Christopher Street Owners Corp.

CHRISTOPHER STREET OWNERS CORP Christopher Street Owners Corp. and Local 32B- 32J, Service Employees International Union, AFL-CIO. Case 2-CA-22258 May 26, 1989 DECISION AND ORDER BY CHAIRMAN STEPHENS AND MEMBERS CRACRAFT AND HIGGINS On April 14, 1988, Administrative Law Judge Edwin H. Bennett issued the attached decision. The Respondent filed exceptions and a supporting 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 brief and has decided to affirm the judge's rulings, findings, I and conclusions as modified,2 to modify his remedy, but not to adopt the recommended Order. 1. The judge found that the Respondent violated Section 8(a)(5) by unilaterally changing one of the porter's job duties. We agree. The "Job Responsi- bility Memo" that the Respondent distributed to unit employees in May 1987 "materially, substan- tially, and significantly" altered the porter's duties to include the regular distribution of post office and United Parcel Service packages to tenants. The fact that the porter testified that he performs these additional duties only twice a week is not determi- native. There is no guarantee that the frequency of this distribution will not increase; indeed, it likely will on at least a seasonal basis. In any event, the nature of the unilateral change, and not the fre- quency of its performance, triggers the bargaining obligation. 2. We agree with the judge that the Respondent violated Section 8(a)(5) by failing to notify Local 32B-32J, Service Employees International Union, AFL-CIO (the Union) that the employees' medical insurance coverage was canceled in May 1987, by i The Respondent has excepted to some of the judge's credibility find- ings The Board's established policy is not to overrule an administrative law judge's credibility resolutions unless the clear preponderance of all the relevant evidence convinces us that they are incorrect Standard Dry Wall Products, 91 NLRB 544 (1950), enfd 188 F 2d 362 (3d Cir 1951) We have carefully examined the record and find no basis for reversing the findings 2 We reject the judge's statement in par 13 of his decision's "Discus- sion," that the "Respondent's purchase of new insurance, or its acting as a self-insurer, even without bargaining with Local 32, would not have violated its bargaining obligation " On the contrary, that unilateral action would violate Sec 8(a)(5) Clear Pine Mouldings, 238 NLRB 69 (1978), enfd 632 F 2d 721 (9th Cir 1980), Eastern Washington Distributing Co, 216 NLRB 1149 (1975) The Respondent is, however, as explained below, required to maintain medical insurance benefits at the pre-May 1987 level, to the extent that it must make whole its employees for losses suf- fered as a result of the unlawful discontinuation of those benefits, until it fulfills its bargaining obligation with the Union 277 Local 2, New York State Independent Union of Building Service Employees and Factory Workers, N.F.I.U. (Local 2), and by failing to bargain with the Union over the effects of this cancellation. We agree with the judge that, to remedy this violation, the Respondent is required to make whole employ- ees for losses suffered as a result of the May 1987 discontinuation of medical insurance coverage until such time as the Respondent fulfills its bargaining obligation. 3 3. Contrary to the judge, we do not find that the "Staff Problems" provision of the "Job Responsi- bility Memo" unlawfully commands employees to deal directly with the Respondent on mandatory bargaining subjects. The "Staff Problems" provi- sion merely instructs employees to raise work-relat- ed issues with the superintendent, a unit employee, or with management, rather than to embroil tenants in employee disputes. There is nothing in the "Staff Problems" provision, or the context in which it ap- pears in the "Job Responsibility Memo," which either prohibits employees from discussing work- related problems among themselves or penalizes employees for such activity. Nor does this provi- sion directly or impliedly preclude employees from consulting with a lawful bargaining representative, on "any problems affecting . . . work or sched- ule." Rather, the "Staff Problems" provision 9 In its Decision and Order reported at 286 NLRB 253 (1987), the Board found that on July 16, 1984, the Respondent became a successor employer obligated to recognize and bargain with the Union The Board further found that on January 31, 1985, the Respondent violated Sec 8(a)(2) by executing a collective-bargaining agreement with Local 2 Having established terms and conditions of employment in the January 1985 contract, albeit unlawfully, the Respondent thereafter could not alter them without first satisfying its bargaining obligation to the Union See NLRB v Katz, 369 U S 736 (1962) Notwithstanding this obligation, however, in May 1987, when Local 2 canceled the employees' medical insurance coverage, the Respondent failed to notify the Union of this de- velopment and failed to bargain over the effects of the cancellation In- stead, as the judge pointed out, the Respondent simply elected to discon- tinue providing medical insurance of any kind for unit employees Al- though the Respondent was not required to bargain over the termination of the Local 2 plan, the decision to strip employees of medical insurance coverage altogether was quite a different matter The Respondent re- mained obligated