Stone Boat Yard

National Labor Relations Board - Board Decisions

Sep 30, 1983

264 N.L.R.B. 981 (N.L.R.B. 1983)

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