Independent Stave Co., Inc.

740 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD Independent Stave Company, Inc. and James A. Holt and Charles William Moore and James O. Railey, Jr. and James Edward Turner. Cases 9- CA-19619-1, 9-CA-19619-2, 9-CA-19619-3, and 9-CA-19619-4 16 December 1987 DECISION AND ORDER BY CHAIRMAN DOTSON AND MEMBERS JOHANSEN, BABSON, STEPHENS, AND CRACRAFT Upon charges filed on 4 and 5 May 1983,1 the General Counsel of the National Labor Relations Board issued a complaint on 14 June against the Respondent alleging that it has violated Section 8(a)(3) and (1) of the National Labor Relations Act. The complaint alleges that on specified dates in February the Respondent refused to hire the Charging Parties because, for several years prior to December 1982, the individuals held offices with the Coopers International Union of North Amer- ica, Local Union No. 48, AFL-CIO (the Union). On 20 June the Respondent filed an answer admit- ting and denying in part the allegations of the com- plaint and requesting that the consolidated com- plaint be dismissed. On 18 July the Respondent filed a Motion for Summary Judgment, with a supporting brief and exhibits. On 22 July the Board issued an order transferring the proceeding to the Board and a Notice to Show Cause why the Respondent's Motion for Summary Judgment should not be granted. On 4 August the General Counsel filed a brief in opposition to the Respondent's Motion for Summary Judgment. Ruling on the Motion for Summary Judgment In its Motion for Summary Judgment, the Re- spondent contends that there are no genuine issues concerning material facts and that all the matters raised in the complaint have been fully resolved. In support of its contentions, the Respondent offers copies of agreements signed on 28 June by the Charging Parties James A. Holt, Charles W. Moore, and James Edward Turner, settling all claims the individuals may have against the Re- spondent.2 Pursuant to the agreements, each indi- vidual was given employment with retroactive se- niority and $350, for which each agreed to release the Respondent from "any and all claims of what- soever nature relating to pending NLRB charges" ' All dates are in 1983 unless otherwise indicated 2 Copies of the agreements are attached to this decision as Appendices. A (Holt), B (Moore), and C (Turner) and to request withdrawal of the unfair labor prac- tice charges. The agreements were approved by the Union's president and secretary-treasurer with a statement that the agreement was "fair" and that the Union would not oppose it but rather "encour- ages it being approved and carried out." Regarding James O. Raley Jr., who did not execute a non- Board settlement agreement, the Respondent as- serts that Raley has waived any right to claim em- ployment by rejecting the Respondent's uncondi- tional offer of employment and that, by virtue of his full employment elsewhere, he would not be entitled to backpay. Based on the foregoing, the Respondent requests that its motion be granted and that the complaint be dismissed as a matter of law. The General Counsel, in opposition to the Re- spondent's motion, argues that the Regional Direc- tor properly refused to approve the Charging Par- ties' withdrawal requests of the underlying unfair labor practice charges because the private, non- Board settlement agreements do not fully remedy the alleged unfair labor practices. The General Counsel contends that the settlement agreements are deficient because they provide only 10 percent of the net backpay to which each employee would be entitled were the prosecution of the complaint successful and fail to provide for the posting of a notice by the Respondent to its employees. There- fore, the General Counsel argues that the Regional Director's refusal to allow withdrawal of charges and to dismiss the complaint effectuated the poli- cies of the Act, as the Regional Director must con- sider the public interests and not only the parties' private rights.3 With respect to the purported un- conditional employment offer made to Raley, the General Counsel states that because Raley was re- quired to respond to the Respondent's offer the same day, he was not'given a reasonable amount of time to respond and the offer is therefore inad- equate. The General Counsel also argues that al- though backpay may not be owing at the present time, Raley may be entitled to backpay if and when the General Counsel prevails. The General Counsel also states that the Respondent offers no evidence that Raley acknowledged the substance of the telephone conversation or adopted the tran- script purportedly made of the