East Kentucky Paving Corp.

1132 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD East Kentucky Paving Corporation and United Steelworkers of America, AFL-CIO-CLC Case 9-CA-25546 May 19, 1989 DECISION AND ORDER BY CHAIRMAN STEPHENS AND MEMBERS JOHANSEN AND CRACRAFT On February 7, 1989, Administrative Law Judge Claude R Wolfe issued the attached decision The Respondent filed exceptions and a supporting brief, and the Charging Party 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 and to adopt the recommended Order ORDER The National Labor Relations Board adopts the recommended Order of the administrative law judge and orders that the Respondent, East Ken- tucky Paving Corporation, Grayson, Kentucky, its officers, agents, successors, and assigns, shall take the action set forth in the Order James R Schwartz Esq for the General Counsel James U Smith III Esq, for the Respondent Franklin G Shuler Jr Esq, for the Charging Party DECISION STATEMENT OF THE CASE CLAUDE R. WOLFE Administrative Law Judge This proceeding was litigated before me on October 19 1988 at Lexington Kentucky pursuant to charges filed by the Union and served on July 7 1988 and complaint subse quently issued on August 15, 1988 alleging Respondent violated Section 8(a)(5) and (1) of the National Labor Relations Act (the Act) by failing to honor and continue in full force and effect an existing collective bargaining agreement it has with the Union Respondent denies the commission of unfair labor practices After considering the evidence before me and the able posttrial briefs of all parties I make the following FINDINGS OF FACT I JURISDICTION Respondent is a corporation with an office and place of business in Grayson, Kentucky, and is engaged in bi tuminous asphalt paving operations During the 12 months preceding the issuance of the complaint, Re spondent in the course and conduct of its business, pur chased and received at its Grayson, Kentucky facility products, goods, and materials valued in excess of $50 000 directly from points located outside the State of Kentucky Respondent is an employer engaged in com merce within the meaning of Section 2(2) (6) and (7) of the Act II LABOR ORGANIZATION The Union is a labor organization within the meaning of Section 2(5) of the Act III THE ALLEGED UNFAIR LABOR PRACTICES Respondent is a member of Highway Contractors Inc which is composed of employers engaged in high way construction and negotiates collective bargaining agreements on their behalf Highway Contractors, Inc currently has such an agreement with the Union with a term of July 1 1986, to June 30 1989 Respondent con cedes, and I find that this agreement covers its paving operations Prior to January 1988, Respondent owned and operat ed portable asphalt manufacturing plants and performed asphalt paving Respondent sold its asphalt manufactur ing business which was not covered by the collective bargaining agreement on January 5, 1988, because Jack Ruth Respondents sole owner, had become extremely ill and was unable to continue the business as he had in the past In addition to the manufacturing portion of his business, Ruth also sold about 90 percent of Respond ent s asphalt laying equipment to Mountain Enterprises Inc, a competitor Thereafter Ruth entered into a hand shake agreement with Billy D Meade, the former owner and current operator of Lehman Meade, which has been owned by Apex Corporation a subsidiary of Ashland Oil, Inc since June 1987 Lehman Meade operates four asphalt plants in the Central Kentucky area The essence of the agreement between Respondent and Lehman Meade is that the two companies jointly bid on highway projects and then, after securing a contract as a result of these bids Lehman Meade produces and delivers asphalt mix to East Kentucky who then applies it to the road way Each company keeps track of its costs for its por tion of the work At the conclusion of a project these costs are tabulated and reimbursed by Respondent s office personnel from payments there received from the Kentucky Department of Transportation Profits or losses remaining after the reimbursement of costs are shared equally by Respondent and Lehman Meade The record shows that Respondent and Lehman Meade had operated as joint adventurers on other occasions com mencing in 1985 It appears from the uncontroverted tes timony of Charles Cantrell, the Union s president that he first became aware of a joint venture between these two employers some time in September, October or Novem ber 1987 when Jack Ruth told him that Lehman Meade and Respondent were going to perform a highway paving job as a joint venture, and the job would be run by East Kentucky Paving At that time, Cantrell told him the Union could not accept a nonunion bridge sub contractor but Cantrell did not then protest the joint venture proceeding About a month to 6 weeks thereaf ter he