Medallion Kitchens, Inc.

58 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Medallion Kitchens, Inc. and International Union, United Automobile, Aerospace and Agricultural Implement Workers of America (UAW), Local No. 1267. Cases 18-CA-8458, 18-CA-8535, and 18-CA-8630 10 April 1985 DECISION AND ORDER BY CHAIRMAN DOTSON AND MEMBERS HUNTER AND DENNIS On 26 December 1984 Administrative Law Judge Karl H. Buschmann issued the attached deci- sion. The Respondent filed exceptions and a sup- porting brief; and the General Counsel and the Charging Party filed cross-exceptions and support- ing briefs; the Charging Party filed a brief in oppo- sition to the Respondent's exceptions; and the Re- spondent filed a brief in opposition to the General Counsel's and the Charging Party's cross-excep- tions. 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 conclusions as modified and to adopt the recom- mended Order as modified.' The judge found, and we agree, that the replace- ment employees hired by the Respondent were not permanent replacements for the employees who went on strike on 19 September 1983 and therefore the Respondent violated Section 8(a)(3) and (1) of the Act by refusing to reinstate the strikers on their unconditional offer to return to work.2 We also agree with the judge's finding that the Respondent violated Section 8(a)(1) by threatening employees prior to the strike that, if they went on strike, the Union would not be coming back. The judge fur- ther found that the Respondent violated Section 8(a)(3) and (1) by refusing to pay employees their accrued vacation and "random day" benefits be- cause of their participation in the strike. We agree with that finding, but we do so only for the follow- ing reasons. ' We find ment in the General Counsel's cross-exceptions to certain of the affirmative provisions of the judge's recommended Order and there- fore modify the Order to provide the traditional reinstatement language used by the Board, and to require the Respondent to pay the discmmma- tees their accrued vacation and random day benefits with interest Addi- tionally, because it appears that the Respondent has since closed its Fergus Falls, Minnesota facility and moved its production operations to Waconia, Minnesota, we shall order the Respondent to mail a copy of the notice to each of the bargaining unit employees, including those on the Respondent's payroll immediately prior to 19 September 1983, the date the strike commenced 2 In view of our agreement with the judge's finding that the replace- ments were temporary replacements , we find it unnecessary to pass on the parties' exceptions and cross -exceptions requesting the Board to make findings and conclusions on the issues arising from the alternative conten- tion that the replacements were permanent replacements The facts, insofar as they relate to this one issue, are as follows. The most recent collective -bargain- ing agreement between the Respondent and the Union expired on 19 September 1983. On that date, negotiations for a new collective-bargaining agree- ment having been unsuccessful, virtually all of the Respondent's approximately 250 employees com- menced an economic strike. Within days of the strike, the Respondent began to hire replacements and about 42 strikers returned to work. In Novem- ber 1983, over 100 of the strikers submitted individ- ual written requests for vacation and random day pay which they had accrued prior to the strike. On 1 December 1983, the Respondent responded as follows in a letter sent to each of the strikers who had made such requests: SUBJECT: Request for Accrued Vacation and Random Days Recently you inquired about the status of the vacation and random days which you may have coming under the old labor agreement. Medallion Kitchens will fully respect any vacation and random day benefits which you may have accrued pursuant to the previous labor agreement terminated by UAW, Local 1267, at the time of its strike on September 19, 1983. These benefits are not available, howev- er, to employees who are not on active em- ployment status at the time of any requests for vacation or random days, or unless those em- ployees have actually terminated their employ- ment with Medallion Kitchens. No such bene- fits can be provided under the contract for a strike period and none will be available to any employee who is not either at work or formal- ly separated from employment. You should also be aware that serious misconduct during a strike may terminate any obligation of Medal- lion Kitchens to provide such benefits. Medallion Kitchens will honor its vacation and random day obligations under the expired labor agreement to any employee including employees currently on strike, who meet the previous contractual and customary require- ments for vacation or random day benefits without discrimination between striking and nonstriking employees and Medallion Kitchens will continue to honor these commitments in the future for eligible employees without such discrimination. On 19 December the Union notified the Re- spondent that it was calling off the strike as of 25 December and that its members would make un- conditional offers to return to work on 26 Decem- 275 NLRB No. 8 MEDALLION KITCHENS ber. As indicated in the judge's decision, as of the unfair labor 'practice. hearing none of the strikers had been recalled to work, nor had any strikers re- ceived pay for vacation and random days accrued prior to 19 September 1983. Moreover , notwith- standing the statement in the Respondent's 1 De- cember letter that accrued benefits were available for employees who actually terminated their em- ployment, striker employee Nola Halverson, who had submitted a letter of resignation on 11 June 1984, was