American Distilling Company

DECISIONS OF NATIONAL LABOR RELATIONS BOARD The American Distilling Company and William L. Kasley. Case 33-CA-3307 September 27, 1979 DECISION AND ORDER BY CHAIRMAN FANNING AND MEMBERS JENKINS AND MURPHY On September 14, 1978, Administrative Law Judge Donald R. Holley issued the attached Decision in this proceeding. Thereafter, Respondent filed exceptions and a supporting brief, the Charging Party filed lim- ited cross-exceptions and a supporting brief, and the General Counsel filed a brief in support of the Ad- ministrative Law Judge's Decision. 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, findings, and conclusions of the Administrative Law Judge to the extent consistent herewith and to adopt his recom- mended Order, except as modified below. The Administrative Law Judge found that Respon- dent's guard employees supported the strike until it ended on June 27, 1977, and were not entitled to rein- statement until June 29, 1977, when Respondent re- ceived a letter from the guards' representative indicat- ing that they had abandoned their strike. The Charging Party contends that the guards abandoned their strike on June 17, 1977, when the vice president of Local 235, acting on behalf of the guards, sent Re- spondent a telegram unconditionally requesting their reinstatement. We find merit in the Charging Party's contention. The evidence reveals that the guards ceased picketing in mid-April 1977. Their refusal to return to work thereafter was based on Respondent's unlawful reduction of wages and benefits. We con- clude, therefore, that the guards effectively aban- doned the strike when their representative uncondi- tionally requested reinstatement on June 17, 1977. Respondent was obligated as of that date to reinstate the guard employees to their former jobs. Its offer of employment at reduced wages was not a valid accept- ance of guards' request and did not toll its backpay liability. Consequently, we shall order Respondent to make whole the striking guards for any loss of earn- ings suffered by reason of Respondent's refusal of their unconditional application for reinstatement from June 17, 1977, to the date of a valid offer of reinstatement, in the manner set forth in the Adminis- trative Law Judge's remedy.' Amended Conclusion of Law Substitute the following for the Administrative Law Judge's Conclusion of Law 5: "5. By refusing to reinstate its guard employees, excepting Amelda Stout, to their former or substan- tially equivalent positions of employment since the week of June 17. 1977, Respondent violated Section 8(a)(1) and (3) of the Act." 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, The American Distilling Company, Pekin, Illinois, its offi- cers, agents, successors, and assigns, shall take the ac- tion set forth in the said recommended Order, as so modified: 1. Insert "previously enjoyed" after "rights and privileges" in paragraph 2(a). 2. Substitute the attached notice for that of the Administrative Law Judge. MEMBER JENKINS, dissenting in part: I agree with my colleagues that Respondent vio- lated Section 8(a)(1) and (3) by altering the terms or conditions of employment of its guard employees dur- ing pendency of a representation case involving these employees. I also agree with their finding that in tak- ing such action Respondent converted an economic strike by the guards into an unfair labor practice strike. Where my colleagues and I differ is over the effect this unlawful reduction in wages and benefits had upon the striking guard employees. Although my colleagues recognize both the unlawfulness and the seriousness of Respondent's decision to reduce sub- stantially the striking guard employees' wages and benefits, they are unwilling to find or to even presume against the wrongdoer that such onerous and unlaw- ful changes in the conditions of employment would necessarily have to be rejected by the employees and that, by such action, Respondent must be said to have I Aside from other disagreement with the dissent's rationale, we cannot conclude that the striking employees refrained from severing the employ- ment relationship because they believed it would have been futile. Far from seeking to sever that relationship or being forestalled from doing so, the employees unconditionally offered to return to work on June 17. and Re- spondent's refusal to accept their offer is found to violate Sec. 8(a)43). We cannot presume that the striking employees quit their jobs, but did not com- municate that fact to Respondent because it would have been futile, where the evidence establishes that they did not abandon their employment. Also see J. W Mays, Inc., 147 NLRB 942 (1964). 245 NLRB No. 62 454 THE AMERICAN DISTILLING COMPANY constructively discharged its employees. For the rea- sons stated herein, I would find that the striking guard employees were constructively discharged on April 29, 1977, when Respondent notified them of the changes in their wages and other benefits. The record evidence shows that, prior to the strike, the guards' benefits included plantwide and depart- mental seniority, time-and-one-half pay under speci- fied circumstances, paid holidays, $5.84 per hour with shift differentials of 20 cents for second shift and 30 cents for third shift, double time for Sunday work, double time and one-half for work on holidays, vaca- tions based on length of service, preference in vaca- tion time based upon departmental seniority partici- pation at no cost in Local 4's health, welfare, and pension plans, and paid leave for death in the family. Respondent's unlawful changes resulted in the dis- continuance of plantwide seniority, shift differentials, double time, double time and one-half for overtime, and participation in Local 4's health and welfare plans. It is clear, again from the record evidence, that such drastic changes were not dictated by business necessity. On the contrary, the record evidence shows that the changes were put into effect purely and sim- ply to punish the guard employees for exercising their protected right under our Act to strike. My majority colleagues seem unwilling to draw the conclusion that Respondent's intent was to punish the striking guard employees. But, by the same token, no one is able to offer any other explanation for Respondent's action. As the Second Circuit stated in F. W. Woolworth Company v. National Labor Relations Board, "[p]er- sons engaged in unlawful conduct seldom write letters or make public pronouncements explicitly stating their attitudes or objectives; such facts must usually be discovered by inference; the evidence does not come in packages labeled, 'Use me,' like the cake, bearing the words 'Eat me," which Alice found help- ful in Wonderland." 