MEMC Electric Materials Inc.

National Labor Relations Board - Administrative Judge Opinions

Sep 20, 2004

14-CA-027688 (N.L.R.B. Sep. 20, 2004)

JD(ATL)–47–04
Saint Peters, MO

UNITED STATES OF AMERICA
BEFORE THE NATIONAL LABOR RELATIONS BOARD
DIVISION OF JUDGES
ATLANTA BRANCH OFFICE

MEMC ELECTRIC MATERIALS, INC.

and CASE 14-CA-27688

INTERNATIONAL ASSOCIATION OF
MACHINISTS & AEROSPACE
WORKERS, AFL-CIO

Christal J. Key, Esq.,
for the General Counsel.
Timothy J. Sarsfield, Esq., and
Stephen P. Smith, Esq.,
for the Respondent.
Mark W. Conner, Business
Representative, for the
Charging Party.

DECISION

Statement of the Case

LAWRENCE W. CULLEN, Administrative Law Judge: This case was heard before
me in St. Louis, Missouri, on August 23, 2004, pursuant to a complaint filed by the Regional
Director of Region 14 of the National Labor Relations Board (“the Board”) as amended on June
17, 2004, and as further amended at the hearing. The complaint is based on an amended charge
filed by the International Association of Machinists & Aerospace Workers, AFL-CIO (“the
Charging Party” or “the Union”) on February 23, 2004. The complaint as amended, alleges that
MEMC Electronic Materials, Inc. (“the Respondent” or “the Company”) committed violations of
Sections 8(a)(1) and (5) of the National Labor Relations Act (“the Act”). Respondent has by its
answer as amended at the hearing denied the commission of any violations of the Act.

Upon the entire record in this proceeding, including my observation of the demeanor of
the witnesses and after consideration of the trial brief filed by the General Counsel and the
closing argument of the Respondent, I make the following:

Findings of Fact and Conclusions of Law

I. Jurisdiction

A. The Business of the Respondent

The complaint alleges, Respondent admits and I find that at all times material herein,
Respondent has been a Delaware Corporation, with offices and a manufacturing facility in Saint

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Peters, Missouri, where it has been engaged in the manufacture, distribution and non-retail sale
of silicon wafers, that during the 12-month period ending January 1, 2004,1 Respondent in
conducting its aforesaid business operations, sold and shipped from its Saint Peters facility,
goods valued in excess of $50,000 directly to points outside of the State of Missouri and at all
material times, Respondent has been an employer engaged in commerce within the meaning of
Section 2(2)(6) and (7) of the Act.

B. The Labor Organization

The complaint alleges, Respondent admits and I find that at all times material herein, the
Union has been a labor organization within the meaning of Section 2(5) of the Act.

C. The Appropriate Unit

All full-time and regular part-time employees employed in the MTT2
classification at the Employer’s Saint Peters, Missouri facility, EXCLUDING all
utility operators, office clerical and professional employees, guards, supervisors
as defined in the Act, and all other employees.

The complaint further alleges, Respondent admits and I find that on June 5 and 6, 2002, a
representation election was held among the employees in the Unit and on October 24, 2002, the
Union was certified as the exclusive collective-bargaining representative of the Unit and that at
all material times since June 6, 2002, based on Section 9(a) of the Act, the Union has been the
exclusive collective-bargaining representative of the Unit.

The complaint alleges and Respondent admits and I find that on January 1, 2004,
Respondent took the following actions regarding Unit employees’ health insurance:

i. changed the carrier from United Healthcare to Aetna;
ii. changed the benefits; and
iii. changed the amount of the employee contribution for the premium.

The complaint alleges, Respondent admits and I find that on January 1, 2004, Respondent
took the following actions regarding Unit employees’ dental insurance:
i. changed the benefits; and
ii. changed the amount of the employee contribution for the premium.

The complaint alleges, Respondent admits and I find that on January 1, 2004, Respondent
implemented an optional policy, which if selected by Unit employees through an election or by
default, changed their vacation, holiday, short term disability leaves, leave of absence and leave
sell back benefits.

