Crown Beer Distributors, Inc.

CROWN BEER DISTRIBUTORS Crown Beer Distributors, Inc. and Local 153, Inter- national Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, AFL- CIO and Craig H. Livingston. Cases 22-CA- 15103 and 22-CA-15224 September 15, 1989 DECISION AND ORDER BY CHAIRMAN STEPHENS AND MEMBERS CRACRAFT AND DEVANEY On August 26, 1988, Administrative Law Judge Joel P. Biblowitz issued the attached decision. The Respondent filed exceptions and a supporting brief, and the General Counsel filed cross-exceptions and a supporting brief. The Respondent also filed a brief in answer to the General Counsel's cross-ex- ceptions, and the General Counsel filed a brief in answer to the Respondent's exceptions. 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, 2 as modified, and to adopt the recom- mended Order as modified and set forth in full below. 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 The Respondent also excepts to the judge 's findings that the three non- struck employers, who together with the Respondent were members of an employer association, locked out their employees in mid-April 1987; that the Respondent discontinued its delivery system due to the difficulty of maintaining it, and that association negotiator Francis Heston informed those present at the June 15, 1987 negotiation session that the lockout would end on June 22 . The record shows that the lockout began May 1, 1987, and there is no evidence indicating why the Respondent discontin- ued its deliveries, or that Heston made the above statement at the June 15 meeting. These corrections, however, have no effect on the outcome of the decision 8 The Respondent contends that the judge found that it unlawfully "refus[ed] to grant full reinstatement to strikers " and that this issue was neither alleged in the complaint nor litigated at the hearing . We note that the judge found that the Respondent violated Sec 8(a)(1) and (3) by of- fering returning strikers reinstatement only as casuals and by refusing to reinstate them except as casual employees . We further find that although this matter was not alleged as such in the complaint , it is closely related to the complaint allegation that the Respondent failed to reinstate the re- turning strikers to their former positions Moreover, on our review of the record, we find that the nature of the Respondent's offers of reinstate- ment was fully litigated and that the Respondent was given a full oppor- tunity to present evidence on and to cross -examine witnesses regarding this issue. In light of all the above, we find no merit to the Respondent's argument that any variance between the complaint allegations and the judge's findings precludes our finding of a violation here See , e g., Chel- sea Laboratories, 282 NLRB 500 (1986), enfd 825 F 2d 680 (2d Cir 1987) We shall amend the judge's Conclusions of Law to conform to the judge's findings and to the recommended Order 541 The judge found, and we agree, that the Re- spondent violated Section 8(a)(1) and (3) of the Act by offering former strikers reinstatement only as casual employees, in effect depriving them of the rights and protections to which they were entitled as regular employees. In fashioning a remedy, the judge recommended, inter alia, that the Respondent be ordered to offer the 22 discriminatees immediate reinstatement as regular employees. The Respond- ent excepts, inter alia, to this recommendation, con- tending that such a remedy is inappropriate given the judge's finding that the replacements hired be- tween April 6 and June 22, 1987,3 were permanent and that a number of the former strikers had been permanently replaced, and given the absence of evidence showing that there were vacancies for all 22 former strikers. We find merit to the Respond- ent's exceptions. The record shows that in March 1987, prior to the April 1 strike, the Respondent had approxi- mately 41 drivers and warehousemen. Between April 6 and June 22, the date of the unconditional offer to return, a number of former strikers re- turned to work. In addition, during that time, the Respondent hired a number of new employees. Thus, by the conclusion of the strike, the Respond- ent employed approximately 61 drivers and ware- housemen. On June 29 and 30, the Respondent of- fered reinstatement to two former strikers, Scar- pino and Miller. Further, from late August through September 1987, the Respondent made offers of re- instatement to at least 15 employees based, by its own admission, on 5 vacancies at that time. There is no record evidence regarding additional vacan- cies or offers of employment. Although the judge found it unnecessary to de- termine whether all strikers had been permanently replaced, he nonetheless found that at least some had been replaced. He further found that all re- placements hired between April and June 22, 1987, were permanent employees. As the number of em- ployees in the Respondent's employ by June 22, 1987, clearly exceeded the number of its employees in March 1987, we find it reasonable to infer that there were no vacancies for returning strikers as of June 22. We also find, however, that the Respond- ent's offers of reinstatement to two former strikers (Miller and Scarpino) on June 29 and 30, together with its admission regarding five additional vacan- cies, show that by September 1987 there were at least seven vacancies for which former strikers should have been offered full reinstatement.4 Ac- 3 All dates are in 1987 unless otherwise indicated 4 We shall leave to the compliance stage the determination of when ad- ditional vacancies for regular employees became available since June 22, 1987. 296 NLRB No. 78 542 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD cordingly, we shall modify the judge's recommend- ed remedy and Order to provide for reinstatement to vacancies that became available after June 22, 1987, and to provide for a preferential hiring list for the remaining strikers. AMENDED CONCLUSIONS OF LAW Substitute the following for Conclusion of Law 3. "3. The Respondent violated Section 8(a)(1) and (3) of the Act by offering to reinstate the returning strikers only as casual employees , without accumu- lated benefits or seniority." AMENDED REMEDY Having found that the Respondent has engaged in certain unfair labor practices , we shall order it to cease and desist and to take certain affirmative action designed to effectuate the policies of the Act. We have found that the Respondent violated Section 8(a)(1) and (3) of the Act by offering rein- statement to former strikers only as casual employ- ees. To remedy this violation, we shall order the Respondent to offer immediate reinstatement as regular employees, without prejudice to their se- niority or any other rights and privileges, to all strikers for whom vacancies became available after June 22, 1987, discharging, if necessary, any per- sons hired as permanent employees to perform drivers' or warehousemen's work after June 22, 1987. Those former strikers for whom no positions are immediately available shall be placed on a prefer- ential hiring list in accordance with their seniority or other nondiscriminatory criteria and they shall be reinstated before any other persons are hired, or on the departure of their permanent replacements. Those former strikers entitled to immediate rein- statement shall be made whole for any loss of earn- ings or benefits caused by the Respondent 's unlaw- ful conduct. In addition, because employees Scar- pino and Miller accepted employment with the Re- spondent initially in casual status, they will