Capitol-Husting Co.

CAPITOL-HUSTING COMPANY Capitol-Husting Company, Inc. and Teamsters, Local 344, Sales and Service Industry, affiliated with the International Brotherhood of Team- sters, Chauffeurs, Warehousemen and Helpers of America. Case 30-CA-5003 September 9, 1980 DECISION AND ORDER BY CHAIRMAN FANNING AND MEMBERS JENKINS AND PENELLO On January 28, 1980, Administrative Law Judge Karl H. Buschmann issued the attached Decision in this proceeding. Thereafter, Respondent filed ex- ceptions and a supporting brief. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the Na- tional Labor Relations Board has delegated its au- thority in this proceeding to a three-member panel. The Board has considered the record and the at- tached Decision in light of the exceptions and brief and has decided to affirm the rulings, findings,' and conclusions of the Administrative Law Judge 2 and to adopt his recommended Order, as modified herein.3 ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Re- lations Board adopts as its Order the recommended Order of the Administrative Law Judge, as modi- fied below, and hereby orders that the Respondent, Capitol-Husting Company, Inc., Milwaukee, Wis- consin, its officers, agents, successors, and assigns, shall take the action set forth in the said recom- mended Order, as so modified: Substitute the following for paragraph (a): "(a) Failing and refusing to bargain in good faith with Teamsters Local 344, Sales and Service In- dustry, affiliated with the International Brother- hood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, while the Union is lawfully I Respondent has excepted to certain credibility findings made by the Administrative Law Judge. It is the Board's established policy not to overrule an administrative law judge's resolutions with respect to credi- bility unless the clear preponderance of all of the relevant evidence con- vinces us that the resolutions are incorrect. Standard Dry Wall Produc. Inc, 91 NLRB 544 (1950), enfd 188 F.2d 362 (3d Cir. 1951) We have carefully examined the record and find no basis for reversing his findings. I In adopting the Administrative Law Judge's finding that Respondent violated Sec. 8(aX5) by reneging on its agreement to match the economic proposal of Metropolitan or Edison, we find it unnecessary to rely on Union Business Representative Maahs' description of statements by Robert Martin to Maahs during the Union's negotiations with Metropoli- tan. We note that the Administrative Law Judge stated at the hearing that such evidence "is just background information. It does not go to any evidence establishing a violation or non-violation " , We shall modify the Administrative Law Judge's recommended Order to conform to his findings. 252 NLRB No. 9 entitled to recognition as the bargaining representa- tive of Respondent's employees." DECISION KARL H. BUSCHMANN, Administrative Law Judge: This case arose upon the filing of a charge on December 7, 1978, by Teamsters Local 344 and a resulting com- plaint issued on March 16, 1979, alleging that the Re- spondent, Capitol-Husting Company, Inc., had violated Section 8(a)(5) and (1) of the National Labor Relations Act, as amended, herein called the Act. Respondent's answer, filed on March 26, 1979, admitted all jurisdic- tional allegations in the complaint and denied the com- mission of any unfair labor practices. A hearing was held on July 9, 1979, in Milwaukee, Wisconsin. Thereafter, Respondent and the General Counsel filed briefs on August 14 and 20, 1979, respec- tively. Upon the entire record in this case, including the hear- ing transcript, exhibits, and the briefs, and from my ob- servation of the witnesses, I make the following: FINDINGS OF FACT Respondent, Capitol-Husting Company, Inc., is a Wis- consin corporation engaged in the wholesale of liquor and related products. Located in Milwaukee, Wisconsin, Capitol-Husting is admittedly an employer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act. The hierarchy of supervision of Capitol- Husting included James Alevizos as president, Gregory Alevizos as vice president, and James Ballsieper as the comptroller. The Union, Teamsters, Local 344, Sales and Service Industry, affiliated with the International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, is, admittedly a labor organization within the meaning of Section 2(5) of the Act. Prior to 1974 the Union had negotiated agreements with Respondent, Capitol-Hustinq Company, in connec- tion with a multiemployer association consisting of three or four employers, including Edison Liquor and Metro- politan Liquor. Thereafter, the Union had negotiated contracts with these firms on an individual basis. The first individual contract between Respondent and the Union was negotiated in 1974 and expired in 1977. The second contract expired August 1, 1978. By letter, dated June 20, 1978, the Union requested Respondent to commence bargaining for a new contract. The parties first met