Union Fork & Hoe Co.

National Labor Relations Board - Board Decisions

Jun 17, 1998

325 N.L.R.B. 950 (N.L.R.B. 1998)

950
325 NLRB No. 174
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
1 In adopting the judge’s conclusion that the Respondent had the
authority unilaterally to discontinue its matching contributions to the
401(k) plan, Chairman Gould and Member Liebman rely solely on
art. XVI of the parties’ collective bargaining agreement, which, in
addition to the provision cited by the ALJ, also states that the ‘‘Em-
ployer will not be required to provide any ’employer matching con-
tributions’ under the 401(k) plan.’’ They find it unnecessary to pass
on the judge’s finding that the cessation of the 401(k) match was
a lawful part of the remediation of the Respondent’s unlawful dis-
continuance of the active employees’ retirement health benefits.
In adopting the judge’s finding that the Respondent did not violate
Sec. 8(a)(5) of the Act by rescinding its 401(k) matching contribu-
tions, Member Brame agrees with the judge that the Respondent
could rescind these contributions unilaterally both because it had the
right to do so under the collective-bargaining agreement and because
the cessation of the 401(k) matching contribution was part of the
remedy, i.e., a return to the status quo ante, for the Respondent’s
unlawful discontinuance of the active employees’ retirement health
benefits. In this regard, Member Brame agrees with the judge that
since the 401(k) matching contributions clearly were meant to assist
employees who were losing their health insurance coverage, and was
given in lieu of that coverage, the Respondent could rescind those
matching contributions in order to return to the status quo when it
restored the retirement health benefits at issue here.
2 We shall modify the judge’s recommended Order in accordance
with Excel Container, Inc., 325 NLRB 17 (1997), and Indian Hills
Care Center, 321 NLRB 144 (1996). In addition, we shall provide
that any amounts due employees be computed as set forth in Kraft
Plumbing & Heating, 252 NLRB 891 fn. 2 (1980), enfd. 661 F.2d
940 (9th Cir. 1981), with interest as prescribed in New Horizons for
the Retarded, 283 NLRB 1173 (1987). Finally, we shall substitute
a new notice that conforms to the recommended Order.
Union Fork and Hoe Company and International
Brotherhood of Boilermakers, Iron Ship Build-
ers, Blacksmiths, Forgers and Helpers, AFL–
CIO, Local 1916. Cases 3–CA–20278 and 3–
CA–20720
June 17, 1998
DECISION AND ORDER
BY CHAIRMAN GOULD AND MEMBERS LIEBMAN
AND BRAME
On February 25, 1998, Administrative Law Judge
Joel P. Biblowitz issued the attached decision. The
General Counsel filed exceptions and a supporting
brief, the Respondent filed cross-exceptions, a support-
ing brief, and an answering brief.
The National Labor Relations Board has delegated
its authority in this proceeding to a three-member
panel.
The Board has considered the decision and the
record in light of the exceptions and briefs and has de-
cided to affirm the judge’s rulings, findings, and con-
clusions1 and to adopt the recommended Order as
modified.2
ORDER
The National Labor Relations Board adopts the rec-
ommended Order of the administrative law judge as
modified below and orders that the Respondent, Union
Fork and Hoe Company, Frankfort, New York, its offi-
cers, agents, successors, and assigns, shall take the ac-
tion set forth in the Order as modified.
1. Substitute the following for paragraphs 2(a), (b),
and (c):
‘‘(a) Make whole its employees in the appropriate
unit for any monetary losses that they suffered due to
the Respondent’s discontinuance of medical insurance
coverage for certain of its employees upon retirement,
as set forth in Kraft Plumbing & Heating, 252 NLRB
891, fn. 2 (1980), enfd. 661 F.2d 940 (9th Cir. 1981),
with interest as prescribed in New Horizons for the Re-
tarded, 283 NLRB 1173 (1987).
‘‘(b) Preserve and, within 14 days of a request,
make available to the Board or its agents for examina-
tion and copying, all payroll records, social security
payment records, timecards, personnel records and re-
ports, and all other records necessary to analyze the
amount of backpay due under the terms of this Order.