to bargain over that decision, just as it would have been required to bargain over a decision to substitute a different health plan See Clear Pine Mouldings, 238 NLRB 69, 79-80 (1978), enfd 632 F 2d 721, 729 (9th Cir 1980) The remedy for the violation committed here is the same as the remedy in Clear Pine in which the respondent unlawfully instituted substitute health insurance coverage after lawfully ceasing pay- ments to the prior plan employees shall be made whole, with interest, for their losses The Respondent contends, however, that such a make-whole remedy is inappropriate, citing First National Maintenance, 254 NLRB 289 (1981), and R J E Leasing Corp, 262 NLRB 373 (1982) Those cases are distin- guishable In First National Maintenance and R J E Leasing, unlike the situation here, there was no lawful collective-bargaining representative and therefore the respondents were not subject to a bargaining duty In this case, the Respondent could have satisfied its obligations under both Sec 8(a)(2) and (5) by notifying the Union of the cancellation of the em- ployees' health benefit insurance and bargaining over the effects of the cancellation This the Respondent failed to do, and it is therefore only equitable that it be required to bear the financial consequences of its un- lawful conduct 294 NLRB No. 18 278 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD merely establishes the general policy that tenants are not to be enmeshed, at least initially, in employ- ee complaints.4 Accordingly, we do not find this provision violative of Section 8(a)(5). CONCLUSIONS OF LAW 1. The Respondent, Christopher Street Owners Corp., is an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act. 2. The Union, Local 32B-32J, Service Employees International Union, AFL-CIO, is a labor organi- zation within the meaning of Section 2(5) of the Act. 3. The following employees constitute a unit ap- propriate for the purpose of collective bargaining within the meaning of Section 9(b) of the Act: All service employees employed at Respond- ent's 165 Christopher Street building. 4. At all times material the Union has been and is now the exclusive representative of all employees in the appropriate unit for purposes of collective bargaining within the meaning of Section 9(a) of the Act. 5. The Respondent has refused to bargain in vio- lation of Section 8(a)(5) of the Act in the following respects: (1) by failing to notify the Union of the May 1987 cancellation of employees' health benefit insurance and bargain over the effects of this can- cellation; (2) by promulgating new work rules about early May 1987 without notification to and 'bargaining with the Union concerning the changes. ORDER i The National Labor Relations Board orders that the Respondent, Christopher Street Owners Corp., New York, New York, its officers, agents, succes- sors, and assigns, shall 1. Cease and desist from (a) Refusing to bargain collectively with Local 32B-32J by failing and refusing to notify and offer to bargain with Local 32B-32J about any proposed changes in health benefit insurance, job duties, and other terms and conditions of employment; or by unilaterally promulgating and instituting work rules relating to job duties and responsibilities of unit employees. 4 Indeed, the "Job Responsibility Memo," in which this provision ap- pears, was not prepared in response to the Union's attempts to represent the Respondent's employees As found by the judge, Simon A Berman Realty Corporation prepared the memo in 1985, well before it assumed management of the Respondent's apartment building, for Berman's use in the approximately 40 apartments it managed We do not suggest that employers are free to tell employees that they can never publicize their collective grievances to the public We note that this case was alleged and litigated entirely on an 8(a)(5) theory relat- ed to undermining the employees' collective-bargaining representative (b) In any like or related manner interfering with, restraining, or coercing employees in the ex- ercise of the rights guaranteed them by Section 7 of the Act. 2. Take the following affirmative action neces- sary to effectuate the policies of the Act. (a) Delete and withdraw the handyman and porter job descriptions from the "Job Responsibil- ity Memo" distributed to employees in May 1987. (b) Notify and offer to bargain with Local 32B- 32J about health benefit insurance, work rules, and other terms and conditions of employment. (c) Make whole unit employees for any losses they have suffered, together with interest as set forth in the remedy section of the judge's decision, as a result of the Respondent's failure to notify the Union of the May 1987 cancellation of the employ- ees' health benefit insurance and failure to bargain over the effects of the cancellation. (d) Preserve and, on request, make available to the Board or its agents, for examination and copy- ing, all records, including health insurance policies and trust agreements, necessary for determining the amounts due to employees pursuant to the make whole provision of this Order. (e) Post at its building at 165 Christopher Street, New York, New York, and at the office of its agent, Simon A. Berman Realty Corporation, copies of the attached notice marked "Appendix."5 Copies of the notice, on forms provided by the Re- gional Director for Region 2, after being signed by the Respondent's authorized representative, shall be posted by the Respondent immediately upon re- ceipt and maintained for 60 days in conspicuous places including all places where notices to em- ployees are customarily posted. Reasonable steps shall be taken by the Respondent to ensure that the notices are not altered, defaced, or covered by any other material. (f) Notify the Regional Director in writing within 20 days from the date of this Order what steps the Respondent has taken to comply. 