Texaco, Inc.Download PDFNational Labor Relations Board - Board DecisionsAug 6, 1987285 N.L.R.B. 241 (N.L.R.B. 1987) Copy Citation TEXACO, INC. Texaco, Inc. and Richard E. Turner and Kenneth N. Meyer and Don W . Gibson . Cases 19-CA- 12349, 19-CA-12390 , and 19-CA-12409 6 August 1987 SUPPLEMENTAL DECISION AND ORDER BY CHAIRMAN DOTSON AND MEMBERS JOHANSEN, BABSON, AND STEPHENS The issue in this case is whether the Respondent unlawfully suspended disability and other benefits for the three employee Charging Parties upon the commencement of an economic strike. On 24 March 1982 the National Labor Relations Board issued a Decision and Order' finding that the Re- spondent violated Section 8(a)(3) and (1) of the Act by suspending these benefits. The Board ordered the Respondent to cease and desist and to make whole the discriminatees for the benefits unlawfully withheld. Thereafter, the Respondent petitioned the United States Court of Appeals for the Ninth Circuit to review and set aside the Board's Deci- sion and Order, and the Board filed a cross-applica- tion for enforcement of its Order. While the case was pending before the Ninth Circuit, the Board issued its opinion in Conoco, Inc.2 In order to clari- fy both the impact of the Conoco opinion and the specific benefits involved in this case, the Board re- quested the Ninth Circuit to remand it. On 7 Feb- ruary 1983 the court granted the remand request. On 18 February 1983 the Board notified the parties of its decision sua sponte to reconsider the original Decision and Order. The Board has reconsidered its Decision and Order in light of the entire record. For the reasons stated below, we have reaffirmed our original find- ing of a violation for the Respondent's suspension of disability benefits. We have also specifically con- sidered the Respondent's suspension of one dis- abled employee's pension credit and its treatment of disabled employee medical insurance coverage. We find a violation with respect to the former but not the latter.3 I. This case involves three specific benefits avail- able to unit employees at the Respondent's Ana- cortes, Washington refinery during the term of a collective-bargaining agreement effective from 8 January 1979 to 8 February 1981. The first of these ' 260 NLRB 1192 265 NLRB 819 (1982). The Respondent has requested oral argument This request is denied as the record , the exceptions, and the briefs adequately present the issues and the positions of the parties 241 benefits is the Respondent's Accident and Sick (A&S) Benefit Plan, a corporatewide disability plan incorporated by reference into the contract, funded entirely by the Respondent, and providing financial benefits for employees absent from work because of either nonoccupational or occupational illness or injury. Under the A&S plan, nonoccupational ill- ness or injury benefits were computed on the basis of completed years of service, ranging from a mini- mum of 4 weeks of full pay and 2 weeks of half pay after I full year of service to a maximum of 13 weeks of full pay and 39 weeks of half pay after 10 years of service. Employees suffering occupational injury or illness were entitled to the 13/39-week maximum benefit regardless of length of service but subject to a deduction for workmen's compen- sation awards. Rules governing administration of the A&S plan include these provisions: 3. In order to qualify for benefits under this Plan, employees must, if required, present evi- dence satisfactory to the Company showing that an absence is due to illness or accident within the meaning of this Plan. 4. Illness or accident occurring when an em- ployee is not on duty will not serve to dis- qualify such employee for benefits under this Plan except where such illness or accident occurs while he or she is on (a) leave of absence granted for military service, or (b) leave of absence granted for personal business, or (c) layoff, or (d) vacation. However, where an illness or accident occurs during vacation and the illness or inju- ries continue beyond the date the employee is scheduled to return to work, he or she will be entitled, to the extent he or she is eligible therefore, to benefits for absence beyond that date on account of such illness or injuries. There is no evidence that the parties intended or that the Respondent at the Anacortes refinery has adhered to an interpretation of these provisions which (1) would equate absence during a strike with the four specifically identified disqualifying absences, or (2) place on disabled employees the burden of avoiding suspension of benefits by re- quiring such employees to report that absence during a strike was due to continued disability. It is undisputed, however, that strikers who became dis- abled while on strike were not entitled to A&S benefits. In addition to the A&S plan, the collective-bar- gaining agreement incorporates a group pension 285 NLRB No. 45 242 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD plan. Although the pension plan itself is not in the record, it was stipulated at the hearing that for pur- poses of determining eligibility for pension benefits an employee will not be credited for service in any month in which the employee is absent from work with less than full pay for 15 days or more. An em- ployee receiving full