Dunmyre Motor Express, Inc. And/Or Dunmyre Motor Express, Inc., Debtor-In-Possession

DUNMYRE MOTOR EXPRESS - 299. Dunmyre Motor Express, Inc. and/or Dunmyre Motor Express, Inc., Debtor-In-Possession, and International Brotherhood of Teamsters, Chauf- feurs, Warehousemen and Helpers of America, Local Union 538. Case 6-CA-15813 29 April 1985 DECISION AND ORDER BY CHAIRMAN DOTSON AND MEMBERS HUNTER AND DENNIS On 8 September 1983 Administrative Law Judge Robert M. Schwarzbart issued the attached deci- sion. The Respondent filed exceptions. The Board has considered the decision and the record in light of the exceptions and has decided to affirm the judge's rulings, findings, and conclusions only to the extent consistent with this Decision and Order. The judge found that at various times during the period of 1 April 19821 through February 1983, when it liquidated its assets, the Respondent unilat- erally modified the terms and conditions of em- ployment set forth in the collective-bargaining agreement and subcontracted work in violation of Section 8(a)(5) and (1), and laid off seven employ= ees in violation of Section 8(a)(3) and (1). We agree with the judge that, during the period of 1 April through 5 August, the Respondent unlawfully iiri- plemented unilateral changes in the employees' terms and conditions of employment. For the rea- sons set forth below, however, we shall dismiss those portions of the complaint alleging that the Respondent unlawfully implemented unilateral changes subsequent - to 5 August, subcontracted work, and laid off seven employees. The Respondent is engaged in the interstate and intrastate transportation of freight. The parties stip- ulated that the Respondent was a member of a mul- tiemployer bargaining association and through this association entered into successive collective-bar- gaining agreements with the International Brother- hood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, Local Union No. 538, the Charging Party. The most recent agreement was effective 1 April 1982 through 31 March 1985. During the term of this contract, on 6August, the Respondent filed a petition under Chapter 11 of the Bankruptcy Code and was -designated by the Bank- ruptcy Court as debtor-in-possession. The parties further stipulated that the Respond- ent: (1) withheld union dues from the wages of all, employees in the bargaining unit for the months June through September, but did not remit the i All dates are 1982 unless otherwise indicated dues to the Union; (2) failed and refused to remit pension fund contributions as required by the, co l- - lective-bargaining agreement for - the periods 1 . April through 6 August 'and October through Feb- ruary 1983 ; (3) laid .off seven employees . on• 7 Sep- tember; and (4) subcontracted bargaining unit-work during September. - On 22 February 1984,the United States Supreme Court decided NLRB- i . Bildisco & Bildisco, 104 S.Ct. 1188 (1984). In its opinion , the, Court con- cluded that "from the filing of a petition ,`in bank- ruptcy until formal acceptance , the collective-bar-_ gaining agreement is not an enforceable contract within the meaning of NLRA § 8(d)." NLRB v. Bildisco & Bildisco, 104 S.Ct. _at. 1190.. Thus, a debtor-in-possession - does not commit ; an. unfair labor practice - when it unilaterally rejects or modi--- fies a collective-bargaining agreement before ,the Bankruptcy Court approves formal rejection.2 Ac- cordingly, applying Bildisco, we must consider the portions of the complaint involving prepetition ac- tivity separate and apart from those involving ac- tivity which occurred on or after the date the bankruptcy petition was filed. - As set - forth above, , the Respondent stipulated that it withheld union dues from the wages of all employees in the bargaining unit for June through September and- did , not remit pension fund contri-: butions as required by the • collective -bargaining agreement for. _,the,' period 1 . April through 5, August . These changes were made during the term of a valid collective-bargaining agreement, but before the date the Respondent filed its petition in bankruptcy . As,the record does not reveal any_evi-- dence indicating the parties bargained about, or the Union agreed to, such changes, we . affirm the judge's conclusion that the Respondent's implemen- tation . of these changes. during -the period before the -filing of the bankruptcy petition violated Sec- tion 8(a)(5) and ,(l) of the Act.3 . , The Respondent, further - stipulated that,:' subse- quent to filing its petition in bankruptcy , additional unilateral changes were implemented , seven- em- ployees were laid off, and unit ' work was subcon- tracted . As set forth above, however, the Supreme Court specifically held in Bildisco that unilateral re- jection or modification of a collective-bargaining 2 As this case arose in 1982, it is controlled by the Supreme Court's. decision in Bildisco, not by the Bankruptcy Amendments and Federal Judgeship Act of 1984, Pub L 98-353 (July 10, 1984) The judge cited Los Angeles Marine Hardware Co, 235 NLRB 720 (1978), for the general principle that an employer may not make unilater- al midterm modifications in contractual terms Although the Board has since reversed Los Angeles Marine in Milwaukee Spring. Division. (Milwau- kee Spring II), 268 NLRB 601 (1984) (also reversing .Milwaukee Spring I, 265 NLRB 206 (1982)), that general principle remains valid and therefore the reversal does not affect the judge's or our own conclusions, regarding the prepetition allegations , 275 NLRB No. 44 300 DECISIONS OF NATIONAL LABOR RELATIONS BOARD agreement after the petition in bankruptcy is filed but before the Bankruptcy Court approves rejec- tion is not an unfair labor practice. Accordingly, in light of Bildisco, we conclude that the Respondent's postpetition conduct set