Shen-Mar Food Products, Inc.Download PDFNational Labor Relations Board - Board DecisionsJan 2, 1976221 N.L.R.B. 1329 (N.L.R.B. 1976) Copy Citation SHEN-MAR FOOD PRODUCTS, INC. 1329 Shen-Mar Food Products , Inc. and Amalgamated Meat Cutters and Allied Workers of North America, AFIrCIO, Local 593. Case 5-CA-6581 January 2, 1976 DECISION AND ORDER By CHAIRMAN MURPHY AND MEMBERS FANNING AND JENKINS On January 31, 1975, Administrative Law Judge Jennie M. Sarrica issued- the attached Decision in this proceeding. Thereafter, Respondent filed excep- tions and a supporting brief. General Counsel and Charging Party filed cross-exceptions and supporting briefs. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the National Labor Relations Board has delegated its authority in this proceeding to a three-member panel. The Board has considered the record and the attached Decision in light of the exceptions and briefs and has decided to affirm the rulings, findings, and conclusions of the Administrative Law Judge and to adopt her recommended Order as herein modified. The Administrative Law Judge found that Respon- dent's failure to deduct and remit dues of nine employees following their resignation from the Union and their untimely cancellation of voluntary checkoff authorizations by necessity interferes in the relationship of employees and their representative and constitutes an unlawful infringement upon the Section 7 rights of employees protected by law from employer interference. Accordingly, she found that by such conduct Respondent engaged in unlawful interference under Section 8(a)(I) of the Act and violated its bargaining duty under Section 8(a)(5). We agree with the findings of the Administrative Law Judge, and we additionally find that, where, as here, an employer, ceases to deduct and remit dues in derogation of an existing contract, it is in effect unilaterally changing the terms and conditions of employment of its employees and thus violates Section 8(a)(5) of the Act.' The Respondent interprets the collective-bargain- ing agreement as imposing no obligation on the part of the Respondent to deduct and remit dues to the Union pursuant to valid checkoff authorization where an employee has resigned from the Union. In our view, that interpretation is clearly in conflict with the intent of the checkoff provisions of the contract. Article II of the collective-bargaining agreement deals with checkoff and provides: Section 1: The Company agrees to checkoff from the pay of its employees, who are members of the Union, the regular monthly dues and initiation fees and to pay such monies collected over to the proper officers of the Union. Section 2: The Union agrees to furnish to the Company, individual dues deduction authoriza- tion slips voluntarily signed by its employees for the purpose of this checkoff. Section 3: The Union will idemnify and save harmless the Company from any and all claims and disputes by reason of the Company's acting in reliance upon the voluntary assignments furnished it. Section 4: The Company shall once each month furnish a list to the Union showing all newly hired employees who have passed the trial period, or who were laid off or discharged. Many of the employees had signed checkoff authorization cards which stated: I hereby authorize the Amalgamated Meat Cutters & Allied Workers of North America, AFL-CIO, Local Union No. 593, herein called the Union, to bargain collectively with my Employer, named below, in my behalf. I hereby authorize my Employer to deduct from my earnings and pay over to Local 593 those Union initiation fees and dues that may now or hereafter be established by said local. This authorization is irrevocable for a period of one (1) year from the execution hereof or until the termination date of the applicable collective bargaining agreement, whichever occurs sooner, and shall be automatically renewed for successive periods of one (1) year or for the, period of each succeeding applicable collective bargaining agree- ment, whichever period shall be shorter, unless written notice of its revocation by registered mail to the Employer and to the Union is given by me not more than twenty (20) days and not less than ten (10) days prior to any such renewal date. Article II, section' 2, of the contract requires the Union to furnish the Respondent with the "individual dues authorization slips"' which obvious- ly refer to the authorization cards submitted to Respondent. Respondent therefore knew that the attempted revocations were untimely. We cannot conclude that these individual dues authorization I Bruce E. Kronenberger and Herbert Schoenbrod d/b/a American Needle', Novelty Company, Kentucky Manufacturing Company and Harrisburg 221 NLRB No. 219 Manufacturing Company, 206 NLRB 534 (1973) See also George E Light Boat Storage, Inc, 153 NLRB 1209 (1965). 