American National Can Co.

MACHINISTS LODGE 160 (AMERICAN NATIONAL CAN CO.) 389 International Association of Machinists and Aero- space Workers, District Lodge No. 160 (Ameri- can National Can Company) and International Association of Machinists and Aerospace Work- ers, Local Lodge No. 79 (American National Can Company) and Keith Zurn and Marjorie Zurn. Case 19–CB–7970 September 30, 1999 DECISION AND ORDER BY CHAIRMAN TRUESDALE AND MEMBERS LIEBMAN AND HURTGEN Upon a charge and an amended charge filed by Keith Zurn and Marjorie Zurn on, respectively, September 9 and September 30, 1996, the General Counsel of the Na- tional Labor Relations Board issued a complaint on April 30, 1997, against the Respondents, International Associa- tion of Machinists and Aerospace Workers, District Lodge No. 160 (District 160) and Local Lodge No. 79 (Local 79), alleging that the Respondents have engaged in certain unfair labor practices affecting commerce within the meaning of Section 8(b)(1)(A) and Section 2(6) and (7) of the National Labor Relations Act. A copy of the complaint and notice of hearing was served on each of the Respondents. The Respondents filed a timely answer and amended answer denying the commission of any unfair labor practices. On October 24, 1997, the Charging Parties, the Re- spondents, and the General Counsel filed a stipulation of facts and a motion to transfer proceeding to the Board. They agreed that the charges, complaint, answers, and the stipulation of facts constitute the entire record in this case, and that no oral testimony is necessary or desired by any of the parties. The parties waived a hearing, the making of findings of fact, conclusions of law, and the issuance of a decision by an administrative law judge. On January 21, 1998, the Executive Secretary, by direc- tion of the Board, issued an order approving the stipula- tion, and transferring the proceeding to the Board. Thereafter, the General Counsel and the Charging Parties filed briefs. The National Labor Relations Board has delegated its authority in this proceeding to a three-member panel. On the entire record in the case, the Board makes the following FINDINGS OF FACT I. JURISDICTION The Employer, American National Can Company, a corporation, with a place of business in Kent, Washing- ton, is engaged in the business of manufacturing alumi- num beverage containers. The Employer, in the 12 months prior to the issuance of the complaint and in the course and conduct of its business operations, had gross sales of goods and services valued in excess of $500,000. The Employer, in this same period, sold and shipped goods or provided services from its facilities within the State of Washington to customers located outside the State of Washington, or sold and shipped goods or pro- vided services to customers within Washington State, which customers were themselves engaged in interstate commerce by other than indirect means, of a total value in excess of $50,000. The Employer, during this same time period in the course of its business, purchased and caused to be transferred and delivered to its facilities within the State of Washington goods and materials val- ued in excess of $50,000 directly from sources outside Washington, or from suppliers within Washington, which in turn obtained such goods and materials directly from sources outside Washington. We find that American National Can Company is an employer engaged in com- merce within the meaning of Section 2(2), (6), and (7) of the Act. We further find that the Respondents are labor organizations within the meaning of Section 2(5) of the Act. II. ALLEGED UNFAIR LABOR PRACTICES The issues presented in this proceeding are whether the Respondents violated Section 8(b)(1)(A) of the Act by: (1) maintaining and applying to newly resigned employ- ees a 1-month window period for the invocation of their rights under Communications Workers v. Beck, 487 U.S. 735 (1988); and (2) maintaining and applying that por- tion of their Beck procedure which provides that dues reductions will not become effective, for unit members who file Beck objections during the 1-month October window period, until the following January 1. A. Facts The Respondent Local 79, affiliated with the Interna- tional Association of Machinists and Aerospace Workers (IAM), is the collective-bargaining representative of a unit of employees of the Employer. Since at least April 1, 1993, Local 79 and the Employer have maintained and enforced collective-bargaining agreements that included, inter alia, a union-security provision. Since at least July 1, 1996, the Respondents and the IAM have maintained a procedure (Beck procedure) gov- erning the reduction in fees and dues for nonmember employees covered by a union-security provision who object under Communications Workers v. Beck to the payment of dues and fees for