Virginia Sportwwear, Inc.

VIRGINIA SPORTSWEAR, INCORPORATED Virginia Sportswear, Incorporated and United Gar- ment Workers of America, AFL-CIO. Case 5- CA-7506 January 19, 1978 SUPPLEMENTAL DECISION AND ORDER BY CHAIRMAN FANNING AND MEMBERS PENELLO AND TRUESDALE On September 14, 1977, Administrative Law Judge Ralph Winkler issued the attached Supplemental Decision in this proceeding.' Thereafter, Respondent and the General Counsel filed exceptions and sup- porting briefs. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the National Labor Relations Board has delegated its authority in this proceeding to a three-member panel. The Board has considered the record and the attached Supplemental Decision in light of the exceptions and briefs, and has decided to affirm the rulings, findings,2 and conclusions of the Administra- tive Law Judge and to adopt his recommended Order, except that the remedy is modified so that backpay is to be computed in the manner prescribed in F. W. Woolworth Company, 90 NLRB 289 (1950), with interest as set forth in Florida Steel Corporation, 231 NLRB 651 (1977).3 ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Relations Board adopts as its Order the recommend- ed Order of the Administrative Law Judge and hereby orders that the Respondent, Virginia Sports- wear, Incorporated, Lynchburg, Virginia, its officers, agents, successors, and assigns, shall take the action set forth in the said recommended Order. I The Board's original decision is reported at 226 NLRB 12%96 (1976). 2 In view of the fact that it is not material to this decision, we find it unnecessary to pass on the comment of the Administrative Law Judge set out in fn. 2 of his Supplemental Decision. 3 See, generally, Isis Plumbing a Heating Co., 138 NLRB 716 (1962). SUPPLEMENTAL DECISION STATEMENT OF THE CASE RALPH WINKLER, Administrative Law Judge: On De- cember 2, 1976, the Board issued a Decision and Order finding that Respondent Virginia Sportswear, Incorporat- ed, became a successor to C. B. Cones in September 1975 and that Respondent was obligated to recognize and deal with the United Garment Workers of America, AFL-CIO (226 NLRB 1296 (1976)). The Union had been the statutory bargaining representative of Cones' employees. Finding that Respondent had unilaterally changed terms and conditions of employment as to overtime pay, vacation pay, holiday pay, and bereavement pay, the Board directed Respondent to make employees whole for financial losses resulting from these changes. The General Counsel issued a backpay specification on May 23, 1977, and Respondent filed an answer thereto. A supplemental hearing was held in Lynchburg, Virginia, on July 20, 1977, and the parties have filed briefs. The Issues The parties have stipulated the amounts due each of the affected employees (Appendix attached hereto), and the only issues concern two items which Respondent contends it should be allowed as a credit or setoff against the stipulated backpay figures. One item involves payments made by Respondent to a health insurance plan, and the other item involves bonuses it gave to certain employees. Insurance Setoff Respondent's predecessor (Cones) maintained a group health insurance program for its employees, in which employees participated on a voluntary basis. For those employees who did participate, Cones paid a portion of the insurance premiums. Cones and the Union had an opera- tive collective-bargaining agreement when Respondent became Cones' successor and the contract's only reference to this subject matter was that "it is agreed that the present insurance and hospitalization shall be retained for life of this Agreement." Respondent, upon succeeding to Cones, continued to maintain the same insurance plan and it thus continued paying the same aliquot portions of premiums for covered employees until the insurance carrier canceled the policy due to low employee participation. Respondent offered to prove that the Union did not protest this policy cancella- tion, and it thereupon asserts that the maintenance of the policy was not a condition of employment. Urging, in these circumstances, that the insurance plan was not a condition of employment, Respondent accordingly contends it should be entitled to set off those insurance payments it made until the plan was canceled. The insurance plan clearly was