Western Pacific Roofing Corp.,Download PDFNational Labor Relations Board - Board DecisionsAug 21, 1979244 N.L.R.B. 501 (N.L.R.B. 1979) Copy Citation W'ESIERN PACIFIC ROOIIN(i C'ORPORATION Western Pacific Roofing Corporation and United Slate, Tile and Composition Roofers, Damp and Waterproof Workers' Association, Local No. 36. Case 21-CA I o088 August 21, 1979 DECISION AND ORDER BY CHAIRMAN FANNIN(; ANI) MI MBRS PNEILO ANi) TRtUESI)ALI On May 18, 1978, Administrative Law Judge Earl- dean V.S. Robbins issued the attached Decision in this proceeding. Thereafter, Respondent filed excep- tions and a supporting brief, and a reply brief: the General Counsel and Charging Party filed cross-ex- ceptions and supporting 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. The Board has considered the record and the at- tached Decision in light of the exceptions and briets and has decided to affirm the rulings, findings.' and conclusions2 of the Administrative l.aw Judge and to adopt her recommended Order, as modified herein.3 ' The Charging Part) has excepted to certain credlhbilty findings made b) the Administrative l.aw Judge II is the Board's established polic not to overrule an adminlstrative law judge's resolutions with respect to credibilit 5 unless the clear preponderance of all of the rele'sant evidence coninces us that the resolutions are incorrect Standard Dn Ball Pr,,duicl, In, . 91 NLRB 544 (1950). enfid 188 2d 362 3d (ir. 1951). We have carefully examined the record and ind no basis for reversing her findings The Administrative Law Judge ilund merit to Respondent's contention that the existence of a bargaining impasse constituted an "unusual circum- stance" justifying its otherwise untimely withdrawal from the multlemploler unit. We continue to adhere to the principle that impasse does not constitute such an "unusual circumstance." Charle. D Bnanno Linen Senice. Inc . 243 NLRB No. 140 (1979). Moreover. on the basis of the entire record we find that no impasse existed at the time Respondent attempted to withdraw from the multiemployer group. In fact, the parties had reached agreement n all issues only a few dass before Respondent informed the Union of its with- drawal. The contract was ratified b the Union shortll thereafter 2 Chairman Fanning adheres to the position that an untimely withdrawal from multiemployer bargaining does not. of itself, constitute a violation of the Act. Rather, the refusal to execute and apply the contract reached through multiemployer bargaining is the essential part of the 8(a)(S) iola- tion. Preston HI Haskell Compar. 238 NLRB 943. fn. I (1979) Ringside Liquors, Inc. d/h/a Dino'i Lunge, et a.. 237 NLRB 30. fn 2 (1978)L In- dependent Association of Steel Fabricator,. Inc. et al., 231 NLRB 264. fn. 2 (1977). See also Teatmster. Union, Local 3178 afiliated ith International Brotherhood of Teamsters, eli (Olnmpia .4 utomo,hlde Dealer.A .4soclo/tion), 243 NLRB No. 138. fn. 1 (1979). Accordingly. Chairman Fanning. while agree- ing with his colleagues in all other respects herein. would not find that Re- spondent's withdrawal from the unit, of itself, is violative of the Act. The Administrative Law Judge recommended a broad remedial order The Board has recently reconsidered its plicy regarding the application of the so-called broad order and has decided that such is warranted only when a respondent is shown to have a proclivity to violate the Act. or has engaged in such egregious or widespread misconduct as to demonstrate a general disregard for employees' fundamental statutor rights. Hickmolt oodi, Inc, 242 NLRB No 177 (1979). Inasmuch as Respondent's unlawful acts de- scribed herein are not of such a nature, we shall modify the recommended Order of the Administrative Law Judge by substituting the word "in any like or related manner" for the phrase "in an) other manner" In par. 1(h) of said recommended Order. ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Rela- tions Board adopts as its Order the recommended Or- der of the Administrative Law Judge. as modified be- low, and hereby orders that the Respondent, Western Pacific Roofing Corporation, Bell, California, its offi- cers, agents. successors, and assigns, shall take the ac- tion set forth in the said recommended Order, as so modified: I. Substitute the following fr paragraph l(h): "(h) In any like or related manner interfering with, restraining, or coercing its employees in the exercise of their rights guaranteed in Section 7 of the Act." 2. Substitute the attached notice for that of the Administrative Law Judge. APPENDIX Noril(l To EPI.OYIi:IS P(s i lI) BY ORDER oF 111 NATIO()NA. LABOR RFL.ATIONS BOARD An Agency of the United States Government After a hearing at which all parties had the opportu- nity to present their evidence the National Labor Re- lations Board has found that we violated the National l.abor Relations Act. has ordered us to post this no- tice. and we intend to abide by the following: The Act gives all employees these rights: To engage in self-organization To form, join, or help unions To bargain as a group through a representa- tive of their own choosing To act together for collective bargaining or other mutual aid or protection To refuse to do any and all of these things. WE WIt.L N)I refuse to bargain collectively with United Slate, Tile and Composition Roof- ers, Damp and Waterproof Workers' Associ- ation, Local No. 36, as the exclusive representa- tive in its territorial jurisdiction of our employees in the following appropriate unit: All employees employed by the employer- members of the Roofing Contractors Associ- ation of' Southern California, Inc., in the job classification set forth in the collective-bar- gaining agreement between the Roofers Unions and RCA. effective from August 15. 1974, to August 15. 1977. WF WIt.L N withdraw from said multiem- ployer bargaining unit except upon adequate written notice given prior to the date set bh the contract for modification, or to the agreed-upon date to begin the multiemplover negotiations, or 244 NLRB No. 74 501 I)E(ISIONS OF NATIONAL LABOR RELATIONS BOARI) at such other time we may lawfully withdraw. WI WilL NoTi refuse to sign, and acknowledge that we are hound by the terms of, the collective- bargaining agreement between the Roofers Unions and RCA effective August 15. 