2 The majority states that it finds no constructive dis- charges because the evidence fails to establish that any guards actually quit their jobs because of Re- spondent's wage reduction. As the guard employees were on strike, however, they obviously could not walk off their jobs. It would be a futile act to require an employee in these circumstances to say "I quit." Thus, the guards were not in a position to do any- thing more than they actually did and that was to reject employment on these terms. Thus, when Re- spondent notified the 10 striking guard employees that their reemployment would be predicated upon their acceptance of these new terms and conditions of 2 121 F.2d 658. 660 (2d Cir. 1941). employment, only employee Imelda Stout accepted.' Of course, they might have so notified the Respon- dent when they learned of the more onerous condi- tions imposed upon their reinstatement. But, this would be asking too much of employees who are not versed in labor law. In Ma.¥sdon Industries, Inc.,4 we recognized that the so-called onerous conditions which serve as the foun- dation for the finding that there has been a construc- tive discharge are not limited to situations where the employee is given a more arduous work assignment. Any act of retaliation which is designed to cause an employee to forego his exercise of union or protected activities and is serious enough to cause the employee to quit his employment may properly fall into the category of an onerous condition. I cannot conceive of any more onerous condition than having one's wages and benefits substantially re- duced in retaliation for his or her union activities and I would be surprised if my colleagues disagreed. Yet, they still insist on some special declaration from the employees that they cannot accept such terms of em- ployment. Moreover, such a declaration is in fact pre- sent in the record, for, as the Administrative Law Judge found, all the employees refused to work under the reduced terms when Respondent attempted to re- call them on May 3 and all these employees, except Stout, refused to respond to Respondent's second at- tempt to recall them on May 13. On the basis of the evidence, the Administrative Law Judge concluded, and my colleagues agree, that the strike was pro- longed. Frankly, I fail to see how anyone can, on the one hand, say they have doubts as to whether or not the employees were quitting their jobs and, on the other hand, conclude that the offer was so reprehensi- ble that it served to prolong the strike. But this is exactly the position in which my colleagues find themselves placed. Finally, even if I thought there were some doubt as to the employees' intention to quit their employment, and I do not, I would consider it necessary to resolve any such doubt against the wrongdoer and not its victims. For the above reasons, I would find that when Re- spondent notified the striking guard employees, on or about April 29, that their wages and benefits were being reduced, at this point the striking employees became constructive dischargees and are entitled to an appropriate remedy.5 The fact that at a later point in time other guard employees accepted employment under these conditions proves nothing more than the fact that Respondent's unlawful actions were effective and that for reasons of eco- nomic necessity. these guard employees were forced to accept employment conditions which the) had initially rejected '212 NLRB 505 (1974). 'The Administrative Law Judge. in dismissing the General Counsel's con- (Continued) 455 DECISIONS OF NATIONAL LABOR RELATIONS BOARD tention that the guard employees were constructively discharged. states in fn. 24 of his Decision that Respondent's unfair labor practices can be remedied by application of the legal principles which control in an unfair labor prac- tlice situation. If the employees are found to be constructively discharged. however, the reinstatement of wages and benefits would commence on April 29, rather than June 17, when the employees abandoned the strike. APPENDIX NOTICE To EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government After a hearing in which all parties were represented by their attorneys and afforded the opportunity to present evidence in support of their respective posi- tion, it has been found that we have violated the Na- tional Labor Relations Act in certain respects and we have been ordered to post this notice and to carry out its terms. The National Labor Relations Act, gives you, as employees, certain rights, including the right: To engage in self-organization To form, join, or help a union To bargain collectively through a represent- ative of your own choosing To act together for collective bargaining or other mutual aid or protection To refrain from any or all of these things. WE WILL NOT discourage membership in Local 4, affiliated with Distillery, Rectifying, Wine and Allied Workers' International Union, AFL-CIO or Allied Plant Guard Workers of America, Lo- cal No. 235, or any other labor organization by reducing the wages and benefits of our employ- ees while they are engaged in a lawful strike and/or representation proceeding involving them are pending. WE WILL NOT interfere with, restrain, or coerce our employees in the exercise of their Section 7 rights by informing them while they are on strike and representation proceedings involving