Peelle Co.

PEELLE CO 607 The Peelle Co and Shopmen's Local Union No 455, International Association of Bridge, Structural & Ornamental Iron Workers , AFL-CIO Cases 29-CA-6894 and 29-CA-6936 November 9 1988 SUPPLEMENTAL DECISION AND ORDER BY CHAIRMAN STEPHENS AND MEMBERS JOHANSEN AND CRACRAFT On June 30 1987 Administrative Law Judge James F Morton issued the attached supplemental decision The General Counsel filed exceptions and a supporting brief and the Respondent filed a brief in response to the General Counsels exceptions The National Labor Relations Board has delegat ed its authority in this proceeding to a three member panel The Board has considered the supplemental deci sion and the record in light of the exceptions and briefs and has decided to affirm the judges rul ings 1 findings 2 and conclusions only to the extent consistent with this Supplemental Decision and Order The Respondents employees represented by Local 455 the Union went on strike July 1 1975 The Respondent subsequently violated Section 8(a)(5) and (1) of the Act by refusing to bargain with the Union when it requested bargaining in July 1978 3 In 1980 the Board found that the Re spondent violated Section 8(a)(3) and (1) by failing to reinstate fully its striking employees who indi vidually returned to work before August 9 1978 4 Thereafter the Regional Director issued the instant backpay specification The judge dismissed the entire backpay specifica tion as amended finding that the discriminatees were not entitled pursuant to the make whole order to receive reimbursement for wages or fringe benefits lost as a result of their participation in the strike Additionally the judge did not find that they were entitled to reimbursement for medi cal expenses For the reasons set forth below we disagree with the judge ' The General Counsel excepts to the judge s failure to include in his supplemental decision a reference to the General Counsels motion to strike the Respondents answer and for partial summary judgment which he denied at the hearing We find no merit in this exception 2 In sec C of his supplemental decision the judge inadvertently stated that the strike started in July 1978 rather than July 1975 Also in sec C the judge inadvertently listed Pagano s actual hourly wage rate for the third quarter 1981 through the second quarter 1982 as $ 10 50 rather than $1060 3 Kuno Steel Products Corp 252 NLRB 904 905 (1980) enfd sub nom NLRB v Koenig Iron Works 681 F 2d 130 (2d Cir 1982) Peelle Co was one of the respondents in Kano 4 Id at 906 These employees are Glenn Pagano Arthur Reynolds and Thomas Walsh 1 It is well settled that the finding of an unfair labor practice is presumptive proof that some backpay is owed by the [Respondent] 5 The burden is on the General Counsel to prove the gross amount of backpay due 6 The burden then shifts to the Respondent to establish facts that negate or mitigate its liability In analyzing the General Counsels backpay claims for Pagano Reynolds and Walsh the judge acknowledged that the collective bargaining agree ment effective just prior to the 1975 strike provid ed unit employees various fringe benefits He also found that the Respondent did not provide these contractual benefits to employees after the strike began The judge mistakenly stated that the Re gional Directors amended backpay specification sought to make the discriminatees whole by requir ing the Respondent to continue providing those contractual fringe benefits increased in accordance with the rates the Union had established in subse quent contracts with other employers during the backpay period The judge reasoned that requiring the Respondent to provide such benefits would compel the Respondent to discriminate in favor of the discriminatees because they participated in the strike He also stated that because the Respondent ceased providing the benefits long before the 10(b) period began the claim is now time barred The amended backpay specification does not seek to impose on the Respondent any terms in the Union s subsequent collective bargaining agree ments with other employers Rather the specifica tion uses a formula based on continuing the terms of the parties expired agreement Although the Second Circuit held that the Respondent validly withdrew from the multiemployer group following the 1976 impasse in bargaining between the group and the Union 8 the Union as the incumbent was still entitled to a presumption of majority status among the Respondents unit employees 9 The Re spondent was therefore obligated to bargain on request with the Union as an individual employer because the Respondent did not show a good faith doubt as to the Unions majority status 10 As the Union retained majority status the Respondent was obligated to bargain with the Union on its July 1978 request for