telephone conversa- tion by the Respondent's counsel. For the reasons stated below, we agree with the Respondent that, in light of the execution of the private settlement agreements with Holt, Turner, and Moore, there are no genuine issues of material fact which warrant a hearing on the allegations re- garding those three individuals. Therefore, we a Clear Haven Nursing Home, 236 NLRB 853 (1978) 287 NLRB No. 76 INDEPENDENT STAVE CO 741 grant the Motion for Summary Judgment in this regard and dismiss those complaint allegations. However, as also explained below, we deny the Motion for Summary Judgment concerning Raley. The Respondent manufactures wooden barrels. In late 1982 the Respondent purchased Bourbon Cooperage Company, which also manufactured wooden barrels. In February 1983, the Respondent solicited applications for work at the plant and by mid-February began production. By early June, the Respondent had a work force of approximately 122 employees, 101 of whom were former employees of Bourbon Cooperage. During the period from December 1980 until 31 December 1982, the four Charging Parties held of- fices with the Union.4 Each of them timely submit- ted an application for employment with the Re- spondent. The complaint alleges that the Respond- ent violated Section 8(a)(1) and (3) by refusing to hire them in early February 1983. On 14 June Holt, Turner, and Moore were of- fered employment by the Respondent.5 On 28 June the three individuals entered into settlement agree- ments with the Respondent, accepting employment, retroactive seniority, and $350 in return for re- questing the withdrawal of the unfair labor practice charges. The settlement agreements were then ap- proved by the union officers, even though there is no indication that the matter resolved by these agreements was the subject of a pending grievance. As noted, the Regional Director refused to ap- prove the withdrawal requests. The Board has long had a policy of encouraging the peaceful, nonlitigious resolution of disputes. "The purpose of such attempted settlements has been to end labor disputes, and so far as possible to extinguish all the elements giving rise to them."6 On a number of occasions, the Board has reiterated its commitment to private negotiated settlement agreements and its policy of "encouraging parties to resolve disputes without resort to Board proc- esses." Combustion Engineering, 272 NLRB 215 (1984). Accord: Coca-Cola Bottling Co., 243 NLRB 501, 502 (1979); Texaco, Inc., 273 NLRB 1335, 1336-1337 ( 1985). See also NLRB v. Food & Com- mercial Workers Local 23 (No. 86-594, slip op. at 14, 1987) ("Congress was aware that settlements constitute the `life blood' of the administrative process, especially in labor relations.") Notwithstanding this strong commitment to set- tlements, the Board is not required, however, to 4 The offices held 's'ere James A Holt, president, Charles W Moore, vice president , James E Turner , recording secretary , James 0 Raley Jr , financial secretary 5 The three individuals were placed in layoff status until 29 June while the plant was temporarily closed from 13-27 June 6 Wallace Corp, 323 U S 248, 253-254 (1944) give effect to all settlements reached by the parties to a dispute with or without the General Counsel's approval. For it is well settled that "the Board's power to prevent unfair labor practices is exclu- sive, and that its function is to be performed in the public interest and not in vindication of private rights" and "the Board alone is vested with lawful discretion to determine whether a proceeding, when once instituted, may be abandoned."7 Final- ly, the Board has also stated that, in exercising its discretion, it will refuse to be bound by any settle- ment that is at odds with the Act or the Board's policies. See, e.g., Borg-Warner Corp., 121 NLRB 1492, 1495 (1958). Accordingly, upon a motion of one or both of the parties to defer to a settlement agreement in lieu of further proceedings upon a complaint, the Board, after considering any objection raised by the General Counsel, will determine in its own dis- cretion, "whether under the circumstances of the case, it will effectuate the purposes and policies of the Act to give effect to any waiver or settlement of charges of unfair labor practices."8 In deciding whether it will effectuate the pur- poses and policies of the Act to give effect to a set- tlement, the Board has considered such factors as the risks involved in protracted litigation which may be lost in whole or in part, the early restora- tion of industrial harmony by making concessions, and the conservation of the Board's resources.9 In addition, the Board has considered whether the parties to the dispute and the employees affected by the dispute have agreed to the settlement, i 0 whether the settlement was the product of a griev- ance-arbitration mechanism, i i and whether the agreement was entered into voluntarily by the par- ties, without fraud or coercion. 