Harvard Folding Box Co., Inc.

HARVARD. FOLDING BOX CO 841 Harvard Folding Box Co., Inc. and Boston Local No. 600, Graphic Arts International Union, AFL-CIO, CLC. Cases 1-CA-20070 and 1- CA-20350 14 December 1984' DECISION AND ORDER BY MEMBERS ZIMMERMAN, HUNTER, AND DENNIS On ,29 July - 1983 Administrative Law Judge Mary Ellen R. Benard issued the attached decision. The General Counsel and the Respondent filed ex- ceptions and supporting briefs. The National Labor Relations Board has delegat- ed its authority in this proceeding to -a three- member panel. - • The Board has considered the decision and the record in light of the exceptions and briefs and has decided to affirm the judge's rulings, findings, and We do not adopt the judge's discussion of our decision in Associated Grocers, 253 NLRB 31 (1980), concerning its application of Sec 10(b) of the Act In Associated Grocers, notice of the alleged unilateral action was contained in a letter sent by the employer to hundreds of employees 253 NLRB at 43 Under the circumstances, the administrative law judge was reluctant to conclude that the union was not on notice, either actual or constructive, of the change The administrative law judge's decision in that case turns on its particular facts, and does not cast doubt on the well-established principles that the 10(b) period does not start to run until the charging party has notice of the events underlying the charge and that the proponent of the 10(b) defense has the burden of establishing notice Strick Corp, 241 NLRB 210 (1979), AMCAR Division, 234 NLRB 1063 (1978) Member Dennis finds that the unilateral change in vacation pay policy was within the 10(b) period and therefore unlawful because the Union was unaware of the change (or proposed change) before June 1982 Member Dennis finds it unnecessary to consider whether or not the an- nouncement of the proposed change, had the Union been aware of it, would have started the 10(b) period The Respondent's president Ross testified on direct examination that the employees voted to investigate other insurance carriers, rather than the contrary as stated by the judge (pp 16-17) We correct this nonma- terial and inadvertent error We agree with the judge that the Respondent went beyond the protec- tion afforded predictions based on objective considerations when the Re- spondent's president Ross stated that Administrative Law Judge Malon- ey's decision required reinstatement of 20 employees and that if the Re- spondent had to reinstate those employees other people would have to leave There was, as the judge found, no dispute that the Respondent would have been required to offer reinstatement to at most 12 individuals in order to comply with Administrative Law Judge Maloney's decision Thus, Ross had no basis for his statement that Administrative Law Judge Maloney's decision required reinstatement of 20 employees The reliance by our dissenting colleague on the General Counsel' statement that the list was not necessarily final is misplaced That statement was obviously made so that the General Counsel would not be foreclosed should he later become aware of additional employees who were entitled to rein- statement However, the Respondent did not present any evidence that the number exceeded 12 Further, contrary to the implication of the dis- sent, there were no suspended employees who would be entitled to rein- statement Each of the suspensions was for 1 week or less and the affect- ed employees had been returned to .work Thus Ross' comment reason- ably tended to cause the employees to believe that 20 jobs were in jeop- ardy as a result of Board proceedings when in fact, at the most, 12 jobs were at issue Accordingly, we adopt the judge's finding that Ross' com- ment violated Sec 8(a)(1) conclusions' and to adopt the recommended Order as modified.2 ORDER The National Labor Relations Board orders that the Respondent, Harvard Folding Box Co., Inc., Lynn, Massachusetts, its officers, agents, succes- sors, and assigns, shall take the action set forth in the Order as modified. 1.- Substitute the following paragraphs for para- graph 2(a) and (b) and reletter the subsequent para- graphs. "(a) Make unit employees whole for any losses they may have suffered as a result of the Respond- ent's unlawful unilateral change in its vacation pay policy, including interest thereon." - "(b) Make unit employees whole, with interest, for any losses they may have suffered as a result of the Respondent's unlawful unilateral institution of employee contributions for health insurance, in- cluding any excess health insurance costs and/or medical expenses." 2. Substitute the attached notice for that of the administrative law judge. MEMBER HUNTER, dissenting in part. I cannot join my colleagues in adopting the judge's finding that the Respondent violated Sec- tion 8(a)(1) of the Act by threatening to lay off em- ployees as a result of a pending Board proceeding. The judge, crediting the Respondent's president Ross, found that Ross stated at an employee meet- ing that an administrative law judge's decision in another case' required the reinstatement of 20 em- ployees who had been discharged and that if the Respondent lost its appeal and had to reinstate those employees, "other people might have to leave." The judge further found, however, relying on a letter sent by the General Counsel to the Re- spondent listing the names of 12 unlawfully dis- charged employees, that the figure Ross used was inaccurate because reinstatement would be required for at most 12 employees. The judge therefore found that by exaggerating the possible adverse consequences to current employees of the pending Board proceeding, Ross' statement "reasonably tended to cause the employees to believe that their 2 We find merit in the General Counsel's exception that the judge failed to order an adequate make-whole remedy for the Respondent's uni- lateral changes in health insurance payments The record shows that cer- tain employees dropped out of the health plan rather than pay the rate increases instituted in 1982 Accordingly, we shall order the Respondent to make whole employees for any excess health insurance costs and/or medical expenses Incurred as a result of the unilateral changes found un- lawful herein Any determinations necessitated by this remedy shall be left to appropriate compliance proceedings 1 Harvard Folding Box Co., Case 1-CA-17917, which. was pending before the Board at the same time as the instant case 273 NLRB No. 113 842 DECISIONS OF NATIONAL LABOR RELATIONS BOARD jobs were in jeopardy . . . when such was not the case." Contrary to the judge, I would find that Ross' statement was a reasonable prediction based on available objective facts and as such was protected by-Section 8(c) of the Act. NLRB v. GisselPacking Co., 395 U.S. 575, 618 (1969). The General Coun- sel's list mentioned above contained the names of 12 employees who had been discharged, as well as 16 employees who had been suspended, under the new disciplinary system which- was found to be un- lawful. The letter further stated, "This list is not necessarily a final listing of all suspensions and dis- charges." Thus, it is not at all obvious or certain that the figure. of 12 reinstatements was the only accurate figure nor that Ross' mention of 20 rein- statements was necessarily an exaggeration. More- over, as the judge generally recognized,- it was not unlawful in itself for the Respondent to have pre- dicted that if employees were reinstated in compli- ance with a Board order, the Respondent might be forced to lay off current employees in order to make room for the reinstatements. In these circum- stances, I find that the Respondent made a reasona- ble prediction, based on the available facts, as to the probable consequences of events—e.g., a forth- coming Board decision—which were beyond its control. Accordingly, I would dismiss this 8(a)(1) allegation of the complaint. 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 ordered us to post and abide .by this notice. Section 7 of the Act gives employees these rights. To organize To form, join, or assist any union_ To bargain collectively through representa- tives of their own choice To act together for other mutual aid or pro- tection To choose not to engage in any of thee protected concerted activities. WE WILL NOT refuse to bargain collectively with Boston 'Local No. 600, Graphic Arts International Union, AFL-CIO, CLC as the exclusive represent- ative of our employees in the following unit, with respect to rates of pay, wages, hours ' of employ- ment, and other- terms and conditions of employ- ment: All production and maintenance employees, including truck drivers, employed ht our Lynn, Massachusetts plant, excluding office clerical employees, sales employees, profes- sional employees, guards and supervisors as defined in Section 2(11) of the Act., WE WILL NOT require employees to contribute to health insurance premiums or increase the amounts employees contribute to such premiums, or institute changes in vacation pay policies or health insurance plans or any other terms or. condi- tions of employment of employees in the above-de- scribed unit without first notifying the Union and affording it an opportunity to bargain about such changes. WE WILL NOT exaggerate to employees the number of persons who might be reinstated pursu- ant to order of the National Labor Relations ,Board and indicate that as a result some current employ- ees may be laid off. WE WILL NOT in any like or related manner interfere with, restrain, or coerce you in the exer- cise of the rights guaranteed you by Section 7 of the Act. . WE WILL make employees whole, with interest, for any losses they may have suffered as a result of our change in the, vacation pay policy. WE WILL make employees whole, with interest, for any losses they may have suffered as a result of our unlawful unilateral institution of employee con- tributions for health insurance, including , any excess health insurance costs and/or medical expenses. WE WILL, on request, bargain with the Union with respect to the wages, hours, and other terms and conditions of employment of the employees in the unit set forth above. • HARVARD FOLDING Box Co., INC. DECISION STATEMENT OF THE CASE MARY ELLEN R. BENARD, AdMIMStatnie Law Judge The original charge in Case 1-CA-20070 .was filed on July 21, 1982, and ' amended on September 3, 1982, by Boston Local No. 600, Graphic Arts International Union, AFL-CIO, CLC (the Union) against Harvard Folding Box Co., Inc. (Respondent). On September 