5 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- al 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 " CHRISTOPHER STREET OWNERS CORP 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 ordered us to post and abide by this notice. WE WILL NOT refuse to recognize and bargain collectively with Local 32B-32J, Service Employ- ees International Union, AFL-CIO by unilaterally discontinuing employee medical contributions and coverage for employees in the unit described below without notifying the Union of the May 1987 can- cellation of medical insurance coverage and giving such bargaining representative an opportunity to bargain over the effects of this decision. The bar- gaining unit is: All service employees employed at our 165 Christopher Street building. WE WILL NOT unilaterally promulgate and insti- tute changes in job duties and responsibilities of unit employees or in any other term and condition of employment without prior notice to, and bar- gaining with, the Union. WE WILL NOT in any like or related manner interfere with, restrain, or coerce you in the exer- cise of rights guaranteed you by Section 7 of the Act. WE WILL delete and withdraw from the "Job Responsibility Memo" distributed to unit employ- ees in May 1987, the handyman and porter job de- scriptions. WE WILL notify and offer to bargain with the Union about health benefit insurance, job duties, and other terms and conditions of employment. WE WILL make whole unit employees for any losses they have suffered, together with interest, as a result of our failure to notify the Union of the May 1987 cancellation of the employees' health benefit insurance and failure to bargain over the ef- fects of the cancellation. CHRISTOPHER STREET OWNERS CORP. Jonathan Leiner, Esq., for the General Counsel. Marianne J. DeSantis, Esq. (Morris Tuchman, Esq.), for the Respondent. Ira Sturm, Esq. (Manning, Rabb, Dealy & Sturm), for the Charging Party. DECISION STATEMENT OF THE CASE 279 EDWIN H. BENNETT, Administrative Law Judge. On 27 May 1987, Local 32B-32J, Service Employees Inter- national Union, AFL-CIO (Local 32 or Union) filed an unfair labor practice charge against Christopher Street Owners Corp. (Employer or Respondent) which, after investigation by the Regional Office, resulted in a com- plaint on 10 July 1987 alleging violations of Section 8(a)(5) and (1) of the Act. More particularly, Respondent is alleged to have unilateral promulgated new work rules which changed the duties of bargaining unit employees and to have denied medical and hospital insurance cover- age for such employees without bargaining with the Union. A hearing ,on the complaint was held on 2 No- vember 1987. On the entire record,' including my observation of the demeanor of the witnesses, and after due consideration of the briefs filed by General Counsel and Respondent, I make the following FINDINGS OF FACT 1. JURISDICTION The Respondent,. a 'New York corporation, owns and operates a residential apartment building at 165 Christo- pher Street, New York, New York (the Building). Its annual revenues exceed $500,000 and its purchases of goods and materials delivered to it directly in interstate commerce exceed $50,000. Admittedly, Respondent is an employer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act, and Local 32 is a labor organization within the meaning, of Section 2(5) of the Act. II. THE UNFAIR LABOR PRACTICES A. Prior Case On 30 September 1987, the Board issued a Decision and Order (286 NLRB 253) involving the same parties. In relevant part, it adopted the Decision of Administra- tive Law Judge Howard Edelman, issued on 31 July 1986, finding that Respondent had refused to recognize and bargain with Local 32 for a unit of service employ- ees at the Building in violation of Section 8(a)(5) and (1) of the Act and further that it had recognized, and signed a collective-bargaining agreement with, Local 2, New York State Independent Union of Building Service-Em- ployees and Factory Workers N.F.I.U. (Local 2) at a time when that union did not represent an uncoerced majority of unit employees thereby violating Section 8(a)(2) and (1) of the Act. The size of the unit has stead- ily consisted of four employees, a superintendent, a handyman, and two porters. The Board found these vio- lations occurred in the early months of 1985. The Board ordered, inter alia, the Employer to recog- nize and bargain with Local 32 as the exclusive repre- ' The General Counsel's unopposed motion to correct the transcript is granted 280 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD sentative of all service employees at the Building and to cease giving effect to; maintaining or enforcing the col- lective-bargaining agreement with Local 2. Among other things, that agreement provided for the Employer to fur- nish welfare benefits to employees and family members by making payments on behalf of each employee. into a welfare trust fund