on July 17, 1978, and had subse- quent meetings on September 6 and November 2 and 8, 1978. Representing the employees at the July 17 meeting were Carl H. Maahs the Union's business representative, Robert H. Biel, the Union's steward, and Philip Schwab, a member of the bargaining committee. The Employer was represented by James Alevizos, president, and his son, Gregory Alevizos, the vice president of Capitol- Husting. It is strongly disputed whether the parties had reached an agreement during their first meeting on July 17. The testimony of Maahs shows that an understanding was reached to the effect that if Respondent's competi- 43 DECISIONS OF NATIONAL LABOR RELATIONS BOARD tors, "Metropolitan or Edison give anything, he will give the same." Biel similarly testified and recalled that James Alevizos agreed to match the offer of Edison or Metro- politan. Both James and Greg Alevizos denied that any such an agreement was reached. During a subsequent meeting on September 6, no ref- erence was made by either party to this agreement, al- though James Ballsieper, Respondent's comptroller and principal spokesman at this meeting, did urge the Union to organize the nonunion competitors. Ballsieper simply offered to extend the existing contract for another year. That meeting lasted approximately 15 minutes and ended without any concrete results. On November 2, a meeting was called by a Federal mediator in an attempt to solve an apparent stalemate in contract negotiations involving the three liquor wholesal- ers, Edison, Metropolitan, and Respondent. All three companies and the Union were represented at that meet- ing. The possibility of a multiemployer agreement was raised, but this meeting also ended inconclusively. Finally, after negotiations on November 6 and 8 with Robert Martin, warehouse manager of Metropolitan, and Marvin Ford, its comptroller, the Union was able to ne- gotiate an agreement with Metropolitan which provided for a 70-cent-an-hour retroactive increase, a wage "re- opener" for the second year of the contract, and $4-per- week additional contribution for the pension plan in the second year. Although the employees had voted to ratify the proposal on November 8, it communicated accept- ance of the offer to Metropolitan on November 27. The record is uncontroverted that Respondent's commitment to the Union played an important role in the negotiations involving Metropolitan, as related by Maahs: Mr. Martin made the statement that it was very difficult for Metropolitan Liquor to be the forerun- ner for the liquor industry and carry the ball and put themself in left field by offering a substantial raise and finding themselves in a position that there has been no movement made at Edison Liquor or Capitol-Husting Liquor. My response to that, to Mr. Martin, was that I had a commitment from Capitol-Husting Liquor that if either Capitol-Hus- ting Liquor-or Metropolitan or Edison offered anything, that Capitol-Husting would follow and give the same. The terms of Metropolitan's contract with the Union also reflect the direct effect of Respondent's pledge to the Union as explained by Maahs: Mr. Robert Martin and Mr. Ford made it known that if it was a two-year contract, they were very apprehensive because of my statement before that I had an agreement from Mr. Alevizos at Capitol- Husting that he would follow suit on anything they gave, that that pertained to just one year ... Consequently, the Union came back with a coun- teroffer which included a wage reopener for the second year to alleviate the pressure on Metropoli- tan Liquor being the leader in the field and lessen- ing the possibility of a commitment for economics on the second year of the contract. On November 9, the Union met with Respondent to remind it of its previously stated commitment and "to impress upon Capitol-Husting what had transpired at Metropolitan Liquor." The meeting, attended by Maahs, Phil Schwab, a member of the negotiating committee, Robert Biel, the steward on behalf of the employees, and Donald Peters, attorney, with James Alevizos for Re- spondent, only lasted a few minutes after Respondent in- formed the Union that it would be agreeable to extend the existing contract by year but that it could not go any further. Subsequent telephone conversations on No- vember 13 and November 28 between the Union nd Re- spondent remained without success. With respect to paragraph 6(b) of the complaint, the parties stipulated the facts as follows: That since on or about November 14, 1978, at or about the date the strike commenced between em- ployees of Capitol-Husting and the Employer and continuing to date, the Employer, Capitol-Husting Company, without notice to Teamsters Local 344 changed its health insurance and pension plans for all permanent replacement employees nd returning strikers, and that such plans are approximately equivalent in benefits to the plans which previously existed under the collective bargaining agreement, under