Inland Cities, Inc.

DECISIONS OF NATIONAL LABOR RELATIONS BOARD Inland Cities, Inc. and General Truck Drivers, Ware- housemen & Helpers Union Local 467, Interna- tional Brotherhood of Teamsters, Chauffeurs, Ware- housemen and Helpers of America. Cases 21-CA 16063 and 21-CA- 16265 March 23, 1979 DECISION AND ORDER BY MEMBERS PENELLO, MURPHY, AND TRUESDALE On November 14, 1978, Administrative Law Judge Gordon J. Myatt issued the attached Decision in this proceeding. Thereafter, Respondent filed exceptions and a supporting brief. 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 brief and has decided to affirm the rulings, findings,' and conclusions of the Administrative Law Judge, to modify his remedy,2 and to adopt his recommended Order. ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Rela- tions Board adopts as its Order the recommended Or- der of the Administrative Law Judge and hereby or- ' Respondent has excepted to certain credibility findings made by the Ad- ministrative Law Judge. It is the Board's established policy not to overrule an administrative law judge's resolutions with respect to credibility unless the clear preponderance of all of the relevant evidence convinces us that the resolutions are incorrect. Standard Dry Wall Products, Inc., 91 NLRB 544 (1950), enfd. 188 F.2d 362 (3d Cir. 1951). We have carefully examined the record and find no basis for reversing his findings. Respondent also has excepted to the Administrative Law Judge's finding that Respondent's "operation affected commerce within the meaning of Sec- tion 2(6) and (7) of the Act." Respondent, in its answer, however, admitted that it was an "employer engaged in commerce," and admitted the underly- ing jurisdictional allegations upon which the Administrative Law Judge re- lied which warrant the assertion of jurisdiction. Furthermore, Respondent has not adduced any evidence which would contradict its admissions. Ac- cordingly, we find that Respondent's admissions in its answer are binding, and that the Administrative Law Judge's assertion of jurisdiction is proper. See Milford Manor, Inc., 233 NLRB 1283 (1977). 2 Because the provisions of employee benefit fund agreements are variable and complex, the Board does not provide at the adjudicatory stage of a proceeding for the addition of interest at a fixed rate on unlawfully withheld fund payments. We leave to the compliance stage the question whether Re- spondent must pay any additional amounts into the health and welfare trust fund in order to satisfy our "make whole" remedy. These additional amounts may be determined, depending upon the circumstances of each case, by reference to provisions in the documents governing the fund and, if there are no governing provisions, by evidence of any loss directly attributable to the unlawful withholding action, which might include the loss of return on in- vestment of the portion of funds withheld, additional administrative costs, etc., but not collateral losses. ders that Respondent, Inland Cities, Inc., Riverside, California, its officers, agents, successors, and assigns, shall take the action set forth in the said recommend- ed Order, except that the attached notice is substi- tuted for that of the Administrative Law Judge. 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 had an opportuni- ty to present evidence, the National Labor Relations Board has found that we committed certain unfair labor practices in violation of the National Labor Re- lations Act, as amended. We hereby notify you that: WE WILL NOT refuse to bargain collectively with General Truck Drivers, Warehousemen & Helpers Union Local 467, International Brother- hood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, as the exclusive repre- sentative of our employees in the appropriate unit described below, by unilaterally refusing to pay our employees the hourly wage rate increase required by the collective-bargaining agreement, or by unilaterally refusing to make contributions to the health and welfare trust fund on behalf of our employees. The appropriate unit is: All truck drivers, helpers, dockmen, ware- housemen, checkers, power-lift operators, and hostlers; excluding all other employees, office clericals, guards, and supervisors as defined in the Act. WE WILL NOT 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 National Labor Relations Act, as amended. WE WILL make whole the employees who were in the above unit by paying them the difference between the wages they received and the amount they should have received pursuant to the provi- sions of the collective-bargaining agreement, re- troactive to April 1, 1977, with interest thereon. WE WILL make payments to the health and welfare trust fund on behalf of the employees who were in the above unit to restore the amount of the contributions due to the trust pursuant to the collective-bargaining agreement, retroactive to September 1, 1977. WE WILL honor and give effect to the terms and conditions of the collective-bargaining agreement with the Union should we, in the fu- 241 NLRB No. 56 374 INLAND CITIES, INC. ture, resume our trucking operations and employ employees in the represented unit. INLAND CITIES, INC. DECISION STAIEMENT OF tlE CASE GORDON J. MYATT. Administrative Law Judge: Upon a charge filed in Case 21-CA 16063 on September 29, 1977, and a subsequent charge filed in Case 21-CA-16265 on December 15, 1977,'1 by General Truck Drivers, Ware- housemen & Helpers Union Local 467, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America (hereinafter called the Union) against Sackett Transportation, d/b/a Inland Cities Express,' here- inafter called Respondent, the Regional Director fbr Re- gion 21 issued an order consolidating cases and a consoli- dated complaint and notice of hearing on January 1 1, 1978. The consolidated complaint alleges that Respondent en- gaged in unfair labor practices in violation of Section 8(a)(l) and (5) of the National Labor Relations Act, as amended (hereinafter called the Act), 29 U.S.C. §151, et seq. The gravamen of the complaint is that Respondent and the Union have been parties to successive collective-bar- gaining agreements since 1970 (the latest of which is as- serted to be effective from April 1. 