United Pulse Trading d/b/a AGT Foods

National Labor Relations Board - Administrative Judge Opinions

Mar 31, 2020

18-CA-242003 (N.L.R.B. Mar. 31, 2020)

JD–16–20
Minot, ND
UNITED STATES OF AMERICA
BEFORE THE NATIONAL LABOR RELATIONS BOARD
DIVISION OF JUDGES
UNITED PULSE TRADING, D/B/A AGT FOODS
and Case No. 18-CA-242003
BAKERY, CONFECTIONARY, TOBACCO WORKERS
AND GRAIN MILLERS, INTERNATIONAL UNION,
AFL-CIO, LOCAL NO. 167G
Joseph H. Bornong, Esq., for the General Counsel.
Jonathan M. Sutton, Esq., (Sutton and Associates, Oklahoma City, Oklahoma),
for the Respondent.
Elce Redmond, International Representative, Bakery, Confectionary Tobacco Workers and
Grain Millers International Union (BCTGM), Chicago, Illinois,
for the Charging Party.
DECISION
STATEMENT OF THE CASE
Arthur J. Amchan, Administrative Law Judge. This case was tried in Minot, North
Dakota on January 29, 2020. Local 167G of the Bakery, Confectionary Tobacco Workers and
Grain Millers International Union (BCTGM) filed the charge in this matter on May 22, 2019 and
the General Counsel issued the complaint on August 29, 2019.
The General Counsel alleges that Respondent United Pulse Trading/AGT violated
Section 8(a)(3) and (1) of the Act in the spring of 2019 by withholding its practice of giving
employees annual performance reviews and associated wage increases after the Union filed a
representation petition. As set forth below, I conclude that AGT did not violate the Act by
ceasing annual merit increases, but did violate the Act in ceasing to give unit employees annual
performance reviews.
On the entire record, including my observation of the demeanor of the witnesses, and
after considering the briefs filed by the General Counsel and Respondent, I make the following
JD–16–20
2
FINDINGS OF FACT
I. JURISDICTION
5
Respondent, a corporation, has a facility in Minot, North Dakota at which it processes dry
peas, lentils, chickpeas and other dry beans. During 2018, Respondent sold and shipped goods
valued in excess of $50,000 from its Minot facility directly to points outside the State of North
Dakota. Respondent admits, and I find, that it is an employer engaged in commerce within the
meaning of Section 2(2), (6), and (7) of the Act and that the Union, Local 167G of the BCTGM 10
is a labor organization within the meaning of Section 2(5) of the Act.
II. ALLEGED UNFAIR LABOR PRACTICES
AGT purchased its facility in Minot, North Dakota in 2012. It began distributing 15
product, i.e. lentils, from this facility in 2013. Between 2013 and 2018, AGT typically gave new
employees a 90-day review and many and possibly all other employees an annual performance
review and a wage increase depending on the outcome of that review, Tr. 114. The timing of the
increases were erratic. They did not always occur at 90 days or a year after the prior review
and/or wage increase. 20
However, the annual reviews were generally performed between April and June. A chart
attached to G.C. 20 (pages 135-36 of the electronic exhibits) has a list of the last annual review
date for 52 employees.1 The vast majority (41 of 52 by my count) of these reviews in 2018 were
performed between April 1 and June 30, 2018. Several others were performed in March and 25
several of those performed later in the year were for employees hired in 2018. Other exhibits
establish that prior to 2018 the annual reviews were generally performed in the spring.
In addition to annual merit raises Respondent implemented a qualification card (qual
card) program, which allowed employees to get raises of 25 (initially) or 50 cents an hour if they 30
are able to demonstrate competence in certain tasks.2 In this program, in contrast to the annual
review practice, the employee must take the initiative to get a wage increase by doing something
beyond his or her normal duties. For some employees at least this required them to come to
work early, stay late or go to the plant on a day off to get the required signatures for a qual card,
Tr. 68, 79.35
In about February 2018, a year before the Charging Party Union filed a representation
petition, Les Knudson, the senior AGT official3 at Minot informed employees that AGT was
losing money and that therefore there would be no annual wage increases.4 Respondent also
froze hiring. However, it did not suspend the qual card program.40
1 Some employees on this chart, such as Rebecca Irmen, are clearly not bargaining unit employees.
2 The General Counsel does not allege there is anything illegal about the qual card program. AGT
paid maintenance employees more than machine operators, i.e., $1 for each qual card as opposed to 50
cents for machine operators.
3 Knudson’s title is Division Head for Ingredients Operations.
4 One meeting at which Knudson conveyed this message was attended by witness Madison Wigness
and 20-30 other employees.