‘‘(c) Within 14 days after service by the Region,
post at its Frankfort, New York facility copies of the
attached notice marked ‘‘Appendix.’’3 Copies of the
notice, on forms provided by the Regional Director for
Region 3, after being signed by the Respondent’s au-
thorized representative, shall be posted by the Re-
spondent and maintained for 60 consecutive days in
conspicuous places including all places where notices
to employees are customarily posted. Reasonable steps
shall be taken by the Respondent to ensure that the no-
tices are not altered, defaced, or covered by any other
material. In the event that, during the pendency of
these proceedings, the Respondent has gone out of
business or closed the facility involved in these pro-
ceedings, the Respondent shall duplicate and mail, at
its own expense, a copy of the notice to all current
employees and former employees employed by the Re-
spondent at any time since August 1, 1996.’’
2. Substitute the attached notice for that of the ad-
ministrative law judge.
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 or-
dered us to post and abide by this notice.
WE WILL NOT refuse to bargain collectively with the
International Brotherhood of Boilermakers, Iron Ship
Builders, Blacksmiths, Forgers and Helpers, AFL–CIO,
Local 1916 (the Union) by discontinuing health insur-
ance coverage for certain of our employees upon re-
tirement, without giving prior notice of this change to
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951UNION FORK & HOE CO.
1 Unless indicated otherwise, all dates referred to herein relate to
the year 1997.
the Union or bargaining with the Union about this sub-
ject.
WE WILL NOT in any like or related manner interfere
with, restrain, or coerce you in the exercise of the
rights governed you by section 7 of the Act.
WE WILL make whole, with interest, any of our em-
ployees for any monetary loss they suffered due to our
unilateral discontinuance of health insurance coverage
for certain of our employees upon retirement.
UNION FORK AND HOE COMPANY
Alfred M. Norek, Esq., for the General Counsel.
Louis P. Giqliotti, Esq. (Getnick, Livingston, Atkinson,
Giqliotti & Priore, LLP), for the Respondent.
DECISION
STATEMENT OF THE CASE
JOEL P. BIBLOWITZ, Administrative Law Judge. This case
was heard by me on January 12, 1998, in Utica, New York.
The amended consolidated complaint herein, which issued on
August 27, 1997,1 and was based upon unfair labor practice
charges that were filed on September 10, 1996, and May 30
by International Brotherhood of Boilermakers, Iron Ship
Builders, Blacksmiths, Forgers and Helpers, AFL–CIO, Local
1916 (the Union) alleges that Union Fork and Hoe Company
(the Respondent) violated Section 8(a)(5) of the Act by uni-
laterally changing its policy regarding health insurance cov-
erage for current unit employees upon their retirement on
about August 1, 1996, and by rescinding its practice of mak-
ing contributions to the 401(k) deferral plan established for
unit employees, on about May 2.
FINDINGS OF FACT
I. JURISDICTION
Respondent admits, and I find, that it has been engaged in
commerce within the meaning of Section 2(2), (6), and (7)
of the Act.
II. LABOR ORGANIZATION STATUS
Respondent admits, and I find, that the Union has been a
labor organization within the meaning of Section 2(5) of the
Act.
III. FACTS AND ANALYSIS
The facts herein are rather straight and uncontroverted.
The Union has been the collective-bargaining representative
of Respondent’s employees at its facility in Frankfort, New
York, for in excess of 25 years. Briefly stated, until July
1996, the Respondent provided the unit employees with
health insurance coverage, which continued after their retire-
ment. On about August 1, 1996, the Respondent unilaterally
discontinued this coverage for the unit employees after they
retired, and, in lieu thereof, it announced a 1-percent match
contribution to a 401(k) plan for those employees. After the
Union filed a charge with the Board, the Respondent offered
to settle the matter by rescinding the withdrawal of health in-
surance coverage for its employees upon retirement and of-
fered to bargain about the matter. However, in order to return
to the status quo, the Respondent also ceased making the 1-
percent 401(k) matching contributions. The Board is alleging
herein that this change, as well as the original change, are
each unilateral changes in violation of Section 8(a)(5) of the
Act.
The collective-bargaining agreement between the parties
for the period 1992 to 1995 does not require the Respondent
to pay health insurance for retirees or employees upon retire-
ment, although the practice had been for the Respondent to
provide such coverage for these individuals and their
spouses, while employed and when they retired at age 65.
One of the Union’s proposals at the bargaining sessions for
a new contract in 1995, was to require the Respondent to pay
health insurance for retiring employees at age 62; the Re-
spondent rejected this request, stating that it was too costly.
