Solo Cup Co.

SOLO CUP COMPANY 823 Solo Cup Company and United Papermakers and Paperworkers, AFL-CIO. Case l3-CA-8133 June 19, 1969 DECISION AND ORDER BY MEMBERS BROWN, JENKINS, AND ZAGORIA Upon a charge duly filed on November 24, 1967, by United Papermakers and Paperworkers, AFL-CIO, hereinafter called the Union, the General Counsel of the National Labor Relations Board, by the Regional Director for Region 13, issued a complaint and notice of hearing on February 1, 1968, alleging that Solo Cup Company, hereinafter called Respondent, had engaged in and was engaging in unfair labor practices affecting commerce within the meaning of Section 8 (a)(1) and Section 2(6) and (7) of the National Labor Relations Act, as amended . Copies of the charge, complaint, and notice of hearing , were duly served upon the Respondent. 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 proceeding to a three-member panel. The complaint alleged , in substance , that on or about April 14, 1967, Respondent amended its profit-sharing plan so as to exclude from the plan any employees of Respondent who become covered by a retirement program negotiated within the framework of a collective-bargaining contract, that the said amendment was put into effect on or about August 1 , 1967, and that on or about October 1, 1967, the Respondent distributed to its employees a booklet containing, among other items, language setting out in general terms the effect of the amendment to the profit-sharing plan all in violation of Section 8(a)(1) of the Act . Respondent's answer admits the amendment of the profit-sharing plan on or about April 14, 1967, and the promulgation and publicizing of the amendment of August 1, 1967, and thereafter, but denies that it in any way violated the Act. On March 1 , 1968, all parties to this proceeding entered into a stipulation by which they waived a hearing before a Trial Examiner and the issuance by him of a Trial Examiner's Decision and Recommended Order and agreed to submit the case to the Board for findings of fact , conclusions of law, and an order, based upon a record consisting of the charge, the complaint, the answer, and the stipulation. On March 6, 1968, the Board approved the stipulation and ordered the proceeding transferred to the Board . Thereafter, the Respondent and the General Counsel filed briefs. Upon the basis of the stipulation , the exhibits, the briefs, and the entire record in this case, the Board MAKES THE FOLLOWING FINDINGS: FACTS 1. THE BUSINESS OF THE RESPONDENT The Respondent, a Delaware corporation, is engaged in the manufacture and sale of paper containers and related products. During the past 12 months, which is a representative period, the Respondent had a direct outflow of products in interstate commerce valued in excess of $ 1 million which were sold and shipped across state lines from its facilities located in the various States including Illinois, Missouri, Maryland, and Canada. The Respondent's answer admits and we find that the Respondent is engaged in commerce, within the meaning of the Act, and that it will effectuate the policies of the Act to assert jurisdiction herein. II. THE LABOR ORGANIZATION INVOLVED United Papermakers and Paperworkers, AFL-CIO, is a labor organization within the meaning of Section 2(5) of the Act. III. THE UNFAIR LABOR PRACTICES In their stipulation , the parties have agreed that: (1), for many years prior to April 14, 1967, Respondent maintained as one of its benefits for employees a profit-sharing plan whereby each employee, upon completion of 1 year of full-time employment, became a participant of the plan; (2), on or about April 14, 1967, the Board of Directors of Respondent amended paragraph 3.5 of the plan so as to provide that: If at any time the Company is required , pursuant to a collective bargaining agreement, to provide immediate or prospective retirement benefits for an Employee in a collective bargaining unit, the Company shall amend the plan to terminate any and all benefits of Employees in such collective bargaining unit , as of the effective date of such collective bargaining agreement or as of the date the employee joins such collective bargaining unit, whichever occurs later, anything in the Plan and Trust Agreement to the contrary notwithstanding, subject to determination that such amendment does not disturb the qualifications of the Plan as exempt under the Code. and that the said amendment shall be effective August 1, 1967; and (3), on or about October 1, 1967, Respondent caused to be distributed to its employees a booklet entitled "Solo Cup Company, Profit Sharing Plan," which contained the following paragraph, to wit (Par. 2, Answers to Question No. 25): The Company also reserves the right to amend the Plan to terminate any and all benefits under 176 NLRB No. 117 824 DECISIONS OF NATIONAL LABOR RELATIONS BOARD the plan if it is required to provide immediate or prospective retirement benefits under a collective bargaining agreement . Only those employees covered by such a collective bargaining agreement will be excluded from the plan. On the basis of the stipulated facts, we agree with the General Counsel that paragraph 3.5 of Respondent's profit-sharing plan interferes with and restrains the employees rights to engage in collective activity in violation of Section 8(ax 1) of the Act. We also agree that the second paragraph in answer to