Construction Erectors, Inc.

CONSTRUCTION ERECTORS, INC. Construction Erectors, Inc. and International Asso- ciation of Bridge, Structural and Ornamental Iron Workers, Local 25, AFL-CIO. Case 37- CA-1528 September 26, 1980 DECISION AND ORDER BY CHAIRMAN FANNING AND MEMBERS JENKINS AND PENELLO On March 18, 1980, Administrative Law Judge Roger B. Holmes issued the attached Decision in this proceeding. Thereafter, Respondent filed ex- ceptions and a supporting brief, and the General Counsel filed cross-exceptions, a supporting brief, and a brief in support of the Administrative Law Judge's Decision. 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 briefs and has decided to affirm the rulings, find- ings,' and conclusions 2 of the Administrative Law Judge and to adopt his recommended Order. 3 I We hereby find merit in the General Counsel's unopposed limited cross-exceptions to the Administrative Law Judge's inadvertent reference to a construction project performed by Kanehamalei Incorporated Con- struction Company as a project covered by the addendum agreement signed by Respondent and the Union in October 1975. Neither the com- pany nor the project referred to were covered by that addendum agree- ment. ' We agree with the Administrative Law Judge's conclusion that the Union had achieved majority status in a stable unit of Respondent's em- ployees on December 10, 1977, when Respondent and the Union execut- ed a multisite collective-bargaining agreement which Respondent unlaw- fully repudiated on February 29, 1979. A review of payroll charts and data introduced as exhibits by the parties indicates that, on the contract execution date, Respondent had established a permanent complement of at leat six unit ironworkers which it maintained until the outbreak of a strike in late November 1978. Although none of the exhibits clearly iden- tifies which employees worked on each of the projects where Respond- ent utilized ironworkers or the duration of those projects, the Union's business manager testified credibly and without contradiction that iron- workers referred by the Union switched from one of Respondent's pro- jects to another. At all relevant times priorto Respondent's repudiation of the multisite contract, it is admitted that the Union dispatched through its hiring hall at least a majority of Respondent's ironworkers and that union-security provisions applied to all unit employees. On December 10, 1977, 10 of Respondent's 13 ironworkers were union members. Under all the aforementioned circumstances, we find that there is a sufficient basis for characterizing Respondent's ironworkers on that date as a stable work force distinguishable from those for which a construction industry em- ployer hires on a project-by-project schedule with no personnel car- ryover. s To avoid any possible misinterpretation, we hereby clarify the rea- sons for our adoption of the Administrative Law Judge's recommenda- tion that there be no provision for interest on Respondent's obligaton to fringe benefit trusts. Because the provisions of employee benefit fund agreements are variable and complex, the Board does not provide at the adjudicatory stage of a proceeding for the addition of interest at a fixed rate on unlawfully withheld fund payments. We leave to the compliance stage the question whether Respondent must pay any additional amounts into the benefit funds in order to satisfy our "make-whole" remedy. These additional amounts may be determined, depending upon the cir- 252 NLRB No. 45 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 and hereby orders that the Respondent, Construction Erectors, Inc., Honolulu, Hawaii, its officers, agents, successors, and assigns, shall take the action set forth in the said recommended Order. cumstances of each case, by reference to provisions in the documents governing the funds at issue and, where there are no governing provi- sions, to evidence of any loss directly attributable to the unlawful with- holding action, which might include the loss of return on investment of the portion of funds withheld, additional administrative costs, etc., but not collateral losses. Merryweather Optical Ca, 240 NLRB 1213 (1979). DECISION ROGER B. HOLMES, Administrative Law Judge: The unfair labor practice charge in this proceeding was filed on March 13, 1979, by International Association of Bridge, Structural and Ornamental Iron Workers, Local 625, AFL-CIO, herein called the Union. (See G.C. Exh. l(a).) The Regional Director of Region 20 of the National Labor Relations Board, herein called the Board, who was acting on behalf of the General Counsel of the Board, issued on June 13, 1979, a complaint and notice of hearing against Construction Erectors, Inc., herein called the Respondent. (See G.C. Exh. I(c).) A typo- graphical error appears in the General Counsel's com- plaint caption and in the introductory paragraph of the complaint concerning the number of the local union. The testimony and documentary evidence introduced at the hearing established that the local number was 625 rather than 624 as shown in the complaint. The hearing was held before me on October 2, 1979, at Honolulu, Hawaii. The time for filing briefs was ex- tended to December 10, 1979. Persuasively argued briefs have been recieved from the counsel for the General Counsel and the attorney for the Respondent. The General Counsel's complaint alleges that the Re- spondent has engaged in unfair labor practices in viola- tion of Section 8(aX1) and (5) of the National Labor Re- lations Act, as amended, herein called the Act. Specifi- cally, the General Counsel alleges in paragraph 9 of his complaint that since February 28, 1979, the Respondent has refused to abide by the terms and conditions of a col- lective-bargaining agreement with the Union to which, so the General Counsel contends, the Respondent was bound. In summary, the General Counsel takes the posi- tion that the Respondent's unilateral termination of the contract with the Union constitutes a violation of Sec- tion 8(a)(X1) and (5) of the Act. (See p. 4 of the brief filed by the counsel for the General Counsel.) The Respondent filed an answer to the General Coun- sel's complaint and denied