addi- tionally be made whole for any loss of earnings or benefits suffered by being reinstated as casual, rather than regular, employees during this period. Backpay shall be computed in accordance with the formula set forth in F. W. Woolworth Co., 90 NLRB 289 (1950), with interest to be computed in the manner prescribed in New Horizons for the Re- tarded, 283 NLRB 1173 (1987). ORDER The National Labor Relations Board adopts the recommended Order of the administrative law judge as modified and set forth in full below and orders that the Respondent, Crown Beer Distribu- tors, Inc., Wall Township, New Jersey, its officers, agents, successors, and assigns, shall 1. Cease and desist from (a) Refusing to reemploy recalled economic strikers except as new employees and refusing to credit them with their accrued seniority. (b) In any like or related manner interfering with, restraining, or coercing employees in the ex- ercise of any of the rights guaranteed them by Sec- tion 7 of the Act. 2. Take the following affirmative action neces- sary to effectuate the policies of the Act. (a) Offer the following employees reinstatement to their former jobs or, if those jobs no longer exist, to substantially equivalent positions, without prejudice to their seniority or any other rights and privileges, to the extent vacancies have become available since June 22, 1987, discharging, if neces- sary, any persons hired to perform work as drivers and warehousemen since that date. Frederick Baker David Miller Richard Bertoncin Peter Novak Kenneth Damurjian James Parnell George Delp Mark Furiato Kirk Gardner William Greenwood Fredric T. Hand Mark Klotz Scott Laird Thomas McNamara Joseph Scarpino Joseph Scarpino, Jr. Joel Scholtz Michael Softcheck Scott Thomson Robert Wademan James White James Yukka (b) Make these employees whole, with interest, for any loss of earnings and other benefits suffered as a result of the discrimination against them, in the manner set forth in the "Amended Remedy" sec- tion of this decision. (c) Reimburse Joseph Scarpino and David Miller for any additional loss of earnings and other bene- fits suffered by reason of being reinstated as casual, rather than regular, employees. (d) Place the remaining former strikers on a pref- erential hiring list in accordance with their seniori- ty or other nondiscriminatory criteria, and offer them reinstatement before any other persons are hired, or on the departure of their permanent re- placements. (e) Preserve and, on request, make available to the Board or its agents, for examination and copy- ing, all payroll records, social security payment records, timecards, personnel records and reports, and all other records necessary to analyze the CROWN BEER DISTRIBUTORS amount of backpay due under the terms of this Order. (f) Post at its Wall Township, New Jersey facili- ty copies of the attached notice marked "Appen- dix."5 Copies of the notice, on forms provided by the Regional Director for Region 22, after being signed by the Respondent's authorized representa- tive, shall be posted by the Respondent immediate- ly upon receipt and maintained for 60 consecutive days in conspicuous places including all places where notices to employees 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. (g) Notify the Regional Director in writing within 20 days from the date of this Order what steps the Respondent has taken to comply. a 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 " Kirk Gardner William Greenwood Fredric T. Hand Mark Klotz Scott Laird Thomas McNamara Joel Scholtz Michael Softcheck Scott Thomson Robert Wademan James White James Yukka 543 WE WILL place the names of the remaining em- ployees on a preferential hiring list and offer them reinstatement before any other persons are hired, or on the departure of any permanent strike re- placements. WE WILL make them whole, with interest, for any loss of earnings and other benefits suffered as a result of our failure to offer them reinstatement as regular employees and WE WILL make whole Joseph Scarpino and David Miller, with interest, for any loss of earnings and other benefits suffered by their being reinstated as casual, rather than reg- ular, employees. CROWN BEER DISTRIBUTORS, INC. 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 reemploy recalled eco- nomic strikers except as new employees and WE WILL NOT refuse to credit them with seniority for their prior service. WE WILL NOT in any like or related manner interfere with, restrain, or coerce you in the exer- cise of the rights guaranteed you in Section 7 of the Act. WE WILL offer the following employees rein- statement to their former jobs or, if those positions no longer exist, to substantially equivalent posi- tions, without prejudice to their seniority or any other rights and privileges previously enjoyed, to the extent these positions are available, discharging, if necessary, any persons hired as permanent em- ployees since June 22, 1987, to perform the work of drivers and warehousemen. Frederick Baker David Miller Richard Bertoncin Peter Novak Kenneth Damurjian James Parnell George Delp Joseph Scarpino Mark Furiato Joseph Scarpino, Jr. Mitchell A. Schley, Esq., for the General Counsel. Irving L. Hurwitz, Esq. (Carpenter, Bennett & Morrissey), for the Respondent. Edward A. Cohen, Esq. (Schneider, Cohen, Solomon, Leder & Montalbano), for the Charging Party. DECISION STATEMENT OF THE CASE JOEL P. BIBLOWITZ, Administrative Law Judge. This case was heard by me on April 19, 21, 22, 27, and 28, 1988, in Newark, New Jersey. The consolidated com- plaint herein, which issued on December 30, 1987,1 was based on an unfair labor practice charge filed on June 24 by Local 153, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, AFL-CIO (the Union), and an unfair labor practice charge filed on September 1 by Craig Livingston. The consolidated complaint alleges that Crown Beer Distrib- utors, Inc. (Respondent) violated Section 8(a)(1) and (3) of the Act, since on or about June 21, by failing and re- fusing to reinstate 22 named strikers despite the fact that they made an unconditional offer to return to work. On the entire record, including my observation of the witnesses, and the briefs received, I make the following2 FINDINGS OF FACT 1. JURISDICTION AND LABOR ORGANIZATION STATUS There being no dispute, I find that Respondent is an employer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act, and that the Union i Unless indicated otherwise , all dates herein refer to the year 1987 2 General Counsel 's motion to correct the transcript, dated June 29, 1988, was unopposed and is granted. 544 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD is a labor organization within the meaning of Section 2(5) of the Act. 11. THE FACTS Respondent is a member of the Monmouth and Ocean County Beer Distributors Association (the Association), which negotiates with the Union on behalf of Respond- ent and its three other members. A collective-bargaining agreement effective April 1, 1984, through March 31 covered the drivers, warehousemen, and helpers em- ployed by Respondent. Under article 2.1 of the agree- ment there are three distinct categories of employees: regular, extra, and casual . When a new employee is hired he is a casual employee for the first 6 months of his em- ployment with Respondent; this is similar to what other agreements would refer to as a probationary employee with few benefits other than a basic wage; additionally, they may be laid off at the discretion of Respondent. After being employed by Respondent for 6 months of continuous employment the employee becomes an extra with a resulting wage increase . There are two methods of becoming a regular employee of Respondent with its resulting protections and benefits : being employed for 1 year by Respondent (without more than a specified number of absences) or pursuant to the first sentence in article 2. 