1977. WI: will. NOT unilaterally change the wage rate or discontinue making payments to the var- ious benefit funds and the reporting of total hours worked by our employees as required by the above-described collective-bargaining agree- ments without first bargaining with the Union. WE WILL. NOT deal directly and individually with our employees in derogation of the Union's status as exclusive collective-bargaining repre- sentatives. WE WIL. NOT unlawfully discharge our em- ployees. Wt WILl. NO1 attempt to persuade our em- ployees to abandon the Union and remain in our employ by promising employees better working conditions if' they do so. WE WIll1. NOT in any like or related manner interfere with, restrain, or coerce our employees in the exercise of their rights guaranteed in Sec- tion 7 of the Act. WE WIl.L forthwith sign and acknowledge that we are bound by the terms of the collective-bar- gaining agreement between the Roofers Unions and RCA effective August 15, 1977, and comply with the terms and conditions thereof, both re- troactively and for the balance of its term, in- cluding making payments to the Roofers Union depository for the various benefit funds as pre- scribed in said agreement: and wE wiii. make payments to the various benefit funds as pre- scribed in the 1974 77 agreement which we failed to make as a result of individual wage agreements with our employees. WE Will. reimburse our employees for any loss of wages and benefits they may have suffered as a result of our failure to comply with the terms and conditions of the above-described agree- ment, with interest. WE wi.L offer Willie Williams and Simon Rangel immediate and full reinstatement to their former positions or, if those positions no longer exist, to substantially equivalent positions, and WE WIi.t reimburse each of them for any loss of pay he may have suffered because we discharged him, with interest. WESTERN PACIFIC ROOFING CORPORATION DECISION STAIEMENI OF 111E CASI EARIDEAN V.S. ROBBINS, Administrative Law Judge: This case was heard before me in Los Angeles. ('alifornia. on March 13 and 14. 1977. The charge was filed by United Slate. Tile and Composition Roolers. Damp and Water- proof Workers' Association, Local No. 36. herein called the Union, and served on Respondent on October I I, 1977. The complaint, which issued on December 7. 1977. alleges that Respondent violated Section 8(a)( 1 ) and (5) of the Act. The basic issue herein is whether, at the time of Respon- dent's attempted withdrawal from the multiemployer bar- gaining unit, there existed "unusual circumstances" of a na- ture to justify such withdrawal after the commencement of negotiations. Upon the entire record, including my observation of' the witnesses and after due consideration of the briefs filed by the parties. I make the following: FINDINDIN(S ()01 F( 1. JRISII( I iON Respondent is engaged in the business of' roofing con- struction and related operations with its principal office lo- cated in Bell. California. The complaint alleges, and I find as more fully set forth below, that at all times material herein Respondent has been, and is now. an employer- member of the Roofing Contractors Association of' South- ern California. Inc., herein called R('A, for the purpose of' collective bargaining with labor organizations. The complaint alleges, the answer admits, and I find that RCA is an association comprised of various employers en- gaged as roofing contractors in the building and construc- tion industry in Southern California which exists for and engages in collective bargaining for, and negotiates and ex- ecutes collective-bargaining agreements on behalf of. its employer-members, including Respondent, with various la- bor organizations, including the Union. The parties stipu- late that the employer-miembers of' RCA in the aggregate annually purchase goods, products, and services valued in excess of $50().000 either directly from suppliers located out- side the State of (California or directly from suppliers lo- cated within the State of (alifornia, each of whom in turn receives the same goods. products. and services directly from suppliers located outside the State of ('alifornia. Upon the pleading and the evidence. I find that RCA and its employer-members, including Respondent. are now., and have been at all times material herein. employers en- gaged in commerce and in a business affecting commerce within the meaning of Section 2(2), (6). and (7) of the Act. II. I.ABOR OR(ANIZATI()N The Union is now, and at all times material has been, a labor organization within the meaning of Section 2(5) of the Act. Il. 111t A.LLtiED) UNFAIR ABOR P'RA( iS A. The Alleged Conduel It is undisputed that until September 1977,1 Respondent had been a member of RCA since about 1965. It is admit- 'All dates herein will he 1977, unless otherwise indicated. 502 WESTERN PACIFI( RO()OFIN( CORPORATION led that R('A. on behalf' of' its enlplos\er-nmenibers. and Rootfers I.ocal No. 36. Roofers I.ocal No. 72.2 and Roofers I.ocal No. 220. herein referred to collectirvel, as the nions or the Roolers Uln.,ns. have been parties to successive col- lective-hbargaining agreements. the most recent of which was effective from August 15. 1974. until and including Au- gust 15. 1977. with the inion, within its territorial jurisdic- tion, as the exclusive majority representative for purposes of collective bargaining of the employees of the employer- members of the association. including Respondent. in an appropriate unit comprised of all employees working within the job classifications covered by the abhove-stated collec- tive-bargaining agreement, excluding all office clerical em- ployees. professional employees, guards, and supervisors as defined in the Act. By letter dated June 7. the Unions timel\ notified R('A of their intent to modify the existing collective-hargaining agreement. The first negotiation session was held on Jul> 15. RCA submitted to the Unions a document dated Jul) 14. which lists the employers represented by RCA in the negotiations. Respondent is listed on this document.' Johnny Zamrzla. president of Respondent, was a mem- her of the RCA negotiating committee4 and participated in most of the negotiation sessions. Upon the expiration of the 1974-77 collective-bargaining agreement the union negoti- ating committee informed the RCA negotiating committee that they would not work without a contract and the Unions went on strike against the employer-members of RCA. Negotiations continued without hiatus and the Unions recommended to their membership on September 9 that the) ratify the RCA proposal. The membership re- jected the proposal. Other proposals had been rejected on two previous occasions. During the course of the negotiations, the Union made several economic concessions which made the new contract more favorable to the employers than the recently expired contract, viz, cutting the starting wages of apprentices from 60 percent ofjourneymen wages to 40 percent and lowering subsequent progressive increases: extended the free zone' from 25 miles to 30 miles effective August 15, 1978:6 deleted the requirement that a thermostatically controlled kettle or tank car be attended by an employee: and reduction of crew size from two men for eight squares' to two men for 20 squares." The Union's original wage proposal was $1.25 an hour for each of 3 years plus a cost-of-living increase. The Subsequent to the negotiations, the Roofers International Union with- drew the charter of Local No. 72 and transferred all of its members to I.ocal No. 36. J Unless otherwise indicated, the facts herein concerning collective-bar- gaining history and the 1977 negotiations are not disputed 4 At the time of the negotiations. Zamrzla was secretary of RCA. He re- signed upon Respondent's attempted withdrawal from the unit. He sas also a member of the safety committee and ice president of the National Roof- ing Contractors Association and is secretary-treasurer of the Western States Contractors Association. He has not resigned these latter positions. Subsistence pay is not required in the free znme. 6 The association had proposed that the entire geographical area covered by the contract (Orange County. Los Angeles Counts, and Ventura Count), be considered a free zone. 