Gibbs & Cox, Inc.

GIBBS & COX INC 757 Gibbs & Cox, Inc and Marine Technicians Guild Cases 2-CA-18324 and 2-CA-18748 January 31, 1989 DECISION AND ORDER BY CHAIRMAN STEPHENS AND MEMBERS JOHANSEN AND CRACRAFT On August 15, 1985, Administrative Law Judge Robert M Schwarzbart issued the attached deci- sion The General Counsel and the Respondent filed exceptions and supporting briefs, and the Gen eral Counsel filed an answering brief The National Labor Relations Board has delegat ed its authority in this proceeding to a three member panel The Board has considered the decision and the record in light of the exceptions and briefs and has decided to affirm the judge's rulings, findings, and conclusions only to the extent consistent with this Decision and Order 1 We agree with the judge that the Respond ent's unilateral cessation of payments to the Phoe- nix Mutual major medical plan did not violate Sec- tion 8(a)(5) and (1), but find it unnecessary to pass on the judge's conclusion that the plan was unlaw- ful under Section 302 of the Labor Management Relations Act, 29 US C § 186 Instead, we find that the Union waived its right to bargain over the cessation of payments i In a letter sent on April 16, 1982, the Respond- ent advised the Union that it would discontinue payments to the Phoenix Mutual Plan effective May 1, 1982 The Union did not request bargaining over this matter There was no collective bargain ing agreement in effect, so all the Respondent was required to do was give notice of its planned uni- lateral change and afford a reasonable opportunity for bargaining Owens-Corning Fiberglas Corp, 282 NLRB 609 fn 1 (1987) We find that, under the circumstances present here, the Respondent gave sufficient notice to the Union and the Union had a reasonable amount of time within which to request bargaining on whether the Respondent should cease payments into the Phoenix Mutual plan Given the background of the Respondent's repeat ed questions about the coverage provided and its expressions of dissatisfaction with the Union's ad- ministration of the plan, the union representative should have had no doubt about what it might have done to forestall a decision to cease payments to the plan 1 Chairman Stephens would find that the unlawfulness of the plan is not established on this record 2 We do not agree with the judge that the Re- spondent violated Section 8(a)(5) by unilaterally substituting its own major medical plan In the same April 16, 1982 letter noted above, the Re- spondent told the Union of its intention to substi- tute the company policy effective May 1, 1982 The Union did not request bargaining The record shows that pursuant to a request by the Union, the Respondent had provided the Union with a copy of the company plan on July 28, 1981 Company Senior Vice President Erlich testified that there were no changes in the plan as of May 1982 The Union, therefore, had had full information concern- ing the provisions of the company plan in its pos session for a substantial period of time Because the Union clearly had detailed information concerning the company plan, had 2 weeks' notice of the Re spondent's intention to substitute the company plan, and did not request bargaining, we find that the Union also waived its right to bargain over the implementation of the company plan We will dis- miss this allegation of the complaint 3 We do not agree with the judge's recommen- dation that a hearing be held concerning whether the Board should revoke the Union's certification First, it seems inappropriate for that question to be considered in an unfair labor practice proceeding in which the Union is not the respondent Additional- ly, even if true, the alleged acts of misconduct that the judge cited in recommending consideration of revoking the Union's certification would not war- rant this extreme remedy See Teamsters Local 703 (Kennicott Bros), 284 NLRB 1125 (1987) As we find the hearing recommended by the judge to be inappropriate, we find it unnecessary to pass on the judge's conclusion concerning union misconduct ORDER The complaint is dismissed Haywood E Banks Esq and Polly Chill Esq for the General Counsel Anne Gordon Greever and Hill B Wellford Esqs (Hunton & Williams) of Richmond, Virginia, for the Respond ent Stephen E Klausner Esq (Klausner & Hunter), of Somer ville New Jersey, for the Charging Party DECISION STATEMENT OF THE CASE ROBERT M SCHWARZBART, Administrative Law Judge This case' was heard in New York, New York, ' As a settlement was approved in Case 2-CA-18324 that provided among other things for adjusted withdrawal of the charge and dismissal of the related complaint allegations in that matter Case 2-CA-18748 alone was litigated 292 NLRB No 78 758 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD pursuant to a charge2 filed by Marine Technicians Guild (the Union, the Guild, or MTG) and complaint. The complaint, as amended at the hearing, alleges that Gibbs & Cox, Inc. (the Respondent) violated Section 8(a)(5) and (1) of the National Labor Relations Act (the Act) by unilaterally, and without bargaining with the Union as the certified bargaining representative of certain of its employees, discontinuing premium contributions to the Union's major medical plan on behalf of certain unit em- ployees, and by unilaterally putting into effect its own substitute major medical plan for those employees. The Respondent in answering the complaint denies the com- mission of unfair labor practices. All parties were given full opportunity to participate, to introduce relevant evidence, to examine and cross-ex- amine witnesses, and to file briefs. Briefs, filed by the General Counsel and the Respondent, have been careful- ly considered. On the entire record of this case and my observation of witnesses and their demeanor, I make the following FINDINGS OF FACT 1. THE BUSINESS OF THE RESPONDENT The Respondent, a New York corporation with offices and places of business in New York, New York, Arling- ton, Virginia, and Newport News, Virginia, is in the business of marine designing on a contract basis. Annual- ly during the course of its operations, the Respondent performs services valued in excess of $50,000 directly for firms located in States of the United States other than the States where it is located. The complaint alleges, the answer admits, I find that the Respondent is an employer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act. II. THE LABOR ORGANIZATION INVOLVED Marine Technicians Guild (the Union) is a labor orga- nization within the meaning of Section 2(5) of the Act. III. THE ALLEGED UNFAIR LABOR PRACTICES A. Background; Appropriate Bargaining Unit; Relevant Contract Provisions In Gibbs & Cox, Inc.,3 involving these same parties, Administrative Law judge Raymond P. Green found that in August 1980 the Respondent Company had vio- lated Section 8(a)(5) and (1) of the Act by withdrawing recognition from the Union as collective-bargaining rep- resentative of its unit employees employed at its Arling- 8 The relevant docket entries are as follows: The charge in Case 2- CA-18748 was filed on 20 April 1982; the order consolidating Cases 2- CA-18324 and 2-CA-18748 and consolidated complaint issued 30 June 1983; and hearing was held on 22, 23, and 24 August and 14 , 15, 16, and 17 November 1983. Because , as noted, Case 2-CA-18324 was settled after the start of the hearing, docket information relating to that matter is omitted. Cases 2-CA-17515 and 2-CA-17588 (JD-(NY)9--82) issued 29 Janu- ary 1982 , presently by pending on exceptions before the Board. ton, Virginia division,4 bargaining to impasse with the Union on its contention that Arlington division employ- ees be excluded from the bargaining unit, and by unilat- erally granting to its Arlington division employees wage increases and other benefits. It will be recommended that the Board consider the conclusions and proposed Order contained herein before issuing its Decision and Order on the appeal from the Judge Green's decision. As found by Judge Green, the Respondent primarily is involved in providing engineering and design services re- lating to the conception, planning and construction of naval structures. Although much of the Respondent's work involves designing ships for the United States Navy, it also does such work for commercial customers and for foreign governments. In addition, the Respond- ent designs various types of ocean platforms, such as oil rigs. In this work the Respondent employees such techni- cal employees as draftsmen and designers, or advanced draftsmen, who translate architectural and engineering specifications into blueprints and other drawings. These technical employees who are within the unit are termed "white badge" employees, as opposed to the nonunit "blue badge" managerial/supervisory employees. The Respondent also employs a large number of professional employees, such as naval architects and engineers, most of whom are excluded from the unit as "blue badge" per- sonnel. Judge Green found, however, that some profes- sional employees were not considered to be man- agerial/supervisory and, consistent with the bargaining history, he included such employees in the unit. The bargaining unit issue whether both the New York and Arlington employees were to be included in one unit was fully litigated before Judge Green who, as prerequi- site to his conclusion that the Act had been violated, found the following unit appropriate for purposes of col- lective bargaining within the meaning of Section 9(b) of the Act: All technical employees (including but not limited to such classifications as draftsmen, senior designers, junior designers, designer aides, learners and ship arrangement specialists), and all professional em- ployees having white badge status (including, but not limited to naval architects, marine engineers, electrical engineers, electronic engineers, ocean en- gineers, hearing-ventilation-air conditioning (H.V.A.C.) engineers, mechanical engineers civil engineers, structural engineers, and sedimentolo- gists), employed by Gibbs & Cox, Inc., at its New York, New York, place of business and its Arling- ton, Virginia, Division, excluding all office clerical employees, managerial and executive employees, guards and supervisors as defined in Section 2(5) of the Act. 4 The unit asserted as appropriate by the General Counsel and the Union in the matter before Judge Green and here consists of the Re- spondent 's technical employees in New York, New York, and Arlington, Virginia, while the Respondent asserts that only the New York City em- ployees are properly within the unit. GIBBS & COX INC 759 The present complaint, however, alleges as appropriate the following bargaining unit that excludes all profession al employees from a unit that includes nonprofessional employees All technical employees including staff design engi neers, design engineers, senior designers, associate design engineers, designers assistant design engi neers, junior designers, junior designer engineers, designer aides, engineer aides and learners em ployed at Respondent's New York, New York, and Arlington, Virginia, locations, but excluding all other employees, managerial employees, profession al employees, contract staff employees, employees borrowed from other firms, summer employees, office clerical employees, guards and supervisors as defined in the Act The General Counsel and the Union continue to con tend here, in agreement with Judge Green, that the ap propriate unit must include employees at both the Re spondent s New York, New York, and Arlington, Vir ginia facilities,5 but the Respondent maintains its position that the bargaining unit should be restricted to include only employees at the New York City location, exclud ing those at Arlington The Respondent does not dis agree with that part of the unit description alleged in the complaint relating to job classifications or categories to be included or excluded 6 The unit issue is now before the Board as part of the appeal from Judge Green s decision As the parties are of the view that they have fully litigated the unit matter in that proceeding, and as the Respondent has preserved its position in the exceptions and supporting arguments filed in connection with that case, the parties have elected not to relitigate here the question whether a single or dual location unit is appropriate Rather, they will await the Board's ruling on Judge Green s decision The conclu sions reached in this case however can be presented without awaiting final resolution of unit The Union, which negotiates only on behalf of the Re spondent s employees has been the certified bargaining representative since 1946 In 1967 the Board denied an effort by the Union to expand the unit by way of a peti tion for clarification 7 5 The parties agree that the Respondents third location at Newport News Virginia is not within the relevant bargaining unit although em ployees at that facility were once covered by the same collective bargain ing agreement between the Respondent and Union and also by the Union s major medical plan the subject of this proceeding 6 The parties accord in the present matter that professional employees be excluded from a unit that also contains nonprofessional employees comports with Sec 9(b)(1) of the Act which precludes Board certifica tion of such mixed units unless most of the professional employees vote for inclusion This agreement apparently removes an issue that was argued by the General Counsel before Judge Green ° 168 NLRB 220 (1967) In that matter the Union had petitioned for unit clarification to include certain professional employees who the Union claimed had been promoted out of the unit In dismissing the pets non on grounds that the Union never had represented such employees and that to include them would be contrary to Sec 9(b)(1) of the Act the Board noted that the unit as it then