Fireside House of Centralia

THE FIRESIDE HOUSE OF CENTRALIA Centralia Fireside Health, Inc. d/b/a The Fireside House of Centralia' and Service and Hospital Employees Union Local No. 50, affiliated with Service Employees International Union, AFL- CIO. Case 14-CA-9893 October 28, 1977 DECISION AND ORDER BY CHAIRMAN FANNING AND MEMBERS PENELLO AND MURPHY On April 13, 1977, Administrative Law Judge George Norman issued the attached Decision in this proceeding. Thereafter, Respondent filed exceptions and a supporting brief. 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 Decision in light of the exceptions and brief and has decided to affirm the rulings, findings,2 and conclusions of the Administrative Law Judge only to the extent consistent herewith. The Administrative Law Judge found that by promising a wage increase and other benefits in December 1976, and granting the same in January 1977, Respondent violated Section 8(a)(l) of the Act because "[t ]he appearance of the Union ... appears to be the catalyst that triggered Respondent's decision to institute the benefit program .... " Respondent excepts to the Administrative Law Judge's conclusions. We find merit in these excep- tions. In July 1976, Respondent acquired a 50-percent interest in the Centralia nursing home. In August, following reports from the director of nursing that the employees had expressed their concerns about pay and personnel policies, Respondent's executive director, Gains, met with the employees. At that time he told them that he had been informed about their concerns and that he would try to do what he could to improve their situations, based on Respondent's experience at its other nursing homes. He added that he could not make a "total commitment" because Respondent did not then control the corporation and that he would evaluate the situation. He further informed them that in December he would again discuss the matter of wages and benefits with them. I The name of Respondent appears as amended at the hearing. 2 Respondent has excepted to certain credibility findings made by the Administrative Law Judge. It is the Board's established policy not to overrule an Administrative Law Judge's resolutions with respect to credibility unless the clear preponderance of all of the relevant evidence 233 NLRB No. 31 Shortly after the August meeting, Respondent gained full control of the nursing home. Initial wage studies indicated that about 75 percent of the employees received the then legal minimum wage of $2.20 per hour and a few lead people who had been employed for a number of years earned $2.30 or $2.35 an hour. A week or two after the August meeting, Gains gave the employees an across-the- board increase of 5 cents per hour, effective the last payday in August.3 On November 15 and 21 and December 2, the Service and Hospital Employees Union Local No. 50, affiliated with Service Employees International Union, AFL-CIO (the Union), passed out leaflets outside Respondent's nursing home. On each occa- sion the leafleting took place during the change of shifts, between 2:30 and 3:30 p.m. After the leafleting, an unspecified number of Respondent's 75 to 80 employees discussed the union activity, and 4 or 5 employees signed union membership cards. Gains admitted that he learned of the leafleting shortly after it took place in November and on another occasion was notified of the leafleting activity while it was taking place. Meanwhile, in November or early December, Gains first began to receive a realistic understanding of the nursing home's financial status. At that time Respondent's accountant informed him that the nursing home was then enjoying a profit and projected continued profits. Thereafter, Gains, on approximately Decem- ber 1, 1976, held a second employee meeting. He told the employees that Respondent had gained full control of the nursing home and coudk institute the policies that it intended to put into effect. He announced that, effective January 1, 1977, Respon- dent was instituting an increased wage scale ranging from $2.30 to $2.50 per hour and a benefit package which included, inter alia, funeral leave, paid holidays, leave for jury duty, uniform allowance, and adjustments in pay for seniority. Further, Gains informed the employees that the new benefits were based on Respondent's policies at its two other facilities. At no time during the meeting did Gains refer to the Union or the leafleting. Thereafter, in early January 1977, Respondent instituted the previously announced wage increases and benefits. The record also discloses that for the past 5 years the Union has represented the employees of another nearby nursing home facility owned by Respondent and that Gains has been in charge of labor relations at that location. It is undisputed that labor relations convinces us that the resolutions are incorrect. Standard Dry Wall Products, Inc., 91 NLRB 544 (1950), enfd. 188 F.2d 362 (C.A. 3, 1951). We have carefully examined the record and find no basis for reversing his findings. 3 This wage increase was not alleged to have been unlawful. 