nonrepresentational activi- ties. Since 1989, the IAM has published the complete Beck procedure in its magazine, the IAM Journal, once each year. In 1995 and 1996, a copy of the IAM Journal was mailed to the residence of each bargaining unit em- ployee. The parties have stipulated that in establishing the Beck procedure and publishing the annual notice in the IAM Journal, the IAM acts as the agent of its affili- ated local and district lodges, including the Respondents Local 79 and District 160. The parties have further stipulated that the Respondents and/or the IAM expend 329 NLRB No. 41 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 390 the moneys collected from its members, and from non- member employees who have not met the requirements of the Beck procedure, on both representational and non- representational activities. The Beck procedure contains the following window period requirement: Beginning on October 1, 1996, and ending on October 31, 1996, or during the first 30 days in which an objector is required to pay fees to the un- ion, that objector may request that his/her monthly agency fee payment be reduced so that he/she is only bearing the costs of representational activities. The Beck procedure further provides that the reductions will not become effective or apply to objectors’ fees and dues until January 1, 1997. The parties have stipulated that, for unit members who resigned their union membership and registered a Beck objection during the October 1–31, 1996 window period, the amount of fees required pursuant to the union- security provision was reduced effective with the pay- ments due after January 1, 1997. In July 1996, however, 19 unit employees advised the Respondents in writing of their desire to resign union membership, to become “pro- tected by financial core status” as defined in Beck, to have any dues owed to them returned, and to be charged reduced fees pursuant to Beck. In response, the Respon- dents notified the 19 individuals in writing that their res- ignations had been accepted, and provided them with information regarding their Beck rights. The parties have stipulated that the Respondents did not recognize the Beck objections of the 19 individuals who resigned and objected in July 1996, because those objections were made outside the October window period. The parties have further stipulated that the Respondents did not grant fee reductions to the 19 individuals, and that they were obligated under the union-security provision to continue paying full dues and fees until such time as they filed for objector status during the October window period. B. Contentions of the Parties1 1. The General Counsel The General Counsel argues that the Board in Califor- nia Saw & Knife Works2 held unlawful the requirement that Beck objections be filed during a window period, as applied to employees who resign their union membership after the expiration of the window period. The General Counsel asserts that the Respondents here have applied a window period substantially similar to the window pe- riod found unlawful in California Saw & Knife Works. The General Counsel further contends that the Respon- dents have failed to show evidence establishing that the 1 The Respondents did not file a brief. 2 320 NLRB 224 (1995), enfd. sub nom. Machinists v. NLRB, 133 F.3d 1012 (7th Cir. 1998), cert. denied sub nom. Strang v. NLRB, 525 U.S. 813 (1998). window period is an administrative necessity, without which the Respondents’ Beck system would prove to be unduly burdensome or costly. 2. The Charging Parties The Charging Parties likewise argue that the Board’s holding in California Saw & Knife Works is dispositive of the complaint allegation that the Respondents’ win- dow period is unlawful, because it fails to grant employ- ees who resign their union membership a separate win- dow period following resignation in which to file Beck objections. They further argue that once a unit employee resigns his or her union membership and registers a Beck objection, the union must immediately charge the objec- tor reduced fees. The Charging Parties assert that to do so does not pose an administrative burden on the Re- spondents or the IAM. C. Discussion The Supreme Court held in Communications Workers v. Beck that the National Labor Relations Act does not permit a collective-bargaining representative, over the objection of dues-paying nonmember employees, to ex- pend funds collected from them under a union-security agreement on activities unrelated to collective- bargaining, contract administration, or grievance adjust- ment.3 In California Saw & Knife Works, supra, the Board addressed a union’s obligations under Beck pursu- ant to the well-established duty of fair representation owed to all bargaining unit members. The Board held, inter alia, that the requirement that Beck objections be filed