Electro Vector, Inc.

ELECTRO VECTOR, INC. 445 Electro Vector, Inc. and General Truck Drivers, Warehousemen & Helpers Union, Local 980, Inter- national Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America. Case 20-CA-9771 September 18, 1975 DECISION AND ORDER BY CHAIRMAN MURPHY AND MEMBERS FANNING AND JENKINS On April 8, 1975, Administrative Law Judge Rich- ard J. Boyce issued the attached Decision in this pro- ceeding. Thereafter, Respondent filed exceptions and a supporting brief, and the General Counsel filed a brief in support of the Decision. 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 au- thority in this proceeding to a three-member panel. The Board has considered the record and the at- tached Decision in light of the exceptions and briefs and has decided to affirm the rulings, findings and conclusions of the Administrative Law Judge and to adopt his recommended Order.' The Administrative Law Judge finds that Respon- dent unlawfully denied bonus payments to striking employees. We agree. The facts here are not in controversy. Respondent in 1974 had in effect a bonus program. Under the program such employees received a basic amount of $150, less diminutions due to absences or due to not being on the payroll for the entire fiscal year. The diminutions were based on a formula uniformly ap- plied. However, no bonus was paid to any employee who was not on the active payroll, i.e., actually work- ing, both on the last day of the fiscal year, September 30, and the date the bonus was paid, November 27, 1974. On May 2, 1974, the employees had gone on strike. The strike was continuing as of November 27, 1974. As a result of their participation in the strike, a number of employees were not on the payroll on the two qualifying dates and were, therefore, denied any bonus. The benefit here was earned as a result of work attendence over the fiscal year. As of the May 2, 1974, strike date the employees had, under Respondent's formula, earned a part of the benefit ' In the absence of exceptions, we adopt pro forma the Administrative Law Judge's conclusion that the strike was not converted into an unfair labor practice strike. In support of our finding of a violation , we also rely on N.L R B v Great Dane Trailers, Inc., 388 U .S. 26 (1967). subject only to their being on the active payroll on the two qualifying dates. Depriving striking employ- ees of the benefits which- they have previously quali- fied for because they are on strike will have the natu- ral tendency of coercing employees to give up the strike. Nevertheless, disqualification of the strikers is not unlawful if it serves Respondent's legitimate business interests in some significant fashion. N.L.R.B. v. Great Dane Trailers, Inc., 388 U.S. 26. It is, of course, legitimate to reduce the bonus by the length of any employee's absence, even if that absence is due to a strike.2 The Administrative Law Judge's proposed remedy, correctly, calls for such a reduction. Howev- er, Respondent offers no justification, nor do we per- ceive any, for its requirement that the strikers be ac- tually on duty on the two eligibility dates. Thus, Respondent does not contend that the failure of em- ployees to work on those dates, as opposed to any other dates of the year, has any significant impact on its business. Nor does it contend there is anything else special about those particular dates. Depriving employees of any entitlement to the bo- nus which they had otherwise qualified for because they are on strike on two dates without special busi- ness significance is inherently destructive of the em- ployees' right to strike? Therefore, we adopt the Ad- ministrative Law Judge's finding that Respondent violated Section 8(a)(3) and (1) by depriving strikers of bonus payments. ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Re- lations Board adopts as its Order the recommended Order of the Administrative Law Judge and hereby orders that Respondent, Electro Vector, Inc., Forest- ville, California, its officers, agents, successors, and assigns, shall take the action set forth in the said rec- ommended Order. MEMBER FANNING, concurring: I concur in my colleagues' adoption of the Admin- istrative Law Judge's Decision. Pursuant to a practice instituted in 1973, Respon- Z Cf. Tex-Tan Welhausen Company and Tex-Tan Western Leather Compa- ny, Division of Tandy Corporation, 172 NLRB 851, 889-890 ( 1968), enfd. 419 F.2d 1265 (C.A. 5, 1969), rehearing denied and rehearing denied en banc Jan 12, 1970. 7 Quality Castings Company, 139 NLRB 928 ( 1962). The instant case is factually much stronger for the result reached than Quality Castings. In that case the employer sought to apply a 50-percent attendance requirement for eligibility to participate in a profit-sharing plan. Such a requirement bears at least some relationship to productivity Whether there is a sufficient rela- tionship to productivity to warrant denial of benefits to strikers must be determined on the facts of each case . We perceive no business justification herein which would even arguably warrant denial of benefits to strikers for failure to work on the two eligibility dates. 