1 of the agreement: Regular employees are those employees listed on the regular employee list at the Company as of March 31, 1984. This list shall be initialed each March 31st by the Company and the Union. Negotiations for a new agreement commenced on March 4; the principal negotiator on behalf of the Asso- ciation was Francis Heston and for the Union, Michael Markowitz and Henry Tchorzewski, union president. There were four or five negotiating sessions prior to March 31; as of the March 31 meeting no new agreement had been reached by the parties . At that meeting Tchor- zewski told those present that the Union was going to strike Respondent at midnight; Heston said that if the Union struck Respondent, it was Respondent's intent to permanently replace the strikers . A strike of Respondent began April 13 at Respondent 's premises; in about the middle of April the three other Association members locked out the Union's members. Between April 2 and June 15 there were approximately nine negotiating ses- sions; at each of these sessions Heston told the union ne- gotiator (initially Tchorzewski, then, commencing on May 21 , Markowitz) that Respondent was permanently replacing its striking workers . Beginning with the May 8 By letter dated April 1 to its employees Respondent stated, inter alia: "We want you to know that we intend to continue our operations in order to meet customer demands This will be done with the help of our supervisors and by hiring permanent replacements for our striking em- ployees." By letter dated April 11. Respondent wrote its employees: We previously advised you that the Company planned to continue operations to meet our customers' needs by , among other things hiring permanent replacements . Since our last letter to you, a number of new employees have been hired for pemanent [sic] jobs to replace strikers for those of you who are permanently replaced, you will be placed on a preferential hiring list for any future vacan- cy that might open up for which you are qualified. 21 meeting Markowitz asked how many of the workers had been replaced and Heston told him that he didn't know. In late April the union membership voted against ratifying a tentative agreement reached by the parties. Another tentative agreement was reached by the parties at a meeting on June 10; at that time Markowitz told Heston that the Union's bargaining committee would recommend that the membership accept the contract. Shortly thereafter Markowitz called Heston and told him that the contract had been overwhelmingly rejected by the membership . Respondent and the other three Asso- ciation members then decided that beginning on June 22, they would resume deliveries4 to their customers and at the next negotiation session on June 15, Heston told those present that effective June 22 the lockout at the three employers' premises would end, and the four Asso- ciation members would resume making deliveries to their customers. On Sunday morning, June 21 , Respondent's employees ratified the contract that they had rejected 10 days earlier . That morning Tchorzewski called Heston and told him that the employees ratified the agreement so they have a contract and the strike was over; he told Heston that he instructed his members to report for work the following morning . Heston answered "that's fine" or "it was the right thing to do." On June 22, about 6:30 a.m., Joseph Scarpino, the union shop steward at the facility , and almost all the re- maining strikers,5 went to the facility. Scarpino testified that he met Richard Koenig, Respondent 's manager of corporate affairs, in the parking lot. Koenig asked what they wanted and Scarpino told Koenig that the member- ship had ratified the contract and that Tchorzewski had told Heston of the ratification and that Heston said the men should return to work and they were ready to return to work. 6 Koenig said that he was not aware of any of that, and that he had no work for them. Two of the strikers asked if they had been permanently replaced and Koenig said they had. Scarpino asked him to supply them with letters to that effect. Scarpino then asked if they had been replaced and Koenig said: "Yes, some of you have been replaced," and that they would be put on a preferential hiring list and that they would be recalled as casuals. The following day Scarpino went to the facil- ity and picked up identical letters addressed to each of the returning strikers.' The letter said that they had been 4 During April, Respondent used managers , administrators, and any- body else capable of doing so to drive the trucks making deliveries. Due to the difficulty of maintaining this delivery system, commencing on or about May I Respondent discontinued its delivery system and instituted a system whereby its customers came to Respondent 's facility to pick up their orders. Deliveries resumed June 22 5 Scarpino testified that he went with the remainder of the strikers "just about all of them." He believed that all the alleged discriminatees listed in the complaint were with him, except, "if anyone was missing it was maybe one man " Striking union member James Parnell (listed in the complaint) testified that he did not go to the facility on the morning of June 22 because he did not know that the strike had ended. 6 One of the individuals present with Scarpino was Robert Giles, who was originally listed in the complaint as one of the discriminatees whom Respondent refused to reinstate . At the commencement of the hearing, General Counsel moved that Giles' name be withdrawn and this motion was granted. Apparently, Respondent fired Giles before the strike began. 4 There are 22 discriminatees alleged in the complaint . For some unex- plained reason there was a 23d letter to a Patrick Fallon. CROWN BEER DISTRIBUTORS permanently replaced and they would be placed on a preferential hiring list. Scott Thompson, a member of the Union who participated in the strike through its conclu- sion, testified that although he arrived at the facility on June 22 before the time set, when he got there he saw that a discussion was taking place between Koenig and the drivers. At that time, one of the drivers asked Koenig if they had all been replaced : "Mr. Koenig's reply was that some of us have been replaced ."A driver then asked Koenig which of them had been replaced and he said that, at that time, he did not know, but they would soon be receiving a letter in that regard . Striker Bill Greenwood testified that he was a member of the group that came to the facility early in the morning on June 22; Koenig asked if he could help them and Scar- pino said that they ratified the contract and wanted to return of work. Koenig said that he had not been in- formed that they had ratified the contract and he was not expecting them. Koenig then said that they had all been permanently replaced, "and after some discussion, he contradicted himself and said, some of you have been replaced but he doesn't know the exact number yet." He also told the strikers that they would be put on a prefer- ential hiring list for future jobs. Koenig testified that on the morning of June 22 Scar- pino and about 20 other strikers came to the facility; Scarpino said that they were there to return to work. Koenig said