Conoco, Inc.

CONOCO, INC Conoco, Inc. and Larry A. Anderson . Case 16-CA- 9167 16 December 1987 DECISION AND ORDER BY CHAIRMAN DOTSON AND MEMBERS JOHANSEN AND BABSON Upon a charge filed 27 May 1980, and an amend- ed charge filed 29 August 1980, the General Coun- sel of the National Labor Relations , Board issued an amended complaint and notice of hearing 29 De- cember '1980. The complaint alleges that the Re- spondent violated Section 8(a)(3) and ( 1) of the Act by discontinuing disability payments and reducing the vacation and retirement benefits of employee Larry A. Anderson and others similarly situated, who were on disability leave during an economic strike against the Respondent. On 9 February 1981 the General Counsel, with consent of all the parties, moved to transfer the in- stant proceeding to the Board, i' without benefit of a hearing before an administrative law judge, and submitted a proposed record consisting of formal documents and the parties' stipulation of facts with attached exhibits. On 11 March 1981 the Associate Executive Secretary, by direction of the Board, issued an order granting the motion, approving the stipulation, and transferring the proceeding to the Board . Thereafter, the General Counsel and the Respondent filed briefs.2 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, a Delaware corporation, is en- gaged in the production of petroleum products at its facility in Ponca City, Oklahoma, where it annu- ally ships to purchasers located outside the State of Oklahoma products valued in excess of $50,000. We find that the Respondent is an employer en- gaged in commerce within the meaning of Section 2(6) and (7) of the Act. We further find that the Oil, Chemical, and Atomic Workers Union (OCAW) Local 5-857 is a labor organization within the meaning of Section 2(5) of the Act. ' In the stipulation of facts the General Counsel withdrew the portion of the amended complaint related to the reduction of retirement benefits, during the strike 2 On 16 April 1981, shortly after filing his 10 April 1981 brief with the Board, the General Counsel withdrew the portion of the amended com- plaint related to the reduction of vacation benefits during the strike 619 II. ALLEGED UNFAIR LABOR PRACTICE The issue is whether the Respondent violated Section ,8(a)(3) and ( 1) of the Act by discontinuing Charging Party Larry A. Anderson's and other si- miliarly situated employees ' disability benefits at the commencement' of an economic strike. A. Facts The Union and the Respondent entered into a collective-bargaining agreement on 5 March 1979 which remained effective through 1 March 1981, covering the Respondent's production and mainte- nance employees. However, on 1 March 19803 the Union commenced a lawful economic strike at the Respondent's facility. At the time of the strike, 28 unit employees, including Larry Anderson, were unable to work for medical reasons and were re- ceiving disability payments pursuant to the Re- spondent's Comprehensive Disability Income Plan (CDIP). However, starting on 1 March, with the advent of the strike, the Respondent discontinued Anderson's and the 27 other employees' disability payments and continued nonpayment throughout the strike. The strike ended on 6 April, and the Re- spondent resumed payment under the disability plan for Anderson and nine other employees whose disabilities continued after the end of the strike. The Respondent's CDIP was incorporated by reference into the 1979 contract. The plan is fully funded by the Company and provides sickness and disability benefits equal to an employee's monthly pay for the first 3 months of disability and one-half monthly pay thereafter up to a total of 12 months. Subsection 4 under the plan's provision for denial of benefits states: If benefits are being paid prior to a strike or layoff, such benefits will cease for the duration of such strike or layoff. No benefits will be paid during the time you are on strike or layoff. The Respondent sent a letter to its striking employ- ees on 3 March which reminded them that "cover- age under the [CDIP] is discontinued for employ- ees on strike." The Union engaged in an economic strike against the Respondent in 1975, which Anderson support- ed. Employees in the unit who were receiving CDIP benefits at the commencement of the strike were denied payments for the duration of the 1975 strike. 