Raymond Prats Sheet Metal Co., Inc.

194 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD Raymond Prats Sheet Metal Co., Inc. and Sheet Metal Workers' International Association, Local Union No. 11. Case 15-CA-10027 31 July 1987 ` DECISION AND ORDER By CHAIRMAN DOTSON AND MEMBERS BABSON AND CRACRAFT Upon an unfair labor practice charge filed on 8 July 1986 by the Union, Sheet Metal Workers' International Association, Local Union No. 11, the General Counsel of the National Labor Relations Board `issued a complaint on 13 August 1986 against the Respondent, Raymond Prats Sheet Metal Company, Inc., alleging that it violated Sec- tion 8(a)(1) and (5) of the National Labor Relations Act. Copies of the complaint and notice of hearing were served on the Respondent. The Respondent filed a timely answer and amended answer denying the commission of any unfair labor practices and asserting certain affirmative defenses. On 20 October 1986 the parties jointly moved the Board to transfer the proceeding to the Board without benefit of a hearing before an administra- tive law judge and they submitted a proposed record consisting of the formal papers and the par- ties' stipulation of facts with attached exhibits. On 10 December 1986 the Board issued an order grant- ing the motion, approving the stipulation, and transferring the proceeding to the Board. On 20 January -1987 the Respondent filed its brief to the Board and on 9 February 1987 the General Coun- sel filed its brief. On the record in this case, the Board makes the following findings. 1. JURISDICTION The Respondent is a Louisiana corporation en- gaged in the business of sheet metal fabrication with an office and shop facility in New Orleans, Louisiana, from which it is engaged in sheet metal work at various jobsites in the New Orleans, Lou- isiana area. The Respondent during the past 12 months has derived gross revenues in excess of $50,000 from subcontracting duct work and air- conditioning duct work to corporations engaged in the mechanical contractor and construction busi- ness in the New Orleans and Metairie, Louisiana areas. Accordingly, we find that the Respondent is an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act. II. LABOR ORGANIZATION The parties stipulated and we fmd that the Union is a labor organization within the meaning of Sec- tion 2(5) of the Act. III. THE UNFAIR LABOR PRACTICES A. Issue The issue is whether the Respondent, since on or before 8 January 1986, violated Section 8(a)(1) and (5) of the Act by failing and refusing to pay fringe benefit trust fund contributions required by the col- lective-bargaining agreement for its employees rep- resented by the Charging Party. B. Facts The Respondent is engaged in the business of sheet metal fabrication. Since about 1978, the Union was certified as the exclusive collective-bar- gaining representative in the following unit: All employees employed by Respondent, in- cluding but not limited to those engaged in the (a) manufacture, fabrication, assembling, han- dling, erection, installation, dismantling, condi- tioning, adjustment, alteration, repairings, and servicing of all ferrous or nonferrous metal work and all other materials used in lieu there- of and all air-veyor systems and airhandling systems regardless of material used including the setting of all equipment and all reinforce- ments in connection therewith; (b) all lagging over insulation and all duct lining; (c) testing and balancing of all airhandling equipment and duct work; (d) the preparation of all shop and field sketches used in fabrication and erection, including those taken from original architec- tural and engineering drawings or sketches; and (e) all other work included in the jurisdic- tional claims of Sheet Metal Workers' Interna- tional Association. At all times material, the Union, by virtue of Sec- tion 9(a) of the Act, has been the exclusive repre- sentative of the employees in the unit. This recog- nition has been embodied in a collective-bargaining agreement which was effective from its terms from 1 August 1982 through 30 April 1984 and extended, by agreement of the parties to 30 April 1987. The collective-bargaining agreement also contained an addendum, article VIII-A, section 2, which pro- vided for the amount of wage and fringe benefits to be paid to the unit employees. Since about 8 January 1986, the Respondent has failed and re- fused to pay fringe benefit contributions for its unit employees as set forth in the addendum, article 285 NLRB No. 27 RAYMOND PRATS SHEET METAL CO. VIII-A, section 2, of the collective-bargaining agreement. On 13 November 1984 the New Orleans Sheet Metal Workers Health & Welfare Fund, the New Orleans Sheet Metal Workers Pension & Retire- ment Fund, the New Orleans Sheet Metal Workers Apprenticeship and Training Committee Fund, the New Orleans Sheet Metal Vacation and Holiday Fund, and the New Orleans Sheet Metal Workers Contractor Industry Fund, Inc., filed a civil action in the United States District Court for the Eastern District of Louisiana against the Respondent. On 13 August 1985 a consent judgment was entered into by the plaintiffs and defendant , Raymond S. Prats Sheet Metal, Inc., whereby the court ordered