Carpenters Local 2848 (Dallas Corp)

CARPENTERS LOCAL 2848 (DALLAS CORP) United Brotherhood of Carpenters and Joiners of America, Local 2848, AFL-CIO and Dallas Corporation Case 16-CB-2915(E) November 22 1988 SUPPLEMENTAL DECISION AND ORDER BY CHAIRMAN STEPHENS AND MEMBERS JOHANSEN AND CRACRAFF On May 25, 1988 Administrative Law Judge Richard J Linton issued the attached supplemental decision The Respondent filed exceptions and a supporting brief the General Counsel filed cross exceptions a supporting brief and a reply brief to the Respondents exceptions the Charging Party filed cross exceptions a supporting brief and a reply brief to the Respondents exceptions and the Respondent filed a reply brief to the Charging Party s and the General Counsel s cross exceptions The National Labor Relations Board has delegat ed its authority in this proceeding to a three member panel The Board has considered the record and the at tached supplemental decision in light of the excep bons i and briefs and has decided to affirm the judge s rulings findings 2 and conclusions and to adopt the recommended Order The order transferring this proceeding to the Board incorrectly states that a hearing was held in this proceeding before an administrative law judge No such hearing was held 2 In adopting the judge s denial of the application for fees and expenses under the Equal Access to Justice Act we do not rely on the judge s discussion of the relationship between the General Counsel s burden of establishing a prima facie case and the standard of substantial justification or the judge s citation of cases in that connection See Lion Uniform 285 NLRB 249 (1987) We agree with the judge that his dec Sion in the un denying unfair labor practice proceeding turned on credibility and infer ences from the evidence and we find that had the testimony of the Em ployer s personnel manager John W Hufford been credited and the tes timony of the Union s chief negotiator Al J Cortez discredited the evi dence presented by the General Counsel would have been sufficient to establish a prima facie case of unlawful conduct by the Respondent Ac cordingly under the circumstances of this case we find that the General Counsel was substantially justified in pursuing the litigation In finding that the General Counsel was substantially justified the judge cites the Board s standard for substantial justification as something more than mere reasonableness as to both law and fact Under the Su preme Court s elucidation of this standard in Pierce P Underwood 108 S Ct 2541 ( 1988) the Government is substantially justified if its position was reasonable in both law and fact We note that our finding that the General Counsel was substantially justified in pursuing this case is con sistent with the standard set out in Pierce and does not affect the result in this case The Union asserts that it is entitled to a hearing to establish that it never agreed to open the then current contract for negotiations No hear ing is required as Hufford s testimony if credited would establish the prima facie case that the Respondent had in fact agreed to a modification in the contract on December 30 1986 In light of our decision to adopt the judge s findings with the above modification we find it unnecessary to pass on the other exceptions filed by the General Counsel and the Charging Party 787 ORDER The National Labor Relations Board adopts the recommended Order of the administrative law judge and orders that the application is denied Edward B Valverde Esq for the General Counsel L ND Wells Jr Esq (Mullinax Wells Baab & Clout man) of Dallas Texas for the Respondent SUPPLEMENTAL DECISION STATEMENT OF THE CASE RICHARD J LINTON Administrative Law Judge This is an EAJA case i On 29 February 19882 Carpenters Local 2848 (Union) filed its application for attorneys fees and expenses totaling $9 111 28 arising out of litiga tion of the underlying unfair labor practice case in which the Union as the defending respondent there became the prevailing party when I dismissed the complaint filed against the Union by the Government By its order of 2 March 19883 the Board referred this case to me I deny the Union s application On 16 April 1987 Dallas Corporation (Dallas or DC) filed a refusal to bargain charge against the Union Fol lowing an investigation of the charge the General Coun sel on 19 May 1987 issued a complaint against the Union In the complaint the General Counsel alleged that the Respondent Union had violated Section 8(b)(3) of the Act since 8 January 1987 and specifically on 3 February 1987 by failing and refusing to execute a docu ment embodying an agreement allegedly reached on 31 December 1986 between the Union and Dallas The case came before me for hearing in Fort Worth Texas on 5-6 August 1987 I issued my decision JD- (ATL)-56-87 on 25 November 1987 The opening para graph of my underlying decision reads This is a refusal to bargain case The Govern ment