1976, until March 31, 1979), covering a unit of all Respondent's truckdrivers, helpers, dockmen, warehousemen, checkers, power-lift op- erators, and hostlers; excluding all other employees, office clericals, guards, and supervisors as defined in the Act. Ac- cording to the substantive allegations of the complaint, Re- spondent has refused to abide by the terms of the current collective-bargaining agreement by failing to pay the unit employees wage increases on April 1, 1977, as required by the agreement, and by refusing to make contributions on behalf of unit employees to the health and welfare trust fund since September 1977, as required by the current agreement. Respondent's answer denies the substantive allegations of the consolidated complaint and denies the commission of any unfair labor practices. However, Respondent admits failing to make the payments to the trust fund for the health and welfare benefits. By way of an affirmative defense, Re- spondent asserts that it is not signatory to a written trust agreement and any payments to the trust fund would be a violation of 29 U.S.C. §186(c)(5)(B). A hearing was held in this matter on May 18, 1978, in Riverside, California. All parties were represented by coun- sel, afforded full opportunity to examine and cross-examine witnesses, and to present material and relevant evidence on the issues involved herein. The parties entered into a writ- ten stipulation regarding certain facts, which is contained in the record as General Counsel Exhibit 2. Briefs were sub- mitted and have been duly considered. Unless otherwise indicated. all dates herein refer to the ear 1977. The record indicates that Respondent's corporate name was changed after the filing of the charges from Inland Cities Express to Inland Cities, Inc., as reflected in the caption of the consolidated complaint. Upon the entire record in this case, including my obser- vation of the witnesses and their demeanor while testifying, I make the following: FINDINGS OF FACT I. JURISDICTION Respondent is a California corporation engaged in the trucking business with a facility located at Riverside, Cali- fornia. During the 12-month period prior to the issuance of the consolidated complaint herein, Respondent, in the course and conduct of its business operations, performed services valued in excess of $50,000 for customers located within the State of California who, in turn, purchased and received goods valued in excess of $50,000 directly from suppliers located outside the State of California. The plead- ings admit, and I find, that Respondent is an employer within the meaning of Section 2(2) of the Act engaged in commerce and in operations affecting commerce within the meaning of Section 2(6) and (7) of the Act. II. THE I.ABOR ORGANIZATION INVOLVED General Truck Drivers, Warehousemen & Helpers Union Local 467, International Brotherhood of Teamsters, Chauf- feurs, Warehousemen and Helpers of America, is a labor organization within the meaning of Section 2(5) of the Act. II. HE ALLEGEI) UNFAIR LABOR PRACTICES A. Background Facts Respondent and the Union have been parties to succes- sive collective-bargaining agreements since at least 1970. The uncontroverted testimony reveals that contract nego- tiations between the Union and non-Association employers signatory to existing agreements, such as Respondent, tradi- tionally' followed a uniform pattern. Negotiations for a Na- tional Master Freight agreement (NMF) were conducted at the level of the International Union with various trucking- employer associations throughout the country. In order to avoid work stoppages in the event negotiations were not completed prior to the expiration date of the existing agree- ments, non-Association employers usually executed interim agreements with the local unions having jurisdiction over their operations. The "me-too" agreements bound the sig- natories to the outcome of the negotiations of the national agreement and all applicable supplements. In the case of employers in the Western States, the language of the "me- too" agreements was either dictated or sent to the various local unions by officials of the Western States Area Confer- ence. Each local union would then have the responsibility for getting the non-Association employers to execute the interim agreement binding them to the outcome of the na- tional negotiations. Although the intent of the "me-too" agreement is clear- to bind the signatories to the national agreement and its supplements when negotiated-the language of the interim ' The interim agreements are euphemistically referred to in the record as "me-too" agreements. 375 DECISIONS OF NATIONAL LABOR RELATIONS BOARD agreements varied to some extent during given contract ne- gotiating periods. For example, the standard "me-too" agreement executed during the negotiations for the 1970-73 master agreement contained the following provisions: 1. It is hereby understood and agreed this Memo- randum of Agreement hereby becomes a part of and is bound by the National Master Freight Agreement and all Supplemental Agreements to the National Master Freight Agreement. 2. It is hereby agreed by the parties signatory hereto to be bound by all the provisions of the National Mas- ter Freight Agreement, and all Supplemental Agree- ments thereto effective ---- 19-. 