Independent Stave Co.

INDEPENDENT STAVE COMPANY 219 Independent Stave Company and Coopers' Interna- tional Union of North America, AFL-CIO, and Its Local 42. Case 17-CA-7814 March 10, 1980 DECISION AND ORDER BY CHAIRMAN FANNING AND MEMBERS JENKINS AND TRUESDALE On January 26, 1979, Administrative Law Judge James M. Kennedy issued the attached Decision in this proceeding. Thereafter, Respondent, General Counsel, and the Charging Party filed exceptions 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 briefs and has decided to affirm the rulings, find- ings, and conclusions of the Administrative Law Judge as modified below. We agree with the Administrative Law Judge that Respondent violated Section 8(a)(5) and (1) of the Act by repudiating the arbitrator selection clause of its bargaining agreement with the Union. However, we disagree with his conclusions that Respondent did not also violate the Act by failing and refusing to comply with the union-security and checkoff provisions of that agreement. The parties' most recent contract, signed on April 27, 1977, provides in article V for Respon- dent's checking off, upon receipt of duly signed employee authorization forms, all monthly dues and fees which "will be transmitted to the Finan- cial Secretary of the local union." The provisions of the checkoff form shall, it is added, conform to the provisions of "this Article." Article VI of the contract, entitled "Union Security," provides, in section 1, that an employee must, as a condition of employment, be a union member. In section 2, it states (a) that if an employee fails to maintain such membership the Union shall so notify Respondent and demand the employee's discharge, and (b) that "the employer after investigating and finding that said employee is not a member in good standing, and does not agree to become a member, shall dis- charge the delinquent employee immediately." Sec- tion 3 of article VI states: "Member in good stand- ing means payment of dues and initiation fees." On June 2, 1977,1 the Union submitted to Ernest Smith, assistant to Respondent's President, a letter stating that the Union, under article VI, Section 2, was demanding the discharge of some 46 named I All dates are 1977 unless noted otherwise. 248 NLRB No. 25 employees. The Union revised that list on June 6 and also added one more employee it wished dis- charged. Respondent's response to the demand was to ask for the employees' checkoff cards; the Union turned over 36 cards.2 Respondent took no action on the demand and, on June 28, the Union threat- ened to file a charge with this Board if Respondent continued to fail to "enforce the union security provision of our contract." Apparently in response to this threat, Respondent on July 1 sought and se- cured from a Missouri circuit court an order re- straining the Union from enforcing the union-secu- rity provisions of the bargaining agreement.3 Inso- far as the record indicates, Respondent has not complied with the provisions of article VI, section 2. Thus, it has taken no steps to determine if the employees the Union demands be discharged are members in good standing, and, if not, whether they agree to become members; and it has dis- charged no one pursuant to the Union's demand. The Union's first request for compliance with the checkoff provisions of the 1977 agreement was, in effect, its delivery to Respondent of the new checkoff authorizations on June 6. Thereafter, the Union on a monthly basis notified Respondent of the amounts it felt were due pursuant to checkoff. Respondent has not, however, paid over to the Union any checked-off dues or initiation fees since signing the new agreement. Nevertheless, begin- ning on or about July I it began deducting union dues from the wages of employees whose authori- zations had been submitted on June 6. Then, on July 22, Respondent circulated a petition for em- ployees to sign which stated: To Independent Stave Company, you are hereby requested to withhold from my pay check each week an amount sufficient to cover any dues and fees I might have to pay to the Coopers' Local #42 in order to keep my job. Because I object to paying these amounts as being in violation of Missouri Law, I request you hold such amounts in a separate escrow account pending the determination by the Court in the action your company has institut- ed in Laclede County Circuit Court. Some 85 employees signed the petition and Re- spondent thereafter deducted their dues from their pay. However, the sums so deducted were never a These cards were all dated subsequent to the signing of the 1977 agreement and incorporated a provision to the effect that they could be terminated at will as provided in the contract's checkoff provision. These are referred to herein as "new authorizations." Most of the employees represented by the Union had submitted, under prior contracts, signed authorization cards which are referred to as "old authorizations" They contained no clause providing for their being terminated at will 3 The circuit court was reversed in October by the Missouri Supreme Court on the grounds that the court lacked jurisdiction INDEPENDENT STAVE COMPANY 219 220 DECISIONS OF NATIONAL LABOR RELATIONS BOARD placed in an escrow account but were simply car- ried on Respondent's books as an account payable. And, despite the fact that the Respondent lost its "action" in the Missouri courts, as of the date of this proceeding it had not paid over to the Union any of the dues deducted. The Union itself has been unable to collect dues because they are al- ready being "paid over" to Respondent. The Union-Security Issue As indicated, the complaint alleges in substance that Respondent violated Section 8(a)(5) and (1) of the Act, by failing and refusing to comply with the union-security provisions of the bargaining agree- ment in response to the union demand on June 2 that some 46 employees be discharged for failing to be union members in good standing; i.e., for failing to pay their dues and initiation fees. Respondent, in response to the Union's demand, made no attempt to comply with the provisions of the union-security clause and no employees were discharged. Rather, as the facts outlined above show, Respondent's reply to the Union's demand was, first, a request for checkoff authorizations and, second, an unsuc- cessful state legal proceeding to enjoin enforcement of the contract's union-security clause. Neverthe- less, the Administrative Law Judge found that Re- spondent had not violated the Act by failing to comply with the union-security provision of its contract with the Union. He predicated his result essentially on the ground that as the Union had failed in its fiduciary responsibilities towards the employees it sought to have discharged 4 Respon- dent had reasonable grounds to believe the dis- charges would be unlawful and thus was privileged to reject the demand. We find this reasoning and result untenable. 