and Ruth had another conversation wherein he told Ruth the Union would not object to him using a 293 NLRB No 141 EAST KENTUCKY PAVING CORP nonunion bridge contractor Cantrell vacationed in Flori da from December 26 or 27, 1987, until the first few days in March when he returned to Kentucky Shortly thereafter an employee visited his home and advised him he had been fired by Lehman Meade from the joint ven ture job with Respondent When Cantrell said he did not think the employee had been working for Lehman Meade because that was Respondents job the employee continued to insist he had been working for Lehman Meade On April 17 or 18, 1988, Cantrell told Ernest Thompson, a field representative for the Union, he had been told of subcontractors on the job, and asked Thompson to check it out Thompson went to the jobsite on April 19 where he spoke to Neil Bruckner, Respond ent s superintendent On inquiry, Bruckner advised that Respondent was the general contractor and had some nonunion subcontractors Thompson told Bruckner the contract between the Union and Respondent required subcontractors to become signatory thereto There was no discussion of a joint venture Thompson asked Bruck ner to have Jack Ruth call him or Cantrell to get the matter straightened out Receiving no call , Thompson re turned to the project on April 28 and met with Respond ent s superintendent Tom Cannon and filed an oral griev ance with him claiming noncompliance with the collec tive bargaining agreement because the subcontractors were not signatory thereto The agreement does not on its terms require the filing of a written grievance to acts vate the procedure There was no discussion of a joint venture with Cannon On May 12 1988, the following letter was sent to Highway Contractors Inc Upon notice from you regarding a union gnev ance on the Man 0 War Project in Lexington and a request for a hearing date of the alleged grievance please be advised of the following 1 The reference project work is being performed as a Joint Venture and therefore is not subject to the jurisdiction of the Union Contract 2 Provision of the Union Agreement including Article 13 Grievance Procedure and Arbitration are not applicable to the work performed on this project or the Joint Venture 3 Therefore the Joint Venture will not appear before the grievance committee nor appear to be bound by a decision reached by said committee Sincerely, East Kentucky Paving Corporation and Lehman Meade Company a Joint Venture /s/ J E Ruth J E Ruth, President /s/ B D Meade B D Meade, President On May 23 1988, Thompson wrote the following letter to the Managing Secretary of Highway Contrac tors Inc Re East Kentucky Paving Co Grievance 1133 Dear Mr Clemons On May 3 1988 in accordance with the Griev ance Procedure of the Collective Bargaining Agree ment, the Union submitted a grievance against the above reference Company to the 3rd Step of the Grievance Procedure As of this date, no meeting has been held nor scheduled to hear the case As a reminder, the FOURTH Step of the Griev ance Procedure states Any grievance that is not brought before the Joint Grievance Committee, in Step 4 within thirty (30) days after the event giving rise to the grievance (excluding fringe benefits) grievance being presented to the Committee within the thirty (30) day limit The grievance was filed with East Kentucky Paving Co on April 28, 1988 Therefore I suggest that you take immediate steps to schedule the 4th step meeting on or before May 28, 1988 Otherwise, the Union will take the position that the Company has forfeited the grievance Clemons answered Thompson by letter of May 24, 1988, reading in part , as follows It is our understanding that East Kentucky Paving Co is part of a joint venture and that such joint venture is engaged in construction work on the Man 0 War Boulevard The joint venture is, however, no signatory to the Agreement Not su prisingly, it is the position of the East Kentucky Paving Co Joint Venture that it is not covered under terms of the Agreement and that the High way Contractors, Inc lacks jurisdiction to pursue such grievance We have been advised by counsel that the posi tion taken by the joint venture is legally defensible A decision of the National Labor Relations Board has held that a joint venture is not subject to the contractual obligations of its participants Therefore, the Highway Contractors Inc must take the position that the grievance machinery of the Agreement is not applicable to this project and that the Joint Grievance Committee does not have jurisdiction over the referenced grievance However if it is ultimately determined by either the National Labor Relations Board or by a Court of competent jurisdiction that the East Kentucky Paving Co Joint Venture is subject to the terms and provisions of the Agreement , we will process the grievance in accordance with the