Abernathy Excavating

68 313 NLRB No. 3 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1 In his Motion for Summary Judgment, the General Counsel noted that the collective-bargaining agreement did not contain a provision specifying the day on which the employees should be paid. Because the Respondent admits that it changed the payday from Thursday to Friday and does not deny that such a change is a mandatory subject of bargaining and that it made the change without notice to and bar- gaining with the Union, we find that the Respondent’s unilateral change of payday violated Sec. 8(a)(5) and (1) of the Act. American Ambulance, 255 NLRB 417, 421 (1981). Abernathy Excavating, Inc. and International Union of Operating Engineers, Local No. 77, AFL– CIO. Case 5–CA–23192 November 23, 1993 DECISION AND ORDER BY CHAIRMAN STEPHENS AND MEMBERS DEVANEY AND RAUDABAUGH Upon a charge filed by the Union on December 9, 1992, the General Counsel of the National Labor Rela- tions Board issued a complaint on January 22, 1993, against Abernathy Excavating Co., the Respondent, al- leging that it has violated Section 8(a)(5) and (1) of the National Labor Relations Act. On February 5, 1993, the Respondent filed its answer admitting in part and denying in part the allegations of the complaint. On August 18, 1993, the General Counsel filed a motion to transfer proceeding to the Board and for summary judgment. On August 23, 1993, the Board issued an order transferring proceeding to the Board and a Notice to Show Cause why the motion should not be granted. The Respondent failed to file a re- sponse. The allegations in the motion are therefore un- disputed. Ruling on Motion for Summary Judgment The complaint alleges, inter alia, that during the term of the collective-bargaining agreement between the Respondent and the Union, the Respondent failed to continue in effect the terms and conditions of the collective-bargaining agreement by discontinuing its contributions to the health and welfare fund; changing health insurance carriers; changing the unit employees’ payday from Thursday to Friday; ceasing the 24-hour workweek guarantee; ceasing the use of the Union’s hiring hall; freezing payments for accrued vacation pay; and discontinuing the provision of vacation bene- fits without reaching agreement with the Union. In its answer, the Respondent does not specifically deny certain allegations, admits certain other allega- tions, and alleges certain justifications for its actions. The Respondent does not deny that since about May 1988 it has recognized the Union as the exclusive col- lective-bargaining representative of the unit employees by entering into a series of collective-bargaining agree- ments, the most recent effective by its terms for the period May 1, 1988, to April 30, 1991; that since on or about August 16, 1991, the Union has been certified as the exclusive collective-bargaining representative of the unit employees; and that on February 25, 1992, the Respondent executed an addendum to its collective- bargaining agreement with the Union, which extended that agreement from February 24, 1992, through Au- gust 31, 1993. The Respondent admits that it discon- tinued contributions to the health and welfare fund, changed insurance carriers, changed the payday from Thursday to Friday, discontinued all work guarantees, failed to pay accrued vacations, and failed to pay vaca- tion benefits. With respect to the hiring hall allegation, the Respondent acknowledges that ‘‘[i]n one instance we mistakenly hired an operator we were lead [sic] to believe was furnished through the Hall. As soon as we discover [sic] this was not true, he was immediately ‘let go.’’’ The Respondent does not deny that the mat- ters at issue relate to wages, hours, and conditions of employment of the unit employees and are mandatory subjects for the purposes of collective bargaining. Fur- ther, the Respondent does not deny that the changes in these matters commenced on or about June 9, 1992. The Respondent asserts, however, that it failed to con- tinue the contractual provisions in effect because it is ‘‘approaching bankruptcy [emphasis in original],’’ its funds were insufficient, and the ‘‘terrible recession that the construction industry is in has strained our relation- ship.’’ The contractual provisions at issue are mandatory subjects of bargaining. A unilateral modification or re- pudiation of such provisions during a contract term is a violation of Section 8(a)(5). Rapid Fur Dressing, 278 NLRB 905 (1986). The Respondent’s only defense is that its financial condition justified its actions. It is well established, however, that economic inability to pay does not constitute an adequate defense to an alle- gation that an employer has violated Section 8(a)(5) by failing to abide by the provisions of a collective-bar- gaining agreement. Crest Litho, 308 NLRB 108 (1992). Further, although the Respondent alleged in its answer that it was ‘‘approaching bankruptcy,’’ the Re- spondent has failed to establish that it filed a bank- ruptcy petition. Big Track Coal Co., 300 NLRB 951, 952 (1990). Accordingly, we find that the Respondent has failed to present a meritorious defense to its un- lawful conduct, and grant the General Counsel’s Mo- tion for Summary Judgment.1 On the entire record, the Board makes the following FINDINGS OF FACT I. JURISDICTION The Respondent, a corporation with an office and place of business in Bladensburg, Maryland, has been engaged in the business of providing grading and haul- ing of earth and other material. Annually, the Respond- ent, in the course and conduct of its business oper- 69 ABERNATHY EXCAVATING 2 See Merryweather Optical, 240 NLRB 1213, 1216 fn. 7 (1979). ations, has provided services valued in excess of $50,000 in locations other than the State of Maryland. During the same period, the Respondent, in the course and conduct of its business operations, has purchased and received products valued in excess of $5000 di- rectly from points outside of the State of Maryland. We find that the Respondent is an employer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act and that the Union is a labor organi- zation within the meaning of Section 2(5) of the Act. II. ALLEGED UNFAIR LABOR PRACTICES The following employees of the Respondent con- stitute a unit appropriate for the purposes of collective bargaining within the meaning of Section 9(b) of the Act: All operating engineers, mechanics and welders employed by the Respondent from its Bladensburg, Maryland facility; but excluding all other employees, shop laborers and clericals, of- fice clericals, truck drivers, and guards and super- visors as defined in the Act. From approximately May 1988 until April 30, 1991, the Respondent, an employer engaged in the building and construction industry, granted recognition to the Union as the exclusive collective-bargaining represent- ative of unit employees by entering into successive collective-bargaining agreements with the Union, with the most recent agreement effective by its terms for the period of May 1, 1988, to April 30, 1991, without re- gard to whether the majority status of the Union had ever been established under the provisions of Section 9(a) of the Act. On or about August 16, 1991, the Union was certified as the exclusive bargaining rep- resentative of the unit employees. At all material times, based on Section 9(a) of the Act, the Union has been the exclusive collective-bargaining representative of the unit employees. On February 25, 1992, the Respondent and the Union executed an ‘‘Addendum’’ to the collective-bar- gaining agreement, which extended that agreement from February 24 through August 31, 1992. Since on or about June 9, 1992, the Respondent has failed to continue in effect all the terms and conditions of the collective-bargaining agreements by discontinuing its contributions to the health and welfare fund; changing health insurance carriers; ceasing the 24-hour work- week guarantee; ceasing the use of the Union’s hiring hall; freezing payments for accrued vacation pay; and discontinuing the provision of vacation benefits. Simi- larly, the Respondent changed the unit employees’ payday from Thursday to Friday without notice to or bargaining with the Union. These unilateral changes relate to wages, hours, and conditions of employment of the unit employees and are mandatory subjects for the purposes of collective bargaining. Further, the Re- spondent engaged in this conduct without agreement with the Union. We find that, by the acts and conduct described above, the Respondent has been failing and refusing to bargain collectively and in good faith with the exclu- sive collective-bargaining representative of its employ- ees in violation of Section 8(a)(5) and (1) of the Act as alleged. CONCLUSION OF LAW By failing to continue in effect all the terms and conditions of its collective-bargaining agreements with the Union, i.e., by discontinuing its contributions to the health and welfare fund; changing health insurance carriers; ceasing the 24-hour workweek guarantee; ceasing the use of the Union’s hiring hall; freezing payments for accrued vacation pay; and discontinuing the provision of vacation benefits; and by unilaterally changing the unit employees’ payday from Thursday to Friday, the Respondent has committed unfair labor practices affecting commerce within the meaning of Section 8(a)(5) and (1) and Section 2(6) and (7) of the Act. REMEDY Having found that the Respondent has engaged in certain unfair labor practices, we shall order it to cease and desist and to take certain affirmative action de- signed to effectuate the policies of the Act. We shall order the Respondent to make the appro- priate contributions to the health and welfare fund to- gether with any liquidated damages required as a result of the obligations of the Respondent under the collec- tive-bargaining agreement.2 This shall include reim- bursing employees for any contributions they them- selves may have made, with interest, for the mainte- nance of health insurance