1330 DECISIONS OF NATIONAL LABOR RELATIONS BOARD slips, referred to in the contract, are contracts separately arrived at between the Union and the employees involved, and have no bearing on Respon- dent's contractual duty. Indeed, that construction is tantamount to saying that the Union surrendered to Respondent the right to unilaterally cease dues deductions, despite the existence of valid voluntary dues authorizations. Such an intent is so contrary to labor relations experience that it should not be inferred in the absence of unambiguous contract language to that effect or a history of negotiations demonstrating that fact.2 Neither exists in the instant case. Similarly, any contention that Respondent acts at its peril by continuing to check off the dues of the employees in question is certainly dispelled by the third section of article II which states that the Union will indemnify Respondent for all claims by reason of Respondent's acting in reliance upon the volun- tary assignments furnished it. This provision clearly indicates that the checkoff authorization cards were not considered by the parties as contracts separately arrived at between the Union and the employees involved, but rather are clearly incorporated into the collective-bargaining agreement between the Union and the Respondent. The last 'provision of the checkoff article, which requires Respondent to supply the Union with monthly lists indicating changes in employee status, further supports the conclusion that the checkoff cards should not be looked at apart from the contract. Thus, upon examining the entire checkoff article which clearly incorporates by reference the voluntary checkoff authorizations, we conclude that the first section of that article contains language of conven- ience rather than limitation, since the checkoff authorizations executed by employees also authorize the Union to bargain for the individual signatories. To view the first section in isolation, and to conclude that resignation from the Union relieves employees and the Employer of their obligations under the contract, would render the specific procedures and times for revocability of the voluntary checkoff authorizations virtually meaningless. Finally, Respondent's defense is predicated on its reliance on state law to the effect that an employer cannot deduct dues after an employee has terminat- ed his membership in the union by resignation. In this regard, we agree with the Administrative Law Judge that the dues checkoff herein does not, in and of itself, impose union membership or support as a condition required for continued employment, and that matters concerning dues-checkoff authorization and labor agreements implementing such authoriza- tions are exclusively within the domain of Federal law, having been preempted by the National Labor Relations Act and removed from the provision of Section 14(b) by the operation of Section 302. We also find merit in the cross-exceptions of the General Counsel and the Charging Party with respect to the failure of the Administrative Law Judge to require the payment of interest on the back dues owed to the Union by Respondent as a consequence of its unlawful refusal to check off and remit such dues to the Union.3 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 as modified below and hereby orders that Respondent, Shen-Mar Food Products, Inc., Bridgewater, Virgin- ia, its officers, agents, successors, and assigns, shall take the action set forth in said recommended Order as modified herein. 1. Substitute the following for paragraph 2(a): "Honor the contract checkoff provisions and the valid dues-checkoff authorizations filed with it, and remit to the Union dues it should have checked off pursuant to the collective-bargaining agreement in effect between the parties together with interest at 6 percent per annum." 2. Substitute the attached notice for that of the Administrative Law Judge. CHAIRMAN MURPHY, concurring: I concur in the conclusion of my colleagues, but rely on the terms of the dues-checkoff authorizations themselves, which provided that the authorizations would be irrvocable for a period of 1 year or until termination of the contract, whichever occurred sooner. As it is undisputed that the revocations herein were untimely, the Respondent by honoring them unilaterally changed a term or condition of employment in violation of Section 8(a)(5) and (1) of the Act. 2 See C&C Plywood Corporation, 148 NLRB 414 ( 1964), enfd 385 U.S 421 (1967). 