The Union ‘‘fabled’’ this proposal, and there was no further
discussions of making any changes in eligibility for health
insurance at these negotiations. The new contract, effective
from 1995 through 1998, for the first time, states that the Re-
spondent would establish 401(k) plans for the unit employ-
ees, which would permit the employees to defer under the
plan the maximum portion of his salary permitted by law.
‘‘However, the employer reserves the right, in its sole discre-
tion, at any time, to begin making employer matching con-
tribution under the 401(k) plan.’’
On July 21, 1996, Richard Denny, then director of human
resources for the Respondent told the Union that employees
who retired would no longer be covered for medical insur-
ance by the Respondent, with two exceptions. Employees
who retired at age 50 with 10 years of service, or employees
with 25 years of service would continue to receive medical
insurance coverage from the Respondent, all other retirees
would not. The union representatives argued that this was a
negotiated benefit and could not be changed without bargain-
ing with the Union. Denny told them that to offset the cost
of insurance for these retiring employees, the Respondent
would make a 1-percent match to the employees’ 401(k)
plan. The Respondent, in a letter to the unit employees dated
July 26, 1996, discussed the high cost of medical coverage,
and stated, inter alia:
Union Tools can no longer afford to continue provid-
ing this coverage to new retirees and their dependents
without significantly impacting our ability to provide
competitive benefits to you, our active employees and
your dependents. As a result, employees retiring on and
after August 1, 1996, with two exceptions, will no
longer be offered retiree medical coverage . . . .
The two exceptions . . . employees who, as of Au-
gust 1, 1996, are covered by our active medical insur-
ance and who meet one of the following two criteria:
1. Having attained the age of 50 and have mini-
mum of 10 years of service with Union Tools; or
2. Are under the age of 50 but have minimum of
25 years of service with Union Tools.
In an effort to assist you in providing for your
health care upon your retirement, the Trustees have
elected, effective January 1, 1997, to add a match to
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952 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
your 401(k) deferral plan as follows: 100% of the
first 1% that you contribute.
Anthony Tarnacki, union president, testified that July 21,
1996, was the first time that the Union was notified of this
change, and the Respondent never bargained, or offered to
bargain, about the change. During the prior negotiations, the
Respondent never raised the possibility of making this
change. About 7 percent of the employees in the bargaining
unit chose to participate in the 401(k) matching plan.
On August 1, 1996, the Union filed a grievance regarding
this change in medical insurance coverage for retirees; the
Respondent defended that these changes were proper because
the Union does not represent retirees. The Union withdrew
the grievance in order to proceed with the unfair labor prac-
tice charge.
On May 2, Tarnacki and the Union’s international rep-
resentative, Rocco DeRollo, met with Don Keeler, plant
manager; Tom Lefaivre, personnel manager; and Joe Oliver,
Respondent’s controller; Denny had resigned 2 months’ ear-
lier. DeRollo asked what the Respondent was going to do
about the unfair labor practice charge with the Board about
the change in medical insurance for retiring employees.
Keeler said that the Respondent was willing to rescind the
change that it made and would begin negotiating with the
Union about medical insurance. DeRollo said that the 401(k)
payments should not be tied into the changes, Keeler said:
‘‘Yes, it was all a package deal that they were both proposed
together.’’
Letters that DeRollo and Keeler exchanged subsequent to
this meeting frame the issues herein rather well. DeRollo’s
letter of May 7 states, inter alia:
The Company notified the Union that it would not
refuse to bargain with the Union over the decision and
any proposed changes that the Company desires to
make over health care benefits for current unit employ-
ees upon their retirement.
. . . the Company would rescind all unilateral changes
of August 1, 1996 that were made to the health care
plan for employees upon their retirement and would re-
instate the health care plan which was in effect July 31,
1996. Additionally, the Company stated that it would
concurrently rescind the Company’s match of one per-
cent to employees 401(k) deferral plan. To avoid the
upcoming trial the Company stated it would contact the
NLRB and enter into a settlement agreement prior to
the first bargaining session which was proposed by the
Company to be conducted May 15, 1997.
The Union, upon notice that the Company desired to
change health care benefits that were in effect July 31,
1996, stated that it would exercise its rights and engage
in bargaining over the decision and any propose
changes concerning the health care issue but objected to
the revocation of the Company match to the 401(k)
plan.
The Union argued that the Company match to the
401(k) plan effective January 1, 1997 was not disputed
by the Union in its charge against the Company and the
Company’s subsequent decision to unilaterally revoke
the match is unlawful under both the National Labor
Relations Act and our Collective Bargaining Agreement
and as such the Union would take appropriate measures
to enforce its rights.
