Solo Cup Co.

National Labor Relations Board - Board Decisions

Jun 19, 1969

176 N.L.R.B. 823 (N.L.R.B. 1969)

SOLO CUP COMPANY 823
Solo Cup Company and United Papermakers and
Paperworkers , AFL-CIO. Case l3-CA-8133
June 19, 1969
DECISION AND ORDER
BY MEMBERS BROWN, JENKINS, AND ZAGORIA
Upon a charge duly filed on November 24, 1967,
by United Papermakers and Paperworkers,
AFL-CIO, hereinafter called the Union , the General
Counsel of the National Labor Relations Board, by
the Regional Director for Region 13, issued a
complaint and notice of hearing on February 1,
1968, alleging that Solo Cup Company, hereinafter
called Respondent , had engaged in and was
engaging in unfair labor practices affecting
commerce within the meaning of Section 8 (a)(1) and
Section 2(6) and (7) of the National Labor
Relations Act, as amended . Copies of the charge,
complaint , and notice of hearing , were duly served
upon the Respondent.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the
National Labor Relations Board has delegated its
powers in connection with this proceeding to a
three-member panel.
The complaint alleged , in substance , that on or
about April 14, 1967, Respondent amended its
profit-sharing plan so as to exclude from the plan
any employees of Respondent who become covered
by a retirement program negotiated within the
framework of a collective-bargaining contract, that
the said amendment was put into effect on or about
August 1 , 1967, and that on or about October 1,
1967, the Respondent distributed to its employees a
booklet containing , among other items, language
setting out in general terms the effect of the
amendment to the profit-sharing plan all in violation
of Section 8(a)(1) of the Act . Respondent ' s answer
admits the amendment of the profit -sharing plan on
or about April 14, 1967, and the promulgation and
publicizing of the amendment of August 1, 1967,
and thereafter , but denies that it in any way violated
the Act.
On March 1 , 1968, all parties to this proceeding
entered into a stipulation by which they waived a
hearing before a Trial Examiner and the issuance by
him of a Trial Examiner's Decision and
Recommended Order and agreed to submit the case
to the Board for findings of fact , conclusions of law,
and an order, based upon a record consisting of the
charge , the complaint , the answer , and the
stipulation.
On March 6 , 1968, the Board approved the
stipulation and ordered the proceeding transferred to
the Board . Thereafter, the Respondent and the
General Counsel filed briefs.
Upon the basis of the stipulation , the exhibits, the
briefs, and the entire record in this case , the Board
MAKES THE FOLLOWING FINDINGS:
FACTS
1. THE BUSINESS OF THE RESPONDENT
The Respondent, a Delaware corporation, is
engaged in the manufacture and sale of paper
containers and related products . During the past 12
months, which is a representative period, the
Respondent had a direct outflow of products in
interstate commerce valued in excess of $ 1 million
which were sold and shipped across state lines from
its facilities located in the various States including
Illinois, Missouri, Maryland, and Canada. The
Respondent's answer admits and we find that the
Respondent is engaged in commerce , within the
meaning of the Act, and that it will effectuate the
policies of the Act to assert jurisdiction herein.
II. THE LABOR ORGANIZATION INVOLVED
United Papermakers and Paperworkers,
AFL-CIO, is a labor organization within the
meaning of Section 2(5) of the Act.
III. THE UNFAIR LABOR PRACTICES
In their stipulation , the parties have agreed that:
(1), for many years prior to April 14, 1967,
Respondent maintained as one of its benefits for
employees a profit-sharing plan whereby each
employee , upon completion of 1 year of full-time
employment , became a participant of the plan; (2),
on or about April 14, 1967, the Board of Directors
of Respondent amended paragraph 3.5 of the plan
so as to provide that:
If at any time the Company is required , pursuant
to a collective bargaining agreement , to provide
immediate or prospective retirement benefits for
an Employee in a collective bargaining unit, the
Company shall amend the plan to terminate any
and all benefits of Employees in such collective
bargaining unit , as of the effective date of such
collective bargaining agreement or as of the date
the employee joins such collective bargaining unit,
whichever occurs later , anything in the Plan and
Trust Agreement to the contrary notwithstanding,
subject to determination that such amendment
does not disturb the qualifications of the Plan as
exempt under the Code.
and that the said amendment shall be effective
August 1, 1967; and (3), on or about October 1,
1967, Respondent caused to be distributed to its
employees a booklet entitled "Solo Cup Company,
Profit Sharing Plan," which contained the following
paragraph , to wit (Par. 2 , Answers to Question No.
25):
The Company also reserves the right to amend
the Plan to terminate any and all benefits under
176 NLRB No. 117
824 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
the plan if it is required to provide immediate or
prospective retirement benefits under a collective
bargaining agreement . Only those employees
covered by such a collective bargaining agreement
will be excluded from the plan.