139 DECISIONS OF NATIONAL LABOR RELATIONS BOARD between Respondent and the Union at that facility have been good. It is well settled that the granting of wage increases and/or benefits during union organizational activity is not per se unlawful. Rather, the test is whether, based on the circumstances of each case, the granting of the new wages and benefits is calculated to interfere with the employees' right to organize.4 We cannot conclude on the facts before us that Respon- dent's actions had an unlawful purpose. Thus, it is clear that Gains met with the employees in August, prior to any union activity, due to their expressed dissatisfaction with their wages and benefits. Gains further indicated Respondent's desire to bring the employees up to the standards at its other locations, if an evaluation of the financial situation of the nursing home would permit improvements. In December, after receiving a favorable report from the accountant, Gains again met with the employees, as he had previously promised at the August meeting, and announced the new wages and benefits. The wages and benefits announced and ultimately imple- mented, in fact, were consistent with those enjoyed by Respondent's employees at its other locations,5 and further, in this connection, appeared to stem from Respondent's past promises rather than as a response to union activity. Given the presence of the above factors, we cannot find that the mere fact that the announcement of the new wages and benefits was made soon after limited activity by the Union is sufficient to support the conclusion that Respondent's actions were calculated to undermine the employees' union activities. We therefore conclude, contrary to the Administrative Law Judge, that Respondent's announcement and subsequent implementation of the new wage rates and benefits did not violate Section 8(a)(l) of the Act.6 Accordingly, we shall dismiss the complaint in its entirety. ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Relations Board hereby orders that the complaint herein be, and it hereby is, dismissed in its entirety. 4 McCormick Longmeadow Stone Co., Inc., 158 NLRB 1237, 1242 (1966); Champion Pneumatic Machinery Co., 152 NLRB 300, 306 (1965). a We further note, as indicated by the Administrative Law Judge, that the legal minimum wage was increased to S2.30 per hour, effective January 1, 1977. 6 See, e.g., Aircraft Hydro-Forming, Inc., 221 NLRB 581 (1975). DECISION STATEMENT OF THE CASE GEORGE NORMAN, Administrative Law Judge: This case was heard at Centralia, Illinois, on February 24, 1977, on a complaint issued on February 3, 1977, which complaint was based on a charge filed by Service and Hospital Employees Union Local No. 50, affiliated with Service Employees International Union, AFL-CIO, herein called the Union, on December 29, 1976. The complaint alleges, in substance, that Centralia Fireside Health, Inc. d/b/a The Fireside House of Centralia,' herein called Respon- dent, violated Section 8(a)(1) of the National Labor Relations Act, as amended, herein called the Act, by promising and thereafter granting increased wages and benefits to its employees in order to discourage their membership in, and support of, the Union. Respondent's duly filed answer, though admitting some of the factual allegations of the complaint, denies the commission of any unfair labor practices. At the hearing, the parties were afforded full opportunity to be heard, to present evidence, and to make oral argument. Thereafter, counsel for the General Counsel filed a brief. Upon the entire record in this case, including my observation of the witnesses, and upon consideration of the General Counsel's brief, I make the following: FINDINGS OF FACT I. THE BUSINESS OF RESPONDENT Respondent maintains its principal office and place of business at 1030 East McCord Street in Centralia, Illinois. Respondent is engaged in the business of providing nursing care and related services. During the year ending January 31, 1977, which period is representative of its operations during all times material herein, Respondent, in the course and conduct of its business operations, derived gross revenue in excess of $100,000 and purchased and caused to be transported and delivered at its Centralia, Illinois, place of business nursing care supplies and other goods and materials valued in excess of $50,000, of which goods and materials valued in excess of $50,000 were transported and delivered to its place of business in Centralia, Illinois, directly from points located outside the State of Illinois. It is admitted, and I find, that Respondent is an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act. II. THE LABOR ORGANIZATION It is admitted, and I find, that the Union is a labor organization within the meaning of Section 2(5) of the Act. At the hearing, General Counsel's motion to amend the complaint to reflect the correct name of the Respondent, Centralia Fireside Health, Inc. d/b/a The Fireside House of Centralia (formerly referred to as Madison Midwest Nursing Care, Inc. d/b/a Fireside Nursing Home), was granted. 