STAR, Inc.

National Labor Relations Board - Board Decisions

Jul 31, 2002

337 N.L.R.B. 962 (N.L.R.B. 2002)

STAR, INC. 962
STAR, Inc. Lighting the Way and United Food and
Commercial Workers, Local 371, AFL–CIO.
Case 34–RC–1820.
July 31, 2002
DECISION AND DIRECTION OF SECOND
ELECTION
BY CHAIRMAN HURTGEN AND MEMBERS LIEBMAN
AND COWEN
The National Labor Relations Board has considered
objections to an election held between July 13 and 21,
2000,1 and the Hearing Officer’s report recommending
disposition of them. The election was conducted pursu­
ant to a Decision and Direction of Election issued by the
Regional Director on June 19. The tally of ballots shows
44 for and 74 against the Petitioner, with 3 challenged
ballots, an insufficient number to affect the results.
The National Labor Relations Board has delegated its
authority in this proceeding to a three-member panel.
The Board has reviewed the record in light of the ex­
ceptions and briefs,2 affirms the hearing officer’s find-
ings3 and recommendations4 for the reasons set forth
below, and finds that the election must be set aside and a
new election held.
The hearing officer found merit in the Union’s Objec­
tion 4, which alleges that the Employer interfered with
the election by announcing and distributing a fiscal year-
end, cash bonus to unit employees approximately 2
weeks before the election. We agree with the hearing
officer that the Employer failed to establish that it had a
past practice of paying such bonuses, and we find that
the bonus reasonably tended to interfere with the em­
ployees’ free choice in the election.
BACKGROUND
The Employer contracts with the State of Connecticut
to provide residential, employment, and other services to
1 The manual election was conducted on July 14, and the mail ballot
election was conducted between July 13 and 21. Except where other-
wise stated, all dates refer to 2000.
2 On February 2, 2001, the Employer filed a Motion to Reopen the
Record for Receipt of an Exhibit, and the Union filed an opposition.
Because the exhibit, a January 16, 2001 letter, was previously unavail­
able, we grant the Employer’s motion. As explained below, however,
we find that the exhibit is not dispositive.
3 The Employer has excepted to some of the hearing officer’s credi­
bility findings. The Board’s established policy is not to overrule a
hearing officer’s credibility resolutions unless the clear preponderance
of all the relevant evidence convinces us that they are incorrect.
Stretch-Tex Co., 118 NLRB 1359, 1361 (1957). We find no basis for
reversing the findings.
4 In the absence of exceptions, we adopt the hearing officer’s rec­
ommendation to overrule Objection 2 concerning conversations be-
tween or among supervisory House Managers, Executive Director
Katie Benzhaf, and the Employer’s attorney.
the mentally handicapped. It was formed on October 2,
1999, as a result of the merger of two entities, S.T.A.R.
Residential Services, Inc., and the Society to Advance
the Retarded and Handicapped.5 On June 27, 2000, Ex­
ecutive Director Benzhaf notified employees that they
would receive fiscal year-end cash bonuses on June 30,
the last day of the fiscal year. As stated, employees who
worked at least 20 hours a week for the year received
$400, and employees who worked fewer than 20 hours a
week received $200. On call employees received $100.
Employees who worked less than a year received pro-
rated sums based on their length of service.
The Employer asserted its past practice was to pay
such bonuses when it experienced a surplus at the end of
the fiscal year. With respect to past practice, the record
shows that on June 30, 1995, the former Society to Ad­
vance the Retarded and Handicapped announced to its
employees that it would pay a fiscal year-end bonus the
following week. It withheld taxes and made other cus­
tomary deductions from the employees’ bonus checks,
which ranged from $100 to $400 before withholdings.
The only other fiscal year-end bonus paid to the employ­
ees in the 5-year span was in 1999, when the former
S.T.A.R. Residential Services decided in June to pay its
employees a bonus. Thereafter, in August 1999, em­
ployees who participated in its retirement plan received a
3 percent contribution to the plan, and all other regular
employees received bonus checks in the amount of $225.
No other records of year-end bonuses were produced. In
1998, when the Society to Advance the Retarded and
Handicapped faced a surplus, it did not grant bonuses at
the end of the fiscal year. Instead it instituted a “Quality
Enhancement Program” (QEP) under which it raised
base salaries and created new classifications. Any bo­
nuses paid under the QEP were given “in a discretionary
way to reward and recognize quality staff,” and were not
paid across the board.
ANALYSIS
The Board will infer that an announcement or grant of
benefits during the critical period is coercive, but the
employer may rebut the inference by establishing an ex-
planation other than the pending election for the timing
of the announcement or bestowal of the benefit. Uarco,
Inc., 216 NLRB 1 (1974). In making a determination,
the Board will examine the size of the benefit conferred,
the number of employees receiving it, the timing of the
benefit, and how employees reasonably would view the
5 After initial objections by the Union, the hearing officer and the
parties treated the two entities as one for purposes of arguing the exis­
tence or nonexistence of the merged entity’s past practice.
337 NLRB No. 151
963 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
purpose of the benefit. See B & D Plastics, 302 NLRB
245 (1991), and cases cited therein.
Applying that standard here, we find good reasons to
infer that the year-end bonus interfered with free choice
in the election. Its size (as much as $400) was substan­
tial, all of the employees received it, and all of them rea­
sonably would have been influenced in their voting, es­
pecially given the timing of the bonus and its unprece­
dented features. As we will explain, the Employer has
not succeeded in demonstrating that conformity to past
practice explains the timing or grant of the bonus.
The evidence is insufficient to show that either of the
separate entities or the merged entity had a past practice
