Thorwin Mfg., Co.

D[)Lt(ISIONS ()OF NA I IONAI. LABOR REL.AIIONS BOARD Thorwin Manufacturing Company and International Union of Electrical, Radio and Machine Workers, AFI,-CIO, CL,C. Case 18 CA 5643 July 20. 1979 DECISION AND ORDER B M NBRllRS P)NI 1.I.()., MIRPIIY, AND) TR I SI)AI.F Upon a charge duly filed on December 16, 1977, and an amended charge filed on March 24, 1978, by the International Union of Electrical, Radio and Ma- chine Workers, AFL CIO. CLC. herein called the Union, the General Counsel of the National Labor Relations Board, by the Acting Regional Director for Region 18, issued a complaint and notice of hearing on March 29. 1978, against Thorwin Manufacturing Company. herein called Respondent. In substance. the complaint alleges that Respondent violated Sec- tion 8(a)( I) of the Act by refusing to pay vacation pay to certain employees because they had engaged in a strike. On April 10, 1978, Respondent filed an answer admitting in part and denying in part the allegations in the complaint. Thereafter, the parties entered into a stipulation in which they moved the Board to approve the transfer of this proceeding to the Board and waived the mak- ing of findings of fact and conclusions of law by an administrative law judge and the issuance of an ad- ministrative law judge's decision. The parties further stipulated that the entire record in this case shall con- sist of the original charge, the amended charge, the complaint and notice of hearing, Respondent's an- swer, the Regional Director's order postponing hear- ing, and a written stipulation of facts with attached exhibits. They further agreed that no oral testimony was necessary or desired by any of' the parties. On June 16, 1978, the Board issued its order grant- ing the motion to transfer the proceeding to the Board, approved the stipulation, and advised the par- ties to file briefs with the Board in Washington, D.C. Thereafter, the General Counsel and Respondent filed 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. Upon the basis of the stipulation, the briefs, and the entire record in this proceeding, the Board makes the following: FINDINGS OF FA(I 1. THE BUSINESS OF RESPONDINTI Respondent, a Minnesota corporation with its prin- cipal office and place of business in Lakeville, Minne- sota, is engaged in the manufacture, sale, and distri- bution of metal stampings and related products. During the year ending December 31. 1977. a repre- sentative period, Respondent manufactured, sold. and distributed at its Lakeville, Minnesota. plant products valued in excess of $50,000, and shipped from said plant directly to points outside the State of Minnesota products valued in excess of $50,000. Dur- ing the same period, Respondent purchased and cause to be transported and delivered to its Lakeville, Minnesota, plant sheet metals and other goods and materials valued in excess of $50,000 directly from points outside the State of Minnesota, or from enter- prises within the State of Minnesota which had re- ceived said goods and materials directly from points outside the State of Minnesota. Respondent admits, and we find, that it is, and has been at all times material herein, an employer en- gaged in commerce within the meaning of Section 2(6) and (7) of the Act, and that it will effectuate the purposes of the Act to assert jurisdiction herein. 11. IIE ABOR ()R(;ANIZ.AI(ON Respondent admits, and we find, that the Union is a labor organization within the meaning of Section 2(5) of the Act. III. ItIE AI..E(;GE-) NFAIR I.ABOR PRA(CIItES A. The Stipulated Facts The stipulated facts show that on June 18, 1976, the Union was certified by the Board as the collec- tive-bargaining representative of a unit of Respon- dent's production and maintenance employees. Sub- sequently, the parties engaged in collective- bargaining negotiations, but did not reach complete agreement. As a consequence, several unit employees engaged in an economic strike against Respondent commencing on September 15, 1976. Other unit em- ployees who did not participate in the strike crossed the picket line and continued to work. Respondent replaced all the striking unit employees prior to the termination of the strike on November 8, 1977.' Thereafter, on various dates on or after November 8, 1977, several of the strikers, including Donald Doyle, Gary Emerson, Gerald Millerbernd, and Shirley Weierke, wrote letters to Respondent in which each made a claim for the unused portion of his or her "earned vacation pay." Respondent, by a letter to each, refused to honor the claims, stating that it "has never been company practice to provide any employ- ees with vacation pay when they' leave the company," ' On that date the Union was decertified by the Board. 