Maraldo Asphalt Paving, Inc.

98 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Maraldo Asphalt Paving, Inc. and Local 324, Inter- national Union of Operating Engineers, AFL- CIO. Case 7-CA-18836 15 Febuary 1985 ORDER DENYING MOTION BY CHAIRMAN DOTSON AND MEMBERS HUNTER AND DENNIS On 20 April 1982 the National Labor Relations Board issued a Decision and Order' in this pro- ceeding in which the Board found that the Re- spondent violated Section 8(a)(5) and (1) of the Act by unilaterally ceasing to make payments to the Operating Engineers Fringe Benefit Fund as re- quired by the parties' collective-bargaining agree- ment. On 9 November 1982 the United States Court of Appeals for the Sixth Circuit entered its judgment enforcing the Board's Order.2 A controversy having arisen over the amount of fringe benefit contributions due under the Board's Order, as enforced by the court, the Regional Di- rector for Region 7, on 30 April 1984, issued and duly served on the Respondent a backpay specifi- cation and notice of hearing alleging the amount of payments due the Operating Engineers Fringe Ben- efit Fund, and notifying the Respondent that it should file a timely answer complying with the Board's Rules and Regulations. The specification alleges in part that the Respondent is liable for fringe benefit contributions for the periods of June through December 1982 and July through Septem- ber 1983. The specification also states that the Re- spondent filed for bankruptcy under Chapter 11 on 3 ,August 1983 (Case No. 83-03513-6) and asserts that the fringe benefit contributions should be ac- corded priority under the Bankruptcy Act. The Respondent failed to file an answer to the backpay specification. On 22 May 1984 the Regional Attorney advised the Respondent that it had not filed an answer to the backpay specification and that unless it filed an answer by 6 June 1984, a motion for default judg- ment would be filed with the Board. The Respond- ent did not file an answer. On 12 July 1984 the General Counsel filed a Motion for Default Judgment. On 17 July 1984 the Board issued an order transferring the proceeding to the Board and a Notice to Show Cause why the motion should not be granted. The Respondent did not file a response. 1 261 NLRB 225 (1982) Chairman Dotson did not participate in the underlying case In light of the Respondent 's failure to file an answer in that case, the Chairman regards the earlier proceeding as being essentially a default judgment which is without precedential value 2 Enfd mem 708 F 2d 726 (1982) Ruling on Motion for Default Judgment In NLRB v. Bildisco & Bildisco, 104 S.Ct. 1188 (Feb. 22, 1984), the Supreme Court held that "[fjrom the filing of a petition in bankruptcy until formal acceptance, a collective-bargaining agree- ment is not an enforceable contract within the meaning of NLRA Sec. 8(d)." The Board applied Bildisco in a summary judgment proceeding in Earle Equipment Co., 270 NLRB 827 (1984). There, the Board held that an investigation by the Region- al Director into the circumstances surrounding the filing of a bankruptcy petition was necessary even though the respondent failed to file an answer to the complaint. The record in that case revealed that the respondent was a debtor in Chapter 11 proceedings, but there was no evidence as to the date of the bankruptcy petition, the timing of the alleged violations, or the respondent's and Bank- ruptcy Court's treatment of the collective-bargain- ing agreement. Similarly, in Princess Pastries, 271 NLRB 758 (1984), the Board remanded the pro- ceeding for further investigation of the filing of the bankruptcy petition and its effects on the collec- tive-bargaining agreement. In the present case the backpay specification seeks payments to the Operating Engineers Fringe Benefit Fund for the third and fourth quarters of 1982 and the third quarter of 1983. The specifica- tion reveals that the Respondent filed a bankruptcy petition under Chapter 11 on 3 August 1983, a date arising in the third quarter of 1983. The General Counsel's motion does not indicate whether or when the Respondent formally accepted the collec- tive-bargaining agreement after filing the petition Further, the motion does not show whether the Bankruptcy Court permitted the Respondent's re- jection of the contract. In view of the bankruptcy petition, the Respondent's liability for fringe benefit payments during the third quarter of 1983 cannot be determined on this record. Accordingly, we find that in light of Bildisco further investigation into the circumstances surrounding the filing of the bankruptcy petition is necessary.3 We shall