Interstate Electric Co.Download PDFNational Labor Relations Board - Board DecisionsJan 31, 1977227 N.L.R.B. 1996 (N.L.R.B. 1977) Copy Citation 1996 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Interstate Electric Company and Penn H . Smith and Intermountain Chapter , National Electrical Con- tractors Association , Inc., Party to the Contract International Brotherhood of Electrical Workers, Local No. 354 and Penn H . Smith and Intermoun- tain Chapter, National Electrical Contractors Asso- ciation, Inc., Party to the Contract . Cases 27-CA- 4611 and 27-CB-960 January 31, 1977 DECISION AND ORDER BY CHAIRMAN MURPHY AND MEMBERS FANNING, JENKINS, AND WALTHER On February 23, 1976, Administrative Law Judge Bernard J. Seff issued the attached Decision in this proceeding. Thereafter, General Counsel filed excep- tions and a supporting brief. Respondent Internation- al Brotherhood of Electrical Workers, Local No. 354, hereinafter called Respondent Union, filed a brief in answer to General Counsel's exceptions, and Build- ing and Construction Trades Department, AFL- CIO, filed a brief as amicus curiae. Respondent Union's request for oral argument before the Board was granted and, on July 29, 1976, the parties argued the matter orally in Washington, D.C.' All of the parties and the amicus curiae were afforded full opportunity to participate in the argument. The Board has considered the record and the attached Decision in light of the exceptions, briefs, and oral arguments and has decided to affirm the rulings , findings, and conclusions of the Administra- tive Law Judge, as modified below, and to adopt his recommended Order. The complaint alleged that Respondent Union and Respondent Employer, Interstate Electric Company (herein also called Interstate), unlawfully maintained and enforced a contractual hiring hall provision which gives priority, with respect tojob referrals and layoffs, to persons "who have been employed for a period of at least 2 years of the last 4 years under a collective bargaining agreement between the parties to this agreement." We agree with the Administrative Law Judge's conclusion that the Respondents' con- duct did not violate the Act. The facts are not materially in dispute and are fully set forth in the Administrative Law Judge's Decision. Interstate is a member of Intermountain Chapter, National Electrical Contractors Association, Inc. (herein called NECA), an association of employers engaged in the electrical industry which exists for the purpose, inter aka, of negotiating collective-bargain- ing agreements with Respondent Union. NECA and Respondent Union have for many years negotiated successive collective-bargaining agreements, the most recent of which was effective January 1, 1974, through December 31, 1975. These contracts cover employees of NECA's members, including Interstate, as well as employees of signatory employers. The latter are employers in the electrical industry who, while not members of NECA, have signed a letter of assent or other commitment to be bound by the agreement between NECA and Respondent Union. Article III of the most recent contract between the parties provides for the establishment and mainte- nance of an exclusive hiring system under the following relevant provisions: Sec. 3 The Union shall select and refer appli- cants for employment without discrimination against such applicants by reason of membership or nonmembership in the Union or race, creed or color, and such selection and referral shall not be affected in any way by rules, regulations, by-laws, constitutional provisions or any other aspect or obligation of Union membership policies or requirements. All such selection and referral shall be in accordance with the following procedure. Sec. 4(a) The Union shall maintain a register of applicants for employment established on the basis of the groups listed below. Each applicant for employment shall be registered in the highest priority group for which he qualifies. Group I-All applicants for employment who have 4 or more years experience in the trade, are residents of the geographical area constituting the normal construction labor market, have passed a journeyman's examination given by the duly constituted Local Union of the IBEW and who have been employed for a period of at least 2 years of the last 4 years under a collective-bargaining agreement between the parties to this agreement. Group II-All applicants for employment who have 4 or more years of experience in the trade and who have passed the journeyman's examina- tion given by the duly constituted Local Union of the IBEW. Group 111-All applicants for employment who have 2 or more years' experience in the trade, are residents of the geographical area constituting the normal construction labor market and who have been employed for at least 1 year in the last 3 years in the trade under a collective-bargaining agreement between the parties to this agreement. I Argument was also heard in Local Union No 68, International Brother- hood of Electrical Workers (Howard Electric Company), 227 NLRB 1904, a case involving closely related issues , issued this day 227 NLRB No. 291 INTERSTATE ELECTRIC CO. 1997 Group IV-All applicants for employment who have worked at the trade for more than 1 year. (b) When making reductions in the number of employees due to lack of work, Employers shall use the following procedure: (A) Temporary employees, if any are employed, shall be laid off. Then employees in Group IV shall be laid off next, if any are employed in this group. Next to be laid off are employees in Group III, if any are employed in this Group; then those in Group II, and those in Group I. (B) Paragraph (A) will not apply as long as the special skill requirement as provided for in Article III, section 6, subsection 1 is required. In order for an applicant to be an employee under this agreement, he shall possess and maintain such electrical license as are applicable and legally required. One employer will not subcontract work to another employer for the purpose of avoiding this referral procedure. Employees