12 One additional factor has been stressed by the Board. In Robinson Freight Lines, 117 NLRB 1483, 1485 (1957), the Board stated that it would give effect to a settlement agreement only where the 7 Robinson Freight Lines, 117 NLRB 1483 , 1485 (1957) (fn omitted) Accord NLRB Y Federal Engineering Co, 153 F 2d 233, 234 (6th Or 1946), NLRB v Ann Arbor Press, 117 F 2d 786, 792 (6th Cir 1941) e National Biscuit Co, 83 NLRB 79, 80 (1949) Accord Kelly-Spring- field Tire Co, 6 NLRB 325, 347-348 ( 1938), Ingram Mfg Co, 5 NLRB 908, 911 (1938) 9 Roselle Shoe Corp, 135 NLRB 472, 475 (1962), Farmers Co-Operative Gin Assn , 168 NLRB 367 (1967) In both of these cases, the Board also evaluated the legal and factual merits disclosed by the General Counsel's administrative investigation to determine "whether, in view of the normal uncertainties of litigation, it was reasonable to anticipate that the viola- tions alleged in the complaint could so clearly be established by a pre- ponderance of the evidence that no adjustment , less than the fullest relief indicated , would be warranted " Roselle Shoe, 135 NLRB at 475 10 See, e g, House of Adler, 206 NLRB 228 in 1 (1973), APD Transport Corp, 253 NLRB 468 (1980) 11 See, e g, Central Cartage Co, supra at 338 (1973), Coca-Cola Bot- tling Co, supra at 502 (1979) 12 See, e g , Kelly-Springfield Tire Co, 6 NLRB 325, 346-350 (1938) 742 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD unfair labor practices are "substantially remedied" by the agreement. The determination of what con- stitutes a "substantial" remedy caused sharp dis- agreement among the Board members in Clear Haven Nursing Home, 236 NLRB 853 (1978). In that case, the complaint alleged that the respondent violated Section 8(a)(5) by unilaterally terminating, without notice or bargaining, the existing employee health plan and substituting a health plan that pro- vided diminished benefits, by insisting to impasse on changes in the scope of the, recognized bargain- ing unit, and by refusing to furnish the union with relevant information requested by the union during negotiations. In, addition, the complaint alleged that the respondent, violated Section 8(a)(3) by its refus- al to reinstate a large number of unfair labor prac- tice strikers after their unconditional offer to return to work and violated Section 8(a)(1) by unlawfully threatening, warning, and interrogating employees. The non-Board settlement agreement reached by the parties, but opposed by the General Counsel, provided for the execution of a collective-bargain- ing agreement, the reinstatement of 14 strikers who had not yet been reinstated at the time of the hear- ing, and the full reinstatement of 3 strikers who had been returned to work but not to their former or substantially equivalent' positions. The agree- ment provided no backpay for the strikers who had been discriminatorily denied reinstatement. The majority of the Board rejected the settle- ment agreement "as a wholly inadequate vehicle for effectuating the purpose and policies of the Act." Clear Haven, supra at 854. As, basis for re- jecting the agreement, the majority cited the ab- sence of any effective notice to employees concern- ing the Respondent's alleged,unfair labor practices and the absence of any backpay.13 The majority emphasized that "for the limited purpose of passing on the acceptability of a proposed 'settlement, of necessity we begin with the assumption that the case is meritorious and the General Counsel is pre- pared to carry his burden of proof." Clear Haven, supra at 855-856. , The dissenters, characterizing the majority's de- cision as "exhibit[ing] an attitude toward adminis- tration of the Act which we find to be repugnant to its basic purposes and policies," would have given effect to the settlement agreement. Clear Haven, supra at 856. The dissenters reached a dif- ferent result even though they agreed with the ma- jority that "[t]he only sensible ' yardstick against which to measure the settlement is the remedy to which the Union would be entitiled if it won the entire case on the merits." Clear Haven, supra at 13 The General Counsel contended that the amount of backpay would exceed $60,000 857. The dissenters stressed that the agreement pro- vided for the execution of a collective-bargaining agreement, containing