during a window period, solely as applied to bar- gaining unit members who resign their union member- ship following the expiration of the window period, ef- fectively operates as an arbitrary restriction on the right to resign from union membership. The Board explained: A unit employee may exercise Beck rights only when he or she is not a member of the union. An employee who resigns union membership outside the window pe- riod is thereafter effectively compelled to continue to pay full dues even though no longer a union member, and the window period in this circumstance operates as an arbitrary restriction on the right to refrain from un- ion membership and from supporting nonrepresenta- tional expenditures. In light of our duty to uphold the fundamental labor policy of ‘voluntary unionism’ em- phasized by the Court in Pattern Makers [473 U.S. 95, 107 (1985)], we agree with the judge that the January window period, as applied solely to employees who re- sign their union membership after the expiration of the window period, constitutes arbitrary conduct violative of the [union’s] duty of fair representation. 3 487 U.S. at 752–754. MACHINISTS LODGE 160 (AMERICAN NATIONAL CAN CO.) 391 A Board majority has recently reaffirmed the holding in California Saw & Knife Works that a union violates its duty of fair representation by failing—as in this case—to grant employees who resign their union membership a separate window period following resignation in which to file a Beck objection. See Polymark Corp., 329 NLRB No. 7 (1999); Steelworkers Local 4800 (George E. Fail- ing Co.), 329 NLRB No. 18 (1999). We accordingly find unlawful the requirement set forth in the Respondents’ Beck procedure that objections be filed during a 1-month window period, solely with respect to the failure to grant employees who resign their union membership a separate window period following resignation in which to file a Beck objection. For those unit members who file Beck objections dur- ing the 1-month October window period, the Respon- dent’s Beck procedure provides that their dues reduction will not become effective until the following January 1. The Supreme Court has considered whether a union may permissibly apply a fee objector provision under which the union collects the full amount of dues from objectors, and subsequently pays a rebate to the objectors. The Court held that such a “charge and rebate” system was not permissible, because it amounted to a forced loan from the objecting employees to the union.4 Thus, once a union “knows that a certain number of employees are fee objectors . . . then it has no right to collect moneys from those employees notwithstanding their objections, and rebate the sums” at a subsequent time. Nielsen v. Machinists Local 2569, 94 F.3d 1107, 1116 (7th Cir. 1996), cert. denied 520 U.S. 1165 (1997). There is no dispute in this proceeding that the Respondents know the number of employees who file Beck objections during the October window period. The Respondents neverthe- less continue to charge full dues to those objectors for at least 2 months following the filing of their Beck objec- tions. Moreover, the record is devoid of evidence that the Respondents ever refund to objectors charged amounts attributable to nonrepresentational expenses for that period. On the record before us, the Respondents advance no reason for the delay in making reductions effective. We accordingly find that the Respondents violated their duty of fair representation by requiring unit members who register their objections during the Octo- ber window period to wait until January to receive the reduction in their dues.5 CONCLUSIONS OF LAW 1. American National Can Company is an employer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act. 4 Ellis v. Railway Clerks, 466 U.S. 435, 443–444 (1984). 5 Teamsters Local 435 (Mercury Warehouse), 327 NLRB 458 (1999) (respondent violated Sec. 8(b)(1)(A) by continuing to charge employ- ees for nonrepresentational activities after they filed a Beck objection). 2. Respondents International Association of Machin- ists and Aerospace Workers, District Lodge No. 160, and International Association of Machinists and Aerospace Workers, Local Lodge No. 79, are labor organizations within the meaning of Section 2(5) of the Act. 3. By maintaining and applying that portion of their Beck procedure which prevents unit employees who have resigned from the Union from filing Beck objections within a reasonable time after their resignation, and by maintaining and applying that portion of their Beck pro- cedure which provides that dues reductions will not be- come effective, for unit members who file Beck objec- tions during the 1-month October window period, until the following January 1, the Respondents have engaged in unfair labor practices affecting commerce within the meaning of