8, 1982, a complaint issued alleging, in substance, that Re- spondent engaged in certain conduct which violated Sec- tion 8(a)(1) of the National Labor Relations Act, that the Union is the certified representative of Respondent's em- ployees in an appropriate bargaining unit, and that about June 1, 1982, Respondent violated Section 8(a)(5) and (1) of the Act by modifying its vacation pay policies and the unit employees' work schedule without notifying the Union or affording it an opportunity to bargain. On Oc- HARVARD FOLDING BOX CO 843 tober 18, 1982, the Union filed a charge in Case 1-CA- 20350, as amended December 2, 1982, against Respond- ent, and on December 16 the Acting Regional Director for Region 1 of the National Labor Relations Board issued an order consolidating Cases, amended complaint and notice of hearing. The consolidated complaint in- cludes the allegations of the original complaint in Case 1-CA-20070, and further alleges that Respondent addi- tionally violated Section 8(a)(5) and (1) of the Act by in- creasing the amount employees contribute toward premi- ums for their group health insurance.' The complaint was further amended at the hearing to allege that about September 1, 1982, Respondent changed its employees' health insurance plan from a "group premium ? to a "cost plus premium" plan, that about September 1, 1981, Re- spondent began to deduct money for health insurance premiums from employees' paychecks, and that the re- quirement that the employees pay a portion of their health insurance premium violated Section 8(a)(3) as well as Section 8(a)(5) and (1) of the Act. Respondent has denied the commission of any unfair labor practices. A hearing was _held before me at Boston, Massachu- setts, on February 23 and 24, 1983. Following the hear- ing the General Counsel and Respondent filed briefs, which have been considered , On the entire record in the case and from my observa- tion of the witnesses and their demeanor, I make the fol- lowing FINDINGS AND CONCLUSIONS I. THE BUSINESS OF RESPONDENT Respondent -is a Massachusetts corporation engaged in the manufacture, sale and distribution of folding boxes and related products with an 'office and place of-business in Lynn, Massachusetts. Respondent -annually, in the course and conduct of its business operations, ships from its Lynn plan goods valued in excess of $50,000 directly to points outside the Commonwealth of Massachusetts. The answer admits, and I find, that Respondent is an em- ployer engaged in commerce within the meaning of the Act, and I further find that it will effectuate the policies of the Act to assert jurisdiction herein.. II. THE LABOR ORGANIZATION INVOLVED The Union is a labor organization within the meaning of the Act. III. THE ALLEGED UNFAIR LABOR PRACTICES - A. Background The Union was certified as collective-bargaining repre- sentative of Respondent's production and maintenance employees on September 11, 1980. Respondent thereafter refused to bargain with the Union on grounds that the 1 The consolidated complaint alleges that the Union has been the rep- resentative of bargaining unit employees since May-1, 1980 On January 18, 1983, the complaint was further amended to allege that the Union had been the representative of these employees at all times material herein and at least from September 11, 1980, which -Respondent admitted in a second amended answer dated February-7, 1983 certification was invalid and, consequently, on October 2, 1980, the Union filed a charge in Case 1-CA-17917 al- leging that Respondent's refusal to bargain violated Sec- tion 8(a)(5) and (1) of the Act and that Respondent en- gaged in other conduct which violated Sections 8(a)(1), (3), (4), and (5) of the Act. The Regional Director issued a complaint in that case and, subsequently, the General Counsel filed a motion for summary judgment limited to the allegations that Respondent had refused to recognize and bargain with the Union. On December 11, 1981, the Board issued its decision in Harvard Folding Box Co.,2 granting the motion for summary judgment and ordering Respondent to recognize and bargain with the Union. It appears that Respondent did not seek court review of the Board's decision, and Respondent and the Union com- menced bargaining in early 1983. A hearing was held before Administrative Law Judge Walter H. Maloney Jr. in December 1981 on the remain- ing allegations of the complaint, which alleged that Re- spondent had made various unilateral changes in unit em- ployees' terms and conditions of employment, as ,well as committing violations of Section 8(a)(1), (3), and (4) , of the Act, before Administrative Law Judge Walter H. Maloney Jr., in December 1981. Judge Maloney issued his decision on March 4, 1982, finding that Respondent had (1) violated Section 8(a)(3) and (1) of the Act by dis- charging employees George Madden and Robert Lewis and, additionally, violated Section 8(a)(4) of the Act 'by discharging Lewis; (2) violated Section 8(a)(5) and (1) of the Act by unilaterally granting an increase in wages, changing the terms of its attendance bonus and institut- ing a performance bonus, and announcing and instituting new procedures to discipline employees for tardiness and absenteeism and a new system of progressive discipline and for processing grievances, all without notifying the Union and offering it an opportunity to bargain; and (3) engaged in various other conduct which independently violated Section 8(a)(1) of the Act. Respondent and the General Counsel filed exceptions to Judge Maloney's de- cision which are pending before the Board. B. The Alleged Violations of Section 8(a)(1) of the Act 1. The alleged threat to lay off employees Employee Keith King testified' that in late May or .early June 1982 he attended a meeting of all employees on his shift with various management officials, including President Melvin Ross, General Manager Mike Swartz, Production Manager James McGee, and Foreman Bill Lemmo. According to King, Ross told the employees that he had lost in court, apparently referring to the de- cision of Administrative Law Judge Maloney which had issued 2 to 3 months earlier, 3 and further said that he 259 NLRB 686 3 In that decision, Administrative Law Judge Maloney found, inter alia, that in order to remedy Respondent's unilateral imposition of a ilew disciplinary system and rules, Respondent should be required to offer re- instatement to any employees who had been discharged pursuant to that system 844 DECISIONS OF NATIONAL LABOR RELATIONS BOARD had to send letters to 40 or 41 people who had been laid off or fired telling them that they had a job if they wanted it, and that he would "have to make room for these people." McGee, Swartz, and Respondent's controller, Thomas Quinn, all testified, in substance, that at that meeting Ross told the employees that a decision had issued and that Respondent was required to offer reinstatement to Madden and Lewis, and that a settlement had been reached with Madden and he would not be coming back to work, but that Respondent was offering reinstatement to Lewis. These witnesses further testified that Ross said that Respondent had been instructed to offer jobs to a number of people who were no longer working for it and that if Respondent made such offers and all those in- dividuals accepted them, Respondent would have to make room for those employees, which might necessitate layoffs. According to Swartz and Quinn, Ross did not specify how many individuals might be rehired. 4 However, Ross testified that at that meeting he said that Respondent was complying with the judge's decision with respect to Lewis and Madden, that the decision also required that some 20 people who had been discharged had the right to apply for reinstatement, that he did not agree with that ruling, and that the matter was still being litigated. According to Ross, he told the employees that if these individuals were' reinstated there would have to be some place for them to go to work, which meant that other people might have to leave. Ross further testified that he referred specifically to the number 20 when discussing how many people might be reinstated because that was the number of employees that Respondent had told the Board had been discharged. It is undisputed that after Administrative Law Judge Maloney's decision in Case 8-CA-17917 issued counsel for the General Counsel sent Respondent a list of em- ployees who had been suspended or discharged pursuant to the rules and procedures which Administrative Law Judge Maloney' found to be unlawful. That list included the names of 12- employees who had been discharged and 16 employees who had been suspended.5 There is no dispute that the list accurately reflects those employees who were suspended and/or dis- charged Accordingly, the General Counsel contends that Ross exaggerated the number of employees who might have to be reinstated and consequently the number of current employees who might be laid off, and thereby unlawfully threatened employees with layoff. In support of this contention, the General Counsel relies on King's testimony that Ross referred to laying off some 40 em- ployees, and argues that there was no legitimate reason for Ross to exaggerate the number of employees who might have to be reinstated. Respondent, on the other hand, contends that Ross merely predicted the obvious consequences of events over which he had no control, i.e., the requirement that he reinstate employees if Re- McGee was not asked whether Ross stated how many people Re- spondent would be required to reinstate 5 Some of the employees are counted twice because they were sus- pended and subsequently discharged spondent lost its appeal before the Board, and thus his statement cannot be found unlawful. As the Supreme Court has stated, • . an employer is free to communicate to his em- ployees any of his general views about unionism or any of his specific views about a particular union, so long as the communications do not contain' a "threat of reprisal or force or promise of benefit." He may even make a prediction as to the precise ef- fects he believes unionization will have on his com- pany. In such a case, however, the prediction must be carefully phrased on the basis of objective facts to convey an empoyer's belief as to demonstrably probable consequences beyond his control or to convey a management decision already derived at to close the plant in case of unionization • . If there is any implication that an employer may or may not take action solely on his own initiative for