Handleman Co.

HANDLEMAN Co. Handleman Company and Teamsters Professional, Public, Medical & Miscellaneous Employees Local 165, International Brotherhood of Team- sters, Chauffeurs, Warehousemen and Helpers of America. Case 20-CA-19388 31 March 1987 DECISION AND ORDER BY MEMBERS JOHANSEN, BABSON, AND STEPHENS Upon a charge filed 29 November 1984 the Gen- eral Counsel of the National Labor Relations Board by the Regional Director for Region 20 issued a complaint and a notice of hearing 15 Janu- ary 1985. The complaint alleges' that the Respond- ent, Handleman Company, violated Section 8(a)(1) of the National Labor Relations Act by maintain- ing an employee stock ownership plan that pre- cludes employees covered by a collective-bargain- ing agreement from participating unless the Re- spondent , agrees to coverage under a negotiated agreement. On 5 December 1985 all parties including the General Counsel filed a stipulation of facts and a motion to transfer proceedings to the Board. The parties waived a hearing and an administrative law judge's decision and submitted the case directly to the Board for findings of facts, conclusions of law, and a decision and order. - On 7 February 1986 the Board issued an order granting the motion, approving the stipulation, and transferring the proceeding to the Board. The Re- spondent and the General Counsel filed briefs. The National Labor Relations Board has delegat- ed its authority in this proceeding to a three- member panel. On the entire record, the Board makes the fol- lowing FINDINGS OF FACT 1. JURISDICTION The Respondent is a Michigan corporation with headquarters in Detroit, Michigan, and an office and warehouse in Sacramento, California. The Re- spondent is engaged in the wholesale distribution of records, tapes, and related products. During the 12 months preceding issuance of the complaint, the Respondent purchased and received at its Sacra- mento, California facility products, goods, and ma- terials valued in excess of $50,000 directly from suppliers outside the State of California. We find that the Respondent is an employer engaged in ' other complaint allegations were settled by the parties and have been withdrawn from the complaint. 451 commerce within the meaning of Section 2(6) and (7) of the Act. Teamsters Professional, Public, Medical & Mis- cellaneous Employees Local' 165, International Brotherhood of Teamsters, Chauffeurs, Warehouse- men and - Helpers of America is a labor organiza- tion within the meaning of Section 2(5) of the Act. II. ALLEGED UNFAIR LABOR PRACTICES A. Facts Since 1983 the Respondent has maintained an employee stock ownership plan under which quali- fied employees are entitled to acquire stock in the Respondent's corporation. The plan defines eligible employees as: (1) "Covered Employee" means any Em- ployee who is classified by the Company as full-time and who: (ii) Is not covered by a collective bargain- ing agreement entered into by the Company unless such agreement, by specific reference to the Plan, provides for coverage under the Plan. B. Parties' Contentions The General Counsel contends that the Respond- ent's promulgating, maintaining, and publicizing the stock ownership plan is a per se violation of Sec- tion 8(a)(1) of the Act because it automatically ex- cludes from coverage employees who become rep- resented by a labor organization and covered by a collective-bargaining agreement. The General Counsel argues that the plan's exclusionary lan- guage punishes employees who choose a union be- cause they become subject to risking loss of the plan's benefits in negotiations while unrepresented employees would continue to enjoy the benefits. Thus, the General Counsel argues that the exclu- sionary language interferes with, restrains, and co- erces employees because it creates the potential of discrimination or a loss to employees for choosing union representation. The Respondent contends that the plan merely recognizes that Respondent's duty to bargain with its employees' bargaining representative over man- datory bargaining subjects, including participation in employee benefit plans. Thus, the Respondent argues that an employee benefit plan may lawfully point out that employees covered by a bargaining agreement are not eligible to participate unless the bargaining agreement provides for coverage. The Respondent argues that its plan does not exclude any of its employees from participation but that all 283 NLRB No. 65 452 DECISIONS OF THE NATIONAL ,LABOR RELATIONS BOARD employees are eligible to participate, subject to its statutory bargaining obligations. The Respondent argues that the plan's exclusionary language simply points out that participation by employees covered by a bargaining agreement is governed by the bar- gaining agreement. Accordingly, the Respondent contends that the plan does not interfere with, re- strain, or coerce any of the Respondent's employ- ees. C. Discussion The Board has held that an employer violates Section 8(a)(1) of the Act by maintaining a benefit plan excluding employees who join a union, choose union representation, are members of a bargaining unit, or are covered by a bargaining agreement. See respectively Toffenetti Restaurant Co., 136 NLRB , 1156' (1962),' enfd. 311 F.2d 219 (2d Cir. 1962),` cert. denied 372 U.S. 977 ( 1963); Channel Master Corp., 148 NLRB 1343 (1964); Dura Corp., 156 NLRB 285 (1965), enfd. 380 F.2d 970 (6th Cir. 1967),;' and Niagara Wires, 240 NLRB 1326 (1979). Such plans interfere with, restrain, and coerce cur- rently unrepresented employees because the exclu- sionary clauses automatically eliminate the benefits on selection of a representative and do not allow for their continuation pending negotiations . What is unlawful is the suggestion inherent in the exclu- sionary language that unrepresented employees will forfeit the plans' benefits if they choose union rep- resentation. In other words, the plans constitute threats to discontinue the benefits or to refuse to bargain over continuation of the benefits. Such threats violate the Act. Como Plastics, 143 NLRB 151 (1963). The Respondent's employee stock ownership plan defines a covered employee as, one ,who: "Is not covered by a collective bargaining agreement entered into by the Company unless such agree- ment, by specific reference, to the Plan, provides for coverage under the Plan." This exclusionary language, unlike that in the above cases, indicates that coverage for the employees is subject to nego- tiations. The distinction is a critical one. The Re- spondent's plan does not cut off the benefit prior to negotiations, but contemplates the continuation of the benefits during, the negotiations, Rather than automatically withdrawing or completely foreclos- ing coverage for represented employees, the Re- spondent's plan leaves continued coverage to col- lective bargaining, allowing the parties to agree to continued coverage or not. The Board has found that plans containing similar exclusionary provi- sions are not unlawful. Thus, in Sarah Neuman Nursing Home, 270 NLRB 663, 680 (1984), the Board found no violation where the employer, maintained a profit-sharing plan excluding "any person who is covered under a collective bargain- ing agreement . . . unless the collective bargaining agreement provides for the inclusion of such person under,the plan." Further in Rangaire Corp., 157 NLRB 682, 683-684 (1966), the Board found lawful the employers' maintenance of a pension plan excluding "any person covered by a collective bargaining agreement entered into with the em- ployer, which agreement does not provide for cov- erage of such person by this plan." For the foregoing reasons we find that the Re- spondent's maintenance of an employee stock own- ership plan does not violate the Act as alleged.2 CONCLUSIONS OF LAW 1. Handleman Company is an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act. 2. Teamsters Professional, Public, Medical & Miscellaneous Employees Local 165, International Brotherhood of Teamsters, Chauffeurs, Warehouse- men and Helpers of America is a labor organiza- tion within the meaning of Section 2(5) of the Act. 3. HandlemanCompany has not violated the Act as alleged. ORDER The complaint is dismissed. 2 Member Stephens agrees with this finding for the reasons stated in this opinion and for the reasons stated in his concurring and dissenting opinion in Lynn-Edwards Cdrp., 282 NLRB 52 (1986).