Texaco Oil Co.

TEXACO OIL CO 903 Texaco Oil Company and Robert G. Ravert and Mi- chael L. Wergin. Cases 27-CA-6776 and 27- CA-6776-2 16 December 1987 SUPPLEMENTAL DECISION AND ORDER BY CHAIRMAN DOTSON AND MEMBERS JOHANSEN AND BABSON The issue presented in this case is whether the Respondent unlawfully suspended accident and sickness benefits for certain employees on com- mencement of an economic strike on 8 January 1980. On 30 November 1981 the National Labor Relations Board issued a Decision and Order adopting with remedial modifications the judge's finding that the Respondent violated Section 8(a)(3) and (1) of the Act by suspending these ben- efits.' The Board ordered the Respondent to cease and desist and to make whole the discriminatees for the benefits unlawfully withheld. Thereafter, the Respondent petitioned the United States Court of Appeals for the Tenth Circuit to review and set aside the Board's Decision and Order, and the Board filed a cross-application for enforcement of its Order. While the case was pend- ing before the Tenth Circuit, the Board issued its opinion in Conoco, Inc.2 In order to clarify the impact of the Conoco opinion on the benefits in- volved in this case, the Respondent requested the Tenth Circuit to remand this matter. Thereafter, the court granted the remand request. The Board has reconsidered its Decision and Order in light of the entire record, the Board's de- cision in Conoco, and its recently issued decision in Texaco, Inc., 285 NLRB 241 (1987). Applying the framework for analysis articulated in Texaco, we reaffirm, for the reasons set forth below, our origi- nal finding of a violation in the Respondent's sus- pension of accident and sickness benefits. The Respondent and the Union have maintained a collective-bargaining relationship for many years. The Union represents a unit of approximately 160 employees at the Respondent's Casper, Wyoming refinery. The parties' 1979-1981 collective-bargain- ing agreement incorporated by reference the Re- spondent's "Accident and Sick Benefit Plan" (A&S Plan), a corporatewide disability plan funded en- tirely from the Respondent's general assets and providing financial benefits to all regular employ- ees of Texaco absent from work because of either nonoccupational or occupational illness or injury. 1 259 NLRB 408 (1981) 2 265 NLRB 819 (1982), enfd 740 F 2d 811 (10th Cir 1984) Under the A&S Plan, an employee qualifies for benefit payments after 1 year of employment and benefit amounts depend on completed years of service. Plan rules do not state any exceptions to general eligibility requirements for strikes or strik- ers. Rules governing administration of the plan in- clude these provisions: 3. In order to qualify for benefits under this Plan, employees must, if required, present evi- dence satisfactory to the Company showing that an absence is due to illness or accident within the meaning of this Plan. 4. Illness or accident occurring when an em- ployee is not on duty will not serve to dis- qualify such employee for benefits under this Plan except where such illness or accident occurs while he or she is on (a) -leave of absence granted for military service, or (b) leave of absence granted for personal business, or (c) layoff, or (d) vacation. However, where an illness or accident occurs during vacation and the illness or injuries con- tinue beyond the date the employee is sched- uled to return to work, he or she will be enti- tled, to the extent he or she is eligible therefor, to benefits for absence beyond that date on ac- count of such illness or injuries. In addition to the foregoing provisions, the Re- spondent's personnel director, F. M. Chaney, also described the Respondent's policy regarding em- ployee reporting of absences. This policy was re- flected in a "Reporting of Absences" document, posted at the main gate of the plant and given to all new employees. It provided in pertinent part. In order to be certain that there is no misun- derstanding about the reporting requirements for absences, the following procedures should be followed: 1. If you are unable to report for work as a result of accident, illness or for any other reason, you must call your supervisor, or the Night Foreman when applicable, as early as possible and give the reason for the absence, the expected duration of the absence, and any other information the supervisor may need to plan for coverage for your vacant shift. 4. Failure to report an absence, or failure to properly notify supervision, will result in the absence being considered as AWOL. 287 NLRB No. 91 904 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD If you have any questions with respect to the proper procedure for notifying the Company in the event of your absence, please contact your Supervisor. Chaney testified that under normal conditions an employee on sick leave would not be required to report health status on a daily basis and, to the best of his knowledge, none of the six disabled employ- ees involved here was required to report daily. Employee Gottfried corroborated Chaney's testi- mony that the Respondent's absentee policy did not require day-to-day reporting while on sick leave. Each of the six employees involved here complied with the reporting of absence procedures at the inception of his illness. There is no showing that a continuing reporting requirement was im- posed by supervisors or other individuals to whom initial absence reports were given. Employee testi- mony, however, acknowledged a general, informal obligation under the absentee policy to keep the Respondent apprised of health status particularly