Pomona Building Materials Co., Inc.

558 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Pomona Building Materials Co., Inc . and General Teamsters, Sales Drivers, Food Processors, Warehousemen & Helpers, Local 871, International Brotherhood of Teamsters, Chauffeurs, Warehousemen & Helpers of America. Case 21-CA-8020 March 20, 1969 DECISION AND ORDER BY CHAIRMAN MCCULLOCH AND MEMBERS JENKINS AND ZAGORIA On November 20, 1968, Trial Examiner George Christensen issued his Decision in the above-entitled proceeding, finding that the Respondent had engaged in and was engaging in certain unfair labor practices and recommending that it cease and desist therefrom and take certain affirmative action, as set forth in the attached Trial Examiner's Decision. Thereafter, the Respondent filed exceptions to the Trial Examiner's Decision, and a brief in support thereof. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the National Labor Relations Board has delegated its powers in connection with this case to a three-member panel 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 hereby affirmed. The Board has considered the Trial Examiner's Decision, the exceptions and brief, and the entire record in this case, and hereby adopts the findings, conclusions, and recommendations of the Trial Examiner.' ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Relations Board hereby adopts as its Order the Recommended Order of the Trial Examiner, and orders that the Respondent, Pomona Building Materials Co., Inc., Pomona, California, its officers, agents, successors, and assigns, shall take the action set forth in the Trial Examiner's Recommended Order. 'e find no merit in the Respondent 's exception to the Trial Examiner's Recommended Remedy See N L R B v Strong Roofing & Insulating Co , 393 US 357 TRIAL EXAMINER'S DECISION STATEMENT OF THE CASE GEORGE CHRISTENSEN, Trial Examiner. On September 4, 1968, I conducted a hearing at Los Angeles, California, on issues raised by a complaint issued on June 28, 1968, based upon charges filed on April 1, 1968, by Teamsters Local 871, hereafter the Union The complaint alleged that Pomona Building Materials Co , Inc., hereafter the Company or the Respondent, violated Section 8(a)(5) and (1) of the National Labor Relations Act, as amended, hereafter the Act, by refusing on and after October 24, 1967, to comply with the terms of a contract executed on that date by the California Building Material Dealer Association, Inc., hereafter the Association, and the Union for a term extending from September 1, 1967, to August 31, 1971. The Company by its answer denied the jurisdictional, unit, majority representative status of the Union, contract coverage, failure or refusal to comply therewith, failure or refusal to bargain and unfair labor practice allegations of the complaint. All parties appeared at the hearing and were afforded full opportunity to introduce evidence, examine and cross-examine witnesses, argue orally, and file briefs. The General Counsel and the Respondent have submitted briefs Based upon his review of the entire record, observation of the witnesses and perusal of the briefs, the Examiner makes the following. FINDINGS OF FACT 1. JURISDICTION The jurisdictional issue turns on the question of whether at times pertinent to this case the Respondent was part of the Association for purposes of collective bargaining. During Respondent's previous fiscal year its gross sales were $320,000 and it made purchases outside the State of California of approximately $39,000. Standing alone, therefore, it would fail to meet the minimum standards for assertion of Board Jurisdiction. The addition of the annual sales and annual purchases of goods shipped from outside the State of just one other member of the Association, L. A Building Materials Company, however, warrants assertion of jurisdiction. That Company had annual sales in excess of $500,000 and purchases of goods shipped from points outside the State of California valued in excess of $50,000. The jurisdictional question is intertwined with the contract coverage question and shall be finally resolved along with the latter 11. LABOR ORGANIZATION The complaint alleges, the answer admits, and the Examiner finds that the Union is a labor organization within the meaning of Section 2(5) of the Act. 111. THE UNFAIR LABOR PRACTICE A. Background Respondent recognized the Union as the exclusive collective-bargaining agent of a unit of its employees in 1950 and executed an unbroken series of individual contracts with it covering their wages, hours and other conditions of employment through August of 1964 On August 18, 1964, Respondent executed a document entitled "Authorization for Collective Bargaining" wherein Respondent and other members of the Association designated the Association as their exclusive representative and attorney-in-fact for the purpose of negotiating and executing standard collective-bargaining agreements with Teamster Locals -420, 692, 871, and 235 174 NLRB No. 193 POMONA BUILDING MATERIALS CO., INC. covering wages, hours, and other employment conditions of their employees represented by the Locals. The Association was further empowered to handle all grievances and arbitrations arising under the contracts beyond the initial step. The Authorization provided that it would continue in full force and effect until and unless revoked by the service of a written notice upon the Association by a signatory after the execution of a collective-bargaining agreement covering a signatory's employees and not less than 60 days prior to the termination thereof Pursuant to the Authorizations on October 22, 1964, representatives of the Association and the four