S & I Transportation, Inc.

National Labor Relations Board - Board Decisions

Aug 31, 1993

311 N.L.R.B. 1388 (N.L.R.B. 1993)

1388
311 NLRB No. 189
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
1 We note that the instant case is distinguishable from Associated
Milk Producers, 300 NLRB 561 (1990). In that case, we found that
the respondent did not violate Sec. 8(a)(5) and (1) of the Act be-
cause it gave timely notice to the union of its intent to discontinue
its contributions to a pension fund, but the union failed to request
bargaining. There, we concluded that, after receiving timely notice
of the proposed change, the union’s failure to request bargaining
constituted waiver of its right to bargain.
Here, however, we agree for the reasons noted by the judge that
the Respondent’s announcement of the proposed changes was pre-
sented as a fait accompli, and that the Union did not waive its right
to bargain. Specifically, the Respondent’s announcement directly to
employees of unilateral action (the change in pay periods from
weekly to biweekly) indicates its intent to make changes without
bargaining with the Union. The meeting between the Respondent and
the Union would not have taken place at all if the Union had not
learned from employees of the change in pay periods and if the
Union had not threatened to file unfair labor practice charges against
the Respondent for unilaterally implementing that change. Finally,
the testimony of the Respondent’s president, Steven Jones, reveals
the Respondent’s fixed position to implement the changes as an-
nounced. That the Respondent subsequently agreed with the Union’s
suggestion that the change should be phased in gradually only af-
fected the timing of the change’s implementation. It did not alter the
fact that the change itself was a fait accompli and not negotiable.
It was therefore unlawful.
1 The relevant docket entries are as follows: The Union filed its
unfair labor practice charge on October 16, 1991, and a complaint
issued on December 30, 1991, which was amended on June 5, 1992.
The hearing was held in Grand Rapids, Michigan, on August 27,
1992, at which a portion of the complaint was settled. The settle-
ment was complied with and pars. 9(a) and (b), 12, and 13 are here-
by dismissed.
2 On March 27, 1992, in S & I Transportation, Inc., 306 NLRB
865 (1992), the Board certified the Union as the exclusive bar-
gaining representative for the following unit:
All full-time and regular part-time drivers, mechanics, and truck
washers employed by S & I Transportation, Inc. at its 4365 40th
Street, Grand Rapids, Michigan facility; BUT EXCLUDING dis-
S & I Transportation, Inc. and Local No. 406,
International Brotherhood of Teamsters, AFL–
CIO. Case 7–CA–32490
August 31. 1993
DECISION AND ORDER
BY CHAIRMAN STEPHENS AND MEMBERS
DEVANEY AND RAUDABAUGH
On January 27, 1993, Administrative Law Judge
Benjamin Schlesinger issued the attached decision. The
Respondent filed exceptions and a supporting brief and
the General Counsel filed an answering brief.
The National Labor Relations Board has considered
the decision and the record in light of the exceptions
and briefs and has decided to affirm the judge’s rul-
ings, findings, and conclusions1 and to adopt the rec-
ommended Order.
ORDER
The National Labor Relations Board adopts the rec-
ommended Order of the administrative law judge and
orders that the Respondent, S & I Transportation, Inc.,
Grand Rapids, Michigan, its officers, agents, succes-
sors, and assigns, shall take the action set forth in the
Order.
Linda Hammell, Esq., for the General Counsel.
Elizabeth McIntyre, Esq. (Miller, Johnson, Snell &
Cummisky), of Grand Rapids, Michigan, for the Respond-
ent.
Ronald Owen, of Grand Rapids, Michigan, Business Agent
of the Charging Party.
DECISION
FINDINGS OF FACT AND CONCLUSIONS OF LAW
BENJAMIN SCHLESINGER, Administrative Law Judge. The
sole issue in this unfair labor practice proceeding is whether
Respondent S & I Transportation, Inc. bargained in good
faith before it reduced the wages of its employees and elimi-
nated and reduced many of their health and welfare and other
benefits. The complaint alleges that Respondent did not, in
violation of Section 8(a)(5) and (1) of the National Labor
Relations Act, while Respondent contends that it offered
Charging Party Local No. 406, International Brotherhood of
Teamsters, AFL–CIO (Union), an opportunity to bargain
about whether to put the changes into effect.1
Jurisdiction is admitted. Respondent, a corporation with an
office and place of business in Grand Rapids, Michigan, has
been engaged in the operation of a parcel pickup and deliv-
ery service for its sole customer, Airborne Express (Air-
borne), an overnight delivery service, and thereby has acted
as an essential link in the interstate transportation of goods.