coverage. Kraft Plumbing & Heating, 252 NLRB 891 fn. 2 (1980), enfd. mem. 661 F.2d 940 (9th Cir. 1981). We shall also order the Re- spondent to make whole unit employees, in the manner prescribed in Ogle Protection Service, 183 NLRB 682 (1970), for any loss of wages and benefits suffered as a result of its unlawful repudiation of contractual pro- visions. We shall further order the Respondent to make the unit employees whole by paying the accrued vaca- tion pay and providing vacation benefits. Interest on amounts owing to unit employees shall be computed in the manner prescribed in New Horizons for the Re- tarded, 283 NLRB 1173 (1987). ORDER The National Labor Relations Board orders that the Respondent, Abernathy Excavating, Inc., Bladensburg, 70 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 3 If 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 Pursuant to a Judgment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board.’’ Maryland, its officers, agents, successors, and assigns, shall 1. Cease and desist from (a) Refusing to bargain in good faith with Inter- national Union of Operating Engineers, Local No. 77, AFL–CIO as the exclusive collective-bargaining rep- resentative of an appropriate unit of the Respondent’s employees, by failing to continue in effect all the terms and conditions of its collective-bargaining agree- ment with the Union, by discontinuing its contributions to the health and welfare fund; by changing health in- surance carriers; by ceasing the 24-hour workweek guarantee; by ceasing the use of the Union’s hiring hall; by freezing payments for accrued vacation pay; and by discontinuing the provision of vacation bene- fits; and by unilaterally changing the unit employees’ payday from Thursday to Friday. (b) In any like or related manner interfering with, restraining, or coercing employees in the exercise of the rights guaranteed them by Section 7 of the Act. 2. Take the following affirmative action necessary to effectuate the policies of the Act. (a) Give effect to the terms and conditions of em- ployment of its collective-bargaining agreement with the Union. (b) Make whole, in the manner set forth in the rem- edy section of this decision, unit employees for any losses resulting from the Respondent’s failure to con- tinue in effect the terms and conditions of its collec- tive-bargaining agreement with the Union. The appro- priate unit is: All operating engineers, mechanics and welders employed by the Respondent from its Bladensburg, Maryland facility; but excluding all other employees, shop laborers and clericals, of- fice clericals, truck drivers, and guards and super- visors as defined in the Act. (c) Post at its facility, copies of the attached notice marked ‘‘Appendix.’’3 Copies of this notice, on forms provided by the Regional Director for Region 5, after being signed by the Respondent’s authorized represent- ative, shall be posted by the Respondent immediately upon receipt and maintained for 60 consecutive days in conspicuous places including all places where notices to employees are customarily posted. Reasonable steps shall be taken by the Respondent to ensure that the no- tices are not altered, defaced, or covered by any other material. (d) Notify the Regional Director in writing within 20 days from the date of this Order what steps the Re- spondent has taken to comply. APPENDIX NOTICE TO EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government The National Labor Relations Board has found that we violated the National Labor Relations Act and has or- dered us to post and abide by this notice. WE WILL NOT fail to bargain in good faith with the International Union of Operating Engineers, Local No. 77, AFL–CIO as the exclusive bargaining representa- tive of an appropriate unit of our employees, by failing to continue in effect all the terms of our collective-bar- gaining agreement with the Union, by discontinuing contributions to the health and welfare fund; by chang- ing health insurance carriers; by ceasing the 24-hour workweek guarantee; by ceasing the use of the Union’s hiring hall; by freezing payments for accrued vacation pay; and by discontinuing the provision of vacation benefits; and by unilaterally changing the unit employ- ees’ payday from Thursday to Friday. WE WILL NOT in any like or related manner interfere with, restrain, or coerce you in the exercise of the rights guaranteed you by Section 7 of the Act. WE WILL give effect to the terms and conditions of employment of our collective-bargaining agreement with the Union. WE WILL make whole unit employees for any losses resulting from our failure to continue in effect the terms and conditions of employment of our collective- bargaining agreement with the Union. The appropriate unit is: All operating engineers, mechanics and welders employed by us from our Bladensburg, Maryland facility; but excluding all other employees, shop laborers and clericals, office clericals, truck driv- ers, and guards and supervisors as defined in the Act. ABERNATHY EXCAVATING, INC.