3. It is hereby agreed by and between the parties signatory hereto in the event the Company is presently engaged in operations or hereafter engages in opera- tions not covered under the provisions of the National Master Freight Agreement or Supplements thereto but which are covered under the provisions of the Western States Area Master Agreement or any Supplements thereto. they will be bound by the provisions of the Western States Area Master Agreements and Supple- ments thereto. [G.C. Exh. 5.1 The "me-too" agreement applicable to the 1973-76 con- tract negotiating period contained virtually identical provi- sions, except that the second paragraph was more detailed. It stated as follows: 2. It is hereby agreed by and between the parties signatory hereto to be bound by any revised and/or subsequent agreement which will replace the current National Master Freight Agreement and the Western States Area Pick-Up and Delivery, Local Cartage and Dock Workers Supplement Agreement which was signed on July 29, 1970, which would expire June 30, 1973, for the full and complete term of such revised or subsequent agreements referred to herein. [G.C. Exh. 4.1 There was an even more significant change in the lan- guage of the standard "me-too" agreement that applied to the contract negotiating period for the 1976-79 master agreement and supplements. This "me-too" agreement sim- ply provided: By our signatures hereto, we acknowledge our commit- ment to execute the NATIONAL MASTER FREIGHT AGREE- MENT and the applicable Supplements thereto for the period commencing April 1, 1976, and to be bound by the terms and conditions thereof. Resp. Exh. 1.] It is this agreement and a subsequent variation, discussed infra, signed by Respondent and several other employers that provides the basis for the controversy in this case. B. The Events Surrounding the Signing of the 1976 Interim Agreement by Respondent The testimony shows that Respondent was signatory to the NMF agreement and the pick-up and delivery (PUD) and the over-the-road (OTR) supplements for the contract period 1970-73. Although it is acknowledged that Respon- dent adhered to the terms of the 1973-76 NMF agreement and the PUD and OTR supplements, the record is not clear as to whether Respondent was, in fact, signatory to these agreements. The testimony further indicates that, prior to the expiration of the 1973-76 contract, Respondent was no longer engaged in its general freight-hauling operations and only serviced one lease (house) account with a shipper called Libbey Owens. This diminution of its freight-hauling operations caused Respondent to reduce its truckdriver per- sonnel from approximately 30 to 3 drivers, who worked exclusively on the Libbey Owens account. According to the testimony of William Sackett, current president of Respondent, the freight hauled for Libbey Owens was governed by tariff rates set by the state authori- ties and provided a much lower rate than Respondent re- ceived for its other trucking operations.' He testified that it soon became apparent to him and his father, Kenneth Sackett, then president of Respondent, that the Company was not earning enough money on the MRT-15 work to allow it to pay the wages [and other economic benefits] required by the collective-bargaining agreement or antici- pated to be contained in the agreement to be negotiated. Sackett stated that sometime prior to April 1, 1976, he went to the union office and spoke with Frank Wilson, then president of the Union. Sackett testified that he told Wilson of Respondent's economic difficulties in meeting the re- quirements of the existing agreement, and that Respondent would not be able to cope with the increases in wages and fringe benefits anticipated in the agreement expected to be negotiated. According to Sackett, Wilson indicated that Re- spondent was in the same position as Apollo Trucking,' and he understood their plight. Sackett testified that Wilson told him "not to worry about it," and that after negotiations were completed on the national level they could sit down and work something out.6 Sackett was permitted to testify, over the objections of counsel for the General Counsel, that he discussed the matter of the contract with his father prior to April 1, 1976. According to Sackett, his father indicated that based on his discussions with Wilson and Arthur Mar- in, another union business agent, Respondent would receive some consideration of their economic plight. Therefore, it was decided that they would sign the interim agreement when it was presented, because it was understood that the parties would work out a modification after the national agreement was negotiated. Jack Wyatt, a former business agent of the Union and currently a labor consultant, testified on behalf of Respon- dent. Wyatt had been a business agent for the Union from October 1961 to October 15, 1976. In this capacity, Wyatt had been responsible for servicing the contract with Re- spondent until May 1976. Wyatt supported an unsuccessful candidate for union office in the fall elections, and when this candidate was defeated in October 1976, Wyatt re- 4This work was classified as minimum rate tarifl-15 (MRT-I5). s Apollo Trucking was a competitor of Respondent, and it also engaged in MRT-15 work. 6 In an affidavit given to a Board agent in October 1977. Sackett stated that he had not been in contact with any union official prior to the signing of the interim agreement. On the witness stand, however, he testified that he had a conversation with Wilson sometime prior to the hearing in the instant case. According to Sackett, this conversation refreshed his recollection re- garding their discussion before the 1976-79 negotiations. 