Paulstra CRC Corporation

National Labor Relations Board - Administrative Judge Opinions

Sep 3, 2004

07-CA-047365 (N.L.R.B. Sep. 3, 2004)

JD–86–04
Grand Rapids, MI

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

PAULSTRA CRC CORPORATION

and Case 7–CA–47365

LOCAL 49L, UNITED STEELWORKERS
OF AMERICA, AFL-CIO, CLC

Kelly Temple, Esq., for the General Counsel
Peter Kok and Nathan Plantinga, Esqs.,
for the Respondent

DECISION

STATEMENT OF THE CASE

Jane Vandeventer, Administrative Law Judge. This case was tried on August 5, 2004, in
Grand Rapids, Michigan. The complaint alleges Respondent violated Section 8(a)(5) of the Act
by making unilateral changes in working conditions without notice to the Union or affording the
Union an opportunity to bargain about the changes.1 The Respondent filed an answer denying
the essential allegations in the complaint. After the conclusion of the hearing, the parties made
oral arguments, which I have considered. Subsequently, the parties filed briefs,2 which I have
read.

Based on the testimony of the witnesses, including particularly my observation of their
demeanor while testifying, the documentary evidence, and the entire record, I make the
following

1 At the trial herein, I granted the General Counsel’s motion to sever Case 7-CA-47408 from the
instant case, and further granted the General Counsel’s motion to withdraw the complaint allegations
related to that case. The severed case involved an information request, about which the parties reached
a settlement prior to the opening of the trial.
2 The General Counsel’s brief was mistakenly mailed to the Atlanta Judges’ Division office, and
was therefore not timely received. Due to the fact that the transcript, which stated that all post-trial
communications should be with the Washington Judges’ office, may not have been in the hands of the
General Counsel at the time of the mailing of the brief, and the fact that the brief was mailed on the day
before the due date, I have accepted the brief as timely filed.

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FINDINGS OF FACT

I. JURISDICTION

Respondent is a corporation with offices and places of business in Grand Rapids,
Michigan, and Ithaca, Michigan, where it is engaged in the stamping, finishing, and sale of
automotive parts. During a representative one-year period, Respondent purchased and
received at its Grand Rapids and Ithaca facilities goods and materials valued in excess of
$50,000 directly from points outside the State of Michigan. Accordingly, I find, as Respondent
admits, that it is an employer engaged in commerce within the meaning of Section 2(2), (6), and
(7) of the Act.

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

II. UNFAIR LABOR PRACTICES

A. The Facts

1. Background

Respondent operates manufacturing plants in Grand Rapids3 and Ithaca,4 Michigan.
Both plants are represented by the Charging Party Union in two separate bargaining units, each
of which is covered by a collective bargaining agreement. Respondent also operates a sales
and marketing office in Farmington Hills, Michigan, and other facilities in Walker and Cadillac,
Michigan. Only the Grand Rapids and Ithaca plants are involved in this case.

Respondent has a profit-sharing plan, which is reflected in both collective bargaining
agreements. In addition, Respondent, in 1987, instituted a Savings Plan (called SP) for all
employees in its entire operation, including the two bargaining units. The SP is essentially a
401(k) plan, and is not mentioned in the collective bargaining agreements. Under the SP,
Respondent contributes a percentage of each employee’s income to an investment account,
called the base match or base contribution, which is contributed by Respondent regardless of
whether the employee saves anything or not. This amount has been 2.5% of each employee’s
annual compensation for the years 1995 through 2002. Before 1995, the base match amount
was less than 2.5%. For the calendar year 2003, Respondent reduced the base contribution
amount to 1.25% of annual compensation. A second feature of the plan involves an employee’s
own savings from his or her wages. If the employee saves his or her own money, Respondent
3 The bargaining unit at the Grand Rapids plant was stipulated at trial to be that described in the
collective bargaining agreement: “hourly-rated production operator [sic] of Paulstra CRC Corporation
employed at 460 Fuller NE, Grand Rapids, Michigan, excluding skilled trades, supervisors, lead persons
and all other non-production operator employees.” The current collective bargaining agreement is
effective by its terms from November 3, 2003, to November 3, 2006.
4 The bargaining unit at the Ithaca plant was stipulated at trial to be that described in the collective
bargaining agreement: “hourly-rated production operator [sic] of Paulstra CRC Corporation employed at
1300 S. County Farm Drive, Ithaca, Michigan, excluding skilled trades, Quality Technicians, Rep
Technicians, supervisors, lead persons and all other non-production operator employees.” The current
collective bargaining agreement is effective by its terms from January 20, 2004, to March 1, 2007.