terms of the contract The Highway Contractors Inc will not however, presume jurisdiction over the Joint Ven ture and invoke the grievance processes of the Agreement Moreover contrary to the position taken in your May 23 1988 letter the Highway Contractors Inc does not agree that the failure to process this gnev ance on behalf of East Kentucky Paving Co Joint Venture will result in a forfeiture of that grievance in accordance with the terms and provisions of the Agreement Rather, it is the position of the High way Contractors Inc that all proceedings relating 1134 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD to the above referenced grievance must be held in abeyance until a determination has been made re garding the jurisdiction of the Highway Contrac tors, Inc to hear and decide such grievance By letter of June 15, 1988, Clemons notified Thomp son, as a fourth step answer to the grievance by High way Contractors Inc as follows The question of whether the East Kentucky Paving Company Joint Venture is subject to the provisions of the Heavy and Highway Agreement is a legal conclusion under which the Highway Con tractors, Inc lacks the authority and capacity to decide That question will ha-a to be resolved by the National Labor Relations Board If East Ken tucky Paving Company Joint Venture is found to be subject to the terms and provisions of the Heavy and Highway Agreement then, in that event, the Highway Contractors, Inc will review the pertinent facts involved in this case, in light of that decision, to see if the contract has been violated However, until such a determination regarding the legal status of East Kentucky Paving Company Joint Venture has been made by the NLRB the Highway Contractors, Inc declines to render a final determination in this matter Accordingly, the grievance is remanded from current consideration The question is whether by entering into their joint ad ventures Lehman Meade and Respondent became a new employing entity which rendered Respondent's contract with the Union inapplicable The answer to that question I believe must be No ' To support its contention the answer should be Yes Respondent relies on Wood workers Local 5 265 (Willamette Lumber) i and Grove Hendrickson 2 Both are clearly distinguishable on their facts and are not applicable to the situation before me In Woodworkers the Willamette National Lumber Company and the Santiam Lumber Company both engaged in log ging and lumber milling, entered into a joint venture pur suant to a written agreement under which they set up a third company Suttle Lake Logging Company, to take logs from a specified area The agreement provided for an equal sharing by Willamette and Santiam of the man agement of Suttle Lake and the profit or loss from its logging operations Suttle Lake had a separate bank ac count books, and records, was registered as an employer for tax purposes and state employee compensation plans, and met its payroll from its own funds Similarly in Grove Hendrickson that corporation entered into a joint venture with Hendrickson Bros Inc for the purpose of bidding on a construction project The joint venture was called Grove Hendrickson which, pursuant to the agree ment between the two corporations which formed it, became the sole employer of the employees involved in the venture, maintained a separate bank account separate books of account, and separate withholding and social security tax accounts, and selected its own foreman and 1 107 NLRB 1141 (1954) 2 109 NLRB 209 (1954) gave him the sole authority to hire an fire those employ ees under his supervision In both Woodworkers and Grove Hendrickson the joint venture was a separate entity and an employer within the meaning of the Act The facts in the instant case warrant no such conclusion There is no written agreement con cerning the joint venture, nor does the joint venture exists as a separately named entity with separate bank ac counts, payroll books of account, tax accounts or em ployees The only documentation with a governmental agency of the joint venture s existence is the notation by the two companies on their bids for state highway work that they are a joint venture Respondent s and Lehman Meade s production and paving operations under the joint venture arrangement are the same as they were and would be without that arrangement The only real differ ence is their financial arrangement Respondent has the same employees and supervisors performing joint venture paving as it had outside the joint venture arrangement continues to date to submit its employees union dues to the Union along with the fnnge benefit payments re quired by the collective bargaining agreement, pays the wages required by that agreement, issues payroll checks for the wages from a checking account it has maintained at a Grayson Kentucky bank for 31 years, has its offices at Grayson