reasons unrelated to economic necessities and known only to him, the statement is no longer a reasonable prediction based on available facts but a threat of retaliation based on misrepresentation and coercion, and as such without the protection of the First Amendment.6 I credit Ross as to what he said at the meeting, for he seemed to testify more candidly on this issue than either the other witnesses for Respondent or King I therefore find that Ross told the employees that he would be re- quired to reinstate 20 former employees if Respondent lost the case. However, it is clear that even the figure Ross gave as the number of employees who might be re- instated was inaccurate, for there is no dispute that Re- spondent would have been required to offer reinstate- ment to at most 12 individuals in order to comply with Judge Maloney's decision. Had Ross correctly stated the number of employees to be reinstated if Respondent complied with the judge's decision, his comment that other employees might be laid off to make room for them could perhaps be considered as a prediction based on objective considerations beyond Respondent's con- trol. Instead, Ross did not accurately state how many employees Respondent might eventually be required to reinstate, and he thus exaggerated to the current employ- ees the possible adverse consequences of the pending Board proceeding. In these circumstances, I find that Re- spondent went beyond the protection afforded to predic- tions based on objective circumstances and I therefore agree with the General Counsel that Ross' comment rea- sonably tended to cause the employees to believe that their jobs were in jeopardy as a result of Board proceed- ings when such was not the case. Accordingly, I find that Respondent thereby violated Section 8(a)(1) of the Act. 2 The alleged threat to close the plant King testified that sometime subsequent to the meeting discussed above, he attended an employee meeting at 6 NLRB v Gissel Packing Go, 395 US 575, 618 (1969) HARVARD FOLDING BOX CO 845 which Ross stated that he had lost in court, that the em- ployees would not want to pay union dues, and that he would "Just as soon close the .place down because of the Union" Ross denied ever having made such a comment and the other Respondent officials who testified stated that no such comment was made at any employee meet- ings that they attended. _ Although, as discussed below, I do not credit Ross on all issues about which he testified, I do credit his denial that he threatened to close the plant because of the .Union, for his testimony about these meetings seemed candid and straightforward. Further, it is noteworthy that, although King testified that some 100 people were at the meeting, no employee except King was called to testify about what occurred there. Accordingly, I find that the General Counsel has not established by a pre- ponderance of the credible evidence that Ross threatened to close the plant, and I shall therefore recommend that this allegation of the complaint be dismissed. C. The Alleged Unilateral Changes in Terms and Conditions of Employment 1. Vacation pay The parties stipulated that as of June 1981 Respond- ent's practice was to pay employees in June for the vaca- tion time they had earned during the previous 12 months, and that the employees were not paid when they actually took their vacations sometime during the next 12 months The parties further stipulated that commencing in 1982, Respondent changed this arrangement and that in 1982 employees feceived their vacation pay at the time they took their vacation rather than at the end of June. As an illustration of how the vacation pay policy was implemented before and after the change, Quinn cre- dibly testified that under Respondent's prior policy, if an employee was entitled to 5 weeks of vacation sometime in the next 12 months he received 5 weeks' pay at the end of June. Under the new arrangement, if an employee took 2 weeks of vacation in July and 3 weeks in Decem- ber he would receive the 2 weeks' pay in July and 3 weeks' pay in December in addition to being paid for whatever time in those months he worked. There is no question that the employees were advised of the new policy well before it went into effect in June 1982 Quinn and Ross both credibly testified that Ross announced the change as to when vacation pay would be received at an employee meeting in June 1981, telling the employees that in the future they would be paid for their vacations when they took them and that because they were paid in June for vacations taken later some of them did not have any money when it came time for their va- cations. The employees were reminded of the new policy sometime during the fall of 1981, when Respondent dis- tributed a document entitled "Vacation Policy Guide- lines" which explicitly stated "vacation pay will be paid when you take vacation. Vacation pay will not be paid as a lump sum in July" Also, Ross and Quinn further testified that when Ross distributed employees' perform- ance bonuses at a meeting in December he noted that the plant would be closed over the Christmas and New Year's holidays and that the employees should use their performance bonuses to carry them through the period when there would be no salary because they had already received their vacation pay for the year in June. Ross re- minded the employees again that under the new plan they would be able to use their vacation pay at any time, including the Christmas shutdown However, it is undisputed that Respondent did not notify or offer to bargain with the Union prior to an- nouncing or implementing this change, and George Carl- sen, the Union's executive vice president credibly testi- fied that he first became aware of the change when Robert Lewis told him about it in June 1982, after his re- instatement. The allegation that elimination of the lump sum vaca- tion payment violated Section 8(a)(5) and (1) of the Act was first made in an amended charge filed September 3, 1982. Thus, the charge was filed less than 6 months from the time the change was implemented but more than 6 months after it was announced. a The 10(b) issues Section 10(b) of the Act provides "[t]hat no complaint shall issue based upon any unfair labor practice occur- ring more than 6 months prior to the filing of the charge with the Board" Respondent contends that the 6-month limitation period began to run in June 1981 when it an- nounced to employees the change as to when vacation payments would be made and, thus, the allegation that the change was unlawful is barred by Section 10(b) of the Act. The General Counsel, on the other hand, con- tends that implementation, rather than announcement, of a unilateral change triggers the limitations period and that, in any event, the Union was unaware of the deci- sion to change the vacation. payment policy until imple- mentation of that policy in June 1982 and, thus, Section 10(b) does not bar litigation of this allegation As the Supreme Court stated in Machinists Local 1424 v. NLRB, 362 U.S. 411 (1960): . . . due regard for the purposes of Section 10(b) requires that two different kinds of situations be dis- tinguished The first is one where occurrences within the 6-month limitations period in and of themselves may constitute, as a substantive matter unfair labor practices. There, earlier events may be utilized to shed light on the true character of mat- ters ocurring within the limitations period; and for that purpose Section 10(b) ordinarily does not bar such evidentiary use of anterior events The second situation is that where conduct occurring within the limitations period can be charged to be an unfair labor practice only through reliance on an earlier unfair labor practice, there the use of the earlier unfair labor practice is not merely "evidentiary," since it does not simply lay bare a putative current unfair labor practice. Rather, it serves to cloak with illegality that which was otherwise lawful. And where a complaint based upon that earlier event is time barred, to permit the event itself to be so used 846 DECISIONS OF NATIONAL LABOR RELATIONS BOARD in effect results in reviving a legally defunct Unfair labor practice.7 In the instant case, the unfair labor practice alleged is Respondent's implementation, which did not occur until June 1982, of its decision to cease its practice of making vacation payments for the entire year in June. 8 In Elmac Corp., 225 NLRB.1188 (1976), respondent put into effect a new vacation pay policy on May 9 which stated that employees must be on the active payroll as of June 30 in order to receive vacation pay for the previous year. In consequence, those employees who had gone on strike in April and were still on strike at the end of June did not receive their vacation pay. The charge was not filed until December 18 of the same year. The judge, affirmed by the Board, found that the 6-month limitation period began when the employees, were entitled to receive their vacation pay (i.e., sometime after the end of June) but did not get it. This view is also in accord with Swift Service Stores, 169 NLRB 359, 360 (1968), in which re- spondent had paid a bonus for some 16 years to its em- ployees on the basis of points which they earned, but the bonus plan contained a disqualification clause for those employees who engaged in a work stoppage. In April 1965 the employees engaged in a one day strike, and in consequence, respondent removed the bonus scores from the bulletin board and did not pay the. bonus at Christ- mas as it had in the past. The charge was filed the next month. The Board found that the 10(b) limitation did not apply because although the announcement in April that the employees would not be able to earn bonus points may have been unlawful, the failure to pay the bonus in December was also unlawful by itself and, thus, there was no need to depend on events occurring outside the 10(b) period in order to find the violation. I recognize, of course, that the Board has not invari- ably found that the announcement of an intended unilat- eral change is insufficient to begin the 10(b) period run- ning. For example, in Catholic Medical Center, 236 NLRB 497, 500-501 (1978), cited by Respondent, re- spondent announced in March 1976 that it would not grant convention benefits to unit employees the next year, and the charge was filed Within 6 months of the implementation of that announcement but not within 6 months of the announcement itself. The administrative law judge, affirmed by the Board, dismissed the allega- tion that the