known as the Confederated Welfare Fund, Local 2 (the Fund). At the time the agreement was executed (1. February 1985) this contribution amounted to $1280 per employee annually, a figure that was subject to adjustment every June 1 by edict of the insurance company. According to Joseph Donato, acting president of Local 2, and a trustee of the Fund, the Fund acts as a self-insurer. The level of benefits is prescribed in the Agreement and Declaration of Trust. Although that document is not in evidence, Donato testified that benefits included Blue Cross and a major medical plan and it is known that the Fund paid for the hospitalization of an employee's wife in June 1985, thus establishing coverage for dependents. Respondent has not taken any action to comply with the order of the Board that it rec- ognize and bargain with Local 32. It has, at all times, continued to deny that it is subject to such lawful re- quirement. Indeed, Respondent, in the instant case, has plead a statute of limitations defense although it offered no evidence in support thereof., Presumably, this merely is a reiteration of such defense which was raised and re- jected by the Board in the prior case. Nor has Respond- ent actively sought to comply with the Board Order that it cease giving effect to its agreement with Local 2 al- though, as discussed below, Respondent acquiesced in Local 2's recision of that contract. At the time of the hearing in this case, however, no party had begun pro- ceedings under Section 10(e) or 10(f) of the Act for en- forcement or review of the Board's Decision and Order. B. The Instant Case In March 1987 Simon A. Berman Realty Corporation (Berman) became the managing agent for Respondent at the Building. On 12 May 1987, Berman received two let- ters from Donato In pertinent part one of the letters stated the following- Pursuant to the decision and order of the Nation- al Labor Relations Board of case #2-CA-21055 dated July 31, 1986 the owners of 165 Christopher Street, their Officers, Agents, Successors and Assign are ordered to withdraw recognition from Local No. 2 as the exclusive bargaining representatives of its employees at the building andto [sic] recognize and bargain with Local 32B-32J. In essence, the contract with Local No. 2 was found and declared to be illegal Accordingly, this Union can no longer accept dues on behalf of or from any employees at that location, and each of the employees [sic] being notified that they are no longer eligible for benefits. The other letter repeated the first two sentences and continued with the following: .. . Accordingly, this Welfare Fund can no longer accept contributions on behalf of any em- ployees at that location and each of the employees is being notified that they are no longer eligible for coverage by our plan. I must insist that you cease remitting contribu- tions as we will only return them as they are re- cieved. [sic] Please find enclosed a return of your check #153 in the amount of $420.00. • At about the same time, Donato sent similar letters to the employees notifying them that Local 2 no longer would act as their representative. Each employee was told further that "pursuant to the rules and regulations of the Confederated Welfare Fund you may not be permit- ted to be covered by the Fund for benefits. Please be ad- vised that you are no longer eligible for benefits from the Confederated Welfare Fund." It is undisputed that thereafter unit employees no longer received any medical insurance benefits either through Local 2, through any other carrier, or directly from Respondent It further is undisputed that Respond- ent did not, at any time, have any communication what- soever with Local 32 concerning the termination of these medical benefits or the possible replacement of such ben- efits with some other form of insurance. Also, sometime in May 1987, Simon Berman met with Mario Santiago, the building superintendent, in Berman's office. Although a unit employee, Santiago is utilized to transmit the Employer's work assignments,to employees For that purpose, Berman gave Santiago an eight-page memo entitled "Job Responsibility Memo" and told him to distribute a copy to each employee, which Santiago did shortly thereafter at which time the employees were told they had to abide by the rules set forth therein. That document has job duties defined for superintendent, por- ters, and handyman, as well as for doorman-and elevator operators, two jobs which do not exist at the Building. That memo was prepared by Berman in 1985, long before he became managing agent at the Building. It is a standard form used by Berman for the approximately 40 buildings he manages with a total of about 70 to 80 em- ployees. Although Berman testified, that Santiago re- quested the document in order to settle disputes among the employees, there is no evidence there were any work disputes or that Santiago even was aware of the exist- ence of the memo prior to his receiving it from Berman. Although it legally is insignificant for this case to decide whether or not Santiago actually requested these work rules, I conclude there is insufficient evidence to support such conclusion. Rather, I find that the memo routinely was given to Santiago who was told, in the ordinary course of events by a new managing agent to distribute them to employees. In fact, Berman made no effort even to delete the job descriptions that did not apply to the Building's employees. The lead page of the memo is as follows: PROCEDURES & SCHEDULING KNOWLEDGE OF PROCEDURES: Staff should read all job descriptions included in this memo; so as to fully understand the responsibilities of their CHRISTOPHER STREET OWNERS CORP own job, as well as how all staff members work to- gether. SCHEDULING: All staff should know their schedule. All staff should have a copy of the sched- ule. No staff member may change his hours or schedule without first receiving permission from the Super or Management. STAFF PROBLEMS: Staff members should not discuss their work related problems and concerns with tenants.