3 All dates are in 1980 unless noted otherwise 287 NLRB No. 63 620 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD B. Contentions of the Parties The General Counsel contends that Emerson Electric Co., 246 NLRB 1143 ( 1979), enfd . as modi- fied 650 F .2d 463 (3d Cir. 1981), cert. denied 455 U.S. 939 ( 1982), mandates finding the Respondent violated Section 8(a)(3) and ( 1) by terminating sick- ness and disability benefits because it had no knowledge whether the disabled employees acted in support of the strike, and that Anderson's sup- port of the strike in 1975 is not sufficient to show support of the present strike. Further, the General Counsel argues that the Respondent 's action in cut- ting off benefits in 1975 was based on the fact that at that time they could legally do so under South- western Electric Power Co., 216 NLRB 522 (1975), which was specifically overruled by Emerson Elec- tric Co., supra. ' The Respondent contends that Emerson does not create a per se rule that discontinuation of benefits is violative of Section 8(a)(3) and ( 1), but rather is based on facts particular to that case. The Re- spondent argues the present case, unlike Emerson, contains no record evidence that the Respondent's actions . were , intended to coerce or restrain its em- ployees. Second, the Respondent alleges that in ter- minating benefits , it was ' merely applying the terms of its collectively bargained benefit plan, which specifically . provided for cessation of benefits in this situation. Finally, the Respondent urges the Board to return to the Southwestern Electric test. C. Analysis Before our decision in Texaco, Inc., 285 NLRB 241 (1987), both the Board and the Tenth Circuit had occasion to rule on a Conoco case involving the same strike at another of the Respondent's re- fineries.4 Both the Board and the court in Conoco found that the CDIP's subsection 4 language and' a letter from the Respondent to employees during the strike, , which are identical to those in the present case, did not render lawful the Respond- ent's termination of benefits . The Tenth Circuit's Conoco decision applied a Great Dane analysis5 in 4 Conoco, Inc, 265 NLRB 819 (1982), enfd 740 F2d 811 (10th Cir 1984) - 5 The Court in NLRB v Great Dane Trailers, 388 U S 26 ( 1967), ar- ticulated the following test for alleged violations turning on unlawful mo- tivation First , if it can reasonably be concluded that the employer's discrimi- natory conduct was "inherently destructive" of important employee rights, no proof of an antiunion motivation is needed and the Board can find an unfair labor practice even if the employer introduces evi- dence that the conduct was motivated by business considerations Second , if the adverse effect of the discriminatory conduct on em- ployee rights is "comparatively slight," an antiunion motivation must be proven to sustain the charge if the employer has come forward with evidence of legitimate and substantial business justifications for the conduct Thus , in either situation , once it has been proved that the employer engaged in discriminatory conduct which could have determining whether an employer violates the Act by terminating sickness and accident benefit pay- ments to disabled employees on commencement of a strike. The Conoco court emphasized that "whether the benefits here' were due and payable on the date denied, and therefore accrued, depends on the in- terpretation of the contract provision governing denial of disability payments in the event of a strike.6 It then held that the relevant contract lan- guage, identical to that in the case before us, did not clearly and unmistakably waive a disabled em- ployee's right to be free from a discriminatory denial of disability payments because of a strike, and it rejected the respondent's asserted reliance on an nondiscriminatory interpretation of the disability plan because of strike correspondence, identical to correspondence in the instant case, indicating the respondent acted on a different interpretation of the plan. The court thus agreed with the Board's finding that the respondent did not reasonably be- lieve it had the right to terminate disability benefits to an employee disabled prior to and during a strike. - In Texaco, Inc., supra, we held, as did the Tenth Circuit in Conoco, that the question of whether an employer violates Section 8(a)(3) and (1) by termi- nating benefit payments to disabled employees on commencement of the strike will be resolved by application of the Great Dane test for alleged un- lawful conduct. Under this test, the General Coun- sel bears the prima facie burden of proving at least some adverse effect of the benefit denial on em- ployee 'rights. The General Counsel can meet this burden by showing that (1) the benefit was accrued and (2) the benefit was withheld on the apparent basis of a strike. Once the General Counsel makes a prima facie showing of at least some adverse effect on employee rights, the burden under Great Dane then shifts to the employer to come forward with proof of legitimate and substantial business justifi- cation for- its cessation of benefits. -The employer may meet this burden by proving that a collective- bargaining