The complaint also alleges and I find that the above subjects relate to wages, hours, and
other terms and conditions of employment and are mandatory subjects of bargaining, and that

1 All dates are in 2004 unless otherwise stated.
2 Maintenance Mechanic

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Respondent engaged in the aforesaid conduct without prior notice to the Union and without
affording the Union with an opportunity to bargain with respect to this conduct and the effects of
this conduct.

The complaint further alleges and Respondent denies and I find based on the foregoing
admissions and the record as a whole that Respondent violated Section 8(a)(1) and (5) of the Act
by failing and refusing to bargain collectively and in good faith with the exclusive collective-
bargaining representative of its employees.

The facts of this case as set out above are undisputed. Following the certification of the
Union as the collective bargaining representative of the Unit employees on October 24, 2002, the
Respondent failed and refused to recognize the Union and to give it notice of any planned
changes to the Unit employees’ benefits and terms and conditions of employment and spurned
the Union’s request for recognition and demand for bargaining. Instead Respondent chose to test
the certification of the Union and lost before the Board and the Board’s decision of MEMC
Electronic Materials, Inc., 338 NLRB No. 142 slip op. at 2 (1993) was ultimately enforced by
the Eighth Circuit of the United States Court of Appeals on April 9, 2004 in NLRB v. MEMC
Electronic Materials, Inc. in Case Nos. 03-2471 and 03-2764. In the meantime the Respondent
announced changes to the health and dental insurance policies and the leave policies of the Unit
employees and implemented these changes on January 1, 2004. In the case of the health
insurance plans, Respondent changed its health insurance carrier from United Healthcare to
Aetna. It changed from offering one plan during 2003 to three different plan options called high,
middle, and base. Under the high plan Unit employees’ share of the total premium increased
from 20 to 30 percent and their out-of-pocket expenses for the premium increased by 74 percent,
but the level of benefits remained the same. Under the base plan employees’ share of the total
premium remained at 20 percent, but the level of benefits decreased. Under the middle plan
employees’ share of the total premium increased from 20 to 25 percent, the out-of-pocket
expenses for the premium increased by 30 percent and the level of benefits decreased.

It is undisputed and Respondent admits that it failed to provide the Union notice or to
bargain with it regarding the changes to the unit employees’ health benefits. Rather it
implemented these changes unilaterally. In its defense the Respondent contends that it is in an
untenable position because it has agreed to a plan with Aetna Insurance Company for all of its
employees in its three locations in the United States encompassing the Unit employees as well as
its other employees and that the Unit employees make up only 7 percent of its total employee
complement. Respondent moves from this argument to another contention which is that there is
ongoing significant change in the insurance underwriting field which it refers to as the “dynamic
status quo” and that this necessitates Respondent’s adjustment to meet these new challenges.
Respondent thus contends that it has not implemented any material or substantial unilateral
changes violative of the Act but that it has merely met the challenges of the dynamic changes in
the health insurance field as they arose. What Respondent fails to point out, however, is that it
created the situation it finds itself in by bypassing the Union and failing to recognize and bargain
with the Union and entering into agreements with Aetna by its implementation of these unilateral
changes. Respondent contends that if the employees in the Unit were not grouped together with
its other employees in the total plan their costs would have been greater. It thus contends that
there is no meaningful remedy. When an employer makes changes to the terms and conditions
of employment of represented employees while it is challenging the collective bargaining
representative’s certification, it does so at its own peril. Mike O’Connor Chevrolet, 209 NLRB
701, 703 (1974).