the expired-excuse me-under the expired collective bargaining agreement between the Em- ployer and the Union. Analysis Initially, the issue is whether the Union and the Re- spondent had reached an agreement during their meeting on July 17. It is the General Counsel's position that an agreement was reached during that meeting and that Re- spondent subsequently reneged on its obligation. Re- spondent, on the other hand, argues that the July 17 meetings did not result in any understanding and that, in any case, its subsequent proposals merely to extend the expiring contract would have revoked a prior offer. Considering the negotiations in their entirety and the record testimony, I find that an effective agreement re- sulted which Respondent repudiated. Maahs' testimony, albeit vague in part, was unequivocal that Alevizos had made a pledge to match any offer of its two competitors. It is also clear that the Union firmly relied on this com- mitment by Respondent. Maahs' testimony was fully sub- stantiated by Biel who had been employed by Respond- ent for many years but who was working elsewhere at the time of the hearing in this matter. Further corrobora- tion of the July 17 agreement is found in the minutes which had been taken by Maahs on the same day. Re- spondent's witnesses, James and Greg Alevizos, denied that they had expressed a promise to match what either Metropolitan or Edison would give, but they did admit to a meeting on that day which dealt with various pro- posals and their concern about being the first to enter into an agreement. James Alevizos also admitted that Maahs expected them at the November 9 meeting to match Metropolitan's agreement. Further, unrefuted on the record is Maahs' testimony that the success of reach- 44 CAPITOL-HUSTING COMPANY ing an agreement with Metropolitan was primarily based on his representation that Capitol-Husting would match that agreement. I therefore credit Maahs' testimony in this regard and I am convinced that James Alevizos ex- pressed to the Union his commitment to match the finan- cial package which Metropolitan or Edison would agree to. The fact that subsequent meetings were held during which Respondent merely agreed to extend their con- tract for I year did not revoke or interfere with this un- derstanding, considering the realities of the bargaining process. The Union simply attempted to obtain a con- tract from any of the three companies, and, since it had been unsuccessful for a period of time with Metropolitan or Edison, it continued its efforts with Respondent in an attempt to break the deadlock. Moreover, an offer to extend the expiring contract is, in the absence of a lawful impasse or other unusual circumstances, no offer at all; Respondent is already proscribed from making any uni- lateral changes in the existing relationship. Accordingly, the Union was justified in relying on Respondent's offer. And, when on November 8, it had obtained and ratified a contract with Metropolitan and so informed Respond- ent on November 9, a binding obligation arose requiring Respondent to execute or finalize the same agreement with the Union. Respondent's refusal to do so amounted to a failure to bargain in good faith in violation of Sec- tion 8(a)(5) and (1) of the Act. The Walls and Ceiling Contractors Association affiliated with the Builders Associ- ation of Eastern Ohio and Western Pennsylvania, Inc., 233 NLRB 954 (1977). Any different conclusion would not only be unfair to the Union and the employees, but also to Metropolitan which had relied on Respondent's ex- pressed commitment to the union negotiator. Turning now to the second issue, i.e., Respondent's unilateral change of its health insurance and pension plans, the General Counsel simply argues that those items constitute "wages and terms and conditions of em- ployment" within the meaning of Section 8(a)(5) as man- datory subjects of bargaining, and that its failure to notify and bargain with the Union constituted a violation of Section 8(aXS) and (1) of the Act. Respondent, citing case law, insists that its action in this regard was not a violation of the Act since its entire work force, following the strike on November 14, 1978, consisted of only three strikers who had returned to work and 11 permanent replacements. In recapitulating the facts relevant to this issue, the record shows that the last meeting between Respondent and the Union occurred on November 9, 1978, when Capitol-Husting refused to match Metropolitan's offer. On or about November 15, 1978, the employees went out on strike. Picketing continued until December 1978, and thereafter the strike was considered by the Union as only a technical one. At about the time the strike commenced on November 14 or 15, 1978, Respondent changed the health insurance and pension plans for all permanent re- placement employees and returning strikers.' Out of a I See the stipulation of the parties with regard to paragraph 6(b) of the complaint, supra. total