unilateral withholding of convention bene- fits from unit employees was 'unlawful, on grounds that the announcement 'started the 10(b) period running. Re- spondent also relies on Charles Mfg. Co., 245 NLRB 39 fn. 1 (1979)." In Charles, the Board held that respondent did not violate Sec. 8(a)(5) of the Act by . implementing wage increases in October 1977 when it had announced the amount and the effective date of the increases to em- ployees a year earlier, before the union campaign How- 362 U S at 416-417 - 8 The question of whether Respondent violated the Act by announcing in June 1981 a new policy to take effect in June 1982 is not before me See Renton Village Cinema, 228 NLRB 377 (1977), in which the Board found that the announcement of a wage increase required by state law violated Sec 8(a)(1) of the-Act, even though the pay increase itself was lawful ever, the reason stated by the Board for dismissing the allegation was that the announcement had been made prior to the advent of the union's organizing campaign, and there was no discussion of whether Sec. 10(b) ap- plied In the instant case, of course, the Union had been certified well before the unilateral actions at issue. In any event, although Catholic Medical Center would seem to stand for the proposition that the announcement of a uni- lateral change, rather than its implementation, might trig- ger the 10(b) period, I note that subsequent to Catholic Medical Center the Board issued Bay Medical Center, 252 NLRB 1138, 1144 (1980). In that case,- the Board found that respondent's announcement in 1976 that it contem- plated changing the hours in a new facility which did not open until November 1977 did not begin the 6-month period because the announcement was too remote in time from implementation of the change and respondent could have decided to bargain about the matter in the mean- time As another administrative law judge, affirmed by the Board, emphasized in a case involving similar issues under Section 10(b), "a respondent could insulate itself from liability merely by carrying out the unfair labor practice (i.e., the act itself) 6 months and 1 day after the discriminatory decision is made. I visualize this argument as freeing from liability a respondent who wishes to set off 'a bomb by using a fuse which takes more than 6 months to burn. Neither Bryan Mfg. Co._ nor any other case of which I am aware would permit such a result."9 I find Elmac, Swift Serviie Stores, and the administra- tive law judge's analysis in California School of Profes- .sional Psychology, all supra, persuasive on the issue here, and, consequently, find that the 10(b) period did not begin to run until June 1982 when Respondent put, into effect the change which it had announced a year earlier. I further find that, even if the announcement of a planned unilateral change would ordinarily be sufficient to initiate the 10(b) period, the announcement in June 1981 of the change in vacation pay policy- did not cause the time limitations period to begin because the Union was unaware of the change until June 1982. As the United States Court of Appeals for the Sixth Circuit has stated, "the Board has consistently held, with the en- dorsement of at least two circuits, that the 6-month limi- tation does not begin to, run until the . . unlawful activ- ity, which is the basis of the unfair labor practice charge, has become known to the Charging Party." ° I' find such a holding to be especially appropriate here, where Re- spondent attempts to use the same conduct which is, the basis for the unfair labor practice charge, i.e., its failure to notify the Union and/or bargain with it prior to im- 9 California School of Professional Psychology, 227 NLRB 1657, 1666 (1977) Although the United States Court of Appeals for the Ninth Cir- cuit disagreed with this analysis and denied enforcement of the Board's order in this case, 583 F 2d 1099 (1978), I am bound by the , Board's deci- sion" NLRB v Allied Products Corp, 548 F 2d 6,44, 650 (6th Or 1977), -quoted and followed in K & E Bus Lines, 255 NLRB 1022, 1029 (1981) (involving a discharge), and in Plumbers Local 40 (Mechanical Contrac- tor), 242 NLRB 1157, 1161 (1979) (involving deletion of charging party's name from a referral list outside the 10(b) period, but of which he was not aware until a month before he filed the unfair labor practice charge) HARVARD FOLDING BOX CO. 847 plementing a unilateral change in unit employees' terms and conditions of employment, as the basis for -preclud- ing litigation of the issue. In other words, Respondent defends against the allegation that it unlawfully failed to notify the Union before implementing this change on grounds that the Union did not file the charge in a timely fashion, but the Union did not know about Re- spondent's action because Respondent did not tell the Union about it. The view that notice to the charging party is required to start the 10(b) period is supported by a number of Board decisions. For example, in Avila Group, Inc., 218 NLRB 633, 639 (1975), respondent's decision to close a warehouse was made more than 6 months before the charge was filed, but the Board found that the limitations period did not start to run until the earliest date the union could have become aware- of it, noting that "Re- spondent's silence, even if it were not active deceit, was sufficient to -toll the limitations period." Similarly, in Strick Corp., 241 NLRB 210 fn. 1(1979), the Board held that the notice which causes the 10(b) period to run, "whether actual or constructive, must be clear and un- equivocal, and . • . the burden of showing such notice is on the party raising the affirmative defense of .Section 10(b)," citing ACF Industries, 234 NLRB 1063 (1978). In the latter case, involving respondent's subcontracting of work, the Board held that, even if the employees knew that nonemployees were 'doing unit work, the inference was nonetheless not warranted that the union had notice of the unlawful subcontracting. Nonetheless, I note that the cases are not entirely clear on this question. Thus, in Associated Grocers, 253 NLRB 31 fn 3, -55 (1980), the Board - held that litigation of re- spondent's change in the probationary period from 60 to 90 days during the course of a strike was barred by Sec- tion 10(b) because there was no evidence that the union was 'unaware of the change. This case seems to contra- dict the language in Strick Corporation, supra, that the notice must be clear and unequivocal and that the burden of showing notice is on the party raising the affirmative defense. However, subsequent to the Board's decision in Associated Grocers, it issued American _Olean _Tile Co., 265 NLRB 1625 (1982), finding that the 10(b) period did not begin to run until the charging party union was put on notice of the facts constituting the unfair 'labor practice and noting that- there was no evidence that the charging party was aware of respondent's oral announcement of the policy at issue prior to its effectuation. I conclude that the most applicable precedent supports the finding, which I make, that the allegation that Respondent un- lawfully unilaterally changed its vacation pay policy is not barred by Section 10(b) of the. Act. b The merits There is- no dispute that Respondent was under an ob- ligation to bargain about its vacation pay policy. None- theless, at the hearing, Respondent contended that no violation should be found on this issue because the change in this policy was, in any event, de minimis. I dis- agree. First, it is undisputed that-prior to June 1982 the employees received their vacation pay in a lump sum in June and that that money was then available to them for whatever purposes they chose. As of June 1982, howev- er, the employees received their vacation pay only when they took their vacation and did not have it available to them earlier. Second, Ross credibly testified that under the old policy those employees who spent their vacation pay before they took a vacation and consequently could not afford to be without a paycheck worked through their vacation time and got paid for it, but that after 1981 employees were paid for a vacation only when they ac- tually took it. Ross further testified that he believed that Respondent insisted on employees taking vacations. In these circumstances, it is clear that the unilateral change had a substantial impact on unit employees, both as to when vacation money would be made available to them, and because it eliminated the option employees previous- ly had of choosing whether to take a vacation or not 11 I therefore find that by making this change without notice to the Union or affording it an opportunity to bargain, Respondent Violated Section 8(a)(5) and (1) of the Act. 2. The unilateral reduction in working hours The parties stipulated that prior to August 9, 1981, Re- spondent's normal workday for employees who worked Monday through Friday was 10 hours per day and that as of the week ending August 9, 1981, Respondent changed that workday to 9 hours per day. It is undis- puted that Respondent did not notify the Union of its in- tention to change working hours or afford the Union an opportunity to bargain about the matter at the time the change occurred. Respondent concedes that a change in the number of hours in the workday is a mandatory sub- ject of bargaining. Nonetheless, Respondent contends that no finding can be made that the change was unlaw- ful because the charge pertaining to this matter was not filed until September 3, 1982, and, therefore, litigation of this allegation is barred by Section 10(b) of the Act. As discussed above, I have concluded that where an employer's unilateral changes in the terms and conditions of employment of employees represented by a collective- bargaining agent are alleged to constitute unfair labor practices, the limitations period does not commence until that agent is notified of the employer's allegedly unlaw- ful conduct. The General Counsel contends that the Union did not have notice of the change in the number of hours in the workday until less than 6 months before the charge was filed and that, therefore, the 10(b) pro- scription is inapplicable. However, at the hearing in Case 1-CA-17917 on December 14, 1981, Lewis testified that prior to his discharge he worked a 50-hour week 12 and later had the following exchange during his cross-exami- nation by then counsel for Respondent, David Grune- baum, about how many days per week the plant operat- ed and with how many shifts. Q. Now, in the summer of 1980 you knew that