Penn H. Smith, the Charging Party, and Gordon B. Wood are members of IBEW Local Union 357 in Las Vegas. Smith was referred by Respondent Union to Interstate's job in St. George, Utah, on June 26, 1974. Wood was referred by Respondent Union to Interstate's job in North Salt Lake City on June 7, 1974, and was subsequently transferred by Interstate to the St. George job without further involvement by Respondent Union. Both men were terminated on June 20, 1975, in a reduction in force necessitated by the near completion of the job. It is undisputed that they were selected for termination in accordance with the contract provision which requires that, in the event of a layoff, electricians referred under group II, above, be laid off ahead of those in group I. It is also undisputed that Smith and Wood failed to qualify for group I only because they had not worked "for a period of at least 2 years of the last 4 years under a collective bargaining agreement between the parties to this agreement" as required for such status. Thus although Smith and Wood had more seniority on the job than four other journeyman electricians, they were laid off ahead of these four who met the so- called "2 in 4" requirement for group I status.2 Following their terminations, both Smith and Wood signed the out-of-work book at Respondent Union's office and both were offered referrals to other jobs. They declined such offers because the jobs were not located in the St. George area. On August 11, 1975, both Smith and Wood received letters from Respondent Union advising them of a need for journeyman wiremen and stating that "[i]f you are still interested and plan to remain in our jurisdiction, please drop by the union office and register as required in order to obtain a job referral ." No reply was received from either man. It is clear from the foregoing, and the Administra- tive Law Judge found, that Respondent Union did not overtly discriminate against either Smith or Wood because of their lack of membership in Respondent Union . To the contrary, it referred them to the Interstate job and when that was completed it offered to refer them to other available jobs. To that extent , therefore, the Administrative Law Judge correctly distinguished this case from Nassau-Suffolk Chapter of the National Electrical Contractors ' Associ- ation, Inc. (Alcap Electrical Corporation), 215 NLRB 894 (1974). It is also clear that article III of Respon- dents ' contract does not on its face discriminate between applicants for referral on the basis of their membership or nonmembership in Respondent Union . Indeed , section 3 of article III expressly mandates against such discrimination. The issue, therefore, is whether the "2 in 4" years experience requirement for group I referral priority is implicitly discriminatory because , as General Counsel con- tends, it rewards applicants who have worked 2 of the last 4 years for employers signatory to the contract and who , by virtue of the contract 's union-security provision , therefore , are members of Respondent Union . Conversely, General Counsel argues that this provision penalizes employees or applicants for referral with greater experience in the trade solely because they have exercised their Section 7 rights by having worked for nonunion employers or employers not signatory to Respondent Union's contract. We disagree with these contentions and find, instead, that the disputed contract provision is permissible under Section 8(f)(4) of the Act. Section 8(f) of the Act provides , in relevant part, as follows: (f) It shall not be an unfair labor practice under subsections (a) and (b) of this section for an employer engaged primarily in the building and construction industry to make an agreement covering employees engaged . . . in the building and construction industry with a labor organiza- tion of which building and construction employ- ees are members . . . because . . . (3) such agreement requires the employer to notify such labor organization of opportunities for employ- ment with such employer, or gives such labor organization an opportunity to refer qualified applicants for such employment, or (4) such agreement specifies minimum training or experi- 2 These four remaining electricians were terminated between September and November 1975, when thejob was completed 1998 DECISIONS OF NATIONAL LABOR RELATIONS BOARD ence qualifications for employment or provides for priority in opportunities for employment based upon length of service with such employer, in the industry or in the particular geographical area .... [Emphasis supplied.] As is clear from the above, Section 8(f)(4) expressly exempts from the strictures of Section 8(a)(1) and (3) and 8(b)(1)(A) and (2) of the Act and makes lawful an exclusive referral system under which priority in job referrals may be "based upon length of service with such employer." General Counsel and our dissenting colleague would have us construe the phrase "such employer" as a term of art limited to the particular employer or multiemployer association (i.e., Inter- state of NECA) whose employees the Respondent Union represents in an appropriate unit. We believe that such a narrow construction of the phrase would be unrealistic in the construction industry and contrary to the purposes for which Section 8(f) was designed. There is nothing in the legislative history of that section to suggest that the term "employer" was used as a term of art to define the specific employer whose employees the union represents in an appropri- ate unit. Indeed, as stated in the Report of the House of Respresentatives Committee on Education and Labor: In the building and construction industry it is customary for employers to enter into collective- bargaining agreements for periods of time running into the future, perhaps 1 year or in many instances as much as 3 years. Since the vast majority of building projects are of relatively short duration, such labor agreements sometimes apply to jobs which have not been started. The practice of signing such agreements for future employment is