220 NLRB No. 71 446 DECISIONS OF NATIONAL LABOR RELATIONS BOARD dent paid a bonus to employees who worked for it during fiscal year 1974. Respondents fiscal, year runs from October 1 to September 30 of the following cal- endar year. The bonus was computed on a base of $150 for a full year's work, which amount was dimin- ished according to a set formula for absences during the fiscal year. According to Respondent's officials, the reason for instituting the practice of paying a bo- nus was "a humanistic one due to the economic hardships which the employees were suffering . . . in addition to the company's desire to keep attendance at an optimum." Under Respondent's practice, the bonus earned by an employee during the fiscal year was paid to him only if he was on the "active pay- roll," i.e., actually working on September 30, the last day of the fiscal year, and on the date the Respon- dent chose to pay the bonus, which in 1974 was No- vember 27. A strike commenced on May 2, 1974, and was still in progress on November 27. Some strikers had re- turned to work prior to September 30, and those who did and were not absent from work for other reasons on that date or on November 27 were paid their earned bonus computed on the basis of the amount of time actually worked during the fiscal year. The bonus was of course less than the $150 paid to em- ployees who did not strike and worked the full fiscal year. Employees who remained on strike through November 27 and thus were not working on the two dates in question were not paid any bonus. Certain other employees who were absent for other reasons on September 30 or November 27 also did not re- ceive a bonus. The issue in this case is whether Respondent's treatment of the strikers' absence on September 30 and November 27 as absence from the "active pay- roll" consitituted discrimination against the strikers because of their participation in.protected concerted activities likely to discourage such participation. I think there is little doubt that that is the case, for quite clearly employees who did not go on strike, those who quit the strike prior to September 30, and those who were hired as replacements for strikers were paid the bonus, but the strikers were not. The sole reason the latter were not paid the bonus was that they chose to remain on strike rather than come to work on September 30 and remain at work until the Respondent chose a date (at his discretion) to make the bonus payment. This different treatment of two groups of employees-one working, one on strike-each of which had earned a bonus, constitut- ed "discrimination in its simplest form." N.L.R.B. v. Great Dane Trailers, Inc., 388 U.S. 26, 32. By the same token, the payment of the earned portion of the bonus to one group of employees but not to another "who are distinguishable only by their participation in protected activities surely may have a discourag- ing effect on either present or future concerted activi- ty." Ibid. There seems to me no reasonable doubt that the determination between the two groups was "so `inherently destructive of employee interests' that it may be deemed proscribed without the need of proof of an underlying improper motive." Id. at 33. I can perceive no business justification that would ex- cuse this discriminatory conduct. Nor has Respondent come forward with a justifi- cation for discriminating between those employees who received the earned portion of their bonus and the strikers who did not. At most, Respondent argues that it did not have a discriminatory motive because it treated strikers the same way it treated other em- ployees who were absent from work on September 30 or November 27. But the argument at once proves too little and too much. It proves too little because it does not address itself to the question of whether there was discrimination between those who received the bonus and the strikers who did not, but rather to the question whether there was discrimination be- tween two groups of employees who did not receive the bonus. It proves too much in that with respect to those employees who did not receive the bonus the apparent reason for requiring their presence on the "active payroll" on September 30 and on some un- disclosed date in the future when the payment was to be made was to discourage all absences from work .4 Thus, Respondent's apparent justification for not paying the earned portion of their bonus to employ- ees on strike on those dates was a desire to discour- age their absence, which is to say it intended to dis- courage them from striking. The fact that it was not contrary to the Act for Respondent to use the pay- ment-or nonpayment-of the bonus to discourage employees from absenting themselves from work for reasons not connected with the exercise of Section 7 rights cannot be a justification for discouraging em- ployees from engaging in those protected activities. Respondent's equation of absence from work by rea- son of strike activity with other absences and its con- sequent discrimination between strikers and employ- ees who had not struck or had ended their strike subverts the protection afforded employees' lawful strike activity. Quality Castings Company, 139 NLRB 928, 931. I would therefore find that Respondent's denial of The testimony of Respondent's accountant is inconsistent with the as- sertion that Respondent's policy requires presence at work on