the commission of the alleged unfair labor practices. (See G.C. Exh. I(e).) In summary, the Respondent contends that the contract with the Union was executed in accordance with the provisions of 319 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Section 8(f) of the Act, and, under the circumstances of this case, such a prehire contract was neither binding nor enforceable. Even assuming, arguendo, that the prehire contract was enforceable, the Respondent urges that the contract was terminated according to its own terms, and that the Respondent has no continuing obligation to bar- gain with the Union because the Union does not repre- sent a majority of the Respondent's employees in an ap- propriate unit. (See p. 2 of the brief filed by the attorney for the Respondent.) FINDINGS OF FACT I. THE EMPLOYER The Respondent is a Hawaii corporation with a place of business located in Honolulu, Hawaii, where the Re- spondent is engaged in the construction business. During the calendar year preceding the issuance of the General Counsel's complaint, the Respondent purchased and re- ceived goods and supplies valued in excess of $50,000 di- rectly from suppliers located outside the State of Hawaii. Upon the foregoing facts, which were admitted to be true in the pleadings, and upon the entire record herein, I find that the Respondent has been, at all times material herein, an employer engaged in commerce and in a busi- ness affecting commerce within the meaning of Section 2(6) and (7) of the Act. II. THE UNION It was admitted in the pleadings that the Union has been, at all times material herein, a labor organization within the meaning of Section 2(5) of the Act. Based on the pleadings, and the entire record in this case, I find that fact to be so. III. THE WITNESSES In alphabetical order by their last names, the following two persons appeared as witnesses at the hearing in this proceeding: Duane Kerr is the president of the Respond- ent, and Paul H. Morikawa is the financial secretary-trea- surer and the business manager of the Union. IV. CREDIBILITY RESOLUTIONS While the parties view the facts from different per- spectives, and while they urge that different legal con- clusions be drawn from the facts, as they see them, there are really no significant conflicts to resolve in the testi- mony given by the two witnesses. I recognize that both Kerr and Morikawa hold posi- tions of importance in their respective organizations, and, therefore, that each one has an interest in the outcome of the litigation. In evaluating the accuracy and the reliabil- ity of their testimony, I have weighed their answers to certain questions in light of their individual interests. I have credited the testimony of both Kerr and Mor- ikawa. I will rely on their accounts in setting forth the findings of fact which are material herein. In addition, I will also rely on the documentary evidence which was introduced at the hearing. A. The First Contract Between the Respondent and the Union In 1974, Kerr had a brief conversation with Herman "Shorty" Martin on a jobsite on the Island of Kauai, Hawaii. Martin was the financial secretary-treasurer and the business manager of the Union at the time. Martin held those positions until about 3 months prior to the hearing in this case, which was held on October 2, 1979. At the time of the 1974 conversation with Martin, Kerr was the vice president of Kanehamalei, Incorporated. That com- pany was building a warehouse for the gas company on the Island of Kauai. Martin visited the jobsite with an unidentified person. Kerr described Martin as being "very belligerent, which didn't bother me." According to Kerr, Martin "started out bragging about how many people he had punched out in the last two months. Secondly, he told me that if I didn't go through the building trades in Kauai and get the Kauai iron workers on my job, that he would have a picket line on it." On August 6, 1974, Kerr did sign an agreement with Martin to cover the Kauai project. Kerr stated at the hearing that he did so, "Not out of fear, but in the inter- est of expediting the project." The Respondent was incorporated in February 1974. At that time Kerr obtained his license. He also purchased half of Kanehamalei, Incorporated. However, the Re- spondent did not actually commence operations until late 1975 when Kerr began his business operations with small contracts, which Kerr himself could perform. In October 1976 Kerr approached Morikawa with regard to signing an agreement with the Union. Kerr ad- vised Morikawa of his commencing of a business which would employ ironworkers. Kerr made an appointment to meet with Morikawa on October 5, 1976. Kerr stated that Morikawa did not threaten him in any way, and Kerr explained at the hearing that the reason for his action was "because the contractor who I was signing my subcontract with stipulated that I had to use 100 percent union help." At the time that Kerr signed the first contract between the Respondent and the Union on October 5, 1976, the Respondent did not have any permanent employees who were performing iron work. Introduced into evidence as General Counsel's Exhibit 2 was a copy of that agreement, which was entitled a "Signatory Addendum." The document is dated October 5, 1976. That one-page document makes reference to the contract between the Union and the Steel Fabricators and Erectors of Hawaii, and the document acknowledges acceptance of the terms and conditions of that contract by the Respondent and the Union. A copy of the collec- tive-bargaining agreement between the Union and the Steel Fabricators and Erectors of Hawaii was introduced into evidence as General Counsel's Exhibit 3. According to Morikawa, the Respondent did honor the terms and conditions of that agreement. Neither the terms of General Counsel's Exhibit 2, nor the terms of General Counsel's Exhibit 3, limit the appli- cability of the contract to the Kauai Gas Company pro- ject, nor to any other specific individual project. Instead, 320 CONSTRUCTION ERECTORS, INC. the coverage provisions of article 2 of General Counsel's Exhibit 3 are as follows: Article 2-Coverage A. The Union's chartered geographical area of jurisdiction is