Settles, L. M., Construction Co., Inc.

L. M. SETTLES CONSTRUCTION CO., INC. 379 L. M. Settles Construction Co., Inc. and Painters Construction Co., Inc., Livonia, Michigan, its offi- District Council No. 22, International Brother- cers, agents, successors, and assigns, shall take the hood of Painters and Allied Trades, AFL-CIO. action set forth in the said recommended Order. Case 7-CA-17873 DECISION November 24, 1981 STATEMENT OF THE CASE DECISION AND ORDER NORMAN ZANKEL, Administrative Law Judge: This BY MEMBERS JENKINS, ZIMMERMAN, AND case was heard before me on March 13 and May 27, HUNTER 1981, in Detroit, Michigan. Upon an original charge filed on June 9, 1980,1 by On June 29, 1981, Administrative Law Judge Painters District Council No. 22, International Brother- Norman Zankel issued the attached Decision in this hood of Painters and Allied Trades, AFL-CIO (the proceeding. Thereafter, Respondent filed excep- Union), the Regional Director for Region 7 of the Na- tions and a supporting brief, and the Charging tional Labor Relations Board (the Board) issued a com- Party filed a brief in opposition to Respondent's ex- plaint and notice of hearing on July 30. ceptions. In essence, the complaint alleges that L. M. Settles Pursuant to the provisions of Section 3(b) of the Construction Co., Inc. (the Employer), refused to bar- National Labor Relations Act, as amended, the Na- gain collectively with the Union in violation of Section tional Labor Relations Board has delegated its au- 8(a)(5) and (1) of the National Labor Relations Act, as amended (the Act), when it refused the Union's May 9 thority in this proceeding to a three-member panel. request to conduct a comprehensive audit of its financial The Board has considered the record and the at- records, including its general ledger, which, the com- tached Decision in light of the exceptions, brief, plaint claimed, was needed to enable the Union to police and brief in opposition, and has decided to affirm the Employer's administration of a collective-bargaining the rulings, findings,' and conclusions of the Ad- agreement between the parties. ministrative Law Judge, as modified herein,2 and to The Employer filed a timely answer, filed a written adopt his recommended Order. amendment thereto, and made a further oral amendment at the hearing which admitted certain matters but denied AMENDED CONCLUSIONS OF LAW the substantive allegation and that it committed any unfair labor practices. Substitute the following for the Administrative All parties appeared at the hearing. Each was repre- Law Judge's Conclusion of Law: sented by counsel and was afforded full opportunity to "4. By refusing to furnish Painters District Coun- be heard, to introduce and meet material evidence, to ex- cil No. 22, International Brotherhood of Painters amine and cross-examine witnesses, to present oral argu- and Allied Trades, AFL-CIO, or its agents, for an ment, and to file briefs. Counsel for the General Counsel audit, its books and record of original entry, in- and the Union's counsel argued orally. In addition, the cluding its general ledger, for the period September Employer's counsel and the Union's counsel filed briefs 1, 1979, to the date of completion of the audit, the on June 8 and 15, 1981, respectively. I was administra- Employer has refused to bargain collectively with tively advised that the General Counsel would file no the Union, in violation of Section 8(a)(5) and () of Xbrief. I have carefully considered the oral arguments and the Union, in violation of Section 8(a)(5) and (1) of the briefs submitted the Act." the contents of the briefs submitted. Upon consideration of the entire record, the argu- ORDER ments, and the briefs, and from my observation of the single witness and his demeanor, I make the following: Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Re- FINDINGS AND CONCLUSIONS lations Board adopts as its Order the recommended I. JURISDICTION Order of the Administrative Law Judge and hereby orders that the Respondent, L. M. Settles Based upon the Employer's answer, as finally amend- ed, there is no issue as to jurisdiction or labor organiza- 'In adopting the Administrative Law Judge's finding that Respondent tion status. violated Sec. 8(aX5) and (I) of the Act by failing to permit the Union to The Employer, a Michigan corporation, has main- examine its financial records, including its general ledger, for the purpose tained its office and place of business in Livonia, Michi- of conducting a comprehensive audit, we agree with his finding that de- gan where it has been engaged in the drywall construc- ferral to arbitration is inappropriate herein because the audit authoriza- tion provisions for fringe benefit payments contained in art. XVIII are tion business. explicitly exempt from the grievance and arbitration provisions of art. At all material times, the Employer has been a XX of the partiea' agreement. Accordingly, we find it unnecessary to rely member of the Michigan Dry Wall Contractors Associ- on the Administrative Law Judge's further grounds for declining to defer Inc. (the Association) which is comprised of em- this matter to arbitration. ' We will modify the Administrative Law Judge's Conclusions of Law to conform more fully with his recommended Order. All dates hereinafter are in 1980 unless otherwise stated. 