pay under the A&S plan for the requisite number of days qualifies for the monthly pension credit. The final benefit relevant here, although not ex- plicitly incorporated into the collective-bargaining agreement, is the Respondent's health insurance plan. The evidence establishes that the Respondent and the Union have agreed to provide all unit em- ployees, including those receiving A&S benefits, with a hospital-surgical-major medical benefits plan administered by the Skagit County Medical Bureau, to which the Respondent monthly contrib- utes the greater portion of each employee's premi- um, the remainder of which is deducted from each employee's pay. For employees with family cover- age, the Respondent contributed $84 monthly and the employee contributed $5.90. In January 1980 the Union and the Respondent were engaged in negotiations pursuant to a reopen- er provision in their collective-bargaining agree- ment. On 7 January the Union announced that the employees it represented at the Respondent's Puget Sound refinery would commence an economic strike in support of the Union's bargaining position if the parties failed to reach agreement by 4 p.m. the next day. At a bargaining session on 8 January, the Union rejected another contract offer from the Respondent. The Respondent then told the Union that it intended to continue to operate the plant with management personnel during a strike. The Respondent also stated that "in the event of a strike the Labor Agreement at the very minimum would be suspended and possibly terminated."4 It then detailed how it would administer various em- ployee benefit plans. In particular, the Respondent announced that: "[u]pon commencement of a strike, all A&S benefits will be discontinued, except in those cases involving industrial accident or injury"; any employee on strike for 15 days or more in any month would not receive pension credit and such employee's pension contributions would be sus- pended; and striking employees would be required to pay the total health insurance premium, includ- ing the Respondent's proportionally greater contri- bution normally made on their behalf, for the dura- tion of the strike. 4 Although the quoted language parallels language in art XV of the contract concerning exceptions to general no-strike, no-lockout provi- sions, it is undisputed that the Respondent does not rely on art XV as justification for the suspension of payments and credit at issue here The Union did strike on 8 January and the Re- spondent suspended benefit payments in accord with its previous announcement. During the strike the Respondent and the Union agreed through mid-January correspondence with the Skagit County Medical Bureau to cover the Respondent's contributory share of health insurance premiums by drawing from a health insurance fund surplus re- serve account, which had accumulated due to recent favorable claims experience. Ownership in- terests in the reserve account were equal to the rate of premium contributions; consequently, most of the money was attributable to the Respondent. As a result of 14 April 1980 memorandum and strike settlement agreements, the Respondent retro- actively remitted its full health insurance contribu- tion for January 1980 at the prestrike premium rate and increased its monthly contributions effective 1 April 1980. As noted, premium payments for Feb- ruary and March were paid from the accumulated surplus in accord with the parties' agreement. Don W. Gibson, Kenneth N. Meyer, and Rich- ard E. Turner are the only employees, unit or non- unit, identified as receiving A&S benefits for non- occupational illness or injury when the strike com- menced. Gibson and Meyer were receiving half pay benefits, while Turner was still receiving full pay. Consequently, only Turner qualified for pen- sion credit during the strike. When the strike began, the Respondent suspended A&S benefits for these three employees, suspended Turner's pension credit as well, and treated their health insurance premiums in the same manner as it treated strikers' premiums. There is no evidence of any direct com- munication between the Respondent and these em- ployees either before or during the strike. There is also no evidence of any contemporaneous effort by the Respondent to justify its treatment of these em- ployees by reference to the collective-bargaining agreement, specific plan provisions, or a past prac- tice of similar conduct in strike situations. In strike settlement negotiations, the Respondent was aware of the Union's opposition to suspension of the A&S benefits. The strike remained 100-percent effective among unit employees5 until the parties concluded memo- randum and strike settlement agreements ending the strike on 14 April 1980. Gibson and Meyer re- mained disabled throughout the strike period. A doctor released Turner to return to work on 12 April, but he did not return until 14 April. Al- though all three employees had actively participat- 5There were approximately 235 unit employees and 100 nonuntt em- ployees at the Puget Sound refinery when the strike began TEXACO, INC. ed in a 1969 strike, none of them engaged in similar activity during the 1980 strike. The parties' memorandum agreement stated that "for employees who were disabled before the strike began and receiving