the defendant to pay to the plaintiffs the sum of $83,352.30, and in addition, ordered that the de- fendant make monthly contributions to plaintiffs' funds in a timely fashion as required by the collec- tive-bargaining agreement. The Union was not a party to the consent judgment. Subsequently, on 25 February 1986, the same parties filed another action against the Respondent in the United States District Court for the Eastern District of Louisiana. On 30 May 1986 a judgment was entered in that action, whereby the court or- dered the defendant to pay to the plaintiffs the sum of $23,898.24, plus a reasonable attorney 's fee. The Union was not a party to the judgment. C. Contentions of the Parties The Respondent contends that the failure to pay the fringe benefit contributions resulted from the Respondent's inability to pay due to the deteriora- tion of business conditions in the area. The Re- spondent urges the Board to adopt Chairman Dot- son's dissenting position in Rapid Fur Dressing, 278 NLRB 905 (1986), and find that since its poor fi- nancial condition renders it unable to make the re- quired contributions, such conduct is merely a vio- lation of the collective-bargaining agreement and does not give rise to a violation of Section 8(a)(1) and (5) of the Act. The Respondent urges that in none of the cases in which the Chairman has posit- ed his position since Rapid Fur has there been any evidence that the trustees of the funds for whom the charging party-unions were seeking to collect delinquent contributions had secured judgments against the respondent-employer and that allowing the Charging Party to relitigate what has already been decided by the district court would constitute a wasteful expenditure of the Board's scarce re- sources. The Respondent also contends that the claims raised by the Charging Party are barred by the doctrines of res judicata and collateral estoppel be- 195 cause the only issues present in the Board proceed- ing-whether there exists a valid collective-bar- gaining agreement between the Charging Party and the Respondent and whether the Respondent hon- ored its obligations to remit funds to the various fringe benefit trust funds-were also present in the Section 301 proceeding in district court . While the Charging Party may be a different legal entity than the fringe benefit funds , the doctrine of res judicata is still applicable to the Charging Party , since it is acting as the "privy" of the trust funds . Since the Board's remedial purpose is to "make whole" a charging party, the "statutory remedy" that the Board provides is identical to the "contractual remedy" the court would provide under Section 301 of the Act. Finally, the Respondent maintains that the General Counsel 's request for a visitatorial clause should be denied because no showing has been made that its inclusion is necessary to effectu- ate compliance with any remedial order. The General Counsel argues that the Respond- ent's actions are in derogation of its bargaining ob- ligation under Section 8(d) of the Act. It contends that the Respondent is bound to the terms and con- ditions of the contract and that the Respondent's alleged poor financial condition is not a lawful basis for its failure to make fringe benefit contribu- tions. For these reasons the General Counsel as- serts that the Respondent violated Section 8(a)(1) and (5) of the Act. The General Counsel also contends that the prin- ciples of res judicata and collateral estoppel do not apply since the issues raised by this complaint are not the same as those that could have been raised before the court . Further, the Charging Party is a different legal entity than the benefit funds whose interests may be divergent from those of the Charging Party because , inter alia, the trustees of benefit funds are generally composed of both em- ployer and union representatives . Moreover, any remedy provided by a court to the benefit funds would not include a notice to employees or any other statutory remedy that the Board would pro- vide as a part of its order. The General Counsel also submits that the remedial order in this case should contain a visitatorial provision authorizing the Board to engage in discovery if necessary to monitor compliance with the Board's order. D. Analysis and Conclusions Initially, we reject the Respondent's argument that the claims raised by the Charging Party are barred by the doctrines of res judicata and collater- al estoppel. The cause of action and the issues de- cided by the district court are not the same as those presented for the Board 's resolution . The dis- 196 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD trict court litigation in which the Board and the Charging Party were not parties, involved a Sec- tion 301 suit, 29 U.S.C. § 185. The court decided the issue whether the Respondent was required to make contractual payments into various trust funds, even though it was allegedly financially unable to make these payments. The issue now before the Board that could not have been raised in the court proceeding initially is whether the Respondent's re- fusal to make such payments constitutes a violation of Section 8(a)(1) and (5) of the Act. Accordingly, the