Bendix-Westinghouse Automotive Air Brake Co.

BENDIX-WESTINGHOUSE AUTOMOTIVE AIR BRAKE CO. Bendix-Westinghouse Automotive Air Brake Compa- ny and International Union, United Automobile, Aerospace and Agricultural Implement Workers of America (UAW). Case 8-CA-5608 August 27, 1970 DECISION AND ORDER BY CHAIRMAN MILLER AND MEMBERS FANNING, MCCULLOCH, AND BROWN On March 26, 1970, Trial Examiner Ivar H. Peter- son issued his Decision in the above-entitled proceed- ing, finding that Respondent had engaged in and was engaging in a certain unfair labor practice within the meaning of the National Labor Relations Act, as amended, and recommending that it cease and desist therefrom and take certain affirmative action, as set forth in the attached Trial Examiner's Decision. Thereafter, Respondent filed exceptions to the Deci- sion and a supporting brief. The Board has reviewed the rulings of the Trial Examiner made at the hearing and finds that no prejudicial error was committed. The rulings are here- by affirmed. The Board has considered the Trial Examiner's Decision, the exceptions,' the brief, and the entire record in this case, and hereby adopts the findings, conclusions, and recommendations of the Trial Examiner.2 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 I The Respondent has requested oral argument This request is hereby denied, as the record, the exceptions, and the brief adequately present the issues and the positions of the patties ' We are, of course, aware of the holdings of Motor Wheel Corporation, Subsidiary of Goodyear Tire & Rubber Company v NL R B, 74 LRRM 2832 (C A 6), setting aside 180 NLRB No 71, and Goodyear Tire and Rubber Company v NLRB, 413 F 2d 158 (C A 6), denying enforcement in relevant part of 170 NLRB No 79 It appears that the court in Goodyear attached weight to two facts, that the particular language involved was included by agreement of the contracting parties and that the record indicated no employee ever lost anything as a result of the provision To the extent that that opinion may be interpreted as holding that language alone may not have an inhibiting impact on employees, we respectfully disagree However, the instant case may be factually distinguished in that here no agreement of the parties was involved and the language of the plan requires the waiver of statutory rights whereas no such waiver was required in either Goodyear or Motor Wheel Chairman Miller would deter to the Sixth Circuit's view in Good- vear, which he understands to mean that we must consider both the language and any relevant factual context which may be helpful in determining the impact on employees He concurs in the decision herein, however, since no facts are present in this case which would justify any inference that the language would not have an inhibiting impact on the employees' freedom of choice 375 Order of the Trial Examiner, and hereby orders that Respondent, Bendix-Westinghouse Automotive Air Brake Company, Elyria, Ohio, its officers, agents, successors, and assigns, shall take the action set forth in the Trial Examiner's Recommended Order. TRIAL EXAMINER'S DECISION STATEMENT OF THE CASE IVAR H. PETERSON, Trial Examiner: Upon charges and amended charges filed on September 30, 1969,' and Novem- ber 7, respectively, by International Union, United Automo- bile, Aerospace and Agricultural Implement Workers of America (UAW), herein called the Union, the General Counsel fa the National Labor Relations Board, by the Regional Director for Region 8, issued a complaint on November 10 against Bendix-Westinghouse Automotive Air Brake Company, herein referred to as the Respondent or Company, alleging that the Respondent had engaged in conduct violative of Section 8(a)(1) of the National Labor Relations Act, as amended. Briefly stated, the complaint alleged that in September the Respondent distributed to salaried employees at its Elyria, Ohio, plant, and thereafter maintained in effect, a savings and stock ownership plan which, under stated circumstances, made salaried employees who "shall be within a collective bargaining unit for which a labor organization is recognized as collective bargaining agent" ineligible to participate therein In its answer, the Respondent denied having committed any unfair labor prac- tices. Pursuant to notice, I conducted a hearing on January 28, 1970, in Cleveland, Ohio All parties were represented and afforded full opportunity to participate therein. The brief filed by the Respondent has been carefully considered. Upon the entire record in the case, and from my observa- tion of the witnesses, I make the following: FINDINGS OF FACT 1. THE BUSINESS OF THE RESPONDENT The Respondent, a Delaware corporation with its princi- pal office in Elyria, Ohio, has several plants located in various States of the United States, including Elyria, Ohio, where it is engaged in the