A&S Benefits, such benefits shall be resumed at the time the strike is officially discontinued if satisfactory evidence of continuing disability is established." In addition, the settlement agreement provided for dismissal by each party of all pending litigation, including unfair labor prac- tice charges, but it is now undisputed in this case that this agreement does not apply to charges filed here by individual employees Gibson, Meyer, and Turner, who were not parties to the settlement and did not indicate agreement with its terms or re- quest withdrawal of their charges.6 II In the original Decision and Order in this case, the Board adopted the judge's finding that the Re- spondent violated Section 8(a)(3) and (1) of the Act by automatically classifying the three disabled em- ployees as strikers and suspending the benefits in dispute. The judge relied primarily on the Board's rationale in Emerson Electric Co., 246 NLRB 1143 (1979), as the basis for his decision. In Emerson Electric, the Board adopted an ad- ministrative law judge's conclusion that the Re- spondent violated Section 8(a)(3) and (1) by termi- nating sick and accident (S&A) benefits to employ- ees physically unable to work on and after the commencement of a strike. The Board majority overruled the holding in Southwestern Electric Power Co., 216 NLRB 522 (1975), that an employer may presume affirmative strike support to justify the termination of existing disability benefits. Both the Board and the judge in Emerson Electric found that S&A benefits had accrued to employees as a result of past work performed. The Board's theory of a violation, however, did not appear to require proof of accrual. The Board expressed its agree- ment with the Southwestern Electric dissenting opin- ion, which relied in significant part on an 8(a)(1) theory that disabled employees "had a Section 7 right to refrain from declaring their position on this strike while they were medically excused."7 The a Compare with Texaco, Inc, 273 NLRB 1335 (1985) 1 246 NLRB at 1143 In accordance with that theory , the cease-and- desist order adopted by the Board did not prohibit the employer from "discriminating" to discourage union membership , but rather prohibited it from withholding sickness benefits "for the purpose of coercing" employ- ees in their exercise of "rights to engage in protected concerted activities, including strike " Similarly , the order adopted by the Board in the present case did not order the Respondent to cease and desist from dis- cnminating against strikers but rather ordered it to cease and desist from automatically "altering the status" of any employee on sick leave during a strike "to the status of a striking employee" and continuing to treat such employees as strikers "in the absence of evidence " that they actively 243 probable coercive effect of the employer's conduct on this statutory right was the focal point of this theory, and it made no apparent difference whether accrued or nonaccrued benefits had been denied. The Board also found 8(a)(3) discrimination in Em- erson Electric because the announcement of benefit termination in negotiations just prior to the com- mencement of the strike "was intended to coerce and restrain the protected union activity with re- spect to the strike, by imposing a sanction against certain unit employees if others in the unit engaged in strike activity."8 In accord with the predominate 8(a)(1) coercive effects theory of Emerson Electric, the Board fur- ther held that "while disabled employees need not affirmatively disavow the strike action, neither can they participate in the strike without running the risk of forfeiting benefits prospectively."9 Once a disabled employee displays public support of the strike, such as by joining the picket line, he has "enmeshed himself in the ongoing strike activity to such an extent as to terminate his right to contin- ued disability benefits." 10 Consequently, the Board's Order in Emerson Electric limited make- whole liability for unlawfully terminated S&A ben- efits to the period prior to an employee's affirma- tive showing of strike support, if the employer could prove such support. The Third Circuit in Emerson Electric Co. v. NLRB11 agreed with the Board's unfair labor practice findings but utilized as its analytical touch- stone the Supreme Court's watershed opinion in NLRB v. Great Dane Trailers, 388 U.S. 26 (1967).12 Neither the Board majority nor the judge in Emer- son Electric had mentioned Great Dane. In addition, the Third Circuit in Emerson Electric focused on aspects of the judge's decision that received little attention in the Board's decision. The court empha- participated in, or publicly supported , the strike 260 NLRB at 1192, 1199 8 Id 9 246 NLRB at 1143 10 Id at 1144 650 F 2d 463 (1981), cert denied 455 U S. 939 (1982) ' z The Court in Great Dane articulated the following test for alleged unlawful motivation First, if it can reasonably be concluded that the employer's discnmt- natory conduct was "inherently destructive" of important employee rights, no proof of an antiunion motivation is needed and the Board can find an unfair labor practice even if the employer introduces evi- dence that the conduct was motivated by business considerations Second, if the adverse effect of the