Stone Boat YardDownload PDFNational Labor Relations Board - Board DecisionsSep 30, 1983264 N.L.R.B. 981 (N.L.R.B. 1983) Copy Citation STONE BOAT YARD Stone Boat Yard and United Brotherhood of Car- penters and Joiners of America, Local 1149, AFL-CIO. Case 32-CA-3304 September 30, 1983 DECISION AND ORDER BY CHAIRMAN VAN DE WATER AND MEMBERS FANNING AND ZIMMFIRMAN On January 8, 1982, Administrative Law Judge Gerald A. Wacknov issued the attached Decision in this proceeding. Thereafter, the General Counsel and the Charging Party filed exceptions and sup- porting briefs, and Respondent filed an answering brief. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the Na- tional Labor Relations Board has delegated its au- thority in this proceeding to a three-member panel. The Board has considered the record and the at- tached Decision in light of the exceptions and briefs and has decided to affirm the rulings, find- ings, and conclusions of the Administrative Iaw Judge only to the extent consistent herewith. The complaint alleges that Respondent violated Section 8(a)(5) and (1) of the Act by unilaterally discontinuing payments to the Union's health and welfare and pension plans and by unilaterally im- plementing an alternative health insurance plan. The Administrative Law Judge concluded that Re- spondent did not violate the Act as alleged; there- fore, he dismissed the complaint in its entirety. The relevant facts are not disputed and are set out in detail in the Administrative Law Judge's Decision. The Pacific Coast Metal Trades Master Agreement, herein called the Master Agreement, negotiated by the United Brotherhood of Carpen- ters and Joiners of America, AFL-CIO, and the major shipbuilding companies on the west coast, was effective July 1, 1977-June 30, 1980. Within Local 1149's jurisdiction, there are approximately eight independent boat yards-companies which are not members of the multiemployer bargaining association. These eight independents, of which Respondent is one, have always become signatories to the Master Agreement. Respondent on July 5, 1977, signed onto the Master Agreement which was to expire June 30, 1980. The 1977-80 Master Agreement required Respondent to make certain payments to the union health and welfare and pen- sion plans. On April 15, 1980,1 the International wrote Respondent that it sought negotiations for a new agreement. On May 21, Respondent wrote the Union that it intended "to offer substantial changes in the entire contract effective 1 July 1980." Re- ' All dates hereinafter are 1980 unless otherwise specified 264 NLRB No. 130 spondent's president testified that he did not speci- fy what the "substantial changes" might be because he expected the Union to respond immediately to his letter. Negotiations between the International and the major shipbuilding companies for a new master agreement commenced on May 29 in Olym- pia, Washington, and continued throughout June. Respondent made several phone calls in June to the business agent of the Union, but the agent was in Olympia at the negotiations. In late June, Re- spondent announced to its employees that, effective July 1, Stone Boat Yard was implementing a com- pany-funded medical insurance plan and that effec- tive January 1, 1981, a company-funded program would be implemented. The contract expired June 30: on July 1, Respondent ceased making payments to the Union's health and welfare and pension plans and implemented its company-funded health plan. In mid-July the rank and file rejected the recent- ly negotiated new Master Agreement. Following further negotiations, a second version of a new master agreement was ratified on approximately August 15. On August 21 the Union wrote Re- spondent outlining the terms of the new Master Agreement, stating that those new terms were ef- fective July 1, and noting that the new contracts would be available as soon as received from the printers. Seven of the eight independents signed the new Master Agreement. Respondent and the Union held several negotiating meetings but consensus was not reached and Respondent did not sign the new Master Agreement. The Union filed the charge on January 5, 1981. The Administrative Law Judge dismissed the complaint. He began his analysis by quoting the following Board language of Gordon L. Rayner and Frank H. Clark, d/b/a Bay Area Sealers, 251 NLRB 89, 90 (1980): "[Upon contract expiration, an employer must continue to apply the contract terms which govern the employer/union relation- ship] unless the employer gives timely notice of its intention to modify a condition of employment and the union fails to timely request bargaining." In the Administrative Law Judge's view, the Board in Bay Area Sealers created "an exception" to an em- ployer's general obligation to continue applying the terms of an expired collective-bargaining agree- ment. He then found that this "exception" applied to the facts of this case. Thus, in the Administra- tive Law Judge's view, Respondent here gave timely notice of its intention to modify the contract when it wrote that it desired to offer "substantial changes" which would be effective July 1, 1980. Characterizing this notice as "rather pointed lan- guage" which should have put the Union on notice 981 DECISIONS OF NATIONAL LABOR RELATIONS BOARD that Respondent would not sign a me-too contract, the Administrative Law Judge then focused on the Union's failure to communicate with Respondent from late May until late July. The Administrative Law Judge found that the Union, apparently due to its desire to first negotiate a master contract and then to pressure Respondent into signing that con- tract, chose to ignore Respondent's May and June requests for bargaining. He concluded that such action falls within the "exception" set out in Bay Area Sealers and therefore dismissed the complaint. The General Counsel and the Union except to that conclusion. We find merit in the argument of the General Counsel and the Union. The record demonstrates that no bargaining im- passe had been reached in this case prior to Re- spondent's unilateral implementation of the changes in the terms and