a wage rate negotiated with the backpay expectations of the employees in mind, and the reinstatement' of the strikers-more than the union would have gained by Board-or'der after litigation. The dissenters,also stressed that the em- ployees voted in favor of the settlement by a vote of 60 to 14, and that the majority's upsetting of the agreement meant that the employees would imme- diately lose the higher wage rates and other bene- fits of the collective-bargaining' agreement, which would have to be renegotiated by the parties. Thus, according to the dissenters, the settlement agree- ment "attain[s] the ends we desire without the need for going to hearing" and, given the limited staff and resources of the Board, "serves the public in- terest as well as that of the private parties." Clear Haven, supra at 858. We find, in agreement with the dissenters, that the majority's, approach to the settlement' agree- ment in Clear Haven reflected too narrow a focus. The presumption of the majority in Clear Haven that the General Counsel would prevail on every violation alleged in the complaint coupled with, their requirement that-,the settlement agreement must substantially remedy every violation alleged went beyond using the remedy for the alleged vio- lations as a benchmark by which to evaluate the reasonableness of the settlement. The majority was inescapably led to the wrong conclusion that any settlement providing 'a less than full remedy of the violations alleged was not in, accord with "the public interest in the vindication of statutory rights." Clear Haven, supra at 854. Such an assump- tion, however, ignores the equally important public interest in encouraging the parties', achievement of a mutually agreeable settlement without litigation. At this stage of the litigation we are confronted' only with alleged violations of the Act. "Even though the allegations in the complaint issued after the Region's investigation and determination that reasonable, cause exists' to believe the allegations occurred, a charging party's right to a remedy can be enforced, upon the authority of the Govern- ment, only after an adjudication. In addition, there are risks inherent in litigation. For example, wit- nesses may be unavailable or uncooperative; proce- dural delays may occur; the issues may be complex or novel; supporting documentation may have been destroyed or lost; and credibility resolutions may have to be made by the administrative law judge. By operating on a rigid requirement that the settle- INDEPENDENT STAVE CO ment must mirror a full remedy, we would be ig- noring the realties of litigation.14 Each of the parties to a non-Board settlement recognizes that the outcome of the litigation is un- certain and that he may ultimately lose; thus, the party in deciding to settle his claim without litiga- tion compromises in part, voluntarily foregoing the opportunity to have his claim adjudicated on the merits in return for meeting the other party on some acceptable middle ground. The parties decide to accept a compromise rather than risk receiving nothing or being required to provide a greater remedy. When we reject the parties' non-Board settlement simply because it does not mirror a full remedy, we are consequently compelling the par- ties to take the very risks that they have decided to avoid, as well as depriving them of the opportunity to reach an early restoration of industrial peace, which after all is a fundamental aim of the Act. See International Harvester Co., 138 NLRB 923, 926 (1962). Accordingly, we reject the limited approach to settlement agreements set forth in Clear Haven in favor of an expanded approach which will evaluate the settlement in light of all factors present in the case to determine whether it will effectuate the purposes and policies of the Act to give effect to the settlement. As outlined above, such a case-by- case approach was utilized by the Board prior to Clear Haven. Consequently, to the extent that Clear Haven is inconsistent with today's decision, it and other inconsistent cases are overruled. It is, of course, impossible to anticipate each and every factor which will have relevance to our review of non-Board settlement agreements. At this juncture, we find it unnecessary to provide an ex- haustive list of all the factors which may become relevant in individual cases. Generally, however, in evaluating such settlements in order to assess whether the purposes and policies underlying the Act would be effectuated by our approving the agreement, the Board will examine all the sur- rounding circumstances including, but not limited to, (1) whether the charging