not entirely consistent with Wagner Act rulings of the NLRB that exclusive bargaining contracts can lawfully be concluded only if the union makes its agreement after a representative number of employees have been hired. One reason for this practice is that it is necessary for the employer to know his labor costs before making the estimate upon which his bid will be based. A second reason is that the employer must be able to have available a supply of skilled craftsmen ready for quick referral. The committee has decided that the object of validating the prehire agreement in the building and construction industry is sound and has chosen to accomplish this object by providing that a prehire agreement in that industry shall not constitute an unfair labor practice under the act.3 3 H Rept 741, 86th Cong, 1st Sess, I Leg Hist 759 ,777-778 ( 1959) See also S Rept 187 on S 1555, 1 Leg Hist 397 , 424-425 (1959) The bill contains other provisions which take into account the occasional nature of employment in the building and construction industry. It does so by reducing from 30 days to 7 the grace period before which the employees may be required to join the union. The reduction in this time allow- ance reflects the normally short employment period for construction employees. Also, the bill contains provisions permitting an exclusive refer- ral system or hiring hall based upon objective criteria for referral. Thus it is permissible to give preference based upon seniority, residence, or training ... . In a similar vem, the Senate Report on S.1555, explaining Section 8(f), states: This bill . . . contains other provisions which take into account the occasional nature of em- ployment in the building and construction em- ployee [sic] . . . . Also similar to last year's bill are provisions permitting an exclusive referral system or hiring hall based upon objective criteria for referral. Such criteria as are spelled out in the bill are not intended to be a definitive list but to suggest objective criteria which shall be applied without discrimination. Thus it is permissible to give preference based upon seniority, residence, or training of the sort provided by the apprenticeship programs sponsored by the Department of La- bor.4 In light of the special allowances which Section 8(f) makes for the employers and labor organizations in the building and construction industry a limited reading of the term "employer" in Section 8(f)(4) would be unwarranted . Rather , we believe that it is more consistent with the purposes of that section to interpret the word "employer" as including any employer who , although not a member of the multiemployer association with which the union negotiated the collective -bargaining agreement, has agreed to be bound by such agreement while per- forming work in that union 's area of geographical jurisdiction . Therefore , we find that the term "em- ployer" as used in Section 8 (f)(4) includes the signatory employers here who executed letters of assent to be bound by Respondent Union's contract with NECA. To the extent that our findings here are inconsistent with those in Nassau-Suffolk, supra, that case is hereby overruled. Having found that Respondents did not violate Section 8(a)(1) and (3) and 8(b)(1)(A) and (2) of the 4 S. Rept 187 on S . 1555,1 Leg Hist . 397, 424 425 (1959) INTERSTATE ELECTRIC CO. Act by maintaining and enforcing the hiring hall provisions described above, we shall dismiss the complaint in its entirety. ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Relations Board adopts as its Order the recommend- ed Order of the Administrative Law Judge and hereby orders that the complaint be, and it hereby is, dismissed in its entirety. MEMBER JENKINS, dissenting: Contrary to longstanding precedent, the majority finds lawful a collective-bargaining agreement pro- viding for an exclusive hiring hall arrangement which by its very terms discriminates by giving preference to applicants for employment on the basis of prior employment under the collective-bargaining agree- ment. It is well established that similar hiring hall agreements which accord priority to applicants on the basis of past experience with employers signatory to the union contract are unlawful in that they penalize employees for having exercised their statutory right to refrain from bargaining collectively through the union in the past, while rewarding those employees who have chosen to work for employers who are signatory to the union contract. It is clear that such agreements infringe on an employee's rights guaran- teed by Section 7 of the Act to refrain from union activities.5 In the instant case, it appears that employment under a union contract constitutes a condition to preferred referral and layoff status (group I), and the employee cannot obtain experience with an employer who has a contract with the Union unless the Union refers the employee. By approving the foregoing arrangement, the majority states that a union which controls hiring can stipulate that its referral prefer- ence is dependent on employment under union contracts. Such an arrangement clearly encourages union membership, and is unlawful .6 The majority contends that Section 8(f)(4) expressly exempts from the strictures of Section 8(a)(1) and (3) and 8(b(l)(A) and (2) of the Act and makes lawful an exclusive referral system under which priority in job referrals may be "based on length of service with such employer." The majority expands the term "employ- er" as used in Section 8(f)(4) to include the signatory s International Photographers of the Motion Picture Industries, Local 659 of the International Alliance of Theatrical Stage Employees and Moving Picture Machine Operators of the United States and Canada (MPO-TVof California Inc., Y-A Productions, Inc), 197 NLRB 1187 (1972), Directors Guild of America, Inc. (Association of Motion Picture & Television Producers, Inc)' 198 NLRB 707 (1972), Nassau-Suffolk Chapter of the National Electrical Contrac- 1999 employers here who executed letters of assent to be bound by Respondent Union 's contract