Harvard was operating 7 days a week? A. No. " The change from permitting employees to forgo vacations to insist- ing that they take time off from work is not alleged as an unfair labor practice nor litigated as such and I make no finding regarding It " Tr in Case 1-CA-17917, pp 37, 38 848 DECISIONS OF NATIONAL LABOR RELATIONS BOARD • Q. You didn't know that? A.' No. Q. And that it had at least two shifts- going at all times during the summer of 1980 in certain depart- ments? A. No. Q. And in some case's three shifts—you . didn't know that? A. No. JUDGE MALONEY: IS this a fact? Or are ,yon saying you just don't know? THE WITNESS: I never knew this, not seven days a week. More like 40, 45 hours a week. Not 7 days. Q. (By Mr. Grunebaum) Well, you worked 50 hours week? A. Yeah. I know it. Q. And you only worked 5 days? A. Yeah, but it's down to 45 now. Q. We're talking about in the summei of 1980? A. Oh, summer of 1980. I don't remember ever seeing 7 days a week there." It is undisputed that George Carlsen, the Union's exec- utive vice president, was in the hearing room during the exchange just quoted. In these circumstances, and even though I recognize that Lewis' comment about the workweek being reduced to 45 hours was made in the context of testimony about another matter; nonetheless,it was said and Carlsen presumably heard it. Accordingly, I find that the Union was put on notice of the unilateral change in hours on December 14, 1981, more than 6 months before the charge alleging the change to be un- lawful was filed, and that, therefore, litigation of this al- legation is barred by Section 10(b) of the Act. I shall therefore recommend that this allegation of the Com- plaint be dismissed.'4 3. The 1981 deductions from employees' wages to pay a portion of their insurance premiums The parties stipulated that prior to August 1981 Re- spondent paid the entire premium for group health insur- ance it carried for employees It is undisputed that in August 1981 Blue Cross/Blue Shield, the carrier for that insurance plan, increased the premiums for the plan, and the parties stipulated that as of the payroll period ending August 20, 1981, Respondent began to deduct from unit employees' paychecks the difference between what it had been paying for premiums and the new premium. Specifically, the parties stipulated that as of that payroll period the sum of either $2.97 a week for family cover- '3 Tiinscript in Case 1-CA-17917, pp 140, 141 Emphasis added The change in hours is also reflected in timecards which were sub- poenaed by the General Counsel and produced at the December 1981 heanng, but Carlsen credibly testified that he did not assist the General Counsel in that case in examining the material I find that the mere fact that the timecards were present in the heanng room was not sufficient to put the Union on notice of the change in hours I further note that Lewis testified before me that at the time he testified in the previous hearing he probably thought that the plant was temporarily working a 9-hour shift and that he did not know that the change was permanent However, the issue is not why Lewis testified as he did in the 1981 hearing, but what he said, and the consequence of that testimony insofar as whether it put the Union on notice of the change As discussed above, I find that It did age or 65 cents per, week for single coverage was with- held from the employees' paychecks. It is also undis- puted that-Respondent took this action without notifying the Union or affording it an opportunity to bargain. Respondent does not dispute that the proportion of in- surance premiums to be paid by employees is a mandato- ry subject of bargaining, but contends that (1) the allega- tion that this unilateral change was unlawful is timer barred because the charge which included it was not filed until October 18, 1982, and (2) Respondent an- nounced to employees in June 1979 that they would be required to pay all increases in insurance premiums in the future and, thus, the deductions from employees' paychecks to pay for such increases in 1981.did not con- stitute a unilateral change. a. The 10(b) issue. With respect' to Respondent's defense based on Section 10(b), Carlsen testified that in late August or early Sep- tember 1982 Lewis who, as noted above, had been rein- stated in June of that year, told him that Respondent was deducting health insurance inennums from the employ- ees' paychecks. According to Carlsen, prior to this con- versation with Lewis the Union was not aware that Re- spondent was making such dednetions. Carisen further testified that he saw the employee handbook distributed by Respondent prior to the hearing in December 1981." That handbook, which was distrib- uted in July 1981 and has not been amended, states spe- cifically that- Respondent pays. 100 percent of Blue Cross/Blue Shield premiums for employees and, for mar- ried employees, their families, starting with an employ- ee's ninth month on the job. Accordingly, I find that the Union was not on notice uniil August or September 1982 that Respondent had begun making deductions from the employees' paychecks for insurance premiums and, for the reasons stated above with respect to the allegations concerning Respondent's change in its vacation pay policy, I therefore find no merit to Respondent's Section 10(b). defense. b. The contention that the deductions implementeid preexisting policy As noted, Respondent contends that •it announced -in 1979 that it would pass on all premium increases to em- ployees and that, consistent with that announcement,'. it passed on to employees the first such increase in Septeni- ber 1981." Therefore, according to Respondent, it has adhered to its established practice of passing on premium increases and has not made any unilateral change in this respect which is cognizable under Section 8(a)(5) of the Act. In support of this contention, James Robbins, a con- sultant to Respondent on -insurance and- employee bene- fits, testified that some time in June 1979 he met with Ross and told him that he had surveyed the policies of- " credit Carlsen on these matters He seemed to testify forthrightly and his testimony on this Issue is uncontroverted is Respondent also asserts that the employees agreed to this policy 1979, a contention discussed below • HARVARD FOLDING BOX CO 849 fered by some seven insurance -companies and that, be- cause two of those offered policies he considered very attractive, he thought that there was a strong argument in favor of switching from Blue Cross to another insur- ance carrier. Ross replied, however, that Respondent would stay with Blue Cross because it had been a fixture of its benefit package and the employees liked it. '7- Robbins, corroboiated by Swartz', further testified that Ross then called a meeting of the employees and asked them whether they 'would prefer to retain Blue Cross/Blue Shield as the insurance carrier, and apparent- ly a substantial majority of the employees indicated that they would. Ross then announced, according to Robbins and Swartz, that he would pay any increases for 1979 but that he wanted it understood that any future in- creases would be absorbed by the employees.' 8 On direct examination Ross similarly testified 'that at that meeting he asked the employees how they felt about investigating other insurance barriers to avoid any in- crease in the premium and that the employees voted "unanimously" not to investigate any other programs but to stay with Blue Cross, and that he then told the em- ployees that all future increases in the premiums would be passed along to them. However, on cross-examination Ross testified that the employees not only voted to retain Blue Cross but "agreed unanimously" that they would pay future increases in the premiums. Lewis, the only employee witness who had worked at the plant in 1979, credibly testified that prior to his dis- charge he was not present at any meetings where ern: ployees voted on whether they would rather change in- surance carriers or pay part of the premium and that, al- though 'at some meetings Ross announced that he might have to deduct a portion of the premiums from the em- ployees' pay, he neverin fact did so." I credit the testimony of Swartz, McGee, and Robbins as to what occurred at the June 1979 meeting. Accord- ingly, I find that at that time, which was before the advent of the Union's organizing campaign, Ross an- nounced to the unit employees that they would be re- quired to pay future increases in insurance premiums. It is undisputed that, notwithstanding Blue Cross' statement to Respondent in . 1979 that the insurance pre- miums would increase that year, there was in fact no in- crease iii the 1979 premium from what it had been in 1978 and that there was no actual increase in Blue Cross premiums for either individuals or families until 1981.20 17 According to Robbins, Rosi' did not consult with the employees before making this statement 18 Plant supenntendent McGee testified that he was also present at that meeting and that at that time Ross said that any increase from that day on would be passed on to the employees Quinn testified that the em- ployees "pleaded" at that meeting to retain Blue Cross However, Quinn was not even employed by Respondent at that time, much less present at the meeting I recognize that Lewis conceded on cross-examination that there was a 1979 meeting at which Ross announced that in order for the em- ployees to retain Blue Cross/Blue Shield as their health insurance carrier the employees would have to pay the increases in premiums However, Lewis' specific denial that the employees ever voted to pay the increases is not inconsistent with this testimony 2° Thus, the monthly premiums for individuals 'were $4775 in 1978, $43 77 in 1979, $41 39 in 1980, and $4400 in 1981 The inonthly premi- Respondent argues that it had announced the policy of passing along 100 percent of the increases to the employ- ees and was bound to follow that policy. Nonetheless, the policy was merely announced before the advent of the Union, and not implemented until more than 2 years later. Even more significantly, the handbook, which was not distributed to employees until more than 2 years after the 1979 announcement, made no reference to any policy of ever passing on increases in health insurance premiums to employees. Thus, the inference is warranted that the policy of passing on such increases, which had never (as far as this record shows) been distributed in written form to employees, could be considered as with- drawn. Further, since at the time of the June 1979 an- nouncement it was not clear when, if ever, the policy of passing on to employees increases' in their insurance pre- miums would be implemented, I find that this announce- ment did not constitute establishment of a practice which would serve to justify Respondent in refusing to bargain 2 years later about whether it would deduct portions of insurance premiums from its employees' paychecks. 