W.R. Grace & Co.-Conn.

National Labor Relations Board - Board Decisions

Aug 27, 1996

321 N.L.R.B. 1171 (N.L.R.B. 1996)

1171
321 NLRB No. 162
W. R. GRACE & CO.-CONN.
1 We do not rely on the judge’s remarks regarding the Respond-
ent’s treatment of its former chief executive.
2 Charging Party Guy Troutman’s testimony indicates that he may
have received life insurance benefits.
3 For the reasons set forth in his decision, we agree with the judge
that the complaint is not barred by Sec. 10(b) of the Act.
4 The Respondent, in its brief to the Board, refers to Najjar as
being the president of its organic chemical division at that time. The
record also indicates that in any event Najjar had become president
of Hampshire’s organic chemical division by the time of the hearing.
W. R. Grace & Co.-Conn. and Harold D. Bivens
and Donald F. Boarman and Robert L. Cecil
and James D. Chapman and Earl Henderson
and Bill Kirk and Henry E. Lott and Charles
C. Moseley and Kenneth D. Richardson and
James A. Smith and Richard Sutherland and
Bobby D. Troutman and Guy C. Troutman and
William T. Wink. Cases 25–CA–22941–1, 25–
CA–22941–2, 25–CA–22941–3, 25–CA–22941–4,
25–CA–22941–5, 25–CA–22941–6, 25–CA–
22941–7, 25–CA–22941–8, 25–CA–22941–9, 25–
CA–22941–10, 25–CA–22941–11, 25–CA–
22941–12, 25–CA–22941–13, and 25–CA–22941–
14
August 27, 1996
DECISION AND ORDER
BY CHAIRMAN GOULD AND MEMBERS BROWNING
AND COHEN
On April 28, 1995, Administrative Law Judge Mar-
tin J. Linsky issued the attached decision. The Re-
spondent filed exceptions and the General Counsel
filed an exception. The Respondent filed a brief in
support of its exceptions. The General Counsel filed a
brief in support of the judge’s decision and the Charg-
ing Parties filed a brief opposing the Respondent’s ex-
ceptions and supporting the General Counsel’s excep-
tion. The Respondent filed a reply brief in support of
its exceptions and an answering brief to the General
Counsel’s exception.
The National Labor Relations Board has delegated
its authority in this proceeding to a three-member
panel.
The Board has considered the decision and the
record in light of the exceptions and briefs and has de-
cided to affirm the judge’s rulings, findings, and con-
clusions only to the extent consistent with this Deci-
sion and Order.1
The judge found that the Respondent violated Sec-
tion 8(a)(5) and (1) by unilaterally modifying the
Charging Parties’ retiree medical and life insurance
benefits2 by entering into a sales agreement with
Hampshire Chemical Corporation (Hampshire). Con-
trary to the judge, we find merit in the Respondent’s
contentions that the sales agreement did not modify the
existing contractual benefits. We also agree with the
Respondent that it was not required under the con-
tract’s terms to provide the Charging Parties with the
retiree insurance benefits when they ceased employ-
ment with the Respondent and transferred to Hamp-
shire’s payroll because they did not ‘‘retire’’ from W.
R. Grace, as that term is used in the contract. Thus,
as explained more fully below, we reverse the judge’s
conclusion that the Respondent violated Section 8(a)(5)
and (1) by unilaterally changing retirement benefits.3
I. FACTUAL BACKGROUND
The Respondent’s national operations included a fa-
cility in Owensboro, Kentucky. The Owensboro facil-
ity, until December 29, 1992, consisted of three plants,
including the organic chemical plant. The Respondent
and the International Brotherhood of Boilermakers,
Local 726 were parties to a collective-bargaining
agreement that covered the unit employees in all three
Owensboro plants. That agreement was effective from
April 2, 1990, to April 5, 1993. The agreement pro-
vided in pertinent part that ‘‘[t]he company will pro-
vide to an employee who elects retirement between the
age of sixty-two (62) and sixty-five (65), medical in-
surance coverage until the employee reaches age sixty-
five (65)’’; and that ‘‘[t]he Company will provide to
an employee who elects retirement at age fifty-five
(55) or older contributory medical insurance who has
ten (10) or more years with the Company. The insur-
ance rate for retirees shall be the same ten percent
(10%) contribution as an active employee’’; and that
any employee retiring on or after April 2, 1991, shall
receive a $4000 life insurance benefit.