5 4 The Board has long held that an employee must be notified that his job is in jeopardy for nonpayment of dues and/or initiation fee and be given an opportunity to cure the delinquency before a union can lawfully demand the employee's discharge pursuant to the provision of a union- security clause. See Chauffeurs. Teamsters and Helpers Local Union 150. affiliated with the International Brotherhood of Teamsters. Chauffeurs. War- ehousemen and Helpers of America (Delta Airlines), 242 NLRB No. 66 (1979); Distillery. Rectifying. Wine and Allied Workers' International Union of America, Local Union 38, AFL--CIO (Schenley Distillers, Inc.), 242 NLRB No. 51 (1979); Conductron, a subsidiary ofMcDonnell Douglas Cor- poration, 183 NLRB 419, 425 (1970). 5 The Administrative Law Judge also seemed to conclude that Re- spondent's noncompliance was justified because the alleged delinquents- or some of them-had been compelled to sing unlawful dual purpose dues-checkoff authorizations. We fail to see the relevance of this position, for employee membership in good standing under the union-security clause had nothing to do with the employees' signing checkoff authoriza- tions and there is no evidence to support the Administrative Law Judge's apparent conclusion or assumption that the Union would not accept dues and initiation fee payments except by checkoff. Also, Respondent contends that its failure to enforce the contractual union-security provision was justified by the Union's alleged failure to admit the purported delinquents to membership in good standing on the same conditions available to other employees and/or because the Union's motive in seeking those employees' discharge was to retaliate against It is true that before it submitted the June 2 letter to Respondent, seeking the discharge of the 46 employees, the Union had not directly notified each employee, whose discharge it sought, that his job was in jeopardy and that by paying up delin- quent dues and/or initiation fees he could avoid discharge. But it is also true that, under Section 2(b) of the contract's relevant union-security clause, the Union's demand letter did not require the discharge of the alleged delinquents forthwith. Rather, once Respondent received the Union's demand, it was first obliged under Section 2(b) to investigate and to determine that the alleged delin- quent was, in fact, not a member in good standing and would not agree to become such a member. This Respondent did not do. And in failing to do so, Respondent thereby modified the terms of the parties' contract in violation of Section 8(a)(5) and (1) of the Act. This finding is therefore not depen- dent on the Union's alleged failure to fulfill its fidu- ciary obligation of notification to employees. The Checkoff Issue As noted above, the parties' contract provides that, upon proper written authorization from an employee, Respondent shall check off the employ- ee's dues and initiation fee and remit them to the Union. Despite the Union's claim that certain dues and initiation fees were due it under the checkoff provision of the 1977 contract, Respondent has failed since the signing of that contract to remit any such payments to the Union. Nevertheless, the Administrative Law Judge found that Respondent did not violate the Act by failing to comply with the checkoff provision of its bargaining agreement. He reached this result on the narrow ground that the old authorizations signed and submitted prior to execution of the 1977 agreement were no longer effective and that checkoff authorizations signed thereafter were unlawful dual purpose cards. Con- sequently, he concluded in substance that, since there were no outstanding valid checkoff authori- zations, Respondent had no obligation to check off any dues and initiation fees and remit them to the Union. We disagree for the following reasons. We are not faced here with the situation the Ad- ministrative Law Judge dealt with, i.e., one where an employer has failed to check off any dues. Rather, we note that Respondent, by various means, since July and August 1977, checked off union dues for practically all, if not all, employees them for failing to support the Union during a strike. There is no substan- tial evidence in the record to support these claims. Furthermore, they were in substance the subject of a charge filed in Case 17-CB-1817 against the Union by Respondent The charge was dismissed by the Re- gional Director and his dismissal was sustained on appeal to the General Counsel INDEPENDENT STAVE COMPANY 221 represented by the Union. But having checked off the dues, it failed to remit them to the Union as re- quired by the contract. Although the new authorizations were unlawful, as found by the Administrative Law Judge, and Respondent was therefore not obligated to honor them, nevertheless it did so and could not lawfully keep the checked-off dues to itself. Rather, the sums deducted by Respondent represent dues to which the Union was lawfully entitled and which the employees were obligated to pay under the lawful union-security provisions of the contract. Accordingly, Respondent's failure to turn those sums over to the Union as required by the contract violated Section 8(a)(5) and (1) of the Act.6 In addition, between July 22 and August 11, Re- spondent passed around a petition, which was signed by approximately 85 employees, authorizing it to check off dues. However, that authorization petition on its face violated the contract because it provided that the checked-off dues be placed in escrow rather than be paid over to the Union. Nevertheless, pursuant to the authorization peti- tion, Respondent did check off dues and had them held in a general rather than an escrow account. It thereby deprived the Union of the dues which the employees were obligated to pay and to which the Union was entitled under the contract's union-secu- rity provisions. Clearly, this conduct by Respon- dent constitutes an unlawful midterm unilateral change in the checkoff requirements of the con- tract. In sum, we find that Respondent, by refusing to remit checked-off dues to the Union, failed to comply with the checkoff provision of the contract and thereby violated Section 8(a)(5) and (1) of the Act as alleged. THE REMEDY Having found that Respondent has engaged in certain unfair labor practices we shall, in addition to the remedial provisions recommended by the Administrative Law Judge, order that it cease and desist therefrom and that it take certain affirmative action designed to effectuate the policies of the Act. We have found that Respondent has violated the Act by checking off employees' dues and fail- ing to remit to the Union such checked-off dues to which it was entitled under the union-security pro- visions of the effective bargaining agreement be- tween the parties. 7 We shall therefore order Re- spondent to cease and desist from engaging in such conduct and further order that it pay over to the 6 Cf. Welsback Electric Corporation, 236 NLRB 503 (1978); Tribuiani's Detective Agency, Inc., 233 NLRB 1121, 1124 (1977). 7 There is no evidence Respondent checked off any initiation fees and refused to transmit them to the Union. Union a sum of money, plus interest thereon; equal to the sum of all dues checked off and not remitted to the Union. 