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matches a portion of the amount the employee saves.5 This matching contribution was not
changed, and is not at issue in this case.

According to the testimony of the former President of Respondent, Yves Huet,
Respondent has complete discretion in deciding the amount of the base contribution. The SP
adoption agreement states that “the Employer will contribute an amount to be determined from
year to year.” According to Huet, the amount of the base contribution for a particular year
cannot be changed after the end of that calendar year. According to the chief financial officer,
Tom Popma, the actual deposit of the money into the employees’ investment accounts is
normally done during the first six months in the succeeding year. The 2003 base contribution
was actually deposited into employee accounts on June 29, 2004.

2. The 2003 Base Match Contribution

According to Respondent’s witnesses, during the latter part of 2002 and the first few
months of 2003, Respondent’s business was in some difficulty. The American automobile
makers who are its primary customers demanded that Respondent cut its prices on the parts its
sells to them. These price cuts were a condition of their continuing to purchase parts from
Respondent. Respondent announced a program of cost-savings and productivity
enhancements which it called “Spring.” These included, among other things, planned
installation of some robotic production equipment.

In addition, the management team, which is responsible for the budget was requested by
Huet to find additional areas where costs could be cut. The cost-saving measures devised by
management were dubbed the “Spring Extra Mile” or SEM program. Huet composed a
“Message from the President” dated April 21, 2003, in which he outlined the cost-saving
measures in the SEM program. There were six areas described: (1) The SP base amount
would be cut in half; (2) medical insurance premiums paid by employees would be increased;
(3) business travel economies were listed; (4) purchase contracts for raw materials and supplies
were being renegotiated; (5) all purchases would have to be approved in advance, and cell
phone use curtailed; and (6) some lay-offs of non-bargaining unit employees would be
undertaken.

The full paragraph dealing with the SP reads as follows: “First, the annual base 401K
contribution, which is paid entirely by Paulstra, will be reduced by 50%. To explain this further,
the current base contribution is 2.5% of compensation. This would be cut in half (to 1.25% of
compensation). This measure will be effective at year-end in 2003 and 2004 but could be
reversed if we meet our budget without it. We have, however, decided to maintain the 50%
company match on your personal contribution.”

Respondent intended to, and did, distribute this letter to its salaried employees.
According to Respondent’s witnesses, the letter was also posted on bulletin boards at both the
5 Respondent matches 50% of the employee’s savings, up to a maximum of 3% of annual
compensation (if the employee saves 6% of annual compensation). For purposes of clarity, I have
consistently referred to the amount Respondent contributes to the SP regardless of an employee’s
savings as the “base contribution” in order to distinguish it from the amount Respondent contributes to
match employees’ savings. It should be noted that in the record, the base contribution is referred to in
some documents and testimony as the “base match amount” as well as the “base contribution.”

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Grand Rapids and Ithaca facilities. All General Counsel’s witnesses testified that they had
never seen it posted.6

It is, however, undisputed that the April 21, 2003, letter was shown to Charging Party
President Earnest Sallie and Charging Party Recording Secretary Rebecca Sallie in a meeting
which took place in the latter part of April 2003. Both E. Sallie and R. Sallie stated that they
read the letter, and that Huet talked to them about it. They both recalled that E. Sallie said that
the medical insurance premium increase could not be put into place for bargaining unit
employees until it was negotiated. Regular collective bargaining agreement negotiations were
expected to, and did, take place in the autumn of 2003, approximately six months after this
meeting. From the testimony of the two Union representatives, it appeared that E. Sallie’s
remark to the effect that the changes could not be put into place until they were negotiated with
the Union may have referred to the cut in the SP base contribution as well. It was apparent that
the medical insurance premium change and the decrease in the base contribution were the only
two changes, of the six changes in the SEM, which applied directly to bargaining unit
employees. The two Charging Party representatives did not request a copy of the letter at this
meeting, nor was one offered to them.

The SEM and the president’s letter announcing it were also discussed with the Union
committee at the Ithaca plant, headed by Kerry Sanger, the Union president of the Ithaca unit, at
the regular union management meeting in April 2003. Sanger remembered being informed at
that meeting that Respondent “may have to” make changes in the base contribution to the SP.
Like the Sallies, Sanger did not request, and was not given, a copy of the April 21, 2003, letter.