regarding availability for work. During a contract negotiation meeting immedi- ately before the strike, the Respondent detailed how it would administer various employee benefit plans should a work stoppage occur. In particular, the Respondent announced that:' Upon commencement of a strike, all A & S benefits will be discontinued, except in those cases involving industrial accident or injury. A & S benefits will be continued to those em- ployees who are disabled due to industrial injury until medically released by their doctors or until expiration of their benefits in accord- ance with the Plan's benefit schedule, which- ever occurs first. At approximately 3 p.m on 8 January 1980,3 an economic strike commenced at the refinery. It lasted until 30 March when employees began re- turning to work pursuant to a strike-settlement agreement. During the strike the Respondent con- tinued operating most major facilities by utilizing supervisory, technical, and other nonunion person- nel. The only unit employees receiving A&S benefits for nonoccupational illness or injury at the com- mencement of the strike were Peter J. Gottfried, Michael L. Wergin, William B. Noell, John Vin, James T. Lake, and Robert G. Ravert. When the strike began, the Respondent suspended A&S bene- fits for these six employees in accord with its pre- vious announcement. Chaney acknowledged that the benefits these employees were receiving would 3 All subsequent dates refer to 1980 unless otherwise indicated have continued but for commencement of the strike. The Respondent also acknowledged that the fact that these employees were presumed to be strike supporters precipitated the termination of their A&S benefits.4 The employees were not informed by the Re- spondent of the reason for the cessation of their A&S benefits. None of the employees asked the Respondent why his benefits ceased. There is no evidence of any contemporaneous effort by the Re- spondent to justify its treatment of these employees by reference to the collective-bargaining agree- ment, specific plan provisions, or its rule concern- ing the reporting of absences.5 There is also no evi- dence of a past practice during prior strikes or at any other time of invoking the reporting-of-ab- sences rule as justification for the suspension of benefits. During the strike, each of the five employees was released by his doctor to return to work on a date prior to the culmination of the strike. All but one of the six employees commenced picketing sometime after being released to work. Only em- ployee Vin, who contacted the Respondent's nurse, informed the Respondent of his release to work. Another employee, Ravert, crossed the picket line to continue prestrike disability treatments at the Respondent's facility but was denied access by the Respondent's guards. According to credited testimony, during negotia- tions toward strike settlement the Union informed the Respondent that it was willing to withdraw unfair labor practice charges filed by the Union al- leging unlawful failure to pay A&S benefits when the strike began, but it would continue to assist the members if they wished to file individual charges. The Respondent's negotiators informed the Union of their view that any employee could legally file an individual charge, but that management would take "a dim view of our bargaining relationship" if the Union were involved in any postsettlement unfair labor practice charges or grievances. Ac- cording to them, the settlement agreement should preclude the Union "from representation in any form or manner." The strike remained 100 percent effective among unit employees until the parties concluded memo- randum and strike-settlement agreements on 29 a For example, a payroll authorization form for employee Ravers stated "continue full accident and sickness benefits from 1-1-80 through 3 00 p m 1-8-80, employee on strike at 3 00 p m , 1-8-80" and "date of return to work unknown " a Although art XV of the collective-bargaining agreement provides that if a work stoppage occurs, all contractual obligations will be sus- pended on the commencement of such strike, the Respondent does not rely on art XV as justification for suspension of the A&S benefits at issue here TEXACO OIL CO 905 March 1980. The parties' memorandum agreement stated that "for employees who were disabled before the strike began and receiving A&S benefits, such benefits shall be resumed at the time the strike is officially discontinued if satisfactory evidence of continuing disability is established." The settlement agreement also provided for dismissal by each "party" of all pending litigation, including unfair labor practice charges, and proscribed the filing of new litigation, but it contained no express limita- tion on either postsettlement charges by individuals or representational assistance by the Union. Unfair labor practice charges were filed on 10 May and 2 June by employees Wergin and Ravert respectively. Ravert initially testified that a union official spoke with him about filing a charge and gave him a charge form to fill out. He subsequently testified that he was not sure if he received the charge form from this union official. He testified that he had contemplated filing a charge and "had been asking around," but did not recall whether the union official approached him or he ap- proached the union official. Wergin testified that he decided to file a charge after talking with fellow employees at the refinery. He testified that he thinks he approached the same union official and requested a charge form and received a completed charge form already