3 The Baton Rouge Water Works Company, 170 NLRB 1183 ( 1968), W P. Ihrie & Sons, 165 NLRB 167 (1967). APPENDIX NOTICE To EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government We hereby notify our employees that: SHEN-MAR FOOD PRODUCTS, INC. WE WILL NOT refuse to check off union dues pursuant to dues-checkoff authorizations and to remit such dues to the Union under the checkoff provisions of our collective-bargaining agreement. WE WILL NOT in any like or related manner refuse to bargain collectively with the representa- tive of our employees and thereby interfere with, restrain; and coerce our employees with respect to rights protected by Section 7 of the Act. WE WILL, honor the contract checkoff provi- sions and the valid dues-checkoff authorizations filed with us and remit to the Union dues we should have checked off pursuant to the collec- tive-bargaining agreement between the parties, together with interest at 6 percent per annum. SHEN-MAR FOOD PRODUCTS, INC. DECISION STATEMENT OF THE CASE JENNIE M. SARRICA, Administrative Law Judge: This case was heard before me in Waynesboro, Virginia, on November 14, 1974,i pursuant to charges filed on March 7, and amended September 12, resulting in a complaint issued September 26. The complaint, as amended at the hearing, alleges that Respondent violated Section 8(a)(1) and (5) of the Act by, on and since September 7, 1973, unilaterally ceasing ' to check off and remit dues to the Union pursuant to the valid checkoff provisions of their collective-bargaining contract covering the period March 13, 1972, through March 11, 1975. A timely answer was filed by Respondent denying the commission of any unfair labor practices . All parties appeared at the hearing and were afforded full opportunity to be heard and to present evidence. Briefs were received from all parties. Upon the entire record, consisting - entirely of stipulations and documentary evidence , ,I make the following: FINDINGS AND CONCLUSIONS 1. JURISDICTION Respondent, a Virginia corporation, is engaged in the food processing business at its Bridgewater , Virginia, facility. During the preceding 12 months, a representative period , Respondent sold and,shipped products in interstate commerce valued in excess of $50,000 to purchasers located outside the State of Virginia . At all times material herein, Respondent is and has been, an employer as defined in Section 2(2) of the Act, engaged in commerce and in operations affecting commerce as defined in Section 2(6) and (7) of the Act. 1 All dates are in 1974 unless otherwise indicated 2 Variations in the precise wording of some cards submitted in evidence were not pointed to as having any significance in relation to the issues here II. THE LABOR ORGANIZATION 1331 Amalgamated Meat Cutters and Allied Workers of North America, AFL-CIO, Local 593, the Charging Party herein, is a labor organization within the meaning of Section 2(5) of the Act. III. THE ALLEGED UNFAIR LABOR PRACTICES A. The Issues 1. Whether it is a violation of Section 8(a)(1) and (5) of the Act to honor untimely revocations of dues checkoff authorizations in the context of a subsisting labor agree- ment containing a valid checkoff provision. 2. Whether a state court decision interpreting the statute and precedent in a right-to-work state as requiring such action by Respondent constitutes a defense. B. The Contract Checkoff Provisions The contract checkoff provisions are as follows: ARTICLE II Checkoff SECTION 1: The Company agrees to check off from the pay of its employees, who are members of the Union, the regular monthly dues and initiation fees and to pay such monies collected over to the proper officers of the Union. SECTION 2 : The Union agrees to furnish , to the Company, individual dues deduction authorization slips voluntarily signed by its employees for the purpose of this checkoff. SECTION 3: The Union will indemnify and save harmless the Company from any and all claims and disputes by reason of the Company's acting in reliance upon the voluntary assignments furnished it. SECTION 4: The Company shall once each month furnish a list to the Union showing all newly hired employees who have passed the trial period, or who were laid off or discharged. The checkoff authorization cards signed by employees of Respondent read , in pertinent part , as follows: 2 This authorization is irrevocable for a period of one (1) year from the execution hereof, or until the termination date of the applicable collective bargaining agreement, whichever occurs sooner, and shall be automatically renewed for successive periods of one (1) year or for the period of each succeeding applicable collective bar- gaining agreement , whichever period shall be shorter, unless written notice of its revocation by registered mail to the Employer and to the Union is given by me presented , and it is deemed sufficient to set forth the language of most of the authorizations involved. 