259 NLRB No. 57 380 DECISIONS OF NATIONAL LABOR RELATIONS BOARD ployers engaged in the drywall construction industry and Trustees . . . to have access to, and to inspect any and which exists for the purpose, inter alia, of representing its all books, records, accounts, ledgers, and records of employer-members in negotiating and administering col- original entry, for the purpose of determining whether or lective-bargaining agreements with various labor organi- not the Employer has conformed with" its obligations to zations, including the Union. make fringe benefit contributions. Finally, the provision During the calendar year immediately preceding issu- for regular audits specifies "such inspection shall be ance of the complaint, the various members of the Asso- made only on an express order of the ... Trustees." ciation generated gross revenues in excess of $500,000. On or about July 18, 1979, the Union conducted a reg- During the same period of time, the members of the As- ular audit (apparently pursuant to the contractual provi- sociation purchased goods and supplies valued in excess sions quoted above) of the instant Employer's books and of $50,000 from various suppliers which, in turn, pur- records. At that time, employee Chandler was not work- chased such goods and caused them to be transported ing for the Employer.3 and delivered to their Michigan facilities directly from Chandler started work for the Employer in a classifi- points located outside Michigan. cation covered by the collective-bargaining agreement Upon all the foregoing, I find that the Employer is an during the second week of September 1979. The Em- employer engaged in commerce within the meaning of ployer issued a check, dated September 14, 1979, to Section 2(2), (6), and (7) of the Act, and that the Union Chandler for $210. Because the Employer had not yet is a labor organization within the meaning of Section received Chandler's withholding authorizations, that 2(5) of the Act. check represented his gross wages. 4 Sometime in November 1979, Chandler showed Maher II. THE ALLEGED UNFAIR LABOR PRACTICES a copy (or original)5 of the $210 check. Chandler told Maher he believed other employees had been paid the A. The Facts "same way." The material facts are undisputed. They are a compos- In Maher's experience, he occasionally found employ- ite of the testimony of the sole witness, Michael G. ers had circumvented their obligation to make fringe Maher, administrative assistant to the Union's fringe benefit contributions by making wage payments to em- benefit funds, and supporting documentary evidence. 2 ployees from funds held in other than payroll accounts. (The Employer objected to some of Maher's testimony Such payments had been made by issuance of so-called regarding what was reported to him by employee Chan- side checks. Thus, upon seeing Chandler's $210 check, dler as hearsay. The Employer argues I should draw ad- Maher became suspicious that the Employer might be verse inferences regarding what apparently emanated seeking to avoid its contractual obligations. Accordingly, from Chandler because he was present at the hearing, Maher examined the Employer's contribution report but was not called to testify. I decline to make such in- forms. He concluded that the $210 check was drawn ferences because the documentary evidence fully sup- upon the Employer's general account by noting that the ports and confirms all matter which Maher attributed to check was of the same kind which was used by the Em- Chandler. In all other respects, Maher's testimony stands ployer to send its fringe benefit contributions to the uncontradicted. The Employer rested without calling Union. any witness to testify in its behalf). On or about January 23, 1980, Maher reported to the At all material times, the Employer, as a member of trustees. He explained the existence of a possible breach the Association, has been a signatory to a collective-bar- of the Employer's obligation to contribute to the fringe gaining agreement between the Union and the Associ- benefit funds. The trustees ordered Maher to conduct a ation. At the time of the events relevant herein, the Em- full comprehensive audit, including the books of original ployer was bound to such a collective-bargaining agree- entry of the Employer. ment in effect until May 31, 1980. By letter dated January 23, dispatched by regular mail, In material part, the collective-bargaining agreement Maher wrote the Employer he had been instructed by (art. XVIII) provides for the Employer to make regular the Trustees "to conduct a full Comprehensive Audit of contributions to the Union's deposit fund to cover the all your records, and books of original entry, for the fringe benefit package contained in said agreement. The period January 1, 1978, to the date of