advised: Pursuant to'the terms and conditions of the Collective Bargaining Agreement between the U.A.W. Local 1267 and Medallion Kitchens, Inc., which was terminated by the Union on September 19, 1983 , ' eligible employees were entitled to' vacation/random days. Because the payment of monies to those em- ployees who might be eligible for such` pay- ment is the subject, of an Unfair Labor Prac- tice charge, filed by the U.A.W. Local 1267, it therefore would be inappropriate to pay you any of the monies that might be owed you for vacation/random days until this Unfair Labor Practice charge is resolved by the National Labor Relations Board . Medallion Kitchens, Inc. will contact you, and forward any monies you might be entitled to as soon as the Unfair Labor Practice charge is resolved. The Respondent's Personnel Manager McGrady explained at the hearing that, because of produc- tion needs, a decision was made shortly ' after the strike began to place a "moratorium" on the use of vacation time and random days accrued prior to 19 September so that - no one was allowed to take such accrued time off. Three of four nonstrikers were paid for time accrued prior to the strike , but the Respondent contended, and the judge found, that these instances were erroneous . and inadvertent. McGrady further testified that employees who quit were paid for their prestrike accrued time until about April 1984.3 Under, the expired. contract, vacation time essen- tially accrued in increasing amounts depending on the number of completed years of employment. Sections 51, and 52 of the contract also provided: 51. No employee shall be allowed 'to work during their earned vacation and receive pay in lieu of vacation 52. Employees who lose seniority prior to their vacation eligibility date will receive one- twelfth (1/12) of their vacation for each 3 This practice was changed apparently in response to the pending unfair labor practice charges See the Respondent's 19 June 1984 letter quoted above 59 month they have worked at least forty (40) hours in the month. The contract also provided for random days to accrue based on completed years of employment and to be used as follows: Employees who desire a "random day". must notify the Employer by completing a Random Day Request Form with the Company person- nel office ' no later than noon of the working day immediately preceding the working day requested as a "random day" off. In special circumstances where the production 'require- ments of the Company may be disrupted by excessive Random Day absences , the Compa- ny may request that employees voluntarily select alternate "random days . . . ." [Empha- sis in original.] Additional limitations ' on vacation and random days were embodied in a separate document, which provided, inter alia, that only 10 percent per de- partment could be off work unless more were au- thorized by the supervisor; that a week's notice was mandatory for vacations; and that random days had to be used one at a time unless approved by the supervisor. ' The judge, noting that the Respondent had ad- mitted its financial liability to employees for accu- mulated prestrike benefits , found that the Respond- ent's refusal to pay such . accrued benefits to em- ployees unless they terminated their employment or were actively employed-while denying em- ployment to the strikers-effectively denied bene- fits because of the strike. The judge thus found, notwithstanding the Respondent 's contention that its policy was not meant to be discriminatory, that the policy was in fact discriminatory in its effect. Citing NLRB v. Great Dane Trailers, 388 U.S. 26 (1967), the judge concluded that the Respondent's refusal to pay accrued vacation and random day benefits to the strikers violated Section 8(a)(3) and (1). In 'agreeing with the judge's conclusion that the Respondent's conduct violated Section 8(a)(3) and (1),, we,wish to emphasize that this conduct consist- ed ,of actual discrimination against employees be- cause of the strike; thus, there is ample direct proof of unlawful motive. 'In this regard, we particularly note Personnel Manager McGrady 's testimony that 'he was unaware "of any situation' before the strike where employees who were off work were denied their requests for accrued vacation pay. McGrady further testified that, although the situation had not previously arisen involving employees on leave of absence, employees who were hospitalized were 60 DECISIONS OF NATIONAL LABOR RELATIONS BOARD granted their requests for accrued vacation pay. Moreover, Union President Eldon Halverson testi- fied that it was standard practice for employees on permanent layoff4 to receive accrued vacation and random day pay. Thus, uncontradicted testimony indicates that the Respondent's practice prior to the strike for employees who were not "actively employed" was to pay accrued benefits on request. It further is undisputed that, following the strike, the Respondent's practice of paying accrued bene- fits to employees who were not actively employed changed to a policy of not paying any vacation or random day benefits for time accrued prior to the strike. As stated in the Respondent's 1 December 1983 response to strikers ' requests for accrued va- cation and random days , the Respondent's position was that "[n]o such benefits . . . will be available to any employee who is not either at work or for- mally separated from employment ." In this regard we further note that the Respondent withheld pay- ment for such accrued benefits from all employees actively working during the strike, albeit with a few apparently inadvertent exceptions, and that the Respondent thereafter refused to pay such accrued benefits even to strikers who formally terminated their