existed contained both professional and nonprofessional employees although not the professional employees in dispute Since the Union's certification as bargaining represent ative, the parties have executed a series of collective bar gaining agreements, the most recent of which was effec tive from 22 August 1977 until 22 August 1980 In the fall of 1980, after expiration, the parties met several times to try to negotiate a new contract, but were unsuccess ful Accordingly, the Respondent and the Union have been without a collective bargaining agreement since August 1980 The contract that expired in 1980 provided for a modi fled union secunty/agency sop arrangement, whereby employees, after a 30 day grace period were required to become and remain members of the Union or in the al ternative, to pay a specified weekly fee to the Union for representing their interest with the Employer' 8 Article XVII of the contract provided in relevant part that the Respondent would pay the costs of a group life insur ance plan9 and trial and travel insurance, make available to a pension plan and, most germanely, contribute on behalf of unit employees to the Union s major medical plan pursuant to the following contractual provision XVII 3 The Employers contribution toward the group Major Medical plan of the Guild shall be a maximum amount of $10 25 monthly per covered employee payable to an insurance company desig nated by the Guild Hospitalization under a Blue Cross/Blue Shield policy to which both the Respondent and employees contribut ed also was provided under article XVII B The Parties' Positions The General Counsel and the Union contend that, of fective 1 May 1982 the Respondent, contrary to the above quoted article XVII 3 contract provision, unilater ally discontinued making its contributions of $10 25 per employee per month to the Union s major medical plan on behalf of its New York employees This plan had been carried by the Phoenix Mutual Life Insurance Corn pany Instead the Respondent on the same day, then unilaterally placed these employees under a company sponsored major medical plan underwritten by the Equi table Life Assurance Society of the United States (Equi table) While the Union paid the premium to Phoenix Mutual for another month in order to continue coverage for unit personnel, that policy was discontinued on 31 May 1982 as the Respondent refused to resume pay ments Both the unilateral cessation of payments to the Unions plan and the unilateral substitution of the Com pany s plan are alleged as unlawful The General Counsel does not assert that the Equita ble major medical plan put into effect by the Respondent is necessarily inferior in available benefits to that previ ously provided by the Union through Phoenix Mutual, a 8 Although the contract was applied to both the New York and Ar lington employees the union secunty/agency shop provision was opera tive only in New York but not in Arlington as Virginia is a right to work State Accordingly nonmember employees referred to later in this decision were located in Arlington 8 The Respondent selected the carrier for the life insurance plan and was the sole administrator 760 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD point on which the Union denied having information and that the General Counsel did not develop, but that the Respondent unlawfully had changed employment condi- tions by unilaterally discontinuing an insurance policy that, until then, had been administered solely by the Union, and by substituting its own plan and insurance company. The Respondent's conduct in the present matter relates only to the employees at its New York City facility because as discussed in Judge Green's above-referred decision, the Respondent had discontin- ued such contributions for its Arlington employees in August 1980, almost 2 years earlier, when it withdrew recognition from the Union as bargaining representative of those employees. The Respondent argues that it, in fact, had met its ob- ligation by offering to bargain with the Union in March and April 1980 concerning major medical insurance, at which times the Union had refused to meet or to discuss the matter with the Company. The Respondent argues with even greater force, however, that the Union had acted in bad faith in administering the major medical program. The Respondent asserts that for an extended period the Union had overcharged the Company by pro- viding unit employees with fewer major medical benefits than could have been purchased from the Respondent's contributions with the result that a large surplus fund had aggregated, held in an escrow account by Phoenix Mutual subject to the Union's exclusive direction. The Union had not accounted to the Respondent for this monetary surplus, but used it to encourage membership in its organization by unilaterally purchasing additional types of insurance coverage for unit employees beyond the straight major medical protection specified in the col- lective-bargaining agreement. The Company asserts that not only was this done without bargaining with or ob- taining agreement from the Respondent, but also without even informing the Respondent, and by actively reject- ing the Respondent's various efforts to obtain informa- tion concerning the major medical plan's status and ad- ministration. The Respondent also contends that the Union further encouraged membership by using the sur- plus fund, while it lasted, to defray the costs of subse- quent premium increases imposed by Phoenix Mutual for member employees, although employees who did not belong to the Union or who did not pay the agency fee were assessed a $1 monthly adminstration fee not charged to members or agency fee subscribers to com- pensate the Union for administering the plan. At the same time nonmembers, only, also were charged a monthly premium payment of $2.80 that was to be for- warded to the insurance company. 10 The Respondent argues that it had not unilaterally changed the major medical plan because, first, it never had agreed to the plan as it was constituted in April 1982, with dependent life and accidental death and dis- memberment insurance (AD&D) when the Company served notice that it would cease contributions to the to As will be discussed, the Union was not successful in its efforts to collect the $3.80 in monthly surcharges from nonmembers unit employ- ees. Union's major medical plan.11 The contract had speci- fied that employer contributions be made only to the Union's major medical plan, which was all that had been provided under prior collective-bargaining agreements. Also, the payroll deduction authority cards signed by employees to authorize withholding for insurance pur- poses had authorized such payroll deductions only for major medical coverage. All other insurance programs provided under the collective-bargaining agreement were fully funded and administered solely by the Respondent. The Respondent therefore argues that it could not have invoked an unlawful unilateral change to a term and con- dition of employment to which it never had agreed and which had not become legitimately established by agree- ment of the parties. None of the parties to this proceeding have around the applicability of Section 302 of the Labor Management Relations Act, as amended, which will be discussed below. 1 2 C. The Facts 1. The Respondent's cessation of contributions to the Union's major medical plan; substitution of the Respondent's own plan The union-sponsored major medical plan as carried by Phoenix Mutual was put in place in March 1975, when the Union, with company permission, selected that carri- er to replace New England Mutual Life Insurance Com- pany as the underwriter of its major medical policy. As testified to by Union President Ronald A. Carlson,13 New England Mutual originally had been named in the immediately preceding collective-bargaining agreement, effective from 1974 to June 1977, as the carrier of that policy. However, when Phoenix Mutual was designated, the then-existing collective-bargaining agreement was amended deleting New England Mutual and substituting "an insurance company designated by the Guild." The predecessor major medical plan with New England Mutual had provided no additional insurance coverages. The Phoenix Mutual plan, as will be discussed, was later amended in 1979 and 1981. The General Counsel's case is that on 16 April 1982, the Respondent, over the signature of its chairman, Rich- ard M. Ehrlich,14 sent the following letter to Carlson 11 The Union explained that the additional coverages for life insurance and AD&D had been added as required by the insurer in order to enable the Union to obtain the particularly favorable major medical package rate that it claimed it was able to get in 1975 when purchasing its initial policy from Phoenix Mutual. 12 The relevant provisions of Sec. 302 of the LMRA are set forth in the appendix to this decision. 13 Carlson, a design engineer on the Respondent's New York staff, has been with the Company for more than 30 years and has been union presi- dent since 1973 . Most of the record testimony in this proceeding was pro- vided by Carlson, the General Counsel's only witness, who also was ex- tensively examined during the Respondent's direct case. 14 Ehrlich who, while a vice president of the Respondent with labor relations' responsibilities, also appeared as a witness in the proceeding before Judge Green was the Respondent 's only other witness at this hear- ing. Ehrlich, who also has been with the Company for about 30 years, has been chairman since February 1982. GIBBS & COX INC notifying the Union that the Respondent was discontinu mg its contributions to the Union s major medical plan for New York technical (white badge) employees and was implementing its own fully paid coverage in its place In your letter to me of April 14, 1982 you re fused to meet with me to discuss major medical in surance You also failed to provide certain docu ments and information which the company needs to assess technical employees current major medical coverage and premiums As you know, we have re peatedly requested this information and you have refused to give it to us The information we have been able to obtain re veals very serious mishandling by the Guild of com pany contributions for major medical premiums Re cently, facts have come to my attention which con vince me that (1) The Guild has overcharged the company by substantial amounts for major medical premi ums (2) Despite a sizable surplus in our aggregate premium payments the Guild has imposed unnec essary premium charges on bargaining unit em ployees and has increased the deductible amount required to be paid by them (3) The Guild has misrepresented the reason for the employee premium charge by telling em ployees that the company contribution was mad equate, while in fact the Guild knew that the company overpayments were sufficient to pro vide full company paid coverage for both em ployees and their dependents (4) The Guild's mishandling of major medical administration had resulted in a significant number of employees being deprived of coverage for their dependents (5) The Guild has consistently attempted to conceal the overpayments by refusing repeated company requests for premium costs and related information (6) The Guild has discriminated against techni cal employees who are not Guild members by telling them that they must be Guild members to receive major medical coverage (7) The Guild has coerced technical employees to become members by representing to them that they must sign membership cards in order to enroll the major medical insurance (8) The Guild has discriminated against techni cal employees who are not Guild members by failing to inform them of premium charges, by failing to allow them a choice in the selection of coverage options, and by threatening to deprive them of coverage I am convinced that immediate corrective action must be taken in order to give our technical em ployees the comprehensive company paid major medical coverage now enjoyed by other firm em ployees As you will recall, during our 1980 negoti ations I proposed on numerous occasions to provide 761 fully paid major medical coverage for both employ ees and their dependents under the company plan Each time the Guild rejected this proposal, insisting instead that the company pay the premium directly to the Guild As I am sure you know a direct pay ment of that type would have violated Section 302 of the Labor Management Relations Act 15 Throughout those negotiations you never once proposed a specific increase in the company s pre mium contribution undoubtedly because you knew that such a proposal would require you to reveal the premium charges which you had worked so hard to conceal The Guild s conduct in this matter is in violation of its duty to bargain, its duty to fairly represent employees, its duty under federal law as an employ ee trust fund fiduciary, and is in breach of our 1977-1980 collective bargaining agreement For the reasons I have recited immediate corrective action is needed but you have refused to discuss these matters with me Accordingly the company is extending fully paid major medical coverage under the company policy to the New York technical employees, effective May 1 1982 The company will cease monthly pay ments to Phoenix Mutual as of that date Technical employees in Arlington are covered by the same company plan 16 In accordance with the above letter, the Company, as of 1 May 1982, discontinued its monthly $10 25 per em ployee contribution to the Union s major medical plan underwritten by Phoenix Mutual and, as of that date also put its own major medical policy with Equitable in effect for the New York employees Carlson testified that the Respondent instituted these measures unilaterally without meeting with or discussing these steps with the Union and without the