . In effect , Brinker was
asking the Union to ratify the unilateral changes Re-
spondent had already effectuated . On April 21, 1987,
Armao met with the employees and they voted to reject
Brinker's proposals . Armao notified Brinker of the rejec-
tion.
On August 14, 1987, the parties met to negotiate a suc-
cessor agreement to the one expiring on September 30.
Armao had with him the unit members of the committee,
namely, Hester and Chambers. It was agreed to extend
the contract expiration date to October 10. Brinker told
Armao that he could not really negotiate unless the
NLRB charges were withdrawn.6 Armao replied that
any question relating to the withdrawal of charges was
the province of the International.
On September 2, 1987, the negotiators met again. The
Union had previously submitted its demands to Respond-
ent. According to Armao, Brinker stated that he was not
prepared to discuss the demands due to the pendency of
the NLRB charges, and he asked the Union to withdraw
the charges . Armao replied that withdrawal was a deci-
sion for the International . Brinker asked that the Union
° At some point , Brinker told the employees that they could have a
$10,000 life insurance policy and that they would have to contribute $5
per month toward the cost
S Armao was accompanied by unit employees Thomas Chambers and
Thomas Hester
6 On March 4, 1987, the Union had filed its charge in case 2-CA-
22108 alleging unilateral changes by Respondent and direct dealing with
the employees . A complaint issued on April 17 , 1987 and an amended
complaint on June 11, 1987. The charge in case 2 -CA-22658 was filed on
February 3, 1988 , it alleged a failure to bargain in good faith
1297
approve the changes he had made retroactive to October
1, 1986. Although Brinker denied conditioning negotia-
tions on the Union 's withdrawal of the NLRB charges,
he admitted using "pretty strong language" and saying "I
really needed this to get this straightened before we
could go much further ." I credit the description of the
meeting as given by Armao.
On October 6, 1987, negotiations resumed at the plant.
According to Armao, Brinker said he would not negoti-
ate unless the Union would "wipe out" the NLRB
charges .' Armao called Engelhard and eventually
reached him away from his office . Engelhard spoke to
Brinker on the telephone about the NLRB charges and
then Engelhard spoke to Armao . Engelhard told Armao
that the members could vote to accept as of October 1,
1987, the changes Respondent had made but that they
could not "go into the retroactive " and withdraw the
charges . Armao then met with the employees and asked
if they wanted to accept the changes made by Respond-
ent to health coverage, pension and health and insurance;
the employees rejected these changes.
Engelhard testified that on October 6, 1987, Armao
told him that the men were willing to allow Respondent
to cut costs prospectively by permitting Brinker to insti-
tute the changes he had attempted to make in 1986.
Thus, the unit employees were willing to accept
Brinker's proposals for the new contract being negotiat-
ed but not to give up their rights to enforce the contract
that was to run out on October 10, 1987. Engelhard testi-
fied that after he spoke to Armao, he spoke to Brinker.
Brinker gave Engelhard some proposed language, but
Engelhard did not agree to it because it did not accom-
plish the purpose he understood . Engelhard told Brinker
that the Union 's right to continue the outstanding arbi-
tration and the unfair labor practice charge must be re-
served . Engelhard explained to Brinker that the men
could agree to the changes to reduce costs for the
coming contract but that they would not agree to the
unilateral changes that Brinker had made in the expiring
contract . He told Brinker that the men were not giving
up their rights in the old contract and that the Union
was "reserving our right to enforce what he had unilat-
erally modified ." Engelhard and Brinker then agreed on
some modification of the language Brinker had proposed
and "we were both on the same track as to what we
were trying to accomplish ." Engelhard said that when
he spoke to Brinker, "we had an agreement in principle."
Engelhard testified that the language Brinker later wrote
at the bottom of the draft agreement was not the lan-
guage he and Brinker agreed to on October 6; the lan-
guage they agreed to was consistent whereas the lan-
guage Brinker wrote gave up a right in the first sentence
that was reserved in the second sentence. After Engel-
hard spoke to Brinker on October 6,1987, he again spoke
to Armao . He told the latter that "we had an agreement
as to the language... .