that he did not have any jobs available, that they had been permanently replaced and would be placed on a preferential hiring list. Somebody asked that it be put in writing, which Respondent did in a letter sent to each of the strikers. He testified that he never told anyone they only some of them had been replaced. The General Counsel introduced into evidence a newspa- per article in the June 23 edition of the Asbury Park Press, stating as follows: Although he did not know how many, Crown spokesman Richard D. Koenig said some of the drivers had been permanently replaced. He said the union workers who had been replaced would be put on a preferential hiring list , and when jobs opened up for which they were qualified, they would be called back. Koenig testified that during the strike he spoke to report- ers about the situation. On either June 21 or 22, he never told anyone that some of the strikers had been replaced, although he did say that to reporters prior to the middle of June. James Parnell, who participated in the strike for its du- ration, testified that about a week before the strike's con- clusion he went to the facility to speak to Paul Long- street, Respondent's assistant warehouse manager. Long- street called him into his office and Parnell asked him if he had been replaced , "because if I was replaced, I need it in writing because I wanted to go on with my life." Longstreet walked out of his office and returned with Steve Etting, Respondent's warehouse manager. Parnell asked him if he was replaced . "Steve, if I'm replaced, I have to have it in writing . . . this way I can forget all this and go to work and I got to go on with my life." 545 Etting asked Parnell to wait a few minutes while he went up front (where Respondent's main offices are lo- cated). About 15 minutes later Etting returned and said: "As of right now, nobody' s been replaced. Until this contract dispute is resolved, nobody's being replaced." On March 31 Respondent employed 32 regular drivers and 5 regular warehousemen . On April 1 every one of these regular employees joined the strike. From April 6 through June 20, 17 of these strikers crossed the Union's picket line and returned to work; 13 of these were regu- lar employees and when they crossed the picket line and returned to work, they returned as regular employees. All these employees who returned prior to June 22 were told that their positions (whether driver or warehouse- men) were permanent. The 22 alleged discriminatees in this matter are the regular employees who did not at- tempt to return to Respondent's employ until June 22, at which time they were told that they had been perma- nently replaced and would be placed on a preferential hiring list and thereafter would be reemployed as casual rather than regular employees. On June 29 and 30 Scarpino and striker David Miller were reinstated as casual employees; shortly thereafter Miller told Koenig that he did not want to be reinstated as a casual employee, that he felt that he deserved to be reinstated as a regular employee. When Respondent re- fused this request Miller ceased his employment with Re- spondent. Scarpino maintained his employment with Re- spondent and, at the time of the hearing herein, was an extra employee . Beginning on July 1 Respondent wrote to, and called, 15 former strikers informing them of available positions. A large number of these individuals wrote to Respondent saying that they felt that they were entitled to be reinstated as regular employees and would not return as casuals. Since the last of Respondent's let- ters referred to above, dated September 8, Respondent has made no further offers of reinstatement to the strik- ers. Between the fall of 1986 and March, Respondent main- tained a staff of about 41 drivers and warehousemen. At the conclusion of the strike, on June 22, it employed 61 employees in those classifications ; Respondent alleges that they were all permanent employees . In addition, it employed three temporary summer employees. By August 31 this number had dwindled to 31 drivers, 4 warehousemen, and 5 temporary drivers, who were com- pleting some work. When Longstreet left Respondent's employ in February 1988, Respondent employed about 33 drivers and 4 warehousemen. Respondent alleges that (with minor exceptions) all the employees it hired between April 1 and June 22 were hired as permanent replacements for the strikers, and were so informed . Koenig testified that when the strike began Respondent's president told him to start hiring people to replace the striking employees. At this time, he met with Longstreet and Etting and told them that Re- spondent was going to hire employees to permanently re- place the drivers and they were to tell the applicants that they were being hired for a permanent position to re- place the strikers and they would not be let go when the strike ended . He personally interviewed and hired four 546 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD men;8 he told each what the job involved, and that Re- spondent was hiring to replace their striking workers. That they were being hired for permanent positions with Respondent and would not be let go when the strike ended. They accepted the jobs. In addition Respondent employed a number of employees in administrative non- unit positions who expressed an interest in becoming drivers for Respondent. On about June 8 Koenig met with four of these employees9 who told him that they wanted to be employed as drivers; Koenig told them that the jobs would be permanent and they would be replac- ing drivers. When the drivers returned they would not be replaced, but, on the other hand, they could not choose to return to their former positions if they became drivers. About a week later each said that he wanted to become a driver, and all four did so . Koenig testified fur- ther that during May and June (until June 22) he had a number of meetings with employees (both individually and in groups). They principally said that they had heard that when the strike was over the strikers would return and they would be out . Koenig said that was not so; they had been hired by Respondent as permanent replace- ments for the strikers and would remain, even when the strikers returned. Longstreet testified that in about early April, Koenig instructed him to interview people because Respondent was going to hire permanent drivers and warehousemen to replace the striking employees . In that pursuit, Long- street interviewed and hired 27 drivers and warehouse- men; he told each what the job involved and that the drivers and warehousemen were on strike and that Re- spondent was looking to hire people to permanently re- place them. The dates of these interviews and hires oc- curred between March 28 and June 18, although some employees who were hired in about mid-June did not ac- tually begin working for Respondent until June 22 or shortly thereafter. This is because although they accept- ed employment with Respondent prior to June 22, they wanted to give notice to their prior employer. When he interviewed these people he asked them about their prior experience and whether they would have any problem crossing a picket line. Since Respondent needed employ- ees badly, his question and interview were not as exact- ing as it would have been in a nonstrike situation, but there were still a few employees whom he interviewed but did not hire. Koenig testified that , normally Re- spondent checks references for all employees it inter- views for hire. During the strike they checked references for some, but not