376 INLAND CITIES, INC. signed.' At the time of the hearing in this case, Wyatt had been retained by Apollo Trucking and Respondent to han- dle their labor matters with the Union.' Wyatt testified that he was on the telephone in the union office when an official from the Western States Area Con- ference dictated the interim agreement which was to apply to non-Association members during the 1976-79 negotia- tions. Wyatt stated that on March 31 he was assigned the responsibility for contacting the non-Association employers to get them to sign the "me-too" agreement. He stated that he noticed the language in the interim agreement to be signed by Respondent differed from the standard language dictated by the Western States Area Conference. The agree- ment to be executed by Respondent provided: It is understood and agreed that in signing this Memo- randum of Agreement the parties agree that after com- pletion of negotiations of the National Master Freight Agreement and all Supplements thereto, they will be bound by such Agreement. [G.C. Exh. 3.] According to Wyatt, there were only two such modifica- tions from the standard language dictated by the Western States Area Conference. These modifications applied only to Respondent and to Apollo Trucking.9 Wyatt testified that he spoke with Marin and questioned the change in the language of the "me-too" agreements to be signed by Apollo and Respondent. He stated that he was informed that the language had been changed by Wilson. He further testified that it was his "understanding" that Wilson indi- cated Apollo Trucking and Respondent would be able to negotiate a modification after the master agreement and the supplements were resolved. However, he acknowledged that he had no direct conversation with Wilson to this ef- fect. According to the testimony of Wyatt, Kenneth Sackett came in on April 1, 1976, and executed the required interim agreement. At that time, Sackett asked Wyatt if there were going to be further negotiations after the national agree- ment was completed. Wyatt stated that Sackett indicated he had an understanding to this effect with Wilson and Marin. According to Wyatt, he replied that he had no knowledge of such an agreement on the part of the Union. Marin testified on behalf of the General Counsel. Marin, like Wyatt, was no longer employed as a business agent by the Union. He had been relieved of this responsibility after the elections in October 1976. According to Marin, he had never discussed the possibility of engaging in further nego- tiations with Respondent after the completion of the master agreement and its supplements. He also denied being ques- tioned by Wyatt regarding the difference between the lan- guage of the interim agreement to be executed by Respon- dent and Apollo Trucking and the standard interim 7 The testimony indicates that shortly before the change in administration of the union officials in October 1976, Wilson terminated all of the business agents working under him. Wyatt, however, had submitted his resignation prior to this time. I Wyatt was retained by Apollo Trucking in February 1977 and by Re- spondent on March I, 1977. 9 It was established at the hearing that Wyatt's testimony was incorrect in this regard. A third such agreement, signed by Wyatt on behalf of the Union, was executed by Needles-Blythe Freight Lines on March 31, 1976. The rec- ord evidence establishes that Needles-Blythe Freight Lines thereafter fol- lowed the terms of the master agreement and the PUD supplement after the national negotiations were completed. agreement dictated by the Western States Area Conference. Marin further denied that he ever told Wyatt Respondent's interim agreement had been dictated by Wilson or that there would be further negotiations regarding the contracts applicable to Apollo Trucking and Respondent. C. The Events After the Execution of the Interim Agreement on April 1, 1976 It is stipulated that Respondent paid its three truckdriver emloyees (Douglass Miller, Lendon McKenzie, and De- Wain Goodwin) at the rate of $8.04 per hour commencing April 1, 1976. It should be noted at this point, that the hourly rate given the employees was the precise amount required by the PUD supplement to the national agree- ment. It is further stipulated that Respondent made contri- butions to the Southwest Administrators Health and Wel- fare Trust Fund for these employees at the rate of $107.39 per employee per month. Again, this was the exact amount required by the PUD supplement to the national agree- ment. (G.C. Exh. 7.) Doyle Rooks, the business agent who succeeded Marin in servicing the contract with Respondent, testified that in February 1977 he went to Respondent's place of business. His purpose was to check out information he had received from one of the drivers that Respondent would not be able to pay the wage increase due on April 1, 1977, under the terms of the contract. Rooks spoke with William Sackett, who had succeeded his father as president of Respondent. According to Rooks' testimony, Sackett stated that he had made capital investment in equipment and would not be able to pay the wage increase. Sackett asked Rooks "if there was some way he could get relief under the contract?" Rooks informed Sackett that under the NMF agreement there was a provision in article VI which allowed relief in situations such as Respondent was experiencing. Rooks suggested that Respondent submit its books and records to the appropriate committee of the joint council of the Union, who would then make a recommendation which the local would follow. Rooks testified that Sackett agreed, but asked for a few days to get the records from his bookkeeper. Rooks stated that at no time during this conversation with Sackett was there any claim that Respondent was not bound by the NMF agreement or the supplements; nor did Respondent ask for any modification of the master agree- ment or the supplements. Sometime later, Rooks contacted Respondent and informed it of the precise information needed by the joint council in order to grant relief under the contract, and Respondent agreed to provide the Union with it. Sometime shortly after March 9, Wyatt contacted Rooks by telephone to inform him that he represented Respondent and asked for a meeting to negotiate a less stringent con- tract on behalf of his client. 