140 THE FIRESIDE HOUSE OF CENTRALIA III. THE ALLEGED UNFAIR LABOR PRACTICES A. The Facts There is little dispute over the facts. The present owners of Respondent's nursing home purchased it in July 1976. Possession was taken by the purchasers on or about August 15, 1976.2 In August or September, Denzel Gains, execu- tive director of Respondent, called a meeting of the employees of Respondent, introduced himself, and told them that Respondent was new to that particular area, but was not new to the nursing home business. He told them that he had already received comments from the director of nurses, Mrs. Barber, that some of the people were concerned about pay and personnel policies, and that Respondent did not actually know where it stood. At that meeting, Gains also told them that he would look into the matter and try to do what he could to improve their situation, based on the experience that Respondent had at its other places. He said that he would not make any total commitment because Respondent did not then control the corporation, that it had only 50 percent control, and that he would evaluate the situation. Respondent did acquire full control shortly thereafter. Gains testified that the first studies indicated that most of the employees, about 75 percent, were then working at the legal minimum wage, or $2.20 per hour.3 He said a few of them, lead people who had been employed there for a number of years, were making $2.30 per hour and perhaps one or two were making $2.35 per hour. A week or two after the first meeting, Gains gave the employees an across-the-board increase of 5 cents an hour that went into effect the last payday in August. He announced a further pay raise and other benefits in December. Gains said that the first time that he began to get a realistic grasp of that nursing home's earnings and expenditures was in November or December prior to the December meeting he had with the employees concerning the proposed increase to take effect in January. 4 B. The Leafleting of Respondent's Centralia Fireside Nursing Home The parties stipulated that on three occasions, November 15 and 21 and December 2, respectively, the Union passed out pamphlets at the Centralia home between the hours of 2:30 and 3:30 p.m., during the change of shifts. They also stipulated that the nursing home employs 75 to 80 2 All dates are in 1976 unless otherwise indicated. 3 The legal minimum wage went up to $2.30 an hour on January I, 1977. ' The parties stipulated that, around the first of December, Respondent told the employees that effective January 1, 1977, Respondent was instituting 3 days' funeral leave, six paid holidays, leave for jury duty, uniform allowance, paid adjustments for seniority, and the institution of a wage schedule to take effect January 4, 1977. The wage schedule is as follows: from 0 to 3 months, $2.30 per hour; from 3 to 6 months, $2.35 per hour; 6 to 12 months, $2.40 per hour; and 12 months and over. $2.50 per hour. Respondent also instituted a vacation schedule as follows: 5 working days' vacation after I year's employment. 10 working days off after 2 year's employment, 15 working days off after 5 year's employment. With respect to holidays, if any of the employees worked on a holiday, they would be paid double time and straight time if they were not scheduled to work on a holiday, and did not in fact work. The parties further stipulated that none of the above benefits were in effect pnor to Respondent's putting them into effect. These policies were put employees. Employee Blinda Darnell testified that she was aware of the leafleting and that the Union was trying to organize the nursing home. She said discussions among the employees concerning the union activity had taken place after the leafleting activity commenced. She said four or five employees had signed union membership cards.5 The General Counsel's witness, Carol Sellers, who was employed at the home as a housekeeper, said she could see individuals handing out pamphlets in November from where she was standing at the window inside the nursing home. She said that the pamphleting took place in the street at the end of the driveway in front of the building. Employee Pauline Owens testified that she distributed pamphlets at the Centralia nursing home on November 15 and December 2. She said that, while pamphleting, there was a man and a woman standing at the window watching her during the whole time she was there. She said she could not identify either the woman or the man, and that the man was using the phone part of the time.8 When Gains was asked on direct examination by Respondent's counsel as to whether he had ever been informed by any of his supervisors that the Union was leafleting in November or December, Gains responded, "No." Gains later admitted that he was so informed, and that he first learned of the pamphleting at Fireside Nursing Home sometime in November. He said he learned about it shortly after the leafleting took place in November. When asked who notified him, he said, "It would have probably been Mr. Bailey or Miss Peterson,7 or someone that might have." Then he was asked if he was notified at any time while the leafleting was taking place, and he admitted being notified by telephone by Mr. Bailey. He said that, when notified, his main response to Bailey was that he did not know why they were there, that he did not understand it, that he thought they lost the election over at the hospital and he assumed there was nobody in the area.8 Upon direct examination, Gains said that the conversa- tion during which he was informed of the leafleting took place after he decided to institute the benefit changes, but he said he could not make the decision official until he had gotten control of the nursing home. The announcement to the employees, however, was made after he learned of the pamphleting. into effect by Executive Director Denzel Gains and not by the administrator of the Centralia home, John Bailey. 