completion of this amount of such contribution is based on the number of Audit." Maher's letter asked the Employer to contact hours worked by each employee covered by that agree- him within 5 days to arrange the audit. Maher received ment. no response. The funds contributed by Association members is ad- On February 6, Maher dispatched another letter by ministered by trustees of Painters Union Deposit Funds certified mail to the Employer. Its terms were identical (the Trustees). Article XVIII, section 2, contains the em- to the January 23 letter. The February 6 letter was re- ployer-members' authorization for "any accountant se- turned to Maher marked "Unclaimed." lected by the Trustees ... to make regular audits of. .. [their] . . . payroll records to ascertain whether . . . It is not asserted that this audit revealed any deficiency in the Em- [they have] . . . complied with the requirements" of the ployer's contributions. collective-bargaining agreement. Additionally, the audit Employer did not negotiate th check . It was later replaced by the Employer with a payroll check representing Chandler's net wages after authority provides for "any accountant selected by the appropriate withholding deductions. I Maher was unsure whether he saw the original. I do not consider this ' Maher testified on behalf of the General Counsel. significant. L. M. SETTLES CONSTRUCTION CO., INC. 381 On March 3, Maher once again dispatched his Febru- pursue the issue. This resulted in the filing of the charge ary 6 letter, this time by regular mail. underlying the instant Complaint. On March 21, Maher wrote the Employer. He referred to his letters of January 23 and February 6. The March B. Analysis 21 letter states, in relevant part, that the trustees "have The General Counsel and the Union contend the com- given express orders for ... . [Maher] . . . to conduct a prehensive audit, including the Employer's general full Comprehensive Audit of all your records, and books ledger, is necessary and relevant to the Union's perform- of original entry, for the period January 1, 1978 to De- ance of its collective-bargaining obligations. As to neces- cember 31, 1979." Maher asked the Employer to contact sity, they claim the general ledger, specifically, is needed him within 5 days to arrange for his examination of the to ascertain whether the Employer's fund contribution records. The March 21 letter ends with the admonition report forms accurately reflect all payments made to em- that the Employer's failure to comply would result in ployees. Thus, if the general ledger were to reveal no Maher's request of the trustees for them to file unfair side checks had been issued to employees, that would in- labor practice charges. dicate the Employer fulfilled its fringe benefit obliga- The Employer's president, Louis Settles, telephoned tions. On the other hand, if the general ledger reveals Maher around March 25 or 26. Settles asked Maher what such side checks had been issued, the Union might he was seeking. Maher requested production of specific decide to take appropriate action to enforce the con- material, including the general ledger. Settles said he tract. 6 needed more time to consider the request. The Employer contends (I) no prima facie case has Sometime later, Settles contacted Maher. They ar- been established, and (2) the Board should defer to arbi- ranged for Maher to examine the Employer's books at tration. The Employer claimed the General Counsel Settles' office on May 9. "must establish . . . [the Union] . . . held a reasonable On May 9, Maher, together with a field auditor, met belief that it will discover contract violations from the with Settles. Settles was presented with a copy of Chan- information requested." dler's $210 check. Settles explained that no deduction au- I agree with the position taken by the General Counsel thorization form had been received by the Employer at and the Union. the time that check had been issued. Settles also told Maher that check had not been cashed and was replaced 1. Relevance and necessity with the Employer's payroll check. The Employer asserts the evidence reflects the Union Settles then gave Maher some of the records he re- had only a speculative hint of any contract violation. As quested. Specifically, Maher examined certain quarterly such, the Employer contends a prima facie case had not reports and individual payroll summaries. Maher asked been established. to examine the Employer's general ledger. Settles de- I find the facts show the Union had cause to believe dined to produce it. the Employer breached its contractual obligation to Maher completed his examination of the records pro- make fringe benefit contributions. Thus, Maher was pre- vided. He verified that all fringe benefits for Chandler sented with Chandler's side check. This, alone, was a and all other employees reported by the Employer to the sufficient basis to doubt the accuracy of the information Union's funds appeared consistent with the Employer's submitted by the Employer on its fringe benefit contribu- payroll