forth above does not vio- late the Act.4 We shall, therefore, dismiss those portions of the complaint. ORDER The Respondents, Dunmyre Motor Express, Inc. and/or Dunmyre Motor Express, Inc., Debtor-in- Possession, Chicora, Pennsylvania, jointly and sev- erally, and their officers; agents, successors, and as- signs, shall 1. Cease and desist from - (a) Refusing to bargain collectively with the af- filiated local- unions of the International Brother- hood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, including its Local Union No. 538, the Eastern Conference of Teamsters, and Teamsters Joint Council No. 40, as represented by the Teamsters National Freight Industry Negotiat- ing Committee, the Union, as the exclusive bargain- ing' representative of its employees in the appropri- ate multiemployer bargaining unit, including em- ployees of the Respondent, as set forth in articles 2 and 3 of the National' Master Freight Agreement, effective 1 March 1982 to 31 March 1985. (b) Unlawfully failing- to make the required pen- sion contributions and remit to the Union -dues withheld from employees' paychecks. (c) 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) • Make. whole its employees in the manner set forth in the section-of the judge's decision entitled "The- Remedy" by making' the required pension contributions it has failed to; pay in the period from 1=April through and including 5 August 1982, and by remitting to the Union, with interest, the dues it has withheld from its employees' pay from 1 June through and including 5 August 1982.5 - ' We note that the judge concluded that the 7 September 1982 layoffs of seven employees violated Sec 8(a)(3) and (1) solely on the basis that they resulted from the Respondent's subcontracting of unit work, which the judge found, to be violative of Sec 8(a)(5) In so concluding, the judge relied on Los Angeles Marine and Milwaukee Spring I As indicated in In. 3, above, however, those decisions were reversed by the Board in Milwaukee Spring II Additionally, we are reversing the judge's finding of unlawful postpetition unilateral changes Accordingly, we also reverse his 8(a)(3) findings S Member Hunter , as set forth in his partial dissent in Edward Cooper Painting, 273 NLRB 1870 (1985), normally finds appropriate a traditional make-whole order to remedy unfair labor practices committed prior to the filing of a petition in bankruptcy Accordingly, he dissents from ter- minating the remedy as of 5 August 1982 for the Respondent's unlawful (b) Should its operations resume, recognize and, on request, bargain with the Union as the exclusive representative of its employees in the appropriate unit. (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. (d) Mail to all 'persons employed by - the Re- spondent since 1 March 1982, at their last known addresses by return-receipted certified mail, a copy of the attached notice marked "Appendix."s Copies of the notice on forms provided by the Re- gional Director for Region 6; after being signed by the Respondent's authorized representative, shall be mailed by the Respondent immediately upon • re- ceipt thereof. - (e) Notify the Regional Director in writing- within 20 days from the date of this Order what steps the Respondent has taken to comply. ' - refusal to remit dues to the Union However, he concurs in cutting off the remedy as of 5. August 1982 for- the Respondent's unlawful refusal to make pension fund contributions because that violation was adjudicated to have ended on 5 August 1982. - - 6 If this Order is enforced by a Judgment of a United States Court of Appeals, the words in the notice reading "Posted by Order of the Na- tional Labor Relations Board" shall read "Posted Pursuant to a 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. WE WILL NOT, if our operations resume, refuse to bargain collectively with the affiliated local unions of the International Brotherhood of Team- sters, Chauffeurs, Warehousemen and Helpers of - America, including its Local Union No. 538, the Eastern Conference of Teamsters, and Teamsters Joint Council No. 40, as represented by the Team- sters National Freight Industry Negotiating Com- mittee, as'the`exclusive bargaining representative of our employees in the appropriate multiemployer-- bargaining unit, which includes our employees, as set forth in articles 2 and 3 of the National Master DUNMYRE MOTOR EXPRESS 301 Freight Agreement; effective 1 March 1982 through 31 March 1985. WE WILL NOT unlawfully fail to make the re- quired pension contributions and remit to the Union dues withheld from employees' paychecks: 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 whole our employees by provid- ing the required pension contributions .we have failed to pay in the period from 1 April 1982 to 5 August 1982 and WE WILL remit to the Union, with interest, the dues we have withheld from your pay from 1 June through 5 August 1982. WE WILL, should our operations resume, recog- nize and, on request, bargain with 'the Union- as your exclusive bargaining representative. DUNMYRE MOTOR' EXPRESS, INC. AND/OR DUNMYRE MOTOR EXPRESS, INC., DEBTOR-IN-POSSESSION DECISION STATEMENT OF THE CASE ROBERT M. SCHWARZBART, Administrative Law Judge This case was heard in Pittsburgh, Pennsylvania, on July 1, 1983, pursuant to charges' filed by Interna- tional Brotherhood of Teamsters, Chauffeurs, Warehou- semen and Helpers of America, Local Union No. 538 (the Charging Union) and complaint issued October 29, 1982 2 The complaint, as amended on December 2 and July 20, 1983, alleges that Dunmyre Motor Express, Inc., and/or Dunmyre Motor Express, Inc, Debtor-in-Posses- sion,3 have violated Section 8(a)(1), (3), and (5) of the National Labor Relations Act. The Respondent, in an- swering the complaint and its amendments , denies the commission of the unfair labor