with NECA. An examination of the legislative history of Section 8(f) leads me to the conclusion that the discriminato- ry hiring hall provisions in the instant case were not intended to be exempted from the strictures of the Act. Both the House and Senate Reports cited by the majority state that the bill permits "an exclusive referral system or hiring hall based upon objective criteria for referral" (emphasis supplied). The reports note such criteria as seniority , residence , or training. I cannot conceive how the requirement that an appli- cant for employment must have worked for a period of time under the union contract , rather than for a nonunion employer , may be construed as "objec- tive ." Furthermore , the contract provisions herein do not relate to an "employer" but rather to signatories of the contract . If this hiring hall arrangement is found valid , a long-term employee of an employer who had only recently joined NECA or signed the contract would not be eligible for group I status simply because he did not work the requisite time under the union contract . In my view, Section 8(f) was not intended to permit such practices. The majority 's expansion of the term "such employ- er" to encompass signatory employers who executed letters of assent to be bound by the contract is inconsistent with well-established law. The appropri- ate bargaining unit does not include unknown employers who might later choose to sign a letter of assent agreeing to be bound by the multiemployer contract . The provisions in question grant priorities in opportunities for employment based not "upon length of service with such employer ," but on service under collective -bargaining agreement between the parties to this referral procedure. It therefore grants preference to employees and applicants because they had been represented by the Union . I find no sanction in Section 8(f)(4) for this discriminatory conduct. Nor does the majority's attempt to distinguish Nassau-Suffolk, on the theory that Respondent Union did not overtly discriminate against Smith or Wood because of their lack of membership in Respondent Union , withstand scrutiny . Indeed , Smith and Wood were chosen for layoff because they had not worked under the union contract for the required time. Furthermore , I do not see what relevance the fact that Smith and Wood turned down subsequent offers of employment in other parts of the State has to do with tors' Association, Inc (Alcap Electrical Corporation ), 215 NLRB 894 (1974), Local Union No 77 ofInternational Brotherhood of Painters and Allied Trades, AFL-CIO (Colorite, Inc), 222 NLRB 607 (1976) 6 The Radio Officers ' Union of the Commercial Telegraphers Union, AFL [A H Bull Steamship Company] v. N L R.B , 347 U.S 17 (1954). 2000 DECISIONS OF NATIONAL LABOR RELATIONS BOARD the legality of their layoffs and the contractual provision upon which their layoffs were based. Accordingly, I would find that the Respondent Employer violated Section 8(a)(1) and (3) of the Act, and the Respondent Union violated Section 8(b)(1)(A) and (2). DECISION STATEMENT OF THE CASE BERNARD J . SEFF , Administrative Law Judge: This case came on for hearing before me at Salt Lake City, Utah, on January, 4, 1976. The original charge was filed on August 6, 1975, and complaint was issued on September 10, 1975. An order consolidating cases was issued on September 16, 1975. The complaint alleges that the Interstate Electric Company is a member of the National Electrical Contrac- tors Association (herein called NECA), and that Interstate and International Brotherhood of Electrical Workers, Local 354, are joint Respondents. In substance, the consolidated complaint alleges Interstate, NECA, and Local 354 have a contract whose provisions require the employer-parties to the agreement to hire employees exclusively through the union employment office in accord- ance with referral procedures which give preference in employment to applicants who have previously worked under the Union's contract, and that thereby Respondent Interstate is engaged in unfair labor practices within the meaning of Section 8(a)(1) and (3) of the Act. It is further alleged that Respondent Union is engaged in unfair labor practices within the meaning of Section 8(b)(I)(A) and (2) of the Act, by having invoked those provisions of the contract which operate to separate employees from their jobs and create a layoff order, depending upon which classification they occupy as established in the contract. The Respondents filed answers which denied the substance of allegations in the complaint and the commission of any unfair labor practices. Upon the entire record, including my observation of the witnesses and their demeanor, and after due consideration of the briefs filed by the parties, I make the following: FINDINGS OF FACT 1. COMMERCE Interstate Electric Company, a Utah corporation which maintains its principal office and place of business at 100 West Center, North Salt Lake City, Utah, is engaged in the installation of electrical fixtures. It annually purchases and receives goods and materials valued in excess of $50,000 directly from points and places outside the State of Utah. Intermountain Chapter, National Electrical Contractors Association, Inc. (NECA), is now and at all times material herein has been an association of employers in the electrical industry, including in its membership, among others, Interstate Electric Company, the Employer, which exists and functions for the purpose, among others, of represent- ing its members in collective bargaining with Respondent Local No. 354, International Brotherhood of Electrical Workers. All employers or firms who have signed a letter of assent or other designation or commitment to be bound by the collective-bargaining agreement in effect between Local 354 and NECA, described hereinafter and as jointly called the signatory employers, are employers in the electrical industry operating within the geographical area of Respon- dent Local 354s jurisdiction. Annually, the combined employer-members of NECA in the course and