243 NLRB No. 118 (,20 I IIORWIN MANUFA(CILURING C(OMPANY and that it was not obligated to pay employees for any unused vacation. On Fehruary 8. 1978., the Union requested on behalf of all the strikers that Respon- dent pay them all the vacation pay that they had earned for time worked prior to the strike. On Febru- ary 14, 1978, Respondent advised the Union that it had never been its practice to provide any employees with vacation pay when they leave the Company. The stipulated facts further show that Respondent, although never putting its policy with respect to vaca- tions with pay in writing, has a policy whereby em- ployees earn I week's vacation after I year's emplo- ment, and 2 weeks' vacation after 3 years' employment. The vacation earning period begins on May I of each year and ends on April 30 of the next year. Vacations earned during the May I to April 30 period are to be taken during the ne.xt May I to April 30 period. Respondent has prorated vacations. Re- spondent does not permit any of the unused portion of earned vacation to be carried over to a second May I to April 30 period, rather an employee's entitlement to the unused portion of earned vacation is frfeited. It is Respondent's policy not to pay the money equiv- alent of unused vacation time to any employee upon termination from employment regardless of the rea- son for termination and upon termination unused va- cation time is forfeited. Respondent has not paid va- cation pay upon termination to any employee who did not engage in the strike which commenced on about September 15, 1976. In 1977, however, a non- striking employee had 4 hours of unused vacation as of April 30 and Respcndent paid him for such hours, although Respondent prefers that an employee take vacation and time off from work rather than take the money equivalent of the vacation time and work at the same time. In the period from May 1, 1975, through April 30. 1976, each of the employees specifically named above earned a certain amount of vacation time which ac- crued to each of them as of April 30, 1976. As of the time each joined the strike, each had not used all of his or her accrued vacation time. The parties further stipulated that the above-named employees were pre- vented from taking their accrued vacation time be- cause they engaged in the strike and because Respon- dent replaced them prior to the termination of the strike. B. Contentions of the Parties The General Counsel, as noted above, alleges that Respondent's conduct herein was violative of Section 8(a)(1) of the Act. In this regard, he contends, inter alia, that the strikers involved herein had accrued va- cation benefits as of April 30, 1976, prior to the strike, and that they were prevented from taking their ac- crued vacation time as of April 30. 1977. the date on which their unused vacation time would be forfeited under Respondent's policy, because they were en- gaged in a strike and that they were subsequently pre- vented from taking their vacation time because they were replaced by Respondent. He further points out that Respondent, in fact, paid vacation pay to one employee in lieu of vacation time off from work. lie argues that the denial of accrued vacation benefits here was, under N.L. R.B. v. Great Dane Trailers., Inc., 388 U.S. 26 (1967). inherently destructive of the em- ployee rights, or sufficient to require Respondent to come forward with legitimate and substantial busi- ness justification for its action. Finally. the General Counsel argues that Respondent's denial of vacation pay was a consequence of striking and. therefore, was unlawful under Knuth Bros., Inc.. 229 NLRB 1204 (1977). Respondent contends that the instant case is distin- guishable from Great Dane, arguing that there has been no showing here that its conduct was discrimi- natory. It asserts that it uniformly applied its estab- lished policy that vacation time which is not used within the 12-month period following its accrual is forfeited and that no monetary payments are made for unused vacation time. Additionally, it points out that the employees involved herein did not claim any vacation benefits until more than 6 months after the forfeiture date. It further contends that even if such forfeiture policy is not applicable to these employees. its uniformly applied policy of not paying vacation benefits to employees who have left active employ- ment prior to their taking vacations was nondiscrimi- natory. Finally, Respondent contends that its vaca- tion policy was designed to afford working employees with paid rest and relaxation periods based on need. rather than as an additional form of compensation. and that, therefore, it had legitimate business