summaries. Nonetheless, Maher repeated his re- tion reports. quest to examine the general ledger. Settles said he Additionally, Maher was informed other employees would have to think about whether he would produce had been paid the same way. Though literally hearsay, the general ledger and would "get back" to Maher. that information buttressed and enhanced his doubts. Maher credibly testified, and was unshaken during The trustees then acted responsibly in ordering the cross-examination on this issue, that without studying the comprehensive audit. That order set in motion the ma- general ledger he could not determine whether any chinery by which the Union could obtain information by "side" check had been issued to any employee. Maher which it could determine whether a contract breach was further testified that the fringe benefit contribution present. forms, alone, would not necessarily reflect that an em- It is well established that a labor organization, obligat- ployer had made contributions for all hours worked. ed to represent employees in a bargaining unit with re- Those forms comprise a self-serving declaration by an spect to their terms and conditions of employment, is en- employer of whatever number of hours worked the em- titled to such information from the employer as may be ployer desires to place thereon. relevant and reasonably necessary to the proper execu- About 2 weeks later, Maher and Settles spoke. Maher tion of that obligation. Vertol Division, Boeing Company, asked to see the general ledger. Settles said he decided 182 NLRB 421 (1970); N.LR.B. v. Whitin Machine not to deliver it. Works, 217 F.2d 593 (4th Cir. 1955), cert. denied 349 Shortly thereafter, Maher reported to the trustees that Settles refused access to all the books and records and Art. XX of the relevant collective-bargaining agreement establishes that the comprehensive audit was not completed. The an extensive grievance and arbitration procedure "whenever a dispute trustees concluded they needed the general ledger to de- arises beween . . . [the parties] ... concerning the carrying out of this agreement." However, as will be shown in subsec. IlB,2, infra, the sub- termine whether any employee had been issued a "side" ject of fringe benefit contributions is expressly excluded from operation check. The trustees directed Union Attorney Gold to of the grievance and arbitration procedure. 382 DECISIONS OF NATIONAL LABOR RELATIONS BOARD U.S. 905. The right to such information exists not only Co., 208 NLRB 748, 753 (1974); Michigan Drywall Corpo- for the purpose of negotiating a contract, but also for the ration, M & D Drywall, Inc., and James F. Mullins, 232 purpose of administering a collective-bargaining agree- NLRB 120 (1977). This is so because production of the ment. The employer's obligation, in either instance, is Employer's general ledger would have permitted the predicated on the need of the union for such information Union to compare payments made by the Employer to in order to provide intellignt representation of the em- employees (if such payments appear in the general ployees. F. W. Woolworth Company, 109 NLRB 196, 197 ledger) with the hours worked which were reported by (1954), enfd. 352 U.S. 938 (1956). the Employer on its fringe benefit contribution reports; The test of the union's need for such information is or the Union would have discovered that no such side simply a showing of "probability that the desired infor- payments had been made. To deprive the Union of this mation was relevant, and that it would be of use to the ability to make such a comparison effectively vitiates its Union in carrying out its statutory duties and responsibil- collective-bargaining obligation to police implementation ity." N.L.R.B. v. Acme Industrial Co., 385 U.S. 432, 437 of the collective-bargaining agreement. Ellisworth Sheet (1967). 7 The union need not demonstrate that the infor- Metal, Inc., 224 NLRB 1506, 1509 (1976), reaffirmed 232 mation sought is certainly relevant or clearly dispositive NLRB 109 (1977).8 of the dispute between the parties. The fact that the in- The Supreme Court commented upon the efficacy of formation is of potential relevance is sufficient to give such purpose. Though Acme Industrial arose in the con- rise to an obligation on the part of an employer to pro- text of a union's need for information to determine vide it. The Brooklyn Union Gas Company, 220 NLRB whether it should proceed with a grievance, the legal 189 (1975). principles and rationale derived from that opinion are ap- The appropriate standard in determining the potential posite herein. Thus, the Court noted (385 U.S. at 437- relevance of information sought in aid of a bargaining 438): agent's responsibility is a liberal discovery-type standard. Acme Industrial, supra. When the Respondent furnishes the requested in- Herein, the evidence reflects the Employer granted the formation, it may appear that . . . the grievances Union access to a variety of records and reports on May filed are without merit. On the other hand, even if 9. Nonetheless, I