party(ies), the respondent(s), and any of the individual discriminatee(s) have agreed to be bound, and the position taken by the General Counsel regarding the settlement; (2) whether the settlement is reason- able in light of the nature of the violations alleged, the risks inherent in litigation, and the stage of the litigation; (3) whether there has been any fraud, co- Hotel Holiday Inn v NLRB, 723 F 2d 169, 172-173 (ist Cir 1983) All of the uncertainties of an adversary hearing, i e , the competence of counsel, the thoroughness of preparation, the memories of wit- nesses, the attitudes of the hearing officer, and the availability of wit- nesses, stood between [the employees] and [a full remedy], 743 ercion, or duress by any of the parties in reaching the settlement; and (4) whether the respondent has engaged in a history of violations of the Act or has breached previous settlement agreements resolving unfair labor practice disputes. We have examined this case in light of these fac- tors and conclude that the requests of Holt, Moore, and Turner to withdraw their charges pursuant to the settlement agreements with the Respondent should be approved.15 Holt, Moore, and Turner, the Charging Parties and the only discriminatees involved herein, and the Respondent voluntarily agreed to be bound to these settlements. The offi- cers of the employees' union also found each settle- ment "fair" and "encourage[d] it being approved and carried out." There is no contention that the Union's interests were not aligned with the discri- minatees, who were former union officers. The General Counsel, following the dictates of Clear Haven, opposed these settlements. This case was settled 10 days after issuance of the complaint, which had alleged that the Respondent violated Section 8(a)(3) and (1) by refusing to hire Holt, Moore, and Turner because they were union offi- cers. The parties have not identified any unusual litigation risks. We, therefore, take note of the cus- tomary risks inherent in any litigation. When the settlements are viewed against these risks and in light of the early stage of the proceedings and the nature of the allegations, we find the settlements providing for immediate employment,' 6 retroactive seniority, and $350 to be reasonable.'' This early resolution of the dispute after the Board processes have been invoked and the provision for reinstate- ment demonstrate to other employees a recognition of their statutory rights involved. In addition, there is no evidence of fraud, coercion, or duress. It does not appear that the Respondent has engaged in a history of violations of the Act nor is there evi- dence of breach of any prior settlement agree- ments. Therefore, we believe that honoring the parties' agreements advances the Act's purpose of encouraging voluntary dispute resolution, promot- ing industrial peace, conserving the resources of the Board, and serving the public interest. Accordingly, we grant the Respondent's Motion for Summary Judgment with respect to Holt, Turner, and Moore and dismiss the complaint alle- 15 Raley , who did not execute a settlement agreement, will be dis- cussed below 16 Moreover, the Respondent's 14 June offer of employment to Holt, Moore, and Turner came less than 5 months after the Respondent's al- leged unlawful refusal to hire them in early February 17 If fully successful, the Charging Parties would have also been enti- tled to more backpay and the posting of a Board notice to employees 744 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD gations regarding Cases 9-CA-19619-1, 9-CA- 19619-2, and 9-CA-19619-4. Regarding Raley, who did not execute a non- Board settlement agreement, there remains material issues of fact and law which would best be re- solved at a hearing . Accordingly, the Respondent's Motion for Summary Judgment with respect to Raley is denied. ORDER The National Labor Relations Board grants the Respondent's Motion for Summary Judgment with respect to Charging Parties Holt, Moore, and Turner and orders that the complaint allegations regarding Case 9-CA-19619-1, Case 9-CA-19619- 2, and Case 9-CA-19619-4 be dismissed. The Na- tional Labor Relations Board denies the Respond- ent's Motion for Summary Judgment with respect to Raley and orders that the complaint allegations regarding Case 9-CA-19619-3 be remanded to the Regional Director for Region 9 for appropriate proceedings consistent with this decision. Exhibit F APPENDIX A General Release The undersigned, in consideration of the company's promise to pay me $350.00 as contract labor hereby agrees to release the company from any and all claims of whatsoever nature