of 14 of these employees, I were replacements and 3 were returning strikers. The General Counsel is generally correct in stating "that health insurance and pension plans are wages and terms and conditions of employment within the meaning of' the Act and "are mandatory subjects of bargaining." A failure to notify and bargain with the Union concern- ing such changes violates Section 8(a)(5) and (1) of the Act unless there were a lawful impasse. N.L.R.B. v. Benne Katz, etc., d/b/a Williamsburg Steel Products Co., 369 U.S. 736 (1962). Here, the parties were not at an im- passe in their negotiations but, as found above, they had reached agreement. When the Respondent reneged on its agreement on November 9, 1978, and the employees struck on November 15, it would be reasonable to assume that the strike was an unfair labor practice strike and not an economic strike. However, the record is not conclusive on this point and the complaint does not con- tain such an allegation. In any case, under the factual circumstances of this case, including Respondent's stipulation that it initiated the changes in health insurance and pension plans at or about the time of the commencement of the strike, it is clear that the Union was still the sole bargaining agent for all of Respondent's employees. At the time of the commencement of the strike, Respondent could not have known who among its employees were returning strikers or replacements. Respondent was under a duty to notify and bargain with the Union concerning these changes at the time the strike commenced; for the duty to bargain does not terminate with the calling or the exercise of a strike. N.L.R.B. v. J. H. Rutter-Rex Manufacturing Com- pany, Inc., 245 F.2d 594, 596 (5th Cir. 1957). Respond- ent's failure to do so violated Section 8(a)(5) and (1) of the Act. Whether Respondent was ultimately justified in chang- ing its health insurance and pension plans for replace- ment employees or returning strikers appears to be a sep- arate question under the stipulated language. Indeed, case law indicates that, even in the absence of an im- passe, an employer may lawfully change contract rates or fringe benefits for the strike replacements after the termination of a contract. Pacific Gamble Robinson Co. v. N.L.R.B., 186 F.2d 106, 109 (6th Cir. 1950); Imperial Outdoor Advertising, 192 NLRB 1248, 1249 (1971); Leveld Wholesale, Inc., 218 NLRB 1344, 1350 (1975). This is so because the Union is not expected to represent the inter- est of the replacements equally with the interest of the strikers, and because an employer should not be effec- tively prohibited from hiring replacements. I conclude, therefore, that Respondent did not violate Section 8(a)(5) and (I) of the Act when it hired replacement employees and offered them health insurance and pension plans dif- ferent from those provided for in the expired contract. However, I disagree with Respondent insofar as he argues that returning strikers are to be accorded the same status as permanent replacements. A unilateral change of their fringe benefits constituted a violation of Section 8(a)(5) and (1) of the Act. 45 DECISIONS OF NATIONAL LABOR RELATIONS BOARD CONCLUSIONS OF LAW 1. Respondent Capitol-Husting Company, Inc., is an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act. 2. Teamsters, Local 344, Sales and Service Industry, affiliated with the International Brotherhood of Team- sters, Chauffeurs, Warehousemen and Helpers of Amer- ica, is a labor organization within the meaning of Section 2(5) of the Act. 3. By agreeing on July 17, 1978, to match any propos- al which the Union could obtain from Metropolitan Liquor Company or another liquor company and, when confronted by the Union with such a proposal on No- vember 9, 1978, by reneging on its agreement, Respond- ent refused to bargain in good faith, in violation of Sec- tion 8(a)(5) and (1) of the Act. 4. By unilaterally changing the health insurance plans and pension plans for its employees at the commence- ment of their strike, Respondent violated Section 8(a)(5) and (1) of the Act. 5. The aforesaid practices are unfair labor practices af- fecting commerce within the meaning of Section 2(6) and (7) of the Act. THE REMEDY Having found that the Respondent has engaged in cer- tain unfair labor practices in violation of Section 8(a)(1) and (5) of the Act, I shall recommend that the Respond- ent be ordered to cease and desist therefrom and from in any like or related manner infringing upon its employees' Section 7 rights, and to take certain affirmative action designed to effectuate the policies of the Act. I found that the Respondent unlawfully refused to bar- gain with the Union, which had been the certified and contractual representative of its employees for a number of years. I shall therefore recommend that it be ordered to bargain collectively with the Union, upon request, concerning rates of pay, wages, hours, and other terms and conditions of employment, and