conditions of employment. In ad- dition, there is no evidence that the Union here waived its right to bargain over the changes made by Respondent, nor is there evidence that the Union acquiesced in Respondent's action. It does appear that the Union preferred to bargain with Respondent after the negotiations with the major companies for a new master agreement had been completed. And it is true that when an employer has diligently and earnestly sought to engage in bargaining and the union has continually avoided or delayed bargaining, the employer is justified under certain circumstances in implementing unilat- eral changes in the terms and conditions of em- ployment. See, e.g., AAA Motor Lines, Inc., 215 NLRB 793 (1974).2 However, one of the circum- stances which the Board insists upon in such cases is that the employer's unilateral change must be consistent with the employer's previous proposal to the union of changes in the expired contract. Ace Galvanizing, Inc., 217 NLRB 144, 146 (1975); Allen W Bird II, Receiver for Caravelle Boat Company, a Corporation, and Caravelle Boat Company, 227 NLRB 1355, 1358 (1977). Here, Respondent never provided the Union any type of written or detailed proposal of changes in the expired contract. As the Union and Respondent did not reach a bargaining impasse, and the Union did not waive its right to bargain about the changes which were implement- ed, and Respondent did not implement changes which were consistent with any previously rejected offer, Respondent's implementation on July 1 of the changes in terms and conditions of employment a In AAA, the employer in April timely notified the union of its inten- tion to terminate the contract and submitted its proposed contract to the union along with a request to commence bargaining. For 2-1/2 months thereafter, the union refused to meet or bargain with the employer. Upon expiration of the contract, the employer unilaterally implemented changes in terms and conditions of employment. All the changes were consistent with the employer's detailed contract proposal, which the union had in its possession for 2-1/2 months. violated its duty to bargain. Dial Tuxedos, Inc., 250 NLRB 476 (1980); cf. AAA, supra at 794.3 Accord- ingly, we hold that Respondent has violated Sec- tion 8(a)(5) and (1) of the Act 4 since July 1, 1980, by ceasing to make contributions to the union health and welfare and pension funds and by imple- menting the company-funded medical insurance plan. 5 CONCLUSIONS OF LAW 1. The Respondent, Stone Boat Yard, is an em- ployer engaged in commerce within the meaning of Section 2(6) and (7) of the Act. 2. United Brotherhood of Carpenters and Joiners of America, Local 1149, AFL-CIO, is a labor or- ganization within the meaning of Section 2(5) of the Act. 3 Our dissenting colleague does not question the long line of Board de- cisions holding that any changes unilaterally implemented by an employ- er following contract expiration must, inter alia, be consistent with the prior proposal made by the employer during bargaining. See cases cited .n the text herein, plus Peerless Roofing Co., Ltd., 247 NLRB 500, 503-504 (1980). In light of that principle, we are at a loss to understand our dis- senting colleague's analysis. In effect, he would find that an employer has lawfully made a unilateral change that is consistent with its prior propos- al though it has made no prior proposal. It is this internal contradiction that causes us to reject our colleague's analysis. Additionally, our decision serves to foster and promote stable labor re- lations. The important functions of informing the union what changes in the contract are sought by the employer and putting the union on notice that after a reasonable period of time union inaction might result in the employer's unilateral implementation of these proposed changes have led the Board, and leads us, to require that an employer provide a union with a written copy of its proposed contract changes prior to unilaterally im- plementing them. Peerless Roofing, supra at 503; Allen W. Bird, supra at 1358; M & M Building and Electrical Contractors, Inc.. d/b/a M & M Con- tractors, 262 NLRB 1472 (1982). 4 The Administrative Law Judge's reading of the "exception" set out in Bay Area Sealers is overly broad. An employer is not justified under Bay Area Sealers in unilaterally implementing changes in terms or condi- tions of employment after the contract expires unless, inter alia, it first provides the union a written detailed proposal of changes in the expired contract Here, Respondent simply informed the Union it planned to offer substantial changes in the contract; Respondent never offered any specific changes and never provided the Union a written detailed propos- al. Thus, when Respondent unilaterally changed certain terms and condi- tions of employment, it violated Sec. 8(aX5). 5 Respondent argues that the charge here was filed after expiration of the 6-month statute of limitations provided in Sec. 10(b) of the Act. In late June, Respondent announced to the employees that various changes in fringe benefits would be made as of July I. The changes at issue in this case were made on July 1. Respondent maintains that since the Union did not file a charge until January 5, 1981, the charge is untimely filed. The Union argues that it did not have knowledge of the changes until late July or August and that therefore the charge is timely filed. We find the Union's argument persuasive. We note first that the Administrative Law Judge did not rule on his issue merely stating that in light of his finding to dismiss the complaint on the merits, he deemed it "unnecessary to re- solve this issue." More significantly, the relevant testimony-which the Administrative Law Judge failed to cite-does not support Respondent's position. The Union's president testified that he first learned at the end of July or in August of the Respondent's cessation of contributions and im- plementation of its own medical insurance plan. Respondent's president testified that sometime in August was the first time that the Company in- formed the Union that it had on July I unilaterally implemented a com- pany-funded medical insurance plan. We thus find that the charge of Jan- uary 5, 1981, was timely filed. 