there- fore deny the General Counsel's Motion for De- fault Judgment and remand the case to the Region- al Director. ORDER It is ordered that the General Counsel's Motion for Default Judgment is denied. IT IS FURTHER ORDERED that this case be re- manded to the Regional Director for Region 7 for further appropriate consistent action. s See Edward Cooper Painting, 273 NLRB No 224 (Feb 12, 1985) 274 NLRB No. 18 MARALDO ASPHALT PAVING MEMBER HUNTER, dissenting Contrary to my colleagues, I would grant the General Counsel's Motion for Default Judgment and would order the Respondent to make whole the employees by paying on their behalf to the var- ious union trust funds the sums set forth in the backpay specification. In the underlying unfair labor practice proceed- ing,' the Board on 20 April 1982 found that the Respondent violated Section 8(a)(5) and (1) of the Act since August 1980 by unilaterally ceasing to make contractually required payments to the Union's fringe benefit funds. Thereafter, on 9 No- vember 1982 the United States Court of Appeals for the Sixth Circuit enforced the Board's Order.' On 30 April 1984 the Regional Director for Re- gional 7 issued a backpay specification alleging that the Respondent is liable for certain fringe benefit payments for June through December 1982 and July through September 1983. The backpay specifi- cation also alleged that the Respondent filed a Chapter 11 bankruptcy petition on 3 August 1983. Subsequently, the Respondent having failed to file an answer to the backpay specification, the General Counsel filed a motion for default judgment. My colleagues, noting that the backpay specification al- leges that the Respondent is liable for fringe benefit fund payments for August and September 1983 covering periods after the Respondent filed its bankruptcy petition, and relying on NLRB v. Bil- disco,3 deny the General Counsel's motion and remand this proceeding to the Regional Director for further investigation of the circumstances sur- rounding the filing of the bankruptcy petition. For the reasons fully explicated in my dissent in Edward Cooper Painting, 273 NLRB No. 224 (Feb. 12, 1985), I would grant the General Counsel's 1 261 NLRB 225 (1982) x Enfd mem 708 F 2d 726 (1982) 3 104 S Ct 1188 (1984) 99 Motion for Default Judgment . Thus, as more fully stated in my dissent in that case, while Bildisco es- tablishes some limitation on the Board 's jurisdiction to adjudicate unfair labor practices which occur after the date of the filing of the bankruptcy peti- tion, it does not in my view establish a limitation on the Board's authority to adjudicate prepetition unfair labor practices . I further stated that, while a remedial award in cases involving prepetition unfair labor practices ultimately may become a monetary claim against a debtor's estate subject to a determination of allowability by the bankruptcy court, it is appropriate for the Board to issue a remedy in such cases since the remedy is aimed at rectifying past violations and there is no reason to cut off the Board's normal remedy as of the date of the filing of the bankruptcy petition.4 Accordingly, and since the violations found against the Respond- ent here occurred prior to the filing of the bank- ruptcy petition, I see no basis for remanding this proceeding for further investigation into the cir- cumstances surrounding the filing of the bankrupt- cy petition.5 Rather, contrary to my colleagues, I would grant the General Counsel 's Motion for De- fault Judgment and would find the Respondent liable for the sums set forth in the backpay specifi- cation. I therefore dissent. 4 Furthermore, as noted above, the court of appeals previously has en- forced the Board's Order in the underlying unfair labor practice proceed- ing and thereby has determined that a make-whole remedy is appropriate The Board has not moved the court of appeals to remand the unfair labor practice proceeding for reconsideration of the remedy Accordingly, to the extent that my colleagues ' remand of this backpay proceeding ulti- mately may result in cutting off the make -whole remedy, my colleagues are dealing with matters which lie within the court's , not the Board's, ju- risdiction 5 The cases relied on by my colleagues and in which I participated are inapposite to the present case Thus , in Earle Equipment Co, 270 NLRB 827 (1984), there was no indication as to whether the alleged violations occurred before or after the date of the filing of the petition for bank- ruptcy and Princess Pastries, 271 NLRB 758 (1984), involved inter alia a violation which allegedly occurred after the filing of the petition for bankruptcy