employment. Although McGrady testified that the "moratori- um" placed on the use of accrued vacation and random days was motivated by production needs, it is clear that the strikers ' requests for such ac- crued benefits would not affect the Respondent's production because they involved the mere pay- ment of money rather than any changes or disrup- tions in the Respondent 's production plans . Similar- ly, while the Respondent has claimed that its denial of accrued benefits was based on the strikers' fail- ure to satisfy the preconditions in the contract, we also reject that argument, for it was the Respond- ent's wholesale change in policy , not the precondi- tions in the contract, which caused the denial of the accrued benefits. Based on the foregoing, we find that the Re- spondent's change in policy and practice was moti- vated entirely by the employees' protected activity of engaging in an economic strike . Thus, applying the Board's standard Wright Line5 analysis for alle- gations of unlawful discrimination, we find that the General Counsel has shown that the Respondent's conduct was motivated by the employees' protect- ed activities and that the Respondent has not 4 According to Halverson , layoffs of more than 4 10-hour days were considered to be permanent layoffs Our reading of the layoff provisions of the contract confirms that temporary layoffs were those "not to exceed four (4) working days " b 251 NLRB 1083 (1980), enfd 662 F 2d 899 (1st Cir 1981), cert denied 455 U S 989, approved in NLRB Y. Transportation Management Corp, 462 U S 393 (1983) shown that it would have taken the same actions even in the absence of the protected strike activi- ty.6 Accordingly, we conclude, in agreement with the judge, that the Respondent's withholding of and refusal to pay accrued vacation and random day pay to the strikers because of their participa- tion in the strike violated Section 8(a)(3) and (1). ORDER The National Labor Relations Board adopts the recommended Order of the administrative law judge as modified and set forth in full below and orders that the Respondent, Medallion Kitchens, Inc., Fergus Falls and Waconia, Minnesota, its offi- cers, agents, successors, and assigns, shall 1. Cease and desist from (a) Failing to reinstate its employees in accord- ance with their seniority or otherwise discriminat- ing against them after they had made an uncondi- tional offer to return to work following a strike. (b) Failing to pay its employees their accrued va- cation and random day benefits because of their participation in a strike. (c) Threatening its employees because of their protected concerted activity. (d) In any like or related manner interfering with, restraining , or coercing employees in the ex- ercise of the rights guaranteed them by Section 7 of the Act. 2. Take the following affirmative action neces- sary to effectuate the policies of the Act. (a) Offer its employees who participated in the strike immediate and full reinstatement to their former jobs or, if those jobs no longer exist, to sub- stantially equivalent positions, without prejudice to their seniority or other rights and privileges previ- ously enjoyed, and make them whole for any loss of earnings and other benefits resulting from the discrimination against them, discharging if neces- sary the temporary replacement employees, in the manner set forth in the remedy section of the judge's decision. (b) Pay its employees their accrued vacation and random day benefits irrespective of whether they had participated in a strike, with interest. (c) Preserve and, on request, make available to the Board or its agents for examination and copy- ing, all payroll records, social security payment records, timecards, personnel records and reports, and all other records necessary to analyze the amount of backpay due under the terms of this Order. 8 We therefore find it unnecessary to decide whether, under Great Dane, the Respondent 's conduct was so "inherently destructive" of em- ployee interests that no proof of antiunion motivation is needed 388 U S at 33 MEDALLION KITCHENS 61 (d) Mail a copy of the attached notice marked "Appendix" to each of the bargaining unit employ- ees, including those who were on its payroll imme- diately prior to 19 September 1983, the date the strike began. Such notice shall be mailed to the last known address of each employee.' Copies of the notice, on forms provided by the Regional Direc- tor for Region 18, after being signed by the Re- spondent's authorized representative, shall be mailed immediately upon receipt, as directed above. (e) Notify the , Regional Director in writing within 20 days from the date of this Order what steps the Respondent has taken to comply. WE WILL offer our employees who participated in the strike full and immediate reinstatement to their former jobs or, if those jobs no longer exist, to substantially equivalent positions, without preju- dice to their seniority or other rights and privileges previously enjoyed, and WE WILL make them whole for any loss of earnings and other benefits, with interest, discharging if necessary the tempo- rary replacement employees. WE WILL pay our employees for their accrued vacation and random day benefits irrespective of whether they had participated in the strike, with interest. ' 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 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 these protected concerted activities. WE WILL NOT refuse to reinstate employees who had been on strike or otherwise discriminate against any of our employees because of their sup- port of United Automobile Workers, Local No. 1267, or any other union. WE WILL NOT refuse to pay vacation or random day benefits to our employees because they partici- pated