all, applicants. The reasons were their urgent need for employees and the fact that they previ- ously knew some of the applicants. Etting testified that in the beginning of April Koenig told him that Respondent was going to hire permanent drivers to replace the drivers who were on strike. In April and May he interviewed three applicants for em- ployment; he told each that Respondent was looking for permanent drivers to replace their striking drivers, and 6 One of these men had worked for Respondent in 1986 in a temporary position as a summer employee. At the beginning of the strike these four employees drove the trucks; in May, when the Respondent ceased deliveries , they worked in the warehouse these employees accepted the positions and became em- ployees of Respondent. He also testified that during the strike, on a few occasions, about 15 or 20 employees asked him whether they would be replaced when the strikers returned, and he told them that they would not be replaced if and when the strikers returned. The agreement between the parties contains a provi- sion regarding the maximum limit for one- and two-man trucks; it was Respondent's position that this provision was meant to be used only occasionally by drivers who, for some personal reason , were unable to handle a full load on a particular day. Beginning in about January, however, all (or most) of Respondent's drivers invoked this provision. The result of this was that Respondent had to hire new employees as either drivers or helpers to complete its deliveries ; these individuals were all hired as temporary employees to work until the dispute was re- solved. Some of these individuals were still employed by Respondent on April 1 when the strike began and Re- spondent maintained these individuals in their employ. In about May Respondent offered permanent employment to eight of these individuals; Koenig testified that he spoke to all but one of these employees and told them that he was offering them permanent positions of replace the striking employees. All accepted the offers. Etting spoke to the other driver and offered him a position as a permanent driver to replace the striking drivers and he accepted the offer. One employee, John Dolan , who was hired during the slowdown to supplement the work force, quit Respondent's employ prior to April 1; in June Paul Rapisardi, Respondent's vice president, asked Dolan if he wanted to return to Respondent's employ and he said that he did; Rapisardi then offered Dolan a job as a permanent replacement for the striking drivers and Dolan accepted the position; he began working again for Respondent the week ending June 16. On rebuttal, the General Counsel presented four wit- nesses who were interviewed and hired by Respondent during the strike. Brian Lukowitz testified that his first day of employment with Respondent was June 29; he was interviewed by Longstreet about 10 days earlier. Lukowitz testified that he asked Longstreet about the starting salary and told him that he could not begin im- mediately, and would have to give his present employer 2 weeks' notice. He asked about the permanency of the job; Longstreet told him "for the summer I could be a permanent employee, but after that , he couldn't really say one way or another. He couldn't really guarantee a full time job." Lukowitz then asked if he would still have a job when the strikers returned, " and he couldn't say that I would definitely still have a job." Neither Longstreet nor any other official of Respondent told him that he was being hired as a permanent replacement for the striking employees. During this interview Longstreet did not use the words "permanent," "temporary " or "re- placement." On cross-examination, Lukowitz was asked if it was his understanding that the job he accepted was a permanent job; he answered: "That was what I had hoped for." He testified that he left a job that he had held for 6 years at a higher salary to accept employment CROWN BEER DISTRIBUTORS with Respondent.' ° During the interview, Longstreet told him that "if everything worked out," after being employed by Respondent for 6 months , he would receive a union book and a pay increase . Counsel for Respond- ent showed Lukowitz an affidavit that an associate in his firm took from Lukowitz at his place of employment in February 1988. The affidavit states that he was inter- viewed by Longstreet on June 19 and that Longstreet told him that he had a permanent job; that he was hired as a permanent employee, not contingent on the return of the strikers. When Lukowitz was asked whether he read this affidavit before he signed it, he testified that it was taken in the back room of his place of employ- ment-"which was rather inconvenient"-he looked at it, "but I didn't really have time to actually sit down and read it well." Edwin Brandt testified that he had an interview with Longstreet in mid-June; during this interview Longstreet never said that he was being hired as a permanent re- placement for strikers, but "I'm not sure exactly how it was worded by Mr. Longstreet. My intentions were that it was a permanent position ." At the time he was em- ployed elsewhere at a salary higher than that offered by Respondent; he was looking for a permanent position and would not have accepted a temporary position with Respondent. During the interview, Longstreet told him that the first 6 months of employment was a probation- ary period and the foreman would decide whether he would remain in Respondent 's employ. Brandt gave an affidavit in February 1988 to the same associate of coun- sel for Respondent ; it states, inter alia, that Longstreet "told me that employees were on strike, but that I was hired for a permanent position at Crown, and that I would not be let go when the strikers returned." Brandt began working for Respondent on June 19 (to allow for notice to his prior employer) and remained in Respond- ent's employ for approximately 6 weeks. Matthew Henry testified that he was interviewed by Longstreet on June 12; at the time he was employed by a lumberyard at an hourly rate of $6.25 with a lot of over- time work. Henry asked what Respondent paid, and Longstreet said for the first 6 months of employment that pay was $40 a day; he did not tell him what the rate would be subsequent to that time . "I asked him if the job was temporary or permanent . Paul said he wasn't sure." Longstreet did tell him that after 6 months of employ- ment he would be a permanent driver . He accepted the job and began working for Respondent on June 29 in order to give his employer 2 weeks' notice . At the time of the hearing herein, he was still employed by Respond- ent. Richard Lazzaro testified that on June 18 he had an interview with Etting at the facility (he was unemployed at the time). Etting told him that after the initial 6-month probationary period he would receive a small increase in pay. After the second 6-month period he would become "a full time employee, I would have benefits, I would be a union member." He testified that during this interview Etting did not tell him that he had been hired as a per- 10 After 3 weeks' employment with Respondent , he left to return to work at his prior employer. 