In the latter half of 1992, the Respondent and
Hampshire Chemical Corporation (Hampshire) engaged
in negotiations for the sale of the Respondent’s organic
chemical division, including the Owensboro chemical
plant. Edward Najjar, then president of Respondent’s
national organic division,4 in a letter dated November
4, 1992, to Local 726 President Crask, stated that:
I am writing this letter to advise you that the pro-
spective purchaser of the Organic Chemical Divi-
sion, Hampshire Chemical Corp. (‘‘Hampshire’’)
. . . has agreed with Grace to continue the em-
ployment status of those bargaining unit employ-
ees assigned to the Organic Department as of the
closing and, following said closing, to continue
the present wages, benefits and working condi-
tions, and upon request, to recognize your Union
and bargain with it for the purpose of reaching a
collective-bargaining agreement comparable to the
agreement presently in effect between Local 726
and Grace. Hampshire has also agreed to continue
the employment status of a yet to be determined
number of bargaining unit maintenance and lab-
oratory employees assigned to the Organic De-
partment as of the closing.
1172 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
5 The parties stipulated that all the Charging Parties had at least
10 years of service with the Respondent at the time of their separa-
tion from Grace. Robert Randolph, Respondent’s personnel manager
at all times material to this proceeding, testified that at the time the
Charging Parties terminated their employment with the Respondent
they were all age 55 or older and had 10 years of service with the
Respondent. On the other hand, the General Counsel presented a
document, summarizing the birth dates and retirement dates of the
Charging Parties, prepared by the Respondent during the investiga-
tion of this case, which shows that two of the Charging Parties were
less than 55 years of age on December 29, 1992.
6 A new local was formed to represent the Hampshire employees.
On December 17, 1992, Najjar wrote to Crask:
Hampshire intends to continue the employment
status of those Bargaining Unit employees as-
signed to the Organic Division as of the Closing
and, following the Closing, to continue the
present wages, benefits and working conditions.
This will include, but not be limited to, continu-
ation of the present retirement benefits for Bar-
gaining Unit employees. Upon request, after the
Closing, Hampshire will recognize your Union
and bargain with it for the purpose of reaching a
Collective Bargaining Agreement comparable to
the Agreement presently in effect between Local
726 and Grace.
Crask’s reply, addressed to, President Najjar, Hamp-
shire Chemical Company, dated December 21, 1992,
read as follows:
IN RELIANCE TO [sic] YOUR LETTERS OF
NOVEMBER 4, 1992 AND DECEMBER 17,
1992, THE MEMBERS OF OUR LOCAL
UNION WHO OPT TO REMAIN IN THE OR-
GANIC CHEMICAL PLANT AS OF DECEM-
BER 23, 1992, ACCEPT YOUR PROPOSALS
AND WILL CONTINUE TO WORK UNDER
THE TERMS AND APPLICATIONS OF THE
W.R. GRACE-BOILERMAKERS CONTRACT
AND PAST PRACTICES, UNTIL SUCH TIME
AS THAT CONTRACT IS REOPENED BY THE
UNION.
RELYING ON YOUR REPRESENTATIONS,
THE MEMBERS OF THE NEW BARGAINING
UNIT WILL WORK AND WILL CONTINUE
TO RECEIVE ALL WAGES, FRINGES, AND
PENSION RIGHTS WHICH THEY HAVE
BEEN RECEIVING AT W.R. GRACE-CONN.
The individual Charging Parties signed forms ac-
cepting the offer of employment contained in Najjar’s
December 17 letter.
On December 29, 1992, the Respondent and Hamp-
shire concluded their sales agreement. The Employee
Benefits Agreement, included in the sales agreement,
stated in relevant part that:
7. Post-Retirement Medical and Life Insurance
(b)(1) Grace shall extend post-retirement medi-
cal expense and life insurance coverage to . . .