On the basis of the stipulated facts , we agree with
the General Counsel that paragraph 3.5 of
Respondent ' s profit-sharing plan interferes with and
restrains the employees rights to engage in collective
activity in violation of Section 8(ax 1) of the Act.
We also agree that the second paragraph in answer
to question No. 25 of the employees ' booklet
likewise violates Section 8(a)(I) of the Act.
The record shows that Respondent adopted and
promulgated its rule requiring that it amend its plan
for the purpose of excluding any employees who
might thereafter become covered by a
collective -bargaining contract containing a provision
for a retirement system . In our opinion , such a rule,
while not self-executing, as it was in the Kroger
case,' certainly has a definite and direct impact on
the employees and their right to engage in concerted
activities including the right to future bargaining
over various conditions of employment.
We reject Respondent ' s basic contention that it
has the absolute right to announce in advance the
results of future collective bargaining , particularly
where a penalty or forfeiture may result and no
collective-bargaining agent is yet in existence. It is
clear that where a collective-bargaining relationship
exists, the Employer , merely by submitting an offer
to the Union necessarily indicates in some measure
what the results of bargaining might be , but it is
also equally clear that where no bargaining agent
exists, such a course of conduct necessarily
evidences of a predisposition toward future collective
bargaining that reasonably would affect the
individual employee ' s decision as to whether he
should or should not select a collective -bargaining
agent . Collective-bargaining contracts contain terms
and conditions arrived at after due deliberation
including compromise and the give and take of the
bargaining table . That retirement systems are an
important part of this system is clear . As of 1967,
17.5 million employees were covered by a total of
17,091 private pension plans . Of these, 6,341 were
negotiated by Unions covering 12.5 million
employees. _
When an employee considers engaging in
concerted activities , via collective bargaining, he
does so because he believes that through collective
action his lot, as well as that of his coworkers will
be improved . A foreseeable or predictable loss or
hardship would have a definite impact on, and
interfere with , the employees initial decision to
engage or not to engage in concerted activities
directed toward collective bargaining. Thus, in the
The Kroger Co., 164 NLRB No. 54, enfd. 399 F.2d 455 (C.A. 6), cert.
denied 395 U.S. 904.
'Monthly Labor Revkw, May 1968, Vol. 91. No. 5, p. 29.
instant case , a retirement plan, although an integral
part of the overwhelming number of
collective -bargaining contracts , has become a cause
for rejection and outright opposition to all collective
bargaining by some employees , particularly those
who have had a vesting in a substantial sum of
money under the profit-sharing plan. In short, prior
to the advent of any concerted activity, Respondent
has already carved out at least one special group of
employees and under threat of substantial harm,
given them a very compelling reason why they
should resist collective bargaining.
Potential collective -bargaining units could readily
be prejudiced by policy announcements tied to
future collective- bargaining contracts where each
employee feels the possibility of a real loss if a
collective-bargaining representative is chosen. Such
a course of action interferes with , coerces, and
restrains those employees , as well as other similarly
situated, from engaging in protected concerted
activities in violation of Section 8(a)(1) of the Act.'
IV. THE EFFECT OF THE UNFAIR LABOR
PRACTICES UPON COMMERCE
The activities of the Respondent set forth in
section III, above , occurring in connection with the
operations of the Respondent described in section I,
above , have a close , intimate , and substantial
relation to trade , traffic , and commerce among the
several States and tend to lead to labor disputes
burdening and obstructing commerce and the free
flow thereof.
THE REMEDY
As we have found that Respondent violated
Section 8 (a)(1) of the Act by maintaining paragraph
3.5 of its Profit Sharing Plan we shall order
Respondent to cease and desist from further
maintaining the said paragraph . We shall further
order Respondent to amend the said plan and any
existing employee booklets and/or publications so as
to eliminate therefrom any language which suggests
that employees covered by a pension plan resulting
from collective bargaining through a union will be
disqualified from all benefits under Respondent's
profit-sharing plan.4
CONCLUSIONS OF LAW
1. Solo Cup Company, is an Employer within the
meaning of Section 2(2) of the Act and is engaged
in commerce within the meaning of Section 2(6) and
(7) of the Act.
'This does not mean of course , that an employer may not advise his
employees, in a noncoercive fashion, that pensions for those in the unit are
subject to bargaining and that if a separate pension plan for those in the
unit is agreed upon , coverage in the existing plan will not be maintained,
i e., the employer is not obligated to provide "double coverage."
'See Kroger Co., supra.
SOLO CUP COMPANY 825
2. United Papermakers and Paperworkers,
AFL-CIO, is a labor organization within the
meaning of Section 2(5) of the Act.
3. By maintaining and continuing to maintain a
profit-sharing plan which by its terms requires that
Respondent exclude from participation employees
covered by a pension plan resulting from collective
bargaining through a labor organization,
Respondent has interfered with , restrained, and
coerced its employees in their exercise of the rights
guaranteed in Section 7 of the Act, and is thereby
violating Section 8(a)(l) of the Act.
