Service Art Co., Inc

National Labor Relations Board - Board Decisions

Sep 30, 1990

291 N.L.R.B. 234 (N.L.R.B. 1990)

234 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
Service Art Company , Inc and Local 67, Operative
Plasterers' and Cement Masons' International
Association of the United States and Canada,
AFL-CIO and Detroit Association of Walls and
Ceiling Contractors, Party in Interest Case 7-
CA-25579
September 30 1990
SUPPLEMENTAL DECISION AND
ORDER
BY CHAIRMAN STEPHENS AND MEMBERS
JOHANSEN AND CRACRAFT
On September 9 1986, the Board issued a Deci
sion and Order in this proceeding' ordering the
Respondent to make all the contractually required
payments to fringe benefit funds owed since Sep
tember 1985 and to reimburse its employees for any
losses attributable to its failure to make these con
tractually required payments which failure the
Board found violated Section 8(a)(5) and (1) of the
Act On February 16 1987 the United States
Court of Appeals for the Sixth Circuit enforced the
Board s Order in full 2
On June 26, 1987 the Acting Regional Director
for Region 7 issued a backpay specification and
notice of hearing alleging inter alia that a contro
versy had arisen over the amount of delinquent
contributions owed to the union fringe benefit
funds and the amount of employee losses attnbuta
ble to the failure to make the delinquent benefit
fund contributions The Respondent failed to file
an answer to the backpay specification
On August 17 1987 the General Counsel filed
with the Board a Motion to Transfer Case to the
Board and for Default Judgment with exhibits at
tached On August 19 1987 the Board issued an
order transferring the proceeding to the Board and
a Notice to Show Cause why the motion should
not be granted The Respondent filed no response
On August 25 1988, the Board issued a Supple
mental Notice to Show Cause why the motion
should not be granted The Respondent again filed
no response The allegations in the motion and in
the backpay specification are therefore undisputed
The National Labor Relations Board has delegat
ed its authority in this proceeding to a three
member panel
Ruling on Motion for Default Judgment
Section 102 54(a) of the Board s Rules and Regu
lations provides that the respondent shall file an
answer within 21 days from service of a backpay
' 281 NLRB No 47
a Docket No 86-6223 (unpublished judgment)
specification Section 102 54(c) of the Board s
Rules and Regulations states
If the respondent fails to file any answer to the
specification within the time prescribed by this
section the Board may either with or without
taking evidence in support of the allegations of
the specification and without notice to the re
spondent find the specification to be true and
enter such order as may be appropriate
The backpay specification served on the Re
spondent states that pursuant to Section 102 54 of
the Boards Rules and Regulations the Re
spondent shall within twenty one (21) days from
the date listed below file with the Acting Regional
Director an original and four (4) copies of an
Answer to this Specification The backpay specifi
cation states further that to the extent that such
Answer fails to deny allegations of the Specifica
tion in the manner required under the Board s
Rules and Regulations and failure to do so is not
adequately explained such allegations shall be
deemed to be admitted to be true and the respond
ent shall be precluded from introducing any evi
dence controverting them Further the undis
puted allegations in the Motion for Default Judg
ment disclose that the Regional Director for
Region 7 by a letter dated July 21 1987 notified
the Respondent that unless an answer was filed by
August 4 1987 a Motion for Default Judgment
would be filed The Respondent did not reply to
this letter or file an answer to the backpay specifi
cation
In the absence of good cause being shown for
the failure to file a timely answer to the backpay
specification and as no explanation or response to
the Notices to Show Cause has been filed we
grant the General Counsels Motion for Default
Judgment except as to the amount alleged for the
Wall & Ceiling Contractors Industry Promotion
Fund 3 Accordingly we find the computations in
the specification of the amounts owed to the fringe
benefit funds (with the exception of the Industry
Promotion Fund) for delinquent contributions and
to individual employee James Bushey for his losses
to be true We shall order the Respondent to pay
these amounts plus interest, if any 4
3Industry promotion funds are permissive nonmandatory subjects of
bargaining Because it is not an unfair labor practice for an employer uni
laterally to make a change in a permissive nonmandatory subject of bar
gaining we shall not require the Respondent to make payments to the
Wall & Ceiling Contractors Industry Promotion Fund See Finger Lakes
Plumbing Co 254 NLRB 1399 (1981)
4 The Board does not provide for the addition of interest at a fixed rate
on unlawfully withheld fund payments Instead see Merryweather Optical
Co 240 NLRB 1213 1216 at fn 7 (1979) for the method of determining
any additional amounts owed to such funds as reimbursement for losses
Continued
291 NLRB No 35
SERVICE ART CO 235
ORDER the amounts following their names plus interest,6 if
The National Labor Relations Board orders that
any
Incthe Respondent Service Art Company Health and Welfare Fund $5320 95,,
Warren Michigan its officers agents successors Pension Fund 5601 00
Vacation Fund 420075and assigns shall make its employees whole by
Building Trades Council Fund 33606paying the trust funds and employee listed below James Bushey 60000
attributable to the unlawfully withheld contributions However the
Board does provide interest at a fixed rate on amounts owed to individual
employees for their losses attributable to the unlawful withholding of
benefit fund contributions Kroft Plumbing 252 NLRB 891 fn 2 (1980)
enfd mem 661 F 2d 940 (9th Cir 1981) Interest on such amounts shall
be computed in accordance with our decision in New Horizons for the Re
Larded 283 NLRB 1173 (1987)
5 In accordance with our decision in New Horizons for the Retarded
283 NLRB 1173 ( 1987) interest on and after January 1 1987 shall be
computed at the short term Federal rate for the underpayment of taxes
as set out in the 1986 amendment to 26 US C § 6621 Interest on
amounts accrued prior to January 1 1987 (the effective date of the 1986
amendment to 26 U S C § 6621) shall be computed in accordance with
Florida Steel Corp 231 NLRB 651 (1977)
I