547 manent replacement for strikers . Lazzaro also gave an af- fidavit to the same associate of counsel for Respondent in February 1988 which he read and signed. It states, inter alia, that at the interview "Etting told me that I had a regular position subject to a period when I was called a casual . It was my understanding that the job was permanent . ..." Lazzaro began working for Respond- ent on June 22 and ceased his employment with Re- spondent 3 weeks later. The obvious question herein is why Respondent had to hire such a large number of permanent employees be- tween April 1 and June 22, so that by June 22 it em- ployed approximately 64 permanent employees when prior to the strike, its normal complement of permanent employees was about 40? Every summer prior to 1987, in about May, Respondent hired between 20 and 40 tempo- rary summer employees, principally students who worked from about Memorial Day through Labor Day, which is Respondent's busiest time. Koenig testified that in 1987 Respondent hired only three individuals as tem- porary summer employees; the other employees were hired as permanent employees to replace the strikers. The General Counsel, alleges that Respondent's claim that these employees are permanent is a subterfuge for the fact that most or all of these replacement employees were really temporary summer help and the fact that so many left Respondent's employ prior to Labor Day proves it. Koenig and Longstreet testified to the disparity be- tween Respondent's normal employment complement of about 40 permanent unit employees and its alleged com- plement of about 60 during the strike . Koenig testified that one reason for the larger number of unit employees is that they purposely "overhired," because their experi- ence was that they lose a large number of employees through attrition; employees quit because they can not physically handle the job or they are fired because they can not perform it adequately . In addition these were new inexperienced employees-"they couldn't do the work of the people that were there before." Therefore, Respondent had to give these drivers lighter loads or put two men on a truck instead of one. Finally, Respondent had to put more than one driver on some trucks during the strike because the pickets were harassing the drivers on some routes . Longstreet testified that Respondent em- ployed more employees at that time than usual : "I knew that it was higher than we usually ran with, but the people were less experienced and it really wasn't my place to question it." Another factor Longstreet testified to, was that the replacements did not have the "guid- ance" of the senior drivers, although almost one-half of them crossed the line and worked. One aspect of the General Counsel (and Charging Party's) case herein is that after the strikers made an un- conditional offer to return on June 22 , Respondent of- fered to reinstate them as casuals, whereas strikers who returned prior to June 22 returned as regular employees. Respondent defends that this action was mandated by its agreement with the Union . As stated, supra, the agree- ment that expired on March 31 provided for two meth- ods for employees to become regular employees; the first 548 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD was: "Regular employees are those employees listed on the regular employee list at the Company as of March 31, 1984. This list shall be initialed each March 31 by the Company and the Union." The other method of obtain- ing regular status is, basically, to complete a year of em- ployment with Respondent with minimal breaks in serv- ice. The new contract between the parties, dated June 22, states in this regard: "Within ten (10) days following execution of this agreement, each distributor shall com- pile and give to the Union an up-to-date list of their reg- ular employees. This list shall be initialed each March 31st by the Company and the Union." The alternate method, as stated supra, is also set forth. Michael Markowitz, the chief negotiator for the Union during this period, testified that at the final negotiating session on June 10, Heston gave him a draft agreement; this pro- vision was the same as it had been in the prior agreement except that the date (March 31) had been crossed out: He said, they wanted to make a change on that because had they given us a seniority list, as of the 31st, it would have been immediately incorrect in that we were now two and a half months on strike. There were indications that a number of people were-would take retirement. Some others had in- dicated they may not be coming back and there also might be some new employees. So, current seniority list as of March 31, would have been, by its issu- ance immediately, incorrect. Markowitz testified that there was a very brief discussion on this point and the Union agreed that the list of regu- lar employees should be prepared 10 days after the new agreement was executed ; there was no discussion that through this provision the Union was waiving any rights of the strikers in returning . Koenig testified that the agreement between the parties in negotiations on this provision was that regular status would be determined by those employees who were on the regular seniority list on the date the new agreement was executed-June 22, and since the 22 alleged discriminatees were not on this seniority list on June 22, they were not regular em- ployees under the new agreement . By letter dated August 17, Respondent sent the Union a list of its regu- lar employees as of June 22; it listed 14 employees, 10 of whom had been regular employees as of March 31. The other four began their employ with Respondent May 1984, October 1985, and May 1986. Finally, Respondent defends that this matter should be deferred to the arbitration procedure under the agree- ment under Collyer Insulated Wire, 192 NLRB 837 (1971), and United Technologies, 268 NLRB 557 ( 1983). In this regard on July 1 and 2 Scarpino and Miller filed three grievances alleging that Respondent paid them below their "seniority status after recall to work in viola- tion of Article 8.2." Respondent denied all three griev- ances on July 7. By letter dated July 9 to Koenig, the Union informed him that it was proceeding to the second step with these grievances . By letter dated July 17 to the American Arbitration Association (the AAA), the Union stated : "A dispute has arisen between the parties con- cerning the grievances above noted . Please process the same for arbitration ." In the following paragraph, how- ever, the letter states: "I would ask that you defer the issuance of panels for the present time as determinations are being awaited from the National Labor Relations Board with regard to the surrounding issues." By letter to the parties dated February 8, 1988, AAA stated that they had received a "communication " from counsel for the Union "advising that the above entitled matter has been withdrawn from arbitration ." The AAA requested written confirmation of this withdrawal from the parties. Counsel for the Union wrote the AAA stating that he never meant to withdraw the Scarpino and Miller mat- ters and by letter dated February 26, 1988, the AAA in- formed the parties that the "case remains open, but in abeyance pending further instructions by the parties." Apparently, it has proceeded no further . The agreement between the parties states that if a grievance has not been adjusted at step 1 or step 2, either Respondent or the Union may submit the grievance to arbitration. Re- spondent is willing to arbitrate the matters involved herein. Analysis On June 21 Tchorzewski informed Heston that the contract had been ratified, the strike was over and the employees would be reporting for work the following day; on the next morning, Scarpino appeared at the facil- ity with the other employees and told Koenig that they were there to return to work. Counsel for Respondent, in his brief, alleges that this