typed in and ready to be signed. He thereafter met at a local hotel with rep- resentatives from the International Union and the National Labor Relations Board. Addressing the merits of the complaint allega- tions," the judge relied on Emerson Electric Co., 246 NLRB 1143 (1979), enfd. as modified 650 F.2d 463 (3d Cir. 1981), to find that the Respondent vio- lated Section 8(a)(3) and (1) of the Act by discon- tinuing A&S benefits for the six employees on the first day of the strike The judge noted that, ac- cording to the Respondent's own testimony, its de- cision to terminate the A&S benefits was predicat- ed on the assumption that the six employees sup- ported the strike. This assumption, as was found in Emerson Electric, violated the employees' Section 7 6 In its exceptions the Respondent contends that the Union's activities with respect to the charges here violated the strike-settlement agreement and the Board's acceptance of those charges gives rise to an estoppel " We find no merit to this contention It is undisputed that the settlement agreement does not bar the individual charges filed by employees Fur- thermore, because the settlement agreement did not clearly abrogate the right of individual employees to file unfair labor practice charges, the judge correctly found no explicit waiver of this right The gravamen of the Respondent's contention appears to be that postsettlement assistance rendered by the Union to individual charging parties rose to a sufficient level of involvement that the settlement agreement should be construed as barring the charges and warranting dismissal of the complaint We agree with the judge that the evidence is insufficient to establish that the charges were filed or the Union's assistance was given in breach of the settlement agreement and in a manner warranting dismissal of the com- plaint right to refrain from announcing their positions with regard to the strike. The judge rejected the Respondent's argument that the failure of the employees to keep supervi- sion informed of their disability status contravened company policy thereby warranting cessation of the benefits. She found, inter alia, that there was no clear showing of a set procedure for the retention of eligibility in the event of a strike under the re- porting-of-absences policy or otherwise that was directly violated by any of the six employees whose benefits were terminated. Recently, in Texaco, Inc., 285 NLRB 241 (1987), we set forth governing principles for determining when an employer's suspension of benefits for dis- abled employees on commencement of a strike vio- lates the Act. The judge there also relied primarily on the Board's rationale in Emerson Electric as the basis for finding an 8(a)(3) and (1) violation. We concluded that although the Board's Conoco deci- sion expressly overruled only the remedial limita- tion in Emerson Electric, it engendered confusion regarding the continuing validity of the coercive effects theory of violation in Emerson Electric. Ac- cordingly, we expressly overruled the Emerson Electric theory of violation and held that the ques- tion whether an employer violates Section 8(a)(3) or (1) by refusing to continue benefit payments to a disabled employee on commencement of a strike will be resolved by application of the Great Dane test for alleged unlawful conduct.'' Under this test, the General Counsel bears the prima facie burden of proving at least some adverse effect of the benefit denial on employee rights. The General Counsel can meet this burden by showing that (1) the bene- fit was accrued and (2) the benefit was with- held on the apparent basis of a strike. Once the General Counsel makes a prima facie showing of at least some adverse effect ' NLRB v Great Dane Traders, 388 U S 26 (1967) The Court in Great Dane articulated the following test for 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 proved 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 adversely affected employee rights to some extent, the burden is on the employer to establish that it was motivated by legitimate objec- tives since proof of motivation is most accessible to him 388 U S at 34 906 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD on employee rights, the burden under Great Dane then shifts to the employer to come for- ward with proof of a legitimate and substantial business justification for its cessation of bene- fits. The employer may meet this burden by proving that a collective-bargaining represent- ative has clearly and unmistakably waived its employees' statutory right to be free of such discrimination or coercion. If the employer does not seek to prove waiver, it may still con- test the disabled employee's continued entitle- ment to benefits by demonstrating reliance on a nondiscriminatory contract interpretation that is "reasonable and . . . arguably correct" [em- phasis in original , fns. omitted], and thus suffi- cient to constitute a legitimate and substantial business justification for its conduct. More- over, as under Great Dane, even if the employ- er proves business justification, the Board may nevertheless find that the employer has com- mitted an unfair labor practice if the conduct is demonstrated to be "inherently destructive" of important employee rights or motivated by antiunion intent.8 Applying the Great Dane/Conoco principles ar- ticulated in Texaco to the situation here, involving the same Respondent, strike, and A&S plan, we find that the General Counsel has proven a prima facie 8(a)(3) and (1) case concerning the Respond- ent's discontinuance of A&S benefits for nonoccu- pational illness