'One hundred square feet. Rivera testified that the average residence is about 13 squares. Zamrzla testified that the average residence and two-car garage is about 25 squales. According to Rivera, the association had proposed two men to 25 squares. According to Zamrzla. the proposal was two men to 50 squares association counterproposed 53 an hour oer a 3-ear pe- riod. Thes reached agreemenl prior to the final negotiation session on n $1.10 an hour for the first ear and $I a1 hour 1or each of the 2 succeeding years. The last negotialtion session was held on September 12. Zamrzla was present. Ihe major outstanding issues at the commencement of that session were subsistence pa\. the proposed inclusion of' a pre-apprentice classification. tid the proposed contribution to an industr> fund. D)uring the course of the September 12 negotiation session. agreement was reached on these issues and certain other minor items. 'The Unions agreed that theS would recommend to their membership that the proposal be ratified. A ratificationl meeting was held on September 17 and the proposed modifications to the preious agreement was rati- tied hb the membership of the nions. ()n September 16. Respondent. who operates in the geographical jurisdiction of the Union. sent the U nion a telegram stating: THIS IS TO Al)VISE YOU THAT WESTERN PA- CIFIC ROOFlING CORPORATION IS WIl'IH- DRAWING THEIR BARGAINING RIGHIS PE R OUR I.ETTER OF SEP'EMBER IS 1977. Fernando Rivera. secrelary-treasurer of the Union and chairman of the union negotiating committee. testified that the Union did receive the September IS letter: as he recalls it was received before receipt of the telegram. John Mitchell, assistant business agent for the Union. testified that on about September 28 he asked Zamrzla to sign the new' contract. Zamrzla said he w'as not read to sign at that time. About a week later. Mitchell telephoned Zamrzla and asked if he was ready to sign the new agree- ment. Zamrzla said he was not going to sign the agreement. Zamrzla testified that Mitchell came to his shop twice and asked him to sign a document. According to him, the first time Mitchell had a one-page document which he as- sumed to be an interim agreement. but he admits he did not read the document. The second time. Mitchell had a multi- page document. Both occasions were in the last week of September or the first week in October. He admits that he refused to sign the agreement. Shortly thereafter. Rudy Hell telephoned Zamrzla and said he was sending Union Busi- ness Agent Hallal over with the contract for Zamrzla to sign. Zamrzla said he was not going to sign. They had a short conversation regarding Zamrzla's opposition to the new contract piecework. free travel zone, etc. Later that day Hallal came to Zamrzla's office and asked him to sign the new collective-bargaining agreement. Zamrzla told him to take the agreement back and Heil would fill him in. The parties stipulated that no trust fund payments have been made by Respondent for any period subsequent to August 15. Zamrzla admits that he is not complying with the new agreement as to wages and that only one employee is receiving health insurance coverage.' Employee Willie Williams testified that during the first half of 1977 he worked between 40 and 45 hours a week. 9Zamrzla admits that he is presently providing medical and dental cover- age only for Cooke. This is under a plan different from that provided n the collectie-bargaining agreement 5)3 DI):(ISIONS OF NATIONAL. LABOR RELA'I IONS BOARD and that in June. July. and August he averaged about 40 hours a week. During that period he was paid by check or some of' the hours and in cash for some of the hours. Itis rate of pay was $12.34. When he was paid in cash he re- ceived cash at the rate of about $8 an hour which is what his take-home pay after deductions would normally be.'" Since he understood that those hours tfor which he was paid in cash would not be reported to the Union, he inquired on several occasions if Respondent was reporting enough hours work to ensure that he would be entitled to various benefits. On each occasion he was assured by Zamrzla or office personnel that sufficient hours were being reported. Zamrzla admits that he made these cash payments and that he did not make contributions to the various trust funds for the hours worked for which Williams was paid in cash. Williams testified that he saw other employees being paid in cash, but overheard no conversation which would ex- plain such payments. It is undisputed that for more than a year Respondent's payroll checks were frequently returned for insufficient funds. On these occasions he redeemed the bad checks by giving employees cash. Employee Simon Rangel testified that he was paid twice in cash. According to Rangel, in about July he was given half of his pay in cash and half in a check. On a second occasion in September, Zamrzla paid him in cash. Rangel went to the office and protested to Zamrzla and his wife that he wanted a check stub setting forth the various deduc- tions. He was then given a slip of paper that listed the deductions. Rangel asked why they did not deduct for the Union and for vacations. Mrs. Zamrzla said there was no more Union." Rangel said he wanted to belong to the Union. Mrs. Zamrzla did not testify. Zamrzla testified that on this second occasion he paid Rangel in cash and at the same time asked him to endorse a check. Zamrzla further testified that on this and other occasions he would give employees a check to endorse merely as a receipt and then pay them in cash. Zamrzla denied that any employees were paid partially in cash and partially by check other than Williams and Douglas Cooke. He contends that Williams and Cooke sometimes performed work for Respondent as subcontrac- tors and it was for this work that he paid them in cash. Respondent would supply the material and load the roof. Williams and Cooke would then apply the roofing at a flat rate.'2 Since there is no evidence to indicate whether these cash payments were only partial payments, initial payments or redemption of insufficient fund checks, I find that the evidence is insufficient to establish that these other employ- ees were paid cash under the same arrangement as existed with Williams and Cooke. 