8 We shall order that Respondent cease and desist circulating and seeking employee signatures on checkoff authorization petitions pro- viding, contrary to the contract checkoff provi- sions for placing such checked-off dues in escrow rather than remitting them to the Union. With re- spect to the union-security violations, we shall order that Respondent cease and desist from refus- ing to comply with those provisions of the contract and affirmatively that Respondent take steps to comply with the said contractual provisions. Finally, as it appears that Respondent has a pro- clivity for violating the Act 9 and in view of the se- rious nature of the violations involved in this pro- ceeding, we find under our recent Decision in Hickmott Foods, Inc.,' ° that a broad injunctive order is fully warranted in this case. We shall therefore order thatRespondent not violate the Act "in any other manner." CONCLUSIONS OF LAW 1. Respondent, Independent Stave Company, is an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act. 2. Coopers' International Union of North Amer- ica, AFL--CIO, and its Local 42, are labor organi- zations within the meaning of Section 2(5) of the Act. 3. Respondent has violated Section 8(a)(5) and (I) of the Act of its 1977 collective-bargaining agreement with the Union by: (a) Repudiating the arbitrator selection clause of that agreement in July and August 1977. (b) Failing and refusing in response to the Union's demand letter of June 1 and August 1977. (c) Failing and refusing to comply with the checkoff provisions of the contract by: (i) Soliciting and securing from employees on its checkoff authorization petition a provision that checkoff dues be placed in an escrow account, rather than remitted to the Union, as required by the bargaining agreement. (ii) Failing to remit checked-off dues to the Union. 4. The aforesaid unfair labor practices are unfair labor practices affecting commerce within the meaning of Section 2(6) and (7) of the Act. 8 See International Union of Electrical, Radio and Machine Workers. Local 601. AFL-CIO (Westinghouse Electric Corporation), 180 NLRB 1062 (1970) Interest upon the sum due shall be computed in the manner pre- scribed in Florida Steel Corporation, 231 NLRB 651 (1977). See, generally, Isis Plumbing & Heating Co., 138 NLRB 716 (1962). 9 See, e.g.. Independent Stave Company. Diversified Industries Division, 233 NLRB 1202 (1977); Independent Stave Company, 175 NLRB 156 (1969); and Independent Stave Company, 148 NLRB 431 (1964). o0 242 NLRB No 177(1979). 222 DECISIONS OF NATIONAL LABOR RELATIONS BOARD ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Re- lations Board hereby orders that the Respondent, Independent Stave Company, Lebanon, Missouri, its officers, agents, successors, and assigns shall: I. Cease and desist from: (a) Refusing to bargain in good faith with Coo- pers' International Union of North America, AFL- CIO, and its Local Union 42 by: (1) Repudiating and refusing to comply with the arbitrator selection clause of its collective-bargain- ing agreement with the above-named Union. (2) Refusing and failing to comply with the union-security provisions of its bargaining agree- ment with the Union. (3) Refusing and failing to comply with the checkoff provisions of its bargaining agreement with the Union by soliciting from employees in a checkoff authorization petition a provision that checked-off dues be placed in escrow rather than remitted to the Union as required by the bargaining agreement, or by not remitting checked-off dues to the Union as required by the bargaining agreement. (b) In any other manner interfering with, re- straining, or coercing employees in the exercise of the rights guaranteed them in Section 7 of the Act. 2. Take the following affirmative action which the Board finds will effectuate the policies of the Act: (a) Remit to the Union with interest any and all union dues and initiation fees withheld from em- ployees but not yet remitted to the Union. (b) Preserve and, upon request, make available to the Board or its agents, for examination and copy- ing, all payroll records, wage rate and other re- cords, work schedules, production reports and data, social security payment records, timecards, personnel records and reports, and all other re- cords and entries necessary to determine the sums due under this Order. (c) Bargain in good faith with the Union by complying with the arbitrator selection and the union-security and checkoff provisions of its 1977 bargaining agreement with the Union. (d) Post at its Lebanon, Missouri, plant copies of the attached notice marked "Appendix B." 1 Copies of said notice, on forms provided by the Regional Director for Region 17, after being duly signed by Respondent's authorized representative, shall be posted in said premises by Respondent im- I I In the event that this Order is enforced by a Judgment of a United States Court of Appeals, the words in the notice reading "Posted by Order of The National Labor Relations Board" shall read "Posted Pursu- ant to a Judgment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board." mediately upon receipt thereof, and be maintained by it for 60 consecutive days thereafter, in con- spicuous places, including all places where notices to employees are customarily posted. Reasonable steps shall be taken by Respondent to insure that said notices are not altered, defaced, or covered by any other material. (e) Notify the Regional Director for Region 17, in writing, within 20 days from the date of this Order, what steps Respondent has taken to comply herewith. APPENDIX NOTICE To EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government After a hearing at which all parties had the oppor- tunity to present evidence, the National Labor Re- lations Board has found that we violated the Na- tional Labor Relations Act and we have been or- dered to post this notice to our employees. The National Labor Relations Act, as amend- ed, gives all employees the following rights: To organize themselves To form, join, or support unions To bargain as a group through a represen- tative they choose To act together for collective bargaining or other mutual aid or protection To refrain from any or all such activity except to the extent that the employees' bar- gaining representative and employer have a collective-bargaining agreement which im- poses a lawful requirement that employees become union members. WE WILL NOT refuse to bargain in good faith with Coopers' International Union of North America, AFL-CIO, and its Local 42 by: (a) Repudiating the arbitrator selection clause of our bargaining agreement with the Union. (b) Failing and refusing to comply with the union-security provision of that agreement. (c) Failing or refusing to comply with the checkoff provisions of that agreement by: (i) Soliciting and securing from employees covered by the agreement a provision on checkoff authorizations that checked-off dues be placed in escrow rather than remitted to the Union as required by the agreement. (ii) Failing to remit checked-off dues to the Union. INDEPENDENT STAVE COMPANY 223 WE WILL NOT in any other manner interfere with, restrain, or coerce you in the exercise of the rights guaranteed in Section 7 of the Act. WE WILL pay over to the UniQn