Jemco, Inc.

166 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Jemco, Inc. and United Steelworkers of America, AFL-CIO. Case 7-CA-8133 April 28, 1971 DECISION AND ORDER BY MEMBERS FANNING, JENKINS, AND KENNEDY shall take the action set forth in the Trial Examiner's recommended Order as herein modified: 1. Delete from paragraph 2(a) of the Order the word "June" and substitute "July" therefor, and add "with interest from on or after that date." 2. Substitute the attached notice for the Trial Ex- aminer's. On January 25, 1971, Trial Examiner Paul E. Weil issued his Decision in this proceeding, finding that the Respondent had engaged in and was engaging in cer- tain 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. The Trial Examiner also found that Re- spondent had not engaged in certain other unfair labor practices alleged in the complaint and recommended dismissal of those allegations. Thereafter, Respondent filed exceptions to the Trial Examiner's Decision 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 powers in connection with this proceeding to a three-member panel. The Board has reviewed the rulings of the Trial Ex- aminer made at the hearings and finds that no prejudi- cial error was committed. The rulings are hereby affirmed. The Board has considered the Trial Ex- aminer's Decision, the exceptions and brief, and the entire record in this proceeding, and hereby adopts the findings, conclusions, and recommendations of the Trial Examiner' as modified below. ORDER Pursuant to Section 10(c) of the National Labor Re- lations Act, as amended, the National Labor Relations Board adopts as its Order the recommended Order of the Trial Examiner as modified below and hereby or- ders that the Respondent, Jemco, Inc., Buchanan, Michigan, its officers, agents, successors, and assigns, ' Respondent excepts to the finding in section I of the Trial Examiner's Decision that Respondent annually causes to be shipped to its Michigan plant goods and materials valued in excess of $50 ,000 from points outside the State. Since Respondent denied this allegation in its answer to the complaint and no evidence was adduced on this point, we do not rely on this finding. Respondent also excepts to the Trial Examiner's finding at fn. 4 that it admitted that vacation pay was withheld from some employees who were not involved in the activities which gave rise to the injunction. Examination of Respondent's testimony on this point reveals that, although it can be given this interpretation, it does not compel this conclusion and thus is something less than an admission . We do not rely on the Trial Examiner's finding that Respondent admitted that it had withheld vacation pay from employees who had not participated in the activities in question. Additionally, Respondent excepts to the Trial Examiner's finding that interest on vacation pay is due from June 1, 1970. Since the contract pro- vides that eligibility for vacation pay shall be determined as of June 30, we find merit to this exception and shall modify the Order accordingly. APPENDIX NOTICE To EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government WE WILL NOT withhold vacation pay from or in any other manner discriminate against our em- ployees with regard to hire or tenure of employ- ment or any term or condition of employment to encourage or discourage membership in any un- ion. WE WILL NOT in any like or related manner interfere with, restrain, or coerce our employees in the exercise of their right to self-organization, to form, join, or assist unions, to bargain collectively through representatives of their own choosing and to engage in other concerted activities for the pur- poses of collective bargaining or other mutual aid or protection, or to refrain from any or all such activities. WE WILL pay to each employee on our payroll who qualifies for vacation pay under the terms of our contract with United Steelworkers of America, AFL-CIO, the vacation pay due on or after July 1, 1970, under the terms of the aforesaid contract. JEMCO, INC. (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, 500 Book Building, 1249 Washington Boule- vard, Detroit, Michigan 48226, Telephone 313-226- 3200. 190 NLRB No. 36 JEMCO, INC. 167 TRIAL EXAMINER'S DECISION STATEMENT OF THE CASE PAUL E. WEIL, Trial Examiner: On August 11, 1970, United Steelworkers of America, AFL-CIO, hereinafter called the Union, filed a charge with the Regional Director for Region 7 (Detroit, Michigan), of the National Labor Re- lations Board, hereinafter called the Board, alleging that Jemco, Inc., hereinafter called Respondent, violated the Na- tional Labor Relations Act, as amended, by refusing to pay vacation benefits to striking employees. On October 14, 1970, said Regional Director on behalf of the General Counsel issued a complaint and notice of hearing alleging that by its refusal to pay vacation pay to its striking employees and by discharging its striking probationary employees Respondent violated Section 8(a)(3) and (1) of the Act. Respondent by its answer admitted various facts and denied others, denied the commission of any unfair labor practices and denied that there is any vacation pay accrued to the striking employees. On the issues thus joined I conducted a hearing in Niles, Michigan, on December 10, 1970, at which all parties were represented, had an opportunity to adduce relevant and material evidence, to call, examine, and cross-examine wit- nesses, to argue on the record, and to file briefs. A brief was received from Respondent. On the entire record of this case and in consideration of the brief, I make the following: FINDINGS OF FACT 1. THE BUSINESS OF RESPONDENT Respondent is a Michigan corporation engaged in the busi- ness of precision machining in Buchanan , Michigan. Re- spondent annually causes to be transported to its plant from points located outside the State of Michigan goods and materials valued in excess of $50,000 and annually ships from its Buchanan, Michigan , plant to points located outside the State of Michigan products valued in excess of $50,000. Respondent 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. ent's president, stated that the probationary employees were terminated. According to the testimony of employee Vernon Vincent, Mr. Johnson said that as far as he was concerned the probationary employees were fired; that was academic. Al- though pressed to state in words what he said on that occa- sion President Johnson as a witness merely said that he re- jected the Union's demand. However, he gave as his explanation of the siutation the fact that none of the four probationers to whom the Union had reference occupied that status any more: one was no longer a probationer but had achieved seniority several days before the strike commenced, a second he understood to have gone in the Navy and he had seen neither of the other two since early in May and con- cluded that they had other jobs and were no longer interested. I conclude that what Johnson said was not that he had dis- charged the probationers but in substance that they were terminated, i.e., by their own conduct, and that any discus- sion of their future with the Respondent was academic be- cause the man in the Navy had reemployment rights under the law, the second man was no longer a probationer and the demand was not applicable to him and the other two had abandoned their employment . He stated on the witness stand that if the probationers returned he was prepared to take them back as probationers to work out their 50 days of proba- tionery employment. The statement attributed to Mr. John- son by employee Vincent that the issue was academic sup- ports this conclusion. On July 3, 1970, Union Representative Halstead wrote to Respondent requesting payment of vacation pay under the terms of the contract. On July 21 President Johnson wrote to the Union that payment of vacation pay was refused because Respondent was not "legally obligated for payment of vaca- tion pay." At the negotiation session on August 11 Johnson stated that the cost of the legal action necessary to stop unlawful picket line activity was $1,200' and he was prepared to negotiate vacation pay against this cost to reimburse Re- spondent for its expenditure necessitated by the Union's ac- tion. At the hearing President Johnson stated that he is not automatically obligated to pay vacation pay but it is a negoti- able item and pointed out that the contract says that vacation pay is not a vested interest. He also stated that if he pursues his damage suit and collects his expenditure of $1,100 under that he will then pay the vacation pay because he will be made whole on what he had suffered because of the illegal acts by the Union. III. THE ALLEGED UNFAIR LABOR PRACTICES The Union has represented Respondent's employees at all times since Respondent purchased the business some 5 years ago. In 1969 Respondent and the Union entered into a con- tract for a period of 3 years. A provision of the contract provided for a wage reopener on 60 days' notice prior to May 1, 1970. Notice was given by the Union and, no agreement having been reached by May 1, the Union called a strike which was still effective at the time of the hearing. Early in the strike, at the instigation of Respondent , an injunction was issued by a local court against unlawful picket line activity. At some time thereafter or at the same time a suit for damages was filed against the Union by Respondent. On August 11' the parties met in the presence of a mediator to negotiate. At this meeting the Union proposed that on the conclusion of the strike all probationary employees should return on a seniority basis.' According to the testimony of Union Business Agent Halstead, Herbert Johnson, Respond- All dates herein are in the year 1970 unless otherwise specified. The contract provided that new employees remain in a probationary status for the first 50 days of work. Discussion and Conclusions 1. With regard to the probationary employees, in the light of Respondent's statement at the hearing and of the conclu- sions reached above with regard to Respondent 's statements in negotiations, I conclude that no discrimination took place, the probationary employees have not been discharged and Respondent proposes to reinstate any who appear after the strike. Accordingly, no discrimination has taken place, no violation exists and I shall recommend that the complaint be dismissed with regard to this allegation. 2. With regard to the vacation pay issue Respondent does not deny that vacation pay had accrued to the 14 employees who went on strike but contends that it remained at all times negotiable and that he proposed to negotiate it as a setoff against his legal costs. Whether or not the contract under which the Union de- manded payment of vacation pay had terminated as a result of its own provisions is an issue that need not be reached herein. The record is clear that vacations were a customary ' At a later negotiating session he lowered the figure to $1,100. 168 DECISIONS OF NATIONAL LABOR RELATIONS BOARD condition of employment and Respondent at no time has negotiated with a view to removing them as such. Respondent does not contend that the contract is void, but on the contrary stated at the trial that it proposes to live up to the contract which it takes seriously. The issue really boils down to the question whether Respondent has a right to set off its legal expenses against the money owing the employees as vacation pay. Under the circumstances of this case where no evidence is adduced as to the amount of vacation pay or as to the costs said to set off against them and where such costs have not, at least to the time of this hearing, been reduced to any final figure, a setoff cannot really be effectuated. In addition there is no showing that the individuals to whom vacation pay is owed are individuals who were responsible for or guilty of any unlawful acts which necessitated the expenditure of legal fees or that under any law they may be held personally responsible for reimbursement to the Employer of such expended moneys. In N.L.R.B. v. Great Dane