982 STONE BOAT YARD 3. All carpenters, shipwrights, joiners, marine millmen, boatbuilders, stage riggers, wood caulkers, loftsmen, leadingmen, helpers, trainees and appren- tices employed by Respondent excluding all other employees, office clerical employees, professional employees, guards, and supervisors as defined in the Act, constitute an appropriate unit for the pur- poses of collective bargaining within the meaning of Section 9(b) of the Act. 4. Since on or about July, 1977, the above-named labor organization has been the designated exclu- sive representative of the employees in the afore- said appropriate unit for the purpose of collective bargaining within the meaning of Section 9(a) of the Act. 5. By unilaterally ceasing payments on July 1, 1980, to the health and welfare and pension plans established by the collective-bargaining agreement which expired June 30, 1980, Respondent has en- gaged in, and is engaging in, unfair labor practices within the meaning of Section 8(a)(5) and (1) of the Act. 6. By unilaterally implementing on July 1, 1980, a medical group insurance plan, Respondent has engaged in, and is engaging in, unfair labor prac- tices within the meaning of Section 8(a)(5) and (1) of the Act. 7. The aforesaid unfair labor practices are unfair labor practices within the meaning of Section 2(6) and (7) of the Act. THE REMEDY Having found that Respondent has engaged in certain unfair labor practices, we shall order it to cease and desist therefrom and to take certain af- firmative action designed to effectuate the policies of the Act. We have found that Respondent since July 1, 1980, violated Section 8(a)(5) and (1) of the Act by ceasing to make contributions on behalf of its bar- gaining unit employees to the Union's health and welfare and pension plans. In order to dissipate the effect of these unfair labor practices, we shall order Respondent to commence making the required con- tribution to the respective plans and to transmit to the appropriate plans the contributions it has failed to make since its unlawful cessation of payments. 6 e Because the provisions of employee benefit fund agreements are vari- able and complex, the Board does not provide at the adjudicator)y stage of the proceeding for the addition of interest at a fixed rate on unlawfully withheld fund payments. We leave to the compliance stage the question whether Respondent must pay any additional amounts into benefit funds in order to satisfy our "make-whole" remedy These additional amounts may be determined, depending upon the circumstances of each case, by reference to provisions in the documents governing the funds at issue and, where there are no governing provisions, to evidence of any loss directly attributable to the unlawful withholding action, which might in- clude the loss of return on investment of the portion of funds withheld. In addition, we shall order Respondent to make whole employees in the unit for the losses or ex- penses they suffered due to Respondent's unilateral cessation of payments, with interest computed under the "other monetary remedies" category set forth in Florida Steel Corporation, 231 NLRB 651 (1977). 7 ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Re- lations Board hereby orders that the Respondent, Stone Boat Yard, Alameda, California, its officers, agents, successors, and assigns, shall: I. Cease and desist from: (a) Refusing to bargain collectively with the United Brotherhood of Carpenters and Joiners of America, Local 1149, AFL-CIO, as the representa- tive of its employees in the appropriate unit de- scribed as follows: All carpenters, shipwrights, joiners, marine millmen, boatbuilders, stage riggers, wood caulkers, loftsmen, leadingmen, helpers, train- ees and apprentices employed by Respondent excluding all other employees, office clerical employees, professional employees, guards, and supervisors as defined in the Act. (b) Failing and refusing to make contributions on behalf of its employees in the above-described unit since July 1, 1980, to the United Brotherhood of Carpenters and Joiners of America, Local 1149, AFL-CIO, health and welfare and pension plans. (c) Unilaterally instituting its own medical insur- ance plan with respect to employees in the above- described appropriate unit. (d) In any like or related manner interfering with, restraining, or coercing employees in the ex- ercise of the rights guaranteed them in Section 7 of the Act. 2. Take the following affirmative action neces- sary to effectuate the policies of the Act: (a) Upon request, bargain collectively with the Union as the exclusive representative of employees in the above-described unit and, if an understanding is reached, embody such understanding in a signed agreement. (b) Restore making payments to the union health and welfare and pension plans as it did prior to the discontinuance of said payments on July 1, 1980, for the employees in the aforesaid unit. additional administrative costs, etc.. but not collateral losses. Merryweather Optical Company, 240 NLRB 1213 (1979). 7 See, generally, Isis Plumbing & Heating Co., 138 NLRB 716 (1962). Nothing in our Decision and Order shall be construed as requiring Re- spondent to rescind the medical insurance plan benefits, which it unilater- ally established, the implementation of which, we find, violated the Act. 983 DECISIONS OF NATIONAL LABOR REI.ATIONS BOARD (c) Make employees in the aforesaid unit whole for any losses or expenses they may have suffered as a result of the unilateral discontinuance, as set forth in the section of this Decision and Order enti- tled "The Remedy." (d) Pay into the union health and welfare and pension plans those contributions it has failed to pay as a result of said unilateral change. (e) Preserve and, upon request, make available to the Board or its agents, for examination and copy- ing, 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. (f) Post at it Alameda, California, facility copies of the attached notice marked "Appendix."8 