question No. 25 of the employees' booklet likewise violates Section 8(a)(I) of the Act. The record shows that Respondent adopted and promulgated its rule requiring that it amend its plan for the purpose of excluding any employees who might thereafter become covered by a collective-bargaining contract containing a provision for a retirement system . In our opinion , such a rule, while not self-executing, as it was in the Kroger case,' certainly has a definite and direct impact on the employees and their right to engage in concerted activities including the right to future bargaining over various conditions of employment. We reject Respondent's basic contention that it has the absolute right to announce in advance the results of future collective bargaining , particularly where a penalty or forfeiture may result and no collective-bargaining agent is yet in existence. It is clear that where a collective-bargaining relationship exists, the Employer, merely by submitting an offer to the Union necessarily indicates in some measure what the results of bargaining might be , but it is also equally clear that where no bargaining agent exists, such a course of conduct necessarily evidences of a predisposition toward future collective bargaining that reasonably would affect the individual employee' s decision as to whether he should or should not select a collective -bargaining agent . Collective-bargaining contracts contain terms and conditions arrived at after due deliberation including compromise and the give and take of the bargaining table . That retirement systems are an important part of this system is clear. As of 1967, 17.5 million employees were covered by a total of 17,091 private pension plans. Of these, 6,341 were negotiated by Unions covering 12.5 million employees. _ When an employee considers engaging in concerted activities, via collective bargaining, he does so because he believes that through collective action his lot, as well as that of his coworkers will be improved . A foreseeable or predictable loss or hardship would have a definite impact on, and interfere with, the employees initial decision to engage or not to engage in concerted activities directed toward collective bargaining. Thus, in the The Kroger Co., 164 NLRB No. 54, enfd. 399 F.2d 455 (C.A. 6), cert. denied 395 U.S. 904. 'Monthly Labor Revkw, May 1968, Vol. 91. No. 5, p. 29. instant case, a retirement plan, although an integral part of the overwhelming number of collective-bargaining contracts, has become a cause for rejection and outright opposition to all collective bargaining by some employees , particularly those who have had a vesting in a substantial sum of money under the profit-sharing plan. In short, prior to the advent of any concerted activity, Respondent has already carved out at least one special group of employees and under threat of substantial harm, given them a very compelling reason why they should resist collective bargaining. Potential collective -bargaining units could readily be prejudiced by policy announcements tied to future collective-bargaining contracts where each employee feels the possibility of a real loss if a collective-bargaining representative is chosen. Such a course of action interferes with , coerces, and restrains those employees, as well as other similarly situated, from engaging in protected concerted activities in violation of Section 8(a)(1) of the Act.' IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The activities 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 commerce among the several States and tend to lead to labor disputes burdening and obstructing commerce and the free flow thereof. THE REMEDY As we have found that Respondent violated Section 8(a)(1) of the Act by maintaining paragraph 3.5 of its Profit Sharing Plan we shall order Respondent to cease and desist from further maintaining the said paragraph . We shall further order Respondent to amend the said plan and any existing employee booklets and/or publications so as to eliminate therefrom any language which suggests that employees covered by a pension plan resulting from collective bargaining through a union will be disqualified from all benefits under Respondent's profit-sharing plan.4 CONCLUSIONS OF LAW 1. Solo Cup Company, is an Employer within the meaning of Section 2(2) of the Act and is engaged in commerce within the meaning of Section 2(6) and (7) of the Act. 'This does not mean of course, that an employer may not advise his employees, in a noncoercive fashion, that pensions for those in the unit are subject to bargaining and that if a separate pension plan for those in the unit is agreed upon, coverage in the existing plan will not be maintained, i e., the employer is not obligated to provide "double coverage." 'See Kroger Co., supra. SOLO CUP COMPANY 825 2. United Papermakers and Paperworkers, AFL-CIO, is a labor organization within the meaning of Section 2(5) of the Act. 3. By maintaining and continuing to maintain a profit-sharing plan which by its terms requires that Respondent exclude from participation employees covered by a pension plan resulting from collective bargaining through a labor organization, Respondent has interfered with , restrained, and coerced its employees in their exercise of the rights guaranteed in Section 7 of the Act, and is thereby violating Section 8(a)(l) of the Act. 4. The aforesaid unfair labor practices are unfair labor practices within the meaning of Section 2(6) and (7) of the Act. ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Relations Board hereby orders that Respondent, Solo Cup Company, its officers, agents, successors, and assigns, shall: 1. Cease and desist from: (a) Maintaining and enforcing those portions of paragraph 3.5 in its Profit Sharing Plan which requires that Respondent terminate benefits thereunder for employees covered by a pension plan resulting from collective bargaining through a labor organization ; or so advising its employees in booklets or publications describing said Plan. (b) In any like or related manner interfering with, restraining, or coercing its employees in the exercise of their right to self-organization, to form , join, or assist unions, to bargain collectively through representative of their own choosing , to engage in concerted activities for the purposes of collective bargaining or other mutual aid or protection, or to refrain from such activities , except to the extent that such right may be affected by an agreement requiring union membership as a condition of employment, as authorized in Section 8(aX3) of the National Labor Relations Act, as amended, by the Labor-Management Reporting and Disclose Act of 1959. 2. Take the following affirmative action, which we find will effectuate the policies of the Act: (a) Amend its Profit Sharing Plan by deleting therefrom those portions of paragraph 3.5 which requires that Respondent exclude from participation employees covered by a pension plan resulting from collective bargaining through a labor organization. (b) Amend its existing employee booklets and/or publications so as to eliminate therefrom any language which indicates that employees covered under a pension plan resulting from collective bargaining through a labor organization will be disqualified from participation in its Profit Sharing Plan. (c) Post at all its plants, warehouses and other facilities and locations where rank-and-file employees work, wherever located, copies of the attached notice marked "Appendix."' Copies of said Notice, on forms provided by the Regional Director for Region 13, shall, after being duly signed by an authorized representative of Respondent, be posted by Respondent immediately upon receipt thereof, and be maintained by it for 60 consecutive days thereafter, in conspicuous places, including all places where notices to employees are customarily posted. Reasonable steps shall be taken by Respondent to insure that said notices are not altered, defaced, or covered by any other material. (d) Notify the Regional Director for Region 13, in writing, within 10 days from the date of this Order, what steps have been taken to comply herewith. MEMBER ZAGORIA, concurring: I agree with my colleagues' finding that the Respondent's amendment to its profit-sharing plan, as set forth above and described to its employees in the booklet of October 1, 1967, violated Section 8(ax 1) of the Act. I am of the opinion that the absence of a current collective-bargaining representative in no way lessens the inherently restraining effect of the amendment upon the employees' desires and freedom to bargain collectively. As described to the employees in the October booklet, the amendment constitutes an unlawful threat to deprive the employees of vested interests and benefits in the plan should they obtain a negotiated pension plan by exercising their statutory right to bargain collectively through their freely chosen representative. Accordingly, in finding a violation, I rely solely on the "inherently destructive" effect of the Respondent's action on employee rights.' 'In the event that this Order is enforced by a decree of a United States Court of Appeals, there shall be substituted for the words "a Decision and Order" the words "a Decree of the United States Court of Appeals Enforcing an Order." 'N.L.R.B. v. Great Dane Traders, 388 U.S. 26. APPENDIX NOTICE TO ALL EMPLOYEES Pursuant to the Decision and Order 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: WE WILL NOT discourage membership in United Papermakers and Paperworkers, AFL-CIO, or any other labor organization, by disqualifying our employees from participation in our Profit Sharing Plan because of coverage under a pension plan resulting from collective bargaining through a union. WE WILL amend our Profit Sharing Plan to eliminate paragraph 3.5 which disqualifies employees covered under a pension plan resulting from collective bargaining through a union. 826 DECISIONS OF NATIONAL LABOR RELATIONS BOARD WE WILL amend our existing employee booklet so as to eliminate any language which indicates that employees covered under a pension plan resulting from collective bargaining through a labor organization will be disqualified from participation in the Profit Sharing Plan. Dated By SOLO CUP COMPANY (Employer) (Representative) (Title) WE WILL NOT in any like or related manner interfere with, restrain, or coerce our employees in the exercise of the rights guaranteed in Section 7 of the Act. 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 questions concerning this notice or compliance with its provisions, they may communicate directly with the Board's Regional Office, 881 U.S. Courthouse and Federal Office Building, 219 South Dearborn Street, Chicago, Illinois 60604, Telephone 312-353-7572.