them are pending that their wages and benefits are being reduced. WE WILL NOT interfere with, restrain, or coerce our employees in the exercise of their Section 7 rights by informing them that we reduced their wages and benefits so we would have something to negotiate later. WE WILL NOT in any other manner interfere with, restrain, or coerce our employees in the ex- ercise of their rights guaranteed by Section 7 of the Act. WE WILL offer Charles Beach, Willis Hyatt, Vernon Kitterman, Charles Rowan, Roger Hornsby, William Hahn, Dean Meyer, William Scheeler. and Harold Swisher immediate and full reinstatement to their prestrike positions or, if those jobs no longer exist, to substantially equiv- alent positions, without loss of seniority and other benefits previously enjoyed and WE WILL make whole the above-named employees and Imelda Stout for losses sustained by them by rea- son of our discrimination against them in accord- ance with the Decision of the National Labor Relations Board. THE AMERICAN DISTILI.ING COMPANY DECISION STATEMEN'T OF THE CASE' DONAID R. HOI.I.EY. Administrative Law Judge: Upon a charge filed by William L. Kasley. Esquire (herein called Charging Party). the Officer-in-Charge of Subregion 38 of the National Labor Relations Board issued a complaint in this case on September 23, 1977. In essence, the complaint, as amended at the hearing.' alleges that Respondent has engaged in conduct which violates Section 8(a)(1) and (3) of the Act since April 29, 1977 by (I) altering the terms or conditions of employment of its guard employees during the pendency of a representation case involving such em- ployees: (2) converting an economic strike, in which guard employees were participating, into an unfair labor practice by the actions described above; and (3) thereafter refusing. when its guard employees offered to return to work, to rein- state them to jobs which were equivalent to their prestrike positions. Respondent filed timely answer denying that it had engaged in the unfair labor practices described in the complaint. The case was heard before me in Peoria, Illinois, on De- cember 20, 1977. Subsequent to the close of the hearing, counsel for General Counsel and Respondent filed briefs which have been carefully considered. Upon the entire record and from my observation of the witnesses, I make the following: FINDINGS OF FACT 1. JURISDIC'TION Respondent, a Delaware corporation, maintains an office and place of business in Pekin, Illinois, where it operates a plant which manufactures distilled spirits. During the 12- month period preceding issuance of the complaint, it sold and shipped to customers located outside the State of Illi- nois products manufactured at its Pekin, Illinois, plant val- ued in excess of $50,000, and during the same period it puuchased and received materials valued in excess of $50,000, from suppliers located in States other than Illinois. Upon these admitted facts, I find that Respondent is en- i All dates are 1977 unless otherwise indicated. See G.C. Exh. 2 (Notice of Intent to Amend) 456 THE AMERICAN DISTILLING COMPANY gaged in commerce within the meaning of Section 2(6) and (7) of the Act. II. STATUS ()F .ABO()R O()RANI/.AI()NS It was admitted, and I find, that United Plant Guard Workers of America, Local No. 235 (herein called Local 235). and Distillery Workers Union. Local No. 4, affiliated with Distillery Rectifying, Wine and Allied Workers' Inter- national Union of America. AFL- CIO (herein called Local 4), are labor organizations within the meaning of Section 2(5) of the Act. 111. TIlE ALLEGED UNFAIR LABOR PRA('I(CES A. Background From 1940 until March 7, 1977, Respondent recognized Local 4 as the bargaining agent for the production and guard employees employed at its Pekin, Illinois, plant. Ne- gotiations for the two units were conducted separately and separate contracts were signed. On January 15. 1977, the 3 year contracts covering pro- duction workers and guards expired. Thereafter. the parties engaged in negotiation of a new contract for the production workers, extending both the production contract and the guard contract on a day-to-day basis until March 7.1 When agreement on the terms of a new contract had not been reached by March 7, Local 4 called a strike and caused both production employees and guard employees to join the strike. B. Events of March and April When Local 4 called Respondent's guard employees out on strike to support the bargaining demands made by Re- spondent's production employees. Respondent countered by filing a unit clarification petition with Subregion 38 on March 18 to seek clarification as to the status of its security employees. Local 4 chose not to dispute Respondent's con- tention that the security employees were "guards" within the meaning of the Act, and proceedings on the unit clarifi- cation petition were terminated. On April 1, Local 4 representatives David Brown (pres- ident), Al Lutke (business agent), and Wilis Hyatt (a guard employee) met with Joseph Zehnder (Respondent's indus- trial relations manager) and John Nach (general manager) in Zehnder's office.4 Brown there handed Zehnder a letter which indicated, inter alia, "Guard employees are being in- structed to report on their regular shifts. You are notified that the strike by the guard unit has ceased and further negotiations as to that group will be on a voluntary basis on your part."' After reading the letter. Zehnder informed Hyatt, "Willie... I'm sorry ... You walked out on us, ou are on strike. As far as I'm concerned you are on strike." I The record reveals the practice was to negotiate the production contract first as the guard contract was patterned after such contract. 