• If a staff member has a problem with another staff member, or any problem affecting his work or schedule,. he should bring the_ problem to the super, or directly to management. The next two pages deal with the duties and responsi- bilities of the superintendent and it is stipulated that "the job memorandum's list of duties for superintendent does not vary in any way from the duties which Mr . Santiago was assigned to do previously." With respect to the handyman job, the memo states that among his other duties, he will serve as a relief porter performing all the tasks of that job. Juan Nieves, handyman, credibly testified that prior to receiving the memo he occasionally did porter work when either of the two porters was out sick. Thereafter, however, he has been required to, and has performed the porter's job on a regular basis, four times a week caused by the 2 days off each week that each porter receives. Therefore, he now regularly collects garbage, mops floors, washes windows, delivers packages , and cleans rugs, duties which are not part of a handyman's job but which tasks are expected to be performed regularly by porters. Devon Blake, one of the porters, credibly testified that the memo also resulted in changes in his job. Prior to the memo he was not required to distribute to tenants pack- ages delivered by United Parcel Service and the Post Office. Subsequently, this task has been added to the por- ter's duties and in fact he has performed them although on an infrequent basis (about twice a week). Apart from the changes noted above, the memo restat- ed the job duties and responsibilities already performed by, or expected of, the unit employees. Discussion The effect of the Board's decision in the prior case is to grant to Local 32 the status of exclusive collective- bargaining representative under Section 9(a) of the Act of all service employees at the Building. Although Re- spondent questions the validity of that holding it is bind- ing on all parties unless set aside by a court of appeals, an event that has not occurred. Therefore, if Respondent has engaged in any action that fails to acknowledge Local 32's representative status, it will be found to have further violated Section 8(a)(5) of the Act. Respondent does not dispute the conduct it is alleged to have com- mitted but asserts that such conduct is legally permissible even if Local 32 rightfully is the collective-bargaining representative, a status which of course it continues to dispute. With respect to the alleged unilateral change in em- ployment conditions, Respondent's defense is twofold. It asserts that the May 1987 memo describing job duties of 281 unit employees did not represent any significant or sub- stantial change in working conditions and that at most, the Employer merely codified existing conditions. There- fore, it is argued, that under established Board law, typi- fied by such cases as Rust Craft Broadcasting, 225 NLRB 327 (1976), the Employer did not violate a duty to bar- gain. In addition, Respondent argues that its distribution of the memo was in response to employee requests for such codification in order to avoid disputes among them- selves over their work assignments . For the reasons that follow, Respondent's defenses are rejected as unsupporta- ble both in fact and in law. I have already determined, contrary to Respondent's assertion,' that the memo was not distributed in response to any employee request or indeed in response to em- ployee unrest or disputes over working conditions. Rather, the distribution of the memo simply appears to have been a routine matter by Berman who, as a new managing agent, was informing employees what was ex- pected of them by use of a standard job description memo utilized at' all Berman buildings. Furthermore, consistent with Respondent's stated refusal to acknowl- edge Local 32's' representative status, no attempt was made to notify or consult with the Union concerning the subject matter of that memo or its distribution to unit employees. Therefore, if that memo changed terms and conditions of employment or otherwise reflected a by- passing of the exclusive bargaining representative, Re- spondent must be found in violation of the Act and this would be true regardless of who initiated the Employer's misconduct. Whereas here, there is present an exclusive representative, direct negotiations with employees is the antithesis of collective bargaining, for the statute exacts of the employer "the negative duty to treat with; no other." Medo Photo Supply Corp. v. NLRB, 321 U.S. '678, 683 (1944). We turn then to the contents of the memo and on the very first page thereof we are brought face-to-face with evidence of Respondent's disregard of its employees