conduct of their business operations purchase, and cause to be delivered to their respective places of business within the State of Utah, goods and materials valued collectively in excess of $50,000, said goods and materials being received directly from States other than the State of Utah. Annually, the combined employer-members of the Asso- ciation, in the course and conduct of their business operations, collectively perform services outside the State of Utah valued in excess of $50,000. On the foregoing admitted facts, I find that NECA and its employer-mem- bers are engaged in commerce and in operations affecting commerce within the meaning of Section 2(6) and (7) of the Act. H. THE LABOR ORGANIZATION INVOLVED It is admitted , and I also find , that Respondent Union is a labor organization within the meaning of Section 2 (5) of the Act. III. THE ALLEGED UNFAIR LABOR PRACTICES A. Background Events Respondent Union and Respondent Interstate have had bargaining relationships for at least 17 years. The most recent labor agreement was effective January 1, 1974, through December 31, 1975. Section 4(a) provides: The Union shall maintain a register of applicants for employment established on the basis of the groups listed below. Each applicant for employment shall be regis- tered in the highest priority group for which he qualifies. Group I-All applicants for employment who have 4 or more years experience in the trade, are residents of the geographical area constituting the normal construc- tion labor market, have passed a journeyman's exami- nation given by the duly constituted Local Union of the IBEW and who have been employed for a period of at least 2 years of the last 4 years under collective- bargaining agreement between the parties to this agreement. Group II-All applicants for employment who have 4 or more years of experience in the trade and who have passed the journeyman 's examination given by the duly constituted Local Union of the IBEW. Group III-All applicants for employment who have 2 or more years' experience in the trade, are residents of the geographical area constituting the normal construc- tion labor market and who have been employed for at least 1 year in the last 3 years in the trade under a collective-bargaining agreement between the parties to this agreement. INTERSTATE ELECTRIC CO. 2001 Group IV-All applicants for employment who have worked at the trade for more than 1 year. (b) When making reductions in the number of employees due to lack of work, Employers shall use the following procedure: (A) Temporary employees, if any are employed, shall be laid off. Then employees in Group IV shall be laid off next, if any are employed in this group. Next to be laid off are employees in Group III, if any are employed in this Group; then those in Group II, and those in Group I. (B) Paragraph (A) will not apply as long as the special skill requirement as provided for in Article III, section 6, subsection 1 is required. In order for an applicant to be an employee under this agreement, he shall possess and maintain such electrical license as are applicable and legally required. One employer will not subcontract work to another employer for the purpose of avoiding this referral procedure. B. The Alleged Discriminatory Layoffs of Smith and Wood Initially, it should be noted that there is no dispute as to the facts. Both Smith and Wood are members of the Las Vegas Local Union 357, IBEW. They applied for work through Respondent Union and were referred to the Interstate job at St. George, Utah, on June 26, 1974. Both Smith and Wood were terminated on June 20, 1975. The evidence is uncontroverted that the job was in its final stages and that Smith and Wood were terminated on the same day. Interstate Manager Sproul made the decision to reduce the payroll by two employees. No umon officer or agent participated in the decision to reduce the work force at the St. George job. William L. Walker, Interstate general superintendent, stated that Smith and Wood were laid off because they were in group II and the layoff procedure was in strict accord- ance with the agreement. There were six electricians, including the foreman, working on the job; four of whom were in group I, and the other two, Smith and Wood, had group II status. Walker stated that he was aware that Smith and Wood were in group II because their referral cards were so marked. The St. George job closed down in November 1975. After the layoff, there was a gradual reduction of the remaining three electricians and a foreman which occurred between September and November 1975. After the layoff, no other employees were referred to the jobs by the Union. The Company sent one of its own shop employees to the job as cleanup man. This employee was not referred by the Union. Except for the St. George job, Interstate has had no jobs within 150 miles of St. George, Utah, during the past 5 years. Wood was moved to the St. George job by Interstate from its Husky Oil job in North Salt Lake City, without a umon referral. Wood was a member of Las Vegas Local 357 and a resident of St. George, Utah. Anderson stated that there was a negligible amount of union electrical work in the St. George area. St. George is 300 miles from Salt Lake and carries a $22-per-day subsistence rate. Since both Smith and Wood lived near St. George, the $22 per diem was particularly attractive to them, as a referral out of Salt Lake would carry a high subsistence while living at home. Smith and Wood com- muted between St. George, Utah, and Las Vegas, Nevada, for employment over 100 miles away. Anderson made the hiring hall records available, showing referrals during November 1, 1974, and also November 1, 1975, as follows: A total of 1,158 referrals; 649 from group I book; 480 from group II book; 15 from group III book; and 14 from group IV book. Umon Exhibit 5 identified Local 354 members who had not attained group I status, namely: six local members had book IV status; eight had book III; and five had book II status. Union Exhibit 6 lists applicants not members of Local 354 who had