the two crit- ical dates in all instances . As noted in Respondent's brief, she testified "that a person on lay-off for maternity leave might receive the bonus even though she was not actively working on the date of payment, if she had in fact been working at the close of the fiscal year." ELECTRO VECTOR, INC. a bonus to strikers because they were not at work on September 30 and November 27 violated Section 8(a)(3) and (1) of the Act. DECISION STATEMENT OF THE CASE RICHARD J. BOYCE, Administrative Law Judge : This case was heard before me in San Francisco, California, on March 4, 1975. The charge was filed December 3, 1974, and amended January 29, 1975, by General Truck Drivers, Warehousemen & Helpers Union, Local 980 (herein called the Union). The complaint issued January 29, 1975, was amended February 6, and alleges that Electro Vector, Inc. (herein called Respondent) violated Section 8(a)(1) and (3) of the National Labor Relations Act. The parties were permitted at the hearing to introduce relevant evidence, examine and cross-examine witnesses, and argue orally . Briefs were filed for the General Counsel and Respondent. 1. ISSUES The issues are whether Respondent , by not paying year- end bonuses to economic strikers in the circumstances de- tailed below, violated Section 8 (a)(1) and (3) of the Act; and, if so, whether the strike thereby was converted into an unfair labor practice strike. 11. JURISDICTION Respondent is a California corporation engaged in For- estville, California, in the manufacture of electronic prod- ucts. It annually sells and causes to be delivered to custom- ers outside California products of a value exceeding $50,000. Respondent is an employer engaged in and affecting commerce within Section 2 (2), (6), and (7) of the Act. 111. LABOR ORGANIZATION The Union is a labor organization within Section 2(5) of the Act. IV. THE ALLEGED UNFAIR LABOR PRACTICE A. Facts Respondent's production and maintenance employees are represented in collective bargaining by the Union. On May 2, 1974, during contract negotiations with Respon- dent, the Union called a strike in support of its demands. The strike is still on. Respondent's fiscal year is October 1 through September 30. On November 27, 1974, it paid end-of-fiscal-year bo- nuses to those of its employees who were on the "active" payroll-i.e. actually working-on both that date and on the final day of the fiscal year, September 30. There were about 100 recipients, among them strikers who had quit the 447 strike in time to meet the September 30-November 27 qua- lifying standard, as well as striker replacements meeting that test. Respondent's general manager, Philip Del Valle, testified credibly and without refutation that the qualifying test was not compromised for anyone. Strikers and anyone else not satisfying it were ineligible. There were about 33 strikers in this category. Among those qualifying, the bonus amounts varied. The basic amount was $150, but the great majority got less be- cause of absenteeism or absence from the active payroll during the fiscal year.' A formula was uniformly applied in diminution of the basic $150 to allow for these factors, an exception being that absences sometimes were overlooked, as in the case of serious illness or maternity leave, if Del Valle felt the specific circumstances so warranted. The record does not set forth the particulars of the formula, and is devoid of citation to any given situation in which special dispensation was granted. Those who quit the strike and striker replacements received the same partial-year treatment as others who worked like periods of time. A select few, who in Del Valle's judgment had made excep- tional contributions during the year, received above the basic $150. Four thus received $225 in 1974. The record does not reveal the nature of their contributions. Year-end bonuses were instituted by Respondent in 1973, in lieu of hams and turkeys. Although not a product of collective bargaining, they apparently had the Union's blessing. They were administered in exactly the same way in 1974 as 1973. To quote Del Valle: "[W]e took great pains to follow the exact formula so there would be no question of an unfair labor practice." A prime purpose of the bonuses is to stimulate better attendance, other purpos- es being to give the employees a stake in the success of the business after the fashion of profit-sharing plans, and to ease the economic impact on employees of inflation and Christmastime. No evidence was proffered that the denial of bonuses to strikers prolonged the strike. Two strikers testified of learn- ing, about the time the bonuses were granted, that they had been excluded from participation. B. Discussion It is concluded, in agreement with the General Counsel, that Respondent's exclusion of strikers from participation in the bonus distribution, because not on the active payroll at the prescribed times, violated Section 8(a)(3) and (1). This conclusion is grounded on Quality Castings Company, 139 NLRB 928 (1962)-a case similar to the present. Quality Castings involved distributions under a profit- sharing plan. Each employee, to qualify, had to have worked 50 percent of the time between January and Sep- tember preceeding distribution. As in the present case, the amounts paid to those qualifying were a function of absen- teeism, exceptions being allowed for excused absences. Some 64 employees, who had struck in April and May of that year and were not thereafter recalled for valid eco- nomic reasons, were deemed not to have satisfied the quali- 1 For example, Floyd Maes, hired September 26, 1974, received only $10. 