Union s approval 15 In not affirmatively arguing the applicability of Sec 302 to the present matter certain parties apparently were of the view as was ex pressed in Ehrlich s 16 April 1982 letter that for that statute to be violat ed the premium payment would have to have been made by the Em ployer directly to the Union rather than as was the practice to the msur ance carrier Phoenix Mutual In such an interpretation the independent ly admimstered trust fund and other requirements of Sec 302(c)(5) were not afforded proper weight Even so the record reveals that during the unsuccessful contract nego tiations that took place between July and October 1980 the Union re peatedly demanded that the Respondent pay it directly for the group insurance major medical plan which the Respondent refused to do At first the Respondent countered that the language of the relevant contract provision should be clarified to ensure that the Company s payment was for major medical only and that the Union provide to the Company on request copies of major medical fiduciary records This and the Re spondent s 19 August proposal that the Employer provide major medical coverage to all eligible employees under its own plan starting September 1980 was resisted by the Union which continued to insist on its own demand that company premium contributions be paid directly to the Union The Respondents 23 September proposal to provide company major medical coverage effective October 1980 also was rejected by the Union that noted in written response that if the percentage wage in crease is acceptable the Guild will settle for the existing Article XVII 3 This was a reference to the then extant contract language 16 As noted because Arlington employees had been covered by the Company s plan carried by Equitable since around August 1980 this action affected only the New York staff 762 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD Although the Respondents plan became effective for the New York unit employees on 1 May 1982, the Union continued the Phoenix Mutual plan in effect for the month of May by paying the premium from its treasury When the Company did not resume contributions, the Phoenix Mutual plan ended for New York employees on 31 May 1982 and, since May, a month of dual coverage under both the union and company plans, all unit em ployees have been covered by the Respondents Equita ble policy on a noncontributory basis 17 As noted, it was the Company s action in unilaterally stopping its premium contributions to the Union's major medical plan and in substituting its own policy that the General Counsel and Union consider as violative of Sec tion 8(a)(5) and (1) of the Act 2 The Union's administration of the major medical plan The parties stipulated that the Union s Phoenix Mutual major medical plan for unit employees, when in effect, had not been a trust agreement within the meaning of Section 302, LMRA, but was a simple insurance policy covering the unit employees administered by the Union, itself, in conjunction with the insurance company Com pany designated administrators had not overseen the plan in conjunction with the union administrators Before August 1980, the Union s major medical plan was applied at both New York and Arlington The New York facility employed about 200 unit employees while the Arlington facility had approximately 15 to 20 such employees At the time of the hearing, there were 15 em ployees doing unit encompassed work at Arlington As all unit members were considered enrollees in the Unions major medical plan the amounts of the Re spondent s contributions were determined at monthly meetings of company and union repreentatives when the additions and subtractions to the bargaining unit since the last such meeting were recorded The figures agreed on were entered by the union representative on a copy of a multicarbon Phoenix Mutual form entitled Group Insurance Monthly Statement," that was sent to that in surer each month by the Union Although the Employ er s representative would sign the form every month, the Respondent did not receive a fully completed copy of the insurance statement that contained the information that was submitted on the copies that the Union sent month after month to the insurer At most, the Company was provided with a form copy left largely in blank, that showed the number of employees who had been covered when the last statement was prepared, the num hers of employees who had been added to or decreased from the unit as eligible for life insurance for accidental death and dismemberment (AD&D), and for major medi cal coverage Major medical data on the Company s copy of the form was further broken down to indicate the respective numbers of employees protected under single and family coverage respectively The latter cate gory referred to employees with two or more depend ents The Respondent never was provided with such fur ther information, later written in by union representa tives on the copies of the monthly forms that they sent to Phoenix Mutual, that showed the coverage amounts of the various insurance categories provided, the rates, and the premium costs The Company s monthly contribution was calculated by multiplying the total number of eligi ble unit employees, whether under single or family cov erage, by the $10 25 per capita contractual rate The Re spondent's contribution, thus derived, was paid directly to Phoenix Mutual This arrangement continued under the Phoenix Mutual plan from the spring of 1975 until 1 August 1981, when the Company's copy of the Group Insurance Monthly Statement, as furnished by the Union, no longer showed e,ven the numbers of employees added to or subtracted from the unit, or the numbers of persons covered in the different insurance categories, but merely noted without explanation, the number of employees covered by the Respondent s $10 25 per capital contribution, those cov ered by the Union s contribution toward the balance due above and beyond the Company s payment, and the total that was due from the Respondent The Company's payments to Phoenix Mutual under the original premium levels were more than the cost of the protection actually provided and a surplus fund had aggregated from these overpayments that was held in escrow by Phoenix Mutual, subject to the Union s direc tion The parties stipulated that from October 1977 through 1 August 1981, the Respondents overpayments totaled $17,430 15 The Respondent's chairman, Ehrlich testified that the Company estimated there was an adds tional $3000 in overpayments after August 1981, the end of the period covered by the above stipulation The Re spondent, however not having been provided with full cost information did not learn of these overages until a later time The Union, however was fully aware of the escrow account that had accumulated and as will be discussed was able to use that money for its own advantage Early in the contract term on 28 November 1977 Carlson had written to Phoenix Mutual noting that there had been overage payments for October and November of that year, that they had been discussed with Terence S McBrien the Phoenix Companies agent in New York City and would be rectified shortly However, as noted the overages in the Respondents contributions were not corrected and continued to accumulate each month until reaching, at least, the stipulated $17 430 15 aggregate in August 1981 At no time did Carlson or any other union representative advise the Respondent that its monthly payments for major medical insurance were in excess of the premiums actually required and that an escrow fund had accumulated from the Company s excessive pay ments 18 18 Carlson conceded that Phoenix Mutual repeatedly had reminded the 17 The Unions major medical plan which originally was employee Union of the aggregating overages in company contributions In the early contributory when carried by New England Mutual became noncon stages he promised correction but had done nothing in that regard Al tnbutory after it was underwritten by Phoenix Mutual and later again though as Union President Carlson was active in the administration of became contributory as coverage expanded and premiums increased the major medical plan other union representatives also participated GIBBS & COX, INC Carlson testified concerning the premium overages collected from the Respondent He related that the con- tract had set forth the Respondents obligation to con tribute $10 25 per employee each month to an insurance company selected by the Union, but denied any concom itant obligation on the part of the Union to furnish insur ance that was fully valued at $10 25 per employee or else to communicate the existence of such lesser coverage to the Employer Carlson, however, could not indicate Ian guage in the collective bargaining agreement that was supportive of his interpretation, or that specified just how much below the $10 25 insurance value the Union validly could go in administering the plan 3 The 1979 major medical plan amendment The surplus funds held in escrow by Phoenix Mutual was first put to use in March 1979 to help pay the in creased premium costs for certain improvements to the major medical plan as described in the Union's newslet ter for that month, distributed to employees These changes had not been negotiated with or even mentioned to the Company before implementation The newsletter announced the following MAJOR MEDICAL Subject to final approval by Phoenix Mutual, the Guild has been able to obtain additional medical coverage without any additional expense to those enrolled in major medical Additional coverage in cludes Maximum Deductible Increase from $250 000 to $1,000000 Waived for accidents Medicare Benefit Provide same plan as For under age 65 with $10,000 maximum on Private duty nursing Survivor Benefit Two years of Additional coverage without further Premium payment Waiver of Premium If disabled prior to age 60 coverage continues for employees and dependents without further premium payment Psychiatrics Remove $10,000 in hospital maximum Maternity19 Pregnancy for the mother One reason the Guild was able to obtain this ad ditional coverage which by the way makes our 19 Although the statutory requirement that pregnancy or maternity care must be added to the major medical policy contended by the Union was litigated at the hearing only in terms of state law under which in this instance such protection was optional such coverage is mandated under the Federal Pregnancy Discrimination Act as described at 29 CFR § 1604 10(b) and (d) of which official notice is taken Under subsec (d) any insurance program which is in effect on October 31 1978 which 763 total package one of the best available anywhere, was due to the favorable claim experience of our group As soon as this additional coverage becomes effective, you will be notified The above increases in benefits under the Union s major medical plan that, for the first time, provided pregnancy coverage, or maternity care, caused a month ly rise in premiums of $3 72 per employee under single coverage and $16 52 for each employee with dependents Although Carlson initially testified that these higher premiums had been paid from the Union's treasury on behalf of unit employees, he changed his story after being confronted by the relevant group insurance month ly statements from 1 March 1979 through January 1980 that showed that the Union s monthly contributions had not been recorded as a series of payment checks but, rather, was memorialized by a series of notations on the bottom of each monthly statement reading, "Debit or credit Carlson conceded that these union made nota tions had authorized Phoenix Mutual to draw on the escrow fund accumulated from the Company s overpay ments to the major medical plan to pay the Union s part of the higher monthly premiums Accordingly, although the Company s $10 25 per employee contributions contin ued at the preexisting contractual level during that period, it had not been necessary for the Union until 1 February 1980 to include its own check to pay the in creased insurance costs for pregnancy coverage and other benefit improvements announced in its March 1979 newsletter In February 1980, when the escrow fund fi nally was depleted the Union applied the remaining escrow fund balance of $396 88 toward its premium con tnbution and added its own check in the amount of $306 14 to complete the remainder due The Respond ent s contributions, as noted had continued at the con tractual level After February 1980 the escrow fund having been completely exhausted the Union paid from its own treasury all premium amounts that were due above and beyond the Respondents contractually set contributions 20 The foregoing amendments to the plan which became effective 1 March 1979, were authorized by a 20 Febru ary 1979 letter from Carlson to Phoenix Mutual does not treat women affected by pregnancy childbirth the same as other persons not so affected must be in compliance with Sec tion 1604 10(b) by April 29 1979 Sec 1604 10(b) removes any dis tinctions for job related purposes between disabilities caused or contnb uted to by pregnancy or childbirth and other medical conditions under any health or disability insurance The Union in fact noted in its No vember 1979 letter to employees that the Guild Major Medical Plan cost had been increased to include pregnancy in compliance with the Preg nancy Discrimination Act 2° The March 1979 improvements to the major medical plan related back to matters initially referred to in a letter dated 27 September 1978 to Carlson from Terence S McBnen group representative of the Phoe nix Companies There the Union was advised that Phoenix Mutual had agreed to increase the maximum in benefits that any one individual could receive in a given year to $1 million with a deductible waived for acci dents The previous maximum had been $250 000 The