discriminatory conduct on em- ployee rights is "comparatively slight," an antiunion motivation must be proved to sustain the charge if the employer has come forward with evidence of legitimate and substantial business justifications for the conduct Thus, in either situation, once it has been proved that the employer engaged in discriminatory conduct which could have adversely affected employee rights to some extent , the burden is upon the employer to establish that it was motivated by legitimate objectives since proof of motivation is most accessible to him. 388 US at 34 244 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD sized that (1) the S&A benefits withheld were un- conditionally accrued because they were based on sick employees' past performance, did "not depend on any return to work or on any future services to the employer," and were "due and payable on the date on which the employer denied them";13 (2) nothing in the record supported the employer's claim that the benefit plan's definition of disability could be construed as creating an exception to enti- tlement to benefits either because of a disabled em- ployee's strike support or the unavailability of work during a strike; (3) the Emerson Electric case was distinguishable from Southwestern Electric, where there was no indication that sick pay was an accrued benefit; (4) there was no need to decide whether the withholding of S&A benefits had in- herently destructive effects under the Great Dane test because the context of the decision to with- hold, as conveyed in the parties' final negotiations, supported a finding of specific antiunion intent. The court, however, rejected the backpay limita- tion in the Board 's remedy as inconsistent with the reasoning for finding a violation. "[T]he entire basis of the Board's decision was that the S and A payments were to be considered as accrued bene- fits. Since an employer may not deny a striking em- ployee accrued benefits, such as vacation pay, be- cause of his or her active participation in a strike, it follows that the employer may not deny the S and A benefits merely because of the disabled employ- ee's approval of or participation in strike activi- ty." 14 Additionally, the court found the Board's Order inconsistent with precedent holding that an employee who pickets during off-duty time cannot be regarded as a "striker" against whom an em- ployer can act. 1 s In Conoco, supra, the Board reassessed Emerson Electric in light of the Third Circuit's opinion and agreed with the court that an employer could not limit its remedial liability for withholding a fully accrued benefit by showing that a disabled employ- ee actively participated in strike activities. The Board expressly overruled any cases that "provide for a remedy inconsistent with that set forth in this opinion ." 16 In so doing , the Board emphasized that evidence of strike participation does not render an individual a striking employee if that individual is so disabled as to be unable to withhold services from the employer in support of a labor dispute. The Board in Conoco did not, however, expressly discuss the impact of its overruling of the Emerson Electric remedy on the underlying theory of viola- tion in Emerson Electric. In deciding the unfair labor practice issue in Conoco, the Board affirmed the judge's decision finding an 8(a)(3) and (1) violation because the re- spondent employer ceased paying disability benefits to an employee when a strike began. Neither the Board nor the judge explained why the benefits were accrued in Conoco. Language in the plan stated: "If benefits are being paid prior to a strike or layoff, such benefits will cease for the duration of such strike or layoff. No benefits will be paid during the time you are on strike or layoff." The judge found that this language was ambiguous as to its application to a disabled employee and that prestrike correspondence to unit employees indicat- ed the respondent's own view that the restriction on disability payments applied only to employees actually on strike, which the disabled employee in dispute could not be. The Tenth Circuit enforced the Board's Order in Conoco, Inc. v. NLRB, 740 F.2d 811 (1984). The court focused on the sufficiency of the Board's rea- soning under the Great Dane test, which the Board had not addressed, and found the withheld benefit to be accrued and rejected Conoco's proffered business justification. The court emphasized that "whether the benefits here were due and payable on the date denied, and therefore accrued, depends on the interpretation of the contract provision gov- erning denial of disability payments in the event of a strike." 