JD(ATL)–47–04

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It is well settled that Respondent’s change of carriers from United Healthcare was a
mandatory subject of bargaining. Seiler Tank Truck Service, 307 NLRB 1090, 1100 (1992); The
Connecticut Light & Power Company, 196 NLRB 967, 969 (1972). The change in the level of
benefits from one health insurance plan to three plans with different and decreased benefits was a
mandatory subject of bargaining. Atheny Products Corp., 282 NLRB 203, 205 (1986); See also
Exxon Co. U.S.A., 315 NLRB 952, 955 (1994); and Suffolk Child Development Center, 277
NLRB 1345, 1349 (1985); Post-Tribune Co., 337 NLRB 1279, 1280, 1281 (2002). The change
in the percentage allocation of the total premium paid for by Respondent was a mandatory
subject of bargaining Croft Metals, 272 NLRB 208, 213 (1985), Post-Tribune Co., supra. The
increase in the amount employees paid for health insurance was a mandatory subject of
bargaining. Flambeau Airmold Corp., 334 NLRB 165, 179 (2001). I find Respondent’s
contentions, that the changes were not mandatory because it offered employees options, to be
without merit as all of the options constituted significant changes to the employees’ terms and
conditions of employment.

I further find that Respondent violated Section 8(a)(1) and (5) of the Act by its unilateral
change in dental insurance benefits on January, 1, 2004. Respondent changed from offering one
dental plan in 2003 to two different plans called high and base. Under the high plan the
percentage of the total premium employees paid increased from 25 to 30 percent and the out-of-
pocket expenses for the premium increased but the level of benefits remained the same. Under
the base plan the percentage of premium paid by the employees and their out-of-pocket expenses
remained the same but their level of benefits decreased. The foregoing changes are mandatory
subjects of bargaining and Respondent unilaterally implemented them and thus violated Section
8(a)(1) and (5) of the Act. Croft Metals; supra, Post-Tribune, supra; Flambeau Airmold Corp.,
supra and Atheny Products Corp., supra.

Respondent also violated Section 8(a)(1) and (5) of the Act by unilaterally offering
employees a new leave policy called Paid Time Off (PTO) on January 1, 2004. The PTO policy
provided that employees would not be paid when they were off on a holiday unless they used
leave, that employees would earn more leave per pay period, that employees can carry over leave
from one calendar year to the next, that employees on short-term disability can use leave after 3
days in order to be paid at 100 percent of their pay and that employees can use leave as it is
earned rather than waiting until the following January.

On January 1, 2004, Respondent unilaterally changed its accrued leave policy by
providing that employees on short-term disability leave or leave of absence, cease accruing
vacation benefits after they are absent for more than 30 days and employees are no longer
allowed to sell back half of their remaining vacation at the end of the year. At the end of 2004,
all Unit employees will be denied the opportunity to sell back half of their remaining vacation.
The above changes to the leave benefits are mandatory subjects of bargaining and a change
affects hours and other terms and conditions of employment. NLRB v. Katz, 369 U.S. 766, 744
(1962); Martin Marietta Energy, 283 NLRB 173, 175-176 (1987).

Conclusions of Law

1. Respondent is an employer within the meaning of Section 2(2), (6) and (7) of the
Act.

JD(ATL)–47–04

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2. The Union is a labor organization within the meaning of Section 2(5) of the Act.

3. The following employees of Respondent constitute a unit appropriate for the
purpose of collective bargaining within the meaning of Section 9(b) of the Act.

All full-time and regular part-time employees employed in the MTT classification
at the Employer’s Saint Peters, Missouri facility, EXCLUDING all utility
operators, office clerical and professional employees, guards, supervisors as
defined in the Act, and all other employees.

At all times since June 6, 2002, the Union has been the exclusive collective
bargaining representative of the employees in the above-described unit within the meaning of
Section 9(a) of the Act.

4. Respondent violated Section 8(a)(1) and (5) of the Act by unilaterally changing
employees’ health and dental insurance benefits and offering employees the option of a new
leave policy.

5. The above unfair labor practices in conjunction with Respondent’s status as an
employer affect commerce within the meaning of Section 2(6) and (7) of the Act.

The Remedy

Having found that Respondent has engaged in certain unfair labor practices, it shall be
ordered to cease and desist therefrom and take certain affirmative actions designed to effectuate
the policies of the Act.

