Precision Striping, Inc.

1110 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD Precision Striping, Inc. and Painters District Coun- cil No. 5 of the International Brotherhood of Painters and Allied Trades, AFL-CIO. Case 19-CA-10315 17 July 1987 SUPPLEMENTAL DECISION AND ORDER BY CHAIRMAN DOTSON AND MEMBERS BABSON AND STEPHENS On 21 September 1979 the National Labor Rela- tions Board issued a Decision and Order' in this case finding that the Respondent violated Section 8(a)(5) and (1) of the National Labor Relations Act by abrogating its bargaining relationship and labor agreement with the Painters District Council No. 5 (the Union). The Board rejected the Respondent's argument that its contract with the Union was an 8(1) agreement unenforceable under the Act, found that the Union was the employees' statutory bar- gaining representative because a majority of the unit employees were union members, and conclud- ed that the Union, by virtue of its representative status, was entitled to an irrebuttable presumption of majority status for the agreement's duration. On petition for review and cross-application for enforcement, the United States Court of Appeals for the Ninth Circuit denied enforcement 2 of the Board's Order and remanded the case to the Board for further proceedings. The court found that union membership obtained pursuant to a union-se- curity clause is insufficient to raise an irrebuttable presumption of majority support for the Union. On 18 May 1981 the Board accepted remand and notified the parties that they could file statements of position with the Board. The Respondent and the General Counsel each filed a brief. The National Labor Relations Board has delegat- ed its authority in this proceeding to a three- member panel. On the entire record in this proceeding, includ- ing the court's decision and the parties' briefs on remand, we find as follows. The Respondent, which is engaged in the build- ing and construction industry, paints stripes and in- stalls concrete curbing in parking lots and other areas. In 1973, when it began operating, the Re- spondent signed its first labor agreement with the Union; in 1974 it signed a second agreement; and in 1977 it signed a third agreement, effective from 1 June 1977 to 31 May 1980. 3 No one ever presented 245 NLRB 169. 2 642 F.2d 1144 (1981). 9 Although the contracts were the same as those signed by other em- ployers, they were not mulnemployer agreements. At most, the employ- the Respondent with union authorization cards, and no representation election was held. Each of the above agreements contained a union- security provision requiring employees to join the Union within 8 days after they were hired. Al- though the Union's attempts to enforce the union- security provisions were imperfect, the Union did send the Respondent several letters requesting compliance. When the 1977-1980 contract was exe- cuted, the Respondent had six employees, two of whom were union members. By September 1977, the Respondent had five employees, four of whom were union members. The Respondent had the same five employees in March 1978 when it repudi- ated its agreement with the Union. On 13 March 1978 the Respondent conducted a secret-ballot poll of the five employees about their desire to be represented by the Union. Each em- ployee was given a ballot with a memorandum stat- ing there would be no reprisals and giving the fol- lowing instructions: Each of you will be given a ballot to mark. After you have marked this ballot, please fold it and place it in the envelope I will give you and seal the envelope. Please do not sign your name either on the ballot or the envelope. Place the envelope in the ballot box designated for this purpose. Please be sure to vote before the end of work today, so that I will know how you stand on this important issue. Four employees voted against and one in favor of representation.4 On 17 March 1978 the Respond- ent's attorney wrote to the Union, "This letter con- stitutes formal notification that, because of your failure to obtain majority support among its em- ployees, Precision Striping cannot, and does not, recognize you as the exclusive bargaining agent for its employees." The Respondent stopped contribut- ing to the pension and the health and welfare trusts, as the contract required, and ignored the Union's subsequent efforts to enforce the union-se- curity provision. All five employees continued working for the Respondent. The Respondent never filed a petition with the Board for a repre- sentation election. In its 1979 decision the Board rejected the Re- spondent's contention that its agreement with the Union was an unenforceable 8(1) agreement under NLRB v. Iron Workers Local 103 (Higdon Contract- era involved in the negotiations were engaged in joint or convenience bargaining. 4 The General Counsel did not contend at the hearing that the poll was unlawfully conducted, and the , court stated, at 642 F.2d 1145-1146, "There is no dispute as to the lawful conduct of the poll." The manner in which the poll was conducted is not in issue. 