Copies of said notice, on forms provided by the Regional Director for Region 32, after being duly signed by Respondent's authorized representative, shall be posted by Respondent immediately upon receipt thereof, and be maintained by it for 60 con- secutive days thereafter, in conspicuous places, in- cluding 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. (g) Notify the Regional Director for Region 32, in writing, within 20 days from the date of this Order, what steps Respondent has taken to comply herewith. CHAIRMAN VAN DE WATER, dissenting: Contrary to my colleagues, I would adopt the Administrative Law Judge's finding that Respond- ent did not violate Section 8(a)(5) and (1) of the Act by unilaterally implementing changes in its em- ployees' terms and conditions of employment. In my view, Respondent satisfied all of the obligations imposed on it by our statute before making such changes while the Union failed in its concomitant responsibilities. Respondent is signatory to a multiemployer asso- ciation shipbuilding agreement herein referred to as the Master Agreement. Respondent is not, howev- er, a member of the multiemployer association; it is referred to as an independent. By letter dated April 15, 1980,9 the Union informed Respondent that the then current contract would expire on June 30 and requested that it hear from Respondent "at [Re- spondent's] earliest convenience" regarding negoti- 8 In the event that 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 Pursu- ant to a Judgment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board." I All dates are in 1980 unless otherwise indicated. ations for a new contract. Richard Folker, Re- spondent's president, replied in writing on May 21 that Respondent intended to offer "substantial changes in the entire contract effective I July 1980." Folker did not specify what these changes might be since he expected the Union to respond immediately. Upon receiving no response from the Union, Folker telephoned the Union's office during early June to arrange a discussion of the contract with the business agent. Folker was repeatedly informed by the Union's receptionist that the business agent was either busy, out of town, or in Portland, Oregon, for negotiations. ' Hearing nothing from the Union, Folker met with Respondent's employ- ees, discussed the Company's progress, and an- nounced changes in fringe benefits effective July 1. Also effective that date, Respondent discontinued payments into the Union's health and welfare and pension funds. Ted Knudson is the Union's business agent. He was actively involved in the Master Agreement ne- gotiations starting at the end of May and continu- ing through June. The first contact Knudson had with Respondent after Respondent's May 21 letter was on July 22 when Knudson informed Respond- ent that a second offer had been received from the employer association.t l Knudson and Folker con- versed by phone on July 24 at which time a meet- ing was set for July 30 to discuss Respondent's assent to the Master Agreement. On August 22, Knudson requested Respondent's signature on the recently ratified master agreement. By this time, Respondent had unilaterally instituted certain con- tract changes. Knudson was asked al the hearing whether he responded in any way to Respondent's May 21 letter. He testified that he did not because there was nothing he could say, he was leaving the next day for Portland, and he could not tell Folker any- thing until the conclusion of the Master Agreement negotiations. Knudson also testified that he in- formed Union Official Gerald Krahn' 2 of Re- spondent's May 21 letter. Krahn indicated that "they'll [Respondent] just have to wait till we get through here [Portland] with our negotiations." Knudson obviously complied with Krahn's implied instructions. On these facts, my colleagues find that Respond- ent violated Section 8(a)(5) by unilaterally imple- menting contract changes and ceasing payments la Negotiations for a Iiew master agreement began in Portland on or about May 29 " l The first tentative Master Agreement was rejected by the Union's membership on June 30. i2Krahn sent the Union's reopener letter to Respondent in April. 984 STONE BOAT YARD into various union benefit funds. They note that no bargaining impasse had been reached, there was no waiver by the Union of its right to bargain over the changes made by Respondent, and there had been no acquiesence by the Union in those changes. My colleagues note, strictly in passing, that "it does appear" that the Union "preferred" to wait until the conclusion of the Master Agreement negotiations before dealing with Respondent. 13 And they admit that, under certain circumstances, an employer may implement changes if the em- ployer has diligently and earnestly sought bargain- ing and the union has continually avoided or de- layed bargaining. Yet, in spite of the obvious, my colleagues insist that an 8(a)(5) violation has been committed by fo- cusing on the fact that the Employer did not pro- vide the Union with any written or definite con- tract proposals. In my opinion, their emphasis on this "omission" is misplaced: they have disregarded what Respondent did do to meet its obligations. More importantly, they have completely ignored the Union's contribution, or, more accurately, its lack thereof, to this state of affairs. Upon the expiration of a collective-bargaining contract, an employer must continue to honor the terms and conditions of employment established by that contract. However, under certain circum- stances, an employer may be justified in implement- ing changes in the contract. Where an employer gives timely notice of its intention to modify the contract and the Union fails to timely request bar- gaining or a bargaining impasse is reached or the union waives its right to bargain or the union ac- quiesces in the proposed changes, an employer may lawfully implement its changes. 4 Respondent gave prompt notice of its intention to modify the contract and continued to seek a re- sponse from the Union on its request for bargain- ing. The Union failed, over a prolonged period of time, to respond to the Employer's request.' 