alleges that UBC Local 2848 unlawfully re fused to sign a mid term contract modification it purportedly agreed to on 30 December 1986 with Dallas Corporation Because I find there was no meeting of the minds between the Union and Dallas Corporation as to a material term of the po tential contract modification agreement and there fore no agreement the Union could be required to sign I dismiss the complaint Subsequent to my decision the parties settled their dis pute and Dallas filed a request to withdraw the charge it had filed in Case 16-CB-2915 The General Counsel thereafter filed a motion with the Board asking the Board to approve the withdrawal request By its Order dated 9 February the Board granted the General Coun sel s motion i A supplemental proceeding to pass on an application for attorneys fees and expenses under the Equal Access to Justice Act 5 U S C § 504 and Sec 102 143 et seq of the Board s Rules and Regulations 2 Setting forth dates in the military style complies with the wishes of the Board 3 All dates are for 1988 unless otherwise indicated 291 NLRB No 124 788 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD The General Counsel has filed a motion dated 25 March to dismiss the Unions application for attorneys fees and expenses Dallas could have filed comments of the Unions application but is has not done so Section 102 150(e) of the Board s Rules and Regulations The Union filed a response dated 11 April to the General Counsels motion to dismiss Because it is difficult to understand the issues here without reading my previous decision in its entirety I frequently have quoted from that decision Findings and Conclusions In its motion to dismiss the Government asserts sever al procedural defenses to the Union s application It also moves to dismiss the application on the merits That is the General Counsel contends the Governments position in the litigation was substantially justified The statute provides for the award of attorney fees and expenses to eligible parties who prevail in litigation before the Feder al Government unless the Government can establish that its position in litigation was substantially justified or that special circumstances make an award unjust EAJA § 504(a) Section 102 144 of the Board s Rules and Regu lations I find it unnecessary to address the procedural grounds relied on by the General Counsel because I find that the General Counsel s position in Case 16-CB-2915 was sub stantially justified The underlying case evolved from a dispute arising from DC s decision to terminate its defined benefit pen sion plan (plan 51 ) at the close of 1986 and to replace it with a defined contribution plan (plan 60) effective 1 January 1987 As I noted in section III A 2 a of my earh er decision the Union was not necessarily opposed to that change if certain matters could be resolved for the conversion I further noted at that point But before the Union would agree to switch to plan 60 it wanted to be sure employees participat ing in plan 51 were adequately compensated and protected The major stumbling block to any agree ment and the principal factor leading to this litiga tion is the dispute of the parties over the formula for calculating the monthly pension benefit amount in the current plan plan 51 To terminate plan 51 Dallas would have to purchase annuities for the plan s employee participants This is where the benefit formula comes into play Thus in part III A 1 of my decision I wrote But the amount of any such annuities could be as certained only by computations based on the provi sions of the CBA By provision in Appendix A to the CBA (R Exh 1) the parties agreed that the benefit would be as follows (1 43) 3/01/85-$7 50/mo x yrs service 3/01/86-$8 00/mo x yrs service 3/01/87-$8 50/mo x yrs service The parties dispute what the benefit provision means As we see later in more detail the Union would compute the provision as follows for an em ployee retiring in 1987 with service of 30 years $8 50 x 30 years equals a monthly benefit of $255 In contrast DC reads the language as specifying a benefit to be computed for each year s service The final retirement benefit would be calculated by adding each year s benefit year by year for the 30 years of credited service Obviously Dallas Corpo ration s interpretation would yield a significantly lower pension payment than would the Union s reading Although no examples were supplied at the hear mg an exercise in arithmetic starting with the $7 50 shown for 1 March 1985 and projecting 50 cent in creases over the next 29 years to a figure of $22 for the 30th year produces the following results At the end of February 2015 the retiring employee would receive under DC s formula a monthly payment of $442 50 Using the Union s interpretation the figure is $660 ($22 x 30 years) The $217 50 difference is a monthly pension payment some 49 15 percent great er than the monthly sum DC s formula would yield From a retirees