284 NLRB No. 137 PRECISION STRIPING ing), 434 U.S. 335 (1978), and found that the Re- spondent's repudiation of the agreement and with- drawal of recognition violated Section 8(a)(5) and (1) of the Act. The decision quoted Higdon: "Millen the union successfully seeks majority sup- port, the prehire agreement attains the status of a collective-bargaining agreement executed by the employer with a union representing a majority of the employees in the unit." 434 U.S. at 350. The decision then found that because four of the five unit employees were union members when the Re- spondent withdrew recognition, the Union pos- sessed majority support at that time and was a 9(a) collective-bargaining representative. The decision concluded that the Union was entitled to an irre- buttable presumption of majority status flowing from a valid collective-bargaining agreement and that the Respondent did not have the right to repu- diate the agreement. In denying the Board's cross-application for en- forcement, the Ninth Circuit concluded, "The rule adopted by the Board, that majority union mem- bership obtained pursuant to a union security clause creates an irrebuttable presumption of ma- jority union support, is inconsistent with the Act." 642 F.2d at 1148. The court agreed with the Board that an 8(f) agreement becomes an enforceable col- lective-bargaining agreement when the union ob- tains majority support in the unit and that on "transformation the contract bar rule applies" to prohibit challenges to the union's majority status during the agreement. 642 F.2d at 1147. The court, however, held that the Board's finding of an irre- buttable presumption of majority status was incon- sistent with prior decisional law. Id. In the court's view, the Board in R. J. Smith Construction Co., 191 NLRB 693 (1971), order set aside and remand- ed 480 F.2d 1186 (D.C. Cir. 1973), and the Su- preme Court in Higdon, supra, 434 U.S. 335, held that a majority of employees having become union members pursuant to a union-security clause cre- ates 'only a rebuttable presumption of majority status. The court further held, "It is irrational to hold that majority union membership obtained pur- suant to a union security clause creates an irrebut- table presumption of majority union support." 642 F.2d at 1148. The court stated that a union-security clause operates to compel employees to join a union as a price for obtaining a job and that union membership does not necessarily show union sup- port. The court remanded the case to the Board for further proceedings consistent with its opinion. We have accepted remand and on remand again conclude, but for different reasons, that the Re- spondent violated the Act. Section 8(f) permits an employer and a union en- gaged primarily in the construction industry to agree to a labor contract without regard to the ma- jority status of the union. In a series of 1971 cases the Board held: an 8(f) agreement does not extend to the union an irrebuttable presumption of majori- ty status and is not immune from midterm chal- lenge, R. J. Smith, supra, 191 NLRB 693; an em- ployer's failure to abide by an 8(f) agreement is not necessarily a violation of Section 8(a)(5), Ruttman Construction Co., 191 NLRB 701 (1971); and an ini- tial 8(f) agreement, although creating no presump- tion of majority status, prohibits an employer from unilaterally changing working conditions where the union has majority status, Irvin-McKelvy Co., 194 NLRB 52 (1971), enf. denied in part 475 F.2d 1265 (3d Cir. 1973). In Higdon, supra, 434 U.S. at 341, the Supreme Court upheld the Board's interpreta- tion of 8(f) as "acceptable" yet "perhaps not the only tenable one." The Board, however, no longer follows R. J. Smith and related cases. In John Deklewa & Sons, 282 NLRB 1375 (1987), the Board overruled R. J. Smith, abandoned the conversion doctrine, and modified unit scope rules in 8(f) cases. As set forth in Deklewa at 1377 the Board decided to apply the following principles in 8(f) cases: (1) a collective-bargaining agreement permit- ted by Section 8(1) shall be enforceable through the mechanisms of Section 8(a)(5) and Section 8(b)(3); (2) such agreements will not bar the processing of valid petitions filed pur- suant to Section 9(c) and Section 9(e); (3) in processing such petitions, the appropriate unit normally will be the single employer's employ- ees covered by the agreement; and (4) upon the expiration of such agreements, the signato- ry union will enjoy no presumption of majori- ty status, and either party may repudiate the 8(f) bargaining relationship. Regarding the first principle, Deklewa, holds, "When parties enter into an 8(f) agreement, they will be required, by virtue of Section 8(a)(5) and Section 8(b)(3), to comply with that agreement unless the employees vote, in a Board-conducted election, to reject (decertify) or change their bar- gaining representative." (Emphasis added.) The de- cision then states, "Neither employers nor unions who are party to 8(f) agreements will be free uni- laterally to repudiate such agreements." The Board stated (at 1387): In reaching this conclusion, we note first