in a strike. WE WILL NOT threaten our employees because of their exercise of the rights guaranteed them by Section 7 of the Act. WE WILL NOT in any like or related manner interfere with, restrain, or coerce our employees in the exercise of the rights guaranteed them by Sec- tion 7 of the Act. MEDALLION KITCHENS, INC. DECISION STATEMENT OF THE CASE KARL H. BUSCHMANN, Administrative Law Judge. This case was heard on June 27 and 28, 1984, at Fergus Falls, Minnesota, on a consolidated complaint which al- leged that the Respondent, Medallion Kitchens, Inc., en- gaged in certain unfair labor practices in violation of Section 8(a)(1) and (3) of the National Labor Relations Act (the Act). More specifically, the complaint alleges (1) that the Respondent threatened its employees and promised them pay raises in order to discourage their participation in a strike, (2) that the Respondent withheld vacation and random day benefits to its employees be- cause they participated in a strike, and (3) that the Re- spondent failed to recall former strikers who had made unconditional offers to return to work. Respondent's answer, admitting the jurisdictional aspects of the com- plaint, denies that the Company had committed any unfair labor practices. On the entire record,' the briefs filed by the parties, and on consideration of the demeanor of the witnesses, I make the following i Following the hearing and after the briefs were filed in this case, Re- spondent by letter, dated September 13, 1984, filed a motion and a memo- randum in support of that motion to strike portions of the General Coun- sel's brief and the Charging Party's memorandum or, in the alternative, for the reopening of the record for the receipt of additional testimony The Respondent argued that the General Counsel relied for part of its case on a theory not alleged in the complaint and that it had no notice that the General Counsel would dispute the permanent status of its em- ployees who were hired to replace its striking employees The General Counsel and the Charging Party filed oppositions to Respondent's motion Their response disputed Respondent's claim that the complaint misled the Respondent or that the issue relating to the permanent status of the replacement employees was not at issue Since the Respondent did not raise this issue until after the briefs were filed, and since this is not solely a procedural but a substantive issue, I have decided to deal with it in the context of my decision of the entire case For the reasons discussed infra, I deny Respondent's motion Respondent's motion to dismiss the case because it had agreed to a set- tlement of a portion of the case in pretrial negotiations with the General Counsel is denied 62 DECISIONS OF NATIONAL LABOR RELATIONS BOARD FINDINGS OF FACT The Respondent, Medallion Kitchens, Inc., is a Minne- sota corporation located in Fergus Falls, Minnesota, where it is engaged in the manufacture and nonretail sale and distribution of kitchen and bathroom cabinets. It is admittedly an employer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act. Its em- ployees totaling 279 were represented by the United Auto Workers, Local 1267. The bargaining relationship between the Union and the Company had existed for more than 10 years. On September 19, 1983, the most recent bargaining agreement had expired: The parties were unable to reach a new agreement in spite of several bargaining sessions which began on June 6, 1983. The employees decided to strike the facility on September 19, 1983. Prior to the strike, the Respondent through its supervisors had made certain statements to the employees to dissuade them from the strike. Within a few days of the strike, Respondent began to hire replacement employees for the striking employees and by December 10, 1983, 253 replacement workers, as well as a few nonstrikers, were working for the Re- spondent. After the strike, Respondent refused to pay to the strikers any of their accumulated vacation and random day benefits. On December 10, 1983, a fire destroyed Respondent's premises to such an extent that production ceased and only about 20 or 30 people remained employed and the bulk of the work force was laid off. On December 19, 1983, the Union made an uncondi- tional offer on behalf of its members to return to work on December 27, 1984. By letter dated December 19, 1983, the Union informed the Respondent's agent as fol- lows (G.C. Exh 10). "Because of the very unfortunate circumstances of the fire at Medallion Kitchens at this time I am calling off the strike as of December 25, 1983 at 11:59 p.m. Our members will be unconditionally re- porting for work as of December 26, 1983." On Decem- ber 27 all strikers individually made their unconditional offers to return to work. Not until late January or early February did the Re- spondent recall any of its production work force. How- ever none of the strikers were recalled even though they had made their offers to return to work. Against this brief background, the case presents three issues. First, whether Respondent's failure to recall the strikers violated Section 8(a)(3) and (1) of the Act, second, whether Respondent violated Section 8(a)(3) and (1) of the Act when it failed to pay accrued vacation and random days pay to the strikers; and, third, whether Re- spondent violated Section 8(a)(1) of the Act by threaten- ing its employees or promising them benefits in order to discourage their strike activity. Respondent's Failure to Recall the Strikers There is no dispute that Respondent has not recalled any of the strikers after their unconditional offer to return to work, and that following the fire the Respond- ent has only recalled the strike replacement employees and a few nonstriking