(B) each Covered Employee of the Owensboro
plant that is covered on the day before the Clos-
ing Date by a collective bargaining agreement
. . . provided that, (i) . . . if the Covered Contin-
ued Employee is employed at the Owensboro
plant of the Division on the Closing Date, such
Covered Continued Employee retires on or before
April 5, 1993, (ii) the Covered Continued Em-
ployee ‘‘remains retired’’ (as defined below) from
the Buyer for at least 60 months from the date he
or she elects such coverage, (iii) the Covered
Continued Employee elects such coverage during
the 30 day period beginning on the date that he
or she retires from the Buyer, (iv) Grace is noti-
fied of such election within said 30 day period by
the Covered Continued Employee or the Buyer,
(v) the Covered Continued Employee would oth-
erwise have been eligible for such coverage, as
reasonably determined by Grace, as of the date
that he or she retires from the Buyer under the
terms of such collective bargaining agreement, if
the Covered Continued Employee had retired
from Grace on that date, and (vi) the Covered
Continued Employee pays the premium for such
coverage, as determined by Grace and as in effect
from time to time, which would have been appli-
cable had such Covered Continued Employee con-
tinued in the employ of Grace under said collec-
tive bargaining agreement and retired from Grace
on the date said Covered Continued Employee re-
tires from the Buyer.
(2) For purposes of this Section 7(b), a Covered
Continued Employee ‘‘remains retired’’ from the
Buyer only if he or she does not perform any
services for the Buyer (including services as an
employee of the Buyer, a consultant to the Buyer
or an independent contractor) after the date the
Covered Continued Employee elects post-retire-
ment medical expense and life insurance coverage
from Grace. Notwithstanding the immediately pre-
ceding sentence, a Covered Continued Employee
‘‘remains retired’’ if he or she performs services
for the Buyer solely as an employee of an em-
ployer which is not directly or indirectly control-
ling, controlled by, or under direct or indirect con-
trol with, the Buyer.
The 14 Charging Parties were placed on Hamp-
shire’s payroll as of January 1, 1993.5 In April 1993,
Local 727, International Brotherhood of Boilermakers6
was recognized by Hampshire as the new exclusive
collective-bargaining representative of Respondent’s
former employees in the organic chemical division at
the Owensboro facility. Hampshire and Local 727 en-
tered into a collective-bargaining agreement in October
1173W. R. GRACE & CO.-CONN.
7 Charging Parties Guy Troutman and Wink testified during cross-
examination that what they had applied for and received were ‘‘vest-
ed retirement pension benefits.’’
1993. Until that agreement was reached, Hampshire
applied the terms and conditions of the collective-bar-
gaining agreement between Respondent and Local 726,
effective April 2, 1990, through April 5, 1993, to these
employees. Under the terms of the new agreement, em-
ployees who retired by November, 1993 ‘‘shall be able
to continue coverage under the Hampshire Chemical
medical plan with the same terms and conditions re-
garding retiree medical coverage of the 1990–1993 col-
lective-bargaining agreement under which they pre-
viously were covered by W.R. Grace.’’
While employees of Hampshire, the Charging Par-
ties applied for certain retirement benefits from the Re-
spondent on various dates from January 1, 1993, to
June 1, 1993. The Charging Parties purport to have
‘‘officially’’ retired from the Respondent by applying
for those benefits.7 Some of the Hampshire employees
then attempted to pay premiums for medical coverage
as retirees from Grace. In a letter dated June 29, 1993,
addressed to ten individuals, including eight of the
Charging Parties, Respondent’s personnel manager,
Randolph, stated:
We are returning your check and/or cash that was
given to Charlotte Arnett for the purpose of pur-
chasing post-retirement medical benefits from
GRACE. You are not eligible for the post-retire-
ment medical plan pursuant to the Employee Ben-
efits Agreement signed by W.R. Grace & Co. and
Hampshire Chemical Company.
Attached is a copy of the relevant provisions of
this Agreement. Please refer specifically to [item
7(b)(2)]. Since you are an active employee of the
Buyer (Hampshire Chemical Company) you are
not eligible for the medical insurance.