Locals executed a collective-bargaining agreement recognizing the Locals as the exclusive bargaining agents for and convering rates of pay, wages, hours and other employment conditions of employees of all Association members signatory to the Authorizations. The contract remained in effect to August 31, 1967, subject to the usual termination or modification not sooner than 60 days prior thereto. Business was poor in 1966 and 1967 both within the industry and for the Respondent. As the time for termination or renewal of the 1964-67 agreement neared, Respondent's business had deteriorated to the extent that it employed only a few persons in classifications covered by the contract and had trouble retaining those few for more than short periods. B. The Alleged Cancellation of the Authorization On June 14, 1967, Paul Kesner, manager of the Company, addressed the following letter to the Association: June 14, 1967 CBMI)A 99 E. Magnolia Suite :300 Burbank, Calif Gentlemen: We have been in a quandry since the first of the year what with our business shot in the valley. As you probably suspect our employees are down to two and they are new men we just had to pick up off the street and we do not know if they will work out to be good drivers or not. Mac and I are doing everything else to try to keep alive. We have discussed the possibility of having to drop out of the association because of economics but I have been asking Mac to hold on a little longer. A new union contract will be up for discussion for a Sept. change and we want to discuss our shop here with our local union as our conditions in this area are vastly different than your area. We have been unable to attend the L. A. meetings because of time and distance involved. All the other so called dealers in our area are on their backs. You have not been out here for years, why don't you come by some time. Yours truly, /s/ Paul M. Kesner, Mgr. Porn. Bldg. Materials Respondent did not receive any response to the letter. C. Negotiation of the 1967-71 Agreement 559 In the latter part of June 1967, the four Teamster Locals signatory to the 1964-67 agreement served notices on the Association and its members employing persons covered thereby, including the Respondent, of their desire to terminate the agreement effective August 31, 1967, and to negotiate a new agreement. Respondent received his notice from the Union on about June 23, 1967. The Respondent did not reply to the Union's notice. On July 18, 1967, the Association after due notice held a special meeting of its members to discuss the union notices and to plan the response thereto. The members present (Respondent did not attend), constituting a majority of the affected members, voted not to cancel the Association's authority to represent and bargain for them, chose a bargaining committee, and decided "to go along with the bargaining pattern of the past in which we follow the general format of the rock producers, ready mix concrete agreement where it is applicable to building material operations, and where the provisions of their agreement are not applicable to our needs, negotiate provisions which are." On July 25, 1967, the Association acknowledged receipt of the June union notices terminating the 1964-67 contract and signified the willingness of the Association to meet with the Unions to negotiate a successor contract. On the same date the Association sent Respondent and all other members who had executed Authorizations a letter setting out the July 18 Association meeting actions, requesting suggestions for changes in the existing contract, requesting information concerning any pending grievances, and enclosing copies of the Association reply to the Unions' contract termination notice. Respondent did not voice, either orally or in writing, any objection to the Association's actions, its proposed plan for negotiations, or the composition of the bargaining committee; neither did it make any suggestions for changes from the existing contract, submit any information regarding pending grievances, or repudiate the Association's authority to respond to the contract termination notice on its behalf and arrange to negotiate with the Unions as its agent. Neither did Respondent notify the Union it wished to bargain directly. The negotiations resulted in the execution on October 24, 1967, of a new contract for a term extending from September 1, 1967, to August 31, 1971. The new contract, inter alia, increased wage rates, hospital, medical, dental care, disability pay, and pension benefits. On October 27, 1967, the Association sent a copy of the new contract to each affected member with explanation of the new terms therein and the reasons the bargaining commmittee had' accepted them. The Association noted there was division among its members over the terms of the new contract and advised them that because of this the Association would not represent its members in future contract negotiations. Shortly after receipt of the October 27 Association letter and the new contract (which was furnished to McFarland in late October by Local 871 Business Agent Young when McFarland informed Young it had not been enclosed with the Association's letter), McFarland sent a written resignation from membership to the Association. He also informed Young he could not live with the new contract. 