4 The complaint alleges, the answer admits, and find that Zehnder. Nach, and Harold Reach (Respondent's personnel manager) are agents of Respon- dent and supervisors within the meaning of Sec. 2(1 1) of the Act. I See G.C. Exh. 4. Zehnder then said something about "disclassitying" guards and Hyatt asked, "Are you going to disclassify everybody that goes on strike?" Zehnder replied. "No comment." At some point during the conversation. Nach informed the union delegation, "I told you you was making a mistake when you pulled them out.", Subsequent to the April I meeting, Respondent and Lo- cal 4 exchanged correspondence to document their respec- tive positions concerning the guard unit. Thus, on April 5. Respondent sent Local 4 a letter agreement for signature seeking to get it to withdraw as the bargaining agent for Respondent's guards and seeking to cause it to agree that Respondent's guard employees had "seniority and recall rights to the production employee bargaining unit .... "' On the same day. April 5. Brown delivered a letter signed by all 10 of Respondent's guard employees to Zehnder. The letter stated (G.C. Exh. 6): We, the undersigned. hereby form our independent union to be called The American Guard Union. This union shall be the sole bargaining agent for the plant guards employed at The American Distilling Company Pekin plant. On April 7, Local 4 replied to Respondent's April 5 letter stating, inter alia (G.C. Exh. 7): The company always recognized Local 4 as the repre- sentative of the guards. This, of course. was voluntary on both sides and was not illigal [sic[. It was only dur- ing the current strike that the company unilatterly [sic] raised objections to the guards being represented by Local 4 notwithstanding the fact the guards unani- mously wished to be represented by Local 4. However. the company insisted that the guards not be repre- sented by Local 4 and we have advised the guards to honor the company's demand. Accordingly, the guards have organized themselves into a seperate [sic] in- dependent labor organization, and will negotiate their own contract through their own designated officers. Additionally, Local 4 indicated in the described letter that it felt the subject of the guard's recall rights to the production unit should be negotiated by the parties. On April I 1. Respondent sent two (2) letters to Local 4. The first characterized the Union's April 7 letter as ambigu- ous: stated specifically that Respondent was withdrawing recognition from Local 4 as the collective-bargaining repre- sentative of Respondent's guard employees: and indicated that guard employees, who were sent copies of the letter, had 3 days from the receipt of the letter to exercise their right of recall to the production unit. The letter stated that failure to exercise the recall option in timely fashion would result in the guard employees being classified as "Guards" only.' In the second letter. Respondent declined to recog- nize the American Guard Union.' During the period April 13 through 14. three of Respon- dent's guard employees replied to the Respondent's April 7 ' The record fails to reveal that Respondent's 10 guard employees actually attempted, immediately after Local 4 purportedly called the strike in that unit off, to report for work on their regular shifts. 'See G.C. Exh. 5. 'See G.C. Exh. 8 See G C. Exh. 9 457 DECISIONS OF NATIONAL LABOR RELATIONS BOARD letter giving them 3 days from receipt of the letter to exer- cise their recall rights. Employee Hyatt indicated in his let- ter that he desired to remain a guard and he informed Re- spondent that all the guards were then card members of United Guards Local 235.'0 Employee Imelda Stout sent Respondent a copy of a letter she simultaneously sent to Local 4, in which she indicated she was: resigning her mem- bership in Local 4; intended to accept a position as guard at Respondent; and that she desired to be represented by the United Guard Union." The third employee, Charles Rowan, informed Respondent he was willing to withdraw from Local 4 if Respondent would recognize the United Guards as his bargaining agent." On April 11, Local 235 filed its petition in Case 38-RC 2109, seeking to represent "all full-time and regular part- time guards employed by the Employer [Respondent] at its Pekin, Illinois facility."" Henry Applen, vice president of United Plant Guard Workers of America, who represented Local 235 in the representation matter, testified he tele- phoned Zehnder on April 20 and then asked if there was any possibility of getting the guards returned, explaining that he had contacted the Distillery Workers International and there would be no problem between the Unions in get- ting the guards back on the line to perform their duties. Zehnder indicated he was not willing to put the guards back to work at that time. Subsequently, on April 28. Applen again telephoned Zehnder to inform him he under- stood that Respondent's guard employees were no longer receiving strike benefits and to ask if Respondent would return the guards to work while Local 235's petition was being processed. After attempting to get Zehnder to agree to expedite the election process, Applen observed the guards had been left between the "devil and the deep blue sea" because they had been led to believe for years by the Distillery Workers and the Company that they were cov- ered by a bona fide union and labor agreement. Applen testified (without contradiction) that Zehnder replied "he had forewarned them that if they did go out, that he would carve them out of the unit." Zehnder concluded the conver- sation by informing Applen he had observed some of the men [guards] on the picket line and doubted their loyalty to the Company, and, in any event, he did not think the strike would last too much longer and putting the guards back to work at that time might cause hostility." Prior to the commencement of the March 7 strike, Re- spondent's guard employees enjoyed numerous economic and work related benefits by virtue of the separate Local 4 contract with Respondent, which related specifically to them. Those benefits included, inter alia. plantwide and de- 'o See G.C. Exh. I0. " See G.C. Exh. I 1. 12 See G.C. Exh. 12. See G.C. Exh. 3(a). 