17 It then agreed with the Board's view that the relevant contract language did not clearly and unmistakably waive a disabled employee's right to be free from a discriminatory denial of dis- ability payments because of a strike, particularly in light of Conoco's expression of a contrary interpre- tation in a prestrike letter to employees. The court therefore found that the disability benefits were ac- crued benefits. Having found no express waiver of the disabled employee's right to be free from discrimination, the court further considered Conoco's argument that it had reasonably and in good faith relied on a non- discriminatory interpretation of the terms of the plan as justification for withholding benefits. The Tenth Circuit endorsed the principles articulated by other courts of appeals holding that the Great Dane burden of proving legitimate and substantial business justification can be met by such a de- fense.18 Focusing again on Conoco's own interpre- 17 Conoco Inc v NLRB 740 F 2d at 815, , 13 650 F 2d at 469 18 See, e g , Vesuvius Crucible Co v NLRB, 668 F 2d 162, 167 (3d Cir 14 Id at 473 1981), and NLRB v Sherwin-Williams Co, 714 F 2d 1095, 1101 (11th Cir 1s Id at 474 1983) 18 Conoco, Inc, 265 NLRB 819, 821 (1982) Continued TEXACO, INC tation of the contract provision as evidenced by its prestrike letter, the Tenth Circuit in Conoco found substantial evidence to support a finding that Conoco did not reasonably believe it had the non- discriminatory contractual right to terminate dis- ability benefits to an employee disabled prior to and during a strike. The Board first decided the present case prior to deciding Conoco. In the original Decision and Order, the Board adopted, with slight modifica- tions, the underlying judge's decision that the Re- spondent had unlawfully treated the three disabled employees as strikers and suspended their benefits. While the judge found that the employees would normally have received the suspended benefits during their disabilities, he did not specifically decide whether any benefits were accrued. Al- though he concluded that the Respondent had vio- lated Section 8(a)(3), he made no express finding of motivation to discourage union activity under either a specific proof of animus or Great Dane theory . Instead , the judge 's findings , conclusions, and recommended remedial language relied on Em- erson Electric's 8(a)(1) theory of the coercive effects In Vesuvius Crucible, the Third Circuit disagreed with the Board's con- clusion that the respondent employer had unlawfully failed to pay vaca- tion benefits to eligible employees during a strike The court found that the Board had erred in rejecting the employer 's claim of reliance on con- tract language defining eligibility for vacation benefits merely because the Board's own interpretation of the contract was that benefits had uncondi- tionally accrued The court noted that "[t]he legitimacy of the company's conduct for purposes of the analysis prescribed by Great Dane depends not on the truth of its assertions regarding its contractual obligations but rather on the reasonableness and bona fides with which it held its be- liefs " 668 F 2d at 167 It then reviewed this contract claim itself and con- cluded that the employer's interpretation based on contract language and past practice was "reasonable and at least arguably correct " 668 F 2d at 168 Accordingly, the court held that, "in the absence of proof of anti- union motivation or a finding that the company 's conduct was inherently destructive of employee rights, a non-discriminatory refusal to pay bene- fits to all employees based on a good faith interpretation of the labor con- tract is insufficient to make out a violation of the National Labor Rela- tions Act " Id Similarly, in NLRB v Sherwin - Williams, supra , the Eleventh Circuit disagreed with the Board's adoption of a judge's decision finding a viola- tion based on Emerson Electric's rationale for the employer' s suspension of disability benefits upon commencement of a strike The court refused to enforce the Board 's Order, finding that the Board had failed to consid- er the employer's reliance on the disability plan itself and a past practice of discontinuing disability benefits during work stoppages In particular, the plan stated in reference to "lay-off, shut-down or reduced hours" that employees would "receive benefits only for the time they would reason- ably be expected to work " The court reasoned that this language, to- gether with the employer's past practice and evidence that affected dis- abled employees' departments were shut down during the strike at issue, constituted sufficient proof of a legitimate and substantial business justifi- cation The court further found no evidence of inherently destructive ef- fects from the employer's withholding action, noting the absence of evi- dence that past practice or the present action had hindered subsequent bargaining or the exercise of employee rights Finally, the court found no evidence of antiunion motivation , since, in specific contrast to the Emer- son Electric situation , the employer had not conditioned continuing re- ceipt of benefits on employee declarations of nonsupport for the strike and had not threatened to withhold benefits in order to gain concessions from the union Also see NLRB v Borden, Inc, 600 F 2d 313, 321 (1st Cir 1979) 245 of automatically classifying the disabled employees as strikers.19 III. After review and evaluation of the foregoing precedent, we now conclude that although the Board's Conoco decision expressly overruled only the remedial limitation in Emerson Electric, it has also raised questions about the continuing validity of the 8(a)(1) coercive effects theory of violation in Emerson Electric. Pursuant to Conoco, and in accord with both the Tenth Circuit 's opinion in that case and the Third Circuit's opinion in Emer- son Electric, we now expressly