Kentucky, withholds and submits social se curity and income tax payments to the appropriate au thorities on its employees behalf, submits unemployment compensation insurance moneys for these employees issues W 2 forms to paving employees showing Respond ent as their employer, and files its own income tax re turns reflecting, inter alia its share of the profit or loss from joint venture projects The Lehman Meade asphalt production facility is not covered by a union contract None of its employees work on the paving operation or under Respondent's supervision They are paid by Lehman Meade issued W 2 forms by that entity and re ceive no personnel services from Respondent which re quires a conclusion that all such services for asphalt pro duction employees are furnished by Lehman Meade at its Lexington Kentucky offices There is no interchange between paving and asphalt production employees nor is there any common supervi lion The paving work is supervised by Ruth and Re spondent s two superintendents none of whom has been shown to supervise anyone at the asphalt plant With re spect to Meade s testimony that he goes every morning to the asphalt plant to see that production is going well and then checks at the jobsite that delivery of the asphalt has been made, and anything that needs to be done on the job while I in there I am persuaded he is here re porting that he daily monitors production delivery, and quality of his product Anything that needs to be done on the job while I in there is I conclude a reference to matters relating to the quality or quantity of the asphalt mix delivered rather than to actual paving operations Meade's presence is not required for the actual paving work which is overseen by Ruth and his superintendents but Meade s presence might well be required if there were questions regarding the suitability of the asphalt EAST KENTUCKY PAVING CORP mix There is no persuasive evidence Meade supervises any paving employees and I find does not The State of Kentucky recognizes Respondent and Lehman Meade as a joint venture for highway paving contract purposes and they are indeed joint adventurers in the sense that they are lending their respective re sources and skills to a single cooperative enterprise, the paving of state highways Notwithstanding state recogni tion of these two firms as a joint venture, the record is clear that each remains a single separate and distinct em ployer who has decided for practical reasons to work with the other, devoting its individual resources to that portion of the enterprise those resources are especially equipped to accomplish It is a simple formula Lehman Meade provides the asphalt mix, Respondent lays it, and they equally share the resulting profit or loss None of this changes the character of Respondent as a single stat utory employer employing a unit of employees represent ed by the Charging Union There has been no change in the employer/employee relationship The mere attach merit of the title joint venture to the arrangement be tween Respondent and Lehman Meade, although legal and acceptable by the State of Kentucky for purposes of highway contracting, cannot operate to defeat Respond ent's continuing obligation to honor its collective bar gaining agreement when, as here, there has been no real change in the employing entity Contrary to Respondent, the complaint does not allege, and the General Counsel does not argue that the Union contract should be applied to the joint venture in its entirety The allegation and contention are simply that Respondent has unlawfully refused to honor its ex isting collective bargaining agreement There is no claim that the contract should be applied to Lehman Meade or the joint venture as an entity The situation is quite simple The Union protested the subcontracting of work by Respondent and Respondent took the position such a grievance could not be maintained because its collective bargaining agreement with the Union is not applicable to Respondent while it is engaged in the joint venture with Lehman Meade The General Counsel contends that Re spondent s position in this regard is an unlawful repudi ation of the contract in violation of Section 8(a)(5) and (1) of the Act Respondent argues that if it is required to abide by its union agreement while involved in the joint venture, Lehman Meade and the joint venture would be deprived of their constitutional right to freely contract Respond ent also urges that because Kentucky places no subcon tracting restrictions on successful bidders the joint ven lure has the right to subcontract with whomever it chooses, and this right of the joint venture and Lehman Meade would be impermissibly limited by the application of the union contract to the joint venture This right to contract and subcontract argument misses the point All that is before me is whether Respondent unlawfully re