Thorwin Mfg., Co.

National Labor Relations Board - Board Decisions

Jul 20, 1979

243 N.L.R.B. 620 (N.L.R.B. 1979)

D[)Lt(ISIONS ()OF NA I IONAI. LABOR REL.AIIONS BOARD
Thorwin Manufacturing Company and International
Union of Electrical, Radio and Machine Workers,
AFI,-CIO, CL,C. Case 18 CA 5643
July 20. 1979
DECISION AND ORDER
B M NBRllRS P)NI 1.I.()., MIRPIIY, AND) TR I SI)AI.F
Upon a charge duly filed on December 16, 1977,
and an amended charge filed on March 24, 1978, by
the International Union of Electrical, Radio and Ma-
chine Workers, AFL CIO. CLC. herein called the
Union, the General Counsel of the National Labor
Relations Board, by the Acting Regional Director for
Region 18, issued a complaint and notice of hearing
on March 29. 1978, against Thorwin Manufacturing
Company. herein called Respondent. In substance.
the complaint alleges that Respondent violated Sec-
tion 8(a)( I) of the Act by refusing to pay vacation pay
to certain employees because they had engaged in a
strike. On April 10, 1978, Respondent filed an answer
admitting in part and denying in part the allegations
in the complaint.
Thereafter, the parties entered into a stipulation in
which they moved the Board to approve the transfer
of this proceeding to the Board and waived the mak-
ing of findings of fact and conclusions of law by an
administrative law judge and the issuance of an ad-
ministrative law judge's decision. The parties further
stipulated that the entire record in this case shall con-
sist of the original charge, the amended charge, the
complaint and notice of hearing, Respondent's an-
swer, the Regional Director's order postponing hear-
ing, and a written stipulation of facts with attached
exhibits. They further agreed that no oral testimony
was necessary or desired by any of' the parties.
On June 16, 1978, the Board issued its order grant-
ing the motion to transfer the proceeding to the
Board, approved the stipulation, and advised the par-
ties to file briefs with the Board in Washington, D.C.
Thereafter, the General Counsel and Respondent
filed briefs.
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.
Upon the basis of the stipulation, the briefs, and
the entire record in this proceeding, the Board makes
the following:
FINDINGS OF FA(I
1. THE BUSINESS OF RESPONDINTI
Respondent, a Minnesota corporation with its prin-
cipal office and place of business in Lakeville, Minne-
sota, is engaged in the manufacture, sale, and distri-
bution of metal stampings and related products.
During the year ending December 31. 1977. a repre-
sentative period, Respondent manufactured, sold.
and distributed at its Lakeville, Minnesota. plant
products valued in excess of $50,000, and shipped
from said plant directly to points outside the State of
Minnesota products valued in excess of $50,000. Dur-
ing the same period, Respondent purchased and
cause to be transported and delivered to its Lakeville,
Minnesota, plant sheet metals and other goods and
materials valued in excess of $50,000 directly from
points outside the State of Minnesota, or from enter-
prises within the State of Minnesota which had re-
ceived said goods and materials directly from points
outside the State of Minnesota.
Respondent admits, and we find, that it is, and has
been at all times material herein, an employer en-
gaged in commerce within the meaning of Section
2(6) and (7) of the Act, and that it will effectuate the
purposes of the Act to assert jurisdiction herein.
11. IIE ABOR ()R(;ANIZ.AI(ON
Respondent admits, and we find, that the Union is
a labor organization within the meaning of Section
2(5) of the Act.
III. ItIE AI..E(;GE-) NFAIR I.ABOR PRA(CIItES
A. The Stipulated Facts
The stipulated facts show that on June 18, 1976,
the Union was certified by the Board as the collec-
tive-bargaining representative of a unit of Respon-
dent's production and maintenance employees. Sub-
sequently, the parties engaged in collective-
bargaining negotiations, but did not reach complete
agreement. As a consequence, several unit employees
engaged in an economic strike against Respondent
commencing on September 15, 1976. Other unit em-
ployees who did not participate in the strike crossed
the picket line and continued to work. Respondent
replaced all the striking unit employees prior to the
termination of the strike on November 8, 1977.'