book I status under the referral procedure during the year from November 1, 1974, through November 1, 1975. This exhibit was substantially expanded to 39 separate exhibits marked "6(a)" through "6(mm)" and identifies nonmembers of Local 354 holding group I status. Anderson explained that Local 354 members who leave the Union's jurisdiction to work elsewhere forfeit group I standing. According to Anderson, membership or non- membership in or representation or nonrepresentation by Local 354 is not a condition of referral. There was no refutation of this evidence. Nonunion members are accept- ed under the above-described referral practices. Total union membership is about 750, with replenishment through an active apprenticeship program of 70 men. Charging Party Penn Smith had not made application to become a member of Local 354. He had no problem obtaining a job through the referral hall. Smith was sent to Dugway, a job in Utah, and then to the St. George job on June 26, 1974. The Union contends that Smith was fairly treated by Union Business Agent Kilpatrick. The Umon points out that Kilpatrick loaned Smith $40 in order for Smith to obtain his state license. Smith received coopera- tion and fair treatment from the Union. Following the layoff in June 1975, by Interstate, both Smith and Wood came into the union office and again signed the out-of-work book. Smith and Wood were offered jobs at Price, Utah, about 125 miles from Salt Lake, which they both declined to accept. They also were offered jobs at Provo, Utah, about 50 miles from Salt Lake. These jobs were declined. They were only interested in the job in the St. George area where they lived. After the initial signup in July 1975, neither Smith nor Wood again signed the out-of- work book as required by the referral procedure. Both Smith and Wood received union letters on August 11, 1975, explaining that "at the present time we are in need of several journeymen wiremen. If you are still interested and plan to remain in our jurisdiction, please drop by the umon office and register as required in order to obtain a job referral." No reply was received from either of these men. Neither Smith nor Wood manifested an interest in securing whatever work was made available to them by way of union referrals. The testimony in the record demon- strates this fact. Smith testified as follows: 2002 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Q. If there were any other work available through Local 354 but not in the St. George area, would you have accepted it? A. Distance would be a factor whether I accepted it or not, how far-if it was within 150 miles of St. George, I would accept the employment. There was little union work within 150 miles of St. George. Smith would not have accepted a job in Salt Lake City, Utah, if it had been offered, nor would he have moved away from his home to take a Salt Lake job. Wood's attitude was the same. He turned down a job for Jelco at Price, Utah, and refused a job unless it was within 150 miles from St. George. The record also shows that Wood had a small farm which required his attention. In the 3-1/2 years Wood lived near St. George, he had never previously applied for ajob through the Salt Lake IBEW Local 354. The decision to reduce the work force on the job was one that was made entirely by management. After June 20, 1975, no one was added to the job. No one on behalf of the Union requested the layoff of Smith or Wood according to the general superintendent, William L. Walker, of Inter- state. Within the last 5 years Interstate had not had an electrical job, except the St. George job, within 150 miles of St. George. Walker told the Board investigator that "it is not a requirement that a man be a member of the Salt Lake City Local to be in class L" The successor to Kilpatrick as business agent, Lynn Bird, testified that he offered to put Smith and Wood on jobs at Brigham Young University, Provo, Utah, after they signed the out-of-work book on July 1, 1975. Both men turned him down when they learned there was no subsistence pay for Provo. C. Discussion Respondent Union's brief contends that: General Counsel asserts that priority in employment in this case was granted to applicants not on the basis of length of service with an employer, but rather, on the basis of prior employment at which applicant was represented by the Union. Thus, he argues, the referral provisions violate the Act, and consequently, the layoffs of Smith and Wood also violate the Act. The difficulty with his position is that both Smith and Wood had equal access to referrals from the Union's hiring hall, and that the system was operated fairly and without discrimination generally or as concernei either Smith or Wood. s * * + ... The U.S. Supreme Court in Teamsters Local 357 v. N. L. R. B., 365 U.S. 667. The Court there stated, at 365 U.S. 673: Congress has not outlawed the hiring hall, though it has outlawed the closed shop except within the limits prescribed within the provisos to Section 8(a)(3). Senator Taft made clear his views that hiring halls are useful, that they are not illegal per se, that unions should be able to operate them so long as they are not used to create a closed shop. The Supreme Court ruled in Local 357 that the Act only prohibits discrimination in the operation of refer- ral systems which encourage or discourage union membership. Also note the Board 's own decision in Operating Engineers Local 965 (J-M Co., Inc.), 173 NLRB 1461. The complaint in that case alleged that the refusal by the employer , at the instigation of the Union , to recall or reinstate certain employees because they were not members of the Union constituted violations of Section 8(a)(1) and (3) by the Company and 8(b)(1)(A) and (2) by the Union . The collective-bargaining agreement there provided for priority referral of registrants who had 2 years' residence in the area, based on the amount of work experience they had with contractors who had signed agreements with the Union . Those who had no seniority with contractors and agreement with the Union would be