JD–16–20
3
Nevertheless, Knudson feared that a strict policy of no annual merit wage increases, and
no hiring would result in his not having enough employees to run the plant. He got permission
from corporate officials in Regina, Saskatchewan to grant raises to some employees. The hiring
freeze was also lifted at the Minot facility.5
The Union filed a petition to represent all full-time and regular part-time production and
maintenance employees and plant clerical employees at Respondent’s Minot facility on February
15, 2019. Management became aware of the Union’s organizing drive about a month before
that. A representation election was scheduled for March 8, 2019 but was never conducted. This 10
was apparently due to charges filed by the Union that were different than the one at issue in this
case. Since the filing of the representation petition, Respondent stopped giving annual
performance reviews and the merit increases associated with these reviews. However, it has
continued giving wage increases pursuant to the qual card program.
15
Company officials have told some employees that it cannot give annual merit wage
increases due to the pendency of the Union’s representation petition. At a safety meeting in
August or September 2019, Les Knudson told employees that such raises could be misconstrued
as a bribe. Knudson contrasted annual merit raises with the qual card program, stating that
Respondent could continue with qual card raises because Respondent had been consistent in 20
administering the program, Tr. 97.
Specifically with regard to annual evaluations, at a mandatory meeting in March 2019,
Ricardo Pasalagua told employees that Respondent was looking to get performance reviews back
on track, Tr. 68. Les Knudson has told employees that annual performance reviews will be 25
resumed once the union representation issue has been resolved, Tr. 125-26. This position has
also been taken in intra-company management communications, Tr. 70-71.
The record evidence regarding annual wage increases
30
Knudson testified that about 30% of the workforce received an annual wage increase in
2018. The record, however, reflects that a much higher percentage of the employees eligible for a
merit raise based on an annual review received one in 2018.
There are several documents in this record pertaining to Respondent’s practices regarding 35
performance reviews and wage increases prior to the union campaign in addition to G.C. Exh.20.
One is an analysis done by counsel for the General Counsel the day prior to the hearing of
documents he reviewed regarding current employees, G.C. Exh. 4. The other, R. Exh. 1, is a
summary finished by Respondent’s management the night before the hearing regarding the wage
history at the Minot plant. Unlike G.C. 4, this document includes information about performance 40
reviews and wage increases of employees who have since been terminated. This is very
significant because Respondent has an extremely high turnover rate in its workforce. Many
employees work for it for a very short period of time. R. Exh-1, however, does not distinguish
between bargaining unit employees and employees who are not unit members.
45
JD–16–20
4
My analysis of these documents indicates that most employees eligible for an annual
performance review in 2018 received one and most received a wage increase as a result.5
However, there is no indication, with one exception, as to why other employees did not get a
review and/or a wage increase.
5
Jeffrey Aamot received a $3 wage increase as the result of his annual review in
May 2018.
David M. Anderson received a 50 cent per hour wage increase as a result of his
review in June 2018.
Shawn Arndt received a 50 cent increase based on his July 2018 annual review.10
Chad Badke appears to have received neither a review nor a wage increase in
2018.
Richard Bagwell received a 50 cent raise based on an annual review in June 2018.
Libby Bennefield got a review and a raise in about June 2018.
Brady Betterley received neither a review nor a raise in 2018.15
Kelsey Beyer had a review in April 2018 but no raise.
Steven Carey received a raise in June 2018 based on an annual review.
Morgan Cummings got a 50 cent increase in November 2018 based on an annual
review.
Mark Davis received neither a review nor a raise in 2018.20
Sunshine Duchaine received a $ 1 raise based on a performance review in June
2018.
Charles Epunou, a shift supervisor, got a $1 raise based on a June 2018 review.
Robert Fardella received neither a review nor a raise in 2018.
Mitzie Fleming received a $1 raise in May 2018 as the result of a combined 90-25
day and annual review.
Jose Forty-Penero received neither a review nor a raise in 2018.
Justin Green got a $1 raise in May 2018 based on an annual review.
Travis Henderson received a $3.50 raise based on an annual review in July 2018.
Michael Houmann got a $1.50 raise based on an annual review in August 2018.30
Windson Jean-Georges, a leadman, received a 50 cent raise based on an annual
review in August 2018.
Demerio Johnson received a 50 cent increase based on an annual review in
September 2018.
Timothy King got a 50 cent increase in June 2018 based on an annual review.35
Sarah Kropp received a $1 increase in May 2018 based on an annual review.
Sydney Mauti had an annual review in March 2018 and a wage increase of 50
cents in May 2018.
Victor Magaka also had a review in May 2018 but got no raise.
Oscar Monroy had no review and no increase in 2018.40
Logan Morrison received a $2 raise in May 2018 based on an annual review.
Bob Muhindi did not receive a raise or a review in 2018.