practices. Issues 1. Whether the Board has, or should exercise, jurisdic- tion in this matter where the Respondent's Chapter 11 petition is presently pending before a U.S. Bankruptcy Court which also is considering the Respondent's motion ' The charge and first amended charge were filed on' September 24 and October 29, 1982, respectively , 2 All dates hereinafter are within 1982 unless otherwise stated a As the largely stipulated record supports the amended complaint alle- gation that Dunmyre Motor Express, Inc , which has filed a petition under Chapter 11 of the Bankruptcy Code, and the similarly named co-, Respondent , as Debtor in Possession authorized by, the Bankruptcy Court to operate the concern, are alike in all respects , I find them to be alter egos See IS G Extrusion Toolrngs, 262 NLRB 114 (1982), Seeburg Corp, 259 NLRB 819, 826 (1981), Century Printing Co, 242 NLRB 659, 666-667 (1979), enfd 661 F 2d 914 (3d Cir 1981) Accordingly, Dunmyre Motor Express, Inc -as debtor and as debtor- in--possession, will be referred to as the Respondent See, contra , B,Idisco, 682 F 2d 72 (3d Cir 1982), denying enf 255 NLRB 1203, 1204 (1981), Iron Workers Local 455 v Kevin Steel Products, 519 F 2d 698 (2d Cir 1975) to retroactively reject its collective -bargaining agreement with ,the Union. 2. If jurisdiction should be asserted, 'whether the Re- spondent violated Section 8(a)(5) and ( 1) of the Act by unilaterally changing the 'terms and conditions of em-' ployment of its employees during the term of, and con- trary to, an unexpired collective -bargaining agreement, without notice to or bargaining with the Union as the employees' duly recognized bargaining representative by: (a) Failing and refusing to remit to the union dues withheld from - its 'employees' paychecks pursuant to, checkoff.4 - (b) Failing and refusing to pay pension fund contribu- tions to the appropriate fund. (c) Unilaterally subcontracting out its over -the-road transportation work. ' 3. Whether the Respondent violated Section 8(a)(3) and (1)' of the Act by laying off its seven over-the-road,, drivers when subcontracting their work. ' All parties were given full opportunity -,to participate, to produce ' relevant evidence, to examine and cross-ex- amine witnesses, and to file 'briefs. Briefs, which have been filed by the General Counsel and the Respondent, have been carefully considered. ' - 1. JURISDICTION A. Interstate Commerce 1, The Respondent,, a Pennsylvania . corporation with an office and place of business in Chicora , Pennsylvania, was engaged in the interstate and; intrastate transporta- tion of freight. During the 12-month period ending September 30, the Respondent, in the course and conduct of its operations, derived gross revenues in excess of $50,000 for the trans- portation of freight from the Commonwealth of Pennsyl- vania directly to points - outside the Commonwealth of Pennsylvania. The Respondent wasl an employer within the meaning of Section 2(2), (6), and! (7) of the Act at all times 'prior to August 6, the -date on which the Respondent filed a petition in bankruptcy pursuant to Chapter 11 of the United States Bankruptcy Code B. The Appropriateness of Asserting Jurisdiction The Respondent's; principal contention in this matter, where the facts -mostly are stipulated, is that under Bil- disco, supra, in its , present status as debtor- in-possession, it is not subject to unfair labor practice charges pursuant to the Act as it enjoys the ability to retroactively reject the existing collective-bargaining agreement. ' As will be.. detailed. further, below, during the term of the current collective-bargaining' agreement by which it was bound, the Respondent, `on 'August 6, 1982, filed a petition under Chapter 1.1 of the Bankruptcy Code, and in turn was designated by the U.S. Bankruptcy Court, Western District of Pennsylvania, as debtor-in-posses- ' 4 Although the complaint also alleges the Respondent' s failure to remit . initiation fees as violative of. Sec 8(a)(5) and ( 1), this contention is dis- missed as unsupported by the,evidence - , Z, 302 DECISIONS OF NATIONAL LABOR RELATIONS BOARD sion: In this capacity, the Respondent continued to oper- ate its business until February 4, 1983, when it, liquidated its assets. Although the Respondent, in its brief, indicates that it has filed with the Bankruptcy Court a petition to reject the collective-bargaining agreement, there is no in- formation that this petition has been granted. In Bildisco,s the Third Circuit, rejected the Board's finding that -the debtor-in-possession in that case was an alter ego to the debtor. Citing Iron Workers Local 455 Y. Kevin Steel Products,6 the court held that a "debtor-in- possession is a new entity, created with its own rights and duties, subject to the supervision of the bankruptcy court." Attributing powers comparable to those of a trustee, the court found the debtor-in-possession to be an officer of the court with a position analogous.to that of a successor employer. Accordingly, a debtor-in-possession may be required to recognize and bargain with a union but, without, assumption, it is not party to its predeces- sor's agreement. It is empowered to reject the agreement without following the procedures outlined in Section 8(d) of the Act As noted, Board precedent by which I am bound is currently expressed in this area by LS. G. Extrusion Tool- ings,8 where it was found that: Board law supports the General Counsel's conten- tion that bargaining agreements remain effective and binding, notwithstanding the appointment of a debtor-in-possession.2 We have held that an em- ployer is not relieved of its obligation to bargain . merely because it has become a debtor-in-pos- session under the Bankruptcy Act, even. if it be- lieves itself to be financially unable to meet the Union's bargaining demands.3 In