overrule the Emer- son Electric theory of violation and hold that the question of whether an employer violates Section 8(a)(3) or (1) by refusing to continue benefit pay- ments to a disabled employee on commencement of a strike will be resolved by application of the Great Dane test for alleged unlawful conduct.20 Under this test, the General Counsel bears the prima facie burden of proving at least some ad- verse effect of the benefit denial on employee rights. The General Counsel can meet this burden by showing that (1) the benefit was accrued and (2) the benefit was withheld on the apparent basis of a strike. We emphasize the need for proof that the disability benefit is accrued, that is, "due and pay- able on the date on which the employer denied [it]."21 Absent such proof, there is no basis for finding an adverse effect on employee rights be- cause an employer is not required to finance a strike against itself by paying wages or similar ex- penses dependent on the continuing performance of services for the employer. E.g., General Electric 's Another Board case decided under Emerson Electric involved the same respondent, strike, and A&S plan at issue here In Texaco, Inc, 259 NLRB 1217 (1982), the Board adopted the judge's finding of an 8(a)(3) and (1) violation by the suspension of A&S benefits when the strike began at Texaco's El Paso, Texas facility Although the judge there relied on Emerson Electric, his interpretation of that decision incorporated the Great Dane inference of unlawful motivation to discourage union ac- tivity He also made an express finding that the A&S plan benefits were accrued The Fifth Circuit enforced the Board's Order in Texaco, Inc v NLRB, 700 F 2d 1039 (1983) It rejected Texaco's broad challenge to the over- ruling in Emerson Electric of Southwestern Electric's permissible presump- tion of strike support among disabled employees In so doing, the court found the evidence sufficient to support a finding that A&S benefits were accrued, but it relied essentially on the 8(a)(1) theory of coercive effects in affirming the Board, expressly stating that "[w]hether the benefits are accrued or unaccrued has nothing to do with this result" 700 F 2d at 1043 The court expressly reserved opinion on whether the A&S benefits could have been cut off had any disabled employee participated in strike activities 20 In so doing, we note our agreement with judicial opinion that Great Dane is applicable to an assessment of the coercive effects of the with- holding of benefits under Sec 8(a)(1) as well as to the discriminatory mo- tivation of such conduct under Sec 8(a)(3) E g , NLRB Y Jemco, Inc, 465 F 2d 1148, 1152 f n 7 (6th Cir 1972), cert denied 409 U S 1109 (1973) 21 Emerson Electric Co v NLRB, 650 F 2d at 469 246 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD Co., 80 NLRB 510 (1948). Proof of accrual on a case-by-case basis will most often turn on interpre- tation of the relevant collective-bargaining agree- ment, benefit plan, or past practice.22 Once the General Counsel makes a prima facie showing of at least some adverse effect on employ- ee rights the burden under Great Dane then shifts to the employer to come forward with proof of a legitimate and substantial business justification for its cessation of benefits. The employer may meet this burden by proving that a collective-bargaining representative has clearly and unmistakably waived its employees' statutory right to be free of such dis- crimination or coercion. Waiver will not be in- ferred, but must be explicit .2 3 If the employer does not seek to prove waiver, it may still contest the disabled employee's continued entitlement to bene- fits by demonstrating reliance on a nondiscrimina- tory contract interpretation that is "reasonable and . . . arguably correct,"24 and thus sufficient to constitute a legitimate and substantial business justi- fication for its conduct. Moreover, as under Great Dane, even if the employer proves business justifi- cation, the Board may nevertheless find that the employer has committed an unfair labor practice if the conduct is demonstrated to be "inherently de- structive" of important employee rights or motivat- ed by antiunion intent. IV. Applying the Conoco/Great Dane principles to the complaint allegations and evidence in this case, we find that the General Counsel has proven a prima facie 8(a)(3) and (1) case concerning the Re- spondent's discontinuance of A&S benefits to em- ployees Gibson, Meyer, and Turner, as well as con- cerning its suspension of Turner's pension credit. We find, however, that the General Counsel has failed to establish a prima facie case concerning the Respondent's conduct in treating the above-named employees the same as striking employees with re- spect to medical insurance coverage during the strike. Initially, we address the Respondent's 8 January cessation of A&S benefits and Turner's pension credit. We note that the plan provisions regarding eligibility for A&S benefits contain a general provi- sion of entitlement for occupational injury and a 22 See NLRB v Borden, Inc, supra , Vesuvius Crucible Co v NLRB, supra, Conoco, Inc v. NLRB, supra, Sherwin - Williams v NLRB, supra, Texaco, Inc. v. NLRB, supra at 1045, fn I (dissenting opinion of Judge Jolly) 23 Conoco, Inc. v. NLRB, supra