manufacture of automotive air brakes and pneumatic devices. The Respondent admits and I find that annually the Respondent ships products valued in excess of $50,000 directly from its Elyria plant to points outside the State of Ohio. I find that the Respond- ent is an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act II. THE LABOR ORGANIZATION INVOLVED The Union is a labor organization within the meaning of Section 2(5) of the Act ' Unless otherwise indicated, all dates refer to the year 1969 185 NLRB No. 29 376 DECISIONS OF NATIONAL LABOR RELATIONS BOARD III. THE UNFAIR LABOR PRACTICES consists of Bendix common stock. The securities purchased pursuant to the Plan are held by a trustee and provision is made for reinvestment of earnings. Contributions by the Company, as well as earnings thereon, vest in the employee according to a schedule, 100 percent vesting occurs when the employee has completed contributions to the Plan for 85 or more months Provision is made for withdrawals of contributions, and upon retirement, disa- bility or death the employee or his beneficiary will receive all the employee's contributions and all company contribu- tions credited to the employee's account. During July 1969, the Company became aware that the Union was conducting an organizational campaign among salaried employees at the Elyria plant. Indeed, the Company was aware of this before it sent the letter of July 14 concerning improvements in benefits, including the Plan. The Union, on August 11, filed a representation petition (Case 8-RC-7596) seeking to represent a unit of some 180 salaried office clerical employees at the Elyria plant Pursuant to a consent election stipulation, an election was held on October 14, resulting in defeat of the Union by a vote of 96 to 61. The Union filed a petition (Case 8-RC-7660) on October 8, seeking representation of a unit of approximately 54 salaried technical employees at the Elyria plant. No election has been held on this petition. There is no claim or showing by independent evidence that the Respondent had any animus against the Union or that its intent in publicizing the Plan was to frustrate organization of its salaried employees The sole issue presented is whether the Respondent, by distributing to its Elyria salaried employees the Plan and maintaining it in effect, violated Section 8(a)(1) because of the following provisions in the Plan relating to employee eligibility to participate therein: 2 03-An Employee shall not be eligible to make contributions if such Employee shall be within a collec- tive bargaining unit for which a labor organization is recognized as collective bargaining agent by any Participating Company, except that, upon approval of the Company, the foregoing provisions of this clause shall not affect the eligibility of such Employee to make contributions to the Plan, if, prior to his making any such contribution, such Participating Company shall have requested and received from such labor organization a waiver, in terms acceptable to such Participating Company, of all rights of and claims of right by such labor organization to bargain collective- ly with respect to the Plan or any substantially similar plan or program or to compel such Participating Com- pany to do so, but only so long as such waiver shall remain in effect. It is the position of the General Counsel that the foregoing provision is per se violative of Section 8(a)(1). The Respond- ent, however, contends that it is lawful and to be distin- guished from somewhat similar employer benefit plan provi- sions held violative by the Board and the courts. The first portion of the foregoing eligibility clause plainly states that an employee is not eligible to make contributions to the Plan if he is "within a collective bargaining unit for which a labor organization is recognized as collective bargaining agent" by the Company. Later language in the Prior to 1969 The Bendix Corporation (Bendix) had owned 51 percent of the capital stock of the Company. In January 1969 Bendix entered into arrangements to acquire the remaining 49 percent of the Company's stock, thus making the Company a wholly owned subsidiary of Bendix. In August 1968 Bendix adopted a Salaried Employees' Savings and Stock Ownership Plan (herein the Plan), effec- tive January 1969, available to its employees and those of participating subsidiaries Following acquisition of 100 percent ownership of the Company by Bendix, the Compa- ny's personnel policies and compensation programs were reviewed and analyzed, and consideration was given to making participation in the Plan available to employees of the Company. In May the chairman of the board of Bendix consented to the participation of the Company in the Plan and on August 4 the Internal Revenue Service was requested by Bendix to determine that the Plan, as amended to include the Company, met