2 ' I therefore conclude that, by .unilaterally requiring em- ployees_ to pay a portion of their group health insurance premiums, without affording to the Union notice of this action or an opportunity to bargain before implementing it, Respondent violated Section -8(a)(5) and (1) of the Act. urns for family coverage were $11730 in 1978, $111 53 in 1979, $10879 in 1980, and $12070 in 1981 2i Respondent cites, inter alia, A-V Corp, 209 NLRB 451 (1974), in support of its position In that case, prior to entering Into its first collec- tive-bargaining agreement with a union, respondent contributed approxi- mately half of the premiums for its employees' group Insurance program The first union contract provided that the cost to employees of insurance coverage should be reduced by one half and not be increased and this provision was carried Into the next contract When insurance premiums increased a month after that contract's effective date, respondent passed along one quarter of the increase so that again the employees paid ap- proximately 25 percent of the total When the insurance policy was re- newed a year later with an increased premium, respondent again passed along the same percentage of the increase In the following 2 years there were no increases' in premiums, but a year later the proposed increases were substantial-and respondent therefore changed carriers and obtained an identical program with premiums that were higher than those it had paid under the Old policy but loWer than would have been entailed by a renewal of the former policy Respondent advised the employees of the change in carriers and that there would be no increase in the cost of pre- miums to them because It Would absorb the additional premium cost In consequence, the employees' share of the premium was reduced from ap- proximately 25 to 21 percent of the total When this policy was renewed the next year, respondent allocated 21 percent of the increase to the em- ployees, and at this point the union protested for the first time The Board found that respondent's consistent practice had been to allocate a portion of an insurance premium increases to employees on a pro rata basis, that respondent's one departure from this practice in February 1971 did not establish a new condition of employment, and that the union had acquiesced in the practice for a number of years Consequently, the Board found that the 1-year deviation from this practice was not intended to be the new practice and that respondent's reversion to its former prac- tice of passing on to employees the same share of the increase in insur- ance premiums represented a continuation of its past practice and not an unlawful unilateral change In the Instant case, however, Respondent's decision in 1981 to begin deducting insurance premium increases from the employees' paychecks was not a continuation of a preexisting practice, but merely the first implementation of a policy announced more than 2 years earlier which was not even referred to in the employee handbook published in the interim In these circumstances, I conclude that A-V Corp. supra, is inapposite 850 DECISIONS OF NATIONAL LABOR RELATIONS BOARD 4. The increased deductions fOr health insurance premiums in 1982 At the hearing the parties stipulated that, as of the payroll period ending September 2, 1982, Respondent began to deduct $5.13 from the weekly paycheck of each unit employee who had elected single health insurance coverage and $12.69 from the paycheck of each employ- ee who had elected family coverage. It is also undisputed that Respondent neither notified the Union about this in- creased deduction nor offered to bargain with the Union about it. The complaint alleges that, by unilaterally deducting an increased amount from the employees' paychecks, Re- spondent further violated Section $(a)(5) and (1) of the Act. Respondent contends that, in light of its announced policy in June 1979 of passing along premium .increases to the employees and its implementation of that policy in September 1981, the increased deductions in 1982 were not a change but merely a further implementation of that policy. Having found that Respondent's initial deductions of sums from employees' paychecks toward health insur- ance premiums in 1981 was taken in derogation of its bargaining obligation to the Union, I further find, for the same reasons as those discussed above, that Respondent's increase in the amount to be deducted from the employ- ees' checks was also a unilateral change in the employ- ees' terms and conditions of employment I therefore find that by this conduct Respondent further violated Section 8(a)(5) and (1) of the Act. 5 The change in the type of funding for the insurance plan Prior to 1982 Respondent's" group health insurance plan with Blue Cross/Blue Shield was what is referred to in the record as a "premium group plan." As William Rooney, a marketing representative employed by Blue Cross, credibly explained at the hearing, under such a plan a group pays Blue Cross a predetermined amount or premium every month for the 12 months of the contract, and each year Blue Cross reviews the contract and ad- justs the premium up or down depending on several cri- teria, including, in a group such as Respondent's, the group's own experience. Rooney further credibly testi- fied that in its annual review Blue Cross analyzes the last 2 years of its experience with the group and extrapolates that trend to determine what it Would have to pay for the same claims if they arose in the next 12 months Blue Cross then compares the group's experience to that of other small groups and applies a formula in order to es- tablish the single and family premium rate for the group. 22 The premium plan also includes a refund if the group's ,claims and administrative costs come to less than a certain . percentage of the total premium. When Blue Cross determines that a refund is in order, the refund is nonetheless not paid until 12 months after the close of 22 The premium for the total group for the year is the number of indi- viduals times the premium rate for individuals added to the total number of families tunes the premium rate per family Consequently, Inasmuch as some members of the group may leave it and others tom, the total premi- um bill for the group will fluctuate during the year the contract in order to allow excess claims to be proc- essed. In 1982 Respondent, while retaining Blue Cross as the insurance carrier, switched from the premium plan to what is called a "cost-plus" program. It is undisputed that Respondent made this change without notifying the Union or affording it an opportunity to bargain about the matter. As Rooney credibly explained it, under this plan a group pays its actual claims every month plus an admin- istrative cost to Blue Cross of .6.5 percent of the amount of the claims. In addition, Respondent also purchased re- insurance. Under the specific stop-loss policy, Respond- ent has a maximum liability of $15,000 for claims submit- ted by any one employee in any one year. Similarly, Re- spondent purchased an aggregate stop-loss policy under which it would not be liable for any, claims in excess of 110 percent of the amount projected by Blue Cross as the anticipated losses for the year. The premiums for these policies cost $8 per individual or $20 per family per month. It is undisputed that a covered individual receives the same benefits and has his, claims, processed in the same manner regardless of whether the insurance policy is a premium group plan or a cost-plus plan. Rooney ex- plained that under a reinsurance cost plus program there is a cash-flow savings to the group in the first year 1;e- cause of the timelag between when services are provided and when the claim is paid. Consequently, in the first year of such a program the group pays claims on 9 or 10 months instead of the entire year. 23 Rooney further testi- fied that another advantage to the cost plus plan is that a group may consider Blue Cross' projections of its claims experience too high, or the group's members may be of the view that if they know that the group is paying the precise amount of their claims they may be better able to control their medical costs. Quinn credibly testified that in order to determine how much of the Blue Cross premium should be deducted from the employees' paychecks, he first recalculated the Blue Cross premium, which is stated as an amount per month, as an amount per week because employees are paid weekly. As a result of his discussions with Rooney and Robbins, Quinn projected a total cost of $150,000 for claims, administrative expenses, and the reinsurance pre- miums Quinn then multiplied the 69 family subscribers by 3, 24 added that total of 207 to the 23 single subscrib- ers, and then divided the $150,000 projected cost by the total of 230, thereby obtaining the yearly rate. Quinn then divided that number by 12 for the monthly rate for a single subscriber and finally multiplied the monthly rate for a single subscriber by 3 to obtain the family rate 23 In order to ensure that claims that are submitted after the contract expires for services provided during the contract term, Blue Cross re- quires a deposit equal to approximately 2 months of anticipated claims However, since the lag in claims is frequently 3 to 4 months, there is still a cash-flow savings 24 As discussed below, the insurance industry assumes that there are approximately three people in a family for purposes of determining how much larger the premium for family coverage should be than that for single coverage HARVARD FOLDING BOX CO. 851 of $163. 