By letter dated May 13, Keeler wrote to DeRollo, inter
alia:
You are correct that the Company offered to com-
mence bargaining about the proposed changes to health
care benefits for current bargaining unit employees
upon their retirement. More importantly, the Union ac-
cepted that offer. Thus, on May 6, 1997 the Company
signed the Settlement Agreement proposed by the
NLRB and is forwarding the same to the Labor Board.
So that it will not be accused of bargaining in bad faith
the Company is required to return to the status quo.
Thus, we advised you that the Company would rescind
all changes made to health care benefits for current bar-
gaining unit employees that were implemented effective
August 1, 1996.
However, the Company elected, effective January 1,
1997, to match bargaining unit employee’s contribu-
tions to their 401(k) deferral plan as follows: 100% of
the first 1% contributed. A memorandum sent to bar-
gaining unit employees dated July 26, 1996 made clear
that the match was being provided ‘‘In an effort to as-
sist you in providing for your health care upon your re-
tirement. . . .’’ Thus, the 401(k) match was inextrica-
bly linked to the elimination of health care benefits for
bargaining unit employees upon their retirement.
Therefore, please be advised that effective May 22,
1997 the Company will rescind the changes which it
made to the health care plan for current employees on
August 1, 1996. In addition, the Company will cease to
make the 401(k) match.
On about May 15 the Respondent posted a notice at the
plant setting forth the history of this dispute. The notice con-
cludes:
In an effort to resolve the dispute the Company re-
cently offered to bargain over the issue and the Union
has agreed to do so.
In order to bargain in good faith the Company has
now rescinded the changes which it made on August 1,
1996.
Because the Company has now rescinded the
changes it made August 1, 1996, please be advised that
it will no longer continue to add a match to your 401(k)
deferral plan.
The match will be discontinued for the payroll be-
ginning May 22, 1997.
As stated in this notice, the Respondent ceased making the
401(k) matching payments effective May 22. The Union
grieved the cessation of the 401(k) payments, and the Re-
spondent defended that if they rescinded the changes, they
could rescind the 401(k) payments. The Union subsequently
withdrew this grievance.
In Allied Chemical Workers of America Local 1 v. Pitts-
burgh Plate Glass Co., 404 U.S. 157, 180 (1971), the Su-
preme Court determined that retirees were not employees
within the meaning of Section 2(3) of the Act and that retir-
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953UNION FORK & HOE CO.
2 If no exceptions are filed as provided by Sec. 102.46 of the
Board’s Rules and Regulations, the findings, conclusions, and rec-
ommended Order shall, as provided in Sec. 102.48 of the Rules, be
adopted by the Board and all objections to them shall be deemed
waived for all purposes.
3 If 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 Pursuant to a
Continued
ees’ insurance benefits were not a mandatory subject of bar-
gaining. However, the Court also stated that ‘‘the future re-
tirement benefits of active workers are part and parcel of
their overall compensation and hence a well-established stat-
utory subject of bargaining.’’ Midwest Power Systems, 323
NLRB 404 (1997). It is undisputed that the Respondent
never negotiated, or offered to negotiate, with the Union
about the proposed change prior to its implementation on
about August 1, 1996. Therefore, this unilateral change in
medical insurance coverage for active employees upon retire-
ment violated Section 8(a)(5) of the Act.
What takes this case out of the ordinary is the remaining
allegation that by attempting to return to the status quo on
about May 2, by rescinding the prior change and offering to
bargain about it, and rescinding the 401(k) payments, the Re-
spondent further violated Section 8(a)(5) of the Act. The
General Counsel alleges that since the Respondent rescinded
this 401(k) provision, a mandatory subject of bargaining,
without prior negotiations with the Union, it violated Section
8(a)(5) of the Act. The Respondent defends that it could re-
scind these payments in order to return to the status quo, and
that since the contract gave it the right, in its sole discretion,
to begin making matching contributions under a 401(k) plan,
it could likewise, unilaterally, stop making these contribu-
tions. As there is no evidence to establish that upon making
these contributions between January 1 and May 22 the Re-
spondent commmitted itself to continuing them, I agree that
the Respondent can unilaterally discontinue future 401(k)
matching contributions. It generaly follows that if the Re-
spondent had the sole discretion to make these contributions,
it likewise had the sole discretion to not make these match-
ing payments.