the requirements of the Internal Revenue Code. In the meantime, on July 14, Elyria salaried employees of the Company were advised of a number of changes in their benefit and compensation programs, including adoption of the Plan "under which employees may invest up to 8% of their base monthly salary with the Company matching 50% of this investment." Employees were also informed that the changes would be explained in a series of meetings beginning July 21. On August 8 the president of the Company wrote the salaried employees and sent them a memorandum which, among other things, summarized the Plan, advised that it was subject to approval of the Internal Revenue Service which approval was expected by October 1, and informed employees they would attend a "communications program" at which the Plan would be further explained On September 11 and 12, two officials of Bendix, Virgil Hare and Larry Dooley, conducted a series of meetings with salaried employees at the Elyria plant in which they explained the Plan by use of a prepared script and slides that had been developed in the fall of 1968 for use at other locations in introducing the Plan which went into effect January 1. They also distributed a prospectus which set forth the formal text of the Plan On September 29 the Respondent distributed enrollment forms to Elyria sala- nes employees, but noted that IRS approval had not as yet been obtained Such approval was issued under date of October 17, and the Plan was thereupon placed in effect as of October 1 for those Elyria salaried employees who had enrolled. Of the approximately 510 salaried employ- ees at Elyria, about 65 percent enrolled as of October 1; at the time of the hearing, about 71 percent participated The Plan, which is voluntary, provides that an eligible salaried employee may invest not less than 2 percent or more than 8 percent of base salary, either in U.S. government bonds or Bendix common stock. For every $2 an employee invests, the Company invests $ 1 in Bendix common stock on behalf of the employee Employees may elect to have their contributions invested 100 percent in government bonds (Fund A), 100 percent in Bendix common stock (Fund B), or equally divided between Fund A and Fund B Company contributions are invested in Fund C, which BENDIX-WESTINGHOUSE AUTOMOTIVE AIR BRAKE CO. clause, however, provides that such disqualification will not attach under certain circumstances, one of which is that the Company request and receive from the labor organi- zation a waiver, acceptable to the Company, of "all rights of and claims of right by such labor organization to bargain collectively with respect to the Plan or any substantially similar plan or program or to compel" the Company to bargain with respect thereto In other words, salaried employees of the Company are not eligible to participate in the Plan if the Company recognizes a union as their collective-bargaining representative, except if the union in a manner satisfactory to the Company relinquishes the right to bargain about the Plan or any similar program. In short, a necessary condition to employees being able to make contributions to the Plan, once the Company has recognized a union as their representative, is that the bargaining agent forego bargaining about the Plan or any program similar thereto It seems plain that if the Company does not choose to request a waiver, or if the labor organiza- tion refuses to execute a waiver or the waiver is for some reason not acceptable to the Company, the represented employees are foreclosed from making contributions to the Plan. In any event, for represented employees to continue to be eligible to make contributions they must, through their bargaining representatives, forego their statutory right to bargain collectively about the Plan or any similar pro- gram The narrow question, therefore, is whether the Respondent's unilateral action in so conditioning participa- tion in the Plan is an infringement upon the exercise of Section 7 rights of employees Section 7 guarantees employees the right "to bargain collectively through representatives of their own choosing," and Section 8(a)(l) makes it an unfair labor practice for an employer "to interfere with, restrain, or coerce employees in the exercise" of that right. It is now well established that benefits such as those made available by company contributions under the Plan are embraced within the terms "wages" and "conditions of employment" and, as such, are mandatory subjects of collective bargaining. Richfield Oil Corporation, 110 NLRB 356, enfd. 231 F.2d 717 (C A.D.C.), cert. denied 351 U.S. 909. That the contributions made by the Company pursuant to the Plan are substantial is evident, as they represent 50 percent of the contributions made by the employees. And it seems equally evident that employees, by reason of the eligibility provision in