any event, the Board is not deprived of its jurisdiction or•authority to process an unfair labor practice complaint to final disposition upon the adjudication of a respond- ent as a•bankrupt.4 2 See Jersey Juniors, Inc, 230 NLRB 329, 332 (1977) See also Truck Drivers Local Union No. 807• International Brotherhood of Teamsters v The Bohack Corporation, 541 F 2d 312, 320 (2d Cir 1976), cert denied 439 U S 825 (1978) (nothing that the Bankrupt- cy Act does not permit a debtor-in-possession to disregard obliga- tions imposed by the Act) Accord Shopmen's Local Union No 455, International Association of Bridge, Structural and Ornamental Iron Workers. AFL-CIO v Kevin Steel Products, Inc, 519 F 2d 698, 706 (2d Cir 1975) 3 Burgmeyer Bros, Inc. 254 NLRB 1027, 1028 (1981), and cases cited at fn 6 therein 4 M & M Transportation Co, Inc, Employer and Debtor-in-Pos- session, a subsidiary of Qualpeco Services, Inc, 239 NLRB 73, 75 (1978), WT Grant Regional Credit Center, 225 NLRB 881, fn 1 ,(1976) On the basis of the foregoing, I find that the Respond- ent is, and has been at all material times herein, an em- 1 682 F 2d at 77-79 6 519 F 2d 698, 704 (2d Cir 1975) - 7 It is noted that, in the present matter, the Respondent did not seek to follow the 8(d) procedures by serving advance notice on the Federal Me- diation and Conciliation Service or any similar state mediation agency before modifying the terms of the contract, as is required by that provi- sion of law . 8 262 NLRB 114, 115 (1982) Also see Century Printing Co, 242 NLRB 659, 666-667 (1979), enfd 661 F 2d 914 (3d Cir 1981) ployer engaged in commerce within the meaning of Sec- tion 2(2), (6), and (7) of the Act, and that, notwithstand- ing the concurrent proceeding before the Bankruptcy Court, it will effectuate the policies of the' Act to assert jurisdiction herein II. THE LABOR ORGANIZATION INVOLVED The Charging Union is now, and has been at all times material herein , a labor organization within the meaning " of Section 2(5) of the Act. III. THE UNFAIR LABOR PRACTICES A The Facts The Respondent, engaged in the interstate and intra- state transportation of freight by truck, is charged with having violated Section 8(a)(5) and (1) of the Act by uni- laterally failing ,and refusing to remit to the'Union9 dues withheld from the employees' pay, by discontinuing con- tributions to the appropriate pension fund, and by sub- contracting out bargaining unit work. All of the forego- ing alleged unilateral conduct is asserted to have taken place during the term of a collective-bargaining agree- ment, contrary to its provisions, and without notice to or bargaining with the Union. The General Counsel also asserts that the Respondent laid off its seven over-the-road drivers, who had per- formed the subcontracted work, in violation of Section 8(a)(3) and '(1) of the Act. As stated; reserving for'hearing-the evidentiary devel- opment of essentially those facts relating to notice given and/or knowledge imputable to the Union of the alleged unilateral changes, and events relating to the subcon- tracting of bargaining unit work, the parties have submit- ted the following stipulated facts. Richard K. Dunmyre and Bruce Dunmyre are the Re- spondent's president and secretary-treasurer, respective- ly, and are supervisors within the meaning of Section 2(11) of the Act. They also are agents of the Respondent within the meaning of Section 2(13).10 At all material times, the Respondent was a member of the Western Pennsylvania Motor Carriers Association, a multiemployer bargaining association. The Respondent, through this association, and the Charging Local Union, through Teamsters National Freight Industry Negotiat- ing Committee, herein- Teamsters Negotiating Commit- - tee, have entered into and executed successive National Master Freight Agreements and Teamsters Joint Council No 40 Freight Division Riders, the most recent of which is effective April 1, 1982, through March 31, 1985. 9 As will be described below, the parties have stipulated that the bar- gaining unit employees herein, are represented as part of a mulnemployer unit by several distinct entities within the International Brotherhood of Teamsters, including.the Charging Local Union These bodies, collective- ly, will.be referred to herein as the Union - 10 Actually, the record shows that the Respondent is owned by three Dunmyre brothers, Richard K and Bruce, who occupy-the positions in- dicated, and Kevin All three were active in the Respondent's affairs and together attended meetings with the Union While Richard Dunmyre served as spokesman on those occasions, he needed the concurrence of both of his brothers to bind the company to an agreement DUNMYRE MOTOR EXPRESS 303 Employees covered in the multiemployer bargaining unit set forth in articles 2 and 3 of the National Master Freight Agreement, including the. Respondent's relevant employees, constitute a unit appropriate for the purposes of collective bargaining within the meaning of Section 9(b) of the Act. - At all times material herein, the affiliated local unions of the International' Brotherhood of Teamsters, Chauf- feurs, Warehousemen and Helpers of America; herein the International , including the Charging Local Union, the Eastern Conference of Teamsters, -herein the Eastern Conference, and Teamsters Joint Council No. 40 (Joint Council No. 40) represented by Teamsters Negotiating Committee (the Union) have been the designated collec- tive-bargaining representative of the employees in. the above-referred multiemployer unit and have been so rec- ognized by the Respondent in successive collective-bar- gaining agreements. At all times material herein, the Teamsters Negotiating Committee, representing the affiliated locals of the Inter- national, including the Charging'Local Union,-by virtue of Section 9(a) of the Act, has