During 1991 Respondent provided transportation services
valued in excess of $50,000 from its Michigan facilities (it
had another facility in Lansing, Michigan) directly to cus-
tomers located outside Michigan, and during the same period
it derived gross revenues in excess of $100,000. I conclude
that Respondent has been an employer engaged in commerce
within the meaning of Section 2(2), (6), and (7) of the Act.
I also conclude, as Respondent admits, that the Union is a
labor organization within the meaning of Section 2(5) of the
Act.
On May 6, 1991, the Union notified Respondent and Air-
borne Express that it represented a majority of their employ-
ees. The Union mailed a petition for a representation election
to the Board’s Regional Office that day. Respondent reacted
by contacting Airborne and asking for an increase of its rates
so that it could raise the wages of its employees and provide
them with health and welfare benefits, all in an attempt to
ward off the Union drive. The rate increase was granted and
Respondent raised the wages of its employees $2 per hour
and provided a new welfare program within 2 days of the
Union’s notice.
The representation election was held on July 2, 1991 (Air-
borne was dropped as a joint employer), and the Union
might have been successful then in being certified, had Re-
spondent not filed sufficient challenges that might have af-
fected the results of the election. A hearing was held on the
challenges in August, and a theory of the General Counsel
in this proceeding is that Respondent was fairly assured that
it would not be successful.2 So, because the May increases
1389S & I TRANSPORTATION, INC.
patchers, and guards. professional employees and supervisors as
defined in the Act.
3 All dates refer to 1991, unless otherwise stated.
had done nothing to stop the union drive, Respondent de-
cided to take back the increases that it had earlier granted.
So much for the theory, because the complaint alleges
only a violation of Section 8(a)(5) of the Act, not Section
8(a)(3). On September 21, 1991,3 Respondent’s president and
sole owner, Steven Jones, wrote a memorandum to the em-
ployees, stating, in part: ‘‘Due to the cost in the administra-
tive expense of a weekly payroll, S & I Transportation will
be processing its payroll bi-monthly.’’ This prompted rumors
about Respondent’s weak financial status and particularly
about its failure to pay its medical insurance premium for
September. The Union’s attorney, by letter dated September
23, threatened to file an unfair labor practice charge for those
unilateral changes and to institute a separate legal action for
unpaid wages and fringe benefits. He began his letter:
It is my understanding that you have unilaterally, and
without bargaining with the union, changed the employ-
ees’ wage hold back by extending that hold back an ad-
ditional two weeks, in violation of MCL 408.472(3)(b),
and Section 8(a)(5) of the NLRA. Further, it is my un-
derstanding that you have failed to pay the medical in-
surance premium for September 1990. Although this
apparently does not impact employee compensation, we
understand that your fuel providers are threatening to
put you on a ‘‘cash only’’ basis. Finally, there are un-
substantiated rumors that you will be closing up shop
without making good on the wages and fringe benefits
to your employees in the very near future.
This resulted in Respondent’s arranging a meeting with the
Union on Friday, September 27. Respondent’s attorney, Mi-
chael Snapper, opened the meeting by indicating that Re-
spondent was meeting with the Union despite the fact that
the Union had not been certified and that Respondent was
not waiving its right to contest the Union’s status as the em-
ployees’ collective-bargaining representative. Nonetheless,
Respondent was in grave financial condition, and it required
the following changes, which would be implemented on the
following Tuesday, October 1:
1. All employees would work at a single hourly rate,
$7.00 per hour. Employees who had been working for
more would suffer a reduction.
2. Respondent would discontinue paying premiums
for life, dental, and disability insurance on October 1.
It would continue to pay for health insurance only for
October, and the employees had to assume the pre-
miums after that.
3. The payroll period would have to be changed
from weekly to biweekly.
Snapper explained that Respondent’s financial condition
necessitated these changes and offered financial statements
from Respondent’s accountant to support his position. The
Union’s representatives, Karl Schobey and Ronald Owen,
briefly looked at the statements, but immediately dismissed
them because they had not been certified and were based on
unaudited records given to the accountant. As a result, there
was no bargaining about the financial condition of Respond-
ent, but there was some discussion about the change of the
payroll period. The Union contended that the change would
unfairly deprive the employees of their wages for an addi-
tional week and that payment of wages already was delayed
for a week or two after the employees had performed their
work.