stat- utory right to be represented by Local 32. Employees are commanded to • deal directly with management con- cerning "any problems affecting his work or schedule." We need not long dwell on the conclusion that such statement to employees to disregard their exclusive rep- resentative and deal directly with management about mandatory subjects of bargaining is as clear a violation of the duty to bargain as we are likely to confront. With respect to the job duties recited in the memo, Respondent is correct that if the duties were a mere reit- eration of the status quo there could be no finding of a unilateral "change." Essentially, in the final analysis, this is a question of fact. I disagree that the memo does not require employees to perform substantially different job duties than before. The handyman's job was materially altered. Prior to the memo, Nieves performed the por- ter's duties of mopping floors, washing windows, collect- ing garbage, etc., only on those infrequent occasions when a porter was out sick. As a result of the memo he thereafter was obligated to perform all of the porter's duties four times a week, in addition to his regular job. I am not prepared to find that such change was insubstan- 282 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD tial and it most certainly was not a codification of his ex- isting, job. Similarly, the porter's duties also were changed, albeit not to the same extent. Nevertheless, the porters, as a result of the memo, were required to deliver packages to tenants on a regular basis, a job not previously required of them. Given that Respondent admittedly has refused to recognize Local 32 as the bargaining representative despite the Board's Order, and in the context of its other unlawful refusals to bargain, any doubt concerning the significance of the changes in work assignments are re- solved against Respondent. I conclude therefore that by the contents of the memo Respondent engaged in direct dealings with employees and announced changes in job assignments which can not be immunized from violation on the grounds that such changes are insubstantial, insignificant, or trivial. Respondent's conduct here in issue constitutes the type of direct dealings and unilateral changes prohibited by the Act, NLRB v. Katz, 369 U.S. 736, 743 (1962); Medo Photo Supply Corp., supra. We turn our attention then to Respondent's discontinu- ance of medical insurance without notice to, or consulta- tion with, Local 32. Respondent does not deny its con- duct nor does it claim that the termination of that benefit was an insubstantial matter, nor does it argue that such benefit was not a mandatory subject of bargaining. Rather, consistent with the position throughout both cases, Respondent disputes the validity of the Board's prior order. But specifically with respect to this matter, Respondent offers a very special defense. It asserts that the medical benefit existed by virtue of its collective-bargaining agreement with Local 2, an ar- rangement declared by the Board to be unlawful and therefore it was compelled by operation of law to termi- nate 'that agreement and all payments to Local 2 pursu- ant thereto, including contributions to the Fund Re- spondent argues that it could not continue such pay- ments without violating the Board's Order and, more sig- nificantly, the criminal sanctions imposed by Section 302 of the Act. Respondent cites numerous authority for the proposition that, excluding certain situations not relevant here, Section 302 imposes a rigid requirement that there be a valid written collective-bargaining agreement au- thorizing payments by employers to employee represent- atives in order to avoid the criminal penalties of Section 302. I agree with the Employer that this case is distin- guishable from those situations where payments to a wel- fare fund pursuant to a trust agreement, on expiration of a collective-bargaining agreement, are held not to violate Section 302. See, e g., Cauthorne Trucking, 256 NLRB 721 fn. 6 (1981), and that for the sake of argument we can consider the instant case as if continued payments to the Local 2 Fund would have been barred by Section 302. Respondent essentially claims that since it was disput- ing Local 32's status as the 9(a) representative and appar- ently hopes to prevail ultimately in court, it would have jeopardized its legal position if it negotiated a new bene- fit with Local 32. On the other hand, if the earlier Board Order ultimately is enforced, Respondent would have committed an unlawful unilateral act if it instituted a new plan without bargaining. Therefore, Respondent asserts it did the only lawfully permitted act, namely nothing, even though the result was to leave employees without medical insurance protection. Respondent paints a self- portrait of an innocent, victimized by forces beyond its control, without any alternative but to unilaterally dis- continue medical insurance protection for its employees. I reject Respondent's defenses and conclude that in order to maintain the status quo Respondent had an obli- gation to provide without interruption the same benefit previously enjoyed, that had it instituted an identical re- placement benefit it would not have further violated the Act, and that although it was relieved of any obligation to negotiate the termination of the Local 2 plan it was under a statutory duty to bargain in