been the exclusive collec- tive-bargaining representative of the employees in the above-referred multiemployer unit. Article 3, section 3 of the National Master Freight Agreement'' makes provision for deduction by the Em- ployer of dues, initiation fees and assessments from pay, and for remission of same to the Union within 30 days of the date the deduction was made. The contract specifies a 10-percent penalty in liquidated damages in the event the Employer fails to pay over these sums in the time provided. Subcontracting of bargaining unit work, with certain specified exceptions not relevant here, is prohibited by article 32 of the National Master Freight Agreement. Article 50 of the contract requires that the Employer make weekly specified .contributions to the Western Pennsylvania Teamsters and Employers Pension Fund (the Pension Fund) for each eligible. employee: regular, casual, extra, probationary, or'replacement employee Substantively, the' parties stipulated that without prior written notice to the Charging Local Union, or to any of the,above-identified constituent Teamsters agencies, and without prior written notice to the. Federal Mediation and Conciliation Service of the existence of a dispute be- tween the Respondent and the Union, the Respondent- •(a) Withheld union dues from the wages of all its em- ployees in the relevant bargaining unit for June through September 1982, but did not remit such dues to the Union. (b) Did not remit any dues on behalf of employees, named infra, who were laid off on September 7, 1982, for the period from September 1982, through February 4, 1983, when operations ceased. (c) Has made no contribution payments to the Pension Fund, as required by the collective-bargaining agreement for the period from April 1 to August 6, 1982,1 ,2 and, again, withheld such contributions from October 1982 .through February 1983. The parties agree that the Respondent has remitted to the Union dues withheld from the wages of the six bar- gaining unit employees who were not laid off; for the employment period from October 1982 through Febru- ary 4, 1983 The parties further stipulated that about September 7, 1982, the Respondent: (a) Subcontracted most of its over-the-road pickup and delivery services' .(via trip leasing arrangements) to non- union contractor W. C. Crytzer, and the balance to non- union owner-operators Leo Zimmell and -Emery Roy Young. (b) Laid off its employees named below: Lewis C. Dittman Sr. Dean T. Kinch Lewis C Dittman Jr David K. Slaugenhoup James B. Fox13 Paul D' Titley Samuel 'M. Heginbotham The Respondent argues that all, of its conduct alleged as unlawful occurred not because of union animus or desire to avoid bargaining responsibilities, but because of financial hardship 'leading to its petition under Chapter 11 of the Bankruptcy Code and, finally, to the end of its operation. The Respondent asserts that the Union was fully informed of the Company's financial and operating situation, and that the Respondent had attempted to meet and discuss with union officials and employees a plan which would keep the Company afloat. The above-stipu- lated subcontracting arrangements, the Respondent as- serts, had resulted from the Union's unwillingness to co- operate and the Respondent's desire to keep at least some men employed. Richard K. Dunmyre, the Respondent's president, tes- tified that before June 1982, the Respondent did not inform the Union, in writing or orally, that it no longer would pay over to the Union dues it had withheld from the paychecks of bargaining unit employees. Similarly, before August 1982, the Respondent had not notified the Union that it would discontinue making contributions to the Pension Fund and, after pension contributions were resumed, the Respondent did not give notice before Oc- tober that its contributions would cease for the months after October Concededly, too, the Respondent did not give prior notice to the Union that it no longer would continue to remit dues on behalf of the seven laid-off em- ployees. When certain employees, including the union steward, Richard L. Craig Sr, inquired as to why dues had not been paid for these laid-off employees, Richard Dunmyre asked why a bill had riot been sent to him The principal relevant discussion between the Re- spondent and Union occurred at a meeting. on the evening of August 11, 5 days after the Chapter 11 peti- '' The collective-bargaining agreement provides for a union shop In States where a union shop is not lawful and continued employment may not be made contingent on continued membership in the Union, the con- tract provides for the establishment of an agency shop 1' August 6, as noted; is the date the Respondent filed its petition with the Bankruptcy Court - '3 Of the named laid-off over-the-road drivers, only Fox was reinstat- ed. being recalled to his former position on September 22 . 304 DECISIONS OF NATIONAL LABOR RELATIONS BOARD tion had been filed. This was arranged by Union Steward Craig at the request of Richard Dunmyre. The Respondent was represented on August 11 by, Richard, Bruce, and Kevin Dunmyre. Present for the Union were Raymond H. Baker, secretary-treasurer of the Local Union, and Craig, as steward Richard Dun- myre, who served as company spokesman, described the Respondent's gloomy financial picture, and informed the union representatives that to keep the Company operat- ing and as many men as possible working, cuts in wages and benefits would be necessary. He did not know whether, even with such reductions, the Company could continue to' operate as its insurance policies for compre- hensive coverage , liability, and workmen 's compensation were not being renewed because the Respondent, could not sufficiently fund them. In addition to requesting cuts in wages and benefits, Richard Dunmyre asked the Union to