When the meeting ended, Snapper testified, he advised the
Union representatives that the changes would be effected, but
he would be open to more negotiations, and that changes
could be made retroactively. Neither union representative tes-
tified that any mention was made of retroactivity, but both
confirmed that Respondent offered to meet again. They
thought that was of no use, because Respondent had clearly
stated its position; and it appeared that its announcement was
a fait accompli, and nothing would change it. That, in es-
sence, is the issue: whether the announcement was a fait
accompli or whether Respondent offered the Union a reason-
able opportunity to bargain about whether the changes should
be made.
Part of what the General Counsel relies on is the testimony
of the two union representatives that Snapper announced at
the beginning of the meeting that he was ‘‘not there to bar-
gain.’’ Schobey was a particularly unimpressive witness. He
seemed to recall hardly anything about the meeting, and what
he recalled was mostly vague, with the one salient exception
of this particular statement, which he remembered as if it
were imprinted in his brain. Owen was better. His recollec-
tion of Snapper’s statement was identical to Schobey’s testi-
mony; and I found that, with Schobey’s general lack of any
recollection, the statement must have been carefully dis-
cussed between the two.
I find that it was not said. Snapper has been involved in
labor law for many years, and I am convinced that he knew
that he had certain obligations under the Act, one of them
being that an employer risks a violation of the Act for unilat-
erally changing terms and conditions of employment after a
representation election, if the union is ultimately certified.
Mike O’Conner Chevrolet, 209 NLRB 701, 703 (1974). I
find it utterly improbable that he would have openly stated
that he would not bargain, particularly because he would be
well aware that the law does not require that employer to ac-
cede to the Union’s wishes. All that the Act requires is that
he bargain in good faith and, as an experienced counsel, he
would know how to comply with the Act. Furthermore, as
the General Counsel’s brief suggests, the reason for the
meeting was in response to the Union’s threat that it would
file an unfair labor practice charge if Respondent made
changes unilaterally and without bargaining. Therefore, at the
very least, Snapper had to make it appear that he was bar-
gaining in good faith and complying with the Act. For that
reason, he brought Respondent’s accountant and distributed
financial statements to support Respondent’s position.
Snapper’s actions after the meeting are consistent with
these findings. On October 1, he wrote to Schobey agreeing
that Respondent would not change the payroll period to bi-
weekly immediately, but would make the change gradually.
In addition, he confirmed what had transpired at the meeting.
His letter comports in all respects with his testimony. At no
time did he write that he was not bargaining with the Union.
Rather, he encouraged the Union to advise him if its rep-
resentatives had any questions, or wished to meet, or wished
to be supplied with additional information. He prepared his
1390 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
4 Needless to state, there was no bargaining here because Respond-
ent presented a fait accompli. As a result, there could be no impasse
in bargaining within the meaning of Taft Broadcasting Co., 163
NLRB 475, 478 (1967), enfd. sub nom. Television Artists AFTRA v.
NLRB, 395 F.2d 622 (D.C. Cir. 1968).
letter 2 weeks before the unfair labor practice was filed, so
there was no effort to tailor his letter to meet the allegations
of the complaint (although, admittedly, he might have tai-
lored his letter to counter the letter sent by the Union’s coun-
sel). His later letter, on December 5, again inviting further
bargaining, could be subject to that criticism; but it is con-
sistent with his precharge position and his testimony.
Merely because Snapper did not openly announce that he
was not going to bargain with the Union does not mean that
the reduction was not a fait accompli and that the meeting
was anything more than a ruse to give the appearance of bar-
gaining, while not actually doing so. There is no question
that Respondent decided what it needed to do, long before
the meeting was held. The meeting would not have even
been held, had not the Union written to Respondent threat-
ening to take legal action. The Union’s letter was its re-
sponse to Respondent’s distribution of a notice stating that
it was going to change from a weekly to a biweekly payroll.