conclude that the material produced it appears that such activities have taken place, an was insufficient to permit a fair and complete evaluation arbitrator might uphold the contention that no of the Employer's compliance with its contractual obli- breach of the agreement occurred. . . . Such con- gation to make fringe benefit contributions. Indeed, the clusions would clearly not be precluded by the Employer's denial of the general ledger constitutes a res- Board's threshold determination concerning the po- ervation to the Employer of the right to satisfy the legal tential relevance of the requested information. standard upon its unilaterally determined standard of rel- evance. Such usurpation is contrary to the Employer's The Employer urges the Union was engaged in a fish- agreement, article XVIII, which grants the trustees the ing expedition. It claims there is "no real evidence to right to conduct audits. Moreover, such a reservation is suggest [the presence] of a violation of the coutract." I impermissible under Board law. L & M Carpet Contrac- conclude this argument begs the question. The very pur- tors, Inc., 218 NLRB 802, 804 (1975). In L & M, as pose of the Union's requested audit was to enable it to herein, an employer submitted some but not all, of the determine whether a contract violation was present. That records requested by the auditor. The Board left undis- purpose, in my opinion, satisfies the Court's recognition turbed the administrative law judges' finding that the that relevancy is a threshold question for the Board's de- employer refused to bargain in violation of Section termination. 8(aX5) and (1) by failing or refusing to provide access to As previously quoted, the standard for such determina- all the records, including the general ledger. tion is satisfied by showing a "probability that the de- The question of relevance is properly for the Board's sired information was relevant, and that it would be of determination. In Acme Industrial, supra, the Court noted use to the Union in carrying out its statutory duties and (385 U.S. at 435-436): responsibilities." 385 U.S. at 437. I conclude the exist- There can be no question of the general obliga- ence of Chandler's side check, coupled with Maher's ex- tion of an employer to provide information that is perience that other employers had used side checks as a needed by the bargaining representative for the means to avoid their fringe benefit obligations, comprised proper performance of its duties. N.LR.B. v. Truitt sufficient probability the instant Employer might be Mfg. Co., 351 U.S. 149. ... The only real issue in avoiding its contractual commitment. this case, therefore, is whether the Board must I have already discussed, and concluded, the general await an arbitrator's determination of the relevancy ledger could have been used by the Union to promote its of the requested information before it can enforce statutory responsibilities. Moreover, the Court strongly the union's statutory rights. encouraged the use of the earliest opportunities to deter- I find the contents of the general ledger presumptively ' The fact that Chandler's check was not negotiated by him does not relevant to the Union's collective-bargaining functions render moot the need to audit. Maher had been apprised of the possibility herein. Murray Bagdasorian d/b/oa Michael Rossi Carpet other employees had been given side checks. If so, there is no evidence to suggest such checks also had not been negotiated. Thus, the only sure way to conclude the issue was by an examination of the Employer's This case is cited by both the Union and the Employer. books of original entry-specifically, its general ledger. L. M. SETTLES CONSTRUCTION CO., INC. 383 mine whether the Union had an actionable claim. Thus, ances had to be processed to arbitration, the system the Court observed (385 U.S. at 438): "Arbitration can would be woefully overburdened." I conclude the Em- function properly only if the grievance procedures lead- ployer's position would foster such a result. ing to it can sift out meritorious claims." I have already In any event, as I have found the withholding of the observed this is one of the possible results of the Em- requested records has eliminated the Union's ability to ployer's compliance with the request for the comprehen- assess whether a contract breach existed, it would not be sive audit, including the general ledger. possible to utilize either the grievance and arbitration Upon all the foregoing, I find the General Counsel has procedure or any other legal means, for no facts exist sustained the burden of proving the comprehensive audit which give rise to a grievance or any other legal action of the Employer's records, including the books of origi- based on the failure to pay the required fringe benefit nal entry and general ledger, are relevant and necessary contributions. The source of such facts has been ob- to the Union's performance of its collective-bargaining scured by the Employer's unlawful refusal to deliver the obligations. Because the Employer