II. THE ADMINISTRATIVE LAW JUDGE’S DECISION
The judge found that the Respondent had violated
Section 8(a)(5) and (1). He reasoned that the Sales
Agreement between the Respondent and Hampshire,
‘‘sought to negate the right of Respondent’s unit em-
ployees (who transferred to Hampshire) to receive Re-
spondent’s post-retirement medical insurance coverage
as set forth in Respondent’s contract with Local 726’’
and ‘‘also sought to void Respondent’s contractual ob-
ligation to provide, upon later-retirement from Re-
spondent, the $4,000 life insurance benefit due its retir-
ees.’’ The judge concluded that the Respondent had
violated Section 8(a)(5) and (1) of the Act by modify-
ing the Charging Parties’ postretirement benefits with-
out giving prior notice and an opportunity to bargain
to Local 726.
III. ANALYSIS AND CONCLUSION
The question presented is whether, following the
sale of its organic chemical plant to Hampshire and the
Charging Parties’ transfer to Hampshire’s payroll, the
Respondent was required to provide the Charging Par-
ties with contractual retiree medical and life insurance
benefits. We find that under the circumstances here,
the Charging Parties did not have a contractual right
to the benefits they sought because they did not ‘‘re-
tire’’ from the Respondent, within the meaning of the
bargaining agreement’s terms. We further find that
there was no unilateral change in benefits and no vio-
lation.
The correspondence between Najjar and Crask re-
flects the understanding between the Respondent and
Local 726 that the unit employees who remained em-
ployed at the plant would become Hampshire employ-
ees and would be subject to the existing terms and
conditions of employment—including retirement bene-
fits—until a new agreement was reached. The General
Counsel concedes that until October 1993, when
Hampshire and Local 727 negotiated a successor
agreement, Hampshire applied the terms of the Re-
spondent’s contract with Local 726.
Pursuant to that contract, otherwise eligible employ-
ees who retired from W. R. Grace would receive re-
tiree insurance benefits. Thus, until December 29,
1992, the Charging Parties could have retired from the
Respondent and, if otherwise qualified, would have re-
ceived postretirement life insurance and medical cov-
erage. We find, however, that the General Counsel has
failed to prove that the Charging Parties retired from
W. R. Grace. The record demonstrates only that they
opted to transfer to Hampshire’s payroll. The fact that
the Respondent provided the Charging Parties with
vested pension benefits to which they were legally en-
titled does not demonstrate that they retired. Moreover,
under the Respondent’s collective-bargaining agree-
ment, only present employees are eligible to elect to
change their employment status and obtain retiree
medical insurance coverage. Thus, former employees,
like the Charging Parties here, who terminated their
employment with the Respondent on a given date and
went to work for another employer could not later ob-
tain retiree medical insurance benefits from the Re-
spondent. Here, there is no evidence that the Charging
Parties timely requested retiree benefits on December
29, 1992, when they ceased employment with the Re-
spondent.
Moreover, after Hampshire adopted and applied the
terms of the Respondent’s contract with Local 726, eli-
gible unit employees would receive the same contrac-
tual retirement benefits if they retired from Hampshire.
In fact, the changes in retirement benefits available to
unit employees that became applicable after November
1, 1993, were the result of the collective-bargaining
1174 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
8 The General Counsel contends that if the Charging Parties had
known at the time of the sale that they would lose retirement bene-
fits by becoming Hampshire employees, they would likely have re-
mained active employees of the Respondent. We note, however, that
assuming the same contractual retirement benefits would still apply
if the Charging Parties were transferred or reassigned by the Re-
spondent, they would still have to retire to receive the retiree medi-
cal and life insurance benefits—the same situation they faced as
Hampshire employees.
process and the newly negotiated agreement between
Hampshire and Local 727, as agreed to by Najjar and
Crask in their respective letters. Contrary to the
judge’s findings, such changes were not the result of
the sales agreement because, until the newly negotiated
agreement changed the terms, the unit employees were
in the same position with Hampshire, with the same
contractual rights, as they were with the Respondent
before the December 29, 1992 sale.8 All that was
changed was that Hampshire, rather than the Respond-
ent, became the Employer from which qualified unit
employees had to retire to receive the retirement bene-
fits. Rather than changing the nature or amount of the
available benefits, the sales agreement was merely a
mechanism for allocating the cost of retirement bene-
fits during the term of the Respondent’s contract with
Local 726, which expired on April 5, 1993. In this re-
gard, the sales agreement provided that the Respondent
would fund the cost of retiree medical and life insur-
ance coverage for former Grace employees who retired
from Hampshire and applied for the benefits before
April 5.