Two Respondent witnesses, Walter Jenkins, Vice President for Operations, and Huet,
testified that the cost-saving measures dubbed SEM were also discussed, one-by-one, at the
regular monthly union-management meeting, which took place on April 29, 2003, in Grand
Rapids. Huet’s and another manager’s exceedingly terse notes of the meeting support this
testimony. None of the General Counsel’s witnesses recalled any discussion of the cut in the
SP base contribution amount at the monthly meeting. According to their testimony, they were
very focused on discussing the robotic production devices, which were going to be introduced in
order to enhance productivity, and all recalled that this topic was discussed at length.
Respondent’s witnesses’ testimony and documentary evidence that the reduction in the base
contribution was discussed with the Union at this meeting was not contradicted. A failure of
recollection does not constitute a contradiction. I find that the evidence showing that the
reduction in the base contribution was communicated to the Union at this meeting is
uncontradicted.

During collective bargaining for the Ithaca plant initial contract, which lasted from June
2003 through January 2004, and bargaining for the successor contract in Grand Rapids, which
took place in the autumn of 2003, the only proposal which dealt in any way with the SP was a
proposal by the Union to increase the Respondent’s contribution which matches the employees’
personal savings. Respondent rejected the proposal, and the Union withdrew it. Neither side
made any proposal dealing with the Respondent’s base contribution to the plan, the subject
matter at issue here. The collective bargaining agreements which were negotiated in the
autumn of 2003 and January 2004 for the two bargaining units do not include a description of
the SP.
6 The fact that none of the witnesses called by the General Counsel saw the letter posted does not
specifically contravene the testimony of Respondent’s witnesses to the effect that they had posted the
letter on the bulletin boards.

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On March 17, 2004, an employee brought to E. Sallie a letter he had found on the floor
of the Grand Rapids plant. The letter was dated February 20, 2004, and was signed by Andre
Janin, who had taken Yves Huet’s place as president of Respondent in late 2003 or early 2004.
The letter announced that due to the fact that Respondent did not meet its target profitability in
2003, there would be no profit-sharing payment for the year. In addition, it stated: “As
announced last April, we enacted a very strict cost reduction program (called SPRING EXTRA
MILE) in order to help offset the tremendous pressure on our bottom line. As part of this
program, we reduced (by ½) the annual base match paid by the company at the end of each
year to your 401K.”

The Union filed a grievance and later an unfair labor practice charge.

3. Positions of the Parties

The General Counsel contends that the subject matter of the change was retirement
compensation of unit employees, and was thus a mandatory subject of bargaining. The General
Counsel also contends that although the Union received notice of the contemplated cut in the
retirement contribution, the notice was inadequate, as it had not been put in place. The General
Counsel further contends that the Union did not receive notice that Respondent had actually cut
the base contribution to 1.25% until March 17, 2004, when the Janin letter came into its hands.
In arguing that the notice was not adequate, the General Counsel relies on Postal Service
Marina Center, 271 NLRB 397, 400 (1984), a case which held that for purposes of Section
10(b) of the Act, the notice of an employer’s unequivocal intention to take an action, even if the
action is not yet completed, is sufficient to start the running of the six month period within which
a charge must be filed. The General Counsel argues that the notice in the instant case was not
“unequivocal,” and that hence it was not sufficiently clear notice to constitute a “waiver of the
Union’s interest in bargaining. No mention is made in the General Counsel’s argument of the
Union’s obligation to request bargaining. At the same time, the General Counsel argues that
Respondent’s announcement of the change in the base contribution was a “fait accompli,”
hence was so definite as to be impossible to change.

Respondent argues that the base contribution amount of the SP is not a mandatory
subject because it is, by its terms, discretionary with Respondent. It further argues that by past
practice, the Union has ceded its right to bargain over the amount of the base contribution, since
the Union has never requested to bargain about the determination of the base contribution in
over fifteen years of the program’s existence. Furthermore, Respondent argues that the written
SP plan, and the collective bargaining agreement form written documents which, by virtue of a
zipper clause in the contract and the parol evidence rule, mandate a finding that the Union has
waived its right to negotiate over the amount of the base contribution to the SP.

Even if Respondent had a duty to bargain over the base contribution amount,
Respondent contends its notice to the Union, in the April 2003 meetings, to the effect that the
base contribution had been decided to be cut in half was sufficient notice to the Union to trigger
its obligation to request bargaining about the issue. Respondent notes the only ambiguity in its
notice of the base contribution cut was the statement in Huet’s SEM letter that if Respondent’s
business performance improved, the base contribution could be restored to its previous level.
Respondent also notes the fact that the Union raised a different aspect of the SP in one of its
2003 bargaining proposals indicates that the Union could and did make proposals about the SP.