the Plan, must forego such benefits if they select a union to represent them and if the union does not execute an acceptable waiver of bargaining rights as to the Plan or a similar program. The Respondent argues that employees who choose to be represented by a union are not thereby automatically foreclosed from continued participation in the Plan, and on this basis would distinguish cases holding disqualification of represented employees from participation in similar bene- fit plans to be violative of the Act. The Respondent also points out that salaried employees in the only operating unit of Bendix covered by a collective-bargaining agreement (a unit of plant guards at the Kansas City, Missouri, division) participate in the Plan, since the union representing that unit executed a satisfactory waiver of bargaining rights. While represented employees are not "automatically" dis- 377 qualified in the sense that they are forever foreclosed from participation, it is nonetheless true that they-unlike unre- presented employees-can remain or become eligible only by paying the price of giving up the statutory right to bargain about the subject matter of the Plan. In my opinion the unilateral imposition and publication of this requirement is inherently destructive of the rights of employees under Section 7 of the Act and not significantly different from like restrictions found violative of the Act in decided cases involving comparable benefit plans 2 In Melville, supra, the employer restricted participation in a profit-sharing plan to employees "not represented by a Union designated as the bargaining agent for the employee." The Board held that by maintaining the plan with this condition on eligibility the employer violated Section 8(a)(1), and it adopted the Trial Examiner's finding that "no independent evidence of animus or specific intent to abrogate rights guaranteed by the Act is necessary" to support such finding. The Court of Appeals for the Seventh Circuit affirmed the Board's decision, stating that the company's conduct "in maintaining the provision making union representation a disqualification for eligibility to par- ticipate in its employee profit-sharing plan benefits and continuing to bring such restriction to the attention of its employees ... constituted a per se violation of Section 8(a)(1)." The Court further added that such conduct was "inherently destructive of rights guaranteed by Section 7." The Dura case, supra, involved a profit-sharing plan available to "any employee ... who is not a member of a Collective Bargaining Unit recognized" by the employer. Following Board certification of a union as the representative of salaried office clerical employees at one of its plants, the employer refused to permit participation in the plan by the represented employees. The Board held, with court approval, that such disqualification was violative of Section 8(a)(1) and (3) of the Act. In Kroger, supra, the employer's retirement and profit-sharing plan in substance provided that employees who were covered by a negotiated pension plan were not eligible to participate in the employer's retirement and profit-sharing plan. Additionally, the employ- er refused to bargain concerning the profit-sharing plan. The Board's findings of violation of Section 8(a)(1), (3), and (5) were sustained by the Court of Appeals for the Sixth Circuit In Goodyear, supra, the Board held that it was violative of Section 8(a)(1) to limit participation in retirement and insurance plans to employees not represented by a collective- bargaining representative In refusing to enforce the Board's order in this respect, the Sixth Circuit Court of Appeals noted that the language found objectionable by the Board had been inserted at the request of the union there involved in order "to distinguish between employees who were cov- ered under Company plans and employees covered under ' Melville Confections, Inc, 142 NLRB 1334, enfd 327 F 2d 689 (C A 7), cert denied 377 U S 933, Dura Corporation, 156 NLRB 285, enfd 380 F 2d 970 (CA 6), The Kroger Co., 164 NLRB 362, cnfd in pertinent part 401 F 2d 682 (C A 6), The Goodyear Tire & Rubber Company, 170 NLRB No 79, enforcement denied in pertinent part 413 F 2d 158 (C A 6), Motor Wheel Corporation, 180 NLRB No 71 378 DECISIONS OF NATIONAL LABOR RELATIONS BOARD various benefit plans negotiated by their collective bargaining representatives." The Board's latest decision in this area is Motor Wheel, supra There the employer had in effect two retirement plans for salaried employees which provided that in order to be eligible to participate an employee be "not represented by a collective bargaining representative recognized by the Company." In response to an order to show cause why a motion for judgment on the pleadings should not be granted, the employer asserted that the disputed language was never