at 815 , citing, Metropolitan Edison Co. Y. NLRB, 460 US 693 (1983), indicates that an employee's statutorily protected right to receive such benefits free of discrimination can be waived 24 Vesuvius Crucible Co P NLRB, 668 F 2d at 168 one-year continuous service requirement for nonoc- cupational injury. Benefits are due and payable based on past performance with no further work required for continuing receipt. Turner, Meyer, and Gibson were receiving these A&S benefits prior to the strike. Likewise, Turner's monthly pen- sion credit was accrued in the sense that his ac- crued A&S benefit earned him the equivalent of full pay for the requisite number of days to qualify for monthly pension credit. The Respondent undis- putedly discontinued these benefits upon com- mencement of the strike. Such denial of accrued A&S benefits on the basis of protected union strike activity warrants the inference of unlawful con- duct. Consequently, the burden shifts to the Re- spondent to prove a legitimate and substantial busi- ness justification.2 5 The Respondent makes no argument here that the Union expressly waived the right of disabled employees to receive A&S benefits or pension credit in the event of protected strike activity. The Respondent does argue briefly that it relied on a nondiscriminatory contractual interpretation in sus- pending the A&S benefits. In this regard, it sug- gests that sections 3 and 4 of the A&S plan may be interpreted as permitting a nondiscriminatory sus- pension of benefits in any instance where continued absence of employees from work may be due to reasons other than a disability, thereby placing on the employee the burden to notify the Employer that continued absence is due exclusively to the disability. We are unpersuaded that the Respondent's con- tractual interpretation is anything more than a post hoc rationalization. The Respondent made no con- temporaneous reference to a contract interpretation when announcing the suspension of A&S benefits. Both the announcement and the Respondent's prin- cipal defense in this proceeding turn on the non- contractual argument that it should be legally enti- tled to presume that disabled employees are strik- ers. Even assuming that the Respondent actually relied on the A&S plan language in sections 3 and 4 to justify suspension of benefits, we find that the suggested interpretation is both unreasonable and not arguably correct. Section 3 permits the Re- spondent to require an employee to present satis- factory evidence that an absence was due to illness 25 The Respondent's principal justification for its conduct is the aban- doned Southwestern Electric presumption of strike support We reject the argument that the Board should reinstate this presumption On the con- trary, even specific evidence of a disabled employee's participation in strike activities is of limited relevance under the Conoco/Great Dane test. Such evidence may prove that a particular individual was no longer dis- abled TEXACO, INC. or injury in order to qualify for benefits. The em- ployees here had already qualified for and were re- ceiving benefits when the strike began. On its face, the plain language of section 3 is not amenable to a construction that it imposes any continuing report- ing requirement or requires interim proof that dis- ability is the sole reason for absence from work. Furthermore, the Respondent has introduced no evidence of past practice or of bargaining history to support the interpretation urged. Section 4 indicates that an off-duty disability will not serve to disqualify employee receipt of nonoc- cupational A&S benefits except when the disability occurs during a period of personal or military leave of absence, a layoff, or a vacation. Section 4 ap- pears on its face to articulate specific and exclusive disqualifying conditions and does not preclude con- tinued entitlement to disability benefits during a strike to anyone disabled prior to such a strike. The Respondent again has produced no evidence to the contrary. The Respondent likewise adduced no evidence of a separate contractual exception to continued entitlement to pension credit once an employee has satisfied the plan's service requirement. Conse- quently, the failure of the Respondent to demon- strate a reasonable and arguably correct nondis- criminatory contract basis for suspension of Turn- er's A&S benefit undercuts completely the Re- spondent's stated basis for the suspension of Turn- er's pension credit. We conclude therefore, that the Respondent has failed to prove a legitimate and substantial business justification for its suspension of A&S benefits and of Turner's pension credit. In the absence of such proof, and in accord with Great Dane, we find it unnecessary to decide whether the Respondent's conduct was "inherently destructive" of employee rights. The final issue here concerns the medical insur- ance coverage for Gibson, Meyer, and Turner. As stated earlier, we find that the General Counsel has failed to make a prima facie showing of unlawful conduct. Although the Respondent clearly has taken the same action with the medical insurance benefit as with the other benefits involved here by automatically treating disabled employees the same as strikers, there is insufficient record evidence about the medical