448 DECISIONS OF NATIONAL LABOR RELATIONS BOARD fying criterion. The Board held that the disqualified strikers had been discriminated against in violation of Section 8(a)(3) and (1), determining that the respondent's interpretation of the qualifying criterion rested- on the faulty premise that time on strike may lawfully be considered the equivalent of normal absence for purposes of determining profit-share forfeiture. [139 NLRB at 930] The Board continued (139 NLRB 930-931): [T]he Respondent cannot be required to make distri- butions to individuals for the period they were absent on strike. Neither, however, can the Respondent state that strike time is merely another form of absence, equating it to other forms of absence discouraged by it, and then proceed to impose a total and nonpropor- tionate forfeiture on employees because they engaged in such absences-in effect because they engaged in Section 7 activities. [N]otwithstanding the obvious fact that strike ab- sences intensify an employer's production problems, strikers are given protection under the Act not avail- able to workers whose absences are caused by other reasons. While the Act gives no protection to workers who are absent because of illness , athletic events, or family celebrations, it does protect employees who are absent because of a strike, and "excuse" such absenc- es, in the sense contemplated by Respondent. Respondent's contrary treatment subverts the protec- tion afforded by the statute, and its total denial of all profit-sharing benefits to the strikers because of their "absence" discriminates against them as directly as if they were discharged for such activities. Surely the Re- spondent could not lawfully enforce a general dis- charge rule for absenteeism against the 64 strikers, merely because their participation in the strike for its duration constituted "excessive absenteeism" under the Respondent's formula. We therefore find that the 100-percent profit sharing forfeiture . . . imposed by Respondent on the 64 strikers . . . was violative of Section 8(a)(3) and (1), regardless of Respondent's motivation in imposing such a penalty.2 This reasoning, which the Board has never disavowed, is equally apposite to the present situation.' 2 Citing Erie Resistor Corp., 132 NLRB 621, later to be affirmed by the Supreme Court at 373 U S 221 (1963). This reasoning, however, has experienced some difficulty at judicial lev- els. Quality Castings Company was reversed at 325 F.2d 36 (C A 6, 1963) Similarly, Pittsburgh -Des Moines Steel Co, 124 NLRB 855, and National Seal, Division of Federal-Mogul-Bower Bearings, Inc., 141 NLRB 661, in which the Board used kindred reasoning to support violations, were re- versed, respectively, at 284 F 2d 74 (C A. 9, 1960) and 336 F.2d 781 (C.A. 9, 1964). Board law, not that of the circuits, is controlling, however, at this juncture of this proceeding. E.g., Bricklayers, Masons and Plasterers ' Union, Local No. 1, 209 NLRB 820, fn . 1 (1974). Academic criticism of the Board's Quality Castings reasoning appears in Getman, Section 8(a)(3) of the NLRB and the Effort to Insulate Free Employee Choice, 32 U. of Chi. L. Rev. 735, 741-742 (1965), wherein it is observed , among other things: Where the employer applies uniform criteria which predate the particu- lar situation, it makes sense to grant him considerable leeway . [Tlhe fact that the employer applies these standards in situations In addition to urging the illegality of Respondent's deni- al of bonuses to strikers, the General Counsel contends that the denials converted the strike into an unfair labor practice strike, entitling any strikers not theretofore perma- nently replaced to unqualified reinstatement upon their ap- plication. This contention is rejected. There is no evidence that the bonus misconduct influenced any striker to pro- long the strike, and it is not manifest from the facts that the misconduct would have had that effect. The strike was called in aid of the Union's overall position in contract negotiations and already had been underway some 7 months. It cannot be assumed that the larger strike strategy was affected by the bonus matter. See Romo Paper Products Corp., 208 NLRB 644 (1974); Anchor Rome Mills Inc., 86 NLRB 1120, 1122 (1949).4 CONCLUSIONS OF LAW 1. By disqualifying strikers from bonuses, as found here- in, Respondent engaged in unfair labor practices within Section 8(a)(1) and (3) of the Act. 2. These unfair labor practices affect commerce within Section 2(6) and (7) of the Act. 3. Respondent's misconduct, as found herein, did not convert the economic strike that began May 1, 1974, into an unfair labor practice strike. THE REMEDY It is recommended that Respondent be ordered to cease and desist from the unfair labor practices found. Affirmatively, it is recommended that Respondent be or- dered to cure its unlawful discrimination by restoring to eligibility for the 1974 bonuses