alluded to during the course of an organizing campaign leading to certification of the union for a unit of salaried employees; that since certification of the union the parties had bargained with respect to a new pension plan to replace the plans containing the disputed language; and that the represented employees continued to be covered by the plans during the course of negotiations. In granting the motion for judgment on the pleadings and finding that restriction on eligibility to participate per se violative of Section 8(a)(1), the Board stated: As we have had previous occasion to hold, employee benefit plans which on their face are restricted to participation or enjoyment by employees who are not members of a union, or who have foregone their right to select and bargain through a collective-bargaining representative are inherently restrictive of employee rights guaranteed by Section 7 of the Act, and without further evidence of interference, restraint, or coercion are per se violations of Section 8(a)(1) of the Act.' Melville Confections, Inc., 142 NLRB 1334, enfd 327 F.2d 689 (C A 7), cert. denied 377 U S. 933 In making the foregoing determination in Motor Wheel the Board assumed, arguendo, that the employer's "continu- ation of the plan after employees had chosen the Union was subject to pending negotiations" and further assumed "that if the Employer's pension plan had specifically provid- ed for such conditional continuation following selection of a bargaining agent, no violation would have occurred." Noting that the employer's plan did not provide for such conditional continuation, the Board reasoned as follows: Employees considering selecting a bargaining agent would therefore be impeded in their free exercise of their right to selection by clear and unequivocal lan- guage in Respondent's plan indicating that they would suffer a loss of benefit if they selected a Union and the Respondent recognized it. In view of the Respond- ent's admission by answer that it has maintained the retirement plans containing the restrictive language in effect at all times material to this case, and that the provisions of the plans have been publicized to salaried employees such as those currently represented by the Union, we find that there are no matters requir- ing hearing before a trial examiner. Accordingly, it is appropriate that the General Counsel's motion for judgment on the pleadings be, and it hereby is, granted. I conclude and find that the language in the Respondent's Plan, excluding represented employees from continued par- ticipation therein except upon the condition that their repre- sentative waive the right to bargain concerning the Plan or any similar plan or program, is inherently restrictive of employee rights guaranteed in Section 7 of the Act. Accordingly, I find that by maintaining the Plan in effect and publicizing it to its salaried employees, the Respondent has engaged in conduct violative of Section 8(a)(1) of the Act. IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The acts of the Respondent set forth in section III, above, occurring in connection with the operations of the Respondent described in section I, above, have a close, intimate, and substantial relation to trade, traffic, and com- merce among the several States, and tend to lead to labor disputes burdening and obstructing commerce and the free flow of commerce. V. THE REMEDY Having found that the Respondent has engaged in unfair labor practices violative of Section 8(a)(1) of the Act, it will be recommended that the Respondent cease and desist therefrom and take certain affirmative action to effectuate the policies of the Act. I have found that by maintaining in effect those provisions of its Salaried Employees' Savings and Stock Ownership Plan excluding from participation therein otherwise eligible employees if they chose to be represented by a collective- bargaining representative recognized by it, unless such repre- sentative waives the right to bargain concerning the Plan or any similar plan or program, the Respondent interfered with, restrained, and coerced its employees in the exercise of their Section 7 rights. I will accordingly recommend that the Respondent amend the foregoing Plan by eliminat- ing therefrom the provisions so excluding represented employees. I will further recommend that the Respondent cease and desist from in any like or related manner infringing upon rights guaranteed to its employees in Section 7 of the Act. Upon the basis of the foregoing findings of fact, and upon the entire record in the case, I make the following: CONCLUSIONS OF LAW 1. Bendix-Westinghouse Automotive Air Brake Company is an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act. 2. International Union, United Automobile, Aerospace and Agricultural Implement Workers of America (UAW), is a labor organization within the