Board is not precluded from addressing the merits of this case.' Since about 8 January 1986, the Respondent has admittedly failed to make contractually required fringe benefit payments. Moreover, the Respondent has refused continually to make these payments even though on 13 August 1985 and on 30 May 1986, a consent judgment and a judgment, respec- tively, were entered by the United States District Court for the Eastern District of Louisiana order- ing that such payments be made. The Respondent's only defense for not making these payments is a claim that it is unable to do so due to its deteriorat- ing financial condition. Such an economic necessity claim, even if proven, does not constitute an ade- quate defense to an allegation that an employer has unlawfully failed to abide with provisions of a col- lective-bargaining agreement. International Distribu- tion Centers, 281 NLRB 742 (1986); NLRB v. Manley Truck Line, 779 F.2d 1327 (7th Cir. 1985), enfg. 271 NLRB 679 (1984); Oak Cliff-Golman Baking Co,, 207 NLRB 1063 (1973), enfd. 505 F.2d 1302 (5th Cir. 1974), cert. denied 423 U.S. 826 (1975). Accordingly, we find that the Respondent has violated Section 8(a)(5) and (1) by failing to make the contractually required payments to fringe benefit funds. CONCLUSIONS OF LAW 1. Raymond Prats Sheet Metal Co., Inc. is an employer engaged in commerce within the mean- ing of Section 2(6) and (7) of the Act. 2. Sheet Metal Workers' International Associa- tion, Local Union No. 11 is a labor organization within the meaning of Section 2(5) of the Act. 3. The appropriate collective-bargaining unit is: All employees employed by Respondent, in- cluding but not limited to those engaged in the (a) manufacture, fabrication, assembling, han- dling, erection, installation, dismantling, condi- tioning, adjustment, alteration, repairings, and servicing of all ferrous or nonferrous metal 1 In view of this finding we need not address the General Counsel's alternative contentions work and all other materials used in lieu there- of and all air-veyor systems and airhandling systems regardless of material used including the setting of all equipment and all reinforce- ments in connection therewith; (b) all lagging over insulation and all duct lining; (c) testing and balancing of all airliandling equipment and duct work; (d) the preparation of all shop and field sketches used in fabrication and erection, including those taken from original architec- tural and engineering drawings or 'sketches; and (e) all other work included in the, jurisdic- tional claims of Sheet Metal Workers' Interna- tional Association. 4. Since about 1978 the above-named labor orga- nization has been and is now the exclusive repre- sentative of all employees in the appropriate unit for purposes of collective bargaining within the meaning of Section 9(a) of the Act. 5. The Respondent has committed unfair labor practices within the meaning of Section 8(a)(1) and (5) by failing and refusing to transmit fringe benefit trust fund contributions as set forth in the adden- dum, article VIII-A, section 2, of the collective- bargaining agreement. 6. The aforesaid unfair labor practices are unfair labor practices affecting 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 to take certain affirmative action designed to effectuate the policies of the Act. 2 We have found that the Respondent violated Section 8(a)(5) and (1) of the Act by failing to transmit fringe benefit trust fund contributions re- quired by the collective-bargaining agreement ef- fective from 1 August 1982 to 30 April 1984, which expiration date was by mutual agreement ex- tended to 30 April 1987. In order to remedy these unfair labor practices, we shall order the Respond- ent to transmit the fringe benefit trust fund contri- butions it awes to the appropriate funds.3 We shall 2 As noted above the General Counsel requests that the Order include a visitatorial clause authorizing the Board for compliance purposes, to obtain discovery from the Respondent under the Federal Rules of Civil Procedure under the supervision of the United States court of appeals en- forcing this Order. Under the circumstances of this case, we find it un- necessary to include such a clause a The'collective-bargaining agreement provides for employer contribu- tions to the New Orleans Sheet Metal Contractors' Industry Fund Inas- much as industry advancement funds are permissive, nonmandatory sub- jects of bargaining, it is not an unfair labor practice for an employer uni- laterally to discontinue its contributions to such a fund See FML. Supply, 258 NLRB 604 fn. 3 (1981); Finger Lakes Plumbing Co., 254 NLRB 1399 (1981): Accordingly, we shall not require the Respondent to make delinquent and future contributions to that fund. RAYMOND PRATS SHEET METAL CO also order the Respondent to make the unit em- ployees whole for any loss they may have suffered as a result of its failure to make the contractually required fringe benefit contributions, Kraft Plumb- ing, 252 NLRB 891 (1980), enfd. mem. 661 F.2d 940 (9th Cir. 1981), such amounts to be computed in the manner set forth in Ogle Protection Service, 183 NLRB 682 (1970), enfd. 444 F.2d 502 (6th Cir. 1971), plus interest, as