the State of Hawaii and those islands and areas in the Forward Pacific Ocean area which are under the jurisdiction of the U.S. government. B. This Agreement applies to and covers only those employees of the Employer employed as iron- workers, ironworker apprentices and machine oper- ators and shall exclude office and clerical employ- ees, watchmen and/or guards, professional employ- ees and supervisors and all other employees not em- ployed on work coming within the scope of this Agreement. Article 3 of General Counsel's Exhibit 3 further de- fines the type of work covered by the contract. Union- security provisions are set forth in article 4 and hiring hall referral provisions are set forth in article 5 of Gener- al Counsel's Exhibit 3. The duration of the contract was to run through August 14, 1978, and it would renew thereafter unless either party gave written notice to modify, amend, or terminate the agreement. However, either party was entitled to reopen the contract on August 15, 1977, with regard to the wage rates and the employer contributions to employee benefit funds. B. The Second Contract Between the Respondent and the Union On August 15, 1977, the Union began an economic strike against the employers who were parties to General Counsel's Exhibit 3 through their membership in, or au- thorization to, the Steel Fabricators and Erectors of Hawaii and the Reinforcing Steel Companies of Hawaii. That economic strike lasted until December 10, 1977. On August 24, 1977, the Respondent and the Union executed a second contract which was entitled "Interim Agreement." A copy of that agreement was introduced into evidence as General Counsel's Exhibit 4. Like Gen- eral Counsel's Exhibit 2, which was the first contract be- tween the Respondent and the Union, the second con- tract was signed by both Kerr and Martin. Kerr stated that the Respondent did not have any iron- workers on its payroll during the first 3 weeks of August, but after the execution of General Counsel's Ex- hibit 4, the Respondent did employ ironworkers. Kerr stated that the Respondent could not have obtained its employees from the Union without executing the interim agreement. Among other things, the one-page interim agreement provided that the Respondent would be bound to the agreement executed by the Union with the Employer Bargaining Association referred to above, and it pro- vided that any wage and other monetary increases set forth in that agreement would be effective as of August 15, 1977. C. The Third Contract Between the Respondent and the Union On November 18, 1977, the Respondent entered into its third contract with the Union. A copy of that one- page document was introduced into evidence as General Counsel's Exhibit 7. Like the two previous contracts, it was signed by Kerr and Martin. The document is enti- tled "Signatory Addendum (Applies to Specific Con- struction Project Only)." At the hearing Morikawa explained that the Respond- ent had a job in the city of Kaneohe on the Island of Oahu and another project on the Island of Maui, both of which required reinforcing steel ironworkers. Because the Respondent needed reinforcing steel ironworkers, as distinguished from structural ironworkers whom it usual- ly employed at that time, Morikawa asked Kerr to sign the signatory addendum for the specific projects in- volved. However, the projects are not described specifi- cally in General Counsel's Exhibit 7. D. The Fourth Contract Between the Respondent and the Union Introduced into evidence as General Counsel's Exhibit 5 was a copy of the fourth contract between the Re- spondent and the Union. It is entitled "Signatory Adden- dum (Steel Fabricators and Erectors)." The one-page document is dated December 10, 1977, and it bears the signatures of Kerr and Martin. General Counsel's Exhibit 5 makes reference to the contract between the Union and the Steel Fabricators and Erectors of Hawaii, and the contract acknowledges the acceptance of the terms and conditions of that agree- ment by the Respondent and the Union. A copy of that agreement was introduced into evidence as General Counsel's Exhibit 6. General Counsel's Exhibit 6 has effective dates of August 15, 1977, to and including, September 1, 1980. According to article 1 of General Counsel's Exhibit 6, the contract may be renewed from year to year thereaf- ter unless either party gives written notice to the other of its desire to modify, amend, or terminate the agree- ment. The coverage of the collective-bargaining agreement, which was introduced into evidence as General Coun- sel's Exhibit 6 is set forth in article 2 of that document. It provides: Article 2-Coverage A. The Union's chartered geographical area of jurisdiction is the State of Hawaii and those islands and areas in the Forward Pacific Ocean areas which are under the jurisdiction of the U.S. government. B. This Agreement applies to and covers only those employees of the Employer employed as iron- workers, ironworker apprentices and machine oper- ators and shall exclude office and clerical employ- ees, watchmen and/or guards, professional employ- ees and supervisors and all other employees not em- ployed on work coming within the scope of this Agreement. 321 DECISIONS OF NATIONAL LABOR RELATIONS BOARD The jurisdiction of the contract is further spelled out in article 3 of the agreement. Union-security provisions are set forth in article 4 of the contract, and hiring hall referral provisions are contained in article 5 of General Counsel's Exhibit 6. The contract does not contain any provision which limits the contract's applicability to any specific construction project. Morikawa said that eight contractors make up the Steel Fabricators and Erectors of Hawaii, and he esti- mated that from 50 to 75 other employers have signed a "Signatory Addendum" to General Counsel's Exhibit 6. E. The Respondent's Employees as of December 10, 1977 As indicated in the previous section herein, the Re- spondent and the Union entered into their fourth con- tract on December 10, 1977. The bargaining unit in- volved in that agreement has also been described in sec- tion 8 herein. One of the questions presented in this case is whether the Union, in