Brinker testified that before October 6 he consulted an attorney who
told him that it was an unfair labor practice to ask the Union to with-
draw the case and that as a result he never again asked that the case be
withdrawn I do not credit this testimony
1298 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
On October 9, 1987, the negotiators met again . Brinker
for the first time presented his proposal for the new
agreement . In essence, this proposal tracked the changes
Respondent had made unilaterally in holidays , pension
and welfare payments and medical and life insurance.
Brinker's proposal also contemplated annual wage in-
creases provided Respondent made a profit for a certain
period . The union committee told Brinker that the link-
age between wages and profit was not acceptable , that it
did not agree to reduce holidays and that the life insur-
ance policy should not require a contribution by the indi-
vidual employees as proposed by Brinker. Eventually,
agreement was reached on the basis of Brinker 's proposal
except that wage increases were not linked to profits, 10-
1/2 holidays would be paid instead of the 9-1/2 proposed
by Brinker and Respondent agreed to pay the full cost of
life insurance . Contributions to the Pension and Welfare
Funds were no longer required of Respondent.
When the further changes agreed upon by the parties
were being handwritten onto Brinker's proposal, Brinker
wrote the following at the bottom of the document that
the parties were about to sign:
The Union accepts all unilateral changes the Com-
pany made during the period 10/1/86-3 /10/87 in
the present agreement ending 10/10/87 . The Union
reserves the right to continue NLRB Case #22108
and Grievance Case #A87-28 if it desires.
According to Armao he questioned Brinker about this
language and asked Brinker if Engelhard had "said this."
Brinker replied "yes." Then Armao gave the document
for a vote to the unit employees and told them it had
nothing to do with retroactivity or the NLRB charges.
The employees accepted the agreement and it was signed
by Brinker and members of the union committee.
According to Brinker, the Union agreed to accept the
unilateral changes he had made in return for Brinker's
modification of his final proposal to remove the linkage
between wages and profit and to improve the holiday
and insurance benefits . Brinker testified that he had two
sentences relating to the unilateral changes and that he
showed them to Armao. Armao was concerned about
what Engelhard had told him about the unilateral
changes , and Brinker stated that this was the reason for
adding the second sentence reserving the Union 's rights.
Brinker also testified that "I was certainly concerned
about being accused of entering into unfair labor prac-
tice . So I wanted to make sure that it was understood
that I wasn 't in any way trying to negotiate out the
NLRB case against me." Brinker testified that he did not
want to pay back all the money that would be due if the
unilateral changes were not accepted by the employees.
He testified that the complaint pending against him re-
ferred not only to unilateral changes but also to retalia-
tion and bargaining in bad faith . He stated that he
wanted to eliminate any financial liability as a result of
unilateral changes but not the Board case . Brinker testi-
fied , "I wanted the unilateral changes to be accepted by
the men and the Union so I didn 't have any financial re-
sponsibility because I couldn't afford it." I do not credit
Brinker's assertion that the Union agreed to retroactive
implementation of his unilateral changes. Instead, based
on the testimony of Engelhard and Armao, I find that
Brinker and Engelhard had agreed on language on Octo-
ber 6 and that Brinker knew that Armao would sign a
document only if it incorporated the language approved
by Engelhard. I find that Brinker told Armao on Octo-
ber 9 that the language inserted into the memorandum of
agreement had been approved by Engelhard and that
Armao signed on this basis . I find that Brinker misled
Armao and the union negotiating committee and that he
knew very well what he and Engelhard had agreed to
days before . Indeed , Brinker's own notes state that the
Union was unwilling to change the old contract retroac-
tively.
On October 27, 1987, Armao sent Brinker a typed new
agreement . Brinker then pointed out to Armao what he
believed were errors in the new agreement . In response,
Armao sent Brinker a letter dated November 13, 1987,
which stated:
At the negotiations session held on October 9, 1987,
the membership voted on your proposal to accept
the change of wages and benefits that were made
by the Company from October 1, 1986 thru [sic]
March 10, 1987 into the new agreement . The Union
reserves the right to continue the NLRB case #2-
CB-11742 and Grievance #A 0026-A87-28 if it de-
sires.8
After Brinker received the letter , he called Armao and
told him that Engelhard had told him something else.