justifi- cation in denying benefits to the employees herein. C. Discussion and Conclusions We find that Respondent's conduct herein was vio- lative of Section 8(a)(1) of the Act, for the following reasons. In Knuth Bros., Inc., supra, the Board found that the employer unlawfully interfered with em- ployee rights by applying the "cut-off' provision of its vacation policy to replaced strikers. The employer's vacation policy in that case required that an em- ployee had to be on the active payroll on March 1 to be entitled to any vacation benefits "accumulated" during the previous 12 months. The Board found that the replaced strikers were treated in the same manner as other employees terminated prior to March 1: i.e., they were denied vacation benefits if they were not on I)lC(ISIONS OF NATIONAL. ILABOR RLATIONS BOARI) the active payroll as of that critical date, and there was no specific evidence of intent to discriminate against the strikers fbr having engaged in the strike. The Board concluded that the employer's denial of the request for vacation benefits on behalf of the strikers did not violate Section 8(a)(3). The Board, however, concluded that the employer's conduct vio- lated Section 8(a)(1), stating, in pertinent part: However, the record does fully demonstrate that though the replaced strikers were not denied vacation benefits because of their protected con- certed activities, that is, the denial was not keyed uniquely and purposely to those activities, they nevertheless were denied such benefits as a conse- quence of their having engaged in such lawful activities; that is, the Respondent's vacation pol- icy in effect provides that an employee who en- gages in a lawful economic strike loss his accu- mulated vacation pay if the Employer chooses to replace him before March I. The policy is, thus. a clear threat of economic loss to employees for engaging in protected concerted activities, and its application to the replaced economic strikers in this proceeding violated, we find, Section 8(a)( ) of the Act.2 In the instant case, it is undisputed that the strikers involved had accrued certain vacation time prior to the commencement of the strike. Furthermore, as stipulated by the parties, these strikers were pe- vented from taking their accrued vacation time be- cause they engaged in the strike and because Respon- dent replaced them prior to the termination of the strike. We thus find, as in Knuth Bros.. that the denial of vacation benefits to the strikers here, while not "keyed uniquely and purposely" to their protected concerted activities in engaging in the strike, never- theless was a consequence of such activities.) Accord- ingly, we conclude, consistent with that former case, that Respondent's application of its vacation policy so as to require forfeiture of accrued aconomic bene- fits4 by the replaced strikers, as a consequence of their 2 Knuth Bros., supra at 1205. 3 Respondent, in its letters denying the strikers' requests for vacation pay, and the Union's subsequent request on their behalf. referred to the replaced strikers as falling within the category of employees who "leave the com- pany." However, there is no evidence here, nor any contention. that Respon- dent in fact had terminated the replaced strikers or that they had voluntarily severed the employment relationship. And, indeed, Respondent in its brief alludes to the recall rights of these employees. Thus, it is clear that Respon- dent's treatment of them as employees "who leave the company." and there- fore as "terminated" employees, was merely a consequence of their having engaged in a strike 4 In finding that the strikers herein are entitled to pay in lieu of vacation time, we note that Respondent's vacation policy is not the subject of any collective-bargaining agreement with the Union. Additionally, we emphasize that, as noted above, Respondent in fact has paid at least one employee in lieu of vacation time off. protected activities in engaging in the strike, violated Section 8(a)( 1 ) of the Act.5 Till REME)Y Having found that Respondent has engaged in and is engaging in unfair labor practices within the mean- ing of Section 8(a)(1) of the Act, we shall order Re- spondent to cease and desist therefrom. We also shall order Respondent to pay to Donald Doyle. Gary Em- erson, Gerald Millerbernd. and Shirley Weierke the money equivalent to vacation time which each had accrued in the period of May 1, 1975, through and including April 30, 1976, but which remained unused by each as of the time each joined the strike which commenced on September 15, 1976, with interest thereon to be computed in accordance with Florida Steel Corporation, 231 NLRB 651 (1977).6 CO()N(CI.