5 The Union admittedly purposefully delayed, in truth of fact, avoided, any contact with Respondent in order to negotiate a new master agreement. Respondent, on the other hand, at all times stood ready, willing, and able to bargain. Respondent anticipated, ex- pected, and sought negotiations; there is no sugges- tion that Respondent was hostile to the-Union or had any intention of bypassing the Union.' 6 The 1s My colleagues appear to be rather cavalier about these facts in the face of Knudson's uncontradicted testimony. 14 Gordon L. Rayner and Frank H. Clark. d/b/a Bay Area Sealers, 251 NLRB 89, 90 (1980). 1s I note that in its reopener letter, the Union requested the courtesy of an early response from Respondent. 16 See Kentron of Hawaii, Ltd.. Subsidiary of LTV Aerospace Corporu- tion, 214 NLRB 834, 835 (1974) Union's course of action demonstrates its intention to avoid any contact with th:e Respondent during the Master Contract negotiations; this decision ef- fectively foreclosed any bargaining. In my view, the Union cannot now be heard to complain.17 My colleagues place undue emphasis on the fact that Respondent did not provide the Union with a detailed or written contract proposal before effec- tuating its contract changes. I do not view this as being required by Section 8(d) of the Act.'8 More- over, considering what the Administrative Law Judge called "this rather pointed language" of Re- spondent's May 21 letter, the Union should have been on notice that the Employer was not going to accept any new master agreement without bargain- ing with the Union. Thus, the burden shifted to the Union to pursue the matter.t 9 In any event, for the Employer to have given more formal notice under the circumstances would have been futile, for the Union had made a conscious decision to ignore Re- spondent; the Union clearly did not desire to bar- gain with this employer until it had resolved mat- ters which it considered to be of superior prior- ity. 2 0 In view of the circumstances herein, particularly the Union's steadfast refusal to contact, meet, or bargain with Respondent and Respondent's equally steadfast attempts to pursue bargaining, I conclude that Respondent could, and did, lawfully imple- ment changes in its contract with the Union. I The Union could simply have informed Respondent that it would be tied up in other negotiations and that it would have to postpone any bar- gaining with Respondent. Perhaps Respondent would have accepted the delay. Moreover, the Union never kept the Respondent informed as to the progress of the Master Agreement negotiations. These simple steps, had they been taken by the Union, might have avoided this proceeding. ia Had my colleagues scrutinized my dissent more carefully, they would have seen, by this very statement in the text, that I clearly do question the need for an employer to submit contract proposals, in situa- tions such as involved herein, before unilaterally implementing the same. '1 Cf. Clarkwood Corporation, 233 NLRB 1172, 1173 (1977), where the Board noted its decision in Medicenter M.id-South Hospital, 221 NLRB 670, 678-679 (1975), holding that "[wlhen an employer notifies a union of proposed changes in terms and conditions of employment, it is incumbent upon the union to act with due diligence in requesting bargaining." (Em- phasis supplied.) Although the union there did receive notice of contem- plated changes, I find the principles equally applicable to the instant situ- ation where the Union was clearly put on notice that Respondent sought to make changes. 20 Cf. 4AA.4 Motor Lines. Inc., 215 NLRB 793, 794 (1974). The Union's conduct could be characterized as an anticipatory refusal to bargain in that by its actions it clearly intended to only offer the Respondent the identical contract negotiated as a master contract. Since Respondent was not bound by the bargaining, an inflexible attitude by the Union would be violative of Sec 8(bH3) of the Act. 985 DECISIONS OF NATIONAL LABOR RELATIONS BOARD APPENDIX NOTICE To EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government After a hearing at which all sides had an opportu- nity to present evidence and state their positions, the National Labor Relations Board found that we have violated the National Labor Relations Act, as amended, and has ordered us to post this notice. WE WILL NOT refuse to bargain collectively with the United Brotherhood of Carpenters and Joiners of America, Local 1149, AFL- CIO, as the representative of our employees in the appropriate unit described as follows: All carpenters, shipwrights, joiners, marine millmen, boatbuilders, stage riggers, wood caulkers, loftmen, leadingmen, helpers, train- ees and apprentices employed by the Em- ployer excluding all other employees, office clerical employees, professional employees, guards, and supervisors as defined in the Act. WE WILL NOT, without bargaining with the Union, discontinue making contributions to the Union's health and welfare and pension plans or make other unilateral changes in your working conditions without first bargaining with the Union. WE WII.L NOT in any like or related manner interfere with, restrain, or coerce our employ- ees in the exercise of the rights guaranteed them in Section 7 of the Act. WE WIL L. upon request, bargain collectively with the Union as the exclusive representative of employees in the above-described appropri- ate unit and, if an agreement is reached, embody such agreement in a signed contract. WE WILL. resume making payments into the Union's health and welfare and pension plans as existed prior to our discontinuance of such payments on July 1, 1980, and WE WILL pay into said plans all those contributions we have failed to pay as a result of unilateral actions. WE WILL make employees in said unit whole for any losses or expenses they may have suffered as a result of said unilateral dis- continuance, with interest. STONE BOAT YARD DECISION STATEMENT OF THE CASE GERALD A. WACKNOV, Administrative Law Judge: Pursuant to notice, a hearing with respect to this matter was held before me in Oakland, California, on