relating to pending NLRB charges and to request withdrawal of all pending claims or charges and not to refile those or similar claims or charges I further agree that my seniority date and job classification shall be as follows: Seniority date 2-4-83, job classification-maintenance. Pay rate to be $6.85 effective June 29, 1983. I understand that the payment from the company in the above amount shall not be classified as wages or back pay, and that I am entitled to no wages or back pay, and that the payment shall be treated as, and is, for contract labor and to serve as other good and valuable consideration for the mutual promises and agreements reached this date as spelled out herein. I fully understand the contents hereof, and agree that I will indemnify and save and hold the company harmless from any and all damages by reason of any violation of the promise herein contained. The company is not re- quired to give the payment above provided until the NLRB charges relating to my claims are withdrawn and dismissed and until the company has been notified of that fact. Dated June 28, 1983. James A. Holt As union representative of the petitioner for a mainte- nance and cleanup unit, we agree that the above agree- ment is fair and that the Union will not take any action to seek to oppose the carrying out of this agreement, but encourages it being approved and carried out. Ernest D. Higdon Tommy Thompson Exhibit G APPENDIX B General Release The undersigned, in consideration of the company's promise to pay me $350.00 as contract labor hereby agrees to release the company from any and all claims of whatsoever nature relating to pending NLRB charges and to request withdrawal of all pending claims or charges and not to to refile those or similar claims or charges. I further agree that my seniority date and job classification shall be as follows. Seniority Date 2-1-83, job classification-stove grader. Pay rate to be $7.40 effective June 29, 1983. I understand that the payment from the company in the above amount shall not be classified as wages or back pay, and that I am entitled to no wages or back pay, and that the payment shall be treated as, and is, for contract labor and to serve as other good and valuable consideration for the mutual promises and agreements reached this date as spelled out herein. I fully understand the contents hereof, and agree that I will indemnify and save and hold the company harmless from any and all damages by reason of any violation of the promises herein contained. The company is not re- quired to give the payment above provided until the NLRB charges relating to my claims are withdrawn and dismissed and until the company has been notified of that fact. Dated June 28, 1983 Charles W. Moore As union representative of the production unit, we agree that the above agreement is fair and that the Union will not take any action to seek to oppose the carry out of this agreement, but encourages it being approved and carried out. Ernest D. Higdon Tommy Thompson Exhibit H APPENDIX C General Release The undersigned, in consideration of the company's promise to pay me $350.00 as contract labor hereby agrees to release the company from any and all claims of whatsoever nature relating to pending NLRB charges and to request withdrawal of all pending claims or charges and not to refile those or similar claims or INDEPENDENT STAVE CO 745 charges. I further agree that my seniority date and job classification shall be as follows: Seniority date 3-30-83, Job classification-yard labor (outside). Pay rate to be $7.13 effective June 29, 1983. I understand that the payment from the company in the above amount shall not be classified as wages or back pay, and that I am entitled to no wages or back pay, and that the payment shall be treated as, and is, for contract labor and to serve as other good and valuable consideration for the mutual promises and agreements reached this date as spelled out herein. I fully understand the contents hereof, and agree that I will indenify and save and hold the company harmless from any and all damages by reason of any violation of the promises herein contained. The company is not re- quired to give the payment above provided until the NLRB charges relating to my claims are withdrawn and dismissed and until the company has been notified of that fact. Dated June 28, 1983. /s/James Lumor As union representative of the production unit, we agree that the above agreement is fair and that the Union will not take any action to seek to oppose the carrying out of this agreement, but encourages it being approved and carried out /s/Ernest D. Higdon /s/Tommy Thompson