()NS o() LAW 1. Respondent is an employer within the meaning of Section 2(2) of the Act, and is engaged in com- merce within the meaning of Section 2(6) and (7) of the Act. 2. The Union is a labor organization within the meaning of Section 2(5) of the Act. 3. By withholding accrued vacation benefits from its employees as a consequence of their protected con- certed activities in engaging in a strike, Respondent engaged in and is engaging in unfair labor practices proscribed by Section 8(a)( 1 ) of the Act. 4. The aforesaid unfair labor practices affect com- merce within the meaning of Section 2(6) and (7) of the Act. ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Rela- tions Board hereby orders that the Respondent, Thor- 5Respondent. as noted above. contends that its vacation policy was de- signed to afford working employees with paid rest and relaxation based on need, rather than as an additional form of compensation. and that therefore it had legitimate business justification for denying vacation benefits to the strikers. We, however, find that Respondent has failed to establish legitimate and substantial business justifications for its conduct. particularly in iew of its having granted at least one employee pay in lieu of vacation time off. We find without merit Respondent's reliance on the fact that the replaced strikers did not request vacation benefits until some 6 months after the April 30. 1977, "forfeiture" date in support of' its contention that it has not violated the Act. Such circumstance in no way diminishes the unlawful nature and impact of Respondent's conduct in denying the replaced strikers their ac- crued benefits, nor warrants a finding that it did not violate Sec. 8(a I) of the Act. I See, generally. Isis Plumbing & Heating Co., 138 NLRB 716 1962). The parties stipulated that the General Counsel seeks no remedy on behalf of any employees who engaged in the strike herein, other than those employees specifically named above. 622 THORWIN MANUFACTURING COMPANY win Manufacturing Company, Lakeville, Minnesota, its officers, agents, successors, and assigns, shall: 1. Cease and desist from: (a) Withholding accrued vacation benefits from employees as a consequence of their protected con- certed activities in engaging in a strike. (b) In any like or related manner interfering with, restraining, or coercing its employees in the exercise of their rights guaranteed by Section 7 of the Act. 2. Take the following affirmative action which the Board finds is necessary to effectuate the policies of the Act: (a) Pay to Donald Doyle, Gary Emerson, Gerald Millerbernd, and Shirley Weierke, the money equiv- alent to vacation time which each had accrued in the period of May 1, 1975, through and including April 30, 1976, but which remained unused by each as of the time each joined the strike which commenced on September 15. 1976, with interest, in the manner set forth in the section of this Decision entitled "The Remedy." (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, personnel records and reports, and all other records necessary to analyze the amounts due under the terms of this Order. (c) Post at its plant in Lakeville, Minnesota, copies of the attached notice marked "Appendix."7 Copies of said notice, on forms provided by the Regional Director for Region 18, after being duly signed by 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 h Order of the National Labor Relations Board" shall read "Posted Pursuant to a Judgment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board." Respondent's representative, shall be posted by Re- spondent immediately upon receipt thereof, and be maintained by it for 60 consecutive days thereafter, in conspicuous 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. (d) Notify the Regional Director for Region 18, in writing, within 20 days from the date of this Order, what steps Respondent has taken to comply herewith. APPENDIX NOTICE To EMPOYEES POSTED BY ORDER OF IE NAIIONAI LABOR RELArIONS BOARD An Agency of the United States Government WE WIlLl NOT withhold accrued vacation benefits from employees as a consequence of their protected concerted activities in engaging in a strike. WE WIll. NOI in any like or related manner interfere with, restrain, or coerce our employees in the exercise of their rights guaranteed by Sec- tion 7 of the Act. WE XviLI. pay to Donald Doyle Gary Emer- son, Gerald Millerbernd. and Shirle Weirke the money equivalent to vacation time which each had accrued in the period of May 1. 1975, through and including April 30, 1976. but which remained unused by each as of the time each joined the strike which commenced on Septem- ber 15, 1976. with interest. Til()R,,IN M.AN I A( 1I RIN(; (CO()MPANY 623