insurance plan to allow us to conclude that the plan was an accrued benefit. Even assuming that the medical plan was an ac- crued benefit, it does not appear that disabled or striking employees suffered any actual deprivation of that benefit. By agreement of the Union and the Respondent, the employees ' insurance coverage re- mained intact, their premium contribution rates re- 247 mained the same, and for two months of the strike the Respondent's premium contributions were paid from a surplus account created in large part from unused portions of the Respondent's prior contribu- tions. Although the General Counsel speculates that diminution of the surplus account could have some future adverse impact on unit employees, we decline to find a violation on this ground. The General Counsel has failed to establish employee entitlement to the excess assets or interest due on the principal amount attributable to employee con- tributions in the reserve. Moreover, we note that the memorandum agreement ending the strike pro- vided for immediate increases in the Respondent's monthly premium contribution, retroactive pay- ment of partial contributions withheld in January 1980, and a lump sum payment to employees with respect to February and March contributions. Based on the foregoing, we find and conclude that the Respondent violated Section 8(a)(3) and (1) of the Act by suspending A&S benefit payments to employees Gibson, Meyer, and Turner and by suspending Turner's pension credit. We find and conclude that the General Counsel has failed to prove that the Respondent violated Section 8(a)(3) and (1) of the Act by its treatment of these em- ployees with respect to medical insurance coverage during the strike. AMENDED REMEDY Having found that the Respondent has engaged in certain unfair labor practices, we shall order the Respondent to cease and desist and to take certain affirmative actions designed to effectuate the poli- cies of the Act. Having found that the Respondent violated Sec- tion 8(a)(3) and (1) of the Act by withholding pay- ments of or credit for accrued benefits due employ- ees Don W. Gibson, Kenneth M. Meyer, and Rich- ard E. Turner on 8 January 1980, we shall order the Respondent to make whole employees Gibson, Meyer, and Turner by paying the accident and sick benefits due them and by crediting Turner with the monthly pension credit due him, from the date such benefits were initially suspended until the date such benefits were resumed, with interest as pro- vided in New Horizons for the Retarded.26 26 In accordance with our decision in New Horizons for the Retarded, 283 NLRB 1173 ( 1987), interest on and after 1 January 1987 will be com- puted at the "short-term Federal rate" for the underpayment of taxes as set out in the 1986 amendment to 26 U S C § 6621 Interest on amounts accrued prior to 1 January 1987 shall be computed in accordance with Florida Steel Corp, 231 NLRB 651 (1977) Contrary to the Board 's original Decision and Order, we find that liti- gation of the issues here has been limited to the A&S, pension, and medi- cal benefits specifically discussed We will not leave to compliance the determination of whether any additional losses of benefits were suffered by Gibson, Meyer, and Turner 248 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD ORDER The National Labor Relations Board reaffirms the Order in its original Decision and Order as modified below and orders that the Respondent, Texaco, Inc., Anacortes, Washington, its officers, agents, successors , and assigns, shall take the action set forth in the Order as modified. 1. Substitute the following for paragraph 1(a). "(a) Discriminating against and coercing employ- ees in the exercise of their rights to engage in or refrain from engaging in union and other protected concerted activities, including the right to strike, by withholding payments of accrued Accident and Sickness benefits or accrued credit for pension ben- efits." 2. Substitute the following for paragraph 2(a). "(a) Make whole employees Don W. Gibson, Kenneth N. Meyer, and Richard E. Turner in the manner set forth in the amended remedy section of the Supplemental Decision and Order." 3. Substitute the attached notice for that of the Board's in its original Decision and Order. APPENDIX NOTICE To EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government The National Labor Relations Board has found that we violated the National Labor Relations Act and has ordered us to post and abide by this notice. WE WILL NOT coerce or discriminate against you in the exercise of your rights to engage in or re- frain from engaging in union and other protected concerted activities, including the right to strike, by withholding payments of accrued accident and sickness benefits or accrued credit for pension ben- efits. WE WILL NOT in any like or related manner interfere with, restrain, or coerce you in the exer- cise of the rights guaranteed you by Section 7 of the National Labor Relations Act. WE WILL make Don W. Gibson, Kenneth N. Meyer, and Richard E. Turner whole, with inter- est, for the losses they suffered as a consequence of our suspension of their accrued benefits for the entire duration of the strike which began on 8 Jan- uary 1980. TEXACO, INC. Copy with citationCopy as parenthetical citation