admittedly did not general ledger. furnish the general ledger, I further find that neglect vio- It is unclear just what subject matter the Employer lated Section 8(aX5) and (1) of the Act, as alleged. would have subjected to the grievance and arbitration 2. Arbitrability provisions. If it is the Employer's failure to have com- plied with the request for a comprehensive audit which As noted, the Employer urges the Board to defer the should be grieved, the exclusion of article XX-H would issues to the arbitration provisions of the collective-bar- prevent such a grievance because the audit authority is gaining agreement. contained in article XVIII. Thus, the Employer's propos- The General Counsel asserts deferral is inappropriate al effectively eliminates all remedial possibilities. because grievances relating to the fringe benefit funds Upon the foregoing, I find no merit in the Employer's are expressly exempt from application of the grievance contentions regarding deferral. and arbitration provisions of article XX of the parties' Upon the basis of the foregoing findings of fact, con- agreement. clusions, and the entire record, I make the following: The agreement, article XX-H, declares, "Article XX shall not apply to disputes arising between the Union and CONCLUSIONS OF LAW an Employer concerning Article XVIII hereof." g I conclude there is no merit to the Employer's position 1. L. M. Settles Construction Co., Inc., is, and at all that "the grievance procedure would settle the present material times has been, an employer engaged in com- dispute." Patently, the instant controversy is expressly merce within the meaning of Section 2(2), (6), and (7) of excluded from operation of the grievance and arbitration the Act. procedure. 2. Painters District Council No. 22, International Moreover, the Board will not apply its deferral princi- Brotherhood of Painters and Allied Trades, AFL-CIO, ples Collyer (Collyer Insulated Wire, A Gulf and Western is, and at all times material herein has been, a labor orga- Systems Co., 192 NLRB 837 (1971)) unless the contrac- nization within the meaning of Section 2(5) of the Act. tual grievance and arbitration provision at least arguably 3. All of the Employer's employees covered by the encompasses the type of dispute in question. Urban N. collective-bargaining agreement between the Union and Patman, Inc., 197 NLRB 1222 (1972). Accordingly, I the Michigan Dry Wall Contractor Association, Inc., agree with the General Counsel. scheduled to terminate on May 31, 1980, constitute a unit If my conclusion that the grievance and arbitration of employees appropriate for the purpose of collective- provisions are inapplicable to the instant issue is impru- bargaining within the meaning of Section 9(b) of the dent, there exists yet another reason to decline to defer. Act. Thus, in my view, the Employer's suggestion to defer re- 4. By failing to permit the Union to conduct a full stricts the parties in the statute's quest for maintenance of comprehensive audit of its records, including its general labor-management stability. The Employer's proposal re- ledger and other books of original entry, in accordance quires recourse to the intricate grievance and arbitration with the Union's various requests between January and machinery of article XX. That procedure involves an in- May 1980, the Employer refused to bargain collectively formal hearing, a possible investigation, a formal hearing, with the Union in violation of Section 8(a)5) and (I) of and, finally, binding arbitration before an impartial arbi- the Act. trator. 5. The aforesaid unfair labor practices affect commerce It is clear that production of the requested information within the meaning of the Act. 50 may well serve to cause the Union to abandon any such recourse if it should be satisfied, from an examination of THE REMEDY the requested records, that the Employer has fulfilled its contractual fringe benefit obligations. Inasmuch as I have found the Employer refused to The Supreme Court, in Acme Industrial, declared (385 bargain with the Union by declining to permit the full U.S. at 438): "(I]f all claims originally initiated as griev- comprehensive audit, I shall order the Employer to cease and desist from engaging in such unfair labor practice Art. XVIII is entitled "Painters Union Deposit and Other Trust Funds." As noted, this article, inter alia, establishes the Employer's obli- '" I reserved ruling upon the Employer's oral motion to dismiss the gation to make fringe benefit contributions and gives the Union the right complaint allegations. Based upon the aforesaid conclusions of law, the to audit. Employer's motion is hereby denied. 