employees. The Respondent began recalling these employees in, late January or early Febru- ary and continued to recall the replacement employees until June so that as of June 23, 1983, about 114 replace- ment employees had been recalled. The General Counsel's and the Charging Party's posi- tion is that after the strikers' unconditional offer to return to work, the Respondent had a duty to recall the strikers, because the replacement employees were not permanent replacements and, even if the replacements had been permanent when they were first hired, the strikers and the replacements should have been recalled in order of their seniority after the layoff period caused by the fire. Respondent, on the other hand, argues in its brief that the replacement employees were permanent replacements and that its decision to rehire replacements to the exclu- sion of the strikers who had made unconditional offers to return to work was entirely within Respondent's right, because the replacement employees had retained their status as permanent employees. In this regard, the gravamen of the complaint, alleging a violation of Section 8(a)(3) and (1) of the Act, is con- tained in paragraph 6(a) as follows: Since on or about January 4, 1984, and continuing to date Respondent has recalled strikers replace- ments from layoff status and has failed and refused, and is continuing to fail and refuse, to recall any of the strikers, notwithstanding the fact that said strik- ers have more seniority than the strikers replace- ments who have been recalled. In response to this allegation, Respondent attempted to show that the facts as alleged did not occur and that the replacement employees were permanent employees who had not lost their permanent employment status as a result of the interruption caused by the fire. Respond- ent's counsel had perceived the legal issue and his burden of proof when he stated in his opening statement, inter alia, as follows (Tr. 16): "With respect to Case No. 18-CA-8630 . . . I think the General Counsel and I would agree that the Employer is entitled under the McKay case to hire permanent replacements if an eco- nomic strike is underway, and to use them to conduct .. . its business, and . . . unless there is some substantial change in the circumstances . . . that those persons are entitled to continue their employment with the employer . .. and not to be replaced if they are permanent re- placements by ex-strikers even if those strikers make an unconditional offer to return to work." The record evidence is fairly consistent and supports the factual aspects of the allegation in the complaint. It shows that the Respondent hired replacement employees for the striking employees within several days of the strike which began on September 19, and that a fire oc- curred on December 10 which resulted in the idling of almost all of the 253 employees except for about 20 to 30 employees. On December 19, shortly after the outbreak of the fire, the Union notified the Company of the strik- ers' unconditional offer to return to work on December 27, and the strikers individually made their unconditional offer to return to work. Yet the Respondent, when it MEDALLION KITCHENS 63 commenced the recalling of the work force in late Janu- ary or early February, failed and refused to recall any of the strikers. Moreover, the record further shows that when the Re- spondent hired the replacement employees shortly after the strike, they would be employed only until the strike was over. The General Counsel's first witness, Richard McGrady, the personnel director of Medallion Kitchens, testified without objection by Respondent's counsel as follows (Tr. 69-70): Q. When you first began interviewing replace- ment employees, did you interview most of those people? A. Yes sir. Q. Do you recall hiring Marty Beckman? A. I remember Marty Beckman . I believe he was hired at the Holiday Inn , but I'm not sure. Q. Did you tell Mr Beckman how long he would be working? A. No, sir. At that time we didn't know. I told him it might be a week, it might be less and it might be more. Q. Is that essentially what you told everybody who got hired? A. Yes, Sir. Q. That it might be a week, it might be less, it might be a little more? A. They could work up until the strike was over. Q. Until the strike was over? A. Or the people come back. According to the General Counsel and the Charging Party, the evidence clearly shows that Respondent's re- placement employees were not hired as permanent re- placements but only as temporary employees and that they could not have been permanent replacements when they were rehired after the strikers had made their un- conditional offer to return to work. Respondent, howev- er, argues in its brief that the replacements had perma- nent status. Citing record evidence , Respondent states, inter alia, as follows (R. Br. 7 and 27): Within a few days of the strike, Mr Richard McGrady, Medallion's Personnel Director , began to interview replacement employees and striking em- ployees began to return to work (T. 69-70, 445). By December 9, 1983 , a total of 253 permanent replace- ment and non-striking employees were working (T. 53, GCE 6). Consistent with the Employer's final offer to the Union on September 14, 1983, these em- ployees became permanent employees as their 60- day probationary period expired (GCE 2, par. 9, p. 2). Ultimately, all were advised by Mr. McGrady that they were permanent employees and this status was reaffirmed several times in the aftermath of the December 10, 1983 fire (T. 425-428, 458-460). A careful analysis of the record concerning the issue of whether the employees had permanent or temporary status does not support Respondent's argument. While the record shows that