0 Wyatt took the position with 10 As previously noted, Wyatt was retained by Apollo Trucking in Febru- ary and by Respondent in March. Prior to employing the services of Wyatt, Apollo Trucking had been negotiating with the Union through another labor consultant in an effort to get a more favorable contract. After Wyatt was retained, he was able to negotiate an agreement with the Union whereby Apollo Trucking's wage rates were frozen at the April 1, 1976, level and the parties became signatory to the western master freight agreement and the full-load steel supplement. These latter agreements imposed less onerous eco- nomic terms on Apollo Trucking and were executed on March 9. 377 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Rooks that Respondent was not bound by the terms of the NMF agreement or the PUD supplement because Marin had never gotten around to having Respondent sign the agreements. On April 1., Respondent increased the amount of the monthly contributions to the health and welfare trust fund to a rate of $120.36 for each employee. This was the amount of increase required by the PUD supplement as of that date. On May 2, Respondent granted the employees an additional 24-cent-per-hour wage increase. This was the exact amount of the cost-of-living increase due under the terms of the NMF agreement and the PUD supplement. However, Respondent did not give the employees the hourly increase in their basic wage required by the PUD supplement. Sackett testified that Respondent granted the employees the first wage increase on April , 1976, in order to avoid the possibility of a large retroactive backpay liabil- ity while they were attempting to negotiate a modification of the agreement. He stated that it was not Respondent's intent to pay the exact amount required by the PUD sup- plement, although he acknowledged that there was a possi- bility that the wage increase coincided with the increase required by the agreement. He further testified that he checked with a traffic service company and found out what the going rate was in the PUD supplement for the cost-of- living increase in 1977. He admitted that Respondent then paid this amount but was unwilling to give the full, basic wage increase. Sackett claimed unfamiliarity with the NMF and PUD agreements, and was unable to explain how Re- spondent arrived at the precise amounts contributed to the trust fund on behalf of the employees. He testified that these determinations were left to Respondent's bookkeeper. There was no follow-through on Wyatt's request for ne- gotiations of an agreement on behalf of Respondent until June 28. On that date, Wyatt was at the union headquarters discussing several matters with Rooks, and he brought up the topic of negotiations for a new contract for Respondent. Wyatt submitted a proposal to the Union asking for terms similar to that negotiated for Apollo Trucking. (Resp. Exh. 5.) Rooks replied that he would consider the matter and get back to Wyatt. He maintained, however, that Respondent was bound by the National Master Freight agreement." Sometime following his meeting with Wyatt, Rooks ex- amined the Union's files and discovered that Respondent had signed a "me-too" agreement on April , 1976. As a result of this discovery, Rooks sent a letter to Wyatt on July 12 stating: After a close investigation of the records, it is my opin- ion that Sackett Trans. is signatory to the Master Freight Agreement and all of its supplements. Therefbore if Mr. Sackett wishes any relief under the contract, he will have to apply to the proper commit- tee. (G.C. Exh. 8.) Rooks further testified that he had occasion to meet Wyatt several times thereafter. According to Rooks, Wyatt stated that he felt Respondent's employees should accept the offer of the full-load agreement [full-load steel supplement], and Rooks replied that the matter was closed. " According to Rooks, the discussion concerning the proposal to negotiate a new agreement with Respondent lasted 15 minutes, but Wyatt testified that the discussion took the better part of an hour. The parties further stipulated at the hearing that begin- ning in September 1977, Respondent discontinued its pay- ments to the health and welfare trust fund. Respondent took the position there was no agreement in effect with the Union, and payments on behalf of the employees to the health and welfare trust fund were unlawful and in viola- tion of the "written agreement" requirement contained in Section 302 (c)(5)(B) of the Act.' The testimony further discloses that at some subsequent date, not set out in the record, Respondent's work for Libbey Owens was discon- tinued and the three truckdrivers were no longer employed. Concluding Findings It is Respondent's primary contention that the interim agreement executed April 1, 1976, did not bind it to the terms of the NMF agreement or the supplements, including the PUD supplement. Respondent argues that an oral un- derstanding was reached with Wilson, the union president, assuring it that the parties would negotiate an agreement embodying less onerous economic terms, once the master agreement and the supplements were negotiated. This con- tention implies that Respondent signed the interim agree- ment solely to avoid a work stoppage while negotiations on the national level were pending. As evidence of the oral understanding, Respondent relies on the testimony of Wil- liam Sackett concerning his father's conversation with the union president" and on the difference between the lan- guage of the interim agreement it signed and the language of the standard interim agreements dictated by the Western States Area Conference for execution by non-Association employers. In addition, Respondent points out that Apollo Trucking signed an identically worded interim agreement and subsequently negotiated a modification with the Union. In my judgment, Respondent's arguments are without merit as they belie the facts established on the record. Fore- most, I am not persuaded by Sackett's testimony that he or his father had an oral understanding with the union pres- ident regarding further negotiations after the master agree- ment and supplements were finalized. As a businessman confronted with a situation that threatened the economic viability of his trucking