384 DECISIONS OF NATIONAL LABOR RELATIONS BOARD and affirmatively take such actions as will dissipate the ceiver in Bankruptcy, 248 NLRB 405 (1980), discontinu- effects of its unfair labor practice. ance of fringe benefit payments. The Order shall require the Employer to permit the Thus, I find each of the above-cited cases contain ma- Union fund trustees, or their designees, to conduct the terial distinctions from the case at bar. The instant com- comprehensive audit requested between January and plaint and litigation before me does not go so far as those May 1980, and to produce for such purpose to the Union cases. I have been required to resolve only the Union's all records, including its general ledger and other books right to information. This involves consideration only of of original entry, for the Union's examination. the threshold issues to which the Supreme Court alluded The Union requested the period to be covered by its in Acme Industrial. I have done so. To do more would audit begin on January 1, 1978, and encompass the inter- not only wreak an injustice upon the Employer, but vening time until the date the audit is complete. In my would effectively conclude an issue which clearly was opinion, the record does not support such an extensive not, and had not been contemplated to be, litigated. Ac- undertaking. Maher testified the Employer had been au- cordingly, the Union's make-whole request is denied. dited for the first 6 months of 1979. Although the extent With respect to the request for liquidated damages, of that audit was not fully developed, there is evidence there is a collective- bargaining provision covering that there is a collective- bargaining provision covering that the Union had been satisfied of no improprieties. It was not until Chandler began working in September 1979 subject. Thus, article XVIII, section IV, provides "that not until Chandler began working in September 1979 that the facts show the Union had any cause to question the damages which will result from the failure of an Em- the Employer's activities. Though I am mindful of the ployer to pay his fringe benefit contributions on time, or possibility the Employer might have been derelict before in the correct amount, are difficult to calculate with any Chandler began to work, the state of the record provides certainty and, therefore, any Employer who fails to little, if any, evidence to justify the breadth of the make payments to the funds, in accordance with this Union's request. Accordingly, I shall order the Employer Agreement, shall pay as liquidated damages, in addition to submit its general ledger and other books of original to the contribution due: Delinquency for 1-15 days-5 entry for audit only for the period beginning with Sep- percent of monthly contribution; Delinquency for 15-30 tember 1, 1979, to the date of its completion. days-10 percent of monthly contribution; Delinquency The Union has requested a variety of remedial provi- for 30-45 days-20 percent of monthly contribution." sions such as a "make-whole" remedy, a requirement The Employer does not address this specific issue. that the Employer pay interest upon whatever deficien- In Finger Lakes Plumbing & Heating Co., Inc., 254 cies are uncovered by the audit ordered, and enforce- NLRB 1399 (1981), the Board reaffirmed its Order (253 ment of the contractually mandated liquidated damages NLRB 406 (1980)) based on the charging party's excep- provision." tions to an administrative law judge's omission to order As to the request for a make-whole remedy, the Em- payment of contractually mandated liquidated damages ployer resists, claiming, in effect, such a remedy is inap- for failure to pay fringe benefit fund contributions. Thus, propriate because it places the Board in the posture of the Board ordered such was an appropriate remedy. having gone beyond the limits of Acme Industrial by ren- Finger Lakes contains the same distinction noted above dering a decision on the merits of the underlying dispute. in the cases dealing with a make-whole remedy. The Thus, the Employer argues the Supreme Court held, in Board's liquidated damage order was predicated upon Acme Industrial, the Board appropriately considered only the Board's finding of an unfair labor practice in the Em- the threshold issue of the relevance and necessity of the ployer's unlawful discontinuance of fringe benefit pay- information sought. ments. In the absence of such a finding in the case at bar, I find merit to the Employer's position. The complaint I deny the request for payment of the contractual liqui- before me does not allege the Employer refused to bar- dated damages. gain by a failure to pay the fringe benefit contributions. In each of the cases cited by the Union in support of its Regardg the request for a provision for the Employ- make-whole request, the Board had before it the specific er to pay interest upon moneys the Employer may owe issue that an employer refused to bargain by having the fringe benefit funds, it is hereby denied for two rea- failed to make the contractually required fringe benefit sons. First, all the cases which my research has uncov- payments. See, e.g., H & R Contracting Corp., 255 NLRB ered in which interest was even considered by the Board 491 (1981), failure to pay contributions; Tolmich, Inc. were based on a finding by the Board that such moneys d/b/a Orange County Metal Processing, 252 NLRB 1269 actually were due, which finding, in turn, was