22 Quinn further testified that he believed that Blue Cross premiums were not deducted from employ- ees'_ vacation checks, consequently an employee with family coverage who took 5 weeks of vacation would pay less in Blue Cross premiums than an employee with the same coverage who took 2_weeks of vacation. The complaint, as amended, alleges that Respondent's unilateral change from a group premium insurance plan to a cost-plus premium plan violated Section 8(a)(5) and (1) of the Act. Respondent contends that because the change in the type of funding had no impact on the health insurance benefits received by the employees, the change was not 'one over which it was obligated to bar- gain. In support of this contention, Respondent cites, inter alia, Meharry Medical College, 236 NLRB 1396, 1407-08 (1978) In Meharry Medical College, the collective-bargaining agreement specified the amounts which employees paid toward their insurance premiums The administrative law judge, affirmed without comment by ' the Board, found that respondent's change from a "premium" insurance policy to a "cost-plus" policy was not a unilateral change in employees' terms and conditions of employ- ment, on grounds that "Where was no evidence that there was any change in benefits or change in carrier. Thus there has been no change relative to insurance ben- efits that would warrant an 8(a)(5) finding. "26 In the instant case, unlike Meharty, supra, the General Counsel has adduced evidence that the change to a cost- plus plan had an impact • on the employees' terms and conditions of employment. I recognize. of course, that there was no change in the insurance carrier, the benefits employees received, or the procedures they used for sub- mitting claims However, the change to a cost-plus pro- gram did result in a change in the manner in which em- ployees' share of the premium was calculated . In 1981, the first year employees paid any part of the insurance premiums, the premium was calculated by Blue ,Cross and Respondent passed on to the unit employees the in- crease over the previous- year. However, in 1982 Re- spondent itself determined- the probable total cost of claims, the aggregate stop-loss limit over which :Blue Cross would be responsible for paying claims, and the multiplier by which the single rate would be multiplied to determine the family rate, 27 all of which affected the amount of the employees' share of the premium. The foregoing establishes that the facts in this case are significantly distinguishable from those in Meharty Medi- cal College, supra. In Meharry, the contract specified the amount the employee would contribute for his insurance and the employer paid the remainder. In the instant case, 25 Although it is not entirely clear, It appears that Quinn then either multiplied the monthly rates by 12 and divided by 52 to obtain the weekly rate, or divided the monthly rate by 4-1/3 to accomplish the same purpose 26 236 NLRB at 1408 Although Robbins testified that the family rate is normally three times the individual rate, he conceded that that ratio may vary from two and one half to three, which, of course, would have an Impact on the premium required for family coverage Robbins also testified that Blue Cross would only permit a $15,000 individual stop-loss limit but also said that Respondent could have taken a , higher aggregate stop loss of 125 percent, which again would reduce the premium to some extent however, Respondent determined the amount that it would pay toward insurance and the employees were re- quired to pay the rest. Consequently, in this case, unlike Meharty, the method used to determine the amount of the premium, having, as it did, an effect on how much the employees were required to pay, was a term and condition of employment.28 Accordingly, I find that in the circumstances of this case the question of whether Respondent would change its insurance program to a cost-plus premium plan was a mandatory subject of bargaining. I therefore conclude that, by failing to notify the Union about the proposed change and by failing to afford the Union an opportunity to bargain about the matter, Respondent violated Section 8(a)(5) and (1) of the Act." P. The Alleged Violation of Section 8(a)(3) of the Act It is undisputed that Respondent has continued to pay the full amount of insurance premiums for its nonunit employees while requiring unit employees to pay part of those premiums At the hearing the General Counsel amended the complaint to allege that by treating unit and nonunit employees differently in this regard Re- spondent violated Section 8(a)(3) as well as Section 8(a)(5) and (1) of the Act. 3° Respondent contends that the allegations regarding the 1981 increases are barred by Section 10(b) of the Act and that, in any event, the record does not show that the passing on of insurance premium increases was discriminatory. - For the reasons discussed above with respect to the al- leged Section 8(a)(5) violations, I find no merit to Re- spondent's defense premised on Section 10(b) of the Act. 28 It is undisputed that in calculating the amount of the premiums Quinn used the total number of family and single units in the entire group and not merely those in the bargaining unit The record does not indicate how many single and family units were in the bargaining unit as opposed to the entire group nor what percentage of the total claims Respondent's experience had shown to be applicable to the bargaining unit It is possi- ble, of course, that the bargaining unit's claims experience differed from that of the group as a whole Whether, in such circumstances, the premi- ums attnbutable to bargaining unit employees should have been calculat- ed on the basis of their experience rather than that of the entire group is another subject about which the Union was entitled to bargain 29 In Keystone Consolidated Industries, 237 NLRB 763, 767 (1978), en- forcement denied as to other issues 606 F 2d 171 (7th Cir 1979), also cited by Respondent, the Board found that a unilateral change in the administrator/processor of a dental insurance program did not violate Sec 8(a)(5) because of a failure to prove that the identity of that adminis- trator had any effect on the employees' terms and conditions of employ- ment Haying found that in the instant case the change to a cost-plus pro- gram did have an effect on the employees' terms and conditions of em- ployment, I find Keystone, as well as Meharry Medical College, supra, in- apposite 39 I note that the original charge in Case 1-CA-20350, filed October 18, 1982, alleged that Respondent's requirement in 1982 that employees pay a portion of the health insurance premiums violated Sec 8(a)(3) as well as Sec 8(a)(5) and (1) of the Act, and that "The employer made these changes in retaliation to [sic] the employees voting to be represent- ed by [the Union] " The amended charge in Case 1-CA-20350, filed De- cember 2, 1982, alleges only that the 1982 deductions violated Sec 8(a)(5) and (1) of the Act, and there is no indication in the record what disposition was made of the 8(a)(3) allegation, which was not included in the consolidated complaint until it was amended at the heanng. In any event, Respondent has not contended that litigation of this allegation is barred by virtue of the failure to Include It in the December 1982 com- plaint or that this allegation was previously dismissed, and I find it appro- priate to consider the allegation on its merits 852 DECISIONS OF NATIONAL LABOR RELATIONS BOARD With respect to the merits of the allegation, it is well established that an employer's grant of benefits to unrep- resented employees which are withheld from represented employees does not violate Section 8(a)(3) of the Act absent proof of a discriminatory motive." In arguing that there is proof of such motive, the General Counsel relies on what he views as Respondent's history of dis- criminating against its employees because of their union activity, 32 and emphasizes that, although insurance pre- miums rOse significantly in 1977 and 1978, Respondent did not tell the employees in those years that future in- creases would be passed along to them The General Counsel further points out that Respondent did not pass along such increases to unit employees until after the Union was certified as their representative and that in its 1980 campaign literature Respondent emphasized to em- ployees that, although their health insurance premiums were paid in full by their employer, many employees covered by union contracts were required to pay a por- tion of the premiums. Respondent, in its turn, established that its non-unit employees are salaried as opposed to hourly paid and that they have historically had different wages and fringe benefits than those of the unit production and mainte- nance employees. Respondent further argues that it is un- rebutted that the salaried personnel were not present at the June 1979 meeting where, according to Respondent, the unit employees voted to pay increases in Blue Cross/Blue Shield premiums instead of switching to an- other carrier. I find that Respondent has not demonstrated that the employees in the bargaining unit voted in 1979 to pay Blue Cross/Blue Shield increases in the future I have credited Lewis' testimony that there was no such vote and Swartz and McGee testified only that the employees were told at that meeting that if they stayed with Blue Cross they would pay future increases Further, although on cross-examination Ross testified that he asked the em- ployees if they , wanted to stay with Blue Cross and pay any future increases and they agreed unanimously to do so, I do not credit him on this point, both because he did not appear to testify candidly and because his testimony was not substantiated by other management officials Who were present at the meeting." . Notwithstanding this finding, however, I find the evi- dence persuasive that nonunit employees' wages and fringe benefits have always been determined independ- ently of those of unit personnel and that in 1981 unit em- ployees received an across-the-board wage increase while only 2 or 3 of the some 20 nonunit employees re- ceived any raise. 