the Respondent had assured most of the employees (replacements) who had attended the Company's Christmas party on December 17 that it would make an effort to get the Company operating as soon as possible and expected the employees to be back to work, it does not indicate that the employees were ever informed that their employment status had changed to one of permanence . Moreover, at that time Respond- ent had no knowledge of the strikers' offer to return to work. Respondent's reliance on its offer to the Union of a collective-bargaining agreement is obviously misplaced and, in any case, it does not support Respondent 's posi- tion. According to that document, the probationary period for new employees would last 16 weeks and the employees must be members of the Union (R. Exh. 3, G.C. Exh. 2). On September 13, 1984, Respondent moved to strike the General Counsel's and the Charging Party's briefs to the extent that they relied on the record evidence show- ing that the replacement employees had been hired on a temporary basis. Respondent's argument is essentially that it was misled into assuming that the status of the re- placement employees was not in issue. Respondent moved, in the alternative, that the case be reopened for additional evidence on that issue but qualified this re- quest by stating that "this would not be the appropriate ruling on the part of the Administrative Law Judge, since the General Counsel and the Charging Party had ample opportunity to construct a theory of this case and to plead or amend the pleadings appropriately." In their oppositions to Respondent 's motion, the General Counsel and the Charging Party submit that neither the complaint nor the record could have misled the Respondent, par- ticularly since it is the Company's burden to show that replacement employees were permanent employees. My analysis of the issue has convinced me that Re- spondent's motion must be denied , and that I can neither ignore the evidence on this issue nor reopen the proceed- ing for additional evidence for several reasons. First in his opening statement in this case, Respondent 's counsel demonstrated his knowledge of the applicable law and properly perceived the relevant issues raised by the com- plaint, including the permanent status of the replacement employees. He could not have been surprised or misled because he stated, as follows (Tr. 16): "[T]he Employer is entitled under the Mackay case to hire permanent re- placements if an economic strike is underway, and to use them to conduct . . . its business, and . . . unless there is some substantial change in circumstances . . . that those persons are entitled to continue their employment with the employer . . . and not to be replaced if they are per- manent replacements by exstrikers even if those strikers make an unconditional offer to return to work." [Empha- sis added.] Second, it was Respondent's personnel man- ager who testified as the first witness that the replace- ment employees were hired on a temporary basis until the strike was over (Tr. 70). At that time, Respondent's counsel did not object to the testimony. He had the op- portunity at that time to examine the witness on this issue and to litigate the matter more fully. Third, assert- ing that the General Counsel is precluded from raising the issue, the Respondent nevertheless raised the issue 64 DECISIONS OF NATIONAL LABOR RELATIONS BOARD and argues repeatedly that the replacements were perma- nent employees, for in his brief he states, inter alia (R. Br. 7, see also Br. 27): "By December 9, 1983, a total of 253 permanent replacement and nonstriking employees were working . . . these employees became permanent employees as their 60-day probationary period expired ... all were advised by McGrady that they were perma- nent employees . . . [emphasis added]." Respondent cannot be heard to complain and claim surprise or lack of notice when the General Counsel discusses the same issue but argues the opposite view. Respondent's further reference to nonrecord evidence, such as communica- tions between counsel during the investigative stage of the proceeding is obviously of no relevance here. Fourth, while it is clear from the foregoing that Re- spondent was in fact aware of the importance of the issue, although it may have inadvertently ignored McGrady's testimony in this regard, the law is clear that the burden to show the permanent status of the replace- ment employees is upon the Respondent. In short, once the General Counsel has shown that the Respondent has discriminated against the strikers, i.e., its failure to rein- state the strikers after their unconditional offer to return, Respondent may defend its action by showing that the strikers have in fact been replaced by permanent replace- ments. Zapex Corp. v. NLRB, 621 F.2d 328 (9th Cir. 1980); NLRB v. Murray Products, 584 F.2d 934 (9th Cir. 1978). It is difficult to see how the Respondent can hope to justify a lack of vacancies at its plant following a mas- sive layoff caused by the fire, without a serious analysis of the permanent status of its replacement employees. Respondent has obviously attempted to do so, but has failed in this regard. Finally, it is clear that this evidence, which is certainly relevant, was not improperly received in this case, it did not raise a new issue, it did not give rise to a new issue of newly discovered evidence, and it certainly was not a surprise to the Respondent. On the basis of the foregoing, as well as additional reasons ad- vanced by the General Counsel and the Charging Party, Respondent's motion must be denied. In agreement with the General Counsel and the Charging Party, I find that the replacement employees were not permanent replacements and that the