bargaining 11 The Respondent was 3 NLRB v Mastro Plastics Corp 354 F 2d 170 178 (2d Cir 1965) cert denied 384 U S 972 (1966) 6 NLRB v Brown & Root Inc 311 F 2d 447 454 (8th Cir 1963) v Ibid a NLRB Y Independent Assn of Steel Fabricators 582 F 2d 135 (2d Cir 1978) cert denied 439 U S 1130 (1979) e Id at 150 10 Kuno Steel Products Corp 252 NLRB 904 905 (1980) enfd sub nom NLRB Y Koenig Iron Works 681 F 2d 130 (2d Cir 1982) 11 Ibid 291 NLRB No 95 608 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD likewise required to continue giving effect to its ex pired collective bargaining agreement with the Union until bargaining to impasse 12 Thus the amended backpay specification based on the ex pired agreements terms correctly calculated the gross amounts of backpay due The Respondent on the other hand has not established any facts to negate or mitigate its liability Specifically the judge denied all claims set forth in the amended backpay specification for vacation holiday and overtime pay pension deductions and contributions to the Union s Welfare Pension and Annuity Funds We will therefore order the Re spondent to make the discriminatees whole by paying them the respective amounts set forth in the amended backpay specification for vacations hole days overtime and pension deductions and by making the contributions to the Local 455 Welfare Fund 13 Pension Fund and Annuity Fund on their behalf in the respective amounts set forth in the amended backpay specification 2 The amended backpay specification also claimed that Pagano Reynolds and Walsh are owed $21 600 58 $5230 35 and $17 469 44 in back wages respectively on the theory that they would have received the pay rates they received before the strike and the wage increases that similarly situ ated replacement employees received absent the discrimination against them The measure of back wages due used in the specification was the pay rate each earned before the strike plus increases granted similarly situated employees less the rates 12 See NLRB Y Katz 369 U S 736 (1962) Taft Broadcasting Co 163 NLRB 475 (1967) 13 The Respondent asserts that a discriminatee is made whole when he is reimbursed for the cost of premiums incurred in obtaining substitute health insurance coverage and for his out of pocket medical expenses to the extent that those expenses would have been reimbursed through the Local 455 Welfare Fund In order to be made whole however a discri minatee must be restored to the position he would have occupied had the discrimination not occurred This includes not only reimbursement of the discriminatee s premiums and medical expenses but also requires the Re spondent to contribute to the Welfare Fund according to the expired contract s terms so that the discnmmatee s future interests in the Fund will be ensured [T]he diversion of contributions from the union funds undercut[s] the ability of those funds to provide for future needs Stone Boat Yard Y NLRB 715 F 2d 441 446 (9th Cir 1983) Hassett Maintenance Corp 260 NLRB 1211 (1982) a cryptic decision on which the Respondent relies focused on what it characterized as the double insurance costs that would result from requiring the employer (which had provided other coverage) in that case to make contributions to the welfare fund Hassett did not address restoring the full range of an employee s interests in the welfare fund The Hassett decision did not rec oncile its limited remedial order with pre Hassett precedent requiring em ployer contributions to union welfare funds on employees behalf see e g Kraft Plumbing 252 NLRB 891 (1980) affd mem 661 F 2d 940 (9th Cir 1981 ) as does precedent decided after Hassett See Stone Boat Yard 264 NLRB 981 (1982) which the Ninth Circuit enforced The court re jected the double-coverage/punitive claim the employer cannot com plain of the extra cost of improperly created substitute fringe benefits The company is merely required to repay what it has unlawfully withheld Stone Boat Yard Y NLRB 715 F 2d at 446 each actually earned multiplied by the hours each worked 14 The judge rejected the claims for Pagano Reyn olds and Walsh because he found that the pay rates set and increases granted before July 1 1978 antedated the 10(b) period and as the Respondent has not committed any independent discriminatory act since the backpay period began the rates and increases did not constitute continuing violations of the Act This proceeding however is not an unfair labor practice proceeding the unfair labor practice has already been found and affirmed by a court of appeals Kuno Steel Products Corp 252 NLRB 904 (1980) enfd sub nom NLRB v Koenig Iron Works 681 F 2d 130 (2d Cir 1982) The judge apparently misunderstood the order The Board specifically found that the Respondent violated Section 8(a)(3) by not fully reinstating strikers