Section 8(b)(1)(A) and Section 2(6) and (7) of the Act. REMEDY Having found that the Respondents have engaged in certain unfair labor practices, we shall order them to cease and desist and to take certain affirmative action designed to effectuate the policies of the Act. We shall order the Respondents to amend their Beck procedure to clarify that: (1) bargaining unit employees who have re- signed from the Union may file objections to the collec- tion of fees for nonrepresentational expenses at any time, or, at the option of the Union, within a reasonable period specifically designated in the Beck procedure and not to be less than 30 days, after the resignation is submitted; and (2) dues reductions will become effective upon re- ceipt of Beck objections from unit employees. We shall further order the Respondents to recognize as objecting nonmembers as of the effective date of their resignations, the unit employees who resigned their union membership and filed Beck objections in July 1996, and to accept from those employees the reduced dues and fees for the period since they registered their Beck objections. We shall additionally order the Respondents to refund all fees collected for nonrepresentational expenditures from employees for the periods they should have been per- fected Beck objectors, with interest computed in the manner prescribed in New Horizons for the Retarded, 283 NLRB 1173 (1987). ORDER The National Labor Relations Board orders that the Respondents, International Association of Machinists and Aerospace Workers, District Lodge No. 160, and International Association of Machinists and Aerospace Workers, Local Lodge No. 79, their officers, agents, and representatives, shall 1. Cease and desist from (a) Preventing employees in the American National Can Company bargaining unit who have resigned from the Union from filing objections to the payment of fees for expenditures of the Union not germane to the collec- DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 392 tive-bargaining process within a reasonable time after their resignations. (b) Collecting or attempting to collect fees from ob- jecting nonmembers which are attributable to nonrepresentational expenses. (c) In any like or related manner interfering with, re- straining, 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) Amend their Beck policy to clarify that: (i) bargain- ing unit members who have resigned from the Union may file objections to the collection of fees for nonrepre- sentational expenses at any time, or, at the option of the Union, within a reasonable period specifically designated in the Beck procedure and not to be less than 30 days, after the resignation is submitted; and (ii) dues reductions will become effective upon receipt of Beck objections from unit employees. (b) Recognize as objecting nonmembers as of the ef- fective date of their resignations, the unit employees who resigned their union membership and filed Beck objec- tions in July 1996, and accept from those employees re- duced dues and fees for the period since they registered their Beck objections. (c) Refund, with interest, fees collected for nonrepre- sentational expenditures from employees for the periods they should have been perfected objectors. (d) Within 14 days after service by the Region, post at its business offices and meeting halls copies of the at- tached notice marked “Appendix.”6 Copies of the notice, on forms provided by the Regional Director for Region 19, after being signed by the Respondent’s authorized representative, shall be posted by the Respondent imme- diately upon receipt and maintained for 60 consecutive days in conspicuous places including all places where notices to employees and members are customarily posted. Reasonable steps shall be taken to ensure that the notices are not altered, defaced, or covered by any other material. (e) Sign and return to the Regional Director copies of the notice for posting by the Employer, if willing, on its premises where notices to employees are customarily posted. (f) Within 21 days after service by the Region, file with the Regional Director a sworn certification of a re- sponsible official on a form provided by the Region at- testing to the steps the Respondents have taken to com- ply. 6 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 Na- tional Labor Relations Board” shall read “Posted Pursuant to a Judg- ment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board.” MEMBER LIEBMAN, dissenting in part. I find, contrary to the majority, that the requirement set forth in the Respondents’ Beck1 procedure that Beck ob- jections be filed during a window period does not unrea- sonably restrict the right of employees to file Beck objec- tions, and in no sense impairs their right to resign union membership. Steelworkers Local 4800 (George E. Fail- ing Co.), 329 NLRB