letter also reflect ed improvements in medicare benefits and survivors benefits in the psy chiatric benefit where the $10000 limitation on coverage was removed and a waiver of premium in certain circumstances As noted these changes were not put into effect until March 1979 764 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 4 The Union's administrative fee and other major medical surcharges to nonmembers On 22 June 1979, the Union sent at two related types of correspondence One was a letter jointly signed by Carlson, as president, and David Nevitt, as secretary to H Zaeh, then the Respondents personnel manager This letter was as follows Please be advised that as per past practice, a one dollar ($100) administration fee payable to the Marine Technicians Guild is to be deducted month ly for bargaining unit members enrolled in the Guilds Major Medical Plan who are non guild members and pay no agency fee The second correspondence was sent to nonmember unit employees inviting them to become members and in dicating certain benefits of membership Enclosed with each copy was a payroll deduction authority card au thonzing checkoff for union dues, a membership card to be completed when the deduction authority card was signed, and a payroll deduction authority card for major medical authorizes payroll deductions for major medical insurance The addressee employees were informed that no payroll deductions were being made then, the Union was receiving '10 25 monthly per enrolled member from Gibbs & Cox, Inc, and that, therefore, it would not be necessary to charge the bargaining unit personnel The letter continued, in relevant part This plan is administered by the Guild and there by [sic] it will have to charge an administration fee of $100 per month for this service to Non Guild members (who pay no agency fee) in the Bargaining Unit at Gibbs & Cox Inc For Guild members only, the Guild will try to absorb any increases in premiums in excess of the company s contribution made according to the Bar gaining Unit contract The Guild will not absorb these increases for Non Guild members and they will be charged the increase In a followup 16 November 1979 letter to employees jointly signed by Carlson and secretary Nevitt the Union served the following notice The Guild Major Medical Plan cost has been in creased to include Pregnancy to comply with Preg nancy Discrimination Act of (EEOC) This increase brings the cost over the $10 25 per month the coin pany contributes in accordance with the Collective Bargaining Agreement of August 22, 1977 This additional cost will be passed along to all bargaining unit people who are not Guild members and do not pay an agency fee Since the average cost charges from month to month, we have averaged the cost which is in excess of the company contribution, over a three month period As of December, 1979 the total de duction will be as follows $1 00-administrative fee $2 80-avg cost over company contribution $3 80-total deduction per month The Guild will review this additional cost every three month period and will advise the company of any changes I thank you Carlson explained that by November 1979, the Re spondent's contractual contributions no longer were suf ficient to pay the total major medical premium and the escrow fund had been largely exhausted He conceded that the Union, as stated in its above letter, had decided to pass along the costs increase solely to those bargaining unit employees who were not members of the Union or who did not pay an agency fee For those who were union members or who did pay an agency fee, the Union had opted to absorb the increases from its own treasury According to Carlson, the Union had considered it unfair to use its treasury funds to pay for those who were not members or paying an agency fee in the right to work State of Virginia The $1 fee was to be kept by the Union, while the $2 80 contribution for each employee was to be pooled and sent in monthly to Phoenix Mutual with the Group Insurance Monthly Statement Although Carlson testified that the Union began to collect the $2 80 premium contribution and the $1 admin istrative fee from nonmember employees in January 1980, and Ehrlich testified that those collections had begun in November 1979, both the Company and the of fected employees actually had refused to cooperate with the Union and these money s, in fact, were not paid In stead the Union s efforts to gather these sums discnmm atonly from employees who had not joined the Union formed part of the allegations in the subsequently settled complaint in Cases 5-CB-3313 and 5-CB-3372 21 re ferred to above The events concerning the Union s col lection attempts its threat to drop from major medical coverage those nonmember employees who did not pay, the case settlement and the Union s reaction are best told by the Union, itself as set forth in its newsletter, distributed to employees in January 1982 3 Concerning Major Medical Insurance The Major Medical plan payment was increased over and above the company payment under our agreement The Arlington and Newport News bar gaining units were advised by the Guild they would have to pay $2 80 plus our administrative fee They refused and were advised they would be dropped The Company put them under their Major Medical Plan and brought charges at the Bal timore N L R B against the Guild The employees in question were no more than ten or so These people were being subsidized by our dues Under Virginia law there is no agency 21 This consolidated matter was settled with the Boards Baltimore Maryland Regional Office in November 1981 The Union has misrepre sented in its answer to the complaint in that proceeding that it had not notified employees of the Respondent who were nonmembers of the Union that they would be required to pay the $1 monthly administrative fee and that it had not notified such employees that if they failed to pay the monthly fee they no longer would be covered under the major medi cal plan GIBBS & COX INC shop as a result they paid nothing and the Guild would have been forced to pay for the Major Medi cal increase from our treasury An atrocious case of demanding our money and when not receiving same charging the Guild with unfair labor prac tices The company was hoping the Guild would appear in Baltimore at the Board and fight this case We did not agree with the law Nevertheless, we were in violation and unlike the company, we abide by the law We setled [sic] the case 5 The 1981 major medical plan amendment and related costs On 30 March 1981 a Phoenix Mutual senior under writer in a letter to Carlson advised the Union that be cause of the increase in claims paid in the period from 1 March 1980 to 1 March 1981 effective 1 June the major medical premiums for both single and family coverage would be slightly more than doubled The Union responded to this by sending a letter, dated 1 June 1981, and an enclosed ballot to each of its mem bers The letter gave notice that Phoenix Mutual had been forced by increased medical costs and inflationary pressures to raise its major medical premiums, and asked the employees to use the ballot to vote whether to keep the existing plan unchanged at a monthly cost of $26 to employees with dependent (family) coverage, or to revise the existing plan by instituting a $200 deductible22 based on an employee contribution of $14 Employees also were invited on the same ballot, to participate in a survey by voting whether they were interested in a sep arate Guild sponsored dental place for Guild members only at an approximate monthly cost of $9 per member (Emphasis added) In a followup letter to members sent later that month, the Union announced that, in accordance with the mem bership s majority choice in response to the Union s above 1 June 1981 letter the Phoenix Mutual major medical plan deductible would be raised from $100 to $200 and that a $14 monthly contribution would be re quired from all employees maintaining family cover age 23 The Union promised to search for a more cost effective plan Also, in response to the clearly evident interest in a Guild sponsored dental plan the Union calling for vol unteers to assist promised to pursue that matter further and to report back should a suitable plan be devel oped 24 On 1 June 1981 Carlson wrote to Phoenix Mutual au thonzing the change in deductible and premiums As was the case with its other activities concerning the major medical plan, the Union did not advise the Company that it was considering the 1981 changes in the plan of the employee vote it had sponsored, of the re suits or that the changes had been made effective 1 June 22 The then existing deductible was $100 At the time employees were not contributing to the cost of their major medical insurance 23 Employee contributions were not imposed by the Union on those who selected single coverage 24 The dental plan never was adopted 765 1981 No copy of the amended plan was furnished to the Company Carlson explained that the Union s 1 June letter invit ing the employees to vote on the changes in family cov erage had been sent only to union members and that the purpose had been to reduce the memberships out of pocket expenses Although the Respondent still was con tnbuting $10 25 per employee each month the escrow fund already had been used up to pay the Union s share of the higher premiums that had resulted from the preg nancy coverage and other improvements announced in the Union s March 1979 newsletter Therefore, had the $100 deductible been kept, the 1981 premium increase then being effectuated by Phoenix Mutual would have raised the cost of the major medical plan well above the Company s contributions and would have made it too ex pensive to the membership The Union, for this reason had opted to give the membership a chance to select a higher deductible at a lower premium as it could not have afforded to pay the entire increase from its own treasury 25 Collected from employees who were mem bers, the 1981 amendment marked the first time that such employees were called on to contribute to the cost of major medical coverage since 1975 6 The Respondents efforts to learn the status of the major medical plan The Respondents relevant contractual agreement with the Union related solely to major medical insurance for unit employees, with no reference to the dependent life insurance and AD&D provided under the Union Phoenix Mutual policy When the major medical insurance had been carried under the predecessor policy with New England Mutual only major medical had been provided and that was the only coverage for which payroll deduc tions had been authorized under the language of the pay roll deduction authorization cards for health insurance that had been completed by employees under the New England Mutual plan When Phoenix Mutual became the carrier there was no change in the wording of the de duction authorization cards although the different cover ages were thereafter unilaterally added to the plan Therefore deductions from compensation for these addi tional purposes exceeded in scope what had been author ized in writing by the employees It also is undisputed that none of the above described additional coverages changes in premium or the deduct ible had been negotiated or even discussed with the Re spondent Although Carlson testified that at some unre called time in 1975 soon after the Phoenix Mutual policy first was put into effect he had given a copy of the policy as it then existed to H Zaeh, the Respondent s personnel manager the Company does not acknowledge that such a copy was received and I do not credit Carl son s indeterminate statement In so concluding it is noted that Carlson could not produce a cover letter indi cating that the plan had been delivered to the Respond 26 In June 1981 when this second amendment to the plan became op erative no collective bargaining agreement between the parties was in effect the last contract having expired in August 1980 766 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD ent, that Carlson admitted 'hat the Respondent was not voluntarily given copies of the 1979 or 1981 amendments to the plan, that Carlson and the Union had taken the position that the details concerning the plan's operation were not the Company's business and, consistent with this, had withheld important information on the monthly statements As will be discussed, the Union had strongly resisted the Respondents efforts to learn of the plan s status, even to the point of temporarily defying subpoe nas Also, Carlson s testimony was so self contradictory and described conduct so untrustworthy that it is impos sible to credit him where his statements conflict with the testimony of others As will be further shown, so deter mined were Carlson and his associates to keep informa tion concerning the union plan and their stewardship from the Respondent that it would have been totally in consistent with their pattern of conduct to have volun tanly supplied the Company with a copy of the policy The Respondent's first request for information came on 25 June 1979, more than 4 years after the Phoenix Mutual policy first was implemented, when Ehrlich, then still company vice president, wrote to Carlson asking for early delivery of a copy of the Union s major medical policy, including the schedule of benefits, the total cost of the plan, and the cost per enrolled individual This data request was in response to the above 22 June 1979 correspondence from the Union concerning the imposi tion of its $1 monthly administrative fee on nonmember Virginia employees and on those who were not paying the Union an agency fee As described on 22 June the Union had sent a letter to the Respondent requesting that the administrative fee be withheld from the pay of such employees and, concurrently had written to nonmember employees inviting membership, advising that if they did not