with inter- est any and all union dues and initiation fees withheld from employees' pay but not yet given to the Union. WE WILL bargain with the Union in good faith by complying with the arbitrator selec- tion and the union-security and checkoff pro- visions of our 1977 bargaining agreement with the Union. INDEPENDENT STAVE COMPANY DECISION STATEMENT OF THE CASE JAMES M. KENNEDY, Administrative Law Judge: This case was heard before me on August 22 and 23, 1978, at Lebanon, Missouri, pursuant to a complaint issued on December 21, 1977, and an amendment to the complaint issued on April 25, 1978, by the Regional Director of the National Labor Relations Board for Region 17. The complaint and the amendment are based on a charge and an amended charge filed by Coopers' International Union of North America, AFL-CIO, and its Local 42 on August I and 22, 1977, respectively. The complaint al- leges that Independent Stave Company, herein called Respondent, had engaged in and is engaging in certain violations of Section 8(a)(5) and (1) of the National Labor Relations Act, as amended. Issues The complaint, together with the later amendment, al- leges that Respondent violated Section 8(a)(5) and (1) of the Act by repudiating the collective-bargaining contract in three ways: (1) refusing to comply with Local 42's demand to discharge certain employees because they failed to become members of the Union as required by the union-shop clause; (2) refusing to honor executed dues-checkoff authorizations and refusing to transmit those dues to Local 42; and (3) refusing to comply with a clause setting forth the procedure to select arbitrators. While Respondent advances several defenses to these al- legations, its principal defense with regard to the first is that Local 42 breached its fiduciary obligation to its members by failing to properly advise them that their jobs were in jeopardy and the steps which could be taken to avoid discharge. With regard to the second alle- gation, Respondent defends on the ground that the checkoff authorizations are invalid. It defends the third by denial. All parties were given full opportunity to participate, to introduce relevant evidence, to examine and cross-ex- amine witnesses, to argue orally, and to file briefs. At the end of the General Counsel's case-in-chief, as supple- mented by a presentation by the Charging Party, Re- spondent moved to dismiss the complaint and orally argued that motion. Upon my denial of the motion, Re- spondent chose to stand on the record as made and elect- ed not to present further evidence. Both the General Counsel and Respondent filed briefs which have been carefully considered. Upon the entire record of the case,' and from my ob- servation of the witnesses and their demeanor, I make the following: FINDINGS OF FACT 1. RESPONDENT'S BUSINESS Respondent admits it is a Missouri corporation operat- ing a manufacturing plant in Lebanon, Missouri, where it produces barrels. It also admits it annually purchases goods and services valued in excess of $50,000 directly from sources outside Missouri and annually sells goods and services valued in excess of $50,000 to customers lo- cated outside Missouri. Accordingly, it 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. II. THE LABOR ORGANIZATION INVOLVED At the hearing the parties stipulated that the Charging Party, consisting of both the International Union and its Local 42, were labor organizations within the meaning of Section 2(5) of the Act and I so find. Ill. THE AL.LEGED UNFAIR LABOR PRACTICES A. Background Respondent operates at least two facilities at its Leba- non, Missouri, location, its Diversified Industries Divi- sion, known locally as the bowl factory, and the barrel factory. Local 42 is the recognized bargaining represen- tative at the barrel factory while its sister, Local 7, is the collective-bargaining representative of employees work- ing at the bowl factory. Local 42, together with its parent International Union, has had a collective-bargain- ing relationship with Respondent since at least 1964. In 1976 the preceding collective-bargaining agreement covering the barrel factory employees expired and Local 42 struck to obtain a new agreement. The strike began on September 13 and ended on November 24 of that year. The expired agreement contained a standard union- shop clause, a dues-checkoff authorization clause, and a grievance-arbitration clause. Although the strike ended in November, no new collective-bargaining agreement was signed until April 27, 1977, with an effective date of In July 1977 Respondent filed an action in the Missouri state court system seeking to demonstrate that the Missouri constitution contained a prohibition against union-security clauses in collective-bargaining con- tracts At the time of the instant hearing that case had reached the Su- preme Court of Missouri Thereafter, on October 10, 1978, that court issued its decision holding that the Missouri constitution did not bar the inclusion of union-security provisions in collective-bargaining agreements Independent Stave Company, Inc. v Higdon, 572 S.W. 2d 414 (Mo. 1978). At the parties' request I have taken notice of that decision. The Charging Party, on November 9, 1978, filed a motion before me to submit newly discovered evidence and in the alternative requested that I take notice that Respondent had filed a motion for reconsideration with that court and on November 6 the clerk advised the motion had been "overruled" The Charging Party's motion is granted to the extent that I shall take judicial notice of the courts order denying reconsideration 224 DECISIONS OF NATIONAL LABOR RELATIONS BOARD April 9, 1977. The reason for the delay between the end of the strike and the signing of a new contract is not clear in this record, though a petition for representation election may have been filed by a rival union causing some of the delay. B. Negotiations Relating to the Dues-Checkoff Authorization Clause The principal negotiator for Respondent was its attor- ney, Ransome Ellis. The Union's negotiating committee consisted of several individuals not clearly shown in the record, but including Local 42's financial secretary, Carl Tait. Tait testified that during negotiations Respondent and the Union agreed that the old checkoff cards were not properly worded and new cards would have to be used in the future. Respondent's assistant to its president, Ernest Smith, recalled that Ellis and Union Attorney J. F. Souders had reached a side agreement requiring new checkoff cards to be submitted, apparently to change some wording regarding the employees' right of revoca- tion. Indeed, the new collective-bargaining agreement is consistent with the testimony of Tait and Smith. 