meaning of Section 2(5) of the Act. 3. By maintaining in effect a Salaried Employees' Savings and Stock Ownership Plan which provides for the exclusion from participation therein of employees who shall be within a collective-bargaining unit represented by a labor organiza- tion recognized by the Respondent, unless such labor organi- zation waives the right to bargain concerning the Plan or any similar plan or program, the Respondent has inter- fered with, restrained, and coerced its employees in the exercise of their rights guaranteed in Section 7 of the Act, and has thereby engaged in unfair labor practices BENDIX-WESTINGHOUSE AUTOMOTIVE AIR BRAKE CO. within the meaning of Section 8(a)(1) of the Act. 4. The aforesaid unfair labor practices are unfair labor practices affecting commerce within the meaning of Section 2(6) and (7) of the Act. RECOMMENDED ORDER Upon the basis of the foregoing findings of fact and conclusions of law, and upon the entire record in the case, it is recommended that Bendix-Westinghouse Automo- tive Air Brake Company, Elyria, Ohio, its officers, agents, successors, and assigns, shall: 1. Cease and desist from- (a) Maintaining in effect a Salaned Employees' Savings and Stock Ownership Plan which contains a provision excluding employees from participation therein because they are within a collective-bargaining unit represented by a labor organization recognized by the Respondent, unless such labor organization waives the right to bargain concern- ing the Plan or any similar plan or program. (b) In any like or related manner interfering with, restrain- ing, or coercing employees in the exercise of the rights guaranteed to them by Section 7 of the Act. 2. Take the following affirmative action designed to effec- tuate the policies of the Act: (a) Amend its Salaried Employees' Savings and Stock Ownership Plan by the elimination therefrom of the provi- sion excluding from participation therein employees within a collective-bargaining unit represented by a labor organiza- tion recognized by the Respondent, unless such labor organi- zation waives the right to bargain concerning the Plan or any similar plan or program. (b) Post at its plant in Elyria, Ohio, copies of the attached notice marked "Appendix "' Copies of said notice, on forms provided by the Regional Director for Region 8, after being duly signed by the Respondent's authorized represent- ative, shall be posted immediately upon receipt thereof, and be maintained for 60 consecutive days thereafter, in conspicuous places, including all places where notices to employees are customarily posted Reasonable steps shall be taken to insure that said notices are not altered, defaced, or covered by any other material. (c) Notify said Regional Director, in writing, within 20 days from the receipt of this Decision, what steps Respondent has taken to comply herewith.' ' 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 , recommendations, and Recommended Order herein shall , as provided in Sec 102 48 of the Rules and Regulations, 379 be adopted by the Board and become its findings, conclusions, and order, and all objections thereto shall be deemed waived for all purposes In the event that the Board's 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 be changed to read "Posted pursuant to a Judgment of the United States Court of Appeals enforcing an Order of the National Labor Relations Board " ' In ih% event that this Recommended Order is adopted by the Board, this provision shall be modified to read "Notify said Regional Director, in writing, within 10 days from the date of this Order, what steps Respondent has taken to comply herewith " APPENDIX NOTICE TO EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government WE WILL amend our Salaried Employees' Savings and Stock Ownership Plan by the elimination therefrom of the provision which excludes from participation employees within a collective-bargaining unit represent- ed by a labor organization recognized by us, unless such labor organization gives up the right to bargain concerning the Plan or any similar plan or program. WE WILL NOT disqualify our salaried employees from eligibility to participate in our Salaned Employees' Savings and Stock Ownership Plan because they are or become members of a collective-bargaining unit represented by a labor organization recognized by us BENDIX-WESTINGHOUSE AUTOMOTIVE AIR BRAKE COMPANY (Employer) Dated By (Representative) (Title) This is an official notice and must not be defaced by anyone. This notice must remain posted for 60 consecutive days from the date of posting and must not be altered, defaced, or covered by any other material. Any questions concerning this notice or compliance with its provisions may be directed to the Board's Office, 1695 Federal Office Building, 1240 East Ninth Street, Cleveland, Ohio 44199, Telephone 216-522-3715.