those disqualified because of strike-related absence, and by calculating their bonus shares in such a way that they do not suffer a dispropor- tionate reduction because of their strike activities. Their shares may, however, be reduced pro rata for their absences from the job during the pertinent fiscal year whether be- cause on strike or for any other reason. Quality Castings Company, supra, at 932. Interest at the rate of 6 percent per annum from November 27, 1974, shall be included in the shares. Those entitled to relief include:5 J. E. Anderson M. Gramlich J. L. Aviles D. G. Herrington S. A. Aviles S. F. Hester R. L. Beck I. J. Jorgensen which do not involve union activity indicates that there is a legitimate business interest involved 4The General Counsel's argument to the contrary cites N L. R.B v Erie Resistor Corp, 373 U.S. 221 (1963 ) As I read that decision, however, the Supreme Court did not address itself to the issue of the strike's status. Be- yond that, a reading of the underlying NLRB decision -Erie Resistor Corp, 132 NLRB 621-reveals that in that case , unlike the present , the striking employees expressly voted to continue the strike in protest of the company's unlawful conduct. 5 And such others as are determined , in the compliance phase of this proceeding, to be entitled . FC.F Papers, Inc, a Division of the Mead Corpo- ration, 211 NLRB 657 ( 1974); International Brotherhood of Boilermakers, Iron Shipbuilders, Blacksmiths, Forgers and Helpers, Local 101, 206 NLRB 30, fn 3 (1973) ELECTRO VECTOR, INC. A. Bribiescas D. Karson D. Burris B. L. Kelly S. E. Butters S. L. Palmer P. V. Cox J. L. Say D. G. Cresta V. M. Signett M. Cribbins A. E. Skinner S. L. Davis E. Stockman E. B. Edwards J. B. Tyron J. Frost B. S. Vierra H. P. Galusha B. A. Wesley P. A. Garrison L. K. Whitley G. A. Gibson F. G. Wilson R. N. Graham 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: ORDER6 Respondent, Electro Vector, Inc., its officers, agents, successors, and assigns, shall: 1. Cease and desist from discouraging membership in General Truck Drivers, Warehousemen & Helpers Union, Local 980, International Brotherhood of Teamsters, Chauf- feurs, Warehousemen and Helpers of America, or any other labor organization, by discriminatorily denying a bo- nus distribution to employees because of their participa- tion in a strike. 2. Take the following affirmative action: a. Make whole the employees referred to in "The Reme- dy" section of this Decision, in the manner set forth in that section, for the losses suffered by reason of Respondent's discrimination against them. b. Preserve and, upon request, make available to the Board or its agents, for examination and copying, all pay- roll records, social security payment records, timecards, personnel records and reports, and all other records neces- sary for determination of the amount of payment due un- der this Order. c. Post at its place of business in Forestville, California, copies of the attached notice marked "Appendix."7 Copies of said notice, on forms provided by the Regional Director of Region 20, after being signed by an authorized represen- tative of Respondent, shall be posted by Respondent im- mediately upon receipt thereof, and be maintained by it for 60 consecutive days thereafter, in conspicuous places, in- cluding all places where notices to employees customarily are posted. Reasonable steps shall be taken to ensure that said notices are not altered, defaced, or covered by other material. d. Notify the Regional Director of Region 20, in writing, 449 within 20 days from the date of this Order, what steps Re- spondent has taken to comply herewith. 6 All outstanding motions inconsistent with this recommended Order hereby are denied. 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 7In 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 read "Posted Pursuant to a Judgment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board" APPENDIX NOTICE TO EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government The hearing held in San Francisco, California, on March 4, 1975, in which we participated and had a chance to give evidence, resulted in a decision that we had committed cer- tain unfair labor practices in violation of Section 8(a)(1) and (3) of the National Labor Relations Act, as amended, and this notice is posted pursuant to that Decision. Section 7 of the National Labor Relations Act, as amended, gives all employees the following rights: To engage in self-organizing To form, join, or help unions To bargain collectively through representatives of their own choosing To act together for collective bargaining or other mutual aid or protection To refrain from any or all these things In recognition of these rights, we hereby notify our em- ployees that: WE WILL NOT discourage membership in General Truck Drivers, Warehousemen & Helpers Union, Lo- cal 980, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, or any other labor organization, by discriminatorily denying a bonus distribution to employees because of their participation in a strike. WE WILL make whole the approximately 33 striking employees for losses suffered by reason of their being discriminatorily excluded from the November 1974 bonus distributions. ELECTRO VECTOR, INC.