10 Several times Williams inquired of both Zamrzla and his wife as to whether they were reporting sufficient hours to the trust funds for him. Each time they assured him that they were. I Rangel testified through an interpreter. Also, a fellow employee inter- preted for him during this conversation. " Zamrzla testified that he does not know whether Williams has a contrac- tor's license, and that Cooke used Zamnrla's license. Williams testified that in September. Zamrzla told him he was not going to sign a union contract and that he wanted Williams to remain in Respondent's employ. lie said he would ensure that they had insurance coverage. Zamrzla further said that the Union did not do that much for them. that they were going to work without being hassled by the Union. As to health insurance. Zamrzla said that Williams would not have to worry about getting in sufficient hours. that as long as one paid the premiums. one received the benefits. Williams quit his employmen: with Respondent in Sep- tember. Rangel quit in October. 'Ihey both testified that they quit because Respondent withdrew recognition from the Union. They both also testified that another reason that the' quit was because of the insufficient funds payroll checks. B. Facts ats o Re.pontdcent's Economi Dnfi''e Zamrzla testified that Respondent has been having finan- cial difficulties for 3 or 4 years. These difficulties flow in part from a contract on a particular job, herein referred to as the Zapata job, which started in 1974. Zamrzla testified that in the fiscal year ending June 30(). 1976. Respondent suffered an out-of-pocket loss on the job of about $140,(00)0. During this time Respondent experienced a critical cash flow problem resulting in numerous checks being dishon- ored by the bank for lack of funds. Payroll checks were not honored on an almost weekly basis. During 1976 and 1977. Respondent became delinquent in payments to material suppliers. As a result these suppliers either stopped extending credit to Respondent or extended credit only on a limited job-by-job basis. Currently Respon- dent's principal supplier is Modern Materials Incorporated. Certain unaudited financial statements were introduced into evidence by Respondent through Sol Roniss, an out- side accountant retained by Respondent. They show, inter alia, the following for the fiscal ears ending on June 30, 1974-77 and the 6-month period ending December 31. Balances 6/30/74 6/30/75 6/3076 6/30/77 12/31/77 Cash in ank $ 6,586 $(5,217) $(6,346) $(9,757) 96) (overdrai t) Current assets 13/ 288,510 266,691 314,751 295,116 285,176 Current lia- 249,117 255,689 452,811 412,662 400,875 bilities 14/ Retained earn- 28,679 36,695 (100,327) (70,716) (73,792) ings (deticlt) / Addition(reduction) 17,104 6,353 (145,895) 29,611 ( 3,076) to retained earnings Union osts 30,679 32,017 35,311 40,296 3,312 Salaries- 26,000 26,000 20,000 24,500 12,500U ofticer 16/ 6Lros rctiits 163,338 153,712 101,568 142,644 46,852 Iet incoine(loss) 17,104 6,353 (145,985) 29,611 17/ (2,918) 13 Current assets are all assets expected to be converted to cash within the period of a year. 14 Current liabilities are those liabilities which are expected to he paid within a year. I' Retained earnings are the profits after income taxes, that are reinvested into the business. It is a cumulative figure which starts with the first ear of operations i This refers to Zamrzla's salary 17 The accountant's note on this item reads. "Federal income tax liability on current ear's earnings were offset by prior ear loss carrsoser." 504 WESTERN PA('IFIC ROOFING CORPORATION Stephen H. Anderson, of Modern Materials, testified that over the last 2 or 3 years. Respondent had become delin- quent in the payment of its account with Modern until by 1977 Respondent's overdue account was approximately $25,000. During this period. Modern severely curtailed the amount of credit extended to Respondent. In Jul or Au- gust, Anderson met with Zamrzla concerning this account and his line of credit. Anderson pointed out Respondent's poor financial position and suggested that Respondent would have to make some major changes in its operations. Zamrzla agreed and said he had a plan. His plan as out- lined to Anderson was to substantially discontinue new work and to engage primarily in recover work. Therefore, Zamrzla explained, he would not be required to use union help as he would be on new work and this would substan- tially increase his profits. Anderson said, "In other words. you are only going to do work which you personally can oversee." Zamrzla said, "Yes." Anderson said, on those conditions, Modern would extend credit to Respondent. Although Anderson kept referring to Respondent being nonunion as a condition of extending credit, it is apparent from his testimony as a whole that his interest was in Re- spondent restricting itself primarily to recover work, and that he agreed to extend credit to Respondent on the basis of Zamrzla's representation that he would engage primarily in recover work." On redirect. Anderson testified that he told Zamrzla that he was interested in Respondent becom- ing a recover contractor and to ensure that Respondent would not get into new work, he did not want Respondent to be union. Anderson testified that he did not recall exactly when the conversation occurred, but thinks it was in August. Zamrzla testified that in August, Anderson did begin to extend Re- spondent additional credit, however, he did not reach agreement with Anderson on an unlimited line of credit until after he sent his letter attempting to withdraw from the multiemployer bargaining unit, perhaps as late as Octo- ber. He further testified that he first presented his plan to Anderson in the latter part of July. At that time Anderson requested more details on Respondent's accounts payable and accounts receivable. This was delivered to him at a meeting during the course of the strike. Anderson testified that in managing the line of credit ex- tended to Respondent, he periodically reviews Respon- dent's financial reports. He further testified that Respon- dent had an exceptionally weak balance sheet even prior to the Zapata job, that it made money one year and lost it the next, and that Respondent did not appear to be reasonably adept in managing the credit liability that was being ex- tended. Zamrzla testified that Respondent could not survive un- der the financial burdens of the new collectise-bargaining agreement. According to him, survival as a union contrac- 1i It is apparent from Anderson's testimony that he considers recover work to be more profitable and that he does not consider that Respondent has the organization or management expertise to efficiently and profitably handle commercial jobs. tor would have been possible only if negotiations had re- suited in certain decreases in the economic cost of the agreement. According to Zamrzla, Respondent was seeking a piecework rate for tile and composition shingle work a free travel zone which would encompass the three counties covered by the agreement: crew size modification to two men for 50 squares: and a temporary helper or preappren- tice classification with a wage rate of $4.50 an hour for work other than actual roofing application and no, or mini- mal. fringe