5 The parties stipulated that, if called to testify, the testimony of Respondent's employees Claudette Fowler and Diana Davis would be essentially the same as that of Blinda Darnell. s Union Business Agent Dan Sorbie testified that for the past 5 years his Union has represented the employees of Respondent's Maryville Colonial Nursing Home in Maryville, Illinois, and that the labor relations there have been good. I Housekeeper Carol Sellers testified that she, and Supervisors Wilma Peterson and Mary Shobe were standing near the door of the Centralia home when they noticed the pamphleting. Peterson asked Sellers to go outside to see what was being passed out. Sellers went out and brought back a pamphlet to Peterson and "let her look at it." 8 There had been at least two organizational drives at the local hospital. Both failed. One involved the Union in this proceeding. 141 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Discussion and Conclusions An employer violates Section 8(a)(1) of the Act if the effect and purpose of his actions can be said to impinge upon the employees' rights to unionize. N.L.R.B. v. Exchange Parts Co., 375 U.S. 405, 409 (1964). Exchange Parts also stands for the proposition that to grant benefits during a union organizing campaign violates Section 8(a)(1) if, at the time, the employer knew or should have known that a union was organizing or that an election was pending, and if the benefits were granted with the purpose of interfering with the employees' right to organize. An examination of the evidence herein reveals that Respondent's executive director, Gains, did not intend to institute the benefits, nor did he make any commitment to do so, until after he examined the books of Fireside Nursing Home to determine whether he could afford to grant any benefits. Thus, he made no commitment to grant any comprehensive benefits in his August meeting with the employees, which meeting resulted in his granting a 5-cent- per-hour across-the-board increase. About 2 months after that meeting, in November, he was informed by the administrator of the Centralia nursing home that the Union was distributing pamphlets in front of the home. 9 In December, Gains called another meeting of the employees and announced that he decided to grant a wage increase and other benefits effective the following January. Employers, with some justification, have argued that there is a potential for confusion and unfairness in rules that make it illegal, on the one hand, to withhold and, on the other hand, to grant, a wage increase. But neither course has been declared illegal per se. It becomes so only if the employer is found to be manipulating benefits in order to influence his employees' decision during the Union's organizing campaign. N.L.R.B. v. Dothan Eagle, Inc., a subsidiary of Thomson Newspapers, 434 F.2d 93 (1970); N.L.R.B. v. Dorn's Transportation Company, Inc., 405 F.2d 706 (1969); Armstrong Cork Company v. N.L.R.B., 211 F.2d 843 (1954). In this case, notwithstanding the employer's claim that the decision to grant the benefits was made before the Union started its organizing campaign, substantial evi- dence exists to support an opposite conclusion. Respon- dent had not decided definitely to grant the wage increase and benefits until after the organizing activity commenced and it had knowledge of such prior to its December decision. On the one hand, Respondent would have one believe that it made a commitment to grant benefits prior to the pamphleting and, on the other hand, Gains testified he could not make any commitment unless he examined the books to determine whether the financial condition of the Centralia nursing home could justify the granting of 9 As previously indicated, the parties stipulated that the Union passed out pamphlets at the Centralia home on November 15 and 21 and December 2. additional benefits to the employees. The appearance of the Union, which came to the knowledge of Respondent prior to the announcement in December that Gains was instituting a new benefit program, appears to be the catalyst that triggered his decision to institute the benefit program lest he have a union to contend with as the representative of his otherwise dissatisfied employees. I therefore conclude that by promising the wage increases and other benefits in December, and by granting same in January 1977, Respondent has discouraged employees from exercising their right to organize and bargain collectively, 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 Respondent described in section I, above, have a close, intimate, and substantial relationship 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. CONCLUSIONS OF LAW I. Respondent, Centralia Fireside Health, Inc. d/b/a The Fireside House of Centralia, is an employer 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 promising its employees on or about December 5, 1976, increased wages and benefits, and by granting increased wages and benefits to its employees on or about January 1, 1977, Respondent has discouraged their mem- bership in, and support of, the Union and thus did interfere with, restrain and coerce, and is interfering with, restrain- ing, and coercing, its employees in the exercise of their rights guaranteed in Section 7 of the Act, and thereby engaged in, and is engaging in, unfair labor practices affecting commerce within the meaning of Section 8(aX)1) and Section 2(6) and (7) of the Act. 4. Respondent has not otherwise violated the Act. THE REMEDY Having found that Respondent has committed acts in violation of Section 8(aXI) of the Act, I shall recommend that it cease and desist therefrom, and take certain affirmative action designed to effectuate the purposes of the Act. [Recommended Order omitted from publication.] 142