That announcement of a unilateral action demonstrates that
Respondent was unmindful of its duty to bargain collectively
and indicates that it intended to lower wages and eliminate
benefits without consultation with the Union. When threat-
ened by the Union, however, Respondent had to change
course and schedule a meeting. Notwithstanding Snapper’s
words, it was clear that Respondent had no intention of
changing its views. Steven Jones, Respondent’s president and
sole owner, testified that the meeting was held ‘‘to substan-
tiate to the [U]nion why certain actions were going to be
taken’’ and: ‘‘[W]e told them what we were going to do
about changing from weekly to biweekly.’’ The meeting was
not to negotiate but to advise. Jones testified: ‘‘And we
weren’t there very long. We gave them the documents. We
told them our situation and left. A pretty straight forward
deal.’’
Thus, despite the fact that Snapper did not say that he was
not there to bargain, the impression received by the Union
representatives was accurate. Respondent told them its posi-
tion and left. It was a done deed. Respondent contends that,
even if it was, when there are compelling economic reasons
for taking action, an employer does not have to bargain with
the union before making a change. But, assuming there is
some authority for that proposition, it is only dicta. Venture
Packaging, 294 NLRB 544 fn. 2 (1989), citing Mike
O’Conner Chevrolet, 209 NLRB at 703. Furthermore, the
Board has never stated what an employer must prove; and,
here, Respondent proved nothing, because it did not offer the
statement of its financial condition for its truth.
As a result, Respondent was required to bargain about its
intended changes. Part of that obligation involves timely no-
tice to the Union of any changes. In Intersystems Design
Corp., 278 NLRB 759 (1986), the Board quoted with ap-
proval from an administrative law judge’s decision in Ciba-
Geigy Pharmaceuticals, 264 NLRB 1013, 1017 (1982), as
follows:
The Board has long recognized that, where a union re-
ceives timely notice that the employer intends to
change a condition of employment, it must promptly re-
quest that the employer bargain over the matter. To be
timely, the notice must be given sufficiently in advance
of the actual implementation of the change to allow a
reasonable opportunity to bargain. However, if the no-
tice is too short a time before implementation or be-
cause the employer has no intention of changing its
mind, then the notice is nothing more than informing
the union of a fait accompli.
Here, Respondent set the meeting with the Union on a Fri-
day before the Tuesday on which it threatened to make all
the changes. That was two business days’ notice to the
Union and was not reasonable, particularly because by Sep-
tember 21, it had made the decision to pay wages biweekly,
presumably on the same basis that it made its decision to re-
duce wages. Because the notice was too short, it was ‘‘noth-
ing more than informing the [U]nion of a fait accompli.’’
Ibid. Contrary to Respondent’s contention that the Union, by
failing to object, waived bargaining, I conclude, as did the
Board in Intersystems Design, above at 760, ‘‘[T]he Union
cannot be held to have waived bargaining over a change that
was implemented without timely notice.’’ There, the Board
relied on Gulf States Mfg. v. NLRB, 704 F.2d 1390, 1397
(5th Cir. 1983), which found:
It is . . . well established that a union cannot be held
to have waived bargaining over a change that is pre-
sented as a fait accompli. . . . ‘‘An employer must at
least inform the union of its proposed actions under cir-
cumstances which afford a reasonable opportunity for
counter arguments or proposals.’’ . . . Notice of a fait
accompli is simply not the sort of timely notice upon
which the waiver defense is predicated.
Respondent contends that it gave the Union a chance to
bargain even after Respondent implemented its decision and
that, if the Union presented convincing arguments, the imple-
mentation could be changed retroactively. However, Re-
spondent’s obligation to bargain is one that must take place
before it implements the change. Once Respondent unilater-
ally implemented the changes without bargaining, it violated
the Act. The violation must first be remedied before the
Union should be required to bargain. Respondent cites no de-
cision placing the onus on the Union (under penalty of dis-
missal of an unfair labor practice complaint), when it refuses
to bargain to rescind an illegal, unilateral implementation.
Respondent announced the change of its pay schedule in
advance of the September 28 meeting. There was no bar-
gaining on that issue, except for the Union complaint that the
new schedule would delay the payment of the employees’
wages several weeks after they had been earned. The mere
fact that Respondent later acceded partially to the Union’s
objection does not indicate that there was bargaining. Rather,
for whatever reason, Respondent altered what was its pre-
viously announced decision, which had been made and an-
nounced before it consulted with the Union.
In sum, I conclude that Respondent presented the Union
with a fait accompli in violation of Section 8(a)(5) and (1)
of the Act and that the Union did not waive its right to bar-
gain.4
1391S & I TRANSPORTATION, INC.