benefits.? However, the testimony of both Zamrzla and Rivera show that whatever argument Zamrzla made as to Respon- dent's individual need for these provisions, was made within the RCA negotiating ('ommittee, not at the negotia- tion table. Nor did Respondent. prior to September 15, in- form the Union that it wished to negotiate separately from RCA or that it was in dire financial straits. Also, when Zamrzla refused to sign the new agreement he did not plead dire economic difficulty.2" Although Zamrzla tesitified that at some time prior to negotiations he made an extensive survey on piecework done b carpenters and discussed with Rivera his thinking as to piecework, he does not contend. and there is no evidence, that this discussion was couched in terms of Respondent's economic survival.: Zamrzla also testified that the only change in Respon- dent's financial position between the commencement of ne- gotiations and its attempted withdrawal was that Forest Lumber sued Respondent. Apparently it was for the bal- ance of Respondent's account with Forest. A default judg- ment was entered sometime after September 12. Zamrzla is unsure as to whether the suit was filed prior to Respon- dent's attempted withdrawal. Conclusions It is undisputed that Respondent consented to be bound by multiemployer bargaining and that Respondent actively participated in the negotiations which led to the 1977 col- lective-bargaining agreement. Thus, the threshold issue is whether circumstances justified Respondent's withdrawal from the multiemployer bargaining unit after the com- mencement of negotiations. It is well established that once the multiemployer bargaining unit is established, the em- ployer-members and the Union are bound by multiem- ployer bargaining absent compliance with the rules govern- ing withdrawal from multiemployer bargaining set forth by the Board in Retail Associates, Inc., 120 NLRB 388, 393- 394 (1958). i9 Zamrzla denies that he frequently uses helpers. 20 In this regard, Zamrzla testified that on one occasion he mentioned the things he did not like about the contract a1 According to Zamrzla, he is 99 percent sure that piecework was dis- cussed dunng negotiations. As he recalls the discussion was basically as to composition shingles, but there was also some discussion as to tile. The roofers have been striving for jurisdictional control over the tile market Presently most of the tile work is being done by carpenters on a piecework basis and almost all of the wooden shingle work is done by carpenters. Many roofing contractors are using carpenters on a piecework basis. Respondent was signatory to a carpenter's agreement in 1975 and 1977. He never signed a new contract following the 1976 expiration of the new carpenters agree- ment. 505 I)0 ('ISIONS OF NATIONAL LABOR RELATIONS BOARD In Retail Associates, the Board stated. that the stability requirements of the Act dictate that reasonable controls limit the parties as to the time and manner that withdrawal will he permitted fr,om such a unit. Accordingly, the Board held that prior to the date set by the contract tIr modifica- tion, or to the agreed-upon date to commence negotiations, withdrawal can only be effected by an unequivocal written notice expressing a sincere intent to abandon, with relative permanency, the multiemployer unit, and to embrace a dill ferent course of bargaining on an individual employer basis. Once actual bargaining negotiations on a multiemployer basis have begun, withdrawal can be effected only on the basis of' "mutual consent" or when "unusual circum- stances" are present. Here the attempted withdrawal came after the final negotiation session and prior to ratification of the agreement by the union membership. Also, there is no "mutual consent." Respondent contends that "unusual circumstances" exist-specifically the existence of a bargaining impasse, the fragmentation or dissipation, of the multiemployer bargain- ing unit, and dire economic circumstances which threaten Respondent's existence as a viable business entity. I find the first two contentions without merit. The Board has consis- tently rejected the contention that a bargaining impasse constitutes the requisite "unusual circumstances." Hi-Wa i' Billboards, Inc., 206 NLRB 22 (1973); Bill Cook Buick. Inc., 224 NLRB 1094 (1976): Charles D. Bonano Linen Service. Inc., 229 NLRB 629 (1977). Although four circuit courts of appeal have rejected the Board's rationale in this regard, I am bound by the decisions of the Board. Insurance Agents International Union, AFL CIO (Prudential Insurance Com- pany of America), 119 NLRB 768 (1957). As to the second contention, there is insufficient evidence to support any dis- sipation of the unit. Of the 31 employers in the unit, 6, including Respondent, attempted to withdraw after the fi- nal negotiation session. The Union did not consent to any of these withdrawals. Clearly. this does not constitute a fragmentation of the unit. Respondent cites Connell Typeselling Company. et al., 212 NLRB 918, 921 (1974) as holding that withdrawal was jus- tified by the combined effect of several factors-impasse and substantial reduction of the unit. Respondent errs in its reliance on Connell. In that case, the Board specifically based no finding on impasse or any factor other than the reduction of the size and strength of the unit. There, of the 36 employers with a total complement of 209 employees, 23 employers with 173 employees, had either completely with- drawn from the unit or had signed interim or individual agreements which, in effect, constituted a withdrawal of their strength from the unit. In these circumstances, the Board concluded: The Board is always concerned as to stability in the collective-bargaining relationship. However, in our opinion, ths unit has, with the consent of the Union, been so reduced in size and strength that it would be unfair and harmful to the collective-bargaining process to require Respondents to continue in a unit merely because the Union, which consented to the withdrawal of so many others, is unwilling to consent to their with- drawal. In these unusual circumstances we conclude that Respondents were not required to remain within the multiemploher bargaining-unit. Such is not the situation here where the Union has not consented to the attempted withdrawals by 6 of the 31 em- ployers and no interim agreements have been signed by any unit employers.2 Respondent's principal argument is that its withdrawal was justified b extreme financial hardship threatening its existence as a viable business entity. Specifically. Respon- dent argues that it was insolvent at the time it withdrew from the unit and that it could only become solvent and a viable economic unit by drastically changing its method of' operations from large. commercial contracts to recover work.21 This allegedly involved totally different economic circumstances and pricing structure, making the continu- ation of the business under union regulations and union scale impossible because it would not be