who individually returned to work before August 9 1978 but or dered that under the circumstances the Respond ent s backpay liability would run only from 6 months before the instant charges were filed 15 Manifestly the Board contemplated using the dis criminatees prestrike pay rates and increases grant ed to similarly situated employees before the back pay period to determine the amounts of back wages due Accordingly we will order the Re spondent to make whole Pagano Reynolds and Walsh by paying them $21 600 58 $5230 35 and $17 469 44 respectively as claimed on their behalf in the backpay specification 3 The General Counsel has excepted to the judges failure to include in the make whole remedy reimbursement of Pagano Reynolds and Walsh for the purchase of substitute health insur ance and out of pocket medical expenses incurred during the backpay period The amended backpay specification together with the documents intro duced at the hearing claimed $1555 for Pagano s $3886 for Reynolds and $519 for Walsh s substi tute medical insurance premiums and out of pocket medical expenses The judge who as stated above dismissed all fringe benefit claims for all discrimin atees did not specifically address medical expenses It is customary to include reimbursement of sub stitute health insurance premiums and out of pocket medical expenses in make whole remedies for fringe benefits lost 16 Because the Respondent has established no facts that would negate or mitigate its liability we will order the Respondent to reim burse Pagano $1555 Reynolds $3886 and Walsh 4 The calculation computed quarterly was adjusted for overtime 5 Id at fn 5 16 See e g RMC Constructors 266 NLRB 1064 (1983) PEELLE CO 609 $519 for their documented medical expenses during the backpay period ORDER The National Labor Relations Board orders the Respondent The Peelle Co Bayshore New York its officers agents successors and assigns to make whole the employees named below by paying them the amounts of backpay set forth opposite their names plus interest in the manner prescribed in New Horizons for the Retarded 17 less tax withhold ings required by Federal and state law and by paying to the Welfare Fund Pension Fund and Annuity Fund of Shopmen s Local Union No 455 International Association of Bridge Structural & Ornamental Iron Workers AFL-CIO the respec tive amounts on their behalf set forth opposite their names plus interest in the manner prescribed in Merryweather Optical Co 18 Name Backpay Medical Expenses Welfare Fund Pension Fund Annuity Fund G Pagano $35 796 12 $155500 $1421693 $17771 16 $355423 A Reynolds 14 364 93 3 88600 11 093 47 13 886 84 2 773 37 T Walsh 2030060 51900 3 694 28 4 617 84 923 57 17 283 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 U S C § 6621 Interest on amounts accrued pnor 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) is 240 NLRB 1213 (1979) Beatrice Kornbluh Esq for the General Counsel Stanley Israel Esq (Khegman Goldstein Israel & Cooper) of New York New York for the Respondent Vicki Erenstein Esq (Sipser Weinstock Harper & Leibowitz) of New York New York for the Charging Party SUPPLEMENTAL DECISION STATEMENT OF THE CASE JAMES F MORTON Administrative Law Judge This is a backpay case The Board at 252 NLRB 904 ordered the Peelle Co (Respondent) to make whole three em ployees who had not been fully reinstated when they re turned to work 10 years ago after being on strike Re spondent contends that they have been fully reinstated since the backpay period began 9 years ago The hearing in this case was held in conjunction with five related backpay cases-all of which opened on 12 September 1984 in New York City and closed there on 7 October 1986 On the entire record in this case including my obser vation of the demeanor of the witneses and on due con sideration of the briefs filed by the General Counsel and the Respondent I make the following FINDINGS OF FACT A Background 1 Collective bargaining history and prior cases In 1975 Respondent was engaged at its facility in Bay Shore New York in the manufacture sale and installa tion of steel doors At that time it had about 37 employ ees They were represented for purposes of collective bargaining by Shopmen s Local Union No 455 Interna tional Association of Bridge Structural and Ornamental Iron Workers AFL-CIO (Local 455) Local 455 s last collective bargaining agreement with Respondent cover ing those 37 employees expired on 30 June 1975 At that time Local 455 had virtually identical contracts with many other companies that were also engaged in the New York City metropolitan area in steel fabrication On the expiration of those agreements on 30 June 1975 Local 455 struck many of those companies including Re spondent All 37 of Respondents employees joined that strike The strike turned into a lengthy one On 18 