September 9, 1981. The initial charge was filed on January 5, 1981, by United Brotherhood of Carpenters and Joiners of America, Local 1149, AFL-CIO (herein called the Union). Thereafter, on February 23, 1981, the Regional Direc- tor for Region 32 of the National Labor Relations Board (herein called the Board) issued a complaint and notice of hearing alleging a violation by Stone Boat Yard (herein called Respondent) of Section 8(a)(5) and (1) of the National Labor Relations Act, as amended (herein called the Act). The parties were afforded a full opportunity to be heard, to call, examine, and cross-examine witnesses, and to introduce relevant evidence. Counsel for the General Counsel and counsel for the Charging Party presented oral argument at the hearing. Since the close of the hear- ing, a brief has been received from counsel for Respond- ent. Upon the entire record, and based upon my observa- tion of the witnesses and consideration of the arguments presented and the brief submitted, I make the following: FINDINGS OF FACT I. JURISDICTION Respondent is a California corporation with an office and place of business located in Alameda, California, where it has been engaged in operating a boat building and repair yard. Respondent, in the course and conduct of its business operations, annually derives gross rev- enues in excess of $500,000, a substantial portion of which reflects work performed for pleasure, rather than commercial, boat owners, and during the past 12 months preceding the hearing herein has performed services valued in excess of $5,000 for the United States Govern- ment. As Respondent's business operations meet the Board's retail jurisdictional standards, I find that Respondent is an employer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act. II. THE LABOR ORGANIZATION INVOLVED It is admitted that the Union is, and has been at all times material herein, a labor organization within the meaning of Section 2(5) of the Act. Ill. THE AL LEGED UNFAIR LABOR PRACTICES A. The Issues The principal issue raised by the pleadings is whether Respondent has violated and is violating Section 8(a)(5) and (1) of the Act by announcing and implementing changes in employees' benefits. 986 STONE BOAT YARD B. The Facts The salient facts are not in material dispute. Respondent and the Union have maintained a collec- tive-bargaining relationship since at least 1977, when Re- spondent became a signatory to the standard multiem- ployer association shipbuilding agreement. The most recent association agreement, entitled "The Pacific Coast Metal Trades Master Agreement," expired on June 30, 1980. On April 15, 1980, the Union sent the following con- tract reopening letter to Respondent: In accordance with Article 34 of the current Agree- ment between the Pacific Coast Marine Carpenters' Council and Employers' engaged in shipbuilding and repair, boat building and allied industries. This is notification that the current Agreement and any or all addendums or understandings, expires at mid- night June 30, 1980. May we hear from you at your earliest convenience on making arrangements to begin negotiations for a new Agreement. The agreement contains the following pertinent provi- sions: This Agreement, effective July 1, 1977, shall remain in full force and effect until June 30, 1980, and from year to year thereafter, unless either Party shall, at least sixty (60) days, but not more than ninety (90) days prior to any anniversary date, notify the other Party in writing of any desire to make changes in or to terminate this Agreement. * * a * All existing Practices, Customs, Understandings or Local Agreements of any nature whatsoever, whether expressly covered by the Master Agree- ments or otherwise, will continue in effect un- changed until June 30, 1980, except as specifically modified as provided herein or by Mutual Agree- ment between the Parties. On May 21, 1980, Respondent's president, Richard Folker, sent the following written reply:' This notifies you in accordance with the subject ar- ticle that it is the intent of Stone Boat Yard Inc. to offer substantial changes in the entire contract effec- tive I July 1980. The letter was sent to the Portland, Oregon, address ap- pearing on the Union's April 15 reopening letter, but was returned. Thereupon, Folker sent it to the Union's Oak- land, California, address. It was received by the Union on May 28, 1980. Folker testified that he did not deem it necessary to specify the nature of the "substantial changes" he desired to negotiate, as he expected to present these matters to The record indicates that Folker apparently spoke to a union repre- sentative about the matter prior to May 21, 1980, but the record contains no evidence regarding the substance of the conversation the union representative whom he anticipated would contact him forthwith. There being no response from the Union, Folker called the union office several times during the month of June in order to request that the Union's business agent meet with him to discuss the con- tract, but was told by the receptionist on these various occasions that the business representative was either busy, out of town, or unavailable due to his participation in contract negotiations in Portland, Oregon. Ted Knudson is financial secretary and business repre- sentative of the Local. Commencing the last part of May, and throughout the month of June, Knudson was preoccupied with negotiations involving the Master Agreement. These negotiations, conducted in Portland, Oregon, began on or about May 29. On or about June 30, the Union's membership failed to ratify the tentative agreement which had been reached by the bargaining representatives, and negotiations continued thereafter. On July 22, Knudson sent Respondent the following form letter: We have been informed the Negotiating Committee has received a second offer from the Ship Builders Association which will be voted on by the mem- bers. The new contract will call for 90 [cents] per hour increase effective July 1, 1980, which will make the Journeyman rate of $11.57 per hour. Fringe benefits will be increased 25 [cents] per