competitive. Respondent defines insolvency as the inability of one to pay ones debts as they become due in the ordinary course and contend that even though it had not filed a petition fitr bankruptcy, it would have been entitled to do so under the Bankruptcy Act. It could not pay its bills as rithey became due, credit was no longer extended to it by its suppliers, and its checks were returned due to insufficient funds. Thus, Respondent concludes, it would be manifestly unjust to punish Respondent for its willingness to continue opera- tions and to attempt to continue its business in spite of the extreme financial hardship it was suffering. Finally. Respondent argues. it made every effort to make an arrangement with the Union which would solve the par- ticular financial problems and continued to be willing to negotiate with the Union on an individual basis after its n2 Respondent contends that an interim agreement was signed by one em- ployer-member. Federal Roofing. However, ederal Roofing is not listed by RCA as an employer-member. Respondent contends that it is. since it is owned by the same owner as Robert Nichols. Inc., who is a member. Even assuming that Federal Roofing was a member. its signing of an nterim agreement can hardly be deemed to have an adverse impact on the integrity of the unit. 23 The Union argues that Respondent's alleged financial condition is ques- tionable since Zamrzla was involved in related transactions with other enti- ties owned and controlled by him. Western Pacific Roofing of California is owned by Zamrzla. According to Roniss, it is a paper corporation used for expense-saving purposes. It operates solely as a labor-providing unit .hose net profit ranges between 0 and $600. All labor expenses and officer's salaries are paid through this corporation Western Pacific of Orange Counts. also engaged in roofing construction, is equally owned by Zamrzla and his brother-in-law, Zig Hall. According to Zamrzla, he exerts no active control over Western Pacific of Orange County. It is managed solely by Hall. At times Respondent subcontracts work to Western Pacific of Orange County and vice versa. According to Zamrzla, when this occurs, the corporation doing the work bills the other corporation in the same manner that a stran- ger would be billed, and the other corporation would pay in the same man- ner that it would pay a stranger. Williams testified that in June. July, and August, Respondent sent him and his crew. at various times, to work for Western Pacific of Orange County. On these occasions, he would drive either his own truck or Respondent's truck. Materials would he delivered to the jobsite by Respondent's trucks and he was paid in cash by Respondent. 506 WESTERN PACIFI( RO()FIN( (()ORPO)RA IION withdrawal from the multiemploer bargaining unit, hut the l'nion refused to cooperate in any manner. In the cears since Retail 4 sit,( ilr, vtq)ra. the Board has had a number of occasions to consider its ''unusual circuml- stances" rationale. These cases were revieed in li-ill',v Billboard where the Board stated at p. 23: In cases after Retail 4.slsiate. slupr,. the Board has limited application of the term "unusual circum- stances" to those cases in which the withdrawing em- ployer has been faced with dire economic circum- stances. i.e.. circumstances in which the ver, existence of an employer as a viable business entit\ has ceased or is about to cease. Thus the Board has held thait ;n employer may withdraw from a multiemploer bar- gaining association after negotiations with the union have begun where the emplo\er is subject to extreme economic difficulties which result in an arrangement under the bankruptcy laws:b where the employer is faced with the imminent prospect of such adverse eco- nomic conditions as would require it to close its plant:i or where the employer is faced with the prospect of being forced out of business tor lack of qualified em- ployees to do the job and the union refuses to assist the employer by providing replacements or the employees he lost., The Board has refused to permit an employer to withdraw from a multiemployer bargaining association when an employer states he has a good-taith doubt as to the continued majority status of the union where the claim is limited to his own employees:' all of the em- ployer's employees whom the union represented were discharged;"' the union entered into separate agree- ments with individual employer members of the associ- ation;" ' the employer has been suspended from the as- sociation because it failed to pay its dues:' 2 the employer was subject to a strike;'' or the employer suf- fered a sharp decline in its business.'" In the foregoing instances. the Board has found that there was no likeli- hood that the employer's continued existence as a via- ble business entity was jeopardized and. theretfore the employer's withdrawal could not be excused on the ground of "unusual circumstances." 6 US Lingerie Corporation 170 NI.RB 750. 751. ' Spun-Jee (Corp., and the James Tettile Corp. 171 NL RB 557. 558 'Atlas Electrical Service Co., 176 NLRB 827, 830 9 Sheridan Creations. Inc.. 148 NLRB 1503. 1505 06 to The John J. Corbett Press, Inc, 163 Nl.RB 154. n. 8 WE Painters, Inc. 176 N.RB 964. 965 966 " Senco. Inc, 177 NLRB 882, 886 1 State Electric Service. Inc, 198 NL.RB 592. 14 Sen-All Comparnyi Inc.. 199 NLRB 1131. Thus. the critical question is whether the ver) existence of an employer has ceased or such cessation is imminent. Mere business inconvenience or economic hardship. or ap- prehension that bargaining is progressing toward an agree- ment which would be economically burdensome, inability to maintain a competitive position or other business exigen- cies will not justify an untimely withdrawal from group bargaining. Siebler Hearing & Air Condiioning, In.. 219 NLRB 1124 (1975); Serv-AIl Companv, In.. 199 NLRB 1131 (1972). (T. Spun-JvcC (ot7oralni, ut'a. I '.. I, i'ecrie ( 'Er'orllll. QWt1t'tL Respondent contends that its situation falls withiln the anibit of Splll-J.i't' and ( . ting'crc. I o lot aree. In Sputi-Jet. the assoclatillon h d Intl rlle the u loril ret' orc tlhe commnIencemenlt Itl negotiatiolns that [te emlloler in tle industry in the geographicall area were acini a ditlicult ii- nancial stuation. When it became appirent that tIhe union would not chalnge its hbargaining stance in order to alleviate this fiiancial plight. the respondents therein separately ad- vised the union thIat without the special consideration the, sought continuancee (1o their o, n operation u nder the ex- isting contract regardless of' association bargaillning they could not continue to operate in the area. Neertheless, the union remained intransigent in its refusal to accord anll\ special consideration. Thereafter, the respondents wit hdrew from group bargaining and relocated outside the reta. In I.S. I.inreric. the emploer had filed a petition for an arrangement pursuant to the Bainkruptc_ A\ct ad notified the union of' its financial difficult' and sought some special consideration