By seeking to remain actively employed in the or-
ganic chemical plant and also to receive retirement
benefits, the Charging Parties sought a benefit which
the collective-bargaining agreement between the Re-
spondent and Local 726 did not mandate. The agree-
ment between the Respondent and Local 726 did not
grant the employees (nonretirees from Respondent) a
right to continue to work at the Owensboro facility and
to receive medical coverage and life insurance benefits
as retirees. The letters from Najjar did not promise the
continued employees the additional benefit of both re-
taining their active employment status with the organic
chemical division of the Owensboro facility and also
receiving benefits as retirees.
Simply stated, the Charging Parties did not ‘‘retire’’
as that term was used in the collective-bargaining
agreement. Rather, they continued to be active employ-
ees of the Owensboro organic chemical division. Ac-
cordingly, we find that the General Counsel has not es-
tablished that the Respondent had a contractual obliga-
tion to provide the medical coverage and life insurance
coverage sought by the Charging Parties. We therefore
conclude that the General Counsel has not established
that the Respondent has unilaterally modified, through
its sales agreement with Hampshire, or otherwise, the
right of the Charging Parties to receive postretirement
medical coverage and life insurance benefits. We
therefore find no violation of Section 8(a)(5) and (1)
of the Act.
ORDER
The complaint is dismissed.
Steve Robles, Esq., for the General Counsel.
Edwin S. Hopson, Esq., of Louisville, Kentucky, and Richard
G. Remmes, Esq., of Lexington, Massachusetts, for the
Respondent.
John Frith Stewart, Esq., Louisville, Kentucky, for the
Charging Parties.
DECISION
STATEMENT OF THE CASE
MARTIN J. LINSKY, Administrative Law Judge. On Decem-
ber 20, 1993, the 14 individual Charging Parties filed 14 sep-
arate charges against W. R. Grace & Co.-Conn. (Respond-
ent).
On March 8, 1994, the National Labor Relations Board, by
the Regional Director for Region 25, issued a consolidated
complaint, which alleges that Respondent violated Section
8(a)(1) and (5) of the National Labor Relations Act (the
Act), when it unilaterally and without giving prior notice and
opportunity to bargain to the Union modified and/or elimi-
nated future retiree medical insurance and life insurance ben-
efits for the 14 individual Charging Parties.
Respondent filed an answer in which it denied that it vio-
lated the Act in any way and that, in any event, the charges
were filed in an untimely fashion and are time-barred, even
if meritorious, by Section 10(b) of the Act.
A hearing was held before me in Owensboro, Kentucky,
on November 10, 1994.
I find that the General Counsel has proved its case and
will recommend an appropriate remedy.
Based on the entire record in this case, to include
posthearing briefs submitted by the General Counsel, Re-
spondent, and Charging Parties, and based on my observation
of the witnesses and their demeanor, I make the following
FINDINGS OF FACT
I. JURISDICTION
Respondent is, and has been at all times material, a cor-
poration existing under and by virtue of the laws of the State
of Connecticut.
At all times material, the Respondent has maintained an
office and place of business in Owensboro, Kentucky (the fa-
cility), where it is and has been at all times material, engaged
in the manufacture, sale, and distribution of chemicals.
During the 12 months preceding the issuance of the com-
plaint, a representative period, the Respondent, in the course
and conduct of its business operations described above, pur-
chased and received at the facility products, goods, and mate-
rials valued in excess of $50,000 directly from points located
outside the Commonwealth of Kentucky.
1175W. R. GRACE & CO.-CONN.
The Respondent admits, and I find, that it is now, and has
been at all times material, an employer engaged in commerce
within the meaning of Section 2(2), (6), and (7) of the Act.
II. THE LABOR ORGANIZATION INVOLVED
Local Lodge No. 726 of the International Brotherhood of
Boilermakers, Iron Shipbuilders, Blacksmiths, Forgers and
Helpers, AFL–CIO (the Union) is now and has been at all
times material, a labor organization within the meaning of
Section 2(5) of the Act.