fact, represented a majority of the Re- spondent's employees in the unit described in General Counsel's Exhibit 6, when the Respondent entered into that contract with the Union. In order to determine whether that question should be answered in the affirma- tive or in the negative, it has been necessary to examine the substantial amount of documentary evidence intro- duced at the hearing, as well as to consider the wit- nesses, testimony regarding those matters. The docu- ments cover a much broader period of time, both before and after December 10, 1977. Some of the documentary evidence also encompasses employees beyond the scope of the unit defined in General Counsel's Exhibit 6. While all of the documents have been considered, the initial inquiry in this section has been focused on the status of the Respondent's employees in the unit de- scribed in General Counsel's Exhibit 6 as of December 10, 1977. It was admitted by Kerr that for the period of time from October 1976 to February 28, 1979, the persons whose names are listed on General Counsel's Exhibit 11 constituted a majority of the employees utilized by the Respondent to perform the ironwork defined in General Counsel's Exhibit 6. The timespan covered by that ad- mission by the Respondent includes, of course, Decem- ber 10, 1977. General Counsel's Exhibit 11 is a compilation of cer- tain information taken from the Union's records. The document shows the names of all persons who were dis- patched by the Union from its hiring hall to work for the Respondent and the date of the first day of the person's employment with the Respondent. Morikawa explained at the hearing that persons, who were referred to work for the Respondent by the Union, were dispatched to one project, but those persons also worked on other pro- jects for the Respondent. The period of time covered by Generel Counsel's Exhibit 11 is from October 5, 1976, through January 15, 1979. General Counsel's Exhibit 11 shows a total of 92 dispatches by the Union of persons to work for the Respondent. A total of 10 such persons out of the 92 dispatches were identified as being persons who were not members of Local 625 at the time that the Union referred them to work for the Respondent. Those 10 nonmembers of the Local Union were all dispatched by the Union after De- cember 10, 1977. In fact, the first such nonmember was dispatched on January 10, 1978, and the last such non- member was dispatched by the Union on January 15, 1979. The parties stipulated that the following individuals were not members of Local 628 at the time they were referred by the Union: Greg Schubert, 1-10-78; Donald Ford, 1-11-78; Loren Horlock, 1-19-78; Patrick Jen- nings, 1-19-78; Dallas Hemo, 1-24-78; Lincoln Naiwi, 1-15-79. In addition, Morikawa identified four other per- sons who similarly were not members of the Union at the time of their referral. They are: Wayne Rayman, 6- 2-78; Anthony Akau, 6-2-78; Russel Kim, 6-3-78; Melvin Kaehu, 6-2-78. In addition to the foregoing, Kerr said that both he and his son performed ironwork for the Respondent during 1976. His son, Michael Kerr, is a first lieutenant in the United States Army. At the time of the hearing, Lieutenant Kerr was stationed in Germany. However, when he was on leave from military service, he had as- sisted his father. Kerr also identified two other persons who performed ironwork for the Respondent during 1977. Those persons were his brother, Dale Kerr, who is an operating engi- neer, but who did some ironwork, and Charles Coombs, who is a superintendent of the Respondent. Kerr also identified four persons who performed iron- work during 1978 for the Respondent and who had not been referred by the Union. They are: Kerr's stepson, Jerry Miller; Charles Coombs, the superintendent; Ra- phael Kim; and Brad Proctor. By examining the information contained in Respond- ent's Exhibit 3, General Counsel's Exhibit I 11, and Gener- al Counsel's Exhibit 15, a determination can be made as to which persons were employed by the Respondent on December 10, 1977, in the unit described in General Counsel's Exhibit 6. First of all, Respondent's Exhibit 3 discloses that the total number of employees who were employed by the Respondent at any time during the year 1977 was 25. Of course, Duane Kerr is excluded from the computations to be made herein, although his name does appear on Re- spondent's Exhibit 3, because Kerr is the president of the Respondent. Of those 25 persons who worked at various times for the Respondent in the year 1977, 13 of those persons were employed by the Respondent in December 1977. Of those 13 employees who worked at times during December 1977 for the Respondent, 10 of those persons had been dispatched by the Union to work for the Respondent. Those individuals are identified on Re- spondent's Exhibit 3 by the asterisk which is placed by their names. None of those 10 persons are among those who have been previously identified herein as non- members of the Union. General Counsel's Exhibit 15 names the 10 persons employed by Respondent on December 10, 1977, and who had been referred by the Union to work for Re- 322 CONSTRUCTION ERECTORS, INC. spondent; the periods worked in 1977; and the total hours in each period. With regard to the three employees of the Respondent who worked during the month of December 1977, but who were not referred by the Union to work for the Re- spondent, Respondent's Exhibit 3 revealed that Dale Kerr had worked all 12 months of 1977 for the Respond- ent. Another employee, G. Jaggs, had worked in all but 2 months during 1977 for the Respondent. The 2 months in which Jaggs did not work were March and June 1977. The third employee, P. Stobaugh, worked for the Re- spondent only during the month of December 1977. After considering the foregoing, I find that on Decem- ber 10, 1977, that 10 out of 13 employees of the Re- spondent were members of the Union. As stated previ- ously, none of those 10 persons were among those indi- viduals who were identified as nonmembers of the Union. Accordingly, I further find that the Union repre- sented a majority of the Respondent's employees at the time that the Respondent and the Union entered into their fourth