Having found that Respondent on January 1, 2004, unilaterally changed the medical and
dental plans and premiums deductions and the health policy carrier and the Paid Time Off leave
policy, for the employees in the bargaining unit represented by the Union, I recommend that
Respondent be ordered to restore the status quo ante as existed prior to these changes, and upon
demand by the Union bargain in good faith to an agreement or valid impasse regarding the
changes. Respondent shall immediately refund any increase in the health and dental premiums
and expenses incurred by the unit employees by reason of these changes and any loss in benefits
and any loss of leave time or wages and benefits caused by the change in the leave policy.
Interest shall be computed as in New Horizons for the Retarded, 283 NLRB 1173 (1987). I shall
also order that Respondent post the attached “Notice To Employees” a copy of which is attached
hereto as “Appendix” for a period of 60 consecutive days.

On these findings of fact and conclusions of law and on the entire record, I issue the
following recommended
3
:

3 If no exceptions are filed as provided by Sec. 102.46 of the Board’s Rules and Regulations, the findings,
conclusions, and recommended Order shall, as provided in Sec. 102.48 of the Rules, be adopted by the Board
and all objections to them shall be deemed waived for all purposes.

JD(ATL)–47–04

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ORDER

The Respondent, MEMC Electric Materials, Inc., its officers, agents, successors and
assigns shall:

1. Cease and desist:

(a) Unilaterally changing employees’ health and dental insurance benefits.

(b) Unilaterally offering employees the option of a new leave policy.

(c) 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 actions designed to effectuate the policies
of the Act:

(a) On request bargain with the Union.

(b) On request of the Union, rescind the changes to the health and dental
insurance benefits and premiums.

(c) On request of the Union, rescind the change in the carrier providing health
insurance and restore insurance offered by United Healthcare before the change.

(d) Make employees whole for all increased costs to them for health and
dental insurance benefits, including the cost of the health and dental insurance premiums and the
increase in the percentage of the total premiums for health and dental insurance, with interest.

(e) On request of the Union rescind the optional Paid Time Off plan offered to
employees.

(f) On request of the Union, rescind the changes to the leave sell back and
leave accrual while on short-term disability or leave of absence under the accrued leave policy.

(g) Make employees whole for any lost wages or leave hours resulting from
the change in the accrued leave policy and the change to the PTO plan, with interest.

(h) Preserve, and within 14 days of a request, make available to the Board or
its agents for examination and copying, all payroll records, social security payment records,
including an electronic copy of other records if stored in electronic form, necessary to analyze
the amount of backpay or costs due under the terms of this Order.

(i) Within 14 days after service by the Region, post at its facility in Saint
Peters, Missouri copies of the attached notice marked “Appendix.”4 Copies of the notice, on
Continued
4 If this Order is enforced by a Judgment of the United States Court of Appeals, the words in the notice reading

JD(ATL)–47–04

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_________________________
forms provided by the Regional Director for Region 14, after being signed by the Respondent's
authorized representative, shall be posted by the Respondent immediately upon receipt and
maintained 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 notice is not altered, defaced, or covered by any other material. In the event that, during
the pendency of these proceedings, the Respondent has gone out of business or closed the facility
involved in these proceedings, the Respondent shall duplicate and mail, at its own expense, a
copy of the notice to all current employees and former employees employed by the Respondent
at any time since June 2, 2003.

(j) Within 21 days after service by the Regional Director file a sworn
certification of a responsible official on a form provided by the Region attesting to the steps that
the Respondent has taken to comply.

Dated at Washington, D.C.

________________________
Lawrence W. Cullen
Administrative Law Judge
“POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD” shall read
“POSTED PURSUANT TO A JUDGMENT OF THE UNITED STATES COURT OF
APPEALS ENFORCING AN ORDER OF THE NATIONAL LABOR RELATIONS BOARD.”