join the Union the fee and other charges would be deducted from their pay The Union in letters of reply dated 27 June and 6 July, refused to provide information concerning the major medical plan In the 27 June letter Ehrlich was reminded that the Union had written nine letters from 7 August 1978 to 17 May 1979 requesting information from the Company and that such data had not been provided The Union wrote that on receipt of what it was seeking it then would consider Ehrlich s information request as contained in his 25 June letter The Union's 6 July correspondence was as follows The Guild informs you that the lack of your co operation in response for information as requested in our letters dated June 27, 1979 is the basis for the present union papers in reference to your letter of June 25 1979 The Guild advises that Article XV of the Bar gaining Unit Contract does not permit Gibbs & Cox to arbitrate the matter of inspecting the Guild Books " Furthermore the guild [sic] advises you that gov ernment agencies and GOD may inspect, however since you are neither a government agency or GOD you are not to inspect our books) On 5 October, Ehrlich again attempted to obtain infor mation concerning the Union s major medical program through the following letter to Carlson In accordance with Gibbs & Cox s fiduciary re sponsibility, the Company respectfully requests con firmation in writing from the Marine Technicians Guild that the contribution for major medical is used solely for major medical coverages This Gibbs & Cox contribution is in accordance with Article XVII 3 of the Collective Bargaining Agreement be tween Gibbs & Cox, Inc and the Marine Techni cians Guild, dated August 22 1977, and is $10 25 monthly per covered employee Gibbs & Cox does not require any information relative to the cost of other benefits provided by the Marine Technicians Guild, such as life insur anc,e, etc, which is solely the responsibility of the Marine Technicians Guild Please respond in writing on or before October 12, 1979 Carlson s 11 October response was as follows In your reply to your letter of October 5 1979 we wish to remind you that the existing Major Medical Plan was established in March 1975 The procedure associated with this plan is to have a Gibbs & Cox Inc, representative to review and sign the attached form every month, and after so doing the company pays $10 25 per covered em ployee in accordance with Article XVII 3 of the Collective Bargaining Agreement dated August 22, 1977- XVII 3 The Employers contribution toward the group Major Medical plan of the Guild shall be a maximum amount of $10 25 monthly per covered employee payable to an insurance com pany designated by the Guild This provision is not applicable to employees entitled to Medi care such employees are covered under para graph XVII 4 of this Agreement The Guild believes the company payment of $10 25 per covered employee together with accept ance of the associated procedure is indicative of the benefits covered by Major Medical plan of the Col lective Bargaining Agreement On 17 October Ehrlich wrote to Carlson, attaching a group insurance monthly statement and requesting clan fication and confirmation that the Company s contribu tion was being used solely for major medical insurance and not for life insurance and AD&D A response before 26 October was requested The Union through Carlson and Nevitt sent the fol lowing 24 October reply In reference to your letter of October 17 1979 the questions you again raised have been answered in our letter of October 11 1979 If you do not un derstand our answer we suggest you reread the letter Further correspondence on this subject GIBBS & COX INC would be viewed as "beating a dead horse' With this letter we consider the subject closed 7 The Union s efforts to deny major medical coverage to nonmember employees and later legal developments The parties stipulated that in response to the Union's 29 November 1979 request to deduct $3 80 monthly from the paychecks of each of the Virginia employees who were not union members or who did not pay an agency fee moneys representing $2 80 toward the Phoenix Mutual premium payment and a $1 administration fee to the Union, the Company, by 13 December 1979 letter, advised that it would not agree to withhold the request ed amounts from pay The Respondent cited its belief that such deductions would violate the Virginia right to work statute and Section 302 of the Labor Management Relations Act The Union then advised the Company that if deduc tions were not made, and if the employees did not pay the fee directly to the Union, the effected employees would be dropped from coverage under the Union ad ministered major medical plan When the Company did not make the requested deductions, the Guild dropped the effected employees from coverage Starting in February 1980, the Respondent placed the dropped employees under its major medical plan for management and clerical employees, underwritten by Equitable, ensuring that they received continued major medical coverage The Respondent further advised the Union that its addition of these employees to coverage under the company plan was temporary and would cease as soon as the Union returned them to coverage under its Phoenix Mutual plan On 18 March 1980 the Union filed the charge in Case 5-CA-12021 with the Board s Baltimore Maryland Re gional Office, alleging that the Respondent had violated the Act in placing its Arlington and Newport News Vir ginia employees under the Company s major medical plan These employees, as noted had dropped from the Guild administration plan The General Counsel thereaf ter affirmed the Regional Directors decision not to issue complaint In November 1981 a settlement agreement was reached in Baltimore in consolidated Cases 5-CB-3313 and 5-CB-3372, after issuance of complaint, which set tlement contained a nonadmissions clause and among other things, the Union s agreement to provide the Re spondent with information concerning its major medical plan The parties further stipulated that in May 1980, the Respondents `white badge' employees at Newport News resigned as a group from the Union, revoked their checkoff authorizations, were dropped from the Phoenix Mutual plan and became covered by the Company s major medical policy 26 In August 1980, the Respondent 26 As noted although the U-non had represented the Respondents Newport News technical employees and had applied the Phoenix Mutual plan at that location unlike the Arlington employees they never had been within the bargaining unit of the New York City and Arlington em ployees 767 withdrew recognition from the Union as bargaining rep resentative of its Arlington employees, an action chal lenged as unlawful in the matter heard by Judge Green 27 8 The Respondents discontinuation of premium contributions and implementation of its own major medical policy for New York employees As a result of the settlement agreement in consolidated Cases 5-CB-3313 and 5-CB-3372, the Respondent, on or about 22 January 1982, received its first information con cerning the Union s major medical plan These materials, which included a copy of the policy, as amended in March 1979, and the full completed group insurance monthly statements, dated 1 October 1979, 5 March 1980, and 1 November 1980, had been supplied to the Regional Office by the Union in partial compliance, and forwarded from there to the Company The copy of the major medical policy supplied was not current as it did not reflect the 1981 amendments, but the three monthly statements were filled in to show the Company, for the first time, all information sent to Phoenix Mutual for those months From these statements, the Respondent learned both that the Union had been adding information after the statements were signed by the Company's rep resentative28 and that the Company had been paying more than the actual cost of the major medical benefits provided Accordingly, at the February 1982 monthly meetings, Stanley Rothman, by then the Respondents personnel manager after agreeing with the Union on the number of employees who were entitled to major medical coverage for that month, as directed by Ehrlich, crossed out the blank boxes or areas in the Cost" column of the group insurance monthly statement form for life insurance, AD&D, and weekly indemnity This was protested in Carlson s 11 February letter, which accused Rothman of having made a unilateral change in their agreed major medical form for Phoenix Mutual Rothman was ad vised that this was unacceptable and that any changes would have to be negotiated with the Union 24 Another company filed charge in Case 2-CB-9250 alleging viola tions of Sec 8(b)(1)(A) (2) (3) and (6) of the Act against this Union brought in the New York Regional Office on 19 April 1982 was dis missed in part by the Regional Director on 30 June 1982 On 19 August 1983 the Regional Director also refused to issue a complaint on the re maining allegations The General Counsel on appeal affirmed these re spective Regional Office determinations on 23 March and 9 October 1983 At the hearing of this matter the Respondent Employer nonethe less attempted to litigate many of the allegations of that dismissed charge which asserted that the Union had unlawfully engaged in a number of the questionable activities described here Since the hearing in this matter the Board has issued Hotel & Restaurant Employees Local 274 (Warwick Caterers) 269 NLRB 482 (1984) which overruled Food Commercial Workers Local 576 (R & F Grocers) 252 NLRB 1110 (1980) enf denied 675 F 2d 346 (D C Cir 1982) and related case on which I had relied in not permitting the Respondent here to fully relitigate all the issues in the dismissed charge Nonetheless in my judgment sufficient latitude was al lowed the Respondent and in view of the conclusions reached in this matter the relevant rulings were not prejudicial 28 The Respondent objected to the Union s postsignature additions to the monthly statements because it implied that the Company had seen such information 768 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD The next month, on 10 March, Rothman and Carlson met again . They agreed on the number of New York nonmanagement technical employees to be covered by the Union's major medical plan, but when Rothman once more tried to cross out the blank boxes for the other types of insurance on the form, Carlson prevented this by removing the form from the table and by telling Rothman that he could not unilaterally change an agreed procedure. Rothman replied that the Respondent's only agreement was to tender $10.25 per enrollee for major medical benefits, that the Company would continue to do so, but that if Carlson prevented him from completing the form by crossing out the other inapplicable types of coverage, the Company would send that month's contri- bution to Phoenix Mutual with a letter explaining that such moneys were intended solely for major medical benefits for the covered employees. Carlson retorted that he might have to file an unfair labor practices charge with the NLRB. Later that day, 10 March, Carlson sent the following letter to Rothman: Please be advised that all correspondence con- cerning the Guild's major medical insurance plan associated with Phoenix Mutual Life Insurance Co., excepting the agreed upon amount and the check for this amount covering the enrolled members of the bargaining unit, is to be sent to me personally and not to the Phoenix Mutual Life Insurance Co. We consider the statement Mr. Rothman made at our meeting this morning that he will write directly to the Phoenix Mutual Life Insurance Co. as inter- fering with our administration of the Guild's major medical insurance plan. This is a continuation of the Company's harassment and a violation of our rights as a union in the performance of its fiduciary re- sponsibilities on behalf of the members of the bar- gaining unit. On the next day, 11 March, Rothman forwarded the Respondent's monthly major medical contribution check to Phoenix Mutual for the 193 New York nonmanage- ment technical employees enrolled that month with a cover letter that concluded: The Phoenix Mutual Group Insurance Monthly Statement . . . has not been enclosed because Mr. Carlson did not permit the undersigned to complete the Gibbs & Cox portion. It is to be known that the Gibbs & Cox, Inc. con- tribution of $10.25 per enrollee is to be applied only for Major Medical benefits. On 23 March 1982, Ehrlich wrote to the Union re- questing the following information from August 197729 to the request date: 1. The monthly premium cost for individual and family coverage. 29 August 1977 was when the last collective-bargaining agreement became effective. 2. The numbers of employees enrolled for indi- vidual and family coverage respectively. 3. The deductible amounts in effect and any in- creases in the deductible. 4. Who paid the premium balance if the Respond- ent's $10.25 per employee monthly contributions were insufficient to pay the entire major medical premium costs for any month, and details for each such month. 5. Details of any complaints and requests for changes concerning major medical coverage from New York unit employees, received by the union; copies of Union responses, and applicable dates. 6. Details of Company overpayments for premi- um contributions; communications between the Union and Phoenix Mutual concerning such over- payments and copies of some. 7. Copies of the completed Group Insurance Monthly Statements since August 1977. 8. All documents relating to major medical cov- erage, including notice premium increases, changes in scope of coverage or deductible amounts. 