III. THE ALLEGED UNFAIR LABOR PRACTICES
A. The Facts
The Respondent in these cases operates on the national
level, which operations include its facility in Owensboro,
Kentucky. At Owensboro, it manufactures and sells certain
chemical products. Respondent and the International Brother-
hood of Boilermakers, Local 726 have had a collective-bar-
gaining history concerning this facility for over 30 years. As
of December 1992, there were approximately 300 employees
in the Owensboro bargaining unit, with approximately 30
unit employees employed in its Organic Chemical Division
at the facility. Prior to January 1993, Respondent’s
Owensboro enterprise consisted of three fairly autonomous
operations, i.e., the papermill plant, the battery separator
plant, and the organic chemical plant or division. The organic
chemical plant/division and certain of its employees are the
focus of this case.
As of December 1992, Respondent and Local 726 were
parties to a collective-bargaining agreement (G.C. Exh. 3)
which covered the unit employees in all three Owensboro
plants, including the organic chemical plant and its unit em-
ployees. That agreement was effective from April 2, 1990,
to April 5, 1993. The agreement currently in effect between
Respondent and Local 726 (G.C. Exh. 12) is effective from
April 5, 1993, to April 1, 1996.
The collective-bargaining agreement in effect immediately
prior to January 1, 1993 (G.C. Exh. 3), provided for several
retirement related benefits, e.g., (1) for those employees who
retired at age 55 or older, and who had at least 10 years’
service with Respondent, Respondent would provide con-
tributory retiree medical insurance; (2) the insurance rates
would be at the same 10-percent contribution rate as active
employees; and (3) any employee who retired on or after
April 2, 1991, would receive a $4000 life insurance benefit.
In the several months prior to December 29, 1992, Re-
spondent and Hampshire Chemical Corporation (Hampshire)
engaged in negotiations for the sale of the organic chemical
plant operations in Owensboro. During the negotiations, Ed-
ward Najjar, then president of Respondent’s (National) Or-
ganic Chemical Division, wrote two significant letters to
Bobby W. Crask, president of Local 726. In his November
4, 1992 letter (G.C. Exh. 2), Najjar advised Crask of the pro-
spective sale, and assured Crask that, after the sale, Hamp-
shire would, inter alia, continue the then-current wages, ben-
efits, and working conditions of Respondent’s organic chemi-
cal unit employees who transferred to Hampshire employ-
ment. In this letter, Najjar also promised that Hampshire
would recognize the Union and enter into a collective-bar-
gaining agreement comparable to Local 726’s contract with
Respondent. In Najjar’s December 17, 1992 letter (G.C. Exh.
5) to Crask, Najjar repeated the assurances of his November
4, 1992 letter, and specifically assured Crask that the then-
current retirement benefits would remain the same under
Hampshire.
Based on the promises contained in Najjar’s two letters,
Local 726 President Crask, on December 21, 1992, wrote a
reply letter (G.C. Exh. 6) to Najjar stating that Respondent’s
Owensboro organic chemical unit employees would transfer
to Hampshire employment. Crask’s December 21, 1992 letter
repeated Najjar’s assurances of continuing unchanged bene-
fits (including retirement benefits) as the basis for the unit
employees’ agreement to transfer to Hampshire. Based on
Respondent’s (Najjar’s) assurances, many of Respondent’s
Owensboro organic chemical employees, including all 14
Charging Parties here, signed acceptance of employment
forms (G.C. Exhs. 7(a)–(n)), all dated around December 21,
1992. These forms were prepared by Respondent and distrib-
uted to Respondent’s employees.
On December 29, 1992, Respondent and Hampshire con-
cluded their sales agreement. This sales agreement sought to
negate the right of Respondent’s unit employees (who trans-
ferred to Hampshire) to receive Respondent’s postretirement
medical insurance coverage as set forth in Respondent’s con-
tract with Local 726 (G.C. Exh. 3) and as detailed in Re-
spondent’s (1992) summary plan description (Resp. Exh. 1,
see p. 21 of that exhibit). The December 29, 1992 sales
agreement also sought to void Respondent’s contractual obli-
gation to provide, on later-retirement from Respondent, the
$4000 life insurance benefit due its retirees (G.C. Exh. 3).