strikers upon their unconditional offer to return to work were entitled to be recalled in lieu of the replacements. In NLRB v. Fleetwood Trailer Co., 389 U.S. 375, 378 (1967), the Court made it clear that an employer who refuses to reinstate strikers violates Section 8(a)(3) and (1) of the Act, and stated: "Accordingly, unless the employer who refuses to reinstate strikers can show that this action was due to `legitimate and substantial business justifications,' he is guilty of an unfair labor practice." NLRB v. Great Dane Trailers, 388 U.S. 26, 34 (1967). The burden of proving justifications is on the employer. The Court rec- ognized as a "justification" when the jobs claimed by the strikers were occupied by workers hired as permanent replacements during the strike in order to continue oper- ations. See also NLRB v. Mackay Radio & Telegraph Co., 304 U.S. 333 (1930). It is clear in the matter before me, that the Respondent has failed to meet its burden of justifying its failure to re- instate the strikers, because their jobs were not filled by permanent replacements . I therefore find that Respond- ent violated Section 8(a)(3) and (1) of the Act. Respondent's Failure to Pay Random Day and Vacation Benefit to Strikers As a violation of Section 8(a)(3) and (1) of the Act, the complaint alleges that "Respondent has withheld and refused to pay accrued vacation pay and random day pay to its employees." The record evidence is not in dispute that the Compa- ny has indeed withheld the employees' vacation and random day pay. The issue is whether the Respondent did so on a discriminatory basis directed against the strikers. Respondent admitted that its employees had earned certain vacation and random days in accordance with the expired bargaining agreement (G.C. Exh. 2, pp. 7-8) Indeed, Respondent admitted its financial liability to each individual employee for the accumulated vaca- tion and random day benefits as of September 16, 1983 (G.C. Exh. 4). However, Respondent's position with respect to its ob- ligations is reflected in a letter to one of the employees (G.C. Exh. 11): Medallion Kitchens will fully respect any vacation and random day benefits which you may have ac- crued pursuant to the previous labor agreement ter- minated by UAW, Local 1267, at the time of its strike on September 19, 1983. These benefits are not available, however, to employees who are not on active employment status at the time of any requests for vacation or random days, or unless those em- ployees have actually terminated their employment with Medallion Kitchens. No such benefits can be provided under the contract for a strike period and none will be available to any employee who is not either at work or formally separated from employ- ment. You should also be aware that serious mis- conduct during a strike may terminate any obliga- tion of Medallion Kitchens to provide such benefits. Although assuring the employees that it will honor these commitments, Respondent has simply refused to make payments unless an employee has been "on active employment status" or has terminated his employment. This excludes of course all former strikers who have been denied employment status by the Respondent. Their only recourse to obtain these benefits would be to termi- nate their employment status and thereby forsake any hope of reinstatement. But even when a former striker who terminated his employment status made a request for payment of the benefits, Respondent has taken the position as follows (G.C. Exh. 9). Because the payment of monies to those employ- ees who might be eligible for such payments is the subject of an Unfair Labor Practice Charge, filed by the U.A.W. Local 1267. It therefore would be inap- propriate to pay you any of the monies that might be owed you for vacation/random days until this Unfair Labor Practice charge is resolved by the Na- tional Labor Relations Board. Medallion Kitchen, MEDALLION KITCHENS 65 Inc. will contact you, and forward any monies you might be entitled to as soon- as the Unfair Labor Practice Charge is resolved., Furthermore, the record indicates that Respondent had made exceptions to its policy, albeit through inadvert- ence, on at least three occasions In the meantime, ap- proximately'130 former strikers are awaiting payment for their accrued vacation and random day benefits. While the Company repeatedly emphasized that its policy was not meant to be discriminatory towards the strikers, and even considering that the-Respondent may have antici- pated some hardship in making these payments all at one time or during a time when it needed to keep the com- plement of its employees working, the effect of its policy is discriminatory. Respondent could have made a good- faith effort and established- a schedule whereby it could make these payments over a certain period of time. However, entirely refusing to meet its obligations to- wards the strikers, lest they,either terminate their right to reinstatement or be employed by Respondent while at the same time denying them employment status, effec- tively deprives them of the benefits which they would have received had it not been for the strike. I find there- fore that the Respondent violated Section 8(a)(3) and (1) of the Act. NLRB v. Great Dane Trailers, 388 U.S 26 (1967). Independent Violations of Section 8(a)(1) of the Act According to the complaint, Respondent made several threats to employees because of their strike activity and promised them pay raises in order to discourage their support for the Union. In this regard the record shows as follows: Richard Rone, Respondent's vice president, had a conversation with several strikers while they were on the picket line. During that conversation Rone stated to employees Michael