that the obligations we impose on an 8(1) em- ployer through our application of Section 8(a)(5) to 8(f) agreements are limited to pro- 1112 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD hibiting the unilateral repudiation of the agree- ment until it expires or until the employer's unit employees vote in a Board conducted election to reject or change their representa- tive. Importantly, this limited obligation is not imposed on unwitting employers. Rather, it is a reasonable quid pro quo that is imposed only when an employer voluntarily recognizes the union, enters into a collective-bargaining agreement, and then sets about enjoying the benefits and assuming the obligations of the agreement. Finally, at 42, the Board stated that it would "apply the Board's new 8(f) principles to this case and to all pending cases in whatever stage."5 Applying the Deklewa principles to this case, we find that the Respondent has violated Section 8(a)(5) and (1) by repudiating the 1 June 1977 to 31 May 1980 contract with the Union and withdraw- ing recognition during the contract's term. The Re- spondent voluntarily entered into an 8(f) relation- ship with the Union and signed a series of agree- ments, including the 1977-1980 agreement that the Respondent repudiated in midterm. Although the Respondent conducted a secret ballot poll of its unit employees, who voted four to one against union representation, the Respondent never petitioned the Board for an election. As stated above, Deklewa, at 1385, requires a Board election (that a union loses) before an employer may lawfully repudiate an 8(f) agreement. See also id. at 1385 fn. 45, in which Deklewa states that its principle is "that an 8(f) contract can only be 'repu- diated' through the Board's election process." An employer poll, no matter how fairly conducted, is not, for the purpose of ascertaining a union's 9(a) status during the term of a contract, the equivalent of, and cannot substitute for, a Board-conducted election. 6 A Board election avoids potentially com- plex and protracted litigation; the second proviso to Section 8(f) permits the processing of a petition filed pursuant to Section 9(c) or 9(e) during the term of an 8(f) contract; an employer can file an RM petition to test a union's majority status during the term of an 8(f) contract without having to 5 We do not view R. T. Smith and the conversion doctrine as part of the law of the case which the Board must apply here pursuant to the Ninth Circuit's remand. The law of the case which we must and do follow is that the Union cannot achieve the status of a full 9(a) majority representative, irrebuttable by any means including a Board election during the contract term, by operation of a union-security clause. In Delclewa, the Board has recognized a more limited enforceable 9(a) repre- sentative status which is "only coextensive with the bargaining agreement which is the source of its exclusive representational authority" (Deklewa, at 1387), which can be tested at any time by the filing of a Board election petition, and which expires with the 8(1) contract. An employer-conducted poll prior to initial recognition may, in proper circumstances, establish a full Sec. 9 bargaining relationship San Cle- mente Publishing Corp., 167 NLRB 6 (1967), see Deklewa, at 1387 fn. 53. show the existence of any "objective consider- ation" for doubting majority status; 7 and limiting an employer's reliance on its perception of employ- ees' representational wishes in an effort to abrogate lawful contractual obligations is generally consist- ent with the Act. See Deklewa at 1386. Based on the foregoing, we fmd that the Re- spondent unlawfully repudiated its agreement with the Union. As the contract has, however, expired, the Union enjoys no continuing presumption of ma- jority status, 5 and the Respondent "is not com- pelled to negotiate or adopt a successor agreement based solely on the existence of an 8(f) relation- ship." Deklewa at 1386. CONCLUSIONS OF LAW 1. The Respondent is an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act. 2. The Union is a labor organization within the meaning of Section 2(5) of the Act. 3. By repudiating its 1977-1980 collective-bar- gaining agreement with the Union and withdraw- ing recognition from the Union prior to the expira- tion of the collective-bargaining agreement, the Re- spondent has engaged in unfair labor practices within the meaning of Section 8(a)(5) and (1) of the Act. 4. The unfair labor practices affect commerce within the meaning of Section 2(6) and (7) of the Act. REMEDY Having found that the Respondent has engaged in certain unfair labor practices, we shall order it to cease and desist and take certain affirmative action designed to effectuate the policies of the Act. We shall order the Respondent to make whole, as prescribed in Ogle Protection Service, 183 NLRB 689 (1970), any employees for losses they may have suffered as a result of the Respondent's failure to adhere to the contract since 17 March 7 See Deklewa, at 1385 fn 42. We stated in Deklewa, at 1387, "At no time does [an 8(f) union] enjoy