a term and condition of employment during Cones' operation of the plant and was such when Respondent succeeded Cones, and Respon- dent's maintenance and contribution to such plan hardly became otherwise because the Union may not have protested a subsequent cancellation of the plan by the carrier.' Cf. W. W. Cross and Company, Inc. v. N.LR.B., 174 F.2d 875 (C.A. 1, 1949); Bastian-Blessing, Division of Golconda Corporation v. N.LR.B., 474 F.2d 49 (C.A. 6, 1973); Wisconsin Southern Gas Company, Inc., 173 NLRB 480 (1968). I accordingly reject Respondent's setoff conten- tion respecting its insurance payments. I No contention is made that cancellation of the policy was itself unlawful unilateral action. 234 NLRB No. 63 315 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Bonus Setoff Respondent claims it should be credited with amounts given as bonuses to 9 of the approximately 75 unit employees in 1975 and 1976. These same nine employees also had received bonuses from Cones in 1973 and 1974. Aubrey Hall is Respondent's owner and had been plant manager for Cones, and it was upon his recommendation that Cones made bonus payments in 1973-74. Hall testified that the bonuses in question here were "discretionary" on his part and that he awarded the bonuses because of the recipients' extra or superior performance. Respondent thus asserts that the bonuses were "gifts and not a part of the employees' wage structure" and that there "was no reason- able expectation of receiving same by the employees in question." On the basis of K. & H. Specialties Co., Incorporated and Lowell B. Hanon, Sr., An Individual, 163 NLRB 644 (1967), Respondent's bonus contention must be rejected for the very reasons and circumstances advanced by Respondent for allowing it. The Board held in that case that bonuses "[which] were given intermittently and irregularly, and were not obligatory on the Respondent ... should not be treated as regular compensation . . . and may not be set off against ... backpay claims." (163 NLRB at 649)2 Concluding Findings I conclude that Respondent is not entitled to set off the insurance and bonus payments against its backpay liabili- ty. And I accordingly conclude that Respondent is obligat- ed under the Board's Order to pay to its employees the amounts set forth in the attached Appendix, with yearly interest of 6 percent computed on the basis of calendar quarters and less tax withholdings required to be withheld under Federal and state law.3 2 This is not to say, however, that the bonus credit would be allowed if it were found that the bonuses had been part of the affected employees' regular compensation. I In the event no exceptions are filed as provided by Sec. 102.46 of the Rules and Regulations of the National Labor Relations Board, the findings, conclusions, and recommended Order herein shall, as provided in Sec. 102.48 of the Rules and Regulations, be adopted by the Board and become its findings, conclusions, and Order, and all objections thereto shall be deemed waived for all purposes. APPENDIX M. Abbott 1. Allen P. Anderson C. Austin N. Austin L. Bass S. Beavers A. Byrd M. Caldwell S. Campbell G. Dolan G. Doss E. Evans $152.14 261.92 173.14 15.99 114.47 179.94 20.41 1.44 265.00 47.98 2.30 200.39 90.03 1. Foster E. Franklin M. Garland E. Garwood J. Gilbert L. Gordon E. Grant L. Hall M. Hall W. Harvey M. Hawkins C. Heckerman M. Heiser E. Hernandez D. Howard E. Humbles J. Hunter M. Jackson G. Johnson M. Jones H. Lambert M. Layne E. J. Hay A. Martin M. Martin R. Mayberry J. McFaden N. Megginson F. Moses S. Moses A. Neas C. Nichols R. Noble K. Owens C. Parrish P. Pauley D. Payne M. Phelps W. Pisarek R. Powell I. Pribble E. Rice M. Roop P. Routon P. Rowles D. Sajonas P. Scott R. Spencer T. Srey E. Stevans Donna Stump Dorothy Stump C. Swain M. Tolley S. Tomlin H. Turner E. Waller N. Ware M. White 71.95 169.52 93.27 31.06 80.35 144.75 72.81 5.75 155.03 144.83 118.51 97.83 23.70 1.15 166.18 11.50 4.31 82.87 80.25 29.44 86.34 87.58 .86 74.36 62.52 73.53 $ 55.70 101.14 305.45 1.15 63.84 2.30 137.34 167.73 56.72 2.30 5.17 7.75 181.51 275.81 57.29 57.04 6.04 113.95 79.71 55.45 1.15 81.00 5.75 134.58 10.35 60.73 75.65 53.72 87.05 54.78 78.64 72.21 103.77 316 VIRGINIA SPORTSWEAR, INCORPORATED .57 N. Wood, Jr. 17.95 B. Wright 103.47 L. Yeary S. Whorley F. Williams M. Wood 317 36.12 56.15 6.01