December 1975 Local 455 filed unfair labor practice charges that led to extensive litigation before the Board The Board found in that case inter alia that Respondent had failed to bargain collectively with Local 455 its finding how ever was vacated by the U S Court of Appeals for the Second Circuit 1 On 8 August 1978 shortly after the court issued its decision Local 455 applied to Respond ent on behalf of the sinking employees for their rein statement As discussed below the three discnminatees involved in this backpay proceeding had returned to Re spondent s employ long before Local 455 s application of 8 August 1978 On 2 January 1979 Local 455 filed the unfair labor practice charges that gave rise to this back pay proceeding In the underlying case the Board held inter alia that Respondent did not violate Section 8(a)(3) by not reinstating the employees still sinking as of 8 August 1978 as there were no jobs available for them 2 At footnote 5 of its decision however the Board made the following findings which are pertinent to the three discriminatees in the present matter 1 Independent Assn. of Steel Fabricators 231 NLRB 264 (1977) revd 582 F 2d 135 (2d Or 1978) 2 Independent Assn. of Steel Fabricators (Kuno Steel) 252 NLRB 922 (1980) enfd 681 F 2d 130 (1982) 610 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD The General Counsel presented evidence estab lishing a prima fgcte case which [Respondents] have not adequately rebutted returned to work [before the end of the strike] and were not fully re instated to conditions current at the time the strike began Since an individual employee may make an unconditional offer to return to work each individ ual employee who was reinstated pursuant to an un conditional offer was entitled to full reinstatement to the status quo which he occupied at the time he went on strike The Laidlaw Corporation 171 NLRB 1366 1981-82 (1986) enfd 414 F 2d 99 (7th Cir 1969) cert denied 397 U S 920 (1970) According ly in light of [Respondents] failure to rebut the General Counsels prima facie case we find [its] conduct in this regard to be violative of Sec 8(a)(3) of the Act We agree with the Administrative Law Judge s recommendation that determination whether the total wages and benefits package these employees have received since returning to work is substantial ly equivalent to the wages and benefits they re ceived prior to the strike-and thus satisfies the full reinstatement requirement-should be considered in the compliance stage of this proceeding Under the circumstances of this case we hold that [Respond ents ] backpay liability shall run only from 6 months prior to the filing of charges herein 2 Developments between the start of the strike and the start of the backpay period On 22 December 1975 (over 5 months after the strike had begun) Respondent hired a striker replacement paid him $3 75 per hour (the minimum wage rate under the expired contract was $5 80 per hour) and did not make any contributions on his behalf to any of the benefit plans (pension welfare and annuity) provided for in the expired contract There had been no contention that Re spondent had by making those unilateral changes violat ed the Act On 1 November 1976 one of Respondents employees on strike returned to work Discnminatee Glen Pagano crossed the Local 455 picket line to work for $6 50 per hour-20 cents less than he had been earning when the strike started about 16 months before Respondent no longer made contributions on his behalf to the pension welfare and annuity funds provided for in the expired contract Instead Respondent offered Pagano the oppor tunity to participate in various contributory plans Again the changes in Pagano s wage rate and his fringe benefits were never claimed by Local 455 to have been violative of Respondents duty to bargain collectively in that it unilaterally changed terms and conditions of employ ment On 3 January 1977 the second discriminatee in this backpay proceeding Arthur Reynolds abandoned the Local 455 picket line and returned to Respondent s employ He was then paid $7 per hour (10 cents more than he earned when the strike began 18 months before) Respondent no longer contributed to the Local 455 pen sion welfare and annuity funds for him On 15 August 1977 the last discriminatee Thomas Walsh crossed the Local 455 picket line to return to work for Respondent He was paid $5 per hour-80 cents less than he earned as of 30 June 1975 the contract expiration date and Respondent did not contribute on his behalf to the funds set up in the expired contract As with Pagano and Reynolds there has never been an issue raised that these changes were instituted unlawfully in violation of any duty to bargain collectively B Backpay Formula In footnote 5 of the underlying decision of the Board set out above the backpay