representative has clearly and unmistak- ably waived its employees' statutory right to be free of such discrimination or coercion, or that the employer relied on a nondiscriminatory contract interpretation that is reasonable and arguably cor- rect and thus sufficient to constitute a legitimate and substantial business justification for its conduct. If the employer proves business justification, the adversely affected employee rights to some extent, the burden is upon the employer to establish that it was motivated by legitimate objectives since proof of motivation is most accessible to him 388 U S at 34 6 Conoco, Inc v NLRB, 740 F 2d at 815 CONOCO, INC Board may nevertheless find the employer commit- ted an unfair labor practice if the conduct is dem- onstrated to be "inherently destructive " of employ- ee rights or motivated by antiunion intent.' Applying the principles articulated in Texaco to the facts here, we find that the General Counsel es- tablished a prima facie case . The disabled employ- ees were entitled to and , in fact were receiving, benefits under the plan when the strike began, and the Respondent undisputedly suspended benefits on commencement of the strike . Thus, we must deter- mine whether the Respondent has come forward with evidence of either a waiver of the unit em- ployees' right to disability benefits during the strike, or a legitimate and substantial business justi- fication for its suspension of benefits . We conclude that it did not The Respondent argues that the Union waived the unit employees ' right to disability benefits when it agreed to subsection 4 of the Denial of Benefits section of the CDIP. While a union may bargain away employees' statutorily protected rights, waiver of a Section 7 right must be expressed clearly and unmistakably . This waiver will not be inferred , but must be explicit.8 We find that the Union did not clearly and un- mistakably waive the disabled employees ' right to receive disability benefits . As the Tenth Circuit held in the earlier Conoco case concerning the strike correspondence , the Company's 3 March 1980 letter , which announced cessation of benefits to employees on strike, belies the argument that benefits of employees not on strike were affected by the benefit plan. The letter outlines the status of benefits of employees on strike; it mentions nothing about benefits of employees not on strike being af- fected. Even though the Respondent has not proved waiver, it may still present evidence of a substantial business justification for withholding accrued bene- fits, such as good-faith reliance on a nondiscrimina- tory interpretation of the terms of its disability plan.9 However, given our discussion of waiver and Conoco's 3 March letter evidencing a different belief about the rights of nonstriking employees, we find, as did the Tenth Circuit in Conoco, that 7 Texaco, Inc, supra at 246. 6 Metropolitan Edison Co v NLRB, 460 U S 693 (1983) e Amoco Oil Co, 285 NLRB 918 (1987 ), is illustrative of an employer's bona fide reliance on its benefit plan justifying suspension of benefits In that case we found that Amoco's interpretation-to the effect that an em- ployee must meet its dual eligibility requirements of being disabled and normally scheduled to work-was reasonable based both on the language of the plan and past practice The record in Amoco supported our finding that Amoco had consistently applied its dual eligibility requirements non- discriminatorily with respect to disabled employees for whom no work was available during lockouts and other situations not related to employ- ees engaging in union or other protected concerted activities 621 Conoco did not reasonably believe that it had the right under the plan to terminate Anderson's and 27 other employees' disability payments. The fact that Conoco discontinued benefits for disabled employees in a strike at the refinery in 1975 does not alter our conclusion . The past prac- tice of discontinuing benefits during strikes is out- weighed by the more recent evidence of the Re- spondent's interpretation of the contract contained in the 3 March letter to employees. Accordingly , we conclude that the Respondent violated Section 8(a)(3) and (1) of the Act by with- holding accrued benefits as the complaint alleges. CONCLUSIONS OF LAW By discriminatorily withholding payments of ac- crued Comprehensive Disability Income Plan bene- fits due Larry A Anderson, Bob D . Lyons, Rich- ard L . Combest, Larry E. Brown , Thomas R. Clin- ton, Ronald W. Wilson, John H. Bain, Samuel R. Tanksley, Glenn F . Gallagher, John A. Tapp, Janie 1. Roby, Janice E. MacDonnell , John A. Moore, Paul H. Goldman, Glen A. Cope, Marilyn L. Lawson, Anthony J. Liggins, Raymond L . Scott, Rosalie A. Hall, Charles M. Carter, Donald E. Daily, William