offer to return was not a valid offer to return. First, alleges counsel for Respond- ent, "in effect, Scarpino said that unless all the strikers were reinstated together, none of them would return" (emphasis added). Starting with that unsupported premise, counsel for Respondent concluded that the offer to return was invalid because: (1) it included Giles, whose name had been withdrawn from the complaint, apparently, because he was fired by Respondent prior to the commencement of the strike; (2) because the offer to return was an "all or nothing" offer, if only one striker had been replaced it was not a valid offer for anyone; (3) the offer included George Delp, a warehouseman prior to the strike, and all the warehouse jobs were filled on June 22 (three by returning strikers and two by replace- ments); (4) "[t]here is no evidence that is was made on behalf of anyone other than Scarpino, Thompson and Greenwood," and (5) as Parnell was not present with Scarpino and the other strikers on June 22, this "prohib- its any finding that all strikers were present on June 22 when they allegedly made application to return." All these arguments are rejected as frivolous; on June 21 the Union informed Respondent's chief negotiator that the employees would be reporting for work the next day and he agreed that it was the right thing to do. The following morning Scarpino and the other employees ap- peared at the facility. Obviously, he could not remember precisely each and every individual who was with him; one or two (including Parnell) were not there. However, Scarpino's credible testimony establishes that he made an unconditional offer to return to work on behalf of the striking employees and I reject Respondent's unsupport- CROWN BEER DISTRIBUTORS ed contention that this was an "all or nothing" offer to return. I therefore find that Scarpino made an uncondi- tional offer to return to work, on behalf of the striking employees, to Koenig on June 22. Did Respondent violate Section 8 (a)(1) and (3), of the Act by failing to reinstate the 22 discriminatees named in the complaint? Employees engaged in an economic strike are entitled to reinstatement upon making an uncondi- tional offer to return to work. However, their employer may refuse to reinstate them if it has a "legitimate and substantial business justification" for doing so. NLRB v. Fleetwood Trailer Co., 389 U.S. 375, 379 (1967). The per- manent replacement of economic strikers in order to con- tinue business operations is a legitimate business justifica- tion for refusing to reinstate economic strikers following an unconditional offer to return NLRB v. MacKay Radio & Telegraph Co., 304 U.S. 333 (1938). However it is the Respondent's burden to establish that the replacements were hired on a permanent basis prior to the strikers' offer to return. Zapex Corp., 235 NLRB 1236 (1978); As- sociated Grocers, 253 NLRB 31 (1980); Medallion Kitch- ens, 275 NLRB 58 (1985); NLRB v. Cutting, Inc., 701 F.2d 659 (7th Cir. 1983). In order for replacement em- ployees to be determined to be permanent replacements of the strikers, there must be a mutual understanding and commitment on the part of both the employer and the employees of the permanent nature of their employment. Hansen Bros. Enterprises, 279 NLRB 741 (1986); and NLRB v. Murray Products, 584 F.2d 934 (9th Cir. 1978). Koenig, Longstreet, Etting, and Rapisardi each testi- fied that they told each of the replacements they hired that they were being hired as permanent replacements of the strikers; Koenig also testified that, during the strike, he met with replacement employees to assure them that they were permanent employees and they would not be let go when the strikers returned. The four replacement employees called as witnesses for General Counsel each testified that Longstreet and Etting never told them that they had a permanent position;" however a careful ex- amination of their testimony establishes that both sides considered the positions to be permanent . In this regard, Longstreet told Henry what the salary was for his first 6 months of employment and that subsequent to that, he would no longer be a casual employee; Etting told Laz- zaro that after his initial 6 months of employment he would receive a small wage increase , and after the second 6-month period he would become a regular em- ployee and union member. Although I credit the em- ployees over Longstreet and Etting and find that the magic word "permanent" was not used , both sides un- derstood it to be such. Lukowitz and Brandt were like- wise told of the casual status of employment for the first 6 months and of the extra benefits later on. In addition, at the time of their interviews, both had been employed at their present employer for an extended period (6 years and 4 years) where they were earning substantially more than Respondent was offering them , and assumed that they were being offered, permanent positions . Longstreet i i I credit the employees' testimony over the statements contained in the affidavits which were taken almost 9 months after the incidents and, apparently, at inconvenient times for the employees 549 was aware of this and both he and the applicants could have assumed that Lukowitz and Brandt would not have left these jobs for temporary positions. I therefore find that Respondent has satisfied its burden that the replace- ments it hired during the strike were hired on a perma- nent basis. It should be noted, however, that although I have made this finding , I am not totally comfortable with it. That the Respondent hired in excess of 20 more "permanent employees" than it usually employs, while employing only 3 summer employees , whereas in the past it has employed 20 summer employees , leads to the suspicion that it is calling what would otherwise be summer employees permanent employees. Additionally suspicious is that almost 30 of these "permanent replace- ments" left Respondent's employ (two-thirds quit) within a few months. However, suspicion is not enough to over- come the record testimony of Koenig, Longstreet, Etting, Lukowitz, Brandt, Henry, and Lazzaro and I therefore find that Respondent employed the strike re- placements as permanent employees.12 That does not end the inquiry, however . The General Counsel alleges that Respondent violated Section 8(a)(1) and (3) of the Act by offering to reinstate the strikers only as casual employees, i.e., to start at the bottom again. Section 2(3) of the Act defines an employee as in- cluding "any individual whose work has ceased as a con- sequence of, or in connection with , any current labor dis- pute . . . and who has not obtained any other regular or substantially equivalent employment ...." In Laidlaw Corp., 171 NLRB 1366, 1368 (1968), the Board addresses this issue: But its offer of employment as a new employee or as an employee with less than rights accorded by full reinstatement (such as denial of seniority) was wholly unrelated to any of its economic needs, could only penalize Massey for engaging in concert- ed activity, was inherently destructive of employee interest ... . In Mark Control Corp., 244 NLRB 931, 935 (1979), the Board stated: The offer of a substantially equivalent job made to a returning economic striker not only has refer- ence to the nature of the job offered, but "must also permit the employees to earn the same wages and benefits as before and to receive credit for accumulat- ed seniority. [Emphasis supplied.]" See also Harrison Ready Mix Concrete, 272 NLRB 331 (1984), and Bingham Willamette, 282 NLRB 1192 (1987). There is similar language in Glade Springs, 273 NLRB 944, 950 (1944): "The law is clear, to condition the rein- statement of economic strikers as new hires, with depri- vation of previously enjoyed benefits, is a straight dis- 12 Because of my finding, discussed supra, that Respondent's offer of reinstatement to the strikers as new employees was inadequate, I find it unnecessary to determine whether all, or some, of the strikers were per- manently replaced However, I would credit Scarpino and the other em- ployees over Koenig and find that on the morning of June 22 Koenig told the strikers that some of them had been replaced. 