placed at the bottom of the referral lists in the order in which they reported being out of work. The referral system based on graduated experience with contractors in signed agreement with the Union , is identical in principle to the IBEW referral plan here in issue. The Trial Examiner in Operating Engineers found no viola- tion of the Act and the Board affirmed . In his opinion, adopted by the Board , he stated as follows: I have found that the referral service does discriminate in favor of area residents with work experience with contractors bound by the Con- tract , but that such discrimination is legal.. . [T]he preference they receive in connection with referrals, on this record , is due to the seniority based on area residence and work experience and not to union membership . As stated, such a preference is not illegal. Respondent Union takes the position that while the IBEW referral system gives preference in the higher classifications to those who have experience under the collective -bargain- ing agreement, it does not base such preference on union membership , which is all that the Supreme Court has stated is prohibited . As the Court stated in Local 357 at 674-675: "The lanugage of § 8(a)(3) is not ambiguous. The unfair labor practice is for an employer to encourage or discourage membership by means of discrimination. Thus this section does not outlaw all encouragement or discouragement of membership in labor organizations; only such as is accomplished by discrimination is prohibited . Nor does this section outlaw discrimination in employment as such , only such discrimination as encourages or discourages membership in a labor organization is proscribed." The Union's brief also calls attention to Bechtel Power Corporation, 223 NLRB 925 (1976). In that case, the violation occurred because the hiring hall was operating in a manner that union members who were referred from the hall could bump or retain job retention rates with tempo- INTERSTATE ELECTRIC CO. 2003 rary nonunion employees who were hired at the gate. In the instant case , Respondent Umo,i had on its referral lists nonunion electricians who could secure referral from the hall. Union Exhibit 6(x) lists William H. Murray, a group III applicant, whose referrals dated back to August 8, 1974, notwithstanding that he is not a member of the Local Union or any IBEW local union. The General Counsel places his principal reliance on the case of Nassau-Suffolk Chapter of the National Electrical Contractors' Association, Inc. (Aleap Electrical Corporation), 215 NLRB 894 (1974). In that case the Board found that a collective -bargaining agreement , containing language virtu- ally identical to that contained in the contract between the Respondents herein, did grant preference in employment opportunities to applicants who had worked as electricians for employers who had collective-bargaining agreements with the union, and did diminish the employment opportu- nities and discriminate against applicants with equal or even greater competence and experience merely because the latter had not worked for an employer who was under contract with the union. As found in Nassau, such discrimi- nation has a natural tendency to encourage membership in the union, and thereby violates the Act. At first blush, it would appear that there are striking similarities between Nassau -Suffolk and the case at bar. However, there are some significant differences between the cases which distinguish the two situations. In Nassau- Suffolk, one Ernesto Flores, a Puerto Rican and a member of a minority ethnic group, was denied an opportunity to take the union's journeyman's examination. Flores, who was not a member of respondent union, wrote letters on a number of occasions requesting permission to take its journeyman's examination , the passing of which was necessary for his reclassification to the highest priority referral group under the contract, but he had never received any response. Furthermore, when Flores asked Union Employment Manager Segall why he had received no response to his request to the union's executive board to take the journeyman's examination, he was told that he had brought the union up on charges with the Human Rights Commission and the union board did not take this lightly. T} Board agreed with the General Counsel that Union Manager Segall's statement to Flores reveals that the union's real reason for repeatedly denying Flores an opportunity to take the journeyman's examination was because Flores had previously filed charges against the union before the Human Rights Commission. The Board concluded its decision as follows at 894: In these circumstances, we find that the Unio; o actions violated Section 8(b)(1)(A) and (2) of the Act by restraining and coercing Flores it the exercise of his rights under Section 7 of the Act, and by denying Flores greater employment opportunities under its exclusive referral system since Flores would have been placed in a higher and more preferred referral category if he had been permitted to take and pass the Union's journey- man's examination. In Nassau-Suffolk, therefore , the union was clearly guilty of discrimination against Flores by the way it applied the hiring hall provisions of its contract. In the case at bar , Penn Smith was a member of a sister local of the IBEW, Local 357, and had passed his journeyman's examination . Furthermore , he was not de- nied referrals to jobs by the Union. In fact, his employment with Interstate Electric Company had been secured as a result of the referral to this job by that Respondent. In accordance with the contract, he had been properly placed in group II by the Union. The contract provides that when making reductions in the number of employees due to lack of work the employer shall use the following proce- dure: (A) Temporary employees, if any are employed , shall be laid off first . Then employees in Group IV shall be laid off next , if any are employed in this Group. Next to be laid off are employees in Group III, if any are employed in this group ; then those in Group II and