Thereafter, on various dates on or after November 8,
1977, several of the strikers, including Donald Doyle,
Gary Emerson, Gerald Millerbernd, and Shirley
Weierke, wrote letters to Respondent in which each
made a claim for the unused portion of his or her
"earned vacation pay." Respondent, by a letter to
each, refused to honor the claims, stating that it "has
never been company practice to provide any employ-
ees with vacation pay when they' leave the company,"
' On that date the Union was decertified by the Board.
243 NLRB No. 118
(,20
I IIORWIN MANUFA(CILURING C(OMPANY
and that it was not obligated to pay employees for
any unused vacation. On Fehruary 8. 1978., the Union
requested on behalf of all the strikers that Respon-
dent pay them all the vacation pay that they had
earned for time worked prior to the strike. On Febru-
ary 14, 1978, Respondent advised the Union that it
had never been its practice to provide any employees
with vacation pay when they leave the Company.
The stipulated facts further show that Respondent,
although never putting its policy with respect to vaca-
tions with pay in writing, has a policy whereby em-
ployees earn I week's vacation after I year's emplo-
ment, and 2 weeks' vacation after 3 years'
employment. The vacation earning period begins on
May I of each year and ends on April 30 of the next
year. Vacations earned during the May I to April 30
period are to be taken during the ne.xt May I to April
30 period. Respondent has prorated vacations. Re-
spondent does not permit any of the unused portion
of earned vacation to be carried over to a second May
I to April 30 period, rather an employee's entitlement
to the unused portion of earned vacation is frfeited.
It is Respondent's policy not to pay the money equiv-
alent of unused vacation time to any employee upon
termination from employment regardless of the rea-
son for termination and upon termination unused va-
cation time is forfeited. Respondent has not paid va-
cation pay upon termination to any employee who
did not engage in the strike which commenced on
about September 15, 1976. In 1977, however, a non-
striking employee had 4 hours of unused vacation as
of April 30 and Respcndent paid him for such hours,
although Respondent prefers that an employee take
vacation and time off from work rather than take the
money equivalent of the vacation time and work at
the same time.
In the period from May 1, 1975, through April 30.
1976, each of the employees specifically named above
earned a certain amount of vacation time which ac-
crued to each of them as of April 30, 1976. As of the
time each joined the strike, each had not used all of
his or her accrued vacation time. The parties further
stipulated that the above-named employees were pre-
vented from taking their accrued vacation time be-
cause they engaged in the strike and because Respon-
dent replaced them prior to the termination of the
strike.
B. Contentions of the Parties
The General Counsel, as noted above, alleges that
Respondent's conduct herein was violative of Section
8(a)(1) of the Act. In this regard, he contends, inter
alia, that the strikers involved herein had accrued va-
cation benefits as of April 30, 1976, prior to the strike,
and that they were prevented from taking their ac-
crued vacation time as of April 30. 1977. the date on
which their unused vacation time would be forfeited
under Respondent's policy, because they were en-
gaged in a strike and that they were subsequently pre-
vented from taking their vacation time because they
were replaced by Respondent. He further points out
that Respondent, in fact, paid vacation pay to one
employee in lieu of vacation time off from work. lie
argues that the denial of accrued vacation benefits
here was, under N.L. R.B. v. Great Dane Trailers., Inc.,
388 U.S. 26 (1967). inherently destructive of the em-
ployee rights, or sufficient to require Respondent to
come forward with legitimate and substantial busi-
ness justification for its action. Finally. the General
Counsel argues that Respondent's denial of vacation
pay was a consequence of striking and. therefore, was
unlawful under Knuth Bros., Inc.. 229 NLRB 1204
(1977).
Respondent contends that the instant case is distin-
guishable from Great Dane, arguing that there has
been no showing here that its conduct was discrimi-
natory. It asserts that it uniformly applied its estab-
lished policy that vacation time which is not used
within the 12-month period following its accrual is
forfeited and that no monetary payments are made
for unused vacation time. Additionally, it points out
that the employees involved herein did not claim any
vacation benefits until more than 6 months after the
forfeiture date. It further contends that even if such
forfeiture policy is not applicable to these employees.
its uniformly applied policy of not paying vacation
benefits to employees who have left active employ-
ment prior to their taking vacations was nondiscrimi-
natory. Finally, Respondent contends that its vaca-
tion policy was designed to afford working employees
with paid rest and relaxation periods based on need.
rather than as an additional form of compensation.
and that, therefore, it had legitimate business justifi-
cation in denying benefits to the employees herein.