14 In response to General Counsel's leading question. Applen testified he asked Zehnder dunng the conversation if the people could be put back to work without any change in benefits. I do not credit this testimony as Applen, when asked if "unconditional reinstatement" was mentioned, origi- nally indicated he thought it was at a later time. Additionally, Applen con- firmed the conversation by a letter from himself to Zehnder the next day. and the letter does not make reference to conditions under which guards would return to work. See G.C. Exh. 13. partmental seniority; time-and-a-half pay under specified circumstances; paid holidays; $5.8425 per hour, with shift differentials of 20 cents for second shift and 30 cents for third shift: double time for Sunday work; double-time-and- a-half for work on holidays: vacations based on length of service; preference in vacation time based upon depart- mental seniority: participation at no cost in the Local 4's health and welfare plan; paid leave for death in the family; and participation at no cost in the Local 4's pension plan. (See G.C. Exh. 18 (1974 77 contract).) C. A ttempted Recall of Guards and Changed Benefits Zehnder testified that around the end of April he and Nach jointly decided that the supervisors who were then operating the plant were exhausted and that additional help was needed. To remedy the situation. they decided to con- tact Respondent's guard employees and schedule them back to work, commencing May 3. Accordingly, Zehnder telephoned all of the guards except Imelda Stout during the period April 29 to May 2. It is undisputed that Respondent informed the guards contacted that they would not be working under the terms and conditions of their expired contract if they reported as requested. Instead, they were told by Zehnder that they would be paid a basic hourly rate of $5.8425 per hour, with time-and-a-half for overtime after 8 hours and/or after 40 hours, with no benefits." Although many' of the guards indicated they would return to work as scheduled, the first three employees scheduled to report de- cided to honor the picket line and Zehnder cancelled the recall when the third employee, Vernon Kitterman, could not get in to work as scheduled at 7 a.m.. May 4. On May 9, Applen again telephoned Zehnder to ask if he had reconsidered the request Applen had made on April 28 as confirmed by his letter of April 29 to Zehnder. Applen testified Zehnder said he preferred to follow the NLRB pro- cedures with regard to the petition and he was not then disposed to recall the guards for the same reasons given Applen earlier. On May 13, Respondent obtained a State court injunc- tion limiting the number of persons who could picket at the plant to six.' Zehnder testified he contacted all the guard employees, including Stout, immediately after Respondent obtained in- junctive relief on May 13, to schedule them back to work once again. Stout, who was contacted on May 17, reported for work on May 18. The remaining guard employees failed to report, indicating they would not work for less than they had previously received or that they intended to honor the picket line. Stout testified that shortly after she commenced work on May 18, Zehnder conversed with her regarding conditions 's Zehnder's testimony reveals the benefits which Respondent decided not to continue were plantwide seniority, shift differentials, double-time and double-time-and-a-half, and participation in Local 4's health and welfare plans. No decision had been made on the death in the family benefit. partici- pation in Respondent's Blue Cross-Blue Shield insurance plan was made available, after a I month waiting period (employee contribution required). i' See Resp. Exh. 2. While Respondent claimed considerable picket line violence was experienced prior to May 13. I note the injunctive Order pro- hibited massed picketing only. 458 THE AMERICAN DISTILLING COMPANY of employment. She testified he told her she would he work- ing for straight pay, and would have no benefits. Enumerat- ing what she would not have, he said she would have no insurance, no double time on Sunday, no shift premium and "that was so that he would have something to negotiate with later later on."' Zehnder testified that starting May 13 Respondent ran ads in the local newspaper for guard replacements, and that it started to hire guard replacements the following week.' On June 17, Applen sent Respondent a telegram which stated, inter alia (G.C. Exh. 15): On behalf of all employees in the appropriate bargain- ing unit, request is hereby made for unconditional rein- statement to active employment of each guard em- ployee. By letter dated June 22 (a copy of which was sent to all former guards except Stout and William Hahn) Zehnder informed Applen, inter alia, (G.C. Exh. 16): Since only now, according to your telegram, does the remaining guard force request reinstatement (since their refusal to report May 3rd and May 13, 1977), the Company will notify and offer reinstatement to these former economic strikers when their replacements leave the employ of the Company. Because of the fact that your labor organization is not the recognized collective bargaining agent of these guards- am sending a copy of this letter to each of them. D. The Post Strike Siruation Local 4 ended its strike in late June and the strikers re- turned to work commencing June 27. Zehnder testified that a guard position became available on June 27 when a re- placement left and that position was offered to former guard Dean Meyers. Meyers accepted the offer and worked I day before informing Respondent that he would not work as a guard any longer and desired recall to the production unit. On June 29, the guard employees, by their legal repre- sentative Kasley, sent a letter to Zehnder again requesting that the guards be reinstated to their former positions, in- cluding all benefits held prior to the Local 4 strike, pending resolution of the representation election involving Local 235 (G.C. Exh. 17). Describing the fate of the former guard employees upon conclusion of the strike, Zehnder testified as follows: Dean Meyer was recalled as a laborer and quit; Roger Hornsby was rehired to a job opening in the Firemen Oiler's Local; 17 Zehnder testified that after a I-month waiting penod Stout and replace- ment guards were entitled to participate in Respondent's Blue Cross-Blue Shield plan. Stout declined the opportunity as employees contnbuted part of the premium. 