or injury to the six employees in- volved. Plan provisions regarding eligibility for nonoccupational injury contain a 1-year continuous service requirement, which, when satisfied, makes benefits due and payable based on past perform- ance, with no further work required for continuing receipt. All six employees were receiving these benefits prior to the strike. The Respondent undis- putedly discontinued these benefits on commence- ment of the strike. In fact, as noted, the Respond- ent acknowledged that these A&S benefits would have continued but for the strike, and termination was based on its presumption that the six employ- ees were strike supporters at the strike's inception. Such a denial of benefit based on protected strike activity warrants the inference of unlawful con- duct. Consequently, the burden shifts to the Re- spondent to prove a legitimate and substantial busi- ness justification for its action. The Respondent makes no argument here that the Union explicitly waived the right of disabled employees to receive A&S benefits in the event of protected strike activity. As in the lead Texaco case, the Respondent's principal justification for its 8 Texaco, Inc, supra, at 244 conduct is the abandoned Southwestern Electric pre- sumption of strike support. We again reject the ar- gument that the Board should reinstate this pre- sumption.9 To the extent that the Respondent contends that the provisions of the A&S Plan itself, notably sec- tions 3 and 4, may be interpreted as permitting a nondiscriminatory suspension of benefits in situa- tions including strikes, we reject that argument for the reasons set forth fully in the earlier Texaco opinion.10 The Respondent has failed to prove actual reliance on the interpretation urged when terminating the six employees A&S benefits. Even assuming such reliance, we find from the express language of the Plan, as well as relevant extrinsic evidence, that the suggested interpretation is both unreasonable and not arguably correct. We likewise find that the Respondent has failed to prove a legitimate and substantial business justi- fication based on its policy concerning the report- ing of absences, whether considered together with or apart from the A&S Plan. Initially, we note the absence of any affirmative evidence that the Re- spondent relied on this policy when it suspended the A&S benefits. On the contrary, the Respond- ent's failure to permit employee Ravert to report during the strike for continued in-plant disability treatment belies any purported reliance on notice of continuing disability as justification for its denial of benefits. In addition, we find that the Respond- ent has failed to prove a reasonable and arguably correct nondiscriminatory interpretation of its re- porting rule as justification for termination of A&S benefits. The posted notice regarding the reporting of absences rule does not specifically refer to a continuing obligation to report an absence. It is un- disputed that daily reporting was not required. There is also no evidence of how the Respondent applied the reporting requirement in the past. Other than the events of the strike, there is no evi- dence that the Respondent previously suspended benefits for noncompliance with its reporting-of-ab- sences rule. In these circumstances, we find that the Respondent has failed to prove a legitimate and substantial business justification for its suspension of A&S benefits. In the absence of such proof and in accord with Great Dane, we find it unnecessary to address whether the Respondent's conduct was "inherently destructive" of employee rights. Based on the foregoing, we find and conclude that the Respondent violated Section 8(a)(3) and (1) of the Act by suspending A&S benefit payments 9 On the contrary, evidence of a disabled employee's strike participa- tion is merely probative of cessation of disability Texaco, 285 NLRB 241, 246 at fn 25 10 285 NLRB at 246 TEXACO OIL CO to employees Gottfried, Wergin, Noell, Vin, Lake, and Ravert.II ORDER The National Labor Relations Board reaffirms the Order in its original Decision and Order as modified below and orders that the Respondent, Texaco Oil Co., Casper , Wyoming, its officers, agents, successors , and assigns, shall take the action set forth in the Order as modified. 1. Substitute the following for paragraph 1(a). "(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 Accident and Sickness benefits." 2. Substitute the attached notice for that of the Board's in its original Decision and Order. We reaffirm the remedial backpay dates set forth in our original De- cision and Order which modified those found by the judge In accordance with our decision in New Horizons for the Retarded, 283 NLRB 1173 (1987), interest on and after I January 1987 will be comput- ed at the "short -term Federal rate" for the underpayment of taxes as set out in the 1986 amendment to 26 U S C § 6621 Interest on amounts ac- crued prior to 1 January 1987 shall be computed in accordance with Flor- ida Steel Corp , 231 NLRB 651 (1977) APPENDIX NOTICE To EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government 907 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 you or discriminate against you in the exercise of your 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 accident and sickness 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 Peter J . Gottfried , Michael L. Wergin, William B. Noell, John Vin , James T. Lake, and Robert G. Ravert whole, with interest, for the losses they suffered as a consequence of our suspension of their accrued benefits on 8 January 1980. TEXACO, INC.