Joshua Ofsthun received a 50 cent raise based on an annual review in August
2018.
5 I have excluded from consideration the 90-day review and wage increases received by relatively
newly hired employees.
JD–16–20
5
Gilbert Ogendi had neither a raise nor a review in 2018.
Romulo Ortiz had a review in April 2018, but did not receive a raise.
Denise Pardon received a $1 raise based on an annual review in June 2018.
David Rabe received a $1 increase in May 2018 based on an annual review.
Micah Reichenberger received a $3 increase in May 2018 based on an annual 5
review.
Bartin Richard got a $1 increase in June 2018 based on an annual review.
Lorraine Romans did not get a performance review or a raise in 2018.
Craig Sauer apparently was hired, left AGT and returned between January 2018
and January 2019. He received 90-day reviews and raises on both occasions.10
Seth Skager received a $1 raise in May 2018 based on an annual review.
Chelsea Smith received a 25 cent increase in June 2018 based on an annual
review.
Shawn Thompson had neither a review nor received a raise in 2018.
Ramon Ventenilla got a 75 cent raise in May 2018 based on an annual review.15
Phil Waltz, a leadman, had an unfavorable performance review in April 2018 and
did not received a raise.
Madison Wigness had a review in April 2018, but did not receive a raise.
There is no evidence in this record that Knudson ever informed employees generally that 20
some would receive merit-based raises in 2018 or 2019 after his earlier announcement to the
contrary.
Analysis
25
When a representation petition is pending, an employer must act as if the union is not on
the scene. Essentially, it must maintain the status quo. Kauai Coconut Beach Resort, 317 NLRB
996, 997 (1995). NLRB v. Otis Hospital, 545 F.2d 252 (1st Cir. 1976). Thus while a
representation petition is pending, an employer violates the Act if it withholds wage increases
that are an established past practice, Olney IGA Foodliner, 286 NLRB 741, 750 (1987) enfd. 870 30
F.2d 1279 (7th Cir. 1989); Rural/Metro Medical Services, 327 NLRB 49, 51 (1998). In order not
to unfairly influence a union election, the employer must maintain the pre-union status
quo respecting employee benefits. Expectations of upcoming benefits created by the employer
either by promises or through a regular pattern of granting benefits cannot be disappointed
without proof of a union-neutral justification. Southern Maryland Hosp. Center v. N.L.R.B., 801 35
F.2d 666, 668–69 (4th Cir.1986); Robert A. Gorman, Basic Text on Labor Law at 168 (1976).
A merit wage program is a term and condition of employment when it is an established
practice, regularly expected by employees. Factors relevant to this determination include the
number of years that the program has been in place, the regularity with which raises are granted, 40
and whether the employer used fixed criteria to determine whether an employee will receive a
raise, and the amount thereof, Another factor in considering whether wage increases, but not
necessarily other types of benefits, are an established practice is whether they were granted at
JD–16–20
6
predictable intervals, Rural/Metro Medical Services, supra.6 Atlanticare Mgmt., LLC d/b/a
Putnam Ridge Nursing Home, 369 NLRB No. 28 (February 11, 2020) ftn. 6.
Often determining what constitutes the status quo is difficult and an employer runs the
risk of being accused of unfair labor practices regardless of whether it continues to give 5
employees a benefit or withholds that benefit. An employer is allowed to delay continuing a
benefit in some circumstances to avoid giving the appearance of interfering with a representation
election. The employer is also allowed to tell employees that a benefit is being deferred until
after the representation election is concluded if it makes clear that the benefit will be conferred
regardless of the outcome of the representation election.10
With regard to the annual wage increases, I find that Respondent did not violate the Act
by failing to continue them in 2019. AGT publicly abandoned its annual merit wage increase
program in early 2018. While it gave a lot of employees merit increases later in the year, the
record does not indicate the criteria by which AGT determined which employees received such a 15
raise and how much. For example, there is no indication in this record as to why witnesses
Wigness and Betterley did not receive a raise in 2018, when other employees did. Moreover, the
timing of these increases is too erratic for them to be a condition of employment.
However, I conclude the opposite with regard to the annual performance reviews. These 20
occurred every year almost always in the spring. Thus they became a material condition of
employment. Even without the corresponding wage increase the performance review is
important for letting employees “know where they stand,” Tr. 77-78. A performance evaluation
can be an important tool for job security. For example, in unfair labor practice cases it is
sometimes the inconsistency with a performance review after an employee engages in protected 25
activity, compared with prior reviews, that is determinative of discriminatory motive. In other
cases, prior performance reviews indicate that an employer tolerated substandard performance
until the employee engaged in protected activity.
An employer, at least in some instances, can comply with the Act by assuring employees 30
that a benefit will be restored regardless of the outcome of the representation election.