C. Discussion and Conclusions
We find that Respondent's conduct herein was vio-
lative of Section 8(a)(1) of the Act, for the following
reasons. In Knuth Bros., Inc., supra, the Board found
that the employer unlawfully interfered with em-
ployee rights by applying the "cut-off' provision of its
vacation policy to replaced strikers. The employer's
vacation policy in that case required that an em-
ployee had to be on the active payroll on March 1 to
be entitled to any vacation benefits "accumulated"
during the previous 12 months. The Board found that
the replaced strikers were treated in the same manner
as other employees terminated prior to March 1: i.e.,
they were denied vacation benefits if they were not on
I)lC(ISIONS OF NATIONAL. ILABOR RLATIONS BOARI)
the active payroll as of that critical date, and there
was no specific evidence of intent to discriminate
against the strikers fbr having engaged in the strike.
The Board concluded that the employer's denial of
the request for vacation benefits on behalf of the
strikers did not violate Section 8(a)(3). The Board,
however, concluded that the employer's conduct vio-
lated Section 8(a)(1), stating, in pertinent part:
However, the record does fully demonstrate
that though the replaced strikers were not denied
vacation benefits because of their protected con-
certed activities, that is, the denial was not keyed
uniquely and purposely to those activities, they
nevertheless were denied such benefits as a conse-
quence of their having engaged in such lawful
activities; that is, the Respondent's vacation pol-
icy in effect provides that an employee who en-
gages in a lawful economic strike loss his accu-
mulated vacation pay if the Employer chooses to
replace him before March I. The policy is, thus.
a clear threat of economic loss to employees for
engaging in protected concerted activities, and
its application to the replaced economic strikers
in this proceeding violated, we find, Section
8(a)( ) of the Act.2
In the instant case, it is undisputed that the strikers
involved had accrued certain vacation time prior to
the commencement of the strike. Furthermore, as
stipulated by the parties, these strikers were pe-
vented from taking their accrued vacation time be-
cause they engaged in the strike and because Respon-
dent replaced them prior to the termination of the
strike. We thus find, as in Knuth Bros.. that the denial
of vacation benefits to the strikers here, while not
"keyed uniquely and purposely" to their protected
concerted activities in engaging in the strike, never-
theless was a consequence of such activities.) Accord-
ingly, we conclude, consistent with that former case,
that Respondent's application of its vacation policy
so as to require forfeiture of accrued aconomic bene-
fits4 by the replaced strikers, as a consequence of their
2 Knuth Bros., supra at 1205.
3 Respondent, in its letters denying the strikers' requests for vacation pay,
and the Union's subsequent request on their behalf. referred to the replaced
strikers as falling within the category of employees who "leave the com-
pany." However, there is no evidence here, nor any contention. that Respon-
dent in fact had terminated the replaced strikers or that they had voluntarily
severed the employment relationship. And, indeed, Respondent in its brief
alludes to the recall rights of these employees. Thus, it is clear that Respon-
dent's treatment of them as employees "who leave the company." and there-
fore as "terminated" employees, was merely a consequence of their having
engaged in a strike
4 In finding that the strikers herein are entitled to pay in lieu of vacation
time, we note that Respondent's vacation policy is not the subject of any
collective-bargaining agreement with the Union. Additionally, we emphasize
that, as noted above, Respondent in fact has paid at least one employee in
lieu of vacation time off.
protected activities in engaging in the strike, violated
Section 8(a)( 1 ) of the Act.5
Till REME)Y
Having found that Respondent has engaged in and
is engaging in unfair labor practices within the mean-
ing of Section 8(a)(1) of the Act, we shall order Re-
spondent to cease and desist therefrom. We also shall
order Respondent to pay to Donald Doyle. Gary Em-
erson, Gerald Millerbernd. and Shirley Weierke the
money equivalent to vacation time which each had
accrued in the period of May 1, 1975, through and
including April 30, 1976, but which remained unused
by each as of the time each joined the strike which
commenced on September 15, 1976, with interest
thereon to be computed in accordance with Florida
Steel Corporation, 231 NLRB 651 (1977).6
CO()N(CI.()NS o() LAW
1. Respondent is an employer within the meaning
of Section 2(2) of the Act, and is engaged in com-
merce within the meaning of Section 2(6) and (7) of
the Act.
2. The Union is a labor organization within the
meaning of Section 2(5) of the Act.