9. Copies of documents submitted to federal, state or local government agencies that relate to the major medical plan, including documents required by the Employee Retirement Income Security Act (ERISA). a o 10. A copy of the Phoenix Mutual major medical policy currently in force.st The above letter advised the Union that the Company needed the aforesaid information "to ascertain compli- ance with federal laws and regulations with respect to employee benefit plans and to determine what company actions are necessary to provide employees with compre- hensive major medical insurance." In Carlson's 30 March 1982 reply, he protested the ac- tions of the Respondent's counsel in visiting Phoenix Mutual's offices and its use of a subpoena to obtain from that Company copies of documents relating to the Union's major medical plan that the Union termed "con- fidential." Expressing the view that the Company had re- ceived all the information to which it was entitled under the settlement, no further information requested in the Company's above-described 23 March letter would be provided. On 6 April, Ehrlich again wrote to Carlson, acknowl- edging receipt of the materials conveyed in January through the General Counsel, but repeating the Compa- ny's request for the data originally sought in his 23 30 Around March 1979 , the Union had been advised in writing by Phoenix Mutual that, as its benefits plan covered 100 or more employees in the preceding 12-month period, it was required under ERISA to file annual report form 5500 and its schedule A with the Internal Revenue Service within 7 months of the plan year. In its correspondence , Phoenix Mutual had provided the Union instructions concerning the filing and distribution required under ERISA, and had furnished data necessary to complete the necessary forms. Carlson conceded , however, that only one ERISA-required report had been filed with the IRS , sometime before 1980. 31 As noted, the policy copy provided in January 1982 in compliance with the settlement agreement in Cases 5-CB-3313 and 5-CB-3372 had not been current as not containing the 1981 amendments. GIBBS & COX INC March letter Ehrlich noted, however, that the monthly statements from August 1977 through June 1981 listed in paragraph 7 of his letter no longer were required 32 Ehrlich wrote that these monthly statements showed that Employer contributions were far in excess of the major medical premiums due that the Company never had been advised of these overpayments and that an im mediate explanation was due concerning the disposition of those funds Ehrlich s letter concluded as follows I ask that you provide the requested documents and information to me no later than April 9, 1982 Please plan to meet with me on April 14 1982 at 2 00 p in I would like to discuss with you at that time questions concerning the MTG s administra tion of major medical insurance and any actions by the company that may be necessary to assure ade quate major medical coverage for the technical em ployees Carlson refused to meet with Ehrlich on 14 April for any discussion concerning the major medical program The Respondent countered with Ehrlich s 16 April 1982 letter to Carlson, quoted early in this decision, charging the Union with serious mishandling of company con tnbutions for major medical premiums in eight itemized ways and serving notice that, effective 1 May 1982 the Company was extending fully paid major medical cover age under its own policy to New York technical employ ees and also would cease payments to Phoenix Mutual as of that date The Arlington technical employees as noted, already were covered by that plan It was not until 14 May 1982, after the Respondent had discontinued its premium payments to the union plan, that Carlson replied to the Respondents above quoted 23 March request for detailed information, as fol lows Although believing the Company is amply in formed by acquisition of 172 copies of Phoenix Guild data and information on the major medical plan I nevertheless attach copies of the July 1981 thru April 1982 monthly statements Concerning the numbered paragraphs of your letters Par 1 & 2-The information you request may be obtained from the monthly statements Par 3-The deductible was increased from $100 to $200 in June 1981 Par 4 & 6-Whenever the Company contribu tion of $10 25 per employee each month is insuffi cient to pay the premium the Guild supplements the deficiency by use of funds from the member ship or funds that Phoenix Mutual may have in escrow or funds from an insurance plan bank ac count that is used solely for contributing to insuf ficiencies in plan cost Concerning overages of the company contribution be advised that Phoe 32 These monthly statements had been obtained by the Respondents counsel by subpoena during the visit to Phoenix Mutual s offices that was protested in Carlson s 30 March letter 769 nix Mutual retains all money and that at no time has there ever been any money returned to the Guild from the Phoenix escrow account Insufficiencies and overages are a function of a number of variables such as, the changing month ly ratio of single to dependent enrolled employ ees the benefit demand and the constant rising cost of medical services Par 5-In the past I have discussed the plan with employees who for one reason or another did not understand the operation of the plan Such matters have always been settled without difficulty I can recall no complaint or request toward changes in the plan Par 7-You now have the information Par 8-Your request involves internal union business and I do not believe you are entitled to this information at this time Premium increases changes in benefits and deductible amounts are provided to the bargaining unit as a whole Par 9-I enclose the copies of Guild LM IA federal reports filed by the Guild Par 10-My letter of April 14, 1982 provided the information you requested The Union s above 14 May letter did not deter the Re spondent from its announced course, effective 1 May, of applying its own major medical insurance plan, under written by Equitable to the New York technical em ployees without the Union s agreement and discontinuing its contributions to the Union s major medical plan car ned by Phoenix Mutual D Discussion and Findings I The unilateral discontinuation of premium contributions Although it would be a violation of Section 8(a)(5) and (1) of the Act for an employer to unilaterally change employees insurance benefits and carriers without bar gaining with the union representing its employees 33 under Section 302(c)(5)(B) of the LRMA where as here, a plan for employees is not administered through a statutorily qualified trust independent of the employer and the union and that meets the other strict require ments of that provision but is administered only by the union employer contributions may not be compelled re gardless of the terms of the collective bargaining agree ment 34 Not only are contributions to such a union man aged fund unlawful but under Section 302(d) willful violators on conviction, are subject to criminal liability Violators also may be restrained pursuant to Section 302(e) Under Bricklayers Local 15 v Stuart Plastering Co, supra reference in the collective bargaining agree ment to a payment schedule for or amounts due to the insurance plan is not equitable to a qualifying Taft Hart ley trust, and the employer is not estopped or otherwise prevented from asserting the invalidity of the arrange 33 Arno Mocassin Co 274 NLRB 1515 (1985) 94 Bricklayers Local 15 v Stuart Plastering Co 512 F 2d 1017 1029 (5th Cir 1975) cited in John F Boyle Co 222 NLRB 1309 1310 fn 2 (1976) 770 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD ment because it has made prior contributions to such an unlawfully constituted benefits plan. As the U.S. Court of Appeals for the Fifth Circuit stated in that matter at 512 F.2d at 1029: [W]e are not at liberty to bind an employer to make payments that, if made voluntarily, would violate Section 302. Section 302 was described by Justice Stewart in NLRB v. Amax Coal Co.:35 II. Although § 302(a) of the Act generally prohibits an employer from making payments to any repre- sentative of his employees, § 302(c)(5) allows an employer to contribute to an employee benefit trust fund that satisfies certain statutory requirements. To ensure that the funds in such a trust are not used as a union "war chest," Arroyo v. United States, 359 U.S. 419, 426, the Act provides that the funds may be used only for specified benefits for employees and their dependents, and that the basis for these payments be laid out in a detailed written agree- ment between the union and the employer. The fund must be subject to an annual audit, and the re- sults of the audit must be made available to all inter- ested persons. Furthermore, pension or annuity funds must be kept in a trust separate from other union welfare funds. Finally, § 302(c)(5)(B) requires that "employees and employers [be] equally repre- sented in the administration of such fund, together with such neutral persons as the representatives of the employers and the representatives of the em- ployees may agree upon ...." Congress directed that union welfare funds be es- tablished as written formal trusts, and that the assets of the funds be "held in trust," and be administered "for the sole and exclusive benefit of the employees ... and their families and dependents ...." 29 U.S.C. § 186(c)(5). Justice Stewart also noted at 332-333. Whatever may have remained implicit in Con- gress' view of the employee benefit fund trustee under the Act became explicit when Congress passed the Employee Retirement Income Security Act of 1974 (ERISA). 88 stat. 829. ERISA essen- tially codified the strict fiduciary standards that a § 302 (c)(5) trustee must meet . . . . Section 404(a)(1) of ERISA requires a trustee to "discharge his duties . . . solely in the interest of the partici- 3a 453 U.S. 322, 328-329 (1981). In NLRB v. Amex Coal CO., supra, the Supreme Court found that employer -appointed trustees of employee benefit trust funds established under Sec. 302 (c)(5) of the Act are not em- ployer representatives for purposes of collective bargaining or adjustment of grievances within the meaning of Sec. 8(b)(I)(B) of the Act, which makes it unlawful for a union to restrain or coerce the employer in its selection of representatives. This, in essence, was because the trustees of such funds are fiduciaries serving the trust and the beneficiaries and not the parties that appointed them, whether employer or union. pants and beneficiaries. . .. 29 U.S.C. § 1104(a)(1).. . . In sum, ERISA vests the "exclusive authority and discretion to manage and control the assets of the plan" in the trustees alone, and not the employer or the union. 29 U.S.C. § 1103(a). In Arroyo v. U.S.,38 the Supreme Court noted that the strict standards of Section 302 were enacted out of con- cern for "corruption of collective bargaining through bribery of representatives by employers . . . extortion by employee representatives, and with the possible abuse by union officers of the powers which they might achieve if welfare funds were left to their sole control." The specif- ic standards were enacted to remove a "substantial danger" that such funds might be employed to perpet- uate control of union officers, for political purposes, or even for personal gain." Most recently, in BASF Wyandotte Corp.,37 the Board reaffirmed that although it did not have authority to en- force Section 302 of the Act,38 in determining whether an unfair labor practice had occurred, not only is the Board not barred from considering the applicability of Section 302 as a possible defense to unfair labor practice allegations, but that it is appropriate that it do so in order to avoid conflict between Section 8(a)(5) or (b)(3) and Section 302, and to prevent the "incongruous" result of interpreting and applying Section 8 of the National Labor Relations Act in isolation from Section 302 of the Labor Management Relations Act, two provisions en- compassed in the same statute. In the present matter, it was stipulated at the hearing that the Phoenix Mutual major medical plan covering the Respondent's technical employees was not a Section 302 trust agreement but was simple insurance policy ad- ministered solely by the Union in conjunction with the carrier. No administrators appointed by the Company acted with the Union in managing of the plan. In the absence of a jointly constituted qualified admin- istering trust, a detailed written agreement governing such a trust fund, and the other statutory requirements, the Respondent's premium contributions to the union- managed Phoenix Mutual medical plan were in direct violation of Section 302(c)(5). This, as noted, was exem- plified by the Union's ability to use the escrow fund to reduce its financial burden. Such transactions amounted to unlawful assistance in the form of monetary payments made by the Company at the Union's direction, under the Union's control, and for the Union's benefit.39 Therefore, I find no violation of Section 8(a)(5) and (1) in the Respondent's discontinuation of payments to the Union's major medical plan. 36 359 U.S. 419 at 419 (1959). 34 274 NLRB 978 (1985). 38 Authority to judge alleged criminal violations and to restrain pro- scribed activities under Sec. 302(d) and (c), respectively, is vested in the U.S. district courts. 