5 If no exceptions are filed as provided by Sec. 102.46 of the
Board’s Rules and Regulations, the findings, conclusions, and rec-
ommended 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 purposes.
6 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
National Labor Relations Board’’ shall read ‘‘Posted Pursuant to a
Judgment of the United States Court of Appeals Enforcing an Order
of the National Labor Relations Board.’’
The unfair labor practices found herein, occurring in con-
nection with Respondent’s business, have a close, intimate,
and substantial relationship to trade, traffic, and commerce
among the several States and tend to lead to labor disputes
burdening and obstructing commerce within the meaning of
Section 2(6) and (7) of the Act.
THE REMEDY
Having found that Respondent has violated the Act, I shall
recommend that it cease and desist therefrom and take cer-
tain affirmative action designed to effectuate the policies of
the Act. Specifically, I shall order Respondent to return the
terms and conditions described above to the status quo ante
and make the unit employees whole for loss of wages and
other benefits they may have suffered by reason of Respond-
ent’s unilateral changes, in the manner prescribed in Ogle
Protection Service, 183 NLRB 682 (1970), plus interest as
computed in New Horizons for the Retarded, 283 NLRB
1173 (1987). Respondent shall also reimburse employees for
the costs they incurred, such as payments to health care pro-
viders and third-party insurers, because of Respondent’s fail-
ure to pay premiums for life, dental disability, and health in-
surance on their behalf.
On these findings of fact and conclusions of law and on
the entire record, I issue the following recommended5
ORDER
The Respondent, S & I Transportation, Inc., Grand Rapids,
Michigan, its officers, agents, successors, and assigns, shall
1. Cease and desist from
(a) Reducing the wages of its unit employees, eliminating
their insurance coverage, or changing its payroll period from
weekly to biweekly.
(b) Making changes to its terms and conditions of employ-
ment unilaterally and without giving Local No. 406, Inter-
national Brotherhood of Teamsters, AFL–CIO, a meaningful
opportunity to bargain about whether to put the foregoing
changes into effect.
(c) In any like or related manner interfering with, restrain-
ing, or coercing its employees in the exercise of the rights
guaranteed them by Section 7 of the Act.
2. Take the following affirmative action necessary to ef-
fectuate the policies of the Act.
(a) Reinstate all terms and conditions of employment of its
employees as they were on September 30, 1991.
(b) Make whole its unit employees for any loss of earnings
and other benefits suffered as a result of its unilateral
changes, in the manner set forth in the remedy section of this
decision.
(c) Reimburse its employees for any costs they incurred,
such as payments to health care providers and third-party in-
surers, because of its failure to pay premiums for life, dental,
disability, and health insurance on their behalf.
(d) Preserve and, on request, make available to the Board
or its agents for examination and copying, 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.
(e) Post at its facility in Grand Rapids, Michigan, copies
of the attached notice marked ‘‘Appendix.’’6 Copies of the
notice, on forms provided by the Regional Director for Re-
gion 7, after being signed by Respondent’s authorized rep-
resentative, shall be posted by Respondent immediately upon
receipt and maintained for 60 consecutive days in con-
spicuous places, including all places where notices to em-
ployees are customarily posted. Reasonable steps shall be
taken by Respondent to ensure that the notices are not al-
tered, defaced, or covered by any other material.
(f) Notify the Regional Director in writing within 20 days
from the date of this Order what steps Respondent has taken
to comply.
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 vio-
lated the National Labor Relations Act and has ordered us
to post and abide by this notice.
WE WILL NOT reduce the wages of our unit employees,
eliminate their insurance coverage, or change our payroll pe-
riod from weekly to biweekly.
WE WILL NOT make changes to our terms and conditions
of employment unilaterally and without giving Local No.
406, International Brotherhood of Teamsters, AFL–CIO, a
meaningful opportunity to bargain about whether to put the
foregoing changes into effect.
WE WILL NOT in any like or related manner interfere with,
restrain, or coerce our employees in the exercise of the rights
guaranteed them by Section 7 of the Act.
WE WILL reinstate all terms and conditions of employment
of our employees as they were on September 30, 1991.
WE WILL make whole our unit employees for any loss of
earnings and other benefits suffered as a result of our unilat-
eral changes.
WE WILL reimburse our employees for any costs they in-
curred, such as payments to health care providers and third-
party insurers, because of our failure to pay premiums for
life, dental, disability, and health insurance on their behalf.
S & I TRANSPORTATION, INC.