Respondent did not do that in this case. Thus, I find it violated Section 8(a)(3) and (1) in ceasing
its established practice of giving annual performance reviews after the Union filed its
representation petition.
35
On these findings of fact and conclusions of law and on the entire record, I issue the
following recommended7
40
6 There appears to be no difference as to whether or not a benefit is an established practice in Section
8(a)(1) cases compared with Section 8(a)(5) or representation cases. Rural/Metro Medical Services is a
Section 8(a)(1) case; Atlanticare Management is a Section 8(a)(5) case. Kauai Coconut Beach Resort
involved objections filed after a Board election.
7 If no exceptions are filed as provided by Sec. 102.46 of the Board’s Rules and Regulations, the
findings, conclusions, and recommended 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.
JD–16–20
7
ORDER
The Respondent, United Pulse Trading, doing business as AGT Foods, Minot, North
Dakota, its officers, agents, successors, and assigns, shall5
1. Cease and desist from
a. Discontinuing its established practice of giving unit employees annual performance
reviews.
b. In any like or related manner interfering with, restraining, or coercing employees in 10
the exercise of the rights guaranteed them by Section 7 of the Act.
2. Take the following affirmative action necessary to effectuate the policies of the Act.
a. Renew its practice of giving annual performance reviews in 2020.15
b. Within 14 days after service by the Region, post at its facility in Minot, North Dakota
copies of the attached notice marked “Appendix.”8 Copies of the notice, on forms
provided by the Regional Director for Region 18, after being signed by the
Respondent’s authorized representative, shall be posted by the Respondent and 20
maintained for 60 consecutive days in conspicuous places including all places where
notices to employees are customarily posted. In addition to physical posting of paper
notices, the notices shall be distributed electronically, such as by email, posting on an
intranet or an internet site, and/or other electronic means, if the Respondent
customarily communicates with its employees by such means. Reasonable steps shall 25
be taken by the Respondent to ensure that the notices 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 proceedings, 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 30
Respondent at any time since February 15, 2019.
c. Within 21 days after service by the Region, file with the Regional Director 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.35
Dated, Washington, D.C. March 31, 2020
Arthur J. Amchan40
Administrative Law Judge
8 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 Judgment of the United States Court of Appeals Enforcing an Order of the National
Labor Relations Board.”
c?A,/,.(rt. a,,,a,„
JD–16–20
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 Federal labor law and has
ordered us to post and obey this notice.
FEDERAL LAW GIVES YOU THE RIGHT TO
Form, join, or assist a union
Choose representatives to bargain with us on your behalf
Act together with other employees for your benefit and protection
Choose not to engage in any of these protected activities.
WE WILL NOT cease our established past practice of giving you annual performance reviews
because Local 167G of the Bakery, Confectionary, Tobacco Workers and Grain Millers
International Union has filed a petition to represent you.
WE WILL NOT in any like or related manner interfere with, restrain, or coerce you in the
exercise of the rights guaranteed you by Section 7 of the Act.
WE WILL resume our past practice of giving you annual performance reviews in 2020.
UNITED PULSE TRADING, D/B/A AGT FOODS
(Employer)
Dated By
(Representative) (Title)
The National Labor Relations Board is an independent Federal agency created in 1935 to enforce the National Labor
Relations Act. It conducts secret-ballot elections to determine whether employees want union representation and it
investigates and remedies unfair labor practices by employers and unions. To find out more about your rights under
the Act and how to file a charge or election petition, you may speak confidentially to any agent with the Board’s
Regional Office set forth below. You may also obtain information from the Board’s website: www.nlrb.gov.
Towle Building, Suite 790, 330 Second Avenue South, Minneapolis, MN 55401-2221
(612) 348-1757, Hours: 8 a.m. to 4:30 p.m.
JD–16–20
The Administrative Law Judge’s decision can be found at www.nlrb.gov/case/18-CA-242003 or by using the
QR code below. Alternatively, you can obtain a copy of the decision from the Executive Secretary, National
Labor Relations Board, 1015 Half Street, S.E., Washington, D.C. 20570, or by calling (202) 273-1940.
THIS IS AN OFFICIAL NOTICE AND MUST NOT BE DEFACED BY ANYONE
THIS NOTICE MUST REMAIN POSTED FOR 60 CONSECUTIVE DAYS FROM THE DATE OF POSTING AND MUST NOT BE
ALTERED, DEFACED, OR COVERED BY ANY OTHER MATERIAL. ANY QUESTIONS CONCERNING THIS NOTICE OR
COMPLIANCE WITH ITS PROVISIONS MAY BE DIRECTED TO THE ABOVE REGIONAL OFFICE’S
COMPLIANCE OFFICER, (612) 348-1770.