560 DECISIONS OF NATIONAL LABOR RELATIONS BOARD D. The Union's Attempted Enforcement of the New Contract Young furnished McFarland a copy of the new contract in late October . McFarland met with Young a few days later (on November 1, 1967). At that meeting, McFarland stated that he could not live with the new contract; that he would be willing to pay the new wage scales but would not honor the pension and dental plan provisions of the contract and would only pay one-half the cost for the required health and welfare benefits (hospital, medical, disability income ). No concessions were made by Young. McFarland has since paid the new wage scales. He has not maintained any of the hospital, medical, dental care, disability income, or pension benefit plans set out in the contract. Subsequent attempts to compromise the matter (including conferences at the hearing ) have been unsuccessful. Respondent notes that it has and will continue to meet with the Union at reasonable times and places to discuss an agreement on these matters. E. Concluding Findings 1. The unit and the Union' s majority status therein - While the Company denied the correctness of the unit designated in the complaint and that the Union represented a majority of the employees therein, it advanced neither evidentiary nor argumentative support therefor. The unit designated is the unit set out in the 1967-71 agreement; the classifications covered represent what are in essence the production and maintenance employees of the building material dealers covered thereby. In the judgment of the Examiner, this is an appropriate multiemployer unit for purposes of collective-bargaining within the meaning of Section 9 of the Act and he so finds. Respondent recognized the Union as the exclusive collective-bargaining agent of its employees within the unit from 1950 to 1964; the Association recognized the Union and its three sister Locals as the majority representative of the multi-plant unit indicated above in 1964 and at all times subsequent; Respondent failed to adduce any evidence to support any inference that the Union at any time subsequent to 1964 lost its majority status therein. On these facts the Union's continued majority status is presumed, Carter Machine & Tool Co., 133 NLRB 247, and the Examiner so finds. 2. Contract coverage and jurisdiction The Authorization executed by the Respondent empowering the Association to bargain with the Union on his behalf clearly contemplated more than one contract might result, for the Authorization refers to contracts. It also contemplated possible withdrawal by any of its affiliates and provided a specific procedure therefor - written notice served more than 60 days prior to the expiration of a contract then in effect. The Examiner cannot find that Kesner's June 14, 1967, letter constituted such a withdrawal; the first paragraph cites the poor condition of the business, the second notes the Company is finding it difficult to survive, the third notes the possibility that at some future date for economic reasons the Company may have to drop out of the Association, the fourth notes an awareness negotiations for a new labor contract would soon begin and indicates a desire to discuss with the union conditions in the- area where Respondent was operating which allegedly differed from conditions of other Association members in other areas, and closed with an invitation to visit Respondent's premises. At the very most it can be construed as the expression of a desire to discuss with the Union some local- conditions allegedly at variance with those existing elsewhere - a desire which was not conveyed to the Union, either then or at any time prior to the execution by the Association of a successor agreement and Respondent's receipt thereof. No communication was addressed by the Respondent to the Association concerning the Association's continued authority to bargain with the Union and its sister Locals and sign a contract on Respondent's behalf prior to the negotiation and execution of a successor contract, Respondent failed to avail itself of the opportunity to attend the Association meeting prior to the negotiations wherein policy to govern same was established, Respondent failed to make any suggestions or indicate its opposition to the policies adopted when notified thereof and when such suggestions were solicited, Respondent failed to repudiate the Association's communications to the Union addressed in its behalf, and Respondent failed to advise the Union at any time prior to its November 1 resignation that the Association was not acting as its agent. Based on the foregoing, the Examiner finds that the Association had full authority to represent, negotiate for and execute a contract covering the wages, rates of pay, hours and other conditions of employment of Respondent's employees in the unit set out in the contract when it negotiated with the Union and its three sister Locals and executed a contract on October 24, 1967, covering same. The Examiner therefore finds that the Respondent is subject to and bound by that contract executed by his duly authorized agent, the Association, for the term thereof. In view of the finding that the Authorization was in full force and effect at the time the 1967-71 contract was executed on behalf of the Respondent, the proper jurisdictional standard to apply for the purposes of this case is the amount of business done by all the employers within the multi-plant unit consisting of all members of the Association which had empowered it to act on their behalf in collective bargaining with the four Locals. The evidence discloses that just the business of the Respondent and one other member is sufficient to meet the Board's minimum monetary standards for assertion of jurisdiction (see I, above). The Examiner therefore finds that the Respondent at all times pertinent to this case was an employer engaged in commerce and in a business affecting commerce within the meaning of Section 2(2), (6), and (7) of the Act, and that it will effectuate the purposes of the Act to assert jurisdiction herein. 