1 While Zehnder testified that all its guard employees, except Stout, were replaced during the period May 24 to June 13, only the following hires are reflected in the record: Doris Finlow (5/24), Edward Brown (5/26). Richard Synder (5/26). James Bower (5/26), Rick Mortis (6/2). and Lester Miller (6/13). Zehnder testified some additional employees were hired and had left before the Excelsior list was prepared for use in the June 16, 1977, election in Case 38 RC 2109. Charles Beach, Willis Hyatt, Willian Hlahn. and Charles Rowan were rehired as operators in the production unit: William Scheeler and Vernon Killerman were hired as la- borers in the production unit: Harold Swisher was rehired in the production unit as a janitor and quit to seek better employment; and Imelda Stout was recalled as a guard. Analysis and Conclusions The primary issue in this case is whether Respondent violated Section 8(a)(1) and (3) of the Act as alleged when it decided to change the terms and conditions of employment of its guard employees in late April 1977. In N.L.R.B. v. Great Dane Trailers, Inc(..' the U.S. Su- preme Court describes two categories of unfair labor prac- tices where proof of improper motive is not necessary to establish a violation of Section 8(a)( ) and (3) of the Act. Thus. the Court stated: From this review of our recent decisions, several prin- ciples of controlling importance here can be distilled. First, if it can reasonably be concluded that the em- ployer's discriminatory conduct was 'inherently de- structive' of important employee rights. no proof of an antiunion motivation is needed and the Board can find an unfair labor practice even if the employer intro- duces evidence that the conduct was motivated by business considerations. Second. if the adverse effect of the discriminatory conduct on employee rights is 'com- paratively slight,' an antiunion motivation must be proved to sustain the charge if the employer has come forward with evidence of legitimate and substantial business justifications for the conduct. Thus. in either situation, once it has been proved that the employer engaged in discriminatory conduct which could have adversely affected employee rights to some extent, the burden is upon the employer to establish that he was movtivated by legitimate objectives since proof of mo- tivation is most accessible to him. In Hudson Transit Lines, Inc., 173 NLRB 133 (1969). a trial examiner, with Board approval, found that Hudson Transit Lines, violated Section 8(al1) of the Act by reducing the salary and other benefits of employees during the pendancy of representation proceedings. Enforcing the Board's find- ings and order, the Court of Appeals.0 applied the princi- ples set forth in Great Dane, supra at 1230, and concluded: this Court is of the opinion that the impact of the re- duction in salary and fringe benefits at least had the 'potential for adverse effect upon employee rights . . . and therefore, required the employer to come forward with an adequate justification of his conduct.' Applying the foregoing principles to the facts in this case, it is clear that Respondent violated Section 8(a)(l) and (3) of the Act as alleged when it decided to alter the wages and benefits previously paid to its guard employees in late April 1977. Thus, the record in the instant case reveals that Re- spondent altered the terms and conditions of employment of its guard employees by reducing the renumeration they 19 388 U.S. 34, (1967). '2°429 F2d 1223 3d Cir 1970). 459 DECISIONS OF NATIONAL LABOR RELATIONS BOARD received for performing guard duties during the pendancy of a representation case and at a time when its guard em- ployees were engaging in protected concerted activity---an economic strike. While Respondent defended its action by observing that no labor organization represented the guard employees during the period April 29 to May 2, it offered no evidence which would reveal that "legitimate and sub- stantial business justification" necessitated the changes." As Respondent has not shown justification for its described ac- tions, I find, as alleged, that Respondent violated Section 8(a)() and (3) of the Act as alleged by deciding on or about April 29, 1977, to reduce the wages and benefits of its guard employees.2 2 I further find that Respondent independently violated Section 8(a)() of the Act thereafter during the pe- riod April 29 to May 2, 1977, and May 13 to 17, 1977, by notifying each of its guard employees that their wages and benefits had been reduced. Similarly, I find that Respon- dent engaged in independent violation of Section 8(a)() of the Act when Zehnder informed employee Imelda Stout on May 18, 1977, that the wages and benefits of Respondent's guard employees had been reduced "so that he [Zehnder] would have something to negotiate later later on." Remaining for discussion are General Counsel's conten- tions that: Respondent constructively discharged its guard employees by drastically altering their terms and conditions of employment on April 29, 1977; that such Respondent action converted the economic strike by its guards into an unfair labor practice strike; and the contention that the guards made unconditional application for reinstatement on April 29, June 16, and June 29, 1977. In support of the contention that Respondent construc- tively discharged its guard employees on April 29, 1977. General Counsel cites Mason Industries, Inc., 212 NLRB 505, 506 (1974), where the Board stated, inter alia. the Board has found that employees have been con- structively discharged in violation of the Act where ... working conditions have been changed in a manner which has the effect of forcing the employee to quit because the employee engaged in union or protected activity. In the instant case, Respondent's April 29 