It is undisputed that Respondent neither notified Local 726
prior to the sale, of these significant detrimental changes in
employees’ retirement benefits, nor offered to bargain con-
cerning these changes. Not only was there no actual prior no-
tification and bargaining regarding these changes, but Re-
spondent’s agents, Tony Rowe and Bill Vargason, plant man-
ager and production superintendent, respectively, in Decem-
ber 1992, informed then Local 726 Vice President Glen
Davis that they were forbidden to discuss or disclose any as-
pect of the sales agreement to the Union or anyone else.
Tony Rowe and Bill Vargason transferred to similar manage-
ment positions with Hampshire following the sale.
The 14 Charging Parties here transferred to Hampshire,
rather than transfer to Respondent’s two remaining oper-
ations in Owensboro or immediately retire, and were placed
on its payroll as of January 1, 1993. Thereafter, during the
period January 1 to June 1, 1993, the Charging Parties, on
various dates officially retired from Respondent, and began
to receive Respondent’s pension and certain other retirement
benefits with the expectation on their part that Respondent’s
retiree medical benefits and life insurance benefits would fol-
low. The Charging Parties were active employees of Hamp-
shire during this period, however, they were, until October
1993, when Hampshire entered into a collective-bargaining
agreement with ‘‘new’’ Local 727, operating under all the
terms and conditions of the Respondent’s contract with Local
726 (G.C. Exh. 3).
In the period prior to June 29, 1993, several of the Charg-
ing Parties, i.e., Bivens, Boarman, Cecil, Henderson, Kirk,
Lott, Moseley, and Richardson, attempted to pay by check
their premium copayment under Respondent’s retiree medical
insurance program. Charging Parties Guy Troutman and
Bobby Troutman attempted to pay in person on June 28,
1176 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
1993. Charging Parties Wink, Chapman, Smith, and Suther-
land intended to make their payment but did not because
they learned that Respondent was refusing tendered pay-
ments. On June 29, 1993, by mail, Respondent returned the
checks tendered by eight of the Charging Parties and in-
formed them that, under the terms of the December 29, 1992
sales agreement between Respondent and Hampshire, the
Charging Parties were not eligible for Respondent’s post-
retirement medical insurance. This memo (G.C. Exh. 11) is
the first time that any of the Charging Parties were told that,
despite prior assurances from Respondent’s agents, they
would lose both their eligibility for Respondent’s postretire-
ment medical coverage and their $4000 life insurance bene-
fit. It is uncontradicted that, had the Charging Parties known
at the time of the December 29, 1992 sales agreement that
they would lose these benefits by becoming Hampshire em-
ployees, they could have made a fully informed decision on
whether or not to transfer to Hampshire or remain active em-
ployees of Respondent or immediately retire. Guy Troutman
testified, with great believability, that he would not have
transferred to Hampshire had he had known the impact on
postretirement benefits which information was kept from him
and his fellow Charging Parties.
B. Analysis
Respondent raises a 10(b) defense, i.e., the charges were
filed more than 6 months after the Charging Party learned of
the alleged unfair labor practices. I disagree.
Respondent carefully kept from the Charging Parties and
their Union any knowledge of these changes to retiree medi-
cal benefits and life insurance benefits and, in addition, Re-
spondent lulled the Union and the individual Charging Par-
ties into a false sense of security. In his letters of November
4 and December 17, 1992, Edward Najjar, a high-ranking of-
ficial of Respondent, informed the Union that the wages,
benefits, and working conditions under Respondent would
continue for those employees who transferred to Hampshire.
In addition Respondent’s supervisors, Tony Rowe and Bill
Vargason, in December 1992 would not tell the Union the
specifics of the sale of the plant to Hampshire.
It is undisputed that the terms of the sales agreement be-
tween Respondent and Hampshire were kept confidential and
Local 726 was not aware of the contents of the sales agree-
ment and reasonably relied on Respondent’s representations
that wages and benefits and working conditions for those em-
ployees of Respondent who transferred to Hampshire would
remain the same as they were under Respondent.