standpoint the difference is ex tremely important To Dallas Corporation the dif ference in funding requirement would be an extra and unexpected burden of staggering weight when multiplied by all the present and future participants in the plan The parties clearly expressed their positions at their second meeting 18 November 1986 The next day the Union filed a grievance under the collective bargaining agreement (CBA) seeking a determination that the Unions interpretation of the benefit calculation formula was the correct one Dallas waived the initial steps of the grievance procedure and the grievance was on the table for discussion beginning with the next meeting 9 December 1986 Negotiations between DC and the Union came down to the critical meeting of 30 December 1986 At that meeting the parties worked from DC s final proposal of 23 December As I mentioned in section III A 2 d of my underlying decision DC s final proposal may be summa nzed as containing these four items 1 The amount of DC s contribution to plan 60 2 The amounts to be distributed to the partici pants in plan 51 3 Adoption of DC s position on the Union s grievance 4 The proposal would be all inclusive DC s proposal appears in full in section III A 2 d of my decision below Representing the Union at the meeting of 30 Decem ber was its chief negotiator Al J Cortez At this meet ing Personnel Manager John W Hufford represented Dallas As my previous decision fully describes unfortu nate circumstances had much to do with the misunder standing that developed The meeting of 30 December (the seventh meeting) occurred during the Christmas New Year s holiday season DC s principal negotiator CARPENTERS LOCAL 2848 (DALLAS CORP) 789 Industrial Relations Director A Kent McCulloch was not present at the meeting of 30 December Although Hufford had been present at other meetings he was not DC s chief negotiator Cortez had just returned from a 2 week vacation the day before and was handicapped by not having in attendance R Denny Scott a labor econo mist with the Union s International organization Scott who left for vacation some 11 days earlier had partici pated substantially at the bargaining sessions beginning in November Indeed Scott was the Union s expert on the technical aspects of the pension matters Also absent from the Unions side on 30 December was its chief steward Clifford Shepherd Because he too was on vacation Shepherd also missed the acceptance vote meeting of 31 December Shepherd may not have been a pension expert as was Scott but one thing is clear-Shepherd understood the practical aspects of the different positions the parties had going into the meeting of 30 December 4 Before leaving for vacation Shepherd instructed Cortez not to present DC s proposal to the employees for ratification unless there was equivalency between the old plan and the new Although the evi dence below did not directly cover whether in fact there was equivalency at the end of the meeting of 30 December it is clear the parties viewed DC s amended proposal as falling substantially short of equivalency As we shall see the following day Cortez nevertheless pre sented it to the employees and as I found Cortez im pliedly recommended acceptance According to Hufford at the meeting of 30 December the parties began discussing the items of DC s final pro posal Shortly before 1 p in Cortez proposed that DC increase the contribution for 1987 from 5 cents to 10 cents from 7 5 cents to 12 5 cents for 1988 and con cernmg item 2 that DC increase the distribution of excess contributions from 30 percent to 50 percent with the Union selecting bonus option number 1 5 There is no dispute Cortez said if DC did that items 3 and 4 would be okay and the Union would be in a position to with draw the grievance (This is described in my earlier deci sion sec III A 2 e (2)) They continued to discuss mat ters until about 3 p in when they took a recess During the midafternoon recess Hufford telephoned his superior Personnel Director Brunson and reported about the Union s concern for equivalency and the Union s proposed increases Brunson suggested as a way of resolving the matter that DC increase the bonus factor by up to $2 When the parties reassembled Huf ford offered to add $2 to the bonus factor The parties discussed matters until nearly 5 p in when Hufford told Cortez that if the Union did not report to the employees on DC s proposal Hufford would do so Cortez took his group for a caucus I describe the Union s caucus discus sion in section III A 2 e (2) of my earlier decision When the Union group returned Cortez said they would recommend the proposal (Hufford s word) Ac cording to Cortez he said he would recommend it or 4 As noted in fn 9 of my previous decision in April 1987 Shepherd suffered a stroke which ended his employment at DC S A bonus was to be paid under item 2 to employee participants 45 and older the figures to the employees Hufford asked each member of the