contract. As indicated previously, there is a substantial amount of documentary evidence in the record which goes beyond the matters discussed above. For example, Re- spondent's Exhibit 4 and Respondent's Exhibit 5 provide information similar to that contained in Respondent's Ex- hibit 3, but those exhibits cover the years 1978 and 1979, respectively. Similarly, General Counsel's Exhibit 14, General Counsel's Exhibit 16, and General Counsel's Ex- hibit 17 contain information similar to that which is de- scribed above regarding General Counsel's Exhibit 15, but those documents cover the years 1976, 1978, and 1979. However, in view of the findings above, it is un- necessary to set forth the facts revealed by those exhibits or the remaining documents which were introduced. F. Changes in the Respondent's Business Operations In December 1977 the Respondent accepted its first general contract, which was in the amount of $105,000. Previously, the Respondent had basically been a steel subcontractor. The type of work performed was primar- ily the subcontracting of steelwork, metal buildings, some stairways, and other unrelated work. As a steel subcontractor, the Respondent furnished labor and equip- ment, where as a general contractor, the Respondent also furnished materials, which increased the doller volume of the amount of the contract. As a general contractor, Kerr said that his employees lay the foundation, put up the steel, and put on the roof. Kerr said that he subcontracts the electrical work and the plumbing work. Sometimes he also subcontracts part of the excavation work. Kerr stated that instead of iron- workers, he hired "people that are skilled in all different facets of general building work." He said that his em- ployees worked under the supervision of two supervisors who are not craft supervisors, and that his employees worked together on different projects with the same working conditions and benefits. Kerr described a pro- ject where he had successfully completed the construc- tion of a 21,300 square foot warehouse in just 6 weeks. He said that he did so without the use of union iron- workers. Except for the concrete portion of the project, where ironworkers were not needed, the work on the project took place after February 28, 1979, when the Re- spondent had withdrawn recognition from the Union. Introduced into evidence as Respondent's Exhibit 2 was a document showing the percentage of revenues which were derived by the Respondent as a general con- tractor; as a steel erection subcontractor, and as a sub- contractor for other work. The document discloses that in 1977, the Respondent received 55.7 percent of its rev- enues as a general contractor. During that same year, the Respondent received 27.3 percent of its revenues as a steel erection subcontractor and 17 percent of its rev- enues as a subcontractor for other work. Kerr testified that the majority of the work performed by the Re- spondent in 1977 would have been work as a steel erec- tion subcontractor, but for the $105,000 general contract which the Respondent received in December 1977. For the year 1978, the Respondent received 55.2 per- cent of its revenues as a general contractor; 37 percent of its revenues as a steel erection subcontractor, and 7.8 percent of its revenues as a subcontractor for other work. In the year 1979, the Respondent received 94.8 percent of its revenues as a general contractor; 3.2 percent of its revenues as a steel erection subcontractor, and 2 percent of its revenues as a subcontractor for other work. G. The Strike by the Respondent's Employees Six ironworkers were employed by the Respondent in November 1978, and all of those six employees went out on strike. The Union's strike against the Respondent lasted until January 15, 1979. Morikawa stated that the reason for the strike was that the Respondent was delinquent in its payments to the various trust funds. H. The Respondent's Letter Dated February 28. 1979 A copy of a letter dated February 28, 1979, from the Respondent to the Union was introduced into evidence as General Counsel's Exhibit 8. In pertinent part, it states: The Agreement to which we are a Signatory states as follows: It is the objective of the Parties that the obligation of the Employer for successful prosecution of its business and fulfillment of its responsibilities to the employees covered by this Agreement be carried on without interference arising from differences be- tween the Parties. It is, therefore, the intent of the Parties hereto to set forth herein their Agreement with respect to rates of pay, hours of work, and conditions of employ- ment to be observed by the employer, the union, and the employee covered by this Agreement; to provide procedures for equitable adjustment of grievances; to prevent lockouts, interruptions of work, work stoppages, strikes, or other interfer- ences with the work of the employer during the life of this Agreement; to promote harmonious relations 323 DECISIONS OF NATIONAL LABOR RELATIONS BOARD between the employer, its employees, and the union; and to contribute toward the stabilizing and strengthening of the Construction Industry. Now, whereas, Local Union No. 625 has showed interference arising from differences between the Parties to result in no shows; interruptions of work; work stoppages; harassment of employees and ha- rassment of employers clients. And, whereas, the employer no longer employs any members of Local Union No. 625. It is therefor considered that no Agreement exists between Local Union No. 625 and Construction Erectors, Inc., and you are hereby notified that the Agreement is terminated this date. According to Morikawa, he had received no com- plaints prior to February 28, 1979, from the Respondent with regard to "no-shows" or work stoppages. Mor- ikawa said that he was the Union's business agent at that time, and that he was in frequent contact with the Re- spondent. Morikawa had checked on compliance with the contract by the Respondent, and Morikawa said that the Respondent had complied with the contract's terms, including the union-security clause of the contract. No indication was given to Morikawa prior to February 28, 1979, that the Respondent