Borden, Inc.

BORDEN. INC. 387 Borden, Inc., Borden Chemical Division and Local No. 553, International Chemical Workers Union. Cases -CA-12252 and 1-CA-12327 March 12, 1980 SUPPLEMENTAL DECISION AND ORDER BY CHAIRMAN FANNING AND MEMBERS JENKINS AND PENELLO On April 20, 1978, the National Labor Relations Board issued its Decision and Order in the above- entitled proceeding,' finding that Respondent vio- lated Section 8(a)(5) and (1) of the National Labor Relations Act, as amended, by failing to supply the Union with requested information concerning the Company's insurance, pension, and health plans, and that Respondent violated Section 8(a)(3) and (1) of the Act by refusing to confer accrued vaca- tion benefits to striking employees because of their strike activity. The Board ordered Respondent to cease and desist from engaging in such unlawful conduct; to furnish the Union the requested infor- mation; to make Donald J. Collette and any other eligible employee whole with respect to their ac- crued vacation benefits in the manner set forth in the section of the Decision entitled "The Remedy"; and to post appropriate notices. Thereafter, on June 22, 1979, the United States Court of Appeals for the First Circuit issued its decision 2 wherein it affirmed the Board's 8(a)(5) finding, but denied en- forcement of the Board's 8(a)(3) finding, and re- manded the case to the Board for determination of the legitimacy and the substantiality of Respon- dent's asserted business justification for withhold- ing the accrued vacation benefits. On September 12, 1979, the Board notified the parties that it had decided to accept the remand and invited them to file statements of position. Thereafter, a statement was filed by Respondent. In its decision, the Board found that Respon- dent's refusal to pay accrued vacation benefits to strikers when requested resulted in the inhibition of the employees' free exercise of their fundamental right to strike and constituted conduct inherently destructive of employees' rights within the meaning of N.L.R.B. v. Great Dane Trailers, Inc., 388 U.S. 26 (1967). The Board concluded, therefore, that it was not necessary to consider evidence of antiun- ion motivation. The court disagreed because, in its view, Respondent's conduct did not meet the Great Dane "inherently destructive" test of "carr[ying] with it 'unavoidable consequences which the em- ployer not only foresaw but which he must have 235 N RB X2 '2 L R B 1 n . I- B od Ir C , l Divio. i, X) F 2d 313 248 NLRB No. 60 intended' and thus bears 'its own indicia of intent."' 388 U.S. at 33. The court found, instead, that the conduct in issue had only a "comparatively slight" impact on employees' rights; that Respondent had presented a business justification for its conduct, namely, the terms of the collective-bargaining agreement and past practice; and that the Board should have determined whether that asserted justi- fication was legitimate and substantial, and, if so, whether it was pretextual, and remanded for deter- mination of those issues. The Board, having accept- ed the remand, deems the court's decision to be the law of the case. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the Na- tiona: Labor Relations Board has delegated its au- thority in this proceeding to a three-member panel. The Board has considered the record as a whole, the decision of the United States Court of Appeals for the First Circuit remanding the proceeding, and the statement of position, and, for the reasons set forth infra, has decided to affirm its conclusion that Respondent violated Section 8(a)(3) of the Act. The undisputed basic facts are that the parties' collective-bargaining agreement provides, in perti- nent part, that, "[e]xcept where the Company and Union determine otherwise in individual cases, em- ployees shall not be paid vacation pay in lieu of va- cation"; that, pursuant to that agreement and past practice, employees with extra weeks of vacation are permitted to schedule their vacations at any time during the June 1 to December 15 vacation period, provided the operation of the plant is not impaired; that, beginning on October 1, 1976, Re- spondent's employees engaged in protected strike activity; that, at the outset of the strike, Respon- dent rejected the union president's request that ac- crued vacation benefits be paid to employees quali- fied therefor, with the statement that it would not pay vacation pay to strikers; and that, several months later, after the vacation period had ended but while the strike still was in progress, Respon- dent paid the accrued benefits. The business justification presented by Respon- dent rests on its contentions that the quoted con- tractual provision did not require the payment of vacation pay in lieu of actual vacation until the ex- piration of the vacation period, and also authorized it not to consider time off on strike as being time off for vacation purposes so as to render employees eligible to receive vacation pay. However, Respon- dent's stated determination at the outset of the strike not to pay strikers on its face tends to dis- pute both the legitimacy and substantiality of its subsequently asserted business justification since it, in fact, did pay the accrued benefits to strikers BORDEN. INC 387 388 DECISIONS OF NATIONAL LABOR RELATIONS BOARD during the strike-some 3 months after the pay- ment request. That justification, moreover, is fur- ther diluted by Respondent's failure to adduce any evidence to show that it ever before had asserted such a policy, or that it ever had applied that claimed policy to employees other than strikers, or that it ever before had refused to pay accrued va- cation pay because of the use to which an employ- ee planned to put, or put, his vacation time. Indeed, the only evidence adduced as to past appli- cation of the contract in this regard indicates that its sole purpose was to preclude employees from working and simultaneously receiving vacation pay; i.e., to insure that time off was taken instead of being foregone for extra pay. This business pur- pose of the contract provision is, of course, legiti- mate and substantial, but it has no relevance to the delay in the strikers' cases, because they were taking time off and had no possibility of substitut- ing work for vacations and receiving additional pay. Apart from this purpose of the clause, we can find the existence of no other substantial business reason for Respondent's delay in paying benefits al- ready earned and accrued, and it has offered none. Thus, the absence of a legitimate reason for pe- nalizing the employees in this fashion for striking gives rise