34 Accordingly, I conclude that the 31 Empire Pacific Industries, 257 NLRB 1425, 1426 (1981) 32 I note, however, that, although Administrative Law Judge Maloney has made findings of such discriminatory conduct, the case is pending before the Board 33 With respect to this credibility determination and others, It is worth repeating here the often-quoted maxim that "It is no reason for refusing to accept everything that a witness says, because you do not believe all of it, nothing is more common in all kinds of Judicial decisions than to believe some and not all " NLRB v Universal Camera Corp. 179 F 2d 749, 754 (2d Cir 1950) 34 I note that Administrative Law Judge Maloney found that across- the-board increase unlawful in Case 1-CA-17917 However, the General General Counsel has not established by a preponderance of the evidence that the decision to pass along insurance premium increases to unit employees while Respondent continued to pay the total premium for nonunit employ- ees was discriminatorily motivated. I shall therefore rec- ommend that this allegation of the complaint be dis- missed. On the basis of the above findings Of fact and the entire record in this case, I make the folloi.vmg CONCLUSIONS OF LAW 1. Harvard Folding Box Co., Inc. is an employer en- gaged in commerce within the meaning of Section -2(2), (6), and (7) of the Act. 2. Boston Local No 600, Graphic Arts International Union, AFL-CIO, CLC is a labor organization within the meaning of Section 2(5) of the Act. 3. All .production and maintenance employees, includ- ing truckdrivers, of Respondent employed at its Lynn, Massachusetts, plant, excluding office clerical employees, sales employees, professional employees, guards and su- pervisors as defined in Section 2(11) of the Act, consti- tute a unit appropriate for the purposes of collective bar- gaining within the meaning of Section 9(b) of the Act. 4. The Union has, since at least September 11, 1980, been the representative for purposes of collective bar- gaining of the employees in the unit described above 5. By modifying its policy with respect to vacation pay, by requiring unit employees to pay for a portion of their group health insurance premiums, and by changing its health insurance plan from a premium policy to a "cost-plus" policy, all without notification or affording an opportunity to bargain to the Union, Respondent has engaged in unfair labor practices within the meaning of Sections 8(a)(5) and (1) and 2(6) and (7) of the Act .6. By exaggerating to employees the number of per- sons who might be reinstated pursuant to a Board order and telling current employees that in consequence there might be a layoff, Respondent has -.engaged in unfair labor practices within the meaning of Sections 8(a)(1) and 2(6) and (7) of the Act. 7. A preponderance of the credible evidence does not establish that Respondent has otherwise violated the Act. THE REMEDY Having found that Respondent' has engaged in unfair labor practices I shall recommend that it be ordered to cease and desist therefrom and to take certain affirmative action, including the posting of the customary notice, de- signed to effectuate the purposes of the Act. Having found that Respondent has unlawfully made unilateral changes in the employees' ternis and conditions of employment, I shall recommend that Respondent be ordered to restore the status quo ante by restoring its former vacation payment policy and by ceasing to with- hold any amounts from the employees' paychecks to pay Counsel does not contend that Respondent is consequently precluded from relying on the fact that nonunit personnel did not receive such an increase as part of its Justification for treating them differently with' re- spect to the insurance premiums HARVARD FOLDING BOX CO 853 for insurance premiums. I shall also recommend that Re- spondent be ordered to reimburse employees for all amounts withheld from their paychecks to pay for insur- ance premiums and to pay the employees interest on their vacation pay - from the time they would have re- ceived it under the policy in effect through June 1981 until they actually took their vacations and received their pay. With respect to the unilateral change in the method of funding health insurance, I note that Respond- ent's current contract with Blue Cross is about to expire and that, in any event, in light of the cease-and-desist and reimbursement remedies I have recommended, the change in the method of funding insurance will not have an impact on the employees' terms and conditions of em- ployment. I therefore deem it unnecessary to require Re- spondent to bargain retroactively about the insurance policy in effect until August 1983. As a -further measure to remedy Respondent's viola- tions of-Section 8(a)(5) and (1) of the Act, I shall recom- mend that Respondent be ordered to cease and desist from implementing unilateral changes in terms and con- ditions of employment of unit employees without bar- gaining with the Union which represents them Finally, I shall recommend that the amounts paid to employees to make them whole for any loss they may have suffered as a result of Respondent's unlawful unilateral action in- clude interest, to be computed in the manner prescribed in Florida Steel Corp., 231 NLRB 651 (1977).35 On these findings of fact and conclusions of law and on the entire record, I issue the following recommend- eda 6 ORDER The Respondent, Harvard Folding Box Co., Inc., Lynn, Massachusetts, its officers, agents, successors, and assigns, shall 1. Cease and desist from (a) Refusing to bargain collectively with Boston Local No. 600, Graphic Arts International Union, AFL-CIO, CLC as the exclusive representative of its employees in the following unit, with respect to rates of pay, wages, hours of employment, and other terms and conditions of employment: All production and maintenance employees, in- cluding truckdrivers, of Respondent employed at its Lynn, Massachusetts plant, excluding office clerical employees, sales employees, professional employees, guards and supervisors as defined in Section 2(11) of the Act (b) Requiring employees to contribute to health insur- ance premiums or increasing the amounts employees con- tribute to such premiums, or instituting changes in vaca- tion pay policies or health insurance plans or any other terms or conditions of employment of employees in the 35 See generally Isis Plumbing Co, 138 NLRB 716 (1962) 36 If no exceptions are filed as provided by Sec 102 46 of the Board's Rules and Regulations, the findings, conclusions, and recommended Order shall, as provided in Sec 102 48 of the Rules, be adopted by the Board and all objections to them shall be deemed waived for all pur- poses above-described unit without first- notifying the Union and affording it an opportunity to bargain about such changes. (c) Exaggerating to employees the number of persons who might be reinstated pursuant to a Board order and telling employees that in consequence of such- reinstate- ments there might be a layoff. (d) In any like or related manner interfering with, re- straining, or coercing employees in the exercise of their right to engage in or refrain from engaging in any or all of the activities specified in Section 7 of the Act. 2. Take the following affirmative action necessary to effectuate the policies of the Act. (a) Make unit employees whole for any losses they may have suffered as a result of Respondent's unlawful unilateral action, including interest thereon, computed in the manner set forth in the section of this Decision enti- tled "The Remedy." (b) On request, bargain with the Union with respect to the wages, hours, and other terms and conditions of em- ployment of the employees in the unit set forth above (c) Preserve and, on request, make available to the Board or it agents for examination and copying, all pay- roll records, social security payment records, timecards, personnel records and ,reports, and all other records nec- essary to analyze the amount of backpay due under the terms of this Order. (d) Post at its Lynn, Massachusetts facility copies of the attached notice marked "Appendix." 37 Copies of the notice, on forms provided by the Regional Director for Region 1, after being signed by the Respondent's author- ized representative, shall be posted by the Respondent immediately upon receipt and maintained for 60 consecu- tive days in. conspicuous places including all places where notices to employees are customarily posted. Rea- sonable steps shall be taken by the Respondent to ensure that the notices are not altered, defaced, or covered by any other material (e) Notify the Regional Director in writing within 20 days from the date of this Order what steps the Re- spondent has taken to comply. IT IS FURTHER ORDERED that the complaint allegations not specifically found herein are dismissed 37 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 Judgment of the United States Court of Appeals Enforcing an Order of the Nation- al Labor Relations Board" APPENDIX NOTICE To EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government After a hearing at which all sides had an opportunity to present evidence and state their positions, the National Labor Relations Board found that we have violated the 854 DECISIONS OF NATIONAL LABOR RELATIONS BOARD National Labor Relations- Act, as amended, and has or- dered us to post this notice. Section 7 of the Act gives employees these rights. To organize To form, join, or assist any union To bargain collectively through representatives of their own 'choice • To, act together for other mutual aid or protec- tion • To choose not to engage in any of these protect- ed concerted activities. WE WILL NOT refuse to bargain collectively with Boston Local No. 600, Graphic Arts International Union, AFL-CIO, CLC as the exclusive 'representative of our employees in the 'following unit, with respect to rates of pay, wages, hours of employment, and other terms and conditions of employment: All production and maintenance employees, in- cluding truckdrivers, employed at our Lynn, Massa- chusetts plant, excluding office clerical employees, sales employees, professional employees, guards and supervisors as defined in Section 2(11) of the Act. WE WILL NOT require employees to contribute to health insurance premiums or increase the amounts em- ployees contribute to such premiums, or institute changes in vacation pay policies or health insurance plans or any other terms or conditions of employment of employees in the above-described unit without first notifying the. Union and affording it an opportunity to bargain about such changes. WE WILL NOT exaggerate to employees .the number of persons who might be reinstated pursuant to order of the National Labor Relations Board and indicate that , as a result some current employees may be laid off. WE WILL NOT in any like or related manner interfere with, restrain, or coerce employees in the exercise of the rights guaranteed them in Section 7 of the Act. WE WILL make employees whole, with interest, for any losses they may have suffered as -a result of our de- ducting money from employees' paychecks for health in- surance premiums and as a result of our change in the vacation pay policy. WE WILL, upon request, bargain with the Union with respect to the wages, hours, and other terms and condi- tions of employment of the employees in the unit set forth above. HARVARD FOLDING Box Co., INC.