3. The failure or refusal to bargain in good faith The Respondent correctly notes that its relationships with the Union throughout the period since its initial recognition of the Union in 1950 have been friendly and amicable and that it has throughout its collective-bargaining history met with the Union at all reasonable times and places to discuss the wages, hours and other conditions of employment of its employees represented by the Union The General Counsel does not contend that any union animus is involved in this case. However, this is not the question. The question is whether, after authorizing an agent to execute a contract POMONA BUILDING MATERIALS CO., INC. 561 on his behalf with the Union convering his employees represented by that Union and after his agent, acting pursuant to that authorization, has executed a contract with the Union, does that agent's principal refuse to bargain in good faith in violation of Section 8(a)(5) and (1) of the Act when he subsequently repudiates such contract and seeks modification thereof? The Examiner finds that such action is bad-faith bargaining violative of the Act. Once having authorized the Association to represent him and to bargain and execute a contract on his behalf with the Union covering his employees in the unit, it was bad faith on the part of Respondent, on receiving the new contract, to refuse to accept its terms (particularly the health and welfare and pension provisions) and attempt to secure modification of such provisions from the Union. To sit back and permit his agent and the Union to negotiate a contract covering his employees and then on reviewing the results, to repudiate the contract agreed upon and seek to negotiate a lower scale of benefits hardly constitutes good-faith bargaining with the Union and good-faith treatment of his agent and his employees. As the Board has noted: The statutory intent to stabilize during a contract term agreed-upoh conditions of employment is apparent from the provisions of Section 8(d) of the Act, which defines the obligation to bargain. That Section not only imposes an obligation on each party to a contract to refrain from modifying the contract without complying with the notice and waiting period requirements therein set forth, but also expressly provides that "the duties so imposed shall not be construed as requiring either party to discuss or agree to any modification of the terms and conditions contained in a contract for a fixed term, if such modification is to become effective before such terms and conditions can be reopened under the provisions of the contract." In line with that provision, the Board has consistently held that a party does not violate its bargaining obligation when it refused to discuss changes proposed by the other party in the terms of an existing contract. (citing cases) The Board has also held that an employer acts in derogation of his bargaining obligation under Section 8(d), and hence violates Section 8(aX5), when he unilaterally modifies contractual terms or conditions of employment during the effective period of a contract - and this even though he has previously offered to bargain with the Union about the change and the union has refused. (citing cases) C & S. Industries, 158 NLRB 454, 457. [Emphasis Supplied.] The Examiner therefore finds that the Respondent, by repudiating the contract executed on October 24, 1967 by his agent and the Union covering his employees within the unit specified, and by demanding modification thereof and more favorable terms and concessions from the Union, thereby refused to bargain in good faith in violation of Section 8(aX5) and (1) of the Act. CONCLUSIONS OF LAW 1. The Respondent is an employer engaged in commerce and in an industry affecting commerce and the Union is a labor organization within the meaning of Section 2(2), (5), (6), and (7) of the Act. 2. By repudiating the contract executed on October 24, 1967, by the Association as Respondent's agent and the Union covering Respondent's employees in the unit therein described represented by the Union and by demanding modification thereof and more favorable terms and concessions from the Union than those contained in the contract, Respondent refused to bargain collectively in good faith with the representative of his employees and thereby violated Section 8(a)(5) and (1) of the Act. 3. The aforesaid unfair labor practices occurring in connection with Respondent's operations in interstate commerce will tend to lead to labor disputes burdening and obstructing commerce or the free flow thereof unless remedied in accordance with the provisions of the Act. REMEDY Having found that the Respondent engaged in unfair labor practices, it will be recommended that it cease and desist therefrom and take certain affirmative action designed to effectuate the purposes and policies of the Act. It has been found that the Respondent unlawfully repudiated a contract executed by its agent with the Union covering Respondent's employees represented by the Union in the unit described in the contract, that he failed and refused to provide his employees within that unit certain benefits agreed to by the Union and his agent, particularly the health and welfare and pension benefits specified therein, and that he demanded that the Union agree to the deletion of any provision or liability upon Respondent to provide for dental care or retirement pensions of such employees and that Respondent only pay for one-half the cost of hospital, medical, and disability income benefits. To restore to the Union and the affected employees the contract benefits of which they were deprived by the Respondent's unfair labor practice