2 Article V of the new collective-bargaining agreement is the checkoff clause and reads as follows: ARTICLE V Checkoff Section 1. It is mutually agreed that all monthly dues and initiation fees will be deducted by the Company from the second pay period in each month, provided that the Company receives a signed authorization form from the employee. Such signed authorization can be revoked at any time by the employee by giving the Company a signed statement of revocation. Such dues and fees autho- rized by the employee to be deducted from his pay will be transmitted to the Financial Secretary of the local Union. The Company shall be held free and harmless from any liability whatsoever in handling such funds. The checkoff card to be used by the Union during the life of this agreement is attached hereto as Appendix " B" and made a part hereof. The provisions of the check off card shall conform to the provisions of this Article. Although the clause provides that the contract shall contain an appendix B, a style of checkoff authorization to be used, no such style was ever actually attached to the agreement. Nonetheless, Attorney Souders drafted language for the new cards. The language variance be- tween the old and the new cards is shown in the foot- note below. 3 2 Neither Ellis nor Souders testified. 3 The old and new cards read: Old Card: I hereby accept membership in the Coopers Internation- al Union of N.A., and of my own free will authorize the said Inter- national Union, its agents or representatives, to act for me as a col- lective-bargaining agent in all matters pertaining to rates of pay, hours and other conditions of employment I further authorize my employer to deduct from my earnings once each month all union dues, initiation fees and assessments. This authorization is irrevocable C. Solicitation of New Checkoff Authorizations During the 1976 strike, some 40 members of Local 42 had elected to resign their membership and work during the strike. Because the Coopers constitution contained a clause prohibiting its members from resigning during a labor dispute, Local 42 refused to accept those resigna- tions. On April 28, 1977, utilizing a letter drafted by Re- spondent's assistant to the president, Smith, which ap- peared on Respondent's letterhead, approximately 36 of those individuals attempted to revoke their resignations from the Union. The letter was transmitted to Union President Reeves who directed Union Attorney Souders to respond. He did so by book letter dated May 9, 1977. Because the Union did not know the employees' current addresses, Souders' letter was posted on the Union's bul- letin board in the plant.4 It stated that their resignations from the Union had become effective on the date the strike ended, November 24, 1976. Therefore, Souders ad- vised, in order to obtain membership in Local 42 those employees must "secure and complete an application for membership from Mr. Bobbie Reeves, president of Local 42, in the same manner as when you orignally became a member. Mr. Reeves works at the plant and should be readily available to you before or after work. You may also contact your department stewards to request an ap- plication for membership card. Upon completion and filing of the application with the Union, it will be acted upon." On May 14 a union meeting was conducted during which the initiation fees for new members was raised from $50 to $100. Monthly dues, however, remained at $11.60. On May 24 Local 42 posted a notice at the plant con- taining the following intoductory paragraph: At the May 14 union meeting the initiation fee was raised from $50 to $100. All new help and those who resigned are required to sign new initiation cards and monthly dues cards. There will also be another card which everyone will be required to sign, including the members in good standing. This card will be used as an address card for the union files. This notice also served as President Reeves' directive to union stewards when they solicited signatures on the new checkoff authorization forms. In addition, Financial Secretary Tait, who served as a steward in one depart- ment, testified that Reeves gave instructions to him and the other shop stewards to the effect that in order to for a period of not more than one year or the expiration of the agreement which ever occurs sooner. New Card: I hereby accept membership in the Coopers Interna- .tional Union of North America and Local Union No. 42, affiliated with the AFL/CIO and of my own free will, authorize said Union, its Agents or Representatives to act for me as a Collective Bargain- ing Agent in all matters pertaining to rates of pay, hours of work and other conditions of employment. I further authorize my Employ- er to deduct from my earnings all monthly dues and initiation fees. Such signed authorization can be revoked at any time by me on giving the Company a signed statement of revocation. There is no evidence that the Union ever asked Respondent to pro- vide the names and addresses of bargaining unit employees. --- INDEPENDENT STAVE COMPANY 225 rejoin the Union those employees who had resigned would have to sign the new checkoff authorization cards. In this regard Tait testified as follows: Q. (By Mr. Jones) I am asking you what you said to those men, though. A. I asked them, I gave them the cards, and then I said, you have to re-join the Union or you will be dismissed. Q. All right; and in order to re-join the Union, they had to sign those cards, didn't they? A. Yes. Q. Because the card both was a statement indicat- ing acceptance of membership in the Union, that was the first part of the card, wasn't it? A. That's right. Q. And they could not re-join the Union without signing that card, could they? A. No. Q. So it is true, then, isn't it that you told them they had to sign those cards and return them to you or they would have to be asked by the Union to be dismissed by the company? A. Yes. Q. And Bobbie Reeves also gave the same instructions he gave you to all the other shop ste- wards, did he not? A. Yes. In addition to telling the resignees that in order to rejoin the Union they had to sign the new checkoff au- thorization form, the stewards, consistent with Reeves' May 24 notice, also asked the employees to sign another card in order to obtain current addresses for each member. The form which was used to accomplish this purpose appears to be a standard union authorization card commonly used by unions during organizational drives. (See C.P. Exh. 7.) The reason for the second re- quirement is not clear as the checkoff form contained a space for the employee's address. To that extent the second card duplicated the first. D. The Demand for Discharge Under the Union-Shop Clause Pursuant to the May 24 directive Tait and the other stewards began soliciting signatures on both the new checkoff authorization cards and the address cards. Their success in obtaining such signatures was desultory at best as many employees refused to sign them. Accordingly, on June 2, Reeves delivered to Ernie Smith and Plant Superintendent Don Smith a letter demanding the dis- charge of about 45 named employees for failing to join the Union in compliance with the union-shop clause of the new collective-bargaining agreement. On June 6, Reeves and Tait met with Ernie Smith again. At that time Reeves deleted some names on the June 2 list and by a second letter added another name. Simultaneously, Tait gave Ernie Smith at least 36 signed checkoff cards of the "new" variety. - It is undisputed that the Union did not directly com- municate to those employees whose discharges