39 There is no 8(a)(2) allegation in the present proceeding, GIBBS & COX INC 771 2 The unilateral implementation of the Company's major medical plan The impropriety of contributing to an unlawfully es tablished benefits' plan, however, is a separate consider ation from the remaining issue, the Respondent's alleged violation of its statutory bargaining obligation by unilat erally substituting its own major medical plan, under written by a different carrier, for the Union Phoenix Mutual policy Although the Respondent, in its 16 April 1982 letter, elected to treat as a single transaction its discontinuation of contributions to the Union's major medical plan for New York technical employees and the simultaneous ap plication of its own major medical policy to those em ployees, having announced to the Union its intent to do both in that same correspondence, these two actions ac tually are not part of one gesture and must be separately evaluated The Respondent's unilateral substitution and imple mentation of its own policy without bargaining with the incumbent Union is quite different from its statutory obli gation to cease making premium payments that are in ap parent violation of civil and criminal law and that never should have begun However, desirable as it may be that unit employees should have uninterrupted major medical protection, it does not follow in the cortext of a continu ing bargaining relationship that because one insurance plan for employees must be discontinued or reorganized to meet the requirements of law, that the Employer may disregard its bargaining obligation by unilaterally institut ing its own substitute plan I find to be convincing the Respondent's argument that it could not get the Union to bargain concerning the major medical plan as there is no evidence that the Respondent had sought to induce such bargaining by advising the Union that the existing plan had to be renegotiated as unlawful under Section 302 In stead, the Company had sought discussions with the Union only concerning questionable management prac- tices Accordingly, it would be conjecture to contem plate the Union s reaction concerning renegotiation to obtain compliance with the law because that topic never arose Moreover the Respondent long had assisted the Union through monetary payments that not only facili tated, but made possible the Union's conduct that it here proclaims as so objectionable Even apart from Section 302 or the Respondents con tention that the Union had unilaterally changed the scope of the major medical plan I am not persuaded by the Respondent's explanations as to why it had contribut ed to and, essentially, financed the Union s major medi cal policy for so many years without questioning certain changes in the plan of which it must have known Con trary to the Respondents disclaimers, it did have long term actual notice of changes in the policy from those negotiated Although the contract and the plan itself historically had provided only for straight major medical benefits, the Company's copies of the Phoenix Mutual group insurance monthly statements since 1975, and cer tainly since 1977 under the most recent contract, clearly showed that dependent life insurance and AD&D also were being provided Only cost information and the extent of coverage were withheld That these additional coverages had not been negotiated with the Union as stated by Company Chairman Ehrlich, gave no reason to ignore them as the monthly statements showed that they were in place and, quite possibly, were affecting the cost of the entire plan In this context, it seems quite reasona ble that the Respondent before mid 1979 would seek to learn the details of a program for which it was spending thousands of dollars, and that it would have tried to take corrective action before 1982 This latter point is particu larly valid because the Respondent had learned as early as 1979 that its contributions no longer were enough to pay for the entire, therefore noncontributory plan Addi tionally, from the information concerning the applicabil ity of life insurance and AD&D on the partially complet ed monthly statements that were given by the Union, the Respondent also had notice that the scope of the em ployees' signed payroll checkoff authorizations for major medical coverage was being exceeded and that moneys were being withheld from the employees pay for pur poses beyond what they had been authorized The Re spondent s prolonged willingness to overlook these very visible irregularities in the administration of the Union s major medical plan constitutes at best a negligence so ex treme, or gross, as to warrant the inference made here that the Respondent had consented to the additional cov erages arranged by the Union There is no unlimited period during which this Employer, or any party, may look without seeing, reading the announcements in the Union s newsletter, which the Company placed in evi deuce, and the coverages referred to in the monthly statements, and still credibly plead ignorance or surprise at what they have been financing Such a finding also is inconsistent with the Respondents argument that there could be no unilateral change because it never had agreed to the union major medical plan as it was in 1982 In any event, lack of mutuality would be an argument more germane to cessation of contributions to the Union s plan, which action was lawful, than to the right to unilaterally start the Company s own plan Therefore, if the Union should continue as bargaining representative of the Respondent's New York and/or Arlington technical employees, the Respondent would not have standing either by virtue of its own conduct or because of negotiating impasse to have unilaterally sub stituted its own major medical plan and insurance com pany for that of the Union without bargaining This is true although as found above the Respondent was law fully correct in discontinuing payments Accordingly, I find that in unilaterally implementing its own major med ical plan for unit employees40 and changing the insur ante carrier the Respondent violated Section 8(a)(5) and (1) of the Act 41 3 Evidence of union misconduct and recourse The remaining issue is whether the Union should con tinue as bargaining agent or whether it has so failed in its duty to fairly and lawfully represent bargaining unit 40 As the parties agree that the affected New York technical employ ees are within the bargaining unit their unit placement is not in issue 41 Arno Mocastin Co supra 772 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD employees, and has otherwise so conducted itself, as to warrant revocation of its 1946 certification and with- drawal of its recognition as bargaining representative of the Respondent's technical employees until such time as the Union has been certified by the Board.42 In the often-cited case of Alto Plastics Mfg. Co.,43 the Board, while holding that it must process representation case petitions under Section 9 of the Act where the peti- tioning union is a labor organization within the meaning of Section 2(5) of the Act without: regard to the moral character of effectiveness of the Union's officials, also noted with respect to unions already certified as incum- bent bargaining representatives (136 NLRB at 854): [T]he Board has, on occasion, revoked the certifica- tion of a union where it has been shown that the union was not meeting its responsibilities under its certificate as the exclusive bargaining representa- tive. In such cases, the Board has proceeded on the theory that, having issued a certification under Sec- tion 9 of the Act, the Board has the power to police and revoke the certification upon good cause shown. Accordingly, in the event the Petitioner should be certified as a result of this election in- volving employees, and fails to fulfill its statutory obligations as their exclusive bargaining representa- tive, the Board could and would entertain a motion to revoke the certificate. In my view, the evidence adduced at the hearing of this matter indicates that the Union has so functioned as bargaining representative of the employees here as to warrant that the Board consider revoking its certificate of representative. Section 302 was enacted to help pre- vent union corruption. Much of what that provision was intended to avoid may have occurred here because of its disregard. The record shows that in addition to the longstanding violations of Section 302, found above, and the corre- sponding assistance within the meaning of Section 8(a)(2) of the Act derived from the Employer's monetary con- tributions,44 the Union overcharged the Respondent for premium contributions in the stipulated amount of $17,430.15 from October 1977 through 1 August 1981. This surplus, held in an escrow account by Phoenix Mutual subject to the Union's control, was used to enable the Union to unilaterally expand the scope of the policy, adding improvements to existing protections al- though, at the same time, easing the Union's financial ob- ligations by paying, for an extended period, the Union's share of the resultant higher premiums. These expanded 42 Although, as noted, there is evidence of unlawful assistance to the Union, there is no employer domination as would warrant consideration of the Union's disestablishment. 49 136 NLRB 850, 854 (1962). Also see Longshoremen ILA Local 1814 Y. NLRB, 735 F. 2d 1384 (D.C. Cir. 1984), enfg. 265 NLRB 1688 ( 1982). 44 Although there is no showing that moneys from the Company's pre- mium contributions were used to personally enrich union officials or were deposited directly into the Union's treasury, these contributions are not dispositive. The moneys paid by the Respondent were controlled by the Union and, during nearly a year, the more than $17,400 in surplus moneys accumulated from the Respondent 's overpayments was complete- ly absorbed at the Union's discretion. coverages, never negotiated with or approved by the Company, further benefited the Union by enhancing the advantages of membership, a point conspicuously adver- tised by the Union in seeking new members. Although the unauthorized use of company funds from the escrow account unquestionably was an imposition on the Em- ployer, it also burdened the unit employees as the surplus would not have developed had the Union obtained major medical coverage coextensive with the Company's monthly contributions. In short, the surplus arose be- cause the Union had purchased less major medical pro- tection for unit employees than was being paid for by the Company. In this way the employees, too, were adverse- ly affected by the Union. The Guild arguably has failed in its duty to fairly rep- resent nonmember unit employees in Arlington, within the right-to-work State of Virginia, by openly discrimi- nating against them because they did not belong to the Union. Accordingly, for 2 years from November 1979 to November 1981, the Union unsuccessfully tried to obtain the $2.80 monthly premium contributions plus the $1 ad- ministrative fee only from nonmember employees to cover the higher cost of the expanded insurance. Non- member employees were not permitted to vote concern- ing the proposed 1981 major medical amendments as to the amount of the deductible and the employee contribu- tions to the premium, and were given no voice as to whether a dental plan "for members only" should be added to the policy. This was done even though that plan, too, had it been adopted, could have cost the non- members additional moneys .45 Finally in this area of discrimination based on non- membership, the Union in its correspondence to non- member employees used the threat of imposing the $3.80 surcharge, or discontinuation of coverage. for nonpay- ment of same, to induce such employees to join that labor organization. In litigating to include such employ- ees within the unit in the matter before Judge Green, al- though at the same time discriminating against them as described, the Union neither wished to fully or fairly represent such employees nor to relinquish them from the unit. The Union also engaged in conduct of the type quite possibly proscribed in U.S.C., Title 18, § 1001,46 by knowingly filing with the Federal Government false statements in paragraphs 5 and 6 of its answer to the consolidated complaint in Cases 5-CB-3313 and 5-CB- 3372 denying that "it had notified employees who are not members of Respondent that they would be required to pay a monthly administration fee of $1," and that it had "notified non-member employees of the employer that if they failed to pay the monthly administration fee 4s The Union, as noted, was not successful in collecting these sur- charges from the nonmember employees or from the Company and, as part of the November 1981 pretrial settlement of Cases 5-CB-3313 and 5-CB-3372, agreed that it would not impose discriminatory fees or sur- charges on nonmembers . It is relevant at this time to consider in a repre- sentational context the Union 's presettlement conduct in administering the major medical plan in view of the continuing plan-related unlawful activities. 