hour which will make Health & Welfare contribution of 93 [cents] per hour, and Pension contribution of $1.23 per hour. When the contract is approved by the members, copies of the complete agreement will be made available to you for your signature. On July 24, Folker phoned Knudson. While there is no record testimony of the substance of this conversa- tion, Folker's terse notes indicate that he advised Knud- son of the necessity for a conference at Respondent's premises in order to "determine extent of union involve- ment." Knudson's notes of the same conversation state, "Rich Folker called to say he would not sign an agree- ment but would like to talk regarding an opened shop ar- rangement." Knudson testified that he assumed Folker's reference to an opened shop arrangement meant he would not sign the Master Agreement. Apparently, during this conversation, a meeting was arranged for July 30, and it was held as scheduled. The master contract was ratified on or about August 15. By letter dated August 21, Knudson advised Re- spondent of this fact, and set forth the new wages and fringe benefit amounts embodied in the Master Agree- ment, stating that such amounts are "now due and pay- able," and that "[t]he new contracts will be made availa- ble to you as soon as they are received from the print- ers." Knudson testified that the local union organizers are "delegated to go out and get these independents [such as Respondent] to sign the same agreement as the master agreement," and that the Union has a strong policy to have the independents execute the same contract, at least 987 DECISIONS OF NATIONAL LABOR RELATIONS BOARD to cost items, including wages, holidays, health and wel- fare, and pensions. Knudson stated that "we don't really negotiate with the independents . . . that over the past years have always signed what comes out of the master agreement." Knudson testified that he was gone most all of June. On July 30, at the meeting, Knudson was hopeful that he could get the Master Agreement signed, and alterations could probably be discussed. Acknowledging that he received Folker's May 21 letter to reopen negotiations, Knudson testified that he did not respond in any way because there was nothing he could say. Thus, Knudson explained that negotiations on the master contract were soon to commence, that he would be unavailable during the month of June, and that negotiations with the independents could not begin until the master negotiations were concluded. He discussed the matter with Gerald Krahn, a union official, who sent the initial April 15 reopening letter, and Krahn said Re- spondent would just have to wait until the Master Agreement was negotiated. Thereafter, Knudson made no effort to contact Respondent until July 22 when he sent the aforementioned form letter to Respondent and other independents. Having not heard from the Union, Folker held a meet- ing with his employees in late June. While the details of the meeting are not contained in the record, Folker ap- parently presented a verbal synopsis of the progress the Company had made, and announced various changes in fringe benefits. He also distributed a letter to each of the employees entitled "Company Progress Report," which states, inter alia, as follows: It is the policy of this company to continue to pay above average wages and offer company benefits of the finest quality available in the insurance market. Therefore, on July 1, 1980 the Prudential Life In- surance Company and Stone Boat Yard will jointly implement a medical group insurance plan for all employees and their dependents. The cost of the plan will be borne by Stone Boat Yard. The scope of coverage is extremely broad, matching or im- proving upon any other plans of its type. A mini- mum of 10 employees is required. Those who desire to continue their present coverage may do so by merely filing a change over form permitting Stone Boat Yard to pay direct to the desired facility. However, a thorough evaluation of this comprehen- sive program is imperative before making any choices. We will have a representative from Pru- dential go over every aspect of the plan on Tues- day, June 24th at 8:00 a.m. On or before I January 1981, a retirement program also operated by the Prudential Life Insurance Company will be imple- mented permitting everyone over the age of 24 to participate. This is an exciting financial opportunity not only for the employee but for the business. It is designed to give the employee a vested interest in his personal retirement fund only two years after starting and 100% vested interest after 10 years. This too will be the subject of a meeting with ex- perts from Prudential later this summer. The ques- tions of the relationship of other retirement pro- grams you may have with this one can be resolved. After I July 1980, all employees will be covered for Medical and Dental through the Prudential Life In- surance Company at no expense to the employees. Folker testified that as of July I he discontinued pay- ments to the Union's health and welfare fund, and insti- tuted the medical group insurance plan which was entire- ly funded by Respondent. Moreover, he ceased payments to the union pension fund. The record shows that the parties had several negoti- ating sessions after July 30, but that they were unable to reach agreement on the terms of a successor contract. C. Analysis and Conclusions In Gordon L. Rayner and Frank H. Clark, d/b/a Bay Area Sealers, 251 NLRB 89, 90 (1980), the Board noted an exception to an employer's general obligation to con- tinue applying the terms of an expired collective-bargain- ing agreement, as follows: Although an employer's contractual obligations cease with the expiration of the contract, those terms and conditions established by the contract and governing the employer-employee, as opposed to the employer-union, relationship survive the con- tract and present the employer with a continuing obligation to apply those terms and conditions, unless the employer gives timely notice of its inten- tion to modify a condition of employment and the union fails to timely request bargaining, or impasse is reached during bargaining over the proposed change. 