period for discnminatees who returned to work before Local 455 s application on 8 August 1978 was found to have begun 1 July 1978 i e 6 months before the filing of the unfair labor practice charge 2 January 1979 The remedial order issued by the Board in that decision directed Respondent inter alia to offer Reynolds Pagano and Walsh immediate and full reinstatement to their former position and make them whole for any loss of earnings suffered by reason of the discrimination against them The essential issue before me is to determine the amount of backpay if any needed to make these three employees whole for any discrimination against them not since their respective returns to work in 1976 and 1977 but since the start of the backpay period i e 1 July 1978 In the amended backpay specification the General Counsel asserts that were it not for the discrimination against them Pagano Reynolds and Walsh would have been earning as of 1 July 1978 and since much higher wage rates than they were paid and would have been covered by the pension welfare and annuity plans con tained in the expired Local 455 contract Respondents amended answer avers that as of the start of the back pay period these three employees had been fully rein stated under the very terms of the Board s remedial pro visions as set out in footnote 5 of its decision quoted above In particular Respondent urges that I find that the General Counsel cannot prove that any gross back pay is due the discriminatees inasmuch as the total wages and benefits package these employees have re ceived as of 1 July 1978 and since has been substantially equivalent to the wages and benefits they received prior to the strike C The Wage Claims Listed below are the actual wage rates paid to discn minatee Glen Pagano and those that the General Counsel claims he would have been receiving but for the discnm ination practiced against him on his return to work Actual Claimed (1) As of the start of the strike July 1978 $ 6 70 (on strike) 2 I O h k ( ) on n is return to wor November 1976 6 50 3(not stated) (3) As of the start of the backpay period 1 July PEELLE CO 611 Actual Claimed 1978 7 25 $ 8 93 (4) For the 4th Qtr 1978 7 25 8 93 (5) 1st Qtr 1979-2d Qtr 1979 7 25 8 93 (6) 3d Qtr 1979-2d Qtr 1980 7 86 9 73 (7) 3d Qtr 1980-1st Qtr 1981 8 75 10 50 (8) 2d Qtr 1981 9 25 10 50 (9) 3d Qtr 1981-2d Qtr 1982 10 50 11 50 (10) 3d Qtr 1982-2d Qtr 1983 1165 12 82 (11) 3d Qtr 1983-2d Qtr 1984 12 65 13 85 The General Counsels gross backpay formula sets out the basis for claiming that Pagano would have absent discrimination on his return in 1976 been earning $8 93 per hour as of 1 July 1978 (L 3 above) The General Counsel alleges that striker replacements were similarly situated employees and that they averaged hourly wage increases amounting to 21 percent between 1 July 1975 and 1 July 1978 The General Counsel contends that Pa gano s hourly rate of pay at the time the stnke began ($6 70) would have correspondingly been increased by 21 percent The General Counsel has claimed a further increase for Pagano in his hourly rate as of 1 July 1978 because he had received a promotion in 1977 to a higher paying job In sum the General Counsel arrived at an hourly rate of $8 93 for him as of the start of the back pay period Although Respondent concedes that the General Counsels mathematics are accurate it challenges the rel evance of those calculations As noted above Respond ent contends that the Board in its underlying decision at 252 NLRB 904 at footnote 5 quoted above specifically framed the backpay formula to be used i e the differ ence if any between the total wage and benefits package as it existed for Pagano as of the start of the backpay period and the total package as it was when the strike began Parenthetically Respondent has argued that the General Counsels formula distorts the Boards approach to calculating gross backpay as the General Counsel s formula uses the low wage rates paid striker replace ments as the base to calculate percentage increases On that point I note that one of the replacements used by the General Counsel earned $3 50 per hour and was given a 40 cent increase a year later The data the calculations and the observations set forth above reveal three significant points First and as observed earlier Pagano was paid 20 cents less per hour on his return than he had been paid when the strike began Presumably that was a factor that the Board weighed in making its finding that puma facie Respond ent had discriminated against Pagano on his return The second point that is noteworthy is that the 20 cent reduc tion in his hourly rate took effect long before the start of the backpay period i e the 10(b) period as specified within the purposes of the Act as that rate and those earlier increases are inescapably grounded on events