operation, Sackett's prior statement to the Board agent investigating this case and his conduct after the signing of the interim agreement cast serious doubts on the reliability of his testimony in this regard. In his affidavit, given in October 1977, Sackett specifically de- nied having any contact with the union officials concerning his economic problems prior to the signing of the interim agreement, but at the hearing he testified to having just 2 29 U.S.C. 186(c)(5)(XB). This section of the Act requires payments into trust funds to be detailed in a written agreement with the employer. Viola- tions of this provision are misdemeanors under the statute. '3 William Sackett was permitted to testify as to Kenneth Sackett's conver- sation with Wilson over the objections of counsel for the General Counsel. Kenneth Sackett was not called as a witness nor was the failure to do so explained. Since a major issue in this case was the interpretation of the interim agreement. this testimony was permitted to ascertain the meaning of the "me-too" agreement signed by Respondent and not for the purpose of varying its terms. Cf. Inter-Lakes Engineering Company, 217 NLRB 148, 149 (1975). Moreover, while such testimony may have been hearsay in the tech- nical sense. it was permitted as having some probative value on the issue in dispute, but the weight assigned to it is another matter entirely See Alvin J. Bart and Co.. Inc., 236 NLRB 242 (1978)1. 378 INLAND CITIES, INC. such a discussion with Wilson before the expiration of the 1973 76 agreement. His explanation that his memory was refreshed after a conversation with Wilson shortly before this hearing does not have a ring of conviction. I find it highly unlikely that he would have forgotten such an im- portant conversation, since it had a direct bearing on the economic survival of his trucking operation. Furthermore, his failure to seek immediate relief in subsequent negotia- tions hardly comports with the conduct of one who had an understanding that he would be able to negotiate a more favorable contract, one which would allow him to run his operation profitably. Thus, it was not until the expiration of approximately 11 months after the execution of the interim agreement that Respondent engaged in discussions with the Union for the purpose of relief from the economic terms of the existing agreements. Moreover, I note that these discus- sions were not initiated by Respondent but, rather, by the union business agent investigating the report of one of the truckdrivers on Respondent's poor economic condition. Nor do I credit Wyatt's testimony concerning an oral understanding about further negotiations with Respondent after the completion of the national agreements. By his own admission, Wyatt had not been told of any such arrange- ment by Wilson-the person asserted to have given this assurance. Further, Marin, no longer employed as a busi- ness agent by the Union. convincingly testified that he nev- er told Wyatt or anyone else that Wilson had such an un- derstanding with Respondent. Finally. Wyatt had been employed by Respondent since March 1977, on a retainer basis, to work out a more favorable agreement relieving Respondent of the obligations of the existing master agree- ment and the PUD supplement. Wyatt gave me the distinct impression that his testimony was tailored to meet his own personal objectives as a labor consultant rather than to dis- close the true facts that existed at the time the interim agreement was signed by Respondent on April 1. 1976. In sum, I therefore find that there was no oral under- standing between Respondent and the Union that the par- ties would negotiate further after the master agreement and supplements were settled. Nor does the fact that the lan- guage of the interim agreement executed by Respondent differed from that of the uniform interim agreement, dic- tated by the Western States Area Conference. alter my con- clusion in this regard. The evidence discloses that three em- ployers (Apollo Trucking, Needles-Blythe Freight Lines, and Respondent) signed agreements containing this par- ticular wording. Granted, Apollo Trucking and the Union subsequently negotiated a contract providing more favor- able economic terms for that employer, but there is no evi- dence in this record which indicates that Apollo Trucking did not consider itself bound by the master agreement and the PUD supplement prior to the midterm modification through mutual consent with the Union. Furthermore, the record reflects that Needles-Blythe Freight Lines, also sig- natory to this type of agreement, abided by the terms of the master agreement and the supplements. Thus, the execution of this particular styled interim agreement does not support the conclusion urged by Respondent that the parties signa- tory thereto intended to engage in future negotiations after the completion of the master agreement and the supple- ments. Indeed, comparison of the language in the interim agreement signed by Respondent and the uniform interim agreement discloses the difference is, as pointed out by counsel for General Counsel in her brief, merely one of form and not of substance. Accordingly, I find that when Respondent executed the interim agreement on April 1, 1976. it was intended to serve a dual purpose, i.e., avoid a work stoppage pending nego- tiations for the national agreement and its supplements and to bind the signatories to the terms of the national agree- ment and supplements when they were completed. That this was the intention of the parties is further evidenced by the fact that on April 1. 