550 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD crimination in retaliation for protected concerted activi- ty, and in violation of Section 8(a)(3) of the Act." The instant situation is a perfect example of this. The 22 employees named as discriminatees in the complaint 'remained on strike until making an unconditional offer to return on the morning of June 22. They" were offered reinstatement only as casual employees as if they had never previously been employed by Respondent, with the resulting loss of many benefits they had previously enjoyed. On the other hand 17 strikers who crossed the picket line to return to work beginning April 6 returned with full seniority and status; this includes 3 employees who returned to work on June 20, 2 days before the strikers offered to return. Respondent offered no business justification for granting full reinstatement rights to em- ployees who returned on June 20 and none to those who returned June 22. Respondent' s sole defense in this regard appears to be that the Union bargained away the employees' regular status in negotiations at the June 10 negotiating session when the parties agreed to change paragraph 2.1 of the new agreement from March 31 to provide for it to be 10 days after the execution of the agreement . I agree with General Counsel's characteriza- tion of this argument in his brief as preposterous. Markowitz' testimony regarding this change was very reasonable (Heston never testified about it): it was then June 10; providing that Respondent would provide the list of March 31 did not make sense since that date had passed 2 months earlier. Since the parties did not know when the agreement would be reached and ratified, the best means of doing it was to provide that it would be provided to the Union 10 days after the execution of the agreement. That way any retirements or voluntary quits during the strike could be accounted for. It certainly did not constitute a waiver by the Union of the strikers' reg- ular employment status. I therefore find that by offering only casual reinstatement to the strikers,14 Respondent violated Section 8(a)(1) and (3) of the Act. A more serious defense is that these matters should be deferred to the arbitration status under Collyer Insulated Wire, 192 NLRB 837 (1971), and United Technologies Corp., 268 NLRB 557 (1984). As required by these cases, Respondent has demonstrated its willingness to arbitrate the three pending (albeit held in abeyance) grievances and the grievance procedure provided in the contract is broad enough to clearly encompass this (or practically any) dispute between Respondent and the Union or Re- spondent and the employees. I would initially agree with is General Counsel's brief refers to 17 employees being offered inad- equate reinstatement , rather than the 22 named in the complaint. These 17 were Scarpino and Miller, as well as 15 other strikers to whom letters offering reinstatement were received in evidence I must assume that all 22 were offered the same form of reinstatement If this is not the case, Respondent can litigate this as part of the backpay proceeding. i4 In its brief, counsel for Respondent argues that "there is no evidence that the strikers knew that the job offers were at casual status" because the letter offering reinstatement did not specify the casual status of the jobs However, Scarpino and Miller were reinstated in casual status and Miller left for that reason; it is not reasonable to assume that the other striking employees were aware of this Additionally, in evidence are nine letters from former striking employees to Respondent, explaining that they would not accept the jobs being offered to them because they would be in the casual status. Finally, Koenig told Scarpino and the other re- turning strikers on June 22 that they would be recalled as casuals. Respondent's argument that the instant matter is a typi- cal case that the Board would defer to under Collyer and United Technologies, supra; General Dynamics Corp., 271 NLRB 187 ( 1984); Denver Hilton Hotel, 272 NLRB 488 (1984). However, there is one infirmity to Respondent's argument: the three pending grievances involve only Scarpino and Miller; the Union's letter to Respondent dated July 9 refers to the grievances as "On behalf of Joseph Scarpino and David Miller." Yet, there are 20 other named employees in the complaint who suffered the same discrimination as Miller and Scarpino . The con- tract specifies time limits for filing grievances: 7 days after the occurrence for the first step , and 14 days after the first step has been concluded. Those time limitations have long passed for these 20 employees . At footnote 22 in United Technologies, supra, the Board stated : "The Re- spondent must, of course, waive any timeliness provi- sions of the grievance arbitration clauses of the collec- tive-bargaining agreement so that the Union's grievance may be processed . . . ." Respondent has never indicat- ed that it would waive the time limitations set forth in the contract; Clinchfield Coal Co., 275 NLRB 1384 (1985). To defer to arbitration herein would be proper for Scarpino and Miller, but would leave the others in the cold. For this reason I reject Respondent 's argument that the matter be deferred. 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. Respondent violated Section 8(a)(1) and (3) of the Act by failing and refusing to reinstate the following named employees to their former positions of employ- ment, i.e., as regular employees with full seniority: Frederick Baker Richard Bertoncin Kenneth Damurjian George Delp Mark Furiato Kirk Gardner William Greenwood Fredric T. Hand Mark Klotz Scott Laird Thomas McNamara David Miller Peter Novak James Parnell Joseph Scarpino Joseph Scarpino, Jr. Joel Scholtz Michael Softcheck Scott Thomson Robert Wademan James White James Yukka THE REMEDY The Respondent is ordered to cease and desist from committing the unfair labor practices found herein. More specifically, Respondent shall offer reinstatement to the 22 above-named employees as regular employees, credit them with seniority for prior service by restoring them to the place on the seniority list where they would have been but for Respondent's unlawful conduct against them, and make them whole for any loss of benefits caused by such unlawful conduct, offering them rein- statement in casual, rather than regular, employment CROWN BEER DISTRIBUTORS status. In addition, as Scarpino accepted employment with Respondent, initially, in casual status, and has main- tained his employment with Respondent (presumably as an extra and subsequently as a regular employee), and Miller accepted employment with Respondent for a brief time as a casual employee, they will additionally be com- 551 pensated by Respondent by being reimbursed for any loss of earnings of benefits they suffered by being em- ployed as casual, rather than regular employees during this period. [Recommended Order omitted from publication.]