46 U.S.C., Title 18, § 1001, is set forth in relevant part in the appendix to this decision. GIBBS & COX INC of $1, that they no longer would be covered by under the Major Medical Plan The record strongly indicates that when the Union made those representations in its 15 December 1980 answer, it was aware that they were false Such statements were presented as more than the mere routine denials contained in any answer Rather, they were volunteered, written affirmative representa tions that were misleading The Unions correspondence of 22 June 1979 both to the Respondent and to employ ees showed an earlier intent to collect the $1 monthly administration fee only from nonmember employees and the Guild s newsletter of 11 January 1982 plainly stated that when the Arlington and Newport News bargaining units refused the Union s demand that they pay the $3 80 in monthly major medical surcharges, they were advised they would be dropped 47 Although, as indicated in Justice Stewart's above quoted opinion in NLRB v Amax Coal Co, supra, the administration of an employee benefits plan under Sec tion 302 is entwined with ERISA requirements and the Union was advised in writing in 1979 by Phoenix Mutual that it must file annual ERISA mandated reports with the Internal Revenue Service, the contents of which were described in detail by that carrier'48 the Union concededly filed only one such report before 1980 The Company and Union also exceeded the purposes for which payroll deductions were approved by employ ees in their checkoff authorization cards for major medi cal insurance when it continued to use those cards to withhold moneys used for dependent life insurance, AD&D 49 Where sums are withheld from employee compensation in the absence of a signed checkoff author ization, or, analogously for purposes beyond the scope of any existing authorization, the employer has been found in violation of Section 8(a)(1) and (2) of the Act and the union in violation of Section 8(b)(1)(A) of the Act 50 As the complaint in this matter does not allege violations of these provisions of the Act, it is sufficient to note that the Union s conduct in seeking moneys for pur poses beyond what had been specifically authorized by the affected employees was of the type that is pro scribed In view of all that was occurring it is understandable that the Union was reluctant as the record shows to pro vide information concerning its operation and the status of the major medical plan The Union s hesitancy in this regard reached the point where the Respondents first data from the Union was conveyed only in nominal coin pliance with the settlement agreement in Cases 5-CB- 3313 and 5-CB-3372 where further information could be obtained only by a union protested subpoena served on Phoenix Mutual at the time, and on the Union in connec tion with this hearing and where I was compelled to 41 See R Exhs 19 20 and 44 48 See R Exh 52 49 Although the increased premium costs for the dependent life insur ance and AD&D was nominal and inclusion of those coverages as argued by the Union may have enabled an initially more favorable rate from Phoenix Mutual the Union still was not free to add these items um laterally without bargaining and without obtaining revised signed check off authorizations so Terpening Trucking Co 271 NLRB 196 (1984) American Geriatric Enterprises 235 NLRB 1532 (1978) 773 press the Union to comply with the Respondent's sub poena duces tecum even when no timely petition to revoke could still be filed The Union s many refusals to provide the Company with requested details concerning its administration of the major medical plan and its um lateral changes to the plan would have been breaches of its own bargaining obligation of the type prohibited by Section 8(b)(3) of the Act even without regard to its fi duciary accountability imposed by Section 302 It has been found above that if the Union remains as bargaining representative of the Company s employees in a unit to be determined by the Board in its ruling on the appeal from Judge Green s decision, the Respondent, in the present matter, would be in violation of Section 8(a)(5) and (1) of the Act for having unilaterally imple mented its own major medical policy for New York technical employees However, the Union has so failed to meet its statutory obligation to fairly and nondiscri minatonly represent all employees whom it contends are within the bargaining unit, and its other obligations im posed by law, that its activities no longer can be respon sibly permitted Therefore, it will be recommended that the Union s continued status as bargaining representative be examined before the Board is placed in the position of considering the merits of issuing bargaining orders on the Union's behalf both here and in the pending appeal from Judge Green's decision 4 Disposition Noting that the evidence herein strongly indicates that the Union has been assisted for years by company pay ments to the major medical plan in violation of Section 302 and by payroll deductions for that program exceed ing the scope of those authorized by employees in their signed major medical checkoff cards, that the Union has acted contrary to the interests of all unit employees by obtaining less major medical coverage than was paid for by the Company that the Union has variously discrimi nated against nonmember unit employees and has failed to fairly represent them that the Union, without authors zation has used for its own account surplus company funds accumulated from union promoted premium over charges that the Union has apparently failed to meet its own bargaining obligation by not negotiating interim changes in the policy with the Company and by not fur nishing requested relevant major medical information, and further noting that the Union has not filed ERISA mandated annual reports and that it had engaged in other conduct quite possibly in violation of the law its bar gaining obligations, and its responsibilities to employees, I recommend the following 1 That the Board authorize the issuance to the Union of an order to show cause, returnable before an adminis trative law judge not involved in these findings, why the Union's certificate of representative should not be re yoked why it should not be required to cease acting as the representative of the Company s technical employees in New York and, if applicable, Arlington and why the Employer should not be compelled to cease recognizing the Union as the exclusive bargaining representative of its employees until the Union has been certified by the 774 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD Board . Such further hearing would be necessary to afford the Union the due-process requirements of sepa- rate notice and hearing on its future status as the present matter had been brought to consider only the Company's bargaining conduct. It was not within the scope or nature of this proceeding to determine certification revo- cation. After the judge issues his decision in accordance with Section 102.45 of the Board's Rules and Regulations, the procedures set forth in Section 102.46 thereof should become applicable. 2. That the Board defer ruling on the pending appeal from Judge Green's decision in Gibbs & Cox, Inc., JD-9- (NY)-82, and on any exceptions to my findings in the present matter until a determination , after hearing, is reached on the threshold issue of whether the Union's certification should be revoked and recognition be with- drawn as bargaining representative for the Respondent's employees until the Union is certified by the Board. Should the Board see fit to thereafter order revocation of the Union's certificate of representative and that rec- ognition be withdrawn from the Union until it has been certified by the Board, then it would be recommended that the complaints in the present matter and in the pending appeal from Judge Green's decision, both be dis- missed as the bargaining obligation would have been ren- dered moot. 3. Alternatively, should the Board, after hearing, de- termine that revocation of the Union's certification of representative is unwarranted or, in the first instance, find that no hearing should be held whether the Union should continue as bargaining representative , then, of course, there would be no basis for deferring determina- tion on the merits of the pending appeal from Judge Green's decision or on any exceptions to my findings here. 4. The complaint allegations in the present matter that the Respondent violated Section 8(a)(5) and (1) of the Act by unilaterally discontinuing premium payments or contributions to the Union's major medical plan are not sustainable in any event, and it is recommended that they be dismissed. CONCLUSIONS OF LAW 1. The Respondent is an employer engaged in com- merce within the meaning of Section 2(2), (6), and (7) of the Act. 2. The Union is a labor organization within the mean- ing of Section 2(5) of the Act. 3. The Respondent, by unilaterally ceasing to make premium contributions to the Union's major medical plan on behalf of its New York, New York bargaining unit employees, did not violate Section 8(a)(5) and (1) of the Act. 4. The Respondent, by unilaterally implementing its own separate major medical plan for its New York, New York bargaining unit employees, violated Section 8(a)(5) and (1) of the Act. 5. The Board's consideration of remedial action in the present matter should be deferred pending determination, after hearing, of the Union's continued bargaining agent status pursuant to a Board-authorized order to show cause why the Union's certification of representative should not be revoked and the Employer directed to withhold recognition from the Union as bargaining rep- resentative until it is certified by the Board.5 t 6. The appropriate bargaining unit herein previously has been litigated by the parties for purposes of this pro- ceeding in the pending appeal from Judge Green 's deci- sion in Gibbs & Cox, Inc., JD-9-(NY)-82, dated 29 Janu- ary 1982. [Recommended Order omitted from publication.] 51 In recommending that Board decision concerning issuance of any applicable bargaining orders on the Union's behalf, here or in the appeal from Judge Green's decision, be made contingent on prior determination of the Union's continued bargaining representative status, it is recognized that certain otherwise unlawful company conduct ultimately might not be remedied . Nevertheless , each case must be considered on its own facts. In the present circumstances, the Board should have the opportunity to con- sider whether the Act would better be served by revoking the Union's certification of representative or by proceeding to a determination on the merits. APPENDIX Section 302 of the Labor-Management Relations Act of 1947, as amended, provides, in relevant part, as follows: Restrictions on payments to employee representatives Sec. 302.(a) It shall be unlawful for any employer or association of employers or any person who acts as a labor relations expert , adviser, or consultant to an employer or who acts in the interest of an em- ployer to pay, lend, or deliver, or agree to pay, lend, or deliver, any money or other thing of value- (1) To any representative of any of his employees who are employed in an industry affecting com- merce; or (2) To any labor organization, or any officer or employee thereof, which represents, seeks to repre- sent, or would admit to membership, any of the em- ployees of such employer who are employed in an industry affecting commerce; (3) To any employee or group or committee of employees of such employer employed in an indus- try affecting commerce in excess of their normal compensation for the purpose of causing such em- ployee or group or committee directly or indirectly to influence any other employees in the exercise of the right to organize and bargain collectively through representation of their own choosing; or (b)(1) It shall be unlawful for any person to re- quest, demand , receive, or accept, or agree to re- ceive or accept, any payment, loan, or delivery of any money or other thing of value prohibited by subsection (a). (c) The provisions of this section shall not be ap- plicable . . . (5) with respect to money or other thing of value paid to a trust fund established by such representative, for the sole and exclusive bene- GIBBS & COX INC 775 fit of the employees of such employer, and their families and dependents (or of such employees, fam flies, and dependents jointly with the employees of other employers making similar payments, and their families and dependents) provided, That (A) such payments are held in trust for the purpose of paying either from principal or income or both, for the benefit of employees their families and depend ents, for medical or hospital care pensions on re tirement or death of employees, compensation for injuries or illness resulting from occupational activi ty or insurance to provide any of the foregoing or unemployment benefits or life insurance, disability and sickness insurance, or accident insurance, (B) the detailed basis on which such payments are to be made is specified in a written agreement with the employer and employees and employers are equally represented in the administration of such fund, to gether with such neutral persons as the representa tives of the employers and the representatives of employees may agree upon and in the event the em ployer and employee groups deadlock on the ad ministration of such fund and there are no neutral persons empowered to break such deadlock, such agreement provides that the two groups shall agree on an impartial umpire to decide such dispute, or in event of their failure to agree within a reasonable length of time, and impartial umpire to decide such dispute shall, on petition of either group, be ap pointed by the district court of the United States for the district where the trust fund has its principal office, and shall also contain provisions for an annual audit of the trust fund , a statement of the re sults of which shall be available for inspection by interested persons at the principal office of the trust fund and at such other places as may be designated in such written agreement and (C) such payments as are intended to be used for the purpose of pro viding pensions or annuities for employees are made to a separate trust which provides that the funds held therein cannot be used for any purpose other than paying such pensions or annuities (d) Any person who willfully violates any of the provisions of this section shall upon conviction thereof, be guilty of a misdemeanor and be subject to a fine of not more than $10,000 or to imprison ment for not more than one year , or both (e) The district courts of the United States and the United States courts of the Territories and pos sessions shall have jurisdiction for cause shown to restrain violations of this section U S Code, Title 18 Section 1001 in relevant part, provides Whoever, in any matter within the jurisdiction of any department or agency of the United States knowingly and willfully makes any false tic titious or fraudulent statements or representa tions, or makes or uses any false writing or docu ment knowing the same to contain any false ficti tious or fraudulent statement or entry, shall be fined not more than $10,000 or imprisoned not more than five years, or both