Brinker then sent Armao a letter that purported to set
forth the agreement between the parties . Brinker's ver-
sion stated , in relevant part:
On October 9, 1987, the Union accepted all unilat-
eral changes the Company made during the period
October 1, 1986 through March 10, 1987 in the
agreement ending October 10, 1987. . . . The Union
reserves the right to continue NLRB Case #22108
and Grievance Case #A87-28 if it desires.
Armao then wrote to Brinker in a letter drafted by
Engelhard . This letter stated that Brinker's draft was "in-
accurate in that it assumes something to which was
never agreed ." Armao went on to state that it was never
"agreed that the benefits which you unilaterally changed
on . . . October 1, 1986 were accepted for the balance of
the duration of the agreement which expired by its terms
on September 30, 1987." Armao concluded that his draft
to Brinker correctly stated the agreement reached by the
parties.
After a further unproductive exchange of letters,
Armao and Engelhard met with Brinker on December
28, 1987, at the plant . Brinker gave it as his opinion that
Engelhard and he had agreed on the telephone that the
unilateral changes would be retroactive to October 1,
8 The number given for the case filed against Respondent by the Union
is obviously wrong Case 2-CB-11742 is a charge filed by Respondent
against the Union , alleging bargaining in bad faith This charge was dis-
missed . Armao did not explain how he came to substitute this number for
Case 2-CA-22108 I assume that the substitution resulted from careless-
ness in the union office
R.E.C. CORP.
1986. Engelhard said that was not true , and he and
Armao walked out of the meeting . Brinker has not
signed the contract presented to him by the Union.
G. Discussion and Conclusions
General Counsel urges that Respondent repudiated its
collective-bargaining agreement with the Union in viola-
tion of Section 8(a)(1) and (5) of the Act by reason of its
unilateral changes and direct dealings with unit employ-
ees bypassing the Union . The record amply and conclu-
sively demonstrates numerous instances of unilateral
changes in the collective-bargaining agreement by Re-
spondent as discussed above . Further, the record shows
that Respondent dealt directly with its employees , as dis-
cussed above . Indeed , Respondent does not dispute the
facts on which General Counsel bases the allegations of
illegal conduct ; Respondent denies only that it repudiat-
ed the collective -bargaining agreement , and Respondent
seeks to excuse its conduct by economic necessity. It is
clear that the Union was under no legal obligation to
agree to reopen the contract midterm and that Respond-
ent was under a legal obligation to honor the terms of
the contract . Respondent 's unproven plea of economic
necessity is not a defense to the charge that it unilateral-
ly changed terms and conditions of employment that
were fixed by contract . Respondent violated Section
8(a)(5) and (1) of the Act. Further, it is clear that once
Respondent realized that it could not persuade the Union
to agree to midterm changes in the contract, it bypassed
the Union and dealt directly with the employees in viola-
tion of Section 8(a)(5) and (1) of the Act.9
There is no credible evidence that the layoff was occa-
sioned by a lack of orders to be filled as is urged by Re-
spondent . I do not credit the anecdotal testimony of
Chambers and Brinker in this regard and no reliable doc-
umentary evidence in the record shows the actual
amount of orders on hand when the layoff took place.
Further, Brinker himself testified that he ordered the
layoff after the men refused to vote to reopen the con-
tract and when they would not agree to let him cut
costs . It is clear that Brinker used the layoff to impress
upon his employees the consequences of continuing to
refuse to give up their rights under the current contract;
when he called the employees back gradually, Brinker
convinced the men to give up these rights so that they
could be recalled to work . While it is entirely possible
that Respondent might have been justified in laying off
some employees on October 10, 1986 , that fact has not
been proven on the record herein . I find that Respondent
laid off its employees in retaliation for the Union 's refus-
al to renegotiate the contract . Respondent thus violated
Section 8(a)(1) of the Act.10
9 Raymond Prais Sheet Metal Co, 285 NLRB 194 (1987), Admiral Mer-
chants Motor Freight, 265 NLRB 134 (1982); Gentzler Tool & Die Corp,
268 NLRB 330 (1983), enfd. 778 F 2d 1211 (6th Cir 1985), Mashkin
Freight Lines, 272 NLRB 427 (1984).