it was at- tempting to obtain any actual notice of delinquency and did not accord them any opportunity to pay their arrear- ages. It is true that union stewards had in general terms told the employees in question that they were obligated to join or rejoin, as the case may have been under the terms of the union-shop clause. Both Souders' May 9 letter and Reeves' notice so state. However, there is no evidence that any union official ever told each employee that he or she (a) was in arrears, (b) how much the ar- rearage was, (c) that his job was in jeopardy, and (d) what the employee could do to avoid discharge under the clause. Instead of complying with Local 42's demand that the employees in question be discharged, Respondent filed an action in state court seeking to declare the union-shop clause unenforceable as contrary to the Missouri consti- tution. That action was filed on July 1, and on that date Respondent obtained a temporary restraining order en- joining Local 42 and the International from seeking the discharge of employees who had failed to join and re- straining both from collecting dues. A hearing was held on July 13 and on September 13. The Circuit Court of LaClede County issued its judgment entering permanent injunction, together with its memorandum of decision.6 While the action was pending in the county court, Ernest Smith circulated a signature sheet to those em- ployees who wished to sign it. In signing that sheet (be- tween July 22 and August 11) some 85 employees, in- cluding Union Financial Secretary Tait, authorized Re- spondent to deduct an amount to cover dues and initi- ation fees which might be owed and to place them in an escrow account pending court determination of the Union's entitlement to those moneys. The funds, howev- er, have never been deposited in an escrow account; they have simply been carried on Respondent's books as an account payable. Moreover, it appears from the testimony of Reeves, Tait, and Jerry Griffin, Local 42's vice president, all of whom are rank-and-file employees, that Respondent has withheld dues and initiation fees from the pay of all em- ployees, whether or not they authorized such a with- holding. The Union, as a result of Respondent's action in withholding those moneys, has been unable to collect any fees or dues since at least June 6, 1977. It should be observed, however, that Local 42 made no demand for payment of any kind between April 23, when the new contract was signed, and June 6, when it presented Re- spondent with the new dues-checkoff authorization forms which it had recently obtained. Since that time it has, on a monthly basis beginning in June 1977 and through the A total of 38 cards was actually submitted, but 2 were representation authorization cards, such as C.P Exh 7, and did not authorize any checkoff. I The Union appealed the trial court's permanent injunction to the Missouri Supreme Court which, on October 10, 1978, unanimously re- versed the trial court finding that it lacked jurisdiction in the matter In- dependent Stave Company. Inc. v. Higdon, 572 SW 2d 424 (Mo 1978) 226 DECISIONS OF NATIONAL LABOR RELATIONS BOARD instant hearing in August 1978, notified the payroll de- partment of the amounts believed to be owed. E. The Alleged Refusal To Properly Select Arbitrators Both the old and the new collective-bargaining agree- ments contain a grievance-arbitration clause. In the new agreement it appears as article XXV. Among other things, the clause requires that a permanent panel of five arbitrators be selected. In addition, after reaching step 3 of the grievance procedure, unresolved grievances are to be referred to arbitration upon the Local's demand for arbitration. After such a demand, the parties are to place the names of the five permanent arbitrators in a hat and draw one who shall serve as the arbitrator for the dis- pute. During the term of the previous agreement, according to Union President Reeves, the procedure was that, after an arbitrator had been selected, his name was returned to the hat so that it could be drawn again for subsequent arbitrations. Reeves' testimony appears to be consistent with the language of the clause itself. Article XXV, sec- tion 1, states in pertinent part (step 3, subpar. (b): "... The parties shall place the names of these five(5) arbitra- tors in a hat and draw one name therefrom who shall serve as the arbitrator for the dispute ... ." Although the new collective-bargaining contract was signed on April 23, 1977, the parties did not select the permanent panel of arbitrators until the day of the in- junction hearing, apparently July 13. 7 According to Union President Reeves, between the signing of the con- tract in April and the time of the incidents in question, late July or early August, approximately eight grievances had been filed which step 3 had failed to resolve. At a later date that number increased to approximately 13. In any event, immediately after the panel's selection, Reeves met with Respondent's president, Boswell, to select an arbitrator for a grievance filed by Reeves. When a second meeting was held shortly thereafter be- tween Reeves and Boswell to select arbitrators for the other grievances, Boswell refused to utilize the name of the arbitrator who had been selected earlier until the re- maining four arbitrators had been selected. On August 5 Respondent's attorney, Donald W. Jones, mailed Souders a letter stating in substance that Respon- dent understood that the selection procedure was de- signed to distribute arbitrations to all five arbitrators equally and in order to guarantee equal distribution each arbitrator would be stricken from subsequent drawings until all five had been selected; then all five names would be returned to the hat and the process would be repeat- ed. Souders did not respond to Jones' letter, unless the amended charge filed August 22, which with respect to this matter simply repeated the July 28 charge, can be considered a response. The Union has consistently adhered to its position, taken before Boswell, that each time an arbitrator's name is selected from the hat it should be returned to the hat, 7 No witness could recall the exact date, but Reeves remembered that it occurred on the day of the injunction hearing. Resp. Exh. 2, the county court's show cause order, shows the hearing was scheduled for July 13. There is no record evidence that the hearing occurred at a later date. mingled with the other four, and be available for draw- ing for the next arbitration. Reeves observed that such a procedure might result in selecting the same arbitrator for more than one arbitration, which could be held si- multaneously, thereby saving the parties a certain amount of money. Because of this disagreement, the arbi- tration procedure does not now function. IV. ANAL.YSIS AND CONCLUSIONS Matters Relating to Fees, Dues, and Union-Shop Clause Enforcement It will be recalled that the complaint accuses Respon- dent of having violated Section 8(a)(5) and (1) of the Act by repudiating certain terms and conditions of employ- ment as set forth in the collective-bargaining agreement, e.g., dishonoring the dues and initiation