1332 DECISIONS OF NATIONAL LABOR RELATIONS BOARD not more than twenty (20) days and not less than ten (10) days prior to any such renewal date. C. The Events Involved The facts are not in dispute here. During the period beginning with the month of September 1973, and the date of the hearing herein, and at times other than those permitted by the individual checkoff authorizations, nine specified employees of Respondent wrote letters cancelling their checkoff authorizations which Respondent honored by discontinuing the deductions from their pay for remittance to the Union.3 D. Contentions of the` Parties It is the General Counsel's contention that as Respon- dent was under a contractual obligation , to deduct and remit dues under the valid checkoff authorizations, its ceasing to perform this contractual obligation by honoring untimely and ineffective revocations thereof constituted violations of Section 8(a)(1) and (5) of the Act. In addition to cited cases involving this statute , the General Counsel claims support for his theory of the case in its consistency with the general principles of contract law involving actions for intentional interference with existing contractu- al relationships between the employees and the Union, and the Respondent's knowledge of the untimeliness and ineffectiveness of the attempted withdrawals as intentional interference which is prima facie sufficient for liability. In defense of its actions, Respondent relies upon the Virginia statute governing union-security agreements and state court decisions interpreting contract checkoff provi- sions as encompassed by the Section 14(b) authority making state right-to-work laws applicable in determining the validity of such authorizations .4 Respondent classifies dues checkoff and authorization agreements as a form of union security covered by the Section 14(b) deferral to state law , while the General Counsel and the Union both, with impressive court citations, assert that checkoff provisions, as distinguished from union-security provisions, fall under the preemption of Federal law under Section 302 of the statute. 3 It appears that the deferral procedure under Collyer Insulated Wire, A Gulf and Western Systems Co., 192 NLRB 837 (1971), instituted by the Regional Director , was unproductive since Respondent resisted efforts to invoke arbitration . Thus, the Regional Director issued the complaint herein. Accordingly , deferral to the contract settlement procedure is not suggested. See Gray-Hobart Water Corporation, 210 NLRB 742 (1974). 4 Specific reliance is placed upon Roberto Ferro, et at v. Hercules Incorporated Radford Army Ammunition Plant, Radfora Virginia and Local 3-495, Oil, Chemical and Atomic Workers International Union, 'AFL-CIO, Fairlawn, Pulaski County, by Judge A. William Arthur, Wytheville, Virginia, dated May 20, 1970, and upon title 40, article 3, chapter 4 of the Virginia Code, including the following: Sec. 40-72. Employer not to require payment of union dues, etc. - No employer shall require any person, as a condition of employment or continuation of employment , to pay any dues, fees or other charges of any kind to any labor union or labor organization. E. Analysts Preemption issues aside, it should be noted that, with respect to the cases relied upon by the General Counsel to establish that the Respondent's actions here constituted violations of the Act, the checkoff authorizations involved were not executed or renewed as an implementation of a contract union-security provision.5 Nor is this a case in which, after "deauthorizatioii' in an election and without an attempted revocation of any checkoff authorization, the employer elected to interpret the "deauthorization" as an automatic elimination of the "dues-checkoff' provisions as well as the union-security provisions of the contract, and unilaterally ceased dues deductions.6 I find these to be significant distinctions from the circumstances in the case at hand and, accordingly, do not find the holdings in those cases dispositive of the allegation of unlawful conduct here being considered. More guidance is apparent in the resolution of a similar issue in American Needle & Novelty7. There, after the termination date of the supportive contract, the employer checked off union dues but did not remit such moneys to the union , maintaining that since no contract existed after the termination date thereof, it was under no obligation to transmit such dues to the union. Having found that the parties orally agreed upon a complete contract and that such contract was binding upon them, for a specified period beginning at the end of the expired contract, the Board concluded that the employer was required by the contract to check off union dues for the employees who had signed written authorizations and to remit the same to the union. Since the employer had failed to remit such dues it was found to have violated Section 8(a)(5) and (1) of the Act. As authority for this ruling, reliance was placed on cases holding that conduct which breaches a contract and which also, in effect, unilaterally changes conditions of employ- ment, is tantamount to a refusal to bargain and that both the courts and the Board are vested with