10 Although the layoff was also alleged in the complaint as a violation
of Sec 8(a)(3), this contention was not pursued in General Counsel's
brief. Since I have found a violation of Sec 8(a)(1), a finding of the addi-
tional violation would not change the remedy to be ordered and I do not
consider it necessary to reach this additional issue
1299
General Counsel urges that Respondent 's conduct
during the negotiations for a new collective-bargaining
agreement was unlawful in that Respondent conditioned
bargaining on the Union's acceptance of the unilateral
changes, and that Respondent further bargained unlaw-
fully by insisting to impasse on the Union's retroactive
acceptance of the unilateral changes.
Having weighed the evidence carefully and in light of
my credibility findings above, I have concluded that I
credit General Counsel 's version of the bargaining about
the disputed language inserted by Brinker into the
memorandum of agreement . Thus, I find that Brinker
was aware that the Union and the unit employees were
not disposed to accept retroactively the unilateral
changes he had made to the contract expiring on Octo-
ber 10, 1987. But Brinker , as he testified , was bound and
determined to achieve retroactive ratification of the uni-
lateral changes because he wanted to avoid the financial
liability of making the employees whole. I find that on
October 6, 1987, the union negotiating committee reject-
ed Brinker's request for retroactive approval of the uni-
lateral changes but that the parties discussed the fact that
the Union might accept the reduced benefits in the new
contract then being negotiated . Armao knew that he had
to reserve the Union's rights to the ongoing grievance
and ULP cases based on the unilateral changes made by
Respondent ; Brinker was also aware that a legal formula
had to be arrived at. The parties consulted Engelhard
and Engelhard told Brinker what the requirements were.
Based on Engelhard 's testimony , I find that he and
Brinker discussed language that would accomplish the
purpose. I find that Engelhard told Brinker that the unit
employees would not give up their rights retroactively.
On October 9, the parties met on the day before the con-
tract was to expire . The Union expressed its willingness
to accept fewer benefits in the new contract , but it de-
manded more than Brinker was offering. Brinker im-
proved his offer and then wrote language at the bottom
of the memorandum to reserve the Union's rights as re-
quested by Engelhard . Armao asked him if the language
was what Engelhard had said . Brinker replied that it
was. So Armao signed. In fact , the language inserted by
Brinker was not what Engelhard had said; the first of the
two sentences attempted to give up the employees' rights
to compensation for the unilateral changes . I find that
Brinker misled Armao and the committee. Since that
day, Brinker has insisted that the Union sign the contract
containing the language he wrote; this language is con-
trary to the representations he made to the Union at the
negotiations of October 9, 1987.
It is clear that there is no mandatory duty to bargain
about midterm changes in a collective -bargaining agree-
ment . Connecticut Light & Power Co., 271 NLRB 766
(1984). Thus, Brinker's request that the Union negotiate
reductions in the wages and benefits provided in the cur-
rent contract was not a mandatory subject of bargaining.
When Brinker and Armao agreed to terms and condi-
tions for a new contract on October 9, 1987, Brinker told
Armao that the handwritten language he was inserting
into the memorandum of agreement had been approved
by Engelhard and preserved the Union's rights under the
1300 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
current contract. Brinker misled Armao into believing
that he was signing a memorandum that did not retroac-
tively approve Respondent's midterm unilateral modifica-
tions . Once Armao and the Union realized that Brinker's
handwritten language was not what had been agreed to
orally, the Union attempted to correct the language to
reflect what it believed the agreement to have been. At
that point, and continuing to the present , Brinker made it
clear that Respondent would not agree to a contract that
did not retroactively approve the midterm changes to
the contract expiring October 10, 1987. Thus, Respond-
ent will not sign an agreement that does not contain rati-
fication of the midterm changes made to the prior con-
tract. Brinker's testimony establishes clearly that approv-
al of the midterm changes is the sine qua non for signing
a new contract. Respondent is therefore insisting to im-
passe that a nonmandatory subject of bargaining be in-
cluded in the new collective-bargaining agreement.