In early spring of 1993 a new local union was formed. It
was Local 727, International Brotherhood of Boilermakers,
Iron Ship Builders, Blacksmiths, Forgers & Helpers, AFL–
CIO, and it represented the former employees of Respondent
who had transferred to Hampshire.
Former Local 726 Vice President Glen Davis became
president of new Local 727 and on May 26, 1993, wrote to
Plant Manager Tony Rowe and requested a copy of the sales
agreement. In his letter Davis wrote that ‘‘this information
is needed to intelligently represent the bargaining unit em-
ployees in regard to wages, hours of work, and other condi-
tions of employment.’’ (G.C. Exh. 9.)
On June 2, 1993, Tony Rowe sent to Davis a copy of part
of the sales agreement which contained the language which
would put the Union and the 14 individual Charging Parties
on notice that their postretirement medical benefits and life
insurance benefits would not be as good as they had been
assured in Najjar’s letters of November 22 and December 17,
1992, they would be.
In his cover letter to Davis, Rowe wrote that the part of
the sales agreement he sent to Davis, i.e., a document enti-
tled the ‘‘U.S. Employee Benefits Agreement’’ contains
‘‘confidential information’’ and was being furnished with the
express agreement that the Local 727 negotiating committee
‘‘shall maintain the confidentiality of the document and will
not disclose this document or any information contained in
this document to any other person or entity.’’ (G.C. Exh. 10.)
Davis and his negotiating committee complied with this un-
derstanding and did not disclose the contents of the U.S. Em-
ployee Benefits Agreement to any of the 14 Charging Parties
and the 14 Charging Parties did not know until June 29,
1993, in a memo from Human Resources Manager Bob Ran-
dolph that the medical insurance benefits and life insurance
benefits available to them when they retired would not be as
promised, i.e., the same as that which they would get if they
had stayed on as employees of Respondent and not trans-
ferred to Hampshire. Accordingly, the charges, which were
filed on December 20, 1993, or within 6 months of the
Charging Parties’ first learning of the change in retiree bene-
fits, were timely filed.
As to the merits it is clear that Respondent modified to be
detriment of the 14 Charging Parties their postretirement
benefits without giving prior notice and opportunity to bar-
gain to Local 726. This is a violation of Section 8(a)(1) and
(5) of the Act.
The treatment accorded the 14 Charging Parties in this
case by Respondent contrasts rather sharply with Respond-
ent’s treatment of its recently ousted Chief Executive J. P.
Bolduc. The following was reported on page F1 of the busi-
ness section of the Washington Post on April 7, 1995: ‘‘J. P.
Bolduc, ousted as chief executive of W. R. Grace amid alle-
gations of sexual harassment, will receive a severance pack-
age of about $43 million—twice as much as first reported.
The chemical and health care company, based in Boca Raton,
Fla., is giving Bolduc, 55, lifetime pension and health bene-
fits potentially worth nearly $23 million, in addition to $20
million previously reported, the company told the SEC.’’
The remedy for this violation should be as follows: Re-
spondent should be ordered to cease and desist from this or
similar misconduct; Respondent should post a notice at its
Owensboro, Kentucky plant; the postretirement benefits
available to the 14 Charging Parties in the area of medical
benefits and life insurance benefits should be restored to
what they would have been prior to the transfer of the 14
Charging Parties to Hampshire; and Respondent should be
ordered to bargain in good faith with the Union regarding
wages, hours, and other terms and conditions of employment
of its employees.
CONCLUSIONS OF LAW
1. The Respondent, W. R. Grace & Co.-Conn. is, and has
been at all times material, an employer engaged in commerce
within the meaning of Section 2(2), (6), and (7) of the Act.
2. Local 726 of the International Brotherhood of Boiler-
makers, Iron Shipbuilders, Blacksmiths, Forgers & Helpers,
1177W. R. GRACE & CO.-CONN.
AFL–CIO is, and has been at all times, a labor organization
within the meaning of Section 2(5) of the Act.
3. Respondent violated Section 8(a)(1) and (5) of the Act
when it unilaterally and without giving prior notice and op-
portunity to bargain to the Union modified future retiree
medical insurance benefits and life insurance benefits for the
14 Charging Parties.
[Recommended Order omitted from publication.]