decision to change the terms and conditions of employment of its guard employees did not cause any of its guards to quit their employment immediately. Instead, with exception of Stout, all accepted recall in the production unit represented by Local 4 or in the firemen's unit, represented by another union, at the conclusion of the strike." As the evidence herein fails to reveal that any of Respondent's prestrike guards actually quit their employment because of Respon- 21 The defense interposed is meaningless as the complaint does not allege violation of Sec. 8(a)5) of the Act. See Hudson Transit Lines, Inc., supra; and Albion Corporation d/b/a Brooks, Inc., 228 NLRB 1365 (1977). As Respondent's guard employees were then supporting Local 4's strike against Respondent and Local 235 had filed a petition seeking to represent them, I find Respondent's actions had the inherent effect of discouraging membership in both labor organizations. " Noted is the fact that former guard Harold Swisher was recalled on July I, 1977, as a janitor in the production unit, and his testimony which indicates he quit, at an undisclosed time, to seek better employment. I find these facts are insufficient to support a finding that Swisher was constructively dis- charged. dent's April 29 actions, I find that the constructive dis- charge theory advanced by General Counsel is inapplicable in this case. 4 Having found that Respondent violated Section 8(a)(1) and (3) by changing the wages and benefits of its guards while they were on strike and while a representation case involving them was pending, it follows, and I find, that such action converted the guard's economic strike into an unfair labor practice strike. Furthermore, Respondent's April 29 action effectively precluded the guard employees from of- fering unconditionally to return to work from April 29 fore- ward. Subsequent to April 29, the record reveals that all the guard employees refused to work under reduced terms when Respondent attempted to recall them on May 3 and that all guards except Stout refused to respond to Respon- dent's second attempt to recall them commencing May 13. It is thus clear that Respondent's April 29 actions pro- longed the strike by its guards and I so find. 25 On June 27, the production unit employees and the guard unit employees terminated the strike and reported for work. By letter dated June 29, Charging Party Kasley, with au- thorizations from former guards Meyer, Kitterman, Swisher, Rowan, Hyatt, Beach, Scheeler, and Hornsby de- manded "reinstatement to the positions, including all bene- fits and status, held by them prior to the strike." As re- vealed, Respondent ignored Kasley's demand and recalled its former guard employees to positions in bargaining units other than the guard unit. I find that Kasley's letter of June 29 affirmatively indicated that the guard employees had abandoned their strike, and that, in the circumstances which then existed, the guards were not obligated to indi- cate an unconditional willingness to return to their guard positions. Consequently, Respondent, upon receipt of Kas- ley's letter, was legally obligated to discharge the replace- ments hired to full guard positions during the strike, and it was legally obligated to offer such positions to its former guards. By failing to fulfill these legal obligations, Respon- dent violated Section 8(a)(1 ) and (3) of the Act. 26 CONCI.USIONS O[ LAW I. The American Distilling Company is an employer en- gaged in commerce within the meaning of Section 2(6) and (7) of the Act. 2. Distillery Workers Union, Local No. 4, affiliated with Distillery, Rectifying, Wine and Allied Workers' Interna- tional Union, AFL-CIO, and United Plant Guard Workers 24 As indicated hereinafter, I conclude that Respondent's unfair labor practices can be remedied by application of the legal principles which con- trol in an unfair labor practice strike situation. 12 Although the record reveals Local 4 offered to return the guards to work on Aprl I, and that Applen, acting for Local 235, made similar offers on April 29 and June 17, the record fails to reveal that the guard employees abandoned their strike on those occasions. To the contrary, the record re- veals they continued to picket after the April I offer, and they close to refrain from working for less after Respondent reduced their wages and benefits. Consequently, I find Respondent's guard employees supported the strike until it ended on June 27, 1977. Although Respondent recalled employee Meyer to a guard position on June 27. that position was not equal to or substantially equivalent to the position he had occupied before the strike as the wages and benefits had been reduced. Consequently. Meyer has never been offered reinstatement to his former or a substantially equivalent position of employment. 460 THE AMERICAN DISTILLING COMPANY of America, Local No. 235, are labor organizations within the meaning of Section 2(5) of the Act. 3. By altering the wages and benefits of its guard em- ployees while they were engaged in an economic strike and at a time when representation proceedings involving such employees were pending, Respondent, on April 29. 1977. violated Section 8(a)(1) and (3) of the Act. 4. By informing its guard employees of the changes in their terms and conditions of employment described in Conclusions of Law 3 during the periods April 29 to May 13 to 17. 