allow Bruce and Kevin Dunmyre to, drive trucks and to be afforded su- perseniority . He reminded Baker and Craig that his brothers had been union members until asked to resign as management representatives. Baker replied that pensions were almost impossible to touch because of laws and actuarial considerations. There is no evidence 'that the Union, at that meeting, agreed to any of the. Respondent's proposals. What is clear, as conceded by Richard Dunmyre, is that at that meeting nothing was said to the effect that the Respondent would stop making contributions to the Pension Fund; that the Company would or might sub- contract away unit work to nonunion employers, or oth- erwise;14 or that the Company would go out of business. Nothing was said about layoffs, per se, except in the con- text of the Respondent's need to obtain the necessary in- surance coverage to avoid such an occurrence. Layoffs would be contingent on the -amount of insurance the Re- spondent could get. - Richard Dunmyre testified that a few days after the August 11 meeting he asked Craig if the employees would be willing to take a reduction in health and wel- fare benefits since it was so difficult to change pensions .Craig replied that the men did not want to lose anything. The Company received no further communication from the Union concerning its above proposals until Feb- ruary 4, 1983, when Baker called Richard Dunmyre. The employees had been notified of the February 4 close- down during the preceding day. - As noted, the Union did not receive notice of the layoff of the seven over-the-road drivers or the subcon- tracting out of their work before these' incidents oc- curred. The Respondent's references, during the August 11 meeting, to the need to obtain insurance to avoid lay- offs did not indicate which employees, if any, might be affected as there also were six local drivers employed who were not laid off. Craig15 testified that in mid-August Richard Dunmyre told him that the Company would be working on a day- 14 Dunmyre did mention the possibility of selling some equipment 15 Craig was the drivers" union steward for 10 of his 32 years with the Respondent to-day 'basis, the only way they could operate as the Re- spondent had been unable to obtain insurance. Nothing, however, was said about subcontracting bargaining unit work At the end- of August, Craig again, spoke to. Richard Dunmyre in the presence of, Bruce Dunmyre. On that occasion, Richard Dunmyre told Craig that the Compa- ny would have to lay off the road drivers because it was going to sell its equipment Again, nothing was said about subcontracting. On September 7, the above-named' seven over-the-road drivers were laid off. Craig testified that few days after these layoffs, Richard Dunmyre told him that the Re- spondent had sold its vehicular equipment to W C. Crytzer, a nonunion contractor in Kittaning, Pennsylva- nia. Craig, however, noticed within a week after this con- versation that the allegedly sold equipment continued to have the Respondent's license plates. When he asked Richard Dunmyre why his Company's licenses were still on the sold equipment, Craig was told that Dunmyre had not yet removed them. Later, however, Richard Dun- myre informed Craig that the equipment actually had not been sold, but had been leased to Crytzer who was paying the comprehensive coverage premiums. This in- formation, coming 1 to 2 weeks after the layoff of the seven road drivers, was the Respondent's first notifica- tion to any union representative' of 'a lease arrangement for its trucks 16 B. Discussion and Concluding Findings Administrative Law Judge Pannier, in his Board-ap- proved decision in Los Angeles Marine Hardware Co. 17 stated the applicable principles as follows: Under Section 8(d) of the Act, no party to a col- lective-bargaining agreement can be compelled to discuss or agree to a midterm modification of a col- lective-bargaining agreement, and, accordingly, a proposed modification can be implemented only if the other party's consent is first obtained ' Nassau County Health Facilities Association, Inc., et al., 227 NLRB 1680, 1683 (1977), and cases cited therein. The fact that the parties have bargained to impasse regarding the matter does not serve to change this result.. The Boeing Company, 230 NLRB 696, 700 (1977), and cases cited therein This' mandate is not excused either by subjective good faith or by the economic necessity of maintaining viability of an employer's operation and preserving the jobs of the employees in the bargaining unit. "Nowhere in the statutory terms is any authority granted to us to excuse the commission of the proscribed action be- cause of a showing either that such action was com- pelled by economic need or that it may have served what may appear to us to be a desirable economic objective." Oak Cliff-Golman Baking Company, [207 16 As stipulated , the Respondent also subcontracted bargaining unit work via trip leasing arrangements to nonunion owner operators Leo Zimmell and Emery Roy Young 17 235 NLRB 720, 735 (1978), enfd 602 F 2d 1302 (9th Cir 1979) DUNMYRE MOTOR EXPRESS NLRB 1063], supra, at 1064.18 Accord: Rego Park Nursing Home, 230 NLRB 725, 727 (1977). Conse- quently, notwithstanding the persuasiveness and va- lidity of an employer's economic straits, an employ- er is not free, without union consent, to make mid- term modifications in wage rates (Oak Cliff-Golman Baking, supra; Rego Park Nursing Home, supra), nor to remove work from the bargaining unit (The Boeing Company, supra), nor to replace all unit em- ployees. AAA,Electric, Inc., and Simms Electric Co., 190 NLRB 247, 251 (1971), enforcement denied_472 F.2d 444 (C.A. 6, 1973). This rule, that an employer violates Section 8(a)(5) and (1) of-the Act, when, during the term of its collective- bargaining agreement with a union, it