pudiated its agreement with the Union Whether the Union s grievance has merit or whether others can freely contract are not before me It was clearly the filing of the grievance that prompted Respondents letter of repu diation, but whether it is properly filed or meritorious is not what I am called on to decide Those issues are mat 1135 ters to be resolved through the contractual grievances procedure The fact that I may find, as I do, that the contract is applicable to Respondents operations under the joint venture arrangement will not answer the ques tion of the merit of the grievance The Union has not, as Respondent contends it has waived any claim that its contract applies when Re spondent is in the joint venture relationship with Lehman Meade It is well settled that a waiver of a stat utory right will not be lightly inferred and must be ex pressed in clear and unmistakable language 3 Moreover, the record shows the Union did not become aware Re spondent was repudiating its contract until after it pre sented its grievance to the job superintendent The Union filed a timely charge when it learned of that repudiation The burden of proving waiver is on Respondent,' and Respondent has not met that burden The contract at issue is an 8(f) agreement,5 is enforces ble and Respondent may not lawfully repudiate it during its term except as a consequence of the results of a Board representation election 6 Respondents letter to Highway Contractors, Inc on May 12, 1988, is a clear repudiation of the collective bargaining agreement which I find applicable to its employees at all times it has been engaged in the joint venture with Lehman Meade, and Respondents position stated before me makes it clear Respondent has not considered itself bound by that agreement at any time during its involvement in the joint venture Respondents repudiation of the agreement vio lates Section 8(a)(5) and (1) of the Act CONCLUSIONS OF LAW 1 East Kentucky Paving Corporation (Respondent) is, and has been at all times material to this proceeding, an employer engaged in commerce within the meaning of Section 2(2) (6) and (7) of the Act 2 United Steelworkers of America, AFL-CIO-CLC (Union) is a labor organization within the meaning of Section 2(5) of the Act 3 Respondent's paving employees as described in the current collective bargaining agreement between the Union and Highway Contractors , Inc (the Association) to which Respondent is a party constitute a unit appro priate for the purposes of collective bargaining within the meaning of Section 9(b) of the Act 4 At all times since July 1 1986, the Union has been and is now the exclusive representative of all employees in the above described unit for purposes of collective bargaining 5 By failing to abide by the terms of the collective bargaining agreement effective July 1, 1986 , and by repu diating that collective bargaining agreement , Respondent has violated Section 8(a)(5) and (1) of the Act a Armco Inc 279 NLRB 1184 1220 (1986) 4 Litton Systems 283 NLRB 973 fn 6 (1987) 5 Sec 8(f) of the Act permits collective bargaining agreements in the construction industry to require union membership after 7 days of em ployment rather than the 30-day requirement set forth in Sec 8(a)(3) of the Act for other employing industries The contract before me requires membership after 11 days 6 Viola Industries 286 NLRB 306 (1987) 1136 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD THE REMEDY In addition to the usual cease and desist notice posting requirements I shall recommend certain affirmative action by Respondent be required Although the parties agreed at trial and in posttrial briefs that Respondent has continued to submit union dues and fringe benefit pay ments to the Union pays the contractually required wage rates and requires new employees to join the Union I believe it appropriate to assure that all such payments continue to be made in accord with contrac tual requirements Accordingly, I shall recommend Re spondent be ordered in the event it has discontinued such payments or altered employee wage rates, to make whole, in the manner prescribed in Ogle Protection Serv ices, 183 NLRB 682, 683 (1970), any of its bargaining unit employees who suffered loss of wages as a result of such conduct by giving retroactive effect to the terms and conditions of the collective bargaining agreement of fective July 1, 1986 with interest on any amounts due paid in the manner prescribed in New Horizons for the Retarded 7 In accordance with John Deklewa & Sons, 282 NLRB 1375 (1987), this make whole remedy does not extend beyond the expiration date of the 1986-1989 con tract The question of whether interest must be paid on the trust fund contributions shall be left to the compli ance stage of this proceeding Merryweather Optical Co, 240 NLRB 1213 (1979) On these findings of fact and conclusions of law and on