was going to terminate the contract. On February 28, 1979, the Respondent did not have any ironworkers on its payroll, who had been referred to the Respondent by the Union, nor has the Respondent had any such persons since that time. I. The Union's Reply by Letter Dated March 5, 1979 The Union made a reply to the Respondent's letter of February 28, 1979. A copy of the Union's reply by letter dated March 5, 1979, from the Union to the Respondent was introduced into evidence as General Counsel's Ex- hibit 9. In pertinent part, it stated: I just received your letter and in answer to this, I must say that Union Local 625 has always kept good faith with its Employers, providing that the agreements has been lived up to. We in the past have given you good qualified honest men and in return you have not lived up to the agreements that you signed with Union Local 625. By this I mean, you have not made the contribu- tions that is spelled out in the contract, if you had done this there would have be no problem between this local union and your company. The Ironworkers are out there to do a good job and in return for their work, they expect their Employ- ers no matter who they might be, to fulfill their ob- ligations according to the agreement. If this had been done, our relationship would still be beautiful, but as it stands now, I truly believe that you have brought this situation upon yourself. Do not blame the Union for what is happening. In your letter you wrote a portion of the agree- ment, you should also read page 12 to 14, Article 11 and page 17 to 18, Article 18, paragraph E. I must say at this time that the agreements by and between Construction Erectors and the Internation- al Association of Bridge, Structural and Ornamental Iron Workers Local Union 625 are still in effect. I must also say that if you should pick up future work and the call for men as needed are not made, we will take other measures to correct the situation. If you should have any further questions, please feel free to call our office at 836-1855. J. The Respondent's Letter Dated March 7. 1979 The Respondent replied to the Union's letter referred to in the previous section. A copy of the letter dated March 7, 1979, from the Respondent to the Union was introduced into evidence as General Counsel's Exhibit 10. In pertinent part, it states: We are in receipt of your letter of March 5, 1979. Regardless of any other circumstances, in accord- ance with Article 1 of the Agreement, we are free to terminate the Agreement at any time, upon writ- ten Notice, provided that Notice is given sixty (60) calendar days prior to the expiration date of the Agreement, which at present is September 1, 1980. Therefore, since you have acknowledged receipt of our letter on or before March 5, 1979, we consider that Agreement terminated as of that date. The Representation Proceedings Introduced into evidence as Respondent's Exhibit 7 was a copy of a representation petition filed on August 28, 1979, by the Respondent in Case 37-RM-116. The Respondent's representation petition sought an election in the following unit: "All employees of the em- ployer excluding office clerical employees, guards, super- visors, ironworkers, and managerial employees as defined in the Act." The petition averred that the Respondent had been picketed by or on behalf of the Carpenters & Joiners of America Local 745 since January 30, 1979. The Respondent introduced a copy of the eligibility list of employees for the representation election as Re- spondent's Exhibit 8. That document contains the names of all of the Respondent's employees who were em- ployed during the payroll period ending August 31, 1979, except for the names of the Respondent's office clerical employees. A copy of the tally of ballots for the election held on September 11, 1979, was introduced into evidence as Re- spondent's Exhibit 9. The tally of ballots reveals that the election was conducted under the provisions of Section 8(b)(7) of the Act. The tally further reveals that no votes were cast for Carpenters & Joiners of America, Local 745, and that 13 votes were cast against that participating labor organization. A copy of the Certification of Results of Election in Case 37-RM-116 was introduced into evidence as Re- 324 CONSTRUCTION ERECTORS, INC. spondent's Exhibit 10. The Certification of Results is dated September 20, 1979. Conclusions The Board held in its decision in Precision Striping, Inc., 245 NLRB No. 34 (1979), as follows: Respondent and the Union had entered into their original bargaining relationship pursuant to Section 8(f) of the Act, which permits an employer, such as Respondent, engaged primarily in the construction industry, to make a "pre-hire" agreement with a union covering employees engaged in that industry before the union has attained majority status. Respondent contends that it was justified in refus- ing to honor its contract with the Union in mid- term, because such an 8(f) agreement is not enforce- able under the Supreme Court's decision in N.L.R.B. v. Local Union No. 103, International Asso- ciation of Bridge, Structural & Ornamental Iron Workers. AFL-CIO [Higdon Contracting Co.].4 However, the Court there noted that it was "undis- puted that when the union successfully seeks major- ity support, the prehire agreement attains the status of a collective-bargaining agreement executed by the employer with a union representing a majority of the employees in the unit."5 Consistent with this principle, the Board has decided that, where a union, originally recognized under Section 8(f), sub- sequently achieves status among employees who make up a permanent, stable work force," or among employees employed at a particular jobsite, "the employer is then under the statutory duty to recog- nize and bargain with the union as the employees' exclusive representative." 