then those in Group I. Significantly, it should be noted that not only was Smith laid off in accordance with the terms of the collective- bargaining agreement but the layoff was effectuated by the action of the Employer and not by anything the Respon- dent Union did or failed to do. The record amply supports the contention of the Employ- er that the reason for the layoff had nothing whatever to do with the Union . It was occasioned by the fact that the work on the job being performed by Smith was winding down, and the job was about to be completed . No other employees were taken on after Smith and Wood were laid off. In fact, the roster of men doing this same work as Smith dwindled as the need for such employees diminished. It also should be emphasized at this point that both Smith and Wood were offered a number of referrals after their separation from the Interstate payroll in the form of referrals by the Respondent Union but they declined to take any of these employment opportunities. The principles of the Nassau -Suffolk case were correctly stated by the General Counsel, but the case is easily distinguishable because it i6 totally different on its facts from the instant case. In a recent case, Local Union 8, International Brotherhood of Electrical Workers (Romanoff Electrical Corp.), 221 NLRB 1131 (1975 ), Romanoff was a member of the Toledo Electrical Contractors Association and had collective-bar- gaining agreements with Local 8 for many years. These agreements contained union -security provisions and exclu- sive hiring hall provisions which set forth four classifica- tions of employees in descending order of priority for referral to jobs. The operative distinction there was that group I included journeyman residents in the Toledo area while group II included nonresident journeymen . Appli- cants for employment had to be selected and referred without discrimination by reason of membership or non- membership in the union. In that case the issue turned on awarding scheduled overtime for which preference was given to members of group I who were described as area residents . The parties stipulated that unscheduled overtime was not offered to applicants from groups other than group I until the list of group I applicants had been exhausted. As found by the Administrative Law Judge , absent a finding of pretext or sham , preferential hiring or job 2004 DECISIONS OF NATIONAL LABOR RELATIONS BOARD retention based on an objective criterion, particularly in the construction industry, would not be violative of the Act. Therefore, the preferential assignment of unscheduled overtime should not constitute an unfair labor practice where it is based on the objective criterion of area residence. The Board has long held that a union is not prohibited from trying to ease the impact of local unem- ployment by attempting to cause employers to limit work opportunities to strictly local applicants. In other words, the issue was not whether certain employees were accorded unlawful preferential treatment because they were union members, but whether the preferential treatment which local residents received was in violation of the Act. The Board continued by stating that travelers were less depend- able than area workers and that local experience had indicated that job completion schedules were usually met with area men and not travelers. Consequently, they accorded preferential treatment in the assignment of unscheduled overtime to employees residing in the area. Such discrimination is commonly not per se unlawful nor does the nexus seem so suspicious as to require the Board to substitute its wisdom for that of the parties. In summary, the record did not indicate that the respondents had an unlawful purpose in their policy of according preferential assignment of unscheduled overtime to area residents. In making this evaluation, the Board found that respondents had a legitimate interest in favoring residents of the area and further found that the General Counsel did not sustain his burden of proving that respondents acted unlawfully in fulfilling such interests. As the result of the above reason- ing, the Board dismissed the complaint in its entirety. Conclusion It is clear that the decision in Nassau-Suffolk, heavily relied on by the General Counsel, is not apposite to the matter at bar because the facts are easily distinguishable. In the instant case, the order of layoff followed by Respondent Interstate is in direct conformance to the requirements of layoff as set forth in the contract between the parties. Furthermore , it is significant that the layoff was the decision solely of the Employer , based on sound economic reasons , and the Respondent Union played no part in this decision. The absence of any discrimination directed against Smith and Wood is evidenced by the fact that both men were referred to their jobs by the Union . To further buttress the point that the Union did not discriminate against Smith and Wood, it is significant to note that they were subsequently again referred to a number of other jobs by the Union after the layoff by Interstate. I find that Respondents Interstate and Local 354 did not violate any provisions of the Act, and I recommend that the complaint be dismissed in its entirety. CONCLUSIONS OF LAW It has not been established that Respondents committed any of the unfair labor practices alleged in the complaint. Upon the basis of the foregoing findings of fact and conclusions of law, and upon the entire record in this case, and pursuant to Section 10(c) of the Act, I hereby make the following recommended: ORDER1 The complaint is dismissed in its entirety. 1 In the event no exceptions are filed as provided by Sec 102 46 of the of the Rules and Regulations, be adopted by the Board and become its Rules and Regulations of the National Labor Relations Board, the findings, findings, conclusions, and Order, and all objections thereto shall be deemed conclusions, and recommended Order herein shall, as provided in Sec 102 48 waived for all puposes Copy with citationCopy as parenthetical citation