checkoff forms and refusing to discharge those employees who failed to join the Union as required by the union-shop clause. There is really no dispute that Respondent did what it is accused of and it defends, inter alia, on the ground that the dual-purpose checkoff forms were illegal and it was not obligated to honor them. With regard to its refusal to honor the Union's requests for discharge of employees it both points to the allegedly invalid checkoff forms and argues that the Union failed to meet its fiduciary obliga- tion to inform the employees that their jobs were in jeopardy and failed to advise them what steps they could take to cure that jeopardy. It is clear, from the collective-bargaining history, that it was the party's intent to abrogate the viability of the previously executed checkoff forms which were in effect during the previous collective-bargaining agreement and before. The provision of the new collective-bargaining contract relating to the new forms could have no other purpose. Moreover, Tait made no attempt to collect dues in 1977 pursuant to the old authorization cards. Undoubt- edly he did not do so because he believed the old au- thorization cards were no longer effective. Furthermore, Local 42 President Reeves directed his stewards, includ- ing Tait, to obtain the signatures from new employees and resignees on the new forms. Indeed at least 36 new forms were signed and at least 4 appear to have been signed by employees who had never revoked their previ- ous checkoff authorizations. Also, it is clear that the par- ties intended to widen the right of an employee to revoke his authorization and wished to delete the refer- ence to the Union's right to collect assessments, a right it had under the old authorizations. In these circumstances I find that the parties intended to totally cancel those dues and fees checkoff authorizations executed prior to 1977.8 I therefore cannot consider them as valid for any purpose. There is no showing, however, that Respondent ever agreed to the new form of checkoff authorization which was eventually drafted by Union Attorney Souders and circulated among Respondent's employees by the Union's stewards. 8 Because the cumulative effect of the above-cited evidence is very great, demonstrating an extremely high probability that it was the parties' intent to no longer honor the "old" authorization cards, International President Higdon's testimony to the contrary must be rejected. --- INDEPENDENT STAVE COMPANY 227 In fact, it appears that the form which was circulated is unlawful on its face, absent the availability of another option. The form is a dual-purpose card. When an em- ployee signs it, he joins the Union and simultaneously au- thorizes the Respondent to deduct union initiation fees and periodic dues from his pay. The Board has held con- sistently that such card is unlawful on its face. Interna- tional Union of District 50, and Local Union No. 14029, International Union of District 50, United Mine Workers of America (Ruberiod Company, a Division of General Aniline and Film Corporation), 173 NLRB 87 (1968); Internation- al Union of Electrical, Radio and Machine Workers, Local 601, AFL-CIO (Westinghouse Electric Corporation), 180 NLRB 1062 (1970); Interpace Corporation, 189 NLRB 132, 139, fn. 11 (1971); and Luke Construction Co., Inc., 211 NLRB 602, 603-604 (1974). The basis of the Board's holdings in these decisions is that the Act requires an employee to be given a free choice to sign or not to sign a checkoff authorization. American Screw Company, 122 NLRB 485, 489 (1959). In the dual-purpose card cases, the free choice is abrogated by improperly connecting the dues-checkoff authorization to the membership obli- gation under a union-shop clause. Indeed, in this case it appears that the Union went further than simply submit- ting the cards to employees for their signatures. Reeves' instructions to the stewards were, as exemplified by the notice posted on May 24, to point out to employees that they would lose their jobs unless they signed the form which was being submitted to them. It is true that, simultaneously with the dual-purpose card, the stewards submitted to each employee a second card which it may be argued cured the defect inherent in the dual-purpose cards. I am not impressed by that logic here because the announced purpose of the second card was simply to obtain current addresses for each employ- ee. If that is so, the operable language relating to "ac- cepting" union membership contained in that card is ren- dered meaningless. Moreover, it is undenied that the union card solicitors never told employees they could sign either card in order to comply with their contrac- tual obligation to join.9 It can hardly be said, therefore, that the Union gave employees a free choice to sign one card or the other. Indeed, it appears that they were to sign them both, but the single-purpose card had no legal significance. In this circumstance, I conclude that the dual-purpose cards were both unlawful on their face and solicited in a coercive manner. See Hope Industries. Inc., 198 NLRB 853, 856-857 (1972). Accordingly, I conclude that Respondent had no obligation to honor them and that therefore it did not violate Section 8(a)(5) and (I) as alleged upon their presentation to Respondent on June 6 and thereafter. When, on June 2, supplemented by the June 6 modifi- cation, Local 42 demanded the discharge of employees for failing to join as required by the union-shop clause, the large number of employees on the list must have given Respondent some pause. It knew that no new dues-checkoff authorizations had yet been presented and it knew the previous cards were no longer viable. It was a Compare Simmons Company. 150 NLRB 709. 711-712 (1965), where the employee was given a legitimate option and no violation wsas found also well aware that the Local's policy was to collect dues through the checkoff process.' ° Aware of these facts Respondent balked at the Union's demand. Whether it balked for the right reason or not, it is undisputed that the Union had not met its fiduciary obligation to inform employees what steps they could take to satisfy their membership obligations. The Board has held that simple notice-posting, such as either Souders' May 9 letter or Reeves' May 14 notice, is not sufficient to meet that obli- gation. The Union must at a minimum specifically advise an employee whose job is in jeopardy that his job is in jeopardy, the amount he owes, and what steps he must take to avoid discharge. Conductron Corporation, a sub- sidiary of McDonnell Douglas Corporation, 183 NLRB 419 429 (1970); Rocket and Guided Missile Lodge 946, Interna- tional Association of Machinists and Aerospace Workers, ALF-CIO (Aerojet-General Coporation), 186 NLRB 561, 562, and cases cited in fn. 1 (1970); and International Brotherhood of Boilermakers, Iron Shipbuilders, Blacks- miths, Forgers & Helpers, Local Lodge No. 732 AFL-CIO (Triple A Machine Shop, Inc., d/b/a Triple A South), 239 NLRB No. 69 (1978). The Union did not do these things and accordingly it appears to me that Respondent had reasonable grounds to believe that membership was not