8 Further, where there is a collective-bargaining agreement in effect between an employer and a union which is the statutory bar- gaining agent for the employees covered by the contract, that union enjoys an irrebuttable presump- tion of majority status for the duration of the agree- ment. 9 4 434 U.S. 335 (1978). ' Id. at 350. s Cf. Dee Cee Floor Covering Inc., 232 NLRB 421 (1977), Chairman Fanning dissenting in part, where the Board distin- guished situations in which a construction industry employer main- tains "a regular complement of employees," from those in which the employer hires on a project-by-project basis. ' See, e.g., Davis Industries Inc., 232 NLRB 946 (1977). Id. at 952. s Hexton Furniture Company. I 1 NLRB 342 (1955). In addition, the Board has indicated that the rationale of Dee Cee Floor Covering, Inc., 232 NLRB 421 (1977), is not applicable to a 9(a) bargaining relationship. See the Board's decision in G. M. Masonry Co., 245 NLRB No. 54, fn. 1 (1979). In remarking on stability in industrial relations, the Board has commented in its decision in United Supermar- kets, Inc., 214 NLRB 958 (1974), "we have repeatedly emphasized that stabilization in industrial relations is the ultimate objective of all provisions in the Act." With the foregoing guidance from the Board in mind, I conclude that the fourth contract, which was agreed to by the Respondent and the Union, was not a prehire col- lective-bargaining agreement within the meaning of Sec- tion 8(f) of the Act. The first contract between the Re- spondent and the Union fell into the category of an 8(f) agreement. (See section A., herein.) However, at least by the time of the execution of the fourth contract between the Respondent and the Union, the Union had achieved majority status in a stable unit of the Respondent's em- ployees. (See sec. E, herein.) Accordingly, I conclude that Section 9(a) of the Act applied on and after Decem- ber 10, 1977, to the bargaining relationship between the Respondent and the Union, rather than the provisions of Section 8(f) of the Act. Precision Striping, supra. Under the circumstances presented herein, 1 further conclude that the Respondent was not free to question the Union's majority status during the life of the fourth contract, nor was the Respondent free to unilaterally ter- minate that contract and withdraw recognition from the Union. As indicated above, the provisions of Section 9(a) of the Act were applicable to the fourth contract. I also conclude that the Respondent's action in decid- ing to abrogate its contract with the Union was not justi- fied by the Respondent's decision to expand its business operations to become a general contractor, or by the Re- spondent's desire to employ individuals with many skills. (See sec. F, herein.) In addition, I further conclude that the reasons asserted by the Respondent in its letter dated February 28, 1979, did not justify the Respondent's ac- tions. (See sec. H, herein.) On a factual basis, the reasons cited in the letter are not supported by the evidence even assuming, arguendo, that the reasons given in the letter would afford the Respondent a legal basis for terminat- ing its contract with the Union. In this connection, note the testimony given by Morikawa. Considering the testimony of both Kerr and Mor- ikawa, it cannot be fairly said that Kerr was faced with any threat of physical harm, duress, or coercion from the Union at the time Kerr signed the Respondent's fourth contract with the Union. I have considered the matters offered by the Respond- ent regarding the representation proceedings. (See the section entitled "The Representation Proceedings" herein.) However, I am not persuaded as to the applica- bility of those matters to the issues presented in this case. The unit involved in this case pertains to "ironworkers, ironworker apprentices and machine operators." The unit involved in Case 37-RM-116 specifically excluded ironworkers. Thus, the two units are different bargaining units. In addition, the representation proceedings did not in- volve the Union which is the Charging Party in this case. Instead, the representation proceedings involved another labor organization; namely, Carpenters & Joiners of America, Local 745. The representation proceedings were not initiated until 6 months after the Respondent had already withdrawn recognition from the Union involved in this case. Note that the Respondent withdrew recognition from the Union by its letter dated February 28, 1979, and that the 325 DECISIONS OF NATIONAL LABOR RELATIONS BOARD petition involving the Carpenters & Joiners of America, Local 745, was not filed until August 28, 1979. After considering the foregoing, I conclude that the represen- tation proceedings are not genuinely applicable to the issues in this case. CONCLUSIONS OF LAW 1. The Respondent is an employer engaged in com- merce within the meaning of Section 2(6) and (7) of the Act. 2. The Union is a labor organization within the mean- ing of Section 2(5) of the Act. 3. The following employees of the Respondent consti- tute a unit appropriate for the purposes of collective bar- gaining within the meaning of Section 9(b) of the Act: All employees of the Respondent employed as ironworkers, ironworker apprentices and machine operators; excluding office and clerical employees, watchmen and/or guards, professional employees and supervisors as defined in the Act. 4. At all times material herein since on and after De- cember 10, 1977, the Union has been the exclusive repre- sentative of all of the employees in the above-described unit for the purposes of collective bargaining. 