By insisting that the Union retroactively agree to Re-
spondent's unilateral midterm modifications and by refus-
ing to sign a contract that does not contain such a retro-
active provision , Respondent has created an impasse
over a nonmandatory subject of bargaining and has vio-
lated Section 8(a)(5) and (1) of the Act. NLRB v. Borg-
Warner Corp., 356 U.S. 342 (1958).
CONCLUSIONS OF LAW
1. The following employees of Respondent constitute a
unit appropriate for the purposes of collective bargaining
within the meaning of Section 9(b) of the Act:
All production and maintenance employees em-
ployed by Respondent at its facility excluding office
clerical employees, guards and supervisors as de-
fined in the Act.
THE REMEDY
Having found that Respondent has engaged in unfair
labor practices in violation of Section 8(a)(1) and (5) of
the Act, I shall recommend that it be ordered to cease
and desist therefrom and to take certain affirmative
action designed to effectuate the policies of the Act. Re-
spondent must be ordered to cease and desist from uni-
laterally implementing wage increases and other benefits
for its employees ; however, nothing herein shall be con-
strued as requiring Respondent to rescind the wages and
benefits, the granting of which violated the Act. Dial
Tuxedos, 250 NLRB 476 fn. 2 (1980).
Respondent having failed to apply the collective-bar-
gaining agreement to the employees and having laid
them off unlawfully , it must make them whole for loss of
earnings and other benefits, less any net interim earnings
as prescribed in F. W. Woolworth Co., 90 NLRB 289
(1950), plus interest as computed in New Horizons for the
Retarded, 283 NLRB 1173 (1987).11 Backpay for the un-
lawful layoff shall be computed from the date of layoff
until the date of recall or retirement of the employee.
Respondent must make the payments to the Pension
and Welfare Funds as required by the collective- bargain-
ing agreement , reimburse the employees for any costs
they may have incurred and reimburse the Union for any
dues it failed to deduct and transmit in the manner set
forth in Ortiz Funeral Home Corp., 250 NLRB 730
(1980), enfd. 651 F.2d 136 (2d Cir. 1981), cert. denied
455 U.S. 946 ( 1982). See Merryweather Optical Co., 240
NLRB 1213, 1216 fn. 7 (1979).
On these findings of fact and conclusions of law and
on the entire record, I issue the following recommend-
ed12
ORDER
2. At all times since 1970 the Union has been the des-
ignated exclusive collective-bargaining representative of
the employees in the unit and has been recognized as
such representative by Respondent , and such recognition
has been embodied in successive collective -bargaining
agreements , the most recent of which was effective from
December 21, 1984, until October 10, 1987.
3. By ceasing to make payment to the Welfare and
Pension Funds , failing to pay wages specified in the con-
tract, failing to deduct and remit union dues, unilaterally
implementing a hospitalization insurance plan, failing to
pay holidays, unilaterally implementing a wage increase,
unilaterally implementing a life insurance plan, dealing
directly with the unit employees and bypassing the
Union, Respondent violated Section 8(a)(5) and (1) of the
Act.
4. By laying off unit employees in retaliation against
them for rejecting Respondent's midterm modification
proposals , Respondent violated Section 8(a)(1) of the
Act.
5. By demanding as a condition of consummating a
collective-bargaining agreement that the Union agree to
retroactive midterm modifications of the prior contract
the Respondent violated Section 8(a)(5) and (1) of the
Act.
The Respondent , R.E.C. Corporation , Mt. Vernon,
New York, its officers , agents, successors , and assigns,
shall
1. Cease and desist from
(a) Refusing , on request to bargain in good faith with
District Lodge No. 15 of the International Association of
Machinists and Aerospace Workers, AFL-CIO, regard-
ing rates of pay, wages, hours of employment or any
other terms or conditions of employment , as the exclu-
sive representative of the employees in the appropriate
unit described below.