2 In Bay Area Sealers the employer sent a termination notice to the union together with an offer to enter into negotiations for a new contract. Significantly, the Board found that the Union's failure to reply to the notice did not affect the employer's continuing obligation to apply the terms and conditions of the terminated contract, as the employer argued, rationalizing that the employer's prior unremedied unfair labor practices precluded such a defense. In the instant case, both parties gave timely notifica- tion of their desire to modify the contract.3 The Union requested a prompt reply from Respondent in order to arrange for the commencement of negotiations. Thereaf- ter, the Union was timely advised, more than a month 2 Similarly, an employer's unilateral implementation of changes in em- ployees' terms and conditions of employment may be justified by waiver or acquiescence of the employees' collective-bargaining representative. A-V Corporation, 209 NLRB 451, 453 (1974), and cases cited therein at fn. 8. 3 I find no merit in Respondent's argument that the Union's April 15 notice language permitted Respondent to unilaterally terminate any con- tract benefits upon the expiration of the contract, as neither such lan- guage, nor the record as a whole, constitutes the necessary clear and un- mistakable evidence which would support Respondent's argument in this regard. See Wayne's Olive Knoll Farms Inc.. d/b/a Wayne's Dairy, 223 NLRB 260, 265 (1976). 988 STONE BOAT YARD prior to the contract's expiration, of Respondent's inten- tion to offer "substantial changes in the entire contract effective 1 July 1980." Despite this rather pointed lan- guage which should, I find, have reasonably put the Union on notice that Respondent was not simply willing to sign a "me too" association contract, the Union did nothing to even attempt to discern what Respondent had in mind. Nor was the Union's lack of diligence4 simply inadvertent, but rather its failure to act was the result of a conscious decision by union representatives who, after specifically discussing the matter, arrived at the conclu- sion that there was nothing the Union was in a position to then bargain about. Thus, rather than attempt to com- mence negotiations or seek Respondent's agreement to postpone them, the Union, preoccupied with the Master Agreement negotiations, completely ignored Respond- ent's attempts to negotiate. There is no contention that Respondent was attempt- ing to evade its bargaining obligation or that its conduct was discriminatorily motivated. To the contrary, the record evidence shows, and I find, that Folker made sev- eral telephonic attempts to commence negotiations, but that his efforts were ignored. Thereupon, he announced his intentions regarding health insurance and a pension plan to each of his employees, in writing, prior to the ex- piration of the contract. And following the implementa- tion of the health insurance plan, totally funded by Re- spondent, contract negotiations commenced and contin- ued until some months later when the instant charge was filed. The General Counsel represented at the hearing that it was not being contended that Respondent bar- gained in bad faith following the commencement of ne- gotiations. Further, the record evidence demonstrates that, even if the Union had been advised with particularity that Re- spondent intended to institute the changes in health in- surance and in the pension plan upon the expiration of the contract, the likelihood of meaningful bargaining would have been precluded by the Union's virtual inabil- ity to negotiate such changes pending resolution of the Master Agreement. Indeed, the Union's business repre- sentative virtually admitted that he lacked the authority 4 See American Business. Inc., 164 NLRB 1055. 1056 (1967). to negotiate any substantive terms and conditions which deviated from those of the Master Agreement. See U.S. Lingerie Corporation, 170 NLRB 750, 752 (1968). Respondent also maintains that the charge herein is barred by Section 10(b) of the Act, which establishes a 6-month statute of limitations period. The changes which Respondent implemented on July I were announced to the employees in late June, and the charge was filed on January 5, 1981, beyond the limitations period. Neverthe- less, the Union maintains that it had no knowledge of the changes until late July or August, and that the 10(b) period would not begin to run until that time.5 It is diffi- cult to believe that the Union would not have obtained knowledge of Respondent's intentions as early as late June when the employees were so advised, in writing. Moreover, it would appear that the Union's alleged lack of knowledge resulted from its failure to exercise reason- able diligence in contacting Respondent, as stated above. However, in light of my findings below, I deem it unnec- essary to resolve this issue. On the basis of the foregoing, I find the record evi- dence and cases cited by the General Counsel and Union during oral arguments insufficient to establish that Re- spondent has violated the Act as alleged, and I shall therefore dismiss the complaint herein. CONCLUSIONS OF LAW I. Respondent is an employer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act. 2. The Union is a labor organization within the mean- ing of Section 2(5) of the Act. 3. Respondent has not violated the Act as alleged. [Recommended Order for dismissal omitted from pub- lication.] I See Wisconsin River Valtey District Council of the Lnirted Brotherhood of Carpenrers and Joiners of .4nerica. A4FL-CIO (Skippy Enterprises. Inc.), 211 NLRB 222, 227 (1974), enfd 532 F.2d 47 (7th Cir 1976). 6 The following additional cases. cited by the General Counsel and the Charging Party, appear to be inapposite to the issues presented herein and are clearly distinguishable: Wayne's Olive Knoll Farms.& Inc., d/b/a Wayne' Dairy, supra., Capitol Roof & Supply Company, Inc. 217 NLRB 1004 (1975); Peerless Roofing Co., Ltd. 247 NLRB 500 (1980), enfd. 641 F.2d 734 (9th Cir 1981). 989 Copy with citationCopy as parenthetical citation