Trailers, Inc., 388 U.S. 26, the Supreme Court held that the employer's refusal therein to pay vacation pay to striking employees was violative of Section 8(a)(3) of the Act and laid down several principles distilled from its review of the controlling decisions in the field. One such principle as stated by the Court is as follows: ... once it has been proved that the employer engaged in discriminatory conduct which could have adversely affected employee rights to some extent, the burden is upon the employer to establish that [it] was motivated by legitimate objectives since proof of motivation- is most accessible to him. The Employer herein has in my opinion failed to meet the burden laid down by the Supreme Court in the Great Dane case. Elsewhere therein the Court spoke of the need for the employer to come forth with evidence of "legitimate and substantial business justifications for the conduct." In my opinion in the present state of the case the Employer's alleged justification is neither legitimate nor substantial and I con- clude therefrom that by its withholding of vacation pay from its striking employees solely because they were on strike' Respondent has violated Section 8(a)(3) and (1) of the Act. THE REMEDY Having found that Respondent has engaged in and is en- gaging in unfair labor practices it will be recommended that it cease and desist therefrom and take certain affirmative action found necessary to effectuate the policies of the Act. Having found that Respondent discriminatorily withheld from certain of its employees vacation pay for which they had qualified under the terms of the contract between the Re- spondent and the Union, it will be required to pay to each such employee the vacation pay so withheld. The amount due to each employee shall bear interest at the rate of 6 percent per annum from June 1, 1970, the date after which such vacation pay was payable under provisions of the contract, until paid. It will also be recommended that Respondent shall, upon request, make available to the Board or its agents, for inspection and reproduction, all books and records neces- sary or helpful in determining the identity of employees to whom vacation pay is due as herein provided and in comput- ing the amount thereof. Upon the basis of the foregoing findings of fact and upon the entire record in the case, I make the following: ' The Employer admitted on the witness stand that some of the em- ployees from whom vacation pay had been withheld were not involved in the activities which gave rise to the injunction. CONCLUSIONS OF LAW 1. The Respondent is an employer within the meaning of Section 2(2) of the Act engaged in commerce within the meaning of Section 2(6) and (7) of the Act. 2. The Union is a labor organization within the meaning of Section 2(5) of the Act. 3. By withholding vacation pay from its employees as set forth above Respondent has engaged in and is engaging in unfair labor practices proscribed by Section 8(a)(3) and (1) of the Act. 4. The aforesaid unfair labor practices affect commerce within the meaning of Section 2(6) and (7) of the Act. 5. It has not been established by a preponderance of the evidence that Respondent discharged probationary em- ployees and that allegation of the complaint should be dis- missed. Upon the foregoing findings of fact, conclusions of law, and the entire record, and pursuant to Section 10(c) of the Act, I hereby issue the following recommended:' ORDER Respondent Jemco, Inc., its officers, agents, successors, and assigns, shall: 1. Cease and desist from: (a) Withholding vacation pay from or in any other manner discriminating against its employees in regard to hire or ten- ure of employment or any term or condition of employment to encourage or discourage membership in any labor organi- zation. (b) In any like or related manner interfering with, restrain- ing or coercing its employees in the exercise of the rights guaranteed them by Section 7 of the Act. 2. Take the following affirmative action which has been found as necessary to effectuate the policies of the Act: (a) Forthwith pay to each employee on its payroll who qualified for vacation pay under the terms of the agreement between Respondent Jemco, Inc., and United Steelworkers of America, AFL-CIO, the vacation pay due on or after June 1, 1970, as it is provided in the aforesaid contract. (b) Post at its plant in Buchanan, Michigan, copies of the attached notice marked "Appendix."6 Copies of said notice, on forms provided by the Regional Director for Region 7, after being duly signed by its representative, shall be posted by Respondent immediately upon receipt thereof, and be maintained by it for 60 consecutive days thereafter, in con- spicuous places, including all places where notices to em- ployees are customarily posted. Reasonable steps shall be taken by Respondent to insure that said notices are not al- tered, defaced, or covered by any other material. (c) Preserve and, upon request, make available to the Board or its agents, for inspection and reproduction, all records and books necessary or helpful in determining the identity of the employees to whom vacation pay is due as provided herein computing the amount thereof. 5 In the event no exceptions are filed as provided by Section 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 Section 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. 6 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 Boards." JEMCO, INC. 169 (d) Notify the Regional Director for Region 7, in writing, IT IS FURTHER ORDERED that the complaint be dismissed within 20 days from the date of the receipt of this Decision , insofar as it alleges a discriminatory discharge of the proba- what steps the Respondent has taken to comply herewith.' tionary employees. ' In the event that this Recommended Order is adopted by the Board after exceptions have been filed, this provision shall be modified to read : the date of this Order, what steps the Respondent has taken to comply "Notify the Regional Director for Region 7, in writing , within 20 days from herewith."