(b) Failing and refusing to apply the collective-bar-
gaining agreement with the Union for the period from
October 1986 until its expiration date, including failing to
make payments to the International Association of Ma-
chinists District No. 15 Welfare Fund and the District
'' Under New Horizons, interest is computed at the "short-term Federal
rate" for the underpayment of taxes as set out in the 1986 amendment to
26 USC 6621 Interest accrued before I January 1987 (the effective date
of the amendment) shall be computed as in Florida Steel Corp, 231
NLRB 651 (1977)
12 If no exceptions are filed as provided by Sec 102 46 of the Board's
Rules and Regulations , the findings , conclusions, and recommended
Order shall , as provided in Sec 102 48 of the Rules , be adopted by the
Board and all objections to them shall be deemed waived for all pur-
poses
R.E.C. CORP.
No. 15 Machinists Pension Fund , failing to pay wages
and holidays, and failing to remit to the Union dues
which the Respondent is required to check off for all
unit employees pursuant to dues-checkoff authorizations
as provided for in the collective-bargaining agreement
from October 1, until the expiration of the agreement.
(c) Unilaterally implementing a hospitalization insur-
ance plan, a wage increase , and a life insurance plan.
(d) Bypassing the Union and dealing directly with the
employees.
(e) Laying off the employees in retaliation against
them for rejecting Respondent 's midterm modification
proposals.
(f) Demanding as a condition of consummating a col-
lective-bargaining agreement that the Union agree to ret-
roactive midterm modifications of the prior contract.
(g) In any like or related manner interfering with, co-
ercing , or restraining employees in the exercise of rights
guaranteed by Section 7 of the Act.
2. Take the following affirmative action necessary to
effectuate the policies of the Act.
(a) Upon request , bargain in good faith with the Union
regarding rates of pay, wages, hours of employment, and
other terms and conditions of employment for the em-
ployees in the appropriate unit and , if an understanding is
reached , reduce the agreement to writing and sign it.
The appropriate unit is:
All production and maintenance employees em-
ployed by Respondent at its facility excluding office
clerical employees , guards and supervisors as de-
fined in the Act.
(b) Make whole the employees for their loss of earn-
ings and other benefits due to Respondent's failure to
apply the collective-bargaining agreement from October
1, 1986, to its expiration and for their loss of earnings
and other benefits due to their unlawful layoff by Re-
spondent in the manner set forth in the remedy portion
of this decision , including transmitting the contributions
owed to the International Association of Machinists Dis-
trict No. 15 Welfare Fund and the District No. 15 Ma-
chinists Pension Fund since October 1, 1986 pursuant to
1301
the agreement and reimbursing employees for any medi-
cal and dental expense ensuing from Respondent 's unlaw-
ful failure to make such contributions since October 1,
1986. This shall include reimbursing employees for con-
tributions they themselves may have made for the main-
tenance of the Welfare and Pension Funds after Re-
spondent unlawfully failed to contribute , for any premi-
ums they may have paid to third -party insurance compa-
nies for medical and dental coverage, and for any medi-
cal or dental bills employees have paid directly to health
care providers that the Welfare Fund would have cov-
ered.
(c) Reimburse the Union for any loss of dues occa-
sioned by Respondent 's failure after October 1, 1986, to
deduct dues pursuant to checkoff authorizations and to
remit the same to the Union as required by the collec-
tive-bargaining agreement.
(d) Preserve and, on request, make available to the
Board or its agents for examination and copying , all pay-
roll records , social security payment records , timecards,
personnel records and reports, and all other records nec-
essary to analyze the amount of backpay due under the
terms of this Order.
(e) Post at its facility copies of the attached notice
marked "Appendix ." t 3 Copies of the notice, on forms
provided by the Regional Director for Region 2, after
being signed by the Respondent 's authorized representa-
tive, 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 materi-
al.
(f) Notify the Regional Director in writing within 20
days from the date of this Order what steps Respondent
has taken to comply.
'a 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."