from the uiiion until its business imnproed. The Board found that the employer's xv ithlas al tin from group bargaining was justified in the circumstances in- cluding the fact that the employer withdrew in order to relocate outside of the geographical area, the emploer un- successfully sought help from the union in its effort to ox er- come its economic difficult., the employer's status 'x as that of a debtor in possession under the bankruptcy laus. and that the emplo(er's intention to relocate its plant raised issues inherently more amenable to resolution through col- lective bargaining confined to the parties directly involved than to group bargaining. Contrar: to the circumstances in those cases. here cessa- tion of Respondent' s existence is not imminent. In the cir- cumstlances herein the nega;ltle ratio of Responldent's cur- rent assets to its current liabilities do not portend imminent doom. Respondent has exlsted on shak Iina ncial grolund for a long time. Ne ertheless it managed to suriLve for some 2 to 3 ,ears in spite of' the loss occasioned by the Zapata job, its cash flow problems reflected b its chronic bank overdrafts. and the severe curtailment and cessation of credit extended by its principal suppliers. Moreover. ac- cording to Anderson. whom I credit in this regard. Respon- dent had a history of many years standing of seesawing between operating at a profit and operating at a loss. At the time of its attempted withdrawal. Respondent's financial outlook had definitel) improved. It made a profit during the fiscal year which ended in June. A principal supplier had reinstated an open line of credit to Respon- dent, and the nion had made significant economic conces- sions during the negotiations. Furthermore, the legitimacy of Respondent's economic defense is placed in serious doubt by its failure to notifs the Union of any financial difficulties prior to or during the course of the negotiations. or to inform the Union that its refusal to sign the agreement was based on financial diffi- culties. Tulsa Sheet Metail Works, Inc., 149 NL RB 1487 1488 (1964). ent'd. 367 F.2d 55, 58 ( lOth 'ir. 1966). 4cme I)(ECISIONS OF NATIONAL LABOR RELATIONS BOARD Wire Workx, Inc., 229 NLRB 333 (1977). In all of the cir- cumstances, I find that "unusual circumstances" do not exist which would justify Respondent's untimely with- drawal from group bargaining. Accordingly, I find that Respondent violated Section 8(a)(5) and (1) of the Act by its untimely attempt to with- draw from the multiemployer bargaining and by, its refusal to sign, and abide by the collective-bargaining agreement negotiated by RCA and the Unions and effective as of Au- gust 15. 1977. I further find that Respondent violated Section 8(a)(5) and (I) of the Act by unilaterally changing the wage rates of its employees: by failing to appropriately report the total hours worked by unit employees, and to remit to the appro- priate benefit funds contributions on behalf of unit employ- ees as prescribed in the collective-bargaining agreement in effect at the time involved;2" and by entering into an ar- rangement directly with Williams and Cooke for payment of wages in derogation of the provisions of the collective- bargaining agreement, and of the Union's status as exclu- sive bargaining representative. " The complaint alleges that Respondent illegally dis- charged Williams and Rangel. I find that Williams and Rangel quit their employment with Respondent primarily because Respondent repudiated the collective-bargaining agreement. Accordingly, I find that they were construc- tively discharged in violation of Section 8(a)(3) and (1) of the Act. Marquis Elevator Company. Inc., 217 NLRB 461 (1975); Superior Sprinkler, Inc., and William Augusto d/h/a William Augusto Fire Protection Service, 227 NLRB 204 (1976). Finally, I find that Respondent violated Section 8(a)(1) of the Act by attempting to persuade Williams to abandon the Union and remain in Respondent's employ by promising him better working conditions if he did so. Gulf States Can- ners, Inc., 224 NLRB 1566 (1976). CON(CI.USIONS OF LANW I. RCA, and its employer-members including Respon- dent, are employers engaged in commerce within the mean- ing of Section 2(2), (6). and (7) of the Act. 2. The Unions, each is a labor organization within the meaning of Section 2(5) of the Act. 3. All employees employed by the employer-members of RCA in the job classification set forth in the collective- bargaining agreement between the Unions and RCA, effec- tive from August 15, 1974. to August 15. 1977. constitute a unit appropriate for the purposes of collective bargaining within the meaning of Section 9(b) of the Act. 4. At all times material herein the Union, within its terri- torial jurisdiction, has been, and is now, the exclusive repre- 25 N.L.R.B. v. Joseph T Strong d/b/a Strong Roofing and Insulating Co., 393 U.S. 357 (1969). Goodsell d Vocke, Inc., 223 NLRB 60 (1976). 6 Bueter Bakery Corporation and Albert Kelly, Receiver in Bankruptcy, 223 NLRB 888 (1976). Everbrite Electric Signs, Inc., 222 NLRB 679, 684 (1976). 21 Both Rangel and Williams state that another reason they quit was the payroll checks written on insufficient funds. In view of the fact that Williams had continued in Respondent's employ for more than a year and Rangel for several months in spite of such checks, I find that their quitting was precipi- tated by the repudiation of the contract. sentative of all employees in the aforesaid appropriate unit for the purpose of collective bargaining within the meaning of' Section 9(a) of the Act. 5. By repudiating the agreement that RCA negotiated with the Unions effective from August 15, 1977. to August 15, 1980, in said multiemployer bargaining unit; by un- timely withdrawal from said unit: by unilaterally changing the wage rate and discontinuing the payments to the var- ious benefit funds and the reporting of total hours worked by its employees as required by the collective bargaining agreement described above, and the preceding agreement; and by making direct arrangements with employees fbr payment of wages in derogation of the provisions of the collective-bargaining agreement and the Union's status as exclusive bargaining representative, Respondent has vio- lated Section 8(a)(5) and (1) of the Act. 6. By constructively discharging employees Willie Wil- liams and Simon Rangel. Respondent has violated Section 8(a)(3) and (I) of the Act. 7. By attempting to persuade employees to abandon the Union and remain in Respondent's employ by promising them better working conditions if they did so. Respondent has violated Section 8(a)( 1) of the Act. 8. The aforesaid unfair labor practices affect commerce within the meaning of Section 2(6) and (7) of the Act. THlE REMEDY Having found that Respondent has engaged in certain unfair labor practices in violation of Section 8(a)(l). (3), and (5) of the Act. I shall recommend that Respondent be ordered to cease and desist therefrom and to take certain affirmative action designed to effectuate the policies of the Act. I have found that Respondent has violated Section 8(a)(1) and (5) of the Act, inter alia, by its untimely with- drawal from the multiemployer bargaining unit, and by re- pudiating the collective-bargaining agreement effective from August 15. 