Unions committee if he would recom mend the proposal and each said or nodded yes At pages 158 and 226-227 of the transcript of testimony below Hufford testified he left the meeting with the un derstanding that the Union would recommend the pro posal and that (a tentative) agreement had been reached on the whole package Unfortunately the grievance had not been mentioned since early in the meeting and Cortez and Hufford did not check off a list to confirm what they were agreeing to submit Nothing was initialed To Hufford the Union agreed to drop the grievance 6 To Cortez the facts meant something else and I described his complicated thinking in my earlier decision In essence Cortez con templated recommending to the membership and to the grievants that the grievance be withdrawn if they voted strongly in favor of accepting DC s proposal If the vote was not strongly favorable Cortez secretly thought then the parties would arbitrate the grievance The crucial question is what did the Union agree to submit to the voters By agreeing to recommend the proposal (Hufford s word simply the figures or it under Cortez s ver sion) did the Union agree to recommend the amended proposal (the additional $2 bonus) in lieu of substantial equivalency? As I wrote in my earlier decision (sec IIIA2 e(3)) By such process did the Union agree to recom mend the amended proposal (in essence the addi tional $2 bonus) in lieu of substantial equivalency? Stated differently although neither the Union nor DC mentioned withdrawal of the grievance in their post caucus conversation did the Union s agree ment to recommend it the figures include the Union s earlier Okay to item 3 (withdrawing the grievance on condition equivalency was achieved) but without the earlier condition of equivalency? Objectively the situation is ambiguous The facts can be interpreted as an implied dropping of the equivalency condition while leaving the Okay to withdraw the grievance An equally valid interpre tation is that the Union agreed only to recommend the numbers of the amended final proposal that the grievance withdrawal was not part of the agree ment to recommend because there was no equiva lency and neither the grievance nor equivalency had been mentioned since the early part of the meeting Cortez testified he planned to seek withdrawal of the grievance If the voters accepted the Company s offer and he were unsuccessful in persuading the grievants to withdraw what then Cortez testified that if he were unsuccessful in persuading the griev 6 Hufford s testimony is a bit ambiguous in this regard Initially he tes tified Cortez at the beginning of the meeting said okay to items 3 and 4 The implication was that Cortez agreed to do so without any addition at incentive On recross examination Hufford clarified his testimony to explain that Cortez okay was conditioned on DC s agreement to in crease the payments (i e in order to achieve a limited equivalency) 790 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD ants to withdraw the grievance then we just had no deal no ratification (2 400) That is there would be no ratification Dallas Corporation would terminate plan 51 and spin ODT s participants of plan 51 into a different plan with identical provi sions and the parties would proceed to arbitrate the grievance As Cortez stated earlier in his testimony he assumed that if the Union decided to go to arbi tration we didn t have a deal then (2 295) As we shall see Cortez plan apparently was not firmly fixed in his mind for he failed to pursue the subject of the grievance with the grievants (let alone men tioning it to all the employees) at the ratification meeting It seems clear and I find that by the end of the 30 December meeting the Union no longer was pur suing with the exception of the grievance the sev eral aspects of its equivalency claim to the extent that claim exceeds the Company s amended final offer As to the grievance I credit Cortez and find that he planned to seek withdrawal of the gnev ance but if he failed to succeed then there would be no deal no ratification Of course Cortez did not discuss his plan with Hufford Was there a meeting of the minds? At this point the preliminary answer seems to be negative Huf ford thought the earlier withdrawal was part of the Union s agreement to recommend But Cortez fail ing to obtain substantial equivalency agreed only to recommend the Company s figures Assuming the grievance was still alive since withdrawal had been conditioned earlier on obtaining equivalency Cortez planned to seek withdrawal of the grievance as a matter separate from his commitment to Huf ford to recommend the figures If the employees were willing to accept those figures then there would be a new pension plan if the grievants also agreed to withdraw the grievance If the grievants were unwilling then there would be no deal the participants would be spun into a plan identical to plan 51 and the parties would proceed to