Counsel for the General Counsel, in his brief, argues that
the rescission of the 401(k) plan contributions in May 1997
‘‘is a separate and discrete act from its earlier unilateral ac-
tion. . . . that Respondent acted at its peril when it linked
restoration of medical coverage to elimination of 401(k)
matching contributions.’’ I disagree. The 401(k) contribution
was clearly seen by the Respondent, the Union, and the em-
ployees as an alternative to medical insurance coverage for
employees upon retirement and the Respondent, in its July
26, 1996 letter to its employees, so stated. I would have to
close my eyes to reality to believe that these two benefits
were separate and distinct; rather, the 401(k) plan contribu-
tions clearly were meant to assist employees who were los-
ing their health insurance coverage, and was given in lieu of
that coverage. I, therefore, find that the Respondent did not
violate the Act when it ended the 401(k) matching payments
at the same time that it reinstated medical insurance coverage
for retiring employees, and would, therefore, recommend dis-
missal of this allegation of the complaint.
CONCIUSIONS OF LAW
1. The Respondent has been engaged in commerce within
the meaning of Section 2(2), (6), and (7) of the Act.
2. The Union has been a labor organization within the
meaning of Section 2(5) of the Act.
3. The Respondent violated Section 8(a)(5) of the Act by
unilaterally discontinuing medical insurance benefits for its
employees upon retirement.
4. The Respondent did not violate the Act as further al-
leged in the complaint.
THE REMEDY
I have found that the Respondent unilaterally discontinued
medical insurance coverage for certain of its employees upon
retirement on about August 1, 1996. However, in May the
Respondent rescinded this change, reinstate these benefits for
its employees upon retirement, and offered to bargain with
the Union about this subject. It is, therefore, no longer nec-
essary to order the Respondent to rescind the change and to
bargain with the Union about this subject, as they have al-
ready agreed to do so and have so informed the Union. I
shall, however, recommend that the Respondent be ordered
to reimburse any employee who suffered a loss due to the
Respondent’s action, such as any employee who retired be-
tween August 1, 1996, and May, and did not receive health
insurance coverage from the Respondent, resulting in unreim-
bursed medical expenses during that period. Because I have
found that the withdrawal of the 401(k) plan on about May
2 did not violate the Act, it is unnecessary to discuss the
case law which allows a charging party union to decide
which of the unlawful unilateral changes should be main-
tained and which shall be rescinded. Herman Sausage Co.,
122 NLRB 168 (1958); California Pacific Medical Center v.
NLRB, 87 F.3d 304 (9th Cir. 1996).
On these findings of fact and conclusions of law and on
the entire record, I issue the following recommended2
ORDER
The Respondent, Union Fork and Hoe Company, Frank-
fort, New York, its officers, agents, successors, and assigns,
shall
1. Cease and desist from
(a) Refusing to bargain collectively with the Union by dis-
continuing health insurance coverage for certain of its em-
ployees upon retirement, without giving prior notice of this
change to the Union or bargaining with the Union about this
subject.
(b) In any like or related manner interfering with, restrain-
ing, or coercing its employees in the exercise of their rights
under Section 7 of the Act.
2. Take the following affirmative action necessary to ef-
fectuate the policies of the Act.
(a) Make whole its employees in the appropriate unit for
any monetary losses that they suffered due to the Respond-
ent’s discontinuance of medical insurance coverage for cer-
tain of its employees upon retirement.
(b) Preserve and, upon request, make available to the
Board or its agents, for examination and copying, all payroll
records, and all other records necessary to analyze the
amount due herein.
(c) Post at its office and place of business in Frankfort,
New York, copies of the attached notice marked ‘‘Appen-
dix.’’3 Copies of the notice, on forms provided by the Re-
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954 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
Judgment of the United States Court of Appeals Enforcing an Order
of the National Labor Relations Board.’’
gional Director for Region 3, after being duly signed by the
Respondent’s authorized representative, shall be posted by
the Respondent immediately upon receipt thereof and shall
be maintained by it for 60 consecutive days thereafter, in
conspicuous places, including all places where notices to em-
ployees are customarily posted. Reasonable steps shall be
taken by the Respondent to ensure that the notices are not
altered, defaced, or covered by any other material.
(d) Within 21 days after service, file with the Regional Di-
rector a sworn certification of a responsible official on a
form provided by the Region attesting to the steps that the
Respondent has taken to comply.
IT IS FURTHER ORDERED that the complaint is dismissed
insofar as it alleges violations of the Act not specifically
found.
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