5. By failing and refusing since on or about February 28, 1979, to bargain collectively with the Union with re- spect to the rates of pay, wages, hours of employment, and other terms and conditions of employment of the employees in the above-described unit; by repudiating the collective-bargaining agreement executed by the Re- spondent and the Union on December 10, 1977, and by withdrawing recognition from the Union as the collec- tive-bargaining representative of the employees in the above-described unit, the Respondent has engaged in unfair labor practices within the meaning of Section 8(aX1) and (5) of the Act. 6. The unfair labor practices set forth above affect commerce within the meaning of Section 2(6) and (7) of the Act. THE REMEDY Since I have found that the Respondent has engaged in unfair labor practices within the meaning of Section 8(aXl) and (5) of the Act, I shall recommend to the Board that the Respondent be ordered to cease and desist from engaging in those unfair labor practices. I shall also recommend to the Board that the Respond- ent take certain affirmative action in order to effectuate the policies of the Act. Such affirmative action will in- clude the payment of backpay to unit employees who have lost wages since February 28, 1979, as a result of the Respondent's unfair labor practices. (See Don Burgess Construction Corporation d/b/a Burgess Construction and Donald Burgess and Verlon Hendrix d/b/a V & B Build- ers, 227 NLRB 765 (1977). Backpay and interest on such backpay amounts will be computed in accordance with the Board's decisions in F. W Woolworth Company, 90 NLRB 289 (1950); Isis Plumbing & Heating Co., 138 NLRB 716 (1962), and Florida Steel Corporation, 231 NLRB 651 (1977). The General Counsel's request that the interest rate be fixed at a 9-percent annual rate is hereby denied. See Hansen Cakes, Inc., 242 NLRB 472 (1979); Southern Cali- fornia Edison Company, 243 NLRB 372 (1979); Neely's Car Clinic, 242 NLRB 335 (1979); and W Carter Max- well, d/b/a Pioneer Concrete Co., 241 NLRB 264 (1979). Such affirmative action to remedy the Respondent's unfair labor practices will also include the payment to the trust funds for the fringe benefits of employees in ac- cordance with the terms of the collective-bargaining agreement between the Respondent and the Union, which was signed on December 10, 1977. However, in accordance with the Board's decisions, I shall not pro- vide for interest to be added to such payments. Fitzpa- trick Electric, Inc., 242 NLRB 739 (1979); Nelson Electric, Gary C. Nelson, Inc., and Gary C. Nelson Electric, 241 NLRB 545 (1979); B. G. Costich & Sons, Inc., 243 NLRB 79 (1979), and Inland Cities, Inc., 241 NLRB 374 (1979). Finally, I shall recommend to the Board a narrow cease-and-desist order. Hickmott Foods Inc., 242 NLRB 1357 (1979); Supreme Bumpers, Inc., d/b/a Precision Plating, 243 NLRB 230 (1979). Upon the basis of the foregoing findings of fact, con- clusions of law, and the entire record in this proceeding, and pursuant to the provisions of Section 10(c) of the Act, I hereby issue the following recommended: ORDER' The Respondent, Construction Erectors, Inc., Honolu- lu, Hawaii, its officers, agents, successors, and assigns, shall: 1. Cease and desist from: (a) Failing and refusing to bargain collectively with the Union with respect to the rates of pay, wages, hours of employment, and other terms and conditions of em- ployment of the employees in the unit described below, repudiating the collective-bargaining agreement executed by the Respondent and the Union on December 10, 1977, and withdrawing recognition from the Union as the col- lective-bargaining representative of the employees in the unit described below. The appropriate collective-bargain- ing unit is: All employees of the Respondent employed as ironworkers, ironworker apprentices and machine operators; excluding office and clerical employees, watchmen and/or guards, professional employees and supervisors as defined in the Act. (b) In any like or related manner interfering with, re- straining, or coercing its employees in the exercise of the rights guaranteed to them by the Act. 2. Take the following affirmative action which is deemed necessary in order to effectuate the policies of the Act: I In the event that no exceptions are filed, as provided by Sec. 102.46 of the Board's Rules and Regulations, the findings, conclusions, and rec- ommended Order herein shall, as provided in Sec. 102.48 of the Board's 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. 326 CONSTRUCTION ERECTORS. INC. (a) Upon request, bargain collectively with the Union as the exclusive collective-bargaining representative of the employees in the bargaining unit previously de- scribed and embody in a signed agreement any under- standing which may be reached. (b) Honor and abide by the terms of the existing col- lective-bargaining agreement between the Respondent and the Union, which was signed on December 10, 1977, during the life of that contract. (c) Reimburse those employees who have lost wages since February 28, 1979, as a result of the Respondent's repudiation of the collective-bargaining agreement and the Respondent's failure to abide by the terms of its con- tract with the Union. Appropriate interest is to be added to such backpay amounts. See the section of this Deci- sion entitled "The Remedy." (d) Make appropriate payments to the funds estab- lished by the terms of the contract, which Respondent has failed to pay, in accordance with the terms and pro- visions of the collective-bargaining agreement. (e) Preserve and, upon request, make available to the Board's agents for examination and copying, payroll re- cords, social security records, timecards, personnel re- cords, and all of the other records necessary to analyze the amount of money due under the terms of this Order. (f) Post at its Honolulu office and at all of its Hawaii jobsites where its employees are working at the time the Respondent commences compliance with the terms of this Order, copies of the attached notice marked "Ap- pendix." 2 The Regional Director of Region 20 of the Board will provide copies of the notice to the Respond- ent. After the Respondent's representative has signed those copies, the Respondent shall post those notices im- mediately after receiving them. The Respondent shall maintain such notices for a period of 60 consecutive days after they have been posted in conspicuous places, in- cluding all of the places where the Respondent custom- arily posts notices to its employees. The Respondent shall also take reasonable steps to insure that said notices are not altered, defaced, or covered by any other materi- al during the posting period. (g) Within 20 days from the date of this Order, the Re- spondent shall write a letter to the Regional Director of Region 20 of the Board and tell her what the Respond- ent has done to comply with this Order. I 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 Order of the National Labor Relations Board" shall read "Posted Punrsu- ant to a Judgment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board." 327