jurisdiction to give relief for the wrong.8 - As the revocations here were clearly and admittedly untimely and no unusual circumstances such as a deau- thorization election had occurred to support a departure from the clear language of the authorizations, Respondent was under a contract obligation to deduct and remit dues as though no attempt at revocation had been made. Thus, any reliance by Respondent upon the ineffective revoca- Respondent also asserts that under a North Carolina interpretation of the provisions of an identical statute, checkoff authorizations which were automatically renewable and irrevocable for successive periods of I year, etc. were held to be unlawful, and that this same interpretation should be given the Virginia statute which Respondent urges is applicable here. Thus, Respondent appears to be adding the defense that , aside from the revocation factor, the checkoffagreements themselves were unlawful. 5 Cf. Penn Cork & Closures, Inc., 156 NLRB 411 (1966); Bedford Can Manufacturing Corp., 162 NLRB 1428 (1966); Cast Optics Corporation, 184 NLRB 1 (1970), enfd. 458 F.2d 398 (C.A. 1, 1972). 8 Cf. W. P. Ihrie'& Sons, Division of Sunshine Biscuits, Inc., 165 NLRB 167 (1967) 7 Bruce E. Kronenberger and Herbert Schoenbrod d/b/a American Needle & Novelty Company, Kentucky Manufacturing Company and Harrisburg Manufacturing Company, 206 NLRB 534 (1973). 8 This ruling which appears in , the decision of the Administrative Law Judge was not altered by the Board. SHEN-MAR FOOD PRODUCTS, INC. tions as legal justification for its refusal to carry out its contract commitment is comparable to reliance by the employer in American Needle & Novelty upon the nonexis- tence of a viable contract to support payment of the funds deducted. However, it has long been held that not every breach of a collective-bargaining agreement constitutes an unlawful refusal to bargain and/or interference, restraint, and coercion of employees with respect to rights protected by the Act .9 It would seem that in the context of a subsisting collective-bargaining agreement the conduct complained of as an unlawful refusal to bargain as well as a contract breach should be of such a nature as would have an adverse impact upon the conditions of employment established by the agreement, or would reasonably be expected to undermine the status of the employee representative or constitute rejection of the concept of collective bargaining fostered by the statute. It may be that Respondent's failure and refusal to continue deductions and remittance of dues for the named individuals in accordance with the contractual checkoff provision did not literally amount to a unilateral change in the conditions of employment generally or of those individuals in particular. Nevertheless, by thus injecting itself into the relationship between those employees and the Union, Respondent has not only failed in its contract obligation but has also thrown its weight against the position and status of the statutory representative of its employees. A forseeable effect of such action is the undermining of the Union which could only defeat the stability collective bargaining is designed to foster. Addi- tionally, such conduct, of necessity, interferes in the relationship of employees and their representative and constitutes an unlawful infringement upon the Section 7 rights of employees protected by law from employer interference. Accordingly, I find that by such conduct, Respondent engaged in unlawful interference under Section 8(a)(1) and violated its bargaining duty under Section 8(a)(5) of the Act. In so holding, I reject Respondent's contention that contract checkoff provisions are a form of union security 10 given over to the control of the states under Section 14(b) of the Act and that its conduct here is protected, indeed required, by Virginia's right-to-work statute and state court decisions interpreting the Virginia law to be applicable to checkoff provisions of a labor agreement. I do not propose to advance an interpretation of the Virginia statute in this respect or of the cases applying it. For, I am convinced that matters concerning union dues-checkoff authorizations and labor agreements implementing such authorizations are exclusively within the domain of Federal law, having 9 See Old Line Life Insurance Company of America, 96 NLRB 499, 500 (1951); cf. C& S Industries, Inc., 158 NLRB 454,458 (1966). 10 The fact that checkoff provisions may, and probably do afford a union assurance of dues collections for a time certainly does not place it in the category of union security as that term is used in labor parlance. Union security deals with a requirement of union support under threat ofjob loss. Payroll deduction of union dues is merely a wage assignment , a financial accommodation to the union and to its members. It does not in and of itself impose union membership or support as a condition required for continued employment. In other words the job is not at stake because of a contractual dues-checkoff provision. 