JD(ATL)–47–04

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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 Federal labor law and has
ordered us to post and obey this notice.

FEDERAL LAW GIVES YOU THE RIGHT TO

Form, join, or assist a union
Choose representatives to bargain with us on your behalf
Act together with other employees for your benefit and protection
Choose not to engage in any of these protected activities.

WE WILL NOT make changes to, the benefits offered under our health and dental insurance
policies or to the percentage of the total premium employees pay, or the cost of the premium
hourly maintenance employees at the Saint Peters facility are required to pay for such insurance,
without providing the International Association of Machinists and Aerospace Workers, AFL-
CIO (the Union) with adequate prior notice and an opportunity for bargaining.

WE WILL NOT change the carrier providing insurance for hourly maintenance employees at
the Saint Peters facility without providing the Union with adequate prior notice and an
opportunity for bargaining.

WE WILL NOT change our policies regarding vacation, holidays, short term disability leave,
leave of absence, or selling back unused leave for hourly maintenance employees at the Saint
Peters facility without providing the Union with adequate prior notice and an opportunity for
bargaining.

WE WILL NOT in any like or related manner interfere with, restrain, or coerce you in the
exercise of rights guaranteed by Section 7 of the Act.

WE WILL bargain collectively and in good faith with the Union as the exclusive collective
bargaining representative of employees at our Saint Peters facility in the appropriate unit set
forth below:

All full-time and regular part-time employees employed in the MTT classification
at the Employer’s Saint Peters, Missouri facility, EXCLUDING all utility
operators, office clerical and professional employees, guards, supervisors as
defined in the Act, and all other employees.

WE WILL rescind, if requested to do so by the Union, the January 1, 2004, unilateral changes to
the benefits offered under our dental and health insurance policies for hourly maintenance
employees at the Saint Peters facility and make them whole for any additional expenses incurred

JD(ATL)–47–04

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by them as a result of the changes to the benefits, with interest.

WE WILL make whole our hourly maintenance employees at the Saint Peters facility for any
additional costs to them for health and dental insurance premiums as a result of our January 1,
2004 changes, with interest.

WE WILL rescind, if requested to do so by the Union, the January 1, 2004, change to the carrier
providing health insurance for hourly maintenance employees at the Saint Peters facility and
make back contributions to United Healthcare in order to restore the insurance offered before the
change.

WE WILL rescind, if requested to do so by the Union, the unilateral changes made on January
1, 2004, to our vacation, holidays, short term disability leave, leave of absence, and selling back
unused leave policies for our hourly maintenance employees at the Saint Peters facility and make
them whole for any lost wages or hours resulting form these changes, with interest.

MEMC ELECTRONIC MATERIALS, INC.
(Employer)

Dated ______________________ By ________________________________________
(Representative) (Title)

The National Labor Relations Board is an independent Federal agency created in 1935 to enforce
the National Labor Relations Act. It conducts secret-ballot elections to determine whether
employees want union representation and it investigates and remedies unfair labor practices by
employers and unions. To find out more about your rights under the Act and how to file a charge
or election petition, you may speak confidentially to any agent with the Board’s Regional Office
set forth below. You may also obtain information from the Board’s website: www.nlrb.gov.

1222 Spruce Street, Room 8.302, Saint Louis, MO 63101-2829,
(314) 539-7770, Hours: 8: a.m. to 4: 30 p.m.

THIS IS AN OFFICIAL NOTICE AND MUST NOT BE DEFACED BY ANYONE.
THIS NOTICE MUST REMAIN POSTED FOR 60 CONSECUTIVE DAYS FROM THE
DATE OF POSTING AND MUST NOT BE ALTERED, DEFACED, OR COVERED
BY ANY OTHER MATERIAL. ANY QUESTIONS CONCERNING THIS NOTICE
OR COMPLIANCE WITH ITS PROVISIONS MAY BE DIRECTED TO THE ABOVE
REGIONAL OFFICE’S
COMPLIANCE OFFICER, (314) 539-7780