1977, to August 15, 1980. between RCA and the Unions. I shall therefore recommend that Respon- dent recognize and bargain with the Union. within its terri- torial jurisdiction as the exclusive bargaining representative of its employees in the multiemployer bargaining unit found appropriate herein, that. upon request by the Union. it sign said agreement and comply with the terms and con- ditions thereof, both retroactively and for the balance of its term, including making payments to the Union Roofers de- pository for the health and welfare fund and the various other benefit funds as prescribed in said collective-bargain- ing agreement; make whole the employees in the appropri- ate unit for any loss of wages or other benefits they may have suffered as a result of Respondent's unlawful refusal to bargain: and make the payments to the various benefit funds as prescribed in the 1974 77 agreement which Re- spondent did not make as a result of its wage agreement with Williams and Cooke. I have also found that Respondent constructively dis- charged Simon Rangel and Willie Williams in violation of Section 8(a)(1) and (3) of the Act. It is therefore recom- mended that Respondent offer each of them immediate and full reinstatement to his former job or, if that job no longer 508 WEiSTIRN PACIFIC ROOFIN(; (ORPORA'ION exists, to a subhstantiall equisalent position without preju- dice to his seniority or other rights and privileges. and make each ot them whole for any loss of pay suffered b reason of the discrimination against him. All backpay is to he conm- puted with interest thereon in the manner prescribed in 1 . H1 looltorlh (Compatlv, 90 NL R B 289 (1950). and fIlor- ida St'el (orporation. 231 NLRB 651 (1977). Uipon the basis of the foregoing indings of fact and con- clusions otf law. and upon the entire record and pursuant to Section 10(c) of the Act. I herebh issue the following recoim- mended: OR[)ER >R The Respondent. Western Pacific Roofing Corporation. Bell. California. its officers. agents, successors, and assigns. shall: 1. Cease and desist from: (a) Refusing to bargain collectivel with the inion as the exclusive representative, in its territorial jurisdiction of Respondent's employees in the fitllowing appropriate unit: All employees emplosed b the emploer-leimbers ot the RCA in the job classification set forth in the collec- tive bargaining agreement between the inions and RCA, effective from August 15, 1974 to August 15I 1977. (b) Withdrawing from said multiemployer hargaining unit except upon adequate written notice given prior to the date set bhy the contract for modification, or to the agreed- upon date to begin the multiemploer negotiations: or ex- cept at such other time it may lawfully withdraw. (c) Refusing to sign, and acknowledge that it is bound by the terms of the collective-bargaining agreement between the Unions and RCA effective August 15 1977. (d) Unilaterally changing the wage rate and discontinu- ing making payments to the various henefit funds and the reporting of total hours worked bh its emploees s re- quired bh said collective-bargaining agreements. (e) Dealing directl and individuall ' with unit emplo!- ees in derogation of the Union's status as exclusive collec- live-bargaining representative. (f) Unlawftull discharging its employees. (g) Attempting to persuade its employees to abando n the 2 See, generally. Isr Plumbing & Helilng (o. 138 NlRB 716 I19621 29 In the event no exceptions are filed as presided h Sec 1112.46 of the Rules and Regulations of the National Labor Relations Board. the findings. conclusions, and recommended Order herein shall. as provided in Sec. 102.48 of the Rules and Regulations, e adopted bh the Hoard and beconme its findings. conclusions, and Order. .iand ll objeciions thereto shall he deemed waived for all purposes. U!nion and remain in Respondent's emplo by promising employees better working conditions it' the' did so. (h) In a other manner interferinig with. restrailing , or coercing its employees in the exercise ot' their rights guaran- teed in Section 7 of the Act. 2. lake the folloing atirmati e action designed to ef- tiectuate the policies of the Act. (a) i orthwith sign. and acknowledge that It is bund hb the terms of', the collecti e-harga;ining aIgreement het een the U nions an d RK(A ettfctive August Is. 1977 and cor- pl with the terms and conditions thereof. both retroac- tiel! and for the balance tof its term. aind l;ake stch paisi- ments to the union roofters lepositoiry or the arious benefit funds as prescribed in said .igreemenl. and the pre- ceding agreement as set forth in the remed! section herein. (bf Make its employees whole for an! loss of , ages aind benefit the: ma's have suttered as a result of its failur to compy with the terms and conditions of the ahbo e-de- scribed agreement in the manner set forth ill the section herein entitled "The Remled." (c) Offer Willie Williams and Simon Ranuel immlediate and full reinstatement to their tformer positions or i those positions no longer exist. to substantiall equi alelt posi- tions. without prejudice to their seniorit or other rights and privileges. (d) Make Willie Williams and Simon Rangel , hole tor anll loss of pay they man hav e suftterd bh reason of the discrimination against them in the manner set orth in the section herein entitled "1 he Rented." (e) Preser, e and. upon reasonable request. niake a ail- able to the Board and its agents, for exanlinattion aind cop!- ing, all payroll records. and reports alnd all ther records required to ascertain the amounts. it an, of' il h; ackpa due under the terms of this recommended ()rder. (t) Post at its place of business in Bell. ('aliiornia. copies of the att;lched notice marked "'Appendi. " ''' (Copies of said notice. on forms provided hN the Regional Director tr Re- gion 21. after being dul; signed by its authorized represent- ative. shall be posted b Respondent inmmediately upon re- ceipt thereof.i and be maintained hb it for 60 cnsecuti e days thereafter. in conspicuous places. including all places where notices to employ ees are customarily posted. Reason- able steps shall be taken b Respondent to insure that said notices are nt altered. defaced or covered bv any other material. (g) Notif the Regional Director f;Or Region 21, in writ- ing. within 20 days from the date of this Order, what steps Respondent has taken to comply herewith. 'n In the eent that this Order is enforced b ; a Judgment of a niled States Court of Appeals. the words n the notlce reading "Posted hb Order of the National Labor Relations Board" shall read "Posted P'llrsuant to a Judg- ment of the I nited States Court of Appeals i-nhfrcing an Order of the Na- tional Labor Rela;ions Board S(9 Copy with citationCopy as parenthetical citation