Service Art Co., Inc

234 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD Service Art Company, Inc and Local 67, Operative Plasterers' and Cement Masons' International Association of the United States and Canada, AFL-CIO and Detroit Association of Walls and Ceiling Contractors, Party in Interest Case 7- CA-25579 September 30 1990 SUPPLEMENTAL DECISION AND ORDER BY CHAIRMAN STEPHENS AND MEMBERS JOHANSEN AND CRACRAFT On September 9 1986, the Board issued a Deci sion and Order in this proceeding' ordering the Respondent to make all the contractually required payments to fringe benefit funds owed since Sep tember 1985 and to reimburse its employees for any losses attributable to its failure to make these con tractually required payments which failure the Board found violated Section 8(a)(5) and (1) of the Act On February 16 1987 the United States Court of Appeals for the Sixth Circuit enforced the Board s Order in full 2 On June 26, 1987 the Acting Regional Director for Region 7 issued a backpay specification and notice of hearing alleging inter alia that a contro versy had arisen over the amount of delinquent contributions owed to the union fringe benefit funds and the amount of employee losses attnbuta ble to the failure to make the delinquent benefit fund contributions The Respondent failed to file an answer to the backpay specification On August 17 1987 the General Counsel filed with the Board a Motion to Transfer Case to the Board and for Default Judgment with exhibits at tached On August 19 1987 the Board issued an order transferring the proceeding to the Board and a Notice to Show Cause why the motion should not be granted The Respondent filed no response On August 25 1988, the Board issued a Supple mental Notice to Show Cause why the motion should not be granted The Respondent again filed no response The allegations in the motion and in the backpay specification are therefore undisputed The National Labor Relations Board has delegat ed its authority in this proceeding to a three member panel Ruling on Motion for Default Judgment Section 102 54(a) of the Board s Rules and Regu lations provides that the respondent shall file an answer within 21 days from service of a backpay ' 281 NLRB No 47 a Docket No 86-6223 (unpublished judgment) specification Section 102 54(c) of the Board s Rules and Regulations states If the respondent fails to file any answer to the specification within the time prescribed by this section the Board may either with or without taking evidence in support of the allegations of the specification and without notice to the re spondent find the specification to be true and enter such order as may be appropriate The backpay specification served on the Re spondent states that pursuant to Section 102 54 of the Boards Rules and Regulations the Re spondent shall within twenty one (21) days from the date listed below file with the Acting Regional Director an original and four (4) copies of an Answer to this Specification The backpay specifi cation states further that to the extent that such Answer fails to deny allegations of the Specifica tion in the manner required under the Board s Rules and Regulations and failure to do so is not adequately explained such allegations shall be deemed to be admitted to be true and the respond ent shall be precluded from introducing any evi dence controverting them Further the undis puted allegations in the Motion for Default Judg ment disclose that the Regional Director for Region 7 by a letter dated July 21 1987 notified the Respondent that unless an answer was filed by August 4 1987 a Motion for Default Judgment would be filed The Respondent did not reply to this letter or file an answer to the backpay specifi cation In the absence of good cause being shown for the failure to file a timely answer to the backpay specification and as no explanation or response to the Notices to Show Cause has been filed we grant the General Counsels Motion for Default Judgment except as to the amount alleged for the Wall & Ceiling Contractors Industry Promotion Fund 3 Accordingly we find the computations in the specification of the amounts owed to the fringe benefit funds (with the exception of the Industry Promotion Fund) for delinquent contributions and to individual employee James Bushey for his losses to be true We shall order the Respondent to pay these amounts plus interest, if any 4 3Industry promotion funds are permissive nonmandatory subjects of bargaining Because it is not an unfair labor practice for an employer uni laterally to make a change in a permissive nonmandatory subject of bar gaining we shall not require the Respondent to make payments to the Wall & Ceiling Contractors Industry Promotion Fund See Finger Lakes Plumbing Co 254 NLRB 1399 (1981) 4 The Board does not provide for the addition of interest at a fixed rate on unlawfully withheld fund payments Instead see Merryweather Optical Co 240 NLRB 1213 1216 at fn 7 (1979) for the method of determining any additional amounts owed to such funds as reimbursement for losses Continued 291 NLRB No 35 SERVICE ART CO 235 ORDER the amounts following their names plus interest,6 if The National Labor Relations Board orders that any Inc the Respondent Service Art Company Health and Welfare Fund $5320 95 , , Warren Michigan its officers agents successors Pension Fund 5601 00 Vacation Fund 420075 and assigns shall make its employees whole by Building Trades Council Fund 33606 paying the trust funds and employee listed below James Bushey 60000 attributable to the unlawfully withheld contributions However the Board does provide interest at a fixed rate on amounts owed to individual employees for their losses attributable to the unlawful withholding of benefit fund contributions Kroft Plumbing 252 NLRB 891 fn 2 (1980) enfd mem 661 F 2d 940 (9th Cir 1981) Interest on such amounts shall be computed in accordance with our decision in New Horizons for the Re Larded 283 NLRB 1173 (1987) 5 In accordance with our decision in New Horizons for the Retarded 283 NLRB 1173 ( 1987) interest on and after January 1 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 January 1 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) I