1976. Respondent gave its truck- driver employees the basic wage increase required by the PUD supplement and made contributions to the health and welfare trust fund on behalf of these employees in the exact amount required by the terms of the agreement. On April I of the following year, Respondent increased its contribu- tions to the trust fund by the precise amount required in the PUD supplement. It also granted the employees on May 2, 1977, a cost-of-living increase determined by the provisions of the national agreement and the PUD supplement. The failure to grant the employees the basic wage increase in their hourly rate on April 1, 1977, is a reflection of Respon- dent's poor financial condition and in no way bears upon its legal obligation to be bound by the terms of' the agreement. On the basis of the above. I find that Respondent was obligated to abide by the terms of the Master National Freight agreement and the PUD supplement when it ex- ecuted the interim agreement on April 1, 1976. It fillows. therefore, that when Respondent decided not to pay its three truckdriver employees the basic wage increase re- quired by the collective-bargaining agreement on April I. 1977, it was unilaterally altering the terms of that agree- ment without bargaining with the Union in violation of Section 8(a)(1) and (5) of the Act. SAC Construction Corn- panv, 235 NLRB 1211 (1978); Ellis Tacke, dh/b/a Ellis Tacke Company. 229 NLRB 1296 (1977); Tony DeClue. d/ h/a LihertY Cleaners, et al., 227 NLRB 1296 (1977). Simi- larly, when Respondent discontinued making the monthly contributions to the health and welfare trust fund on Sep- tember 1, 1977, it further altered the terms of the existing agreement without satisfying its bargaining obligation with the Union. By this conduct. Respondent has further vio- lated Section 8(a)( I1) and (5) of the Act. SAC Consiruction Companv, supra, Ellis Tacke. d/b/a Ellis Tacke CompanYv. supra. Nor does the fact that Respondent found itself in a distressing financial situation provide sufficient justification for allowing repudiation or modification of terms of the existing collective-bargaining agreement. Phoenix Air Con- ditioning, 231 NLRB 341 (1977). Implicit in the arguments advanced by Respondent is the contention that bargaining commenced on June 28 when Wyatt submitted his proposals for a new agreement, and an impasse occurred when the Union rejected them on July 12. This contention misconceives the responsibilities placed on the parties during the term of an existing agreement. Wyatt's proposals were nothing more than an offer to re- open and modify an existing agreement in midterm, even though he submitted detailed proposals for the modification at that time. The Union was under no legal duty to agree to the midterm modification, and when it rejected the offer on July 12, the matter ended. In the circumstances of this case, the parties could only alter or var the terms of the existing 379 DECISIONS OF NATIONAL LABOR RELATIONS BOARD agreement by mutual consent. Since the Union's rejection of Respondent's offer dispelled any semblance of mutual consent, an impasse could not come into existence for the parties never engaged in valid negotiations on the terms of the modification in the first instance. Finally, Respondent argues that since it never became signatory to the master agreement or the PUD supplement, contributions to the trust fund violated the "written agree- ment" requirements of Section 302(c)(5)(B) of the Act.' In support of this contention, Respondent relies upon Moglia v. Geoghegan, 403 F.2d 110 (2d Cir. 1968), cert. denied 394 U.S. 919 (1969). The Moglia case, however, is distinguishable on its facts and has no application to the circumstances found in the instant case. It involved an action for declaratory judgment to obtain pension payments under a trust fund where the employer never executed a written collective-bargaining agreement or a written trust agreement. Having found in the instant case that Respondent is bound to the terms of the master agreement and the PUD supplement by virtue of its execution of the interim agreement, this is sufficient, un- der Board and court precedents, to satisfy the "written agreement" proscription of Section 302. The Board has consistently held that Section 302 (c)(5)(B) does not bar contributions to trust funds where an existing contract has expired and the employer unilaterally terminates such con- tributions, Harold W. Hinson, d/b/a Hen House Market No. 3, 175 NLRB 596 (1969), enfd. 428 F.2d 133 (8th Cir. 1970); Waine's Olive Knoll Farms, Inc., dbla Wayvne's Dairy, 223 NLRB 260 (1976); SAC Construction, supra, or where a successor employer unilaterally terminates trust fund contributions required under the terms of its prede- cessor's contract with a union, Charles Starbuck and Diane Starbuck, d/bla Starco Farmers Market, 237 NLRB 52 (1978); Hen House Market No. 3, supra. The Board has also held that where an employer has adopted an existing agree- ment, he is bound by its terms even though he has not signed the agreement and this is sufficient to satisfy the requirements of Section 302. Vin James Plastering Com- pany, 226 NLRB 125, footnote 3 (1976). It follows from the above precedents that Respondent's contributions to the trust fund on behalf of the employees do not violate the requirements of Section 302 (c)(5)(B). To hold otherwise, by permitting Respondent to repudiate the terms of the existing agreement, would be granting ap- proval for Respondent to reap "financial gain from its un- lawful conduct." Ellis Tacke, d/b/a Ellis Tacke Company, supra. CONCLUSIONS OF LAW 1. Respondent, Inland Cities, Inc., is an employer within the meaning of Section 2(2) of the Act engaged in com- merce within the meaning of Section 2(6) and (7) of the Act 2. General Truck Drivers, Warehousemen & Helpers Union Local 467, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, is a labor organization within the meaning of Section 2(5) of the Act. 3. Since 1970. the Union has been the exclusive bargain- " 29 U.S.C. §186 (cXSXB). ing representative for Respondent's employees in an appro- priate bargaining unit, set forth below. All truck drivers, helpers, dockmen, warehousemen, checkers, power-lift operators, and hostlers; excluding all other employees, office clericals, guards, and super- visors