arbitrate the 18 November grievance Clearly Hufford and Cortez were talking past each other on a critical and material issue But let us see if the events at the 31 December union meeting change this preliminary assessment The 31 December 1986 acceptance meeting is flawed by the undisputed fact that no one including Cortez specifically mentioned the grievance The bargaining unit consisted of about 200 employees On 31 December 1986 some 50 employees were not at work and another 50 or so in attendance did not vote The vote of 85 to 11 was in favor of acceptance and Hufford was so notified Dallas terminated the old pension plan and installed the new one When Shepherd returned from vacation on 5 January 1987 many employees complained to him about the ac ceptance Shepherd called Cortez and angrily criticized him A petition was circulated to set aside the accept ance and 119 employees signed it By letter dated 8 Jan uary 1987 Cortez wrote McCulloch that the employees now declared the ratification vote null and void Cortez asked for another meeting McCulloch s written response of 16 January declares Therefore it is our po sition that a valid agreement on the pension issue was reached and is not capable of rescission McCulloch agreed to meet to discuss the details of the new plan (I quote in full the text of both letters in my earlier deci lion) The parties met on 3 February 1987 The brief meeting of 3 February was chiefly an ex pression by the parties of their different positions Dallas presented the Union for signing a document embodying the contract modification Dallas contended the Union had agreed to on 30 December 1986 The Union refused to sign and Dallas thereafter filed the refusal to bargain charge in Case 16-CB-2915 As I have noted the meeting of 30 December was critical The parties suffered from the absence of impor tant members of their bargaining teams Two paragraphs that reflect this in section III A 2 e (1) of my decision read The parties had before them and worked from a complete document-the final proposal by DC (ODT) of 23 December At no stage did the parties initial agreement as to any points and at the conclu sion of this meeting no document was prepared me monalizing any agreement (2 280) Thus the task is to resolve what the parties said at the meeting in re lation to the items appearing on DC s final proposal If what was said can be determined a complete document will be established unless there was no meeting of the minds as to a material term Because the parties did not review the points the Union was to carry to the bargaining unit the next day there is a critical dispute as to what the Union agreed to convey to the employees The lack of notes the failure to review the points of any alleged agreement and the absence of key personnel at the crucial meeting of 30 December all combined to form circumstances conducive to demonstrating the unpleasant effects of Murphy s Law as extended-If anything can go wrong it will and at the worst possible time In my earlier decision I conclude (sec III A 3) Finding neither an objective nor subjective meet ing of the minds on a material element of the poten tial agreement I find that no agreement was reached on 30 December 1986 Thus the freight dock vote of 31 December therefore did not accept (or ratify ) any alleged agreement Accordingly I find the Union did not violate Section 8(b)(3) of the Act by refusing to execute the document presented to it for signature on 3 February 1987 and I shall dismiss the complaint My underlying decision turned on resolving credibility of the witnesses and inferences to be drawn from the facts Even if I had credited Hufford and discredited Cortez it is debatable whether the evidence would have established a prima facie case But under the EAJA es tablishing a prima facie case is not the test Talon Inc CARPENTERS LOCAL 2848 (DALLAS CORP) 277 NLRB 1639 fn 1 (1986) Enerhaul 263 NLRB 890 at fn 3 (1982) The test applied to the General Counsel s evidence (assuming it had been credited) is that of sub stantial justification-something more than mere reason ableness regarding both law and fact Although the issue is close I find the General Counsel was substantially jus tified in the Governments litigation position and I shall deny the Union s EAJA application MacDonald Miller Co 283 NLRB 676 (1987) CONCLUSIONS OF LAW 1 Applicant the Union is a prevailing party within the meaning of EAJA 791 2 The General Counsels position in litigation in the underlying proceeding was substantially justified On these findings of fact and conclusions of law and on the entire record I issue the following recommend ed7 ORDER The application is denied 7 If no exceptions are filed as provided by Sec 102 46 of the Board s Rules and Regulations the findings conclusions and recommended Order shall as provided in Sec 102 48 of the Rules be adopted by the Board and all objections to them shall be deemed waived for all pur poses