good faith with Local 32 concerning the impact and effect on employees of this termination as well as any changes or modifica- tion in benefit protection it wished to institute.2 Nothing in the language of Section 302 of the Act or the Board's' earlier Order required Respondent to pocket the $1280 per employee premium rejected by Local 2 in- stead of spending that, or any other amount, to purchase medical benefits identical to those enjoyed under the Local 2 plan. The obligation to continue that benefit is unaltered by the fact that the Local 2 contract was de- clared illegal Section 8(a)(5) required that Respondent bargain with Local 32 before effecting any change in an established condition of employment. Under the peculiar circumstances of this case, that medical benefit can be considered a generic product not tied to the existence of any identifiable insurance compa- ny. As Respondent has noted elsewhere, unless a change in employment conditions has a significant and substan- tial impact on wages, hours, or working conditions, it will not be considered to be an ^ unlawful unilateral act. Here, if benefit levels had been maintained so that there would not have been any discernible resultant loss to em- ployees, Respondent's purchase of new insurance, or its acting as a self-insurer, even without bargaining with Local 32, would not have violated its bargaining obliga- tion and it would have maintained a neutral position with regard to its legal position in the prior case. Cf Golconda Corp. v. NLRB, 474 F.2d 49 (6th Cir. 1973), enfg. 194 NLRB 609 (1971), where a unilateral change of insur- ance carriers was held to violate Section 8(a)(5) because there was a substantive loss to employees in benefits. The Board, however, expressly left unanswered whether or not there would not have been a violation if the level of benefits' had remained stable. Instead, Respondent chose that course of action which gave to it the greatest benefit at the greatest loss to its employees. It seeks, at one and the same time, to avoid its statutory bargaining obligations under the guise of avoiding penalties imposed by law (Sec. 302). The irony 2 The General Counsel recognizes that Respondent had no recourse but to discontinue the Local 2 medical plan on that Union's rejection of the premium payments and therefore the General Counsel, in his brief, has withdrawn par 10(a) of the complaint alleging a violation based on a unilateral termination of medical benefits The General Counsel relies in- stead on the allegation that Respondent refused to provide medical bene- fits without bargaining with Local 32 about such conduct The issues de- cided herein have been fully litigated CHRISTOPHER STREET OWNERS CORP of this position is that an adjudged wrongdoer seeks to profit from. the compounding of its earlier wrong by using the law to shield its actions.3 The illogic of such result mandates a finding of violation for the simple fact is that employee benefits were unilaterally eliminated in direct contravention of Sections 8(a)(5) and 8(d). Such action is a refusal to bargain in fact without regard to motive, NLRB v. Katz, 369 U.S. 736 (1962). I find Re- spondent's reliance on the strictures of Section 302 mis- placed and an insufficient justification to immunize its conduct here in issue. Finally, if this case is viewed in a light most favorable to Respondent and deference is given to all of its argu- ments, a finding of violation nonetheless results. Re- spondent contends its action in terminating the fringe benefit was motivated, if not indeed compelled, by re- quirements of law It would thus place itself in the posi- tion of urging that the decision to terminate the benefit could not constitute a mandatory subject of bargaining. However, it is a long-settled proposition that even where a managerial decision to alter its method of operation which has a significant impact on employees is not a mandatory subject of bargaining, the union must be af- forded a meaningful opportunity to bargain about the ef- fects of that decision. First National Maintenance Corp. v. NLRB, 452 U.S. 666, 681-682 (1981); Cooper Thermome- ter, 160 NLRB 1902 (1966), enfd. in pertinent part 376 F 2d 684 (2d Cir. 1967). Clearly the Respondent failed in this obligation pleading its good intention to avoid a criminal violation as its excuse. It has been demonstrated that Respondent had several options apart from commit- ting a crime, including the simple one of complying with the earlier Board order to recognize and bargain with Local 32. Under these circumstances its good intentions do not translate into a legally recognizable defense. It follows that Respondent violated Section 8(a)(5) and (1) as alleged. CONCLUSIONS OF LAW 1. Respondent Christopher Street Owners Corp is an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act. 2. The Union, Local 32B-32J , Service Employees International Union, AFL-CIO is a labor organization within the meaning of Section 2(5) of the Act. 3. The following employees constitute a unit appropri- ate for the purpose of collective bargaining within the meaning of Section 9(b) of the Act: All service employees employed at Respondent's 165 Christopher Street building. 