antedating the limitations period See Local Lodge 1424 8 The amended specification alleges that as of 25 July 1977 Pagano was entitled to a 13 4-percent increase over the $6 70 rate in the expired con tract v NLRB 362 U S 411 (1960) See also Commercial Cart age Co 273 NLRB 637 648 (1984) The third point and for my purposes the most significant one is that Re spondent has not committed any independent discrimina tory act since the start of the backpay period relative to Pagano s wage rate and cannot be charged now with having continued a discriminatory wage rate into the 10(b) period If anything the facts set out above make clear that Pagano was not discriminated against since 1 July 1978 Thus whereas the General Counsel seeks pay raises for him totaling $4 92 since that date ($13 85 less $8 93) he actually received raises totaling $5 40 ($12 65 less $7 25) The figures in parentheses are the rates claimed and the rate paid him as of the second quarter 1984 minus the claimed and the actual rates for the third quarter of 1978 I note too that Pagano had after his return but before the backpay period began been promoted That hardly bespeaks a continuance of discrimination Regarding the wage claims of the other two discrimin atees Reynolds and Walsh the same observations as those made above about Pagano s are applicable Thus Walsh received a promotion to parts room foreman Reynolds actual raises in the backpay period totaled 9 cents per hour more than the total of the raises claimed for him under the General Counsels formula D The Claims for Benefits There remains for consideration the other element in the total package referred to in the Board s underlying decision that is the fringe benefits As to these fringe benefits the General Counsels for mula does not undertake a comparison of the package as it was when the strike began with the package as of the start of the backpay period Rather the General Counsel would require Respondent to have kept in effect on and after 1 July 1978 the fringe benefits in the Local 455 con tract which expired on 30 June 1975 and as modified by increases Local 455 negotiated in more recent contracts with other firms that still contribute to the contractual funds-pension health welfare and annuity The Gener al Counsel would in effect also require Respondent to pay other benefits (overtime pay vacation pay holiday pay etc ) called for in those contracts Respondents formula calls for a companson inter alia of the respective wages and benefits packages In broad terms the major differences are that the plan covering the employees when the strike began were noncontnbu tory and provided for portability that is that employees would remain covered on obtaining employment with other steel fabricators who contributed to these funds whereas the plans provided by Respondent are contnbu tory and have no portability Also the fringe benefits Respondent grants are available to all its employees The formula propounded by the General Counsel for moneys claimed for Pagano Reynolds and Walsh alleg edly based on Respondents discriminatorily withholding of contractual benefits from them is defective It suffers from the same difficulty as that found with the General Counsels wage claim formula It ignores the clear fact that Respondent had long before the onset of the period 612 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD set under Section 10(b) ceased contributing to the funds provided for under the Local 455 contract The General Counsel proceeds as if there was no strike in 1975 and no impasse as found in 1978 by the U S Court of Appeals for the Second Circuit in the case cited at footnote 2 above The benefits formula urged by the General Coun sel is time barred under Local Lodge 1424 above The formula propounded by the General Counsel is also to be faulted because its use would compel Respond ent to discriminate in favor of Pagano Reynolds and Walsh by providing them with pension and other bene fits under the provisions of the Local 455 contracts while Respondents other employees would be given disparate treatment The only basis for the distinction would be that Pagano Reynolds and Walsh had years ago sup ported Local 455 Because Respondent since the start of the backpay period has provided two of the discriminatees with wage increases greater than those claimed for them by the General Counsel and has promoted one of these two and also the third discriminatee and Respondent has not treated these three disparately from other unit employees regarding fringe benefits it provides I find the Respond ent has since 1 July 1978 provided Pagano Reynolds and Walsh with a total wages and benefits package that in no way discriminates against them because of their having once supported Local 455 [Recommended Order omitted from publication ]