unilaterally modi- fies or otherwise repudiates contractual terms and,condi- tions of employment, was more recently reaffirmed in FWD Corp.' 9 - In the present matter, as described, the Respondent, citing economic difficulties, unilaterally and in. contra- vention of the existing collective-bargaining agreement changed its employees' terms and conditions of employ- ment by discontinuing -contributions to the Pension Fund during two intervals; by not remitting to the Union dues withheld from its employees' pay 'during a 4-month period; and laid off its seven over-the-road drivers, while subcontracting out their work. 20 In this last regard, it is noted that the Respondent in, at first announcing an intent to sell its vehicles while leasing them- under their own licenses, initially_ attempted to conceal its true intent from the Union Since there are no material issues of'fact, and as, from the above authority, the Respondent's economic circum- stances are not a defense to its conduct herein, and as it has been found that the Respondent as, debtor and' as debtor-in-possession,-are alter egos,21 it is concluded that the Respondent violated Section 8(a)(5) and (1) of the Act by unilaterally modifying the terms of its existing collective-bargaining agreement in- (a) Discontinuing its contributions to the Pension Fund from April 1 to August 6, 1982, and, again, from Octo- ber 1982 through February 4, 1983. (b) Failing and refusing to remit to the Union dues withheld from the pay of its bargaining unit employees, pursuant to checkoff, from June 1 to September 30, 1982. (i) Subcontracting out,' in early or mid-September 1982, the over-the-road work previously performed by bargaining unit employees 19 See Oak Cliff-Golman Baking Co , 207 NLRB 1063, enfd 505 F2d 1302 (5th Cir 1974), cert denied 423 U S 826 (1975) 19 257 NLRB 1300, 1301 ( 1981) Also see Morelli Construction Co, 240 NLRB 1190 (1979) 20 Richard Dunmyre explained that the Respondent had stopped con- tributing to the Pension Fund and had not remitted the withheld union- dues because he believed that, under the Bankruptcy Code, everything was in trust for all creditors and so he did not have authority to pay any single individual or organization As the Respondent did not have the money to pay everybody , Dunmyre paid nobody He also had withheld these moneys on the premise that while the Company was operating, someone would have an extra day's pay - In order to maintain wages, other payments would have to be stopped Dunmyre described the chosen course as the lesser of two evils z i See also Bell Air Chateau Hospital, 611 F 2d 1248 (9th Cir 1979) 305 (ii) Laying off the above-named seven over-the-road drivers on September 7. In clarification, although the parties' stipulation of facts22 separately noted that in the period from Septem- ber 1982 through February 4, 1983, the Respondent did not remit to the Union any dues on behalf of the seven laid-off employees, there is no provision in the collec- tive-bargaining agreement indicated by the General Counsel, or of which I am aware, requiring that the Re- spondent assume the payment of dues for laid-off em- ployees. Rather article 3, section -3 of the collective-bar- gaining agreement, at p. 14, expressly places the burden on an employee on checkoff to make "arrangements with the Local Union and/or the Employer to pay such dues in advance," if faced with expectation of layoff. There- fore, the Respondent's -liability to remit dues for laid-off employees exists only to the extent that such dues may have been withheld from any issued post-layoff- pay- checks. Also, although the unilateral layoffs of the seven over- the-road drivers has been alleged in the complaint as vio- lative only of Section 8(a)(3) and (1) of the Act, which matter will be considered below, these layoffs cannot be considered apart from the unlawful subcontracting of their work. In these circumstances, the layoff of these employees must be found to be additionally violative of Section 8(a)(5) and (1) of the Act.23 While, as noted, these layoffs were not alleged as violative of Section 8(a)(5) and (1) of the Act, they were intrinsically related to matters which were so alleged and considered at the hearing.24 In agreement with the General Counsel, it also is con- cluded-that the seven above-named drivers were laid off by the Respondent on September 7 in violation of Sec- tion 8(a)(3) and (1) pf the Act, as their furloughs resulted from the Respondent's efforts to escape the economic obligations imposed by the existing collective-bargaining agreement.25 IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The activities of the Respondent set forth in section III, above, occurring in connection with its operations described in section I, above, have a close, intimate, and substantial relationship to trade, traffic, and commerce 22 Jt Exh 1, par 16(b) 23 Fibreboard Corp v NLRB, 379 U S 203, 216-217 (1964) 24 No merit is found to the Respondent's contention that the Union had been remiss in not responding to its August 1l proposals for benefit reductions, until February 4, 1983, when operations ended The Respond- ent's proposals were hardly coextensive with its conduct Moreover, by August, the Respondent had been unilaterally contravening the existing contract for 4 months by cessation of pension contributions, and for 2 months by not remitting withheld union dues Within a month after the August II meeting, having made an initial effort to conceal its relevant plans from the union steward, the Respondent subcontracted out its over- the-road work and laid off 7 of its 13 unit employees In the context of the Respondent's wholesale abandonment of its bargaining obligation both before and since seeking refuge in the Bankruptcy Court, the law does not require the Union, as bargaining partner, to engage in acts of futility 25 Milwaukee Spring Division, 265 NLRB 206 (1982), Los Angeles Marine Hardware Co, 235 NLRB at 736, Helrose Bindery, 204 NLRB 244, 504 (1973) 306 DECISIONS OF NATIONAL LABOR RELATIONS BOARD among the several States and tend to lead to labor dis- putes burdening and obstructing commerce and the free flow thereof CONCLUSIONS OF LAW 1 The Respondent, an-alter ego debtor and debtor-in- possession , is an employer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act, and it will effectuate the purposes of the Act to assert juris- diction. 