available to those employees on the same terms and con- ditions generally applicable to others within the meaning of the second proviso to Section 8(a)(3) of the Act. In that circumstance it appears to me that Respondent knew, or had reasonable grounds to believe, that the Union's demand was unlawful and that by acceding to it Respondent would violate the Act. Accordingly, I find Respondent was privileged to refuse to honor the Union's demand to discharge the employees in question and therefore did not violate Section 8(a)(5) and (1) of the Act as alleged. Matters Pertaining to the Arbitrator Selection Clause The General Counsel has accused Respondent of un- lawfully failing to comply with the arbitrator selection clause of the agreement. The General Counsel and the Union contend that Respondent's insistence that the arbi- tral work be spread equally among the five arbitrators is contrary both to past practice and to the specific lan- guage of the agreement. They contend that by failing to follow the contract Respondent violated Section 8(a)(5) and (1). Respondent argues that a reasonable reading of the agreement is to spread work equally among the five arbitrators. Thus, it avers that no violation of the Act has occurred because there is simply a disagreement be- tween the parties regarding the manner in which the clause is to be constructed. That, urges Respondent, is 0 It may be that the Union on rare occasions accepted dues paid in some other fashion. but it is clear that the Union wanted the dues to be paid by checkoff In this circumstance. the testimony of Local 42's offi- cials who said that, if an employee had signed only he form In eidence as C P Exh 7 and not the checkoff form, his discharge would not have been sought. is rejected for lack of weight It is too hypothetical II Because of the Union's unlawful solicitation of checkoff authoriza- tions and its unlawful demand for the discharge of nonmembers, cases such as California Blopprpe & Steel Compavnyv. Inc. 218 NiRB 736 (19751. in which the Board found similar contract clause repudiatlons unlawful. are distinguishable 228 DECISIONS OF NATIONAL LABOR RELATIONS BOARD simply a contract interpretation matter, not a question of an unlawful refusal to bargain. In this matter I find myself in agreement with the General Counsel and the Charging Party. Section 8(d) of the Act obligates both parties to engage in good-faith bargaining and, insofar as grievance-arbitration matters are concerned, that obligation is a continuing one. North American Aviation, Inc., 44 NLRB 604, 612 (1942). That Respondent failed to meet that obligation is apparent from the evidence. First, Union President Reeves testi- fied without contradiction that the arbitrator selection clause remained identical to that which appeared in the previous collective-bargaining agreement and during that agreement, whenever an arbitration was called for, all five panel members (with the exception of one who was deceased) were placed in the hat for each arbitration. Second, it appears to me that the plain language of the agreement requires that interpretation. The clause states that when an arbitration demand is made "the parties shall place the names of these five (5) arbitrators in a hat and draw one name therefrom who shall serve as the ar- bitrator for the dispute .... " That language could not, in my opinion, be plainer. It clearly requires the names of all five panel members to be placed in the hat for each arbitration. This is not to say, however, that Respon- dent's position, had it been taken during negotiations, would have been unreasonable, but the time to raise the question was then, not after the contract had been signed. I should also observe that this is not the first time Re- spondent has taken an unjustifiable position regarding grievance-arbitration machinery. Recently in Independent Stave Company, Inc., Diversified Industries Division, 233 NLRB 1202 (1977), the Board found Respondent's insis- tence that a sister local file an affidavit swearing that the Coopers' International was not participating in the Local's grievance procedure to be an unlawful midterm modification of the contract. Although the violation there was not found to be of the "bad faith" variety, the Board might well have drawn that conclusion. With that case in mind, together with the evidence before me, it is fair now to conclude that Respondent's policy is to pre- vent the operation of grievance-arbitration clauses in its contracts. I reach this conclusion, not only because of Respon- dent's history, however, but also because its position here is palpably unreasonable. Even without Reeves' tes- timony about the past practice, the plain language of the contract is so clear that Respondent's position is unten- able. The clause clearly requires that all five names be placed in the hat for each arbitration. That being the case, Respondent's defense to the refusal-to-bargain charge, that the dispute is simply one of contract inter- pretation, does not withstand scrutiny. Compare Pan- Abode, Inc., 222 NLRB 313 (1976), a case where the Board, relying on the plain language of the agreement, reversed an administrative law judge's acceptance of a witness' self-serving testimony attempting to limit a se- niority clause. Similarly, here, Respondent has attempted to unilaterally limit the application of the arbitrator se- lection clause contrary to its plain meaning. Such a posi- tion, blocking the arbitration provision entirely, is simple, bad-faith bargaining. Whether or not Respondent's conduct is found to be in bad faith, however, it also runs afoul of Section 8(a)(5) and (1) as a midterm modification of a significant portion of the collective-bargaining agreement. Independent Stave Company, Inc., supra; The Massilon Publishing Company, 212 NLRB 869, 873-874 (1974); and Danner Press, Inc., 153 NLRB 1092, 1109 (1965), enforcement denied on other grounds 374 F.2d 230 (6th Cir. 1967). Accordingly, I find that Respondent violated Section 8(a)(5) and (1) of the Act by its repudiation of the arbitrator selection clause. V. THE REMEDY Having found that Respondent has engaged in unfair labor practices within the meaning of Section 8(a)(5) and (1) of the Act by repudiating the arbitrator selection clause of the collective-bargaining agreement, I shall rec- ommend that it be ordered to cease and desist therefrom and to take certain affirmative action designed to effectu- ate the policies of the Act. Upon the foregoing findings of fact and upon the entire record in this case, I make the following: CONCLUSIONS OF LAW 1. Respondent Independent Stave Company is an em- ployer engaged in commerce within the meaning of Sec- tion 2(6) and (7) of the Act. 2. Coopers' International Union of North America, AFL-CIO and its Local 42 are labor organizations within the meaning of Section 2(5) of the Act. 3. In July and August 1977, Respondent violated Sec- tion 8(a)(5) and (1) of the Act when it repudiated the ar- bitrator selection clause of its collective-bargaining agreement with the Union. 4. Respondent did not engage in any other violations of the Act. [Recommended Order omitted from publication.]