Hooker and Nola Halverson that the Company was losing business because of the strike and that a layoff could result. During a telephone conversation on November 1, 1983, Tom Cappola, Respondent's former plant manager, told employees Brian and Janet Wehrenberg that he had no intentions of signing a contract with the Union once he had replaced the positions with strike replacements. During that conversation Cappola urged Brian Wehren- berg to return to work' Respondent disputes Cappola's statements suggesting that such testimony is illogical. However, considering that Cappola failed to deny Weh- renberg's testimony, it stands uncontroverted. Bruce Roeder, a former foreman in Respondent's door building department, told employee Tony Arechigo during a conversation about 1-1/2 weeks before the Union's vote to strike that "you guys go on strike, the Union is not coming back." During a similar conversa- tion which dealt with the advantages and disadvantages of a union, Roeder, told _ Arechigo' "that, if the Union wasn't there, he could personally give, us-give me a raise if I worked "up to. his standards. And now in this way, with the Union there, he would have to go through the channels to get a raise." Roeder made the same statements to employee Randi Austin. While walking with her to a cafeteria and ex- plaining a new job to this employee, Roeder stated that if she did well, and "if there wasn't a Union in there, he could give me a raise." He asked her if she would join the strike and said that if the employees "went out on strike, that the Union wouldn't come back as a union." Employee Esmer Gillaspey recalled Roeder telling her that if the employees went out on strike, there would not be a union and that the employees would not have a job. The consistent testimony of these employees-which I have credited-was only disputed by another employee witness who testified that she had never heard Roeder make such statements. She conceded, however, that he could have made these statements without her knowl- edge. , Only some of the above statements made by Respond- ent's supervisors to the employees were sufficiently coer- cive and threatening so as to interfere with their Section 7 rights. Roeder's remarks telling the employees that the Union would not come back if the employees went out on strike were made to several employees, about 1 week before the strike vote by the Union, at the Company's premises and in an environment of coercion during which the employees were initially interrogated as to whether they favored a strike or not. These statements were clearly intended to dissuade the employees from their support for the Union and the strike. This conduct violated Section 8(a)(1) of the Act. His other remarks to the effect that he could give the employees pay raises if it were not for the Union were vague and further- quali- fied with the condition that the employee perform well. Under these circumstances, Respondent did not condi- tion a promise of benefits in exchange for the employee's refusal to support the Union. Moreover, the statements made by Supervisors Cappola and Rone were not suffi- ciently clear and, in any case, were not made with the intent to coerce or restrain the individuals. I find there- fore that Respondent violated Section 8(a)(1) of the Act only in connection with Roeder's repeated threats to the employees as detailed above. CONCLUSIONS OF LAW 1. Medallion Kitchens, Inc. is an employer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act. 2. International Union, United Automobile, Aerospace and Agricultural Implement Workers of America (UAW), Local No. 1207 is a labor organization within the meaning of Section 2(5) of the Act. 3.' By discriminatorily failing to reinstate its employees in accordance with their seniority after they had made an unconditional offer to work following a strike, Re- spondent violated Section 8(a)(3) and (1) of the Act. 4. By discriminatorily refusing to pay its employees random day 'and vacation benefits because of their par- ticipation in a strike, Respondent violated Section 8(a)(3) and (1) of the Act. 5. By threatening its employees because of their pro- tected, concerted activity Respondent violated Section 8(a)(1) of the Act. 66 DECISIONS OF NATIONAL LABOR RELATIONS BOARD THE REMEDY Having found that the Respondent has engaged in cer- tain unfair labor practices, I find it necessary to order it to cease and desist and to take certain affirmative action designed to effectuate the policies of the Act. Having found that Respondent violated Section 8(a)(1) and (3) of the Act by failing and refusing to offer rein- statement to the replaced strikers, after their uncondi- tional offer to return to work, in accordance with their seniority as vacancies arose following a fire at the plant, I find it must offer them reinstatement as the vacancies arose and will arise in the future and make them whole for any loss of earnings and other benefits, computed on a quarterly basis from date of its failure of reinstatement, less any net interim earnings, as prescribed in F W. Woolworth Co., 90 NLRB 289 (1950), plus interest as computed in Florida Steel Corp., 231 NLRB 651 (1977), and discharging, if necessary all the replacement employ- ees who had been hired as temporary workers. Having further found that the Respondent violated Section 8(a)(3) and (1) of the Act by discriminatorily fail- ing to pay the strikers their random day and vacation pay, I find it must make them whole and pay them their earned benefits, with interest, as prescribed in the above cases, irrespective of whether the strikers have been rein- stated or whether they discontinue their employment status with the Respondent. [Recommended Order omitted from publication.]