as defined in the Act. 4. By unilaterally refusing to grant its employees the in- crease in their hourly wage rate on April 1, 1977, as re- quired by the collective-bargaining agreement, and by uni- laterally discontinuing contributions to the health and welfare trust fund on September 1, 1977, Respondent has unlawfully refused to bargain collectively with the Union as the exclusive representative of its employees and has vio- lated Section 8(a)(I) and (5) of the Act. 5. The aforesaid unfair labor practices are unfair labor practices affecting commerce within the meaning of Section 2(6) and (7) of the Act. THE REMEDY Having found that Respondent has committed certain unfair labor practices, I shall recommend that it be ordered to cease and desist therefrom and take certain affirmative action designed to effectuate the policies of the Act. Since the record testimony indicates that Respondent has discon- tinued its trucking operation and no longer employs any truckdrivers in the bargaining unit, it shall be recommend- ed that Respondent make whole the three truckdriver em- ployees who were in the unit by reimbursing them with the difference between the amount paid them and the amount they should have received pursuant to the collective-bar- gaining agreement, with interest, for the period commenc- ing April 1, 1977, to the date Respondent discontinued its trucking operation. Likewise, it shall be recommended that Respondent pay to the health and welfare trust fund, on behalf of the employees who were in the bargaining unit, all contributions it was required to pay pursuant to the collec- tive-bargaining agreement, with interest, for the period commencing September 1, 1977, to the date Respondent discontinued its trucking operations. Backpay and interest thereon shall be computed in the manner described in F. W. Woolworth Company, 90 NLRB 289 (1950), and Florida Steel Corporation, 231 NLRB 651 (1977).'' Further, it shall be recommended that Respondent notify the Union in writing that it will honor and give effect to the terms of the collective-bargaining agreement should it, in the future, resume its trucking operations and employ em- ployees in the represented unit. In addition, Respondent shall be required to send copies of the attached notice to the Union for posting, provided the Union is willing, in order to notify its members of the terms contained therein. ORDER'6 The Respondent, Inland Cities, Inc., Riverside, Califor- nia, its officers, agents, successors, and assigns, shall: 15 See. generally, Isis Plumbing & Heating Co., 138 NLRB 716 (1962). 16 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 by the Board and become its findings, conclusions, and Order, and all objections thereto shall be deemed waived for all purposes. 380 INLAND CITIES. INC. 1. Cease and desist from: (a) Refusing to bargain collectively with General Truck Drivers, Warehousemen & Helpers Union Local 467, Inter- national Brotherhood of Teamsters, Chauffeurs, Ware- housemen and Helpers of America, as the representative of its employees in an appropriate unit, described below, by unilaterally failing to pay employees the hourly wage in- crease required by the collective-bargaining agreement in effect with the Union and by unilaterally discontinuing payment of contributions to the health and welfare trust fund required by the collective-bargaining agreement. The appropriate unit is: All truck drivers, helpers, dockmen, warehousemen, checkers, power-lift operators, and hostlers: excluding all other employees, office clericals, guards, and super- visors as defined in the Act. (b) In any like or related 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 necessary to ef- fectuate the policies of the Act: (a) Make whole the employees who were in the aforesaid bargaining unit for any losses of pay they may have suf- fered by reason of the unilateral refusal to grant them the hourly wage increase on April 1, 1977, pursuant to the col- lective-bargaining agreement, in the manner set forth above in the section entitled "The Remedy." (b) Make contributions to the health and welfare trust fund on behalf of the employees who were in the unit set forth above, thereby restoring any losses or expenses they have suffered as a result of the unilateral discontinuance of payment into said trust fund, in the manner set forth above in the section entitled "The Remedy." (c) Notify the above Union, in writing, that it will honor and give effect to the terms of the collective-bargaining agreement should it, in the future, resume its trucking op- erations and employ employees in the represented unit. (d) Preserve and, upon request, make available to the Board or its agents, for examination and copying, all pay- roll records, social security payment records, timecards, personnel records and reports, and all other records neces- sary and relevant to analyze and compute the amount of backpay and pension contributions due under this recom- mended Order. (e) Post at its Riverside, California, facility copies of the attached notice marked "Appendix."" Copies of said no- tice, on forms to be furnished by the Regional Director for Region 21, after being duly signed by Respondent's autho- rized representative, shall be conspicuously posted by it im- mediately upon receipt thereof and maintained for 60 con- secutive days thereafter, in 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. Further. copies of said notice, after being signed by Respondent's authorized representative, shall be forwarded to the above Union by the Regional Director for posting, provided the Union is willing, in places where notices to members are customarily posted. (f) Notify the Regional Director for Region 21. in writ- ing, within 20 days from the date of this Order, what steps Respondent has taken to comply herewith. 17 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 Pursuant to a Judgment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board." 381