computed in New Horizons for the Retarded, 283 NLRB 1173 (1987).4 ORDER The National Labor Relations Board orders that the Respondent, Raymond Prats Sheet Metal Co., Inc., New Orleans, Louisiana, its officers, agents, successors, and assigns, shall 1. Cease and desist from (a) Refusing to bargain collectively with the Union by failing and refusing, without prior notice to or consent of the Union, to make contractually required fringe benefit trust fund payments. (b) 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) Pay all delinquent fringe benefit trust fund contributions and reimburse employees for any losses directly attributable to the withholding of such contributions under the parties' trust fund agreements in the manner set forth in the remedy section of this decision. The appropriate unit is: All employees employed by Respondent, in- cluding but not limited to those engaged in the (a) manufacture, fabrication, assembling, han- dling, erection, installation, dismantling, condi- tioning, adjustment, alteration, repairings, and servicing of all ferrous or nonferrous metal work and all other materials used in lieu there- of and all air-veyor systems and airhandling systems regardless of material used including the setting of all equipment and all reinforce- ments in connection therewith; (b) all lagging over insulation and all duct lining; (c) testing and balancing of all airhandling equipment and duct work; (d) the preparation of all shop and field sketches used in fabrication and erection, including those taken from original architec- tural and engineering drawings or sketches; and (e) all other work included in the jurisdic- 4 We leave to the compliance stage the question whether the Respond- ent must pay additional sums into the appropriate fund in order to satisfy this "make-whole" remedy Merryweather Optical Co, 240 NLRB 1213 (1979) 197 tional claims of Sheet Metal Workers' Interna- tional Association. (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) Post at its facility in New Orleans, Louisiana, copies of the attached notice marked "Appendix."5 Copies of the notice, on forms provided by the Re- gional Director for Region 15, 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. (e) Notify the Regional Director in writing within 20 days from the date of this Order what steps the Respondent has taken to comply. CHAIRMAN DOTSON, dissenting. For the reasons set forth in my dissent in Rapid Fur Dressing, 278 NLRB 905 (1986), I dissent from the majority's finding that the Respondent violated Section 8(a)(5) and (1) of the Act by failing to make fringe benefit contributions to various trust funds pursuant to its contract with the Union. There is no evidence that the Respondent has en- gaged in conduct reflecting a repudiation of the collective-bargaining agreement in any way tanta- mount to a violation of the Act or has otherwise refused to bargain. By finding a violation in these circumstances, the Board is once again allowing itself to be used as a collection agency for the Charging Party. This is particularly true in this case, since there are two outstanding judgments against the Respondent en- tered by the United States District Court for the Eastern District of Louisiana involving Section 301 suits. The trust funds may seek to collect the delin- quent contributions through the appropriate judi- cial processes. Accordingly, I would find that the Respondent has not committed an unfair labor practice by failing to submit fringe benefit contri- butions pursuant to the contract. S 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 " 198 DECISIONS 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 refuse to bargain with the Sheet Metal Workers' International Association, Local Union No. 11 by failing to make contractually re- quired fringe benefit trust fund contributions. 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 transmit to the various funds those contributions that we withheld with interest, re- quired under the terms of the addendum, article VIII-A, section 2, of the collective-bargaining agreement. WE WILL make whole our employees in the unit for any losses directly attributable to our withhold- ing of the contributions, with interest. The appro- priate unit is: All employees employed by Respondent, in- cluding but not limited to those engaged in the (a) manufacture, fabrication, assembling, han- dling, erection, installation, dismantling, condi- tioning, adjustment, alteration, repairings, and servicing of all ferrous or nonferrous metal work and all other materials used in lieu there- of and all air-veyor systems and airhandling systems regardless of material used including the setting of all equipment and all reinforce- ments in connection therewith; (b) all lagging over insulation and all duct lining ; (c) testing and balancing of all airhandling equipment and duct work; (d) the preparation of all shop and field sketches used in fabrication and erection, including those taken from original architec- tural and engineering drawings or sketches; and (e) all other work included in the jurisdic- tional claims of Sheet Metal Workers' Interna- tional Association. RAYMOND PRATS SHEET METAL CO., INC.