11 Cases cited by the General Counsel as support for this conclusion 1333 been preempted by the National Labor Relations Act as amended and effectively saved from the provision of Section 14(b) thereof by operation of Section 302.11 IV. THE EFFECTS OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The activities of Respondent set forth in section III, above, found to constitute unfair labor practices, occurring in connection with the, operations described in section I, above, have a close, intimate, and substantial -relationship to trade, traffic, and commerce among the several States, and tend to lead to labor disputes burdening and obstructing commerce and the free flow of commerce. V. THE REMEDY As Respondent has been found-to have engaged in unfair labor practices, I shall ^ recommend that it be ordered to cease and desist therefrom and to take specific action set forth below in the recommended Order, designed to effectuate the policies of the Act. Upon the foregoing findings of fact and the entire record in this case, I make the following: CONCLUSIONS OF LAW 1. The Respondent is an employer engaged in com- merce and in operations affecting commerce within the meaning if Section 2(2), (6), and (7) of the Act. 2. The Union is a labor organization within the meaning of Section 2(5) of the Act. 3. Respondent has committed unfair labor practices within the meaning of Section 8(a)(1) and (5) of the Act by failing and refusing to check off union dues pursuant to valid checkoff authorizations and to remit same to the Union pursuant to the collective-bargaining agreement in effect between the parties. Upon the foregoing findings of fact, conclusions of law, and the entire record in this case, and pursuant to Section 10(c) of the Act, I hereby issue the following recommend- ed: ORDER 12 Shen-Mar Food Products, Inc., its officers, agents, successors, and assigns, shall: 1. Cease and desist from: (a) Failing and refusing to check off union dues pursuant to valid checkoff authorizations and to remit same to the Union pursuant to the collective-bargaining agreement in effect between the parties. include State of Utah v. Montgomery Ward & Co., 120 Utah 294,233 F.2d 685, 28 LRRM 2284, cert. denied 342 U. S. 869; International Brotherhood of Operative Potters, AFL-CIO v. Tell Chair Company, 295 F.Supp. 961, 70 LRRM 3113 (1968); Sea Pak Division of W. R. Grace & Co. v. Industrial, Technical and Professional Workers, etc., 300 F.Supp. 1191, affd. 73 LRRM 3007 (C. A. 5), and 400 U. S. 985 (1971). , 12 In the event no exceptions are filed as provided by Sec. 102.46 of the Board's Rules and Regulations, the findings, conclusions , recommenda- tions, and recommended Order herein shall , as pro7vic° ed in Sec. 102.48 of the Rules and Regulations , be adopted by the Board and become its findings, conclusions, and Order, and all objections thereto shall be deemed waived for all purposes 1334 DECISIONS OF NATIONAL LABOR RELATIONS BOARD (b) In any like or'related manner failing or refusing to bargain collectively with the. representative of its employ- ees and thereby interfering with, restraining, and coercing its employees with respect to rights protected by Section 7 of the Act:. 2. Take the following affirmative action designed to effectuate the policies of the Act: (a) Honor the contract checkoff provisions and the valid dues-checkoff authorizations filed with it and remit to the Union dues it should have checked off and to be checked off pursuant to the collective-bargaining agreement be- tween them. (b) Preserve and, upon request, make available to the Board or its agents for examination and copying, all records necessary to analyze the amount due under the terms of this Order. "*a- In the event the Board's 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 Pursuant to a ,(c) Post at its place of business at Bridgewater, Virginia, facility copies of the - attached notice marked "Appendix." 13 Copies of said notice, on forms provided by the Regional Director for Region 5, after being duly signed by Respondent's representative, shall be posted by Re-; spondeni immediately upon receipt thereof, and be maintained by it for 60 consecutive -days thereafter, in conspicuous places, including all, places where notices to employees are customarily posted. Reasonable steps shall be taken by Respondent to insure that said notices are not altered, defaced, or covered by any other material (d) Notify the Regional Director for Region 5, in writing, within 20 days from the date of this Order, what steps the Respondent has taken to comply-herewith. Judgment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board." Copy with citationCopy as parenthetical citation