2. The Charging Union is a labor organization :within the meanining of Section -2(5) of the Act. . - 3. At all times material the employees covered in the multiemployer bargaining unit set forth in"articles 2 and 3 of the National - Master Freight Agreement , including employees of-the Respondent , constitute a unit appropri- ate for the purposes of collective bargaining within the meaning of Section 9(b) of the Act. 4. At all times material the affiliated local unions of the International Brotherhood of Teamsters ,. Chauffeurs, Warehousemen and Helpers of America , including * the Charging Party, the Eastern Conference of Teamsters, and Teamsters Joint Council No. 40 , as represented by the Teamsters National Freight Industry Negotiating Committee (the Union) are the exclusive, duly recog- nized collective-bargaining representative -of the employ- ees in the aforesaid multiemployer unit within the mean- ing of Section 9(a) of the Act. 5. By unilaterally failing and refusing from April 1 to August 6, 1982, and from October 1982 through Febru- ary 1983 to make required pension contributions ; by uni- laterally failing and refusing from about June 1 to Sep- tember " 30," 1982, to remit to the Union the dues withheld from its -employees' pay; by unilaterally subcontracting out its over-the-road work and by laying off the seven bargaining unit employees named below who had per- formed this work, the Respondent has engaged in, and is engaging in, unfair labor practices within the meaning of Section 8(a)(5) and ( 1) of the Act. The unlawfully, laid- off employees are- - - Lewis C. Dittman Sr. Dean T. Kinch Lewis C. Dittman Jr. David K Slaugenhoup James B. Fox Paul D. Titley Samuel M. Heginbotham 6. By laying off the seven above-named employees and by refusing to recall to' work all but Fox, for the further purpose of escaping the economic obligations imposed by its collective-bargaining agreement , the Respondent has engaged in,. and is engaging in, unfair -labor practices within the meaning of Section 8(a)(3) and (1) of the Act. 7. The aforesaid unfair-labor practices are unfair labor practices affecting commerce within the meaning of Sec- tion 2(6) and (7) of the Act. THE REMEDY Having found that the Respondent has engaged in unfair labor practices within the meaning of Section 8(a)(1), (3), and.(5) of the Act, I will recommend that it be ordered to cease and desist therefrom and to take cer- tain affirmative action, necessary to effectuate the policies of the Act. Should the Respondent resume operations in the post- bankruptcy period, it should be required, on request, to recognize and bargain with the Union as the exclusive bargaining representative of its employees in the appro- priate unit by honoring its collective-bargaining agree- ment with the Union. " ' - To dissipate the effects of the unilateral changes made by the Respondent in its employees' terms and conditions of employment, in the event its operations resume, the Respondent should be ordered to rescind its subcontract- ing arrangements with respect to its over-the-road trans- portation functions,'restoring -the ante status-quo as prior to September 7, 1982, and to offer full and immediate re- instatement to each of the seven above-named over-the- road bargaining unit drivers26'"to their former, or to sub- stantially equivalent positions, without prejudice to--their respective seniority and' other rights'and privileges' Even if -the Respondent's operations do not continue in the future, these unlawfully laid off employees should be made whole by reimbursing them for any loss of pay or other benefits resulting from September 7, 1982, through February 4, 1983,27 also remitting to the Union the dues it has withheld from its employees' paychecks from June 1 to September 30, 1982, plus interest., on lost earnings and union dues, as prescribed in'Flor'ida Steel Corp.28 Fi- nally, the Respondent should be ordered to make the re- quired contributions -to the Western Pennsylvania Team- sters and Employers Pension Fund for all contributions it has failed to make on behalf of its bargaining unit em- ployees from April 1 to August 6, 1982, and from Octo- ber 1982 to February 4, 1983.29 As the Respondent is no longer in business, copies of the - attached notice, marked "Appendix" should be mailed by the Respondent -by return-receipted certified mail to all persons whom it has employed since March 1, 1982, at their respective last known addresses. On these findings of fact and conclusions of law and . on the entire record , I issue the following recommend- ed30 [Recommended Order omitted from publication.] 26 As noted, driver James B Fox had been previously reinstated Nothing here should be construed as negatively affecting Fox's future employment if the Respondent resumes operations 2' Fox's backpay entitlement , of course. runs from September 7 until his September 22 reinstatement 28 231 NLRB 651 See Ogle Protection Service, 183 NLRB 682, 683 (1970) ' 29 The matter of whether interest should be paid -on the pension fund reimbursements is left to the compliance stage of this proceeding See Bd- disco & Bildisco, 255 NLRB at 1205 fn 3 ao If no exceptions are filed as provided by Sec 10246 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 ' '