Kelly & Stewart Environmental Service

National Labor Relations Board - Board Decisions

Jan 11, 1991

301 N.L.R.B. 91 (N.L.R.B. 1991)

91
301 NLRB No. 6
KELLY & STEWART ENVIRONMENTAL SERVICE
1 Universal Transfer Co., 266 NLRB 402 (1983); FWD Corp., 257 NLRB
1300 (1981); Morelli Construction Co., 240 NLRB 1190 (1979).
In Member Oviatt’s view, there may be limited circumstances, not present
here, in which an employer’s financial inability to pay may constitute a de-
fense to an allegation that it unilaterally and unlawfully ceased contractually
required payments to union benefit funds. To make this defense successfully,
an employer must establish that it continued to recognize—and did not repu-
diate—its contractual obligations. To satisfy this requirement, an employer
must prove that its nonpayment was followed by its request to meet with the
union to discuss and resolve the nonpayment problem. In so doing, an em-
ployer demonstrates its adherence to the contract and the bargaining process.
In such circumstances, Member Oviatt would find that an employer’s non-
payment of contractually required benefit fund payments would not violate
Sec. 8(a)(5) of the Act.
2 Morelli Construction Co., supra.
Kelly and Stewart Environmental Service Co., Inc.
and International Association of Heat and
Frost Insulators and Asbestos Workers, Local
No. 6. Case 1–CA–26841
January 11, 1991
DECISION AND ORDER
BY CHAIRMAN STEPHENS AND MEMBERS
CRACRAFT AND OVIATT
Upon a charge, an amended charge, and a second
amended charge filed by the Union on, respectively,
November 21 and December 11 and 22, 1989, the
General Counsel of the National Labor Relations
Board issued a complaint and notice of hearing on Jan-
uary 5, 1990, against Kelly and Stewart Environmental
Service Co., Inc., the Respondent, alleging that it has
violated Section 8(a)(5) and (1) of the National Labor
Relations Act. The Company timely filed an answer
and an amended answer admitting to all the allegations
in the complaint.
On October 15, 1990, the General Counsel filed a
Motion for Summary Judgment. On October 17, 1990,
the Board issued an order transferring the proceeding
to the Board and a Notice to Show Cause why the mo-
tion should not be granted. The Respondent filed no
response. The allegations in the motion are therefore
undisputed.
The National Labor Relations Board has delegated
its authority in this proceeding to a three-member
panel.
Ruling on Motion for Summary Judgment
The complaint alleges that the Respondent violated
Section 8(a)(5) and (1) of the Act by failing and refus-
ing, since about May 25, 1989, to make payments to
various fringe benefit funds as provided for in the con-
tract between the Respondent and the Union effective
from August 1, 1988, through April 30, 1990. The
complaint also alleges that the Respondent has violated
Section 8(a)(5) and (1) by failing and refusing, since
about May 25, 1989, to pay unit employees the wage
rates and other benefits set forth in the 1988–1990
contract. The Respondent’s answer to the complaint as
amended admits that it has failed to make contribu-
tions to the various benefit funds and to pay the unit
employees contractual wage rates and other benefits.
The Respondent’s answer states that it has failed to
comply with these contractual requirements because
‘‘it has sustained a massive financial loss’’ and ‘‘has
been without funds sufficient to remit’’ to the Union.
It is well established that an employer’s economic
necessity is not a defense to the unilateral repudiation
of the monetary provisions of a collective-bargaining
agreement.1 An employer acts in derogation of its bar-
gaining obligations under Section 8(d) of the Act, and
thereby violates Section 8(a)(5) and (1) of the Act,
when, during the life of a collective-bargaining agree-
ment between it and a union, it unilaterally modifies
or otherwise repudiates terms and conditions of em-
ployment contained in the agreement.2
We therefore find the Respondent’s answer does not
raise any legal or material issues of fact that warrant
a hearing. Accordingly, we grant the General Coun-
sel’s Motion for Summary Judgment.
On the entire record, the Board makes the following
FINDINGS OF FACT
I. JURISDICTION
The Respondent, a corporation with an office and
place of business in Boston, Massachusetts, operates as
an asbestos-removal contractor in the building and
construction industry. During the 1989 calendar year,
the Respondent provided services valued in excess of
$50,000 for enterprises within the Commonwealth of
Massachusetts, which enterprises are directly engaged
in interstate commerce. The Respondent admits, and
we find, that the Respondent is an employer engaged
in commerce within the meaning of Section 2(6) and
(7) of the Act and that the Union is a labor organiza-
tion within the meaning of Section 2(5) of the Act.
II. ALLEGED UNFAIR LABOR PRACTICES
Since about December 1, 1987, and at all times ma-
terial, the Union has been the designated exclusive col-
lective-bargaining representative of the employees in
the bargaining unit, and since that date has been recog-
nized as the representative by the Respondent. That
recognition has been embodied in successive collec-
tive-bargaining agreements, the most recent effective
by its terms for the period August 1, 1988, through
April 30, 1990. The unit consists of all asbestos-re-
moval workers employed by the Respondent, but ex-
cluding all other employees, guards, and supervisors as
defined in the Act. This unit constitutes a unit appro-
priate for purposes of collective bargaining within the
meaning of Section 9(b) of the Act. At all times mate-
rial, the Union, by virtue of Section 9(a) of the Act,
92 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
3 Any additional amounts owed employee benefit funds shall be determined
in accordance with the procedure set forth in Merryweather Optical Co., 240
NLRB 1213, 1216 fn. 7 (1979).
4 If this Order is enforced by a judgment of a United States court of appeals,
the words in the notice reading ‘‘Posted by Order of the National Labor Rela-
tions Board’’ shall read ‘‘Posted Pursuant to a Judgment of the United States