of granting bonuses at the end of the fiscal year, even
when faced with a projected surplus. The only bonus
that was similar to the pre-election bonus paid in 2000
was given 5 years earlier in 1995 by the Society to Ad­
vance the Retarded and Handicapped. The 1995 bonus
was an across-the-board cash bonus, which ranged gen­
erally from $100 to $400, and was announced to employ­
ees on June 30. The similarities end there. The 1995
bonus differed from the 2000 bonus in that customary
withholdings made in 1995 would have reduced the
amounts employees actually received. It was also paid 1
week after the fiscal year ended.
When faced with a surplus in 1998, the Society to Ad­
vance the Retarded and Handicapped initiated the QEP
and did not give across-the-board bonuses. In 1999,
when S.T.A.R. Residential Services paid its employees
fiscal year-end bonuses, eligible employees received a
contribution to their pensions, while other employees
received $225. It is not clear whether the cash bonuses
were reduced by withholdings. Not only were the 1999
bonuses not across-the-board cash bonuses, they were
paid 2 months after the end of the fiscal year, in August,
not promptly at the end of the year, as in this case.
It is clear that in prior years when the Employer did
grant bonuses, it did so in a significantly different man­
ner with respect to amount, scope or eligibility, and tim­
ing. As stated above, the 2000 bonus was larger than the
bonuses distributed in 1995 and 1999. Withholdings
were deducted from the 1995 bonus, reducing the
amounts the employees actually received, and the 1999
bonus of $225 was substantially less than the preelection
bonus of up to $400. Additionally, the record does not
reveal whether the 1999 bonus was further reduced by
withholdings. In the 6 years from 1995 to 2000, inclu­
sively, the Employer had surpluses in 4 years but only
paid across-the-board, cash bonuses in 1995 and 2000.
In 1999, although all of the employees received a bonus,
an unspecified number of the employees received a 3
percent contribution to their retirement fund instead of
cash. In 1998, under the QEP, bonuses were not paid on
an across the board basis, if paid at all.
The 2000 bonus was announced on June 27, and paid
almost immediately, on June 30. This contrasts sharply
with the 1999 bonus, which was not paid until August
26—2 months after the decision to pay it was made and
more than 3 weeks after written notice of it was given to
employees. It also contrasts with the 1995 bonus, which
too, was paid after the fiscal year ended. The Em­
ployer’s accounting method and its contractual obligation
to provide financial reports permitted it make actual pay-
outs after the end of the fiscal year. The rushed payment
of the 2000 bonus clearly supports a reasonable inference
that it was timed to influence the employees’ choice in
the election.
In short, the 2000 pre-election bonus was larger than
previous bonuses, was paid to proportionately more em­
ployees, and was paid faster than previous bonuses. Its
potential impact on employees, meanwhile, is clear.
Even though the Employer announced to employees that
it was paying the 2000 fiscal year-end bonus pursuant to
past practice, the lack of a practice belies the explanation.
New employees would not reasonably have expected the
bonuses, and as stated above, those with lengthy tenures
would have been aware of the differences in the amount,
scope, and timing of the pre-election bonus payments.6
In view of our determination that the bonus was not
paid pursuant to past practice, we find it unnecessary to
determine whether the hearing officer inaccurately ana­
lyzed the Employer’s actual and projected budgets, as the
Employer asserts in its exceptions. Further, we reject the
Employer’s assertion, in its motion to reopen the record,
that the hearing officer’s recommendations must be re-
examined because its concern about having to return
funds to the State (i.e., “cost-settling”) was substantiated
when it received a notice dated January 2001 from the
State. Contracts for the years 1995, 1999, and 2000 are in
evidence, and each contains cost-settling language.7 Fur­
ther, a former consultant to S.T.A.R. Residential, Agatha
Evans, and Benzhaf each testified that paying money
back to the State was a consideration at the June 1999
6 See generally DMI Distribution of Delaware, Ohio, Inc., 334
NLRB 409 (2001) (employer’s 11-year practice of paying cash for
extra work at other facilities was not shown to be a practice at the two
year-old facility in issue, and employees would reasonably have under-
stood that the bonuses were paid in order to influence their votes). See
also Perdue Farms, Inc., 323 NLRB 345 (1997) (employer’s timing of
a wage increase was deemed objectionable, as was the timing of its
implementation of a pre-petition decision to eliminate attendance bo­
nuses and roll them into salaries). Member Cowen does not rely on
either of the above-cited cases in finding the Employer’s conduct objec­
tionable.
7 The Employer’s 2001 contract is also in evidence. It, too, contains
cost-settling language.
STAR, INC. 964
and June 2000 board meeting at which the decisions to
pay bonuses were made.8 Assuming that cost-settling
was a factor in the decision to pay bonuses in every year
that surpluses existed, we find that it is not an exigency
that would justify the different manner and timing of the
payment of the 2000 bonus. This is because the Em­
ployer was not required to pay the bonus before the end
of the fiscal year on June 30. Thus, the Employer could
have waited until after the election period to announce
and pay the bonus and still avoided returning funds to the
8 The minutes from these meetings do not reflect that cost-settling
was considered.
State. Hence, we find that the possibility of cost-settling
with the State and the State’s subsequent notice of intent
to do so are not dispositive, given that the timing and
method of payment tended to interfere with the employ­
ees free choice.
Accordingly, we find that the Employer engaged in ob­
jectionable conduct when it paid the employees a fiscal
year-end bonus 2 weeks prior to the election.
[Direction of Second Election omitted from publica­
tion.]