4. At all times material herein the Union has been and is now the exclusive representative of all employees in the appropriate unit for purposes of collective bargaining within the meaning of Section 9(a) of the Act. 5. Respondent has refused to bargain in violation of Section 8(a)(5) of the Act in the following respects (1) 9 This situation brings to mind the humorist's definition of the Yiddish word "chutzpah" which now is part of the vernacular A convicted mur- derer, as he is about to be sentenced for killing his parents, begs the court's mercy on the ground he is an orphan 283 by failing to provide unit employees with health benefit insurance protecting them against medical and hospital costs since about 8 May 1987, and by failing and refusing to bargain with the Union concerning such failure, (2) by promulgating new work rules in or about early May 1987 concerning the duties and responsibilities of unit employees without notification to and bargaining with the union concerning such changes; and (3) by directing unit employees to disregard the Union as their represent- ative for the handling of grievances and work-related problems and to directly deal with Respondent with re- spect to such matters. 6. The aforesaid unfair labor practices are unfair labor practices affecting commerce within the meaning of Sec- tion 2(6) and (7) of the Act. REMEDY Having found that the Respondent has engaged in cer- tain unfair labor practices, I shall recommend that it be ordered to cease and desist therefrom and to take certain affirmative action designed to effectuate the policies of the Act. Respondent would limit any affirmative remedy to a bargaining order and specifically with respect to the medical benefits it argues that since it is legally imper- missible to restore the Local 2 medical plan no affirma- tive relief at all would be appropriate. I disagree. It is of course unquestioned that Respondent can not restore the particular medical benefit that existed by virtue of its unlawful recognition of Local 2 . It is also unquestioned that the principle that underlies Board re- medial authority is the restoration of the status quo ante to the greatest degree feasible and as nearly as practica- ble, to assure that Respondent not profit from, its own wrongdoing. Mead Corp., 256 NLRB 686 ( 1981). In cases in which, as here, employees have been denied medical expense insurance it is traditional to require the employer to reimburse employees for those expenses See, e.g., Fi- berboard Paper Products Corp., 180 NLRB 142 (1969); Deena Artware, Inc., 112 NLRB 371, 375 (1955), enfd. 228 F.2d 871 (6th Cir. 1955). This does not impose any undue or unfair burden and to do otherwise would allow the employer to profit from its wrong, a glaring example of which is the Respondent's windfall in this case. Therefore, the remedy in this case will provide for "make whole" relief as well as a requirement that Re- spondent continue to reimburse employees for medical expenses that would have been covered under the Local 2 plan. Employees shall be made whole for losses they may have suffered as a result of not receiving this insur- ance protection with interest on such amounts. In ac- cordance with the Board's decision in New Horizons for the Retarded, 283 NLRB 1173 (1987), interest on and after 1 January 1987 shall be computed at the "short- term Federal rate" for the underpayment of taxes as set out in the 1986 amendment to 26 U.S.C. § 56621. Inter- est on amounts accrued prior to 1 January 1987 (the ef- fective date of the 1986 amendment to 26 U.S.C. § 6621) shall be computed in accordance with Florida Steel Corp., 231 NLRB 651 (1977). It also is recommended that Respondent be ordered to rescind the memo distributed to employees in May 1987 284 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD which inter alia, directed them to bypass Local 32 as their representative for the resolution of work problems and which unilaterally changed the duties and responsi- bilities of unit employees. Although not all unit employ- ees had their jobs redefined, the memo in its entirety must be revoked because it is not possible to separate the permissible from the impermissible directives. The unilat- eral changes and unlawful directives overlap and are intertwined with superficially innocuous sections of the memo. Furthermore, the issuance of the memo in context with Respondent's continued refusal to acknowledge Local 32's status as the 9(a) representative, taints the Re- spondent's action to the degree that no part of that memo may be considered legitimate. Furthermore, not only must there be restoration of the status quo ante, but Respondent must maintain in effect the medical benefits and all other terms and conditions of employment and is forbidden from changing them unless it gives notice to Local 32 and affords it an,opportunity to bargain about any proposed changes in accordance with its obligation to recognize and bargain with Local 32 pursuant to the Board's prior Decision and Order in 286 NLRB 532. The General Counsel's routine request that a visitator- ial clause be included in the remedy is denied on the basis of Cherokee Marine, 287 NLRB 1080 (1988). The General Counsel has not advanced any basis, and I per- ceive none, for concluding that Respondent will attempt to evade compliance. Although Respondent has not com- plied with the earlier Board Order it appears that this is due to a belief that its defenses in that case, notably the 10(b) argument, will prevail in a circuit court on review. [Recommended Order omitted from publication.]