requires an order that the Respondent not only cease and desist from its refusal to comply with the terms and conditions of the 1967-71 contract, particularly the health and welfare and pension provisions thereof, but also that it make the employees and the Union whole for any loss of benefits they may have suffered during the period of Respondent's noncompliance therewith. On the basis of the foregoing findings of fact and conclusions of law and upon the entire record in this case, the Examiner recommends pursuant to Section 10(c) of the Act that the Respondent Pomona Building Materials Co., Inc., its officers, agents, successors, and assigns, shall: 1. Cease and desist from: (a) Failing or refusing to comply with all the terms and conditions of the contract executed by the Association on Respondent's behalf and the Union on October 24, 1967, for a term extending from September 1, 1967, to August 31, 1971, covering the wages, hours, and other conditions of employment of Respondent's employees within the unit specified in said contract. (b) Failing or refusing to provide the health and welfare and pension benefits provided in the health and welfare and pensions provisions of that contract. (c) Making any changes in the terms and conditions of its employees from those specified in that contract during its term without prior notice to, bargaining with, and agreement by the Union. (d) Insisting upon the Union's acceptance of modification of the health and welfare and pension provisions or other provisions of that contract before the Respondent will comply with same. 2. Take the following affirmative action necessary to effectuate the purposes and policies of the Act: 562 DECISIONS OF NATIONAL LABOR RELATIONS BOARD (a) Make whole any of Respondent's employees in the unit covered by the contract noted above who may have suffered any losses by virtue of Respondent's failure and refusal to comply with the health and welfare and pension provisions of that contract, and any other losses they may have occasioned by virtue of such failure or refusal to comply therewith. (b) Make whole the Union for any losses it may have suffered by reason of Respondent's failure to comply with the terms and conditions of said contract. (c) Post at its plant at Pomona, California, copies of the attached notice marked "Appendix A."' Copies of said notice furnished by the Regional Director for Region 21 shall be signed by an authorized representative of the Respondent and posted by it immediately upon receipt thereof, in conspicuous places, where notices to employees are customarily posted and maintained there for 60 consecutive days thereafter. Reasonable steps shall be taken to ensure that said notices are not altered, defaced, or covered by other material. (d) Notify the said Regional Director, in writing, within 20 days from the receipt of this Decision, what steps the Respondent has taken to comply herewith.' 'In the event this Recommended Order is adopted by the Board, the words "a Decision and Order" shall be substituted for the words "the Recommended Order of a Trial Examiner" in the notice In the further event the Board's Order is enforced by a decree of a United States Court of Appeals, the words "a Decree of the United States Court of Appeals, Enforcing an Order" shall be substituted for the words "a Decision and Order " 'In the event this Recommended Order is adopted by the Board, this provision shall be modified to read "Notify the said Regional Director, in writing, within 10 days from the date of this Order, what steps Respondent has taken to comply herewith " APPENDIX A NOTICE TO ALL EMPLOYEES Pursuant to the Recommended Order of a Trial Examiner of the National Labor Relations Board and in order to effectuate the policies of the National Labor Relations Act, as amended, we hereby notify our employees that: After a trial at which all sides had the chance to give evidence, the National Labor Relations Board found that we, Pomona Building Materials Co., Inc., violated the National Labor Relations Act and ordered us to post this notice. The Board found that we violated the Act when we refused to give our employees the health and welfare and pension benefits that their Union, Teamster Local 871, secured for them in a contract signed on October 24, 1967, for a term extending from September 1, 1967, to August 31, 1971, and tried to get the Union to reduce or eliminate those benefits and ordered us to provide those benefits and any others set out in that contract for its term and to make any employees who suffered any losses whole for such loss as they suffered. The Board also ordered us not to make any changes in the benefits set out in the contract without first getting the agreement of the Union to any changes we want. We therefore promise that we will secure the full health and welfare and retirement benefits for our employees that the contract calls for and that we will make up any losses our employees have suffered because those benefits have not been provided. We also promise that we will not make any changes in any rights or benefits provided by the contract unless the Union first agrees to such change. We further agree that we will not refuse to bargain with Teamster Local 871 concerning the wages, hours and other conditions of our employees covered by the contract set out above. Dated By POMONA BUILDING MATERIALS CO., INC. (Employer) (Representative) (Title) 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. If employees have any question concerning this notice or compliance with its provisions, they may communicate directly with the Board's Regional Office, 849 South Broadway, Los Angeles, California 90014, Telephone 688-5229.