embody in a signed agreement any understanding reached. Realizing that Respondent's pledge to the Union to match the offer of Metropolitan or Edison Liquor was generally limited to the economic portion of the con- tract, and having found that this amounted to "seventy cent an hour increase across the board the first year of the contract, a wage reopener on the second year of the contract and four dollars additional on the pension the second year of the contract," I recommend that Capitol- Husting be ordered to furnish the Union with a complete draft contract containing the above-stated wage proposal and Respondent's proposal on all other unresolved items. Having further found that Respondent violated Sec- tion 8(aX5) and (1) by its unilateral change in health in- surance and pension plans, I recommend that Respondent be ordered to bargain collectively and in good faith with the Union concerning these items for all its unit employ- ees, as defined in the expired 1977-78 contract. Finally, Respondent will be ordered to post the at- tached notice. Upon the foregoing findings of fact and conclusions of law, and the entire record, and pursuant to Section 10(c) of the Act, I hereby issue the following recommended: ORDER 2 The Respondent, Capitol-Husting Company, Inc., Mil- waukee, Wisconsin, its officers, agents, successors, and assigns, shall: 1. Cease and desist from: (a) Withdrawing recognition from or failing and refus- ing to bargain in good faith with Teamsters, Local 344, Sales and Service Industry, affiliated with the Interna- tional Brotherhood of Teamsters, Chauffeurs, Warehou- semen and Helpers of America, while the Union is law- fully entitled to recognition as the bargaining representa- tive of Respondent's employees. (b) Refusing, upon request of the aforesaid Union, to furnish the Union with a complete proposed collective- bargaining agreement containing both the agreements reached by the parties, including the wage proposal of July 17 and November 9, 1978, and Respondent's pro- posal on all unresolved issues. (c) Unilaterally and without notice to the Union changing established terms and conditions of employ- ment. (d) In any like or related manner interfering with, re- straining, or coercing employees in the exercise of the right to self-organization, to form labor organizations, to join or assist the above-named or any other labor organi- zation, to bargain collectively through representatives of their own choosing, to engage in concerted activities for the purpose of collective bargaining or other mutual aid or protection, and to refrain from any or all such activi- ties. 2. Take the following affirmative action which is nec- essary to effectuate the policies of the Act: (a) Upon request, furnish the Union with a complete proposed collective-bargaining agreement pursuant to the understanding reached with the Union on the wage pro- posal and, if the Union agrees to such proposed contract, sign the contract. (b) If no such request is made, then, upon request, bar- gain with the Union as the exclusive representative of the employees in the established unit and, if an under- standing is reached, embody such understanding in a signed contract. (c) Bargain collectively and in good faith with the Union concerning the health insurance and pension plans of its unit employees and changing existing plans only if so authorized by the Union, and, if an agreement is reached, embody such understanding in a signed con- tract. (d) Post at its place of business in Milwaukee, Wiscon- sin, copies of the attached notice marked "Appendix."3 2 In the event no exceptions are filed as provided by Sec. 102.46 of the Rules and Regulations of the National Labor Relations Board, the find- ings, conclusions, and recommended Order herein shall, as provided in Sec. 102.48 of the Rules and Regulations, be adopted by the Board and become its findings, conclusions, and Order, and all objections thereto shall be deemed waived for all purposes. 3 In the event that this Order is enforced by a Judgment of a United States Court of Appeals, the words in the notice reading "Posted by Continued 46 CAPITOL-HUSTING COMPANY 47 Copies of said notice, on forms provided by the Regional spicuous places, including all places where notice to em- Director for Region 30, after being duly signed by the ployees are customarily posted. Reasonable steps shall be Respondent's representative, shall be posted by the Re- taken by the Respondent to insure that said notices are spondent immediately upon receipt thereof, and be main- not altered, defaced, or covered by any other material. tained by it for 6 consecutive days thereafter, in con- (e) Notify the Regional Director for Region 30, in writing, within 20 days from the date of this Order, what Order of the National Labor Relations Board" shall read "Posted Pursu- steps the Respondent has taken to comply herewith. ant to a Judgment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board."