3. By withholding accrued vacation benefits from
its employees as a consequence of their protected con-
certed activities in engaging in a strike, Respondent
engaged in and is engaging in unfair labor practices
proscribed by Section 8(a)( 1 ) of the Act.
4. The aforesaid unfair labor practices affect com-
merce within the meaning of Section 2(6) and (7) of
the Act.
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor Rela-
tions Board hereby orders that the Respondent, Thor-
5Respondent. as noted above. contends that its vacation policy was de-
signed to afford working employees with paid rest and relaxation based on
need, rather than as an additional form of compensation. and that therefore
it had legitimate business justification for denying vacation benefits to the
strikers. We, however, find that Respondent has failed to establish legitimate
and substantial business justifications for its conduct. particularly in iew of
its having granted at least one employee pay in lieu of vacation time off.
We find without merit Respondent's reliance on the fact that the replaced
strikers did not request vacation benefits until some 6 months after the April
30. 1977, "forfeiture" date in support of' its contention that it has not violated
the Act. Such circumstance in no way diminishes the unlawful nature and
impact of Respondent's conduct in denying the replaced strikers their ac-
crued benefits, nor warrants a finding that it did not violate Sec. 8(a I) of
the Act.
I See, generally. Isis Plumbing & Heating Co., 138 NLRB 716 1962). The
parties stipulated that the General Counsel seeks no remedy on behalf of any
employees who engaged in the strike herein, other than those employees
specifically named above.
622
THORWIN MANUFACTURING COMPANY
win Manufacturing Company, Lakeville, Minnesota,
its officers, agents, successors, and assigns, shall:
1. Cease and desist from:
(a) Withholding accrued vacation benefits from
employees as a consequence of their protected con-
certed activities in engaging in a strike.
(b) In any like or related manner interfering with,
restraining, or coercing its employees in the exercise
of their rights guaranteed by Section 7 of the Act.
2. Take the following affirmative action which the
Board finds is necessary to effectuate the policies of
the Act:
(a) Pay to Donald Doyle, Gary Emerson, Gerald
Millerbernd, and Shirley Weierke, the money equiv-
alent to vacation time which each had accrued in the
period of May 1, 1975, through and including April
30, 1976, but which remained unused by each as of
the time each joined the strike which commenced on
September 15. 1976, with interest, in the manner set
forth in the section of this Decision entitled "The
Remedy."
(b) Preserve and, upon request, make available to
the Board or its agents, for examination and copying.
all payroll records, social security payment records,
timecards, personnel records and reports, and all
other records necessary to analyze the amounts due
under the terms of this Order.
(c) Post at its plant in Lakeville, Minnesota, copies
of the attached notice marked "Appendix."7 Copies
of said notice, on forms provided by the Regional
Director for Region 18, after being duly signed by
I 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 h Order of the
National Labor Relations Board" shall read "Posted Pursuant to a Judgment
of the United States Court of Appeals Enforcing an Order of the National
Labor Relations Board."
Respondent's representative, shall be posted by Re-
spondent immediately upon receipt thereof, and be
maintained by it for 60 consecutive days thereafter, in
conspicuous places, including all places where notices
to employees are customarily posted. Reasonable
steps shall be taken by Respondent to insure that said
notices are not altered, defaced, or covered by any
other material.
(d) Notify the Regional Director for Region 18, in
writing, within 20 days from the date of this Order,
what steps Respondent has taken to comply herewith.
APPENDIX
NOTICE To EMPOYEES
POSTED BY ORDER OF IE
NAIIONAI LABOR RELArIONS BOARD
An Agency of the United States Government
WE WIlLl NOT withhold accrued vacation
benefits from employees as a consequence of
their protected concerted activities in engaging
in a strike.
WE WIll. NOI in any like or related manner
interfere with, restrain, or coerce our employees
in the exercise of their rights guaranteed by Sec-
tion 7 of the Act.
WE XviLI. pay to Donald Doyle Gary Emer-
son, Gerald Millerbernd. and Shirle Weirke the
money equivalent to vacation time which each
had accrued in the period of May 1. 1975,
through and including April 30, 1976. but which
remained unused by each as of the time each
joined the strike which commenced on Septem-
ber 15, 1976. with interest.
Til()R,,IN M.AN I A( 1I RIN(; (CO()MPANY
623