1977, Respondent violated Section 8(a)(1) of the Act. 5. By refusing to reinstate its guard employees, excepting Imelda Stout, to their former or substantially equivalent positions of employment since the week of June 29, 1977. Respondent violated Section 8(a)(1) and (3) of the Act. 6. By informing an employee on April 18, 1977. that the reason for the changes in the terms and conditions of em- ployment of its guard employees was to give Respondent something to negotiate with later, Respondent violated Sec- tion 8(a)(1) of the Act. THE REMEDY Having found that Respondent has engaged in unfair la- bor practices within the meaning of Section 8(a)(1) and (3) of the Act, I shall recommend that it be ordered to cease and desist therefrom, and to take certain affirmative action designed to effectuate the policies of the Act. Since Respondent unlawfully reduced the wages and benefits of its employee Imelda Stout upon recalling her on May 18, 1977, and it unlawfully refused to reinstate its striking employees Harold Swisher, Roger Hornsby, Charles Beach, Willis Hyatt, William Scheller, Charles Rowan, Vernon Kitterman, William Hahn, and Dean Mey- er, upon their abandonment of the strike, to their former or substantially equivalent positions of employment, it will be recommended that Respondent offer them immediate and full reinstatement to their former positions or to substan- tially equivalent positions without prejudice to their senior- ity or other rights and privileges, discharging if necessary any replacements hired to fill their positions after April 29, 1977. It will also be recommended that Respondent rescind the April 29, 1977, reductions in wages and benefits and that it make such employees whole for the discrimination practiced against them by paying to each the sum of money equal to the amount he or she would have earned but for Respondent's unlawful reduction of the wages and benefits of its guard employees and/or its unlawful failure to rein- state said employees upon their abandonment of the strike, less his or her net interim earnings during the period of the discrimination, with backpay and interest thereon to be computed in the manner prescribed in F. W. Woolworth Co., 90 NLRB 289 (1952), and Florida Steel Corporation, 231 NLRB 651 (1977).2 7 As the unfair labor practices committed by Respondent, particularly the acts of discrimination, strike at the heart of the Act, a broad cease-and-desist order shall be recom- mended, precluding Respondent from "in any manner," in- 27See, generally, Isis Plumbing & Healing Co., 138 NLRB 716 (1962). terfering with, coercing, or restraining employees in the ex- ercise of their rights guaranteed by Section 7 of the Act. Upon the foregoing findings of fact, and conclusions of law, and upon the entire record in this proceeding, and pursuant to Section 10(c) of the Act. I hereby issue the following recommended: ORDER2 The Respondent. The American Distilling Company, its officers. agents, successors, and assigns, shall: 1. Cease and desist from: (a) Discouraging membership in Local 4, affiliated with Distillery, Rectifying, Wine and Allied Workers' Interna- tional Union, AFL CIO or, United Plant Guard Workers of America, Local No. 235. or any other labor organization by reducing the wages and benefits of its employees while they are engaged in a lawful strike and/or representation proceedings involving such employees are pending. (b) Interfering with, coercing. and restraining its employ- ees in the exercise of their Section 7 rights by informing them, while they are on strike and representation proceed- ings involving them are pending, that their wages and bene- fits are being reduced. '(c) Interfering with, coercing, and restraining its employ- ees exercise of their Section 7 rights by informing them during the pendancy of representation proceedings involv- ing them that Respondent reduced their wages and benefits so it would have something to negotiate later. (d) Refusing to reinstate its striking guard employees to their former or substantially equivalent positions of em- ployment upon their abandonment of their strike against Respondent. (e) In any manner interfering with, coercing. or restrain- ing employees in the exercise of their rights guaranteed by Section 7 of the Act. 2. Take the following affirmative action which is deemed necessary to effectuate the policies of the Act: (a) Offer Charles Beach, Willis Hyatt, Vernon Kitter- man, Charles Rowan, Roger Hornsby. William Hahn. Dean Meyer, William Scheeler. and Harold Swisher imme- diate and full reinstatement to their prestrike positions, dis- charging if necessary persons hired to fill those positions since April 29, 1977, or, if such positions no longer exist, to substantially equivalent positions without prejudice to their seniority or other rights and privileges, and make them, and Imelda Stout, whole for any loss of pay (including benefits) suffered by reason of the discrimination against them in the manner described above in the section entitled "The Rem- edy." (b) Preserve, and upon request, make available to the Board or its agents for examination and copying, all payroll records, social security payment records. timecards. person- nel records and reports. and all other records necessary to analyze the amount of backpay due. 2s In the event no exceptions are filed as provided by Sec. 102.46 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. be adopted b the Board and become its findings, conclusions, and Order. and all objections thereto shall be deemed waived for all purposes. 461 DECISIONS OF NATIONAL LABOR RELATIONS BOARD (c) Post at its place of business in Pekin, Illinois, copies of the notice attached hereto and marked "Appendix."' 9 Copies of said notice on forms provided by the Regional Director for Region 38, after being duly signed by Respon- 9 In the event that this Order is enforced by a Judgment of the United States Court of Appeals, the words in the notice reading "Posted by Order of the National Labor Relations Board" shall read "Posted Pursuant to a Judg- ment of the United States Court of Appeals Enforcing an Order of the Na- tional Labor Relations Board." dent's authorized representative, shall be posted immedi- ately upon receipt thereof and bt maintained by Respon- dent for 60 consecutive days thereafter, in conspicuous places, including all places where notices to employees are customarily posted. Reasonable steps shall be taken by Re- spondent to insure that said notices are not altered, defaced, or covered by any other material. (d) Notity the Regional Director for Region 38, in writ- ing, within 20 days from the date of this Order, what steps Respondent has taken to comply herewith. 462