4. The aforesaid unfair labor practices are unfair
labor practices within the meaning of Section 2(6)
and (7) of the Act.
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor
Relations Board hereby orders that Respondent,
Solo Cup Company, its officers, agents, successors,
and assigns , shall:
1. Cease and desist from:
(a) Maintaining and enforcing those portions of
paragraph 3.5 in its Profit Sharing Plan which
requires that Respondent terminate benefits
thereunder for employees covered by a pension plan
resulting from collective bargaining through a labor
organization ; or so advising its employees in
booklets or publications describing said Plan.
(b) In any like or related manner interfering with,
restraining, or coercing its employees in the exercise
of their right to self-organization, to form , join, or
assist unions, to bargain collectively through
representative of their own choosing , to engage in
concerted activities for the purposes of collective
bargaining or other mutual aid or protection, or to
refrain from such activities , except to the extent that
such right may be affected by an agreement
requiring union membership as a condition of
employment , as authorized in Section 8(aX3) of the
National Labor Relations Act, as amended, by the
Labor- Management Reporting and Disclose Act of
1959.
2. Take the following affirmative action, which we
find will effectuate the policies of the Act:
(a) Amend its Profit Sharing Plan by deleting
therefrom those portions of paragraph 3.5 which
requires that Respondent exclude from participation
employees covered by a pension plan resulting from
collective bargaining through a labor organization.
(b) Amend its existing employee booklets and/or
publications so as to eliminate therefrom any
language which indicates that employees covered
under a pension plan resulting from collective
bargaining through a labor organization will be
disqualified from participation in its Profit Sharing
Plan.
(c) Post at all its plants, warehouses and other
facilities and locations where rank-and-file
employees work, wherever located, copies of the
attached notice marked "Appendix."' Copies of said
Notice, on forms provided by the Regional Director
for Region 13, shall, after being duly signed by an
authorized representative of Respondent, be posted
by Respondent immediately upon receipt thereof,
and be maintained by it for 60 consecutive days
thereafter, in conspicuous places, including all places
where notices to employees are customarily posted.
Reasonable steps shall be taken by Respondent to
insure that said notices are not altered, defaced, or
covered by any other material.
(d) Notify the Regional Director for Region 13, in
writing, within 10 days from the date of this Order,
what steps have been taken to comply herewith.
MEMBER ZAGORIA, concurring:
I agree with my colleagues' finding that the
Respondent's amendment to its profit-sharing plan,
as set forth above and described to its employees in
the booklet of October 1, 1967, violated Section
8(ax 1) of the Act. I am of the opinion that the
absence of a current collective-bargaining
representative in no way lessens the inherently
restraining effect of the amendment upon the
employees' desires and freedom to bargain
collectively. As described to the employees in the
October booklet, the amendment constitutes an
unlawful threat to deprive the employees of vested
interests and benefits in the plan should they obtain
a negotiated pension plan by exercising their
statutory right to bargain collectively through their
freely chosen representative. Accordingly, in finding
a violation, I rely solely on the "inherently
destructive" effect of the Respondent's action on
employee rights.'
'In the event that this Order is enforced by a decree of a United States
Court of Appeals, there shall be substituted for the words "a Decision and
Order" the words "a Decree of the United States Court of Appeals
Enforcing an Order."
'N.L.R.B . v. Great Dane Traders, 388 U.S. 26.
APPENDIX
NOTICE TO ALL EMPLOYEES
Pursuant to the Decision and Order of the National
Labor Relations Board and in order to effectuate the
policies of the National Labor Relations Act, as amended,
we hereby notify our employees that:
WE WILL NOT discourage membership in United
Papermakers and Paperworkers , AFL-CIO, or any
other labor organization , by disqualifying our
employees from participation in our Profit Sharing
Plan because of coverage under a pension plan resulting
from collective bargaining through a union.
WE WILL amend our Profit Sharing Plan to eliminate
paragraph 3.5 which disqualifies employees covered
under a pension plan resulting from collective
bargaining through a union.
826 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
WE WILL amend our existing employee booklet so as
to eliminate any language which indicates that
employees covered under a pension plan resulting from
collective bargaining through a labor organization will
be disqualified from participation in the Profit Sharing
Plan.
Dated By
SOLO CUP COMPANY
(Employer)
(Representative ) (Title)
WE WILL NOT in any like or related manner interfere
with , restrain , or coerce our employees in the exercise
of the rights guaranteed in Section 7 of the Act.
This notice must remain posted for 60 consecutive days
from the date of posting and must not be altered, defaced,
or covered by any other material.
If employees have any questions concerning this notice
or compliance with its provisions , they may communicate
directly with the Board ' s Regional Office, 881 U.S.
Courthouse and Federal Office Building , 219 South
Dearborn Street, Chicago , Illinois 60604 , Telephone
312-353-7572.