to the inference3 that Respondent's true motive was to impress upon the strikers that union support risked reprisals which Respondent was willing to inflict. As the Supreme Court described the message of such conduct, it showed that Re- spondent, and not the Union, is the source of vaca- tion benefits, and that "the source of benefits now conferred is also the source from which future benefits must flow and which may dry up if it is not obliged." N.L.R.B. v. Exchange Parts Co., 375 U.S. 405, 409 (1964). Inflicting a disadvantage on employees because of their union support is, of course, the definition of a violation of Section 8(a)(3). We find, therefore, that Respondent's asserted reasons for withholding the accrued vacation bene- fits are pretextual, that it withheld payment of those benefits from those eligible in order to dis- courage the employees' support for the Union and the strikers, and that, by refusing to confer the ac- crued benefits upon request, because of the em- ployees' protected strike activity, Respondent has engaged in unfair labor practices within the meaning of Section 8(a)(3) and (1) of the Act. Ac- cordingly, we shall affirm our initial Order in its entirety. 3 Cf. Shattuck Denn Mining Corporation (Iron King Branch) v N.L.R.B., 362 F.2d 466, 470 (9th Cir 1966). ORDER Based on the foregoing and the entire record in this proceeding, the National Labor Relations Board hereby affirms the Order issued in this pro- ceeding on April 20, 1978, reported at 235 NLRB 982. MEMBER PENELLO, dissenting: Contrary to my colleagues, I would find, for the reasons stated below, that Respondent did not vio- late Section 8(a)(3) of the Act by postponing pay- ment of vacation benefits until after the expiration of the contractual vacation period. When this case was first before us 2 years ago, I agreed with my colleagues that Respondent violat- ed Section 8(a)(5) in certain respects, but dissented from their 8(a)(3) finding on the vacation pay issue. 4 Thereafter, the Board filed an application for enforcement of its Order with the United States Court of Appeals for the First Circuit. On June 22, 1979, the court issued its decision wherein it af- firmed the Board's 8(a)(5) findings, but denied en- forcement of the Board's Order insofar as it related to the 8(a)(3) violation.5 Finding that my col- leagues had committed legal error in refusing to consider the issue of whether antiunion motivation had been proved, the court remanded the case to the Board "in order that the Board may assess whether Borden came forward with a legitimate and substantial business justification for its conduct and, if so, whether the purported justification was pretextual." The relevant facts are not in dispute and are set forth in my earlier opinion. In sum, the parties' col- lective-bargaining agreement provided that em- ployees entitled to a third week of vacation were required to schedule it during the period of June 1 to December 15, 1976.6 The contract also provided that "[e]xcept where the Company and Union de- termine otherwise in individual cases, employees shall not be paid vacation pay in lieu of vacation." On September 30 the contract expired, and on October I the Union called a strike which contin- ued until January 30, 1977. At the beginning of the strike, the Union requested that Respondent pay all accrued vacation benefits, but Respondent refused on the ground that it has consistently asserted throughout this proceeding, namely, that until the contractual vacation period expired on December 15, it was under no obligation to pay vacation benefits in lieu of employees actually taking vaca- tions. In complete accord with its position, Respon- dent did in fact pay the vacation benefits on De- 4 235 NLRB 982. 600 F.2d 313 6 All subsequent dates herein are in 1976 unless otherwise indicated. BORDEN, INC. 389 cember 26, which was shortly after the expiration of the contractual vacation period. Thus, Respondent rests on the terms of its col- lective-bargaining agreement with the Union as a legitimate and substantial reason for its conduct. Accordingly, as stated by the court of appeals, the critical question here is one of determining "wheth- er Borden was motivated by its reliance on the col- lective bargaining agreement or by antiunion animus when it withheld the accrued vacation benefits." My colleagues dismiss Respondent's con- tract justification as pretextual and conclude that its real motivation was to discourage support for the Union and the strike. I cannot agree. First, as I pointed out in my original dissent, "nothing in the record suggests that Respondent's conduct in postponing payment of vacation benefits was motivated by union animus." Second, the con- tract specifically provided that "employees shall not be paid vacation pay in lieu of vacation." Re- spondent's refusal to consider time spent "on strike" as fulfilling the contractual requirement of being "on vacation" is not only reasonable and logical but is also supported by Board precedent.7 'See G. C. Murphy Company, 207 NLRB 579 (1973), discussed in my original dissent. According to my collegues, the "sole purpose" of the clause in question was to prevent employees from working and receiving vacation pay. My Third, Respondent's conduct is consistent with its past practice of always requiring employees to take vacations in order to receive vacation pay. 8 Fourth, and most significantly, once the contrac- tual vacation period expired, Respondent paid the accrued vacation benefits, even though the strike was still in progress. As I stated previously, "Re- spondent's payment of the vacation benefits on De- cember 26 during the pendency of the strike strongly supports the conclusion that its conduct was dictated by the provisions of the collective- bargaining agreement and therefore was not viola- tive of Section 8(a)(3)." colleagues state that this purpose has "no relevance" to the instant case where employees were "taking time off and had no possibility of substitut- ing work for vacations and receiving additional pay". However, the fact that my collegues' interpretation of the contract differs from that of the Respondent is immaterial. 600 F.2d at 321. The issue before us is not one of contract interpretation but of contract reliance, and my colleagues have pointed to no evidence that would warrant the conclusion that Respondent did not, in fact, rely on the collective-bargaining agreement when it postponed payment of the vacation benefits. a Thus, the Administrative Law Judge found that in the past employ- ees have not been allowed to work and receive vacation pay. 235 NL.RB at 989-990. BORDEN, INC. 389