based on a (1980), discontinuance of health and welfare payments; complaint of the General Counsel alleging that the fail- Memley Plating Company, 252 NLRB 1264 (1980), failure ure to make such payments constituted an unfair labor to transmit dues; Allen Materials, Inc., Debtor-In-Posses- practice. As noted above, the instant complaint contains sion, 252 NLRB 1116 (1980), termination of health and no such allegation. Second, the Union's request is, in any welfare contributions; Ace Masonry, Inc., 252 NLRB 287 event, premature. Thus, in Allen Materials, Inc., supra, (1980), unilateral discontinuance of fringe benefit pay- the Board commented, in footnote 2, that it "does not ments; William Minter Masonry Contractor, Inc., 252 provide at the adjudicatory stage of the proceeding for NLRB 130 (1980), discontinuance of trust fund pay- addition of interest at a fixed rate on unlawfully withheld ments; and V. Pangori & Sons, Inc. and David Cuvrell, Re- fund payments." The Board left the matter to the com- pliance stage. See also Merryweather Optical Company, " The General Counsel did not address the scope of the remedy. 240 NLRB 1213 (1979). L. M. SETTLES CONSTRUCTION CO., INC. 385 Finally, the Order shall require tne Employer to re- be taken by Respondent to insure that said notices are frain from in any like or related manner interfering with, not altered, defaced, or covered by any other material. restraining, or coercing its employees in the exercise of (c) Notify the Regional Director for Region 7, in writ- their rights guaranteed in Section 7 of the Act. ing, within 20 days from the date of this Order, what Upon the above findings of fact, conclusions of law, steps Respondent has taken to comply herewith. the entire record in the case, and pursuant to Section 10(c) of the Act, I hereby issue the following recom- APPENDIX mended: NOTICE To EMPLOYEES ORDER1 2 POSTED BY ORDER OF THE The Respondent, L. M. Settles Construction Co., Inc., NATIONAL LABOR RELATIONS BOARD Livonia, Michigan, its officers, agents, successors, and as- An Agency of the United States Government signs, shall: 1. Cease and desist from: After a hearing at which all sides had an opportunity to (a) Refusing to furnish Painters District Council No. present evidence and state their positions, the National 22, International Brotherhood of Painters and Allied Labor Relations Board found that we have violated the Trades, AFL-CIO, or its agents, for an audit, its books National Labor Relations Act, as amended, and has or- and record of original entry, including its general ledger, dered us to post this notice. for the period September 1, 1979, to the date of comple- The Act gives employees the following rights: tion of the audit. (b) In any like or related manner interfering with, re- To engage in self-organization straining, or coercing its employees in the free exercise To form, join, or assist any union of their rights guaranteed in Section 7 of the Act. To bargain collectively through representa- 2. Take the following affirmative action which is tives of their own choice deemed necessary to effectuate the policies of the Act: To engage in activities together for the pur- (a) Furnish to Painters District Council No. 22, Inter- pose of collective bargaining or other mutual aid national Brotherhood of Painters and Allied Trades, or protection AFL-CIO, or its agents, for inspection and examination, all records necessary, including its general ledger and activities. other books and records of original entry, for said labor organization to make a comprehensive audit under article Accordingly, we give you these assurances: XVIII of the parties' collective-bargaining agreement. (b) Post at its Livonia, Michigan, location, and at any WE WILL NOT refuse to furnish Painters District other central location to which the Employer's employ- Council No. 22, International Brotherhood of Paint- ees in the bargaining unit found appropriate herein regu- ers and Allied Trades, AFL-CIO, or its agents, our larly report, copies of the attached notice marked "Ap- general ledger and other records and books of origi- pendix."' s Copies of the notice, on forms provided by nal entry, for auditing purposes, from September 1, the Regional Director for Region 7, shall be posted by 1979, to the date said labor organization conducts a Respondent immediately upon receipt thereof, and be comprehensive audit which began on May 9, 1980. maintained by it for 60 consecutive days thereafter, in WE WILL NOT in any like or related manner in- conspicuous places, including all places where notices to employees are customarily posted. Reasonable steps shall free exere of the rights set forth at the top of th free exercise of the rights set forth at the top of this notice. t* 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 L. M. SETTrLES CONSTRUCTION CO., INC. 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. iS In the event that this 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 Pursu- ant to a Judgment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board."