Court of Appeals Enforcing an Order of the National Labor Relations Board.’’
has been, and is now, the exclusive bargaining rep-
resentative of the unit with respect to rates of pay,
wages, hours of employment, and other terms and con-
ditions of employment.
Since about May 25, 1989, the Respondent has
failed and refused to make payments to various fringe
benefit funds as provided in the parties’ most recent
contract, and to pay contractual wage rates and other
benefits to unit employees. We find that the Respond-
ent by this conduct has repudiated the contract and has
failed and refused to bargain collectively with the
Union as the representative of its employees, in viola-
tion of Section 8(a)(5) and (1) of the Act.
CONCLUSION OF LAW
By failing and refusing to make contributions to var-
ious fringe benefit funds and to pay contractual wage
rates and other benefits, as required by the collective-
bargaining agreement, the Respondent has engaged in
unfair labor practices affecting commerce within the
meaning of Section 8(a)(5) and (1) and Section 2(6)
and (7) of the Act.
REMEDY
Having found that the Respondent has engaged in
certain unfair labor practices, we shall order it to cease
and desist and to take certain affirmative action de-
signed to effectuate the policies of the Act.
We shall order the Respondent to comply with the
1988–1990 collective-bargaining agreement by making
the required contributions to various benefit funds, ret-
roactive to May 25, 1989.3 The Respondent shall also
reimburse its employees for any expenses ensuing
from its unlawful failure to pay such amounts, as set
forth in Kraft Plumbing & Heating, 252 NLRB 891 fn.
2 (1980), enfd. mem. 661 F.2d 940 (9th Cir. 1981),
with interest as provided in New Horizons for the Re-
tarded, 283 NLRB 1173 (1987). Further, we shall
order the Respondent to make whole unit employees
for any loss of wages and other benefits they may have
suffered as a result of the Respondent’s failure to ad-
here to the collective-bargaining agreement since May
25, 1989. Backpay shall be computed in the manner
prescribed in Ogle Protection Service, 183 NLRB 682
(1970), with interest as provided in New Horizons for
the Retarded, supra.
ORDER
The National Labor Relations Board orders that the
Respondent, Kelly and Stewart Environmental Service
Co., Inc., Boston, Massachusetts, its officers, agents,
successors, and assigns, shall
1. Cease and desist from
(a) Failing and refusing to bargain with International
Association of Heat and Frost Insulators and Asbestos
Workers, Local No. 6 as the exclusive collective-bar-
gaining representative of the employees in the fol-
lowing appropriate unit by failing to make the various
benefit fund contributions and to pay the contractual
wage rates and other benefits required by the 1988–
1990 collective-bargaining agreement:
All asbestos removal workers employed by the
Respondent, but excluding all other employees,
guards, and supervisors as defined in the Act.
(b) In any like or related manner interfering with,
restraining, or coercing employees in the exercise of
the rights guaranteed them by Section 7 of the Act.
(2) Take the following affirmative action necessary
to effectuate the policies of the Act.
(a) Make the various fringe benefit fund contribu-
tions and pay the contractual wage rates and other ben-
efits that have been due since May 25, 1989, pursuant
to the collective-bargaining agreement, as set forth in
the remedy section of this decision.
(b) Make whole unit employees for any losses re-
sulting from the Respondent’s failure to make various
fringe benefit fund contributions and to pay contractual
wage rates and other benefits, since May 25, 1989, as
provided under the collective-bargaining agreement, in
the manner set forth in the remedy section of this deci-
sion.
(c) Preserve and, on request, make available to the
Board or its agents for examination and copying, all
payroll records, social security payments records, time-
cards, personnel records and reports, and all other
records necessary to analyze the amount of backpay
due under the terms of this Order.
(d) Post at its facility in Boston, Massachusetts, cop-
ies of the attached notice marked ‘‘Appendix.’’4 Cop-
ies of the notice, on forms provided by the Regional
Director for Region 1, after being signed by the Re-
spondent’s authorized representative, shall be posted
by the Respondent immediately upon receipt and main-
tained for 60 consecutive days in conspicuous places
including all places where notices to employees are
customarily posted. Reasonable steps shall be taken by
the Respondent to ensure that the notices are not al-
tered, defaced, or covered by any other material.
(e) Notify the Regional Director in writing within 20
days from the date of this Order what steps the Re-
spondent has taken to comply.
93KELLY & STEWART ENVIRONMENTAL SERVICE
APPENDIX
NOTICE TO EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
The National Labor Relations Board has found that we
violated the National Labor Relations Act and has or-
dered us to post and abide by this notice.
WE WILL NOT fail and refuse to bargain with Inter-
national Association of Heat and Frost Insulators and
Asbestos Workers, Local No. 6 as the exclusive rep-
resentative of the employees in the following bar-
gaining unit by failing to make the various fringe ben-
efit fund contributions and to pay the contractual wage
rates and other benefits required by our 1988–1990
collective-bargaining agreement with the Union.
All asbestos removal workers employed by us, but
excluding all other employees, guards, and super-
visors as defined in the Act.
WE WILL NOT in any like or related manner interfere
with, restrain, or coerce you in the exercise of the
rights guaranteed you by Section 7 of the Act.
WE WILL make the various fringe benefit fund con-
tributions and pay the contractual wage rates and other
benefits that have been due since May 25, 1989.
WE WILL make whole unit employees for any losses
resulting from our refusal to make the various fringe
benefit fund contributions and to pay the contractual
wage rates and other benefits since May 25, 1989, with
interest.
KELLY AND STEWART ENVIRONMENTAL
SERVICE CO., INC.