E. Miller, Ronald D. Shoptaw, George L. Hollins, Barry A. Cook, Kenneth Guier, Paul Holcomb , and Ken Conely after 1 March 1980, the Respondent engaged in unfair labor prac- tices affecting commerce within the meaning of Section 8(a)(3) and ( 1) and Section 2(6) and (7) of the Act. REMEDY Having found that the Respondent has engaged in certain unfair labor practices, we shall order the Respondent to cease and desist and to take certain affirmative actions designed to effectuate the poli- cies of the Act. Having found that the Respondent violated Sec- tion 8(a)(3) and ( 1) of the Act by withholding pay- ments of accrued benefits due employees Larry A. Anderson, Bob D . Lyons, Richard L. Combest, Larry E. Brown, Thomas R. Clinton , Ronald W. Wilson, John H. Bain, Samuel R. Tanksley, Glenn F. Gallagher , John A . Tapp, Janie I. Roby, Janice E. MacDonnell, John A. Moore, Paul H . Goldman, Glen A. Cope, Marilyn L . Lawson, Anthony J. Liggins, Raymond L . Scott, Rosalie A. Hall, Charles M. Carter, Donald E Daily , William E. Miller, Ronald D . Shoptaw, George L. Hollins, Barry A. Cook, Kenneth Guier, Paul Holcomb, and Ken Conely, we shall order the Respondent to make whole these named employees by paying the disability benefits due them, from the date such benefits were initially suspended until the date such 622 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD benefits were resumed or recovery from disability, with interest as provided in New Horizons for the Retarded.10 1 , ORDER The National Labor Relations Board orders that the Respondent, Conoco, Inc., Ponca City, Oklaho- ma, its officers, agents, successors, and assigns shall 1. Cease and desist from (a) Discriminating against and 'coercing employ- ees in the exercise of their rights to engage in or refrain from engaging in union and other protected concerted activities, including the right to strike, by withholding payments of accrued Comprehen- sive Disability Income Plan benefits. (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) Make the following' employees whole, with interest, in the manner set forth in the remedy sec- tion of the decision: Larry A. 'Anderson, Bob D. Lyons, Richard L. Combest, Larry E. Brown, Thomas R. Clinton, Ronald W. Wilson, John H. Bain, Samuel R. Tanksley, Glenn F. Gallagher, John A. Tapp, Janie I. Roby, Janice E. MacDon- nell, John A. Moore, Paul H. Goldman, Glen A. Cope, Marilyn' L. Lawson, Anthony J. Liggins, Raymond L. Scott, Rosalie A. Hall, Charles M. Carter, Donald E. Daily, William E. Miller, Ronald D. Shoptaw, George L. Hollins, Barry A. Cook, Kenneth Guier, Paul Holcomb, and Ken Conely. ' (b) Preserve and make available to the Board or its agents, on request, all records necessary to ana- lyze the amounts due under this Order. (c) Post at its Ponca City," Oklahoma refinery copies of the attached notice marked "Appen- dix." 11 Copies of the notice, on forms provided by 10 In accordance with our decision in New Horizons for the Retarded, 283 NLRB 1173 (1987), interest on and after 1 January 1987 shall be computed at the "short-term Federal rate" for the underpayment of taxes as set out in the 1986 amendment to 26 US C § 6621 Interest on amounts accrued prior to 1 January 1987 (the effective date of the 1986 amendment to 26 U S C § 6621) shall be computed in accordance with Florida Steel Corp, 231 NLRB 651 (1977) 11 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 " the Regional Director for Region 16, after being signed by the Respondent's authorized representa- tive, shall be posted by the Respondent immediate- ly 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) Notify the Regional Director in writing within 20 days from the date of this Order what steps the Respondent has taken to comply. 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 coerce or discriminate against you in, the exercise of your rights to engage in or re- frain from engaging in union and other protected concerted activities, including the right to strike, by withholding payments of accrued Comprehen- sive Disability Income Plan benefits.. 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 Larry A. Anderson, Bob -D: Lyons, Richard , L. Combest, Larry E. Brown, Thomas R. Clinton, Ronald W. Wilson, John H. Bain, Samuel R. Tanksley, Glenn F. Gallagher, John A. Tapp, Janie, I. Roby, Janice E. MacDon- nell, John A. Moore, Paul H. Goldman,. Glen A. Cope, Marilyn L. Lawson, Anthony J. Liggins, Raymond L. Scott, Rosalie A._ Hall, Charles M. Carter, Donald E. Daily, William E: Miller, Ronald D. Shoptaw, George L. Hollins, Barry A. Cook, Kenneth Guier, Paul Holcomb, and Ken Conely whole, with interest, for the losses they suf- fered as a consequence of our suspension of their accrued- benefits during the strike which began on 1 March 1980. CONOCO, INC.