a presumption of majority status, rebuttable or otherwise, and its status as the employees' representative is subject to challenge at any time." (Foot- note omitted.) During the term of an 8(f) contract, the challenge must be through a Board election. On the expiration of an 8(f) agreement, an em- ployer is free to repudiate its relationship with the union without an elec- tion. Member Stephens, for reasons stated in his concurring opinion in Deklewa; takes the view that we properly acknowledge a presumption of majority during the term of the agreement—a presumption rebuttable during that period only by repudiation of the union through a Board election. He agrees that no majority presummon exists upon expiration of the 8(1) agreement. PRECISION STRIPING 1113 1978,9 with interest as computed in New Horizons for the Retarded." In view of the principles set forth in Deklewa, supra, 282 NLRB 1358, we shall not extend the make-whole remedy beyond the expiration date of the 1977-1980 contract. The Respondent would have been privileged to announce an intention not to bargain with the Union for a new contract, and it was obligated only to adhere to the old contract until its expiration date. Further, the Respondent would have been privileged to withdraw recogni- tion from the Union and implement unilateral changes on the expiration of the contract on 31 May 1980. ORDER The National Labor Relations Board orders that the Respondent, Precision Striping, Inc., Everett, Washington, its officers, agents, successors, and as- signs, shall 1. Cease and desist from (a) Withdrawing recognition during the term of a collective-bargaining agreement from Painters District Council No. 5 of the International Brother- hood of Painters and Allied Trades, AFL-CIO, as the exclusive collective-bargaining representative of the Respondent's employees covered by the agreement. (b) Refusing to adhere to, through the 31 May 1980 expiration date, its 1977-1980 collective-bar- gaining agreement with the Union. (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 remedy, for any losses they may have suffered as a result of the Respondent's failure to adhere to the contract until it expired on 31 May 1980. (b) Preserve and, on request, make available to the Board or its agents for examination and copy- ing, all payroll records, social security payment 9 Because the provisions of employee benefit fund agreements are van- able and complex, the Board does not provide at the adjudicatory stage of the proceeding for the addition of interest at a fixed rate on unlawfully withheld fund payments. Therefore, the interest owed with respect to the health and welfare and pension trusts shall be determined in accordance with the procedure set forth in Menyweather Optical Co., 240 NLRB 1213, 1216 fn. 7(1979). " In accordance with our decision in New Horizons for the Retarded, 283 NLRB 1173 (1987), interest will be computed at the "short-term Fed- eral rate" for the underpayment of taxes as set out in the 1986 amend- ment to 26 U.S.C. § 6621. records, timecards, personnel records and reports, and all other records necessary to analyze the amount of backpay due under the terms of this Order. (c) Post at its Everett, Washington, office copies of the attached notice marked "Appendix."" Copies of the notice, on forms provided by the Re- gional Director for Region 19, after being signed by the Respondent's authorized representative, shall be posted by the Respondent immediately upon receipt and maintained for 60 consecutive days in conspicuous places including all places where notices to employees are customarily posted. Reasonable steps shall be taken by the Respondent to ensure that the notices are not altered, defaced, or covered by any other material. (d) Sign and return to the Regional Director suf- ficient copies of the attached notice marked "Ap- pendix" for posting by Painters District Council No. 5 of the International Brotherhood of Painters and Allied Trades, AFL-CIO, if willing, in con- spicuous places where notices to employees and members are customarily posted. (e) Notify the Regional Director in writing within 20 days from the date of this Order what steps the Respondent has taken to comply. ii 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 Nation- al Labor Relations Board" shall read "Posted Pursuant to a Judgment of the United States Court of Appeals Enforcing an Order of the National 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, during the term of a collective- bargaining agreement, repudiate that agreement and withdraw recognition from Painters District Council No. 5 of the International Brotherhood of Painters and Allied Trades, AFL-CIO, as the ex- clusive collective-bargaining representative of our employees covered by the agreement. 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. 1114 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD WE WILL make our employees whole for any failure to adhere to the 1977-1980 contract with losses they may have suffered as a result of our the Union until it expired on 31 May 1980. PRECISION STRIPING, INC.