No. 18 (1999) (Member Liebman, dissenting); Polymark Corp., 329 NLRB No. 7 (1999) (Members Fox and Liebman, dissenting). The Respon- dents allow members to resign union membership at any time. Indeed, the parties have stipulated that the Re- spondents promptly accepted the July 1996 resignations of the unit employees at issue in this proceeding. “The fact that an employee may have to wait some period of time after resigning from the union to obtain a reduction in the fees [he or she] is charged as a nonmember may make resignation less attractive to the employee at that particular time, but that hardly means that the employee is in any sense being compelled to remain a member of the union against [his or her] will.” Polymark, slip op. at 5. (Emphasis in original.) Further, any assessment of the validity of a window period requirement must take into account unions’ le- gitimate interests in administrative efficiency and sim- plicity. The courts have considered such interests and held that a union’s use of a window period in circum- stances similar to those presented here does not violate its duty of fair representation. See, e.g., Abrams v. Communications Workers, 59 F.3d 1373, 1381–1382 (D.C. Cir. 1995); Nielsen v. Machinists Local 2569, 94 F.3d 1107, 1116 (7th Cir. 1996), cert. denied 520 U.S. 1165 (1997). The Seventh Circuit Court of Appeals in Nielsen v. Machinists thus agreed with the union in that case that the use of a window period was a “reasonable administrative device that helps the union to process its dues objector claims and to keep its annual budget straight.” Id. at 1116. “Nothing in the NLRA or in Beck confers a right to instantaneous action, regardless of the administrative burden the union might bear in imple- menting [Beck objections].” Id. Accordingly, I reiterate my view, set forth in Polymark Corp. and Steelworkers Local 4800 (George E. Failing Co.), that the requirement that Beck objections be filed during a window period such as at issue in this proceed- ing, “fall[s] within a generous range of reasonableness”2 afforded unions under the duty of fair representation. I would dismiss the complaint allegation that the Respon- dents violated the Act by maintaining and applying to newly resigned employees a 1-month window period for the invocation of their Beck rights. On a separate issue, I agree with my colleagues that, once an employee has timely filed a Beck objection, a 1 487 U.S. 735 (1988). 2 Nielsen v. Machinists, supra at 1117. MACHINISTS LODGE 160 (AMERICAN NATIONAL CAN CO.) 393 union may not continue to charge the employee for non- representational activities undertaken by the union.3 Ac- cordingly, I agree with the majority that the Respondents violated their duty of fair representation by maintaining and applying that portion of their Beck procedure which provides that dues reductions will not become effective, for unit members who file Beck objections during the 1- month October window period, until the following Janu- ary 1. APPENDIX NOTICE TO EMPLOYEES AND MEMBERS 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 vio- lated the National Labor Relations Act and has ordered us to post and abide by this notice. WE WILL NOT prevent employees in the American Na- tional Can Company bargaining unit who have resigned from the Union from filing objections to the payment of fees for expenditures of the Union not germane to the collective-bargaining process within a reasonable period after their resignations. 3 See, e.g., Teamsters Local 435 (Mercury Warehouse), 327 NLRB 458 (1999). WE WILL NOT collect or attempt to collect fees from ob- jecting nonmembers which are attributable to nonrepre- sentational expenses. WE WILL NOT in any like or related manner restrain or coerce you in the exercise of rights guaranteed you by Section 7 of the Act. WE WILL amend our Beck policy to make it clear that: (i) bargaining unit members who have resigned from the Union may file objections to the collection of fees for nonrepresentational expenses at any time, or, at the op- tion of the Union, for a reasonable period specifically designated in the Beck procedure and not to be less than 30 days, after the resignation is submitted; and (ii) dues reductions will become effective upon receipt of Beck objections from unit employees. WE WILL recognize as objecting nonmembers as of the effective date of their resignations, the unit employees who resigned their union membership and filed Beck objections in July 1996, and accept from those employ- ees reduced dues and fees for the period since they regis- tered their Beck objections. WE WILL refund, with interest, fees collected for non- representational expenditures from employees for the periods they should have been perfected objectors. ASSOCIATION OF MACHINISTS AND AEROSPACE WORKERS, DISTRICT LODGE NO. 160 AND LOCAL LODGE NO. 79