the entire record I issue the following recommend ed8 ORDER The Respondent East Kentucky Paving Corporation Grayson Kentucky, its officers, agents successors, and assigns shall 1 Cease and desist from (a) Repudiating collective bargaining agreements when there is no legal justification for so doing (b) Failing to honor and apply the collective bargain ing agreement between Respondent and the Union effec tive on its terms from July 1, 1986 to June 30 1989 cov ering a unit of Respondents employees described in that agreement including its paving employees (c) In any like or related manner interfering with re straining or coercing employees in the exercise of the rights guaranteed them by Section 7 of the Act 2 Take the following affirmative action necessary to effectuate the policies of the Act (a) Honor and apply all the terms and conditions of the collective bargaining agreement between Respondent and the Union, effective on its terms from July 1 1986 to June 30 1989, and covering a unit of Respondent s 7 In accordance with the decision in New Horizons for the Retarded 283 NLRB 1173 (1987) interest on and after 1 January 1987 shall be comput ed at the short term Federal rate for the underpayment of taxes as set out in the 1986 amendment to 26 U S C § 6621 a If no exceptions are filed as provided by Sec 102 46 of the Board s Rules and Regulations the findings conclusions and recommended Order shall as provided in Sec 102 48 of the Rules be adopted by the Board and all objections to them shall be deemed waived for all put poses employees described in that agreement including its paving employees (b) Make whole with interest the employees in the above described bargaining unit for any loss of wages of benefits they may have suffered because of Respondent s failure to honor and apply the terms and conditions of the collective bargaining agreement effective on its terms from July 1986 to June 30, 1989, including appropriate contributions to employee benefit trust funds, in accord ance with the remedy section of this decision (c) Preserve and on request, make available to the Board or its agents for examination and copying all pay roll records social security payment records, timecards personnel records and reports, and all other records nec essary to analyze the amount of backpay due under the terms of this Order (d) Post at its offices in Grayson, Kentucky copies of the attached notice marked `Appendix 'e Copies of the notice, on forms provided by the Regional Director for Region 9, after being signed by the Respondents author ized representative, shall be posted by the Respondent immediately upon receipt and maintained for 60 consecu tive days in conspicuous places including all places where notices to employees are customarily posted Rea sonable steps shall be taken by the Respondent to ensure that the notices are not altered, defaced, or covered by any other material (e) Notify the Regional Director in writing within 20 days from the date of this Order what steps the Re spondent has taken to comply 9 If this Order is enforced by a judgment of a United States court of appeals the words in the notice reading Posted by Order of the Nation at Labor Relations Board shall read Posted Pursuant to a Judgment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board APPENDIX NOTICE To EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government The National Labor Relations Board has found that we violated the National Labor Relations Act and has or dered us to post and abide by this notice Section 7 of the Act gives employees these rights To organize To form join or assist any union To bargain collectively through representatives of their own choice To act together for other mutual aid or protec tion To choose not to engage in any of these protect ed concerted activities WE WILL NOT repudiate collective bargaining agree ments when there is no legal justifiction for doing so WE WILL NOT fail to honor and apply the collective bargaining agreement between us and United Steelwork EAST KENTUCKY PAVING CORP 1137 ers Union of America, AFL-CIO-CLC, effective July 1, 1986, to June 30, 1989, and covering our employees de scribed in that agreement including our paving employ ees WE WILL NOT in any like or related manner interfere with, restrain, or coerce you in the exercise of the rights guaranteed you by Section 7 of the Act WE WILL honor and apply the terms of the collective bargaining agreement described above WE WILL make whole, with interest, the employees in the bargaining unit for any loss of wages or benefits they may have suffered as a result of our failure to honor and apply the terms of the above described collective bar gaining agreement, including any appropriate contribu tions we failed to make to employee benefit trust funds, in accordance with the Order of the Board EAST KENTUCKY PAVING CORPORATION