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B. Discussion and Analysis

It is axiomatic Board law that “wages, hours, and working conditions” are mandatory
subjects of bargaining, and must be discussed between an employer and a union who are in a
collective bargaining relationship. The term “wages” has been construed broadly to cover all
types of compensation to employees, including retirement plans such as, for example, pension
plans, profit-sharing plans, stock purchase plans, and 401(k) plans. See, e.g, Convergence
Communications, 339 NLRB No. 56 (2003); Wild Oats Markets, 339 NLRB No. 15, sl. op. at
11 (2003); Paul Mueller Co., 335 NLRB, 808, 809 (2001); Lexus of Concord, Inc., 330 NLRB
1409, 1414 (2000).

Thus, Respondent’s first contention, to the effect that it has no duty to bargain over the
SP because it was unilaterally implemented in the first place, covers all the Respondent’s
employees, is not included in the collective bargaining agreement, and has not normally been
the subject of bargaining between the parties, is rejected. The fact that the SP plan is embodied
in a separate document does not remove it from the scope of bargaining. Midwest Power
Systems, 335 NLRB 237, 238 (2001). The contributions to the SP are a part of employees’
compensation, and are thus mandatory subjects of bargaining.

Respondent’s contentions of waiver of the bargaining right by past practice are likewise
not persuasive. The fact that the Union has not requested bargaining over other changes to the
plan in the past does not by itself waive the Union’s right to bargain over the subject. The Board
will not imply a waiver of a bargaining right absent clear and convincing evidence. Mere disuse
of a right does not establish such a waiver. See, e.g., Mississippi Power Co., 332 NLRB 530,
532 (2000). In that case, unilateral changes in a plan for future retirees were unlawful even
where the union had not requested bargaining over such changes in the past.

Therefore, an employer may not make changes to these plans without giving the
bargaining representative adequate notice of the planned changes, in a sufficiently timely
fashion to allow the union to bargain over the changes and their effects. If an employer does
give the union sufficient notice to permit bargaining over the proposed change, but the union
does not request any bargaining, the employer has satisfied its obligations under the Act, and
no violation will be found. In Associated Milk Producers, 300 NLRB 561, 563 (1990), the
employer notified the union that it would be stopping its contribution to the pension program.
The union failed to request bargaining over the issue, although it filed a charge. The Board held
that no violation of Section 8(a)(5) had occurred. The notice to the union was sufficient, but the
union did not take advantage of the notice by requesting to bargain about the subject. The
Board has frequently held that a protest, a grievance, or the filing of a charge are not
tantamount to a request to bargain.

The last-named case is directly on point here. That some notice was given to the Union
is not disputed. Respondent first notified the Union in April 2003 that the base contribution “will
be reduced by 50%” for 2003 and 2004, and that the change would be effective at the end of
2003. Respondent further said that it hoped business would improve sufficiently to permit a
change back to the former higher contribution. Thus, the Union had approximately eight months
in which to request bargaining about the announced reduction in the base contribution before it
took effect. It did not do so. Even during collective bargaining for a new collective bargaining
agreement, which occurred during as many as seven of those months, the Union did not raise
the issue with respect to either bargaining unit. In the absence of any request to bargain by the
Union, the Union must be deemed to have acquiesced in the announced change, and hence the
change in the base contribution, which Respondent put into effect at the end of 2003, was
entirely lawful.

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The General Counsel’s contention that the notice was not sufficient because it was not
definite is rejected. The language of the letter, which was shown to the Union states that the
change will be made at the end of 2003. This language indicates that unless something
happens to change the Respondent’s plans, the change will occur. In any case, even if the
change were couched in less definite language, it would still be sufficient to put the Union on
notice that it needed to request bargaining about the subject. The General Counsel’s argument
is that the notice was insufficiently clear to trigger a “waiver” of the Union’s right to bargain.
That is not the issue. The issue is whether the notice was sufficiently clear to trigger the Union’s
obligation to request bargaining. The case cited by the General Counsel on this point deals with
an entirely different issue, i.e., what is sufficient notice to start the Section 10(b) period of
limitations. The type of notice necessary to put a bargaining representative on notice that the
Employer is contemplating a change in wages, hours, or working conditions may well be
different from that which would start the limitations period, depending upon the facts of the
particular situation. I find that in this situation, the notice of a proposed change in the base
contribution was not only clear, but was given well in advance of the date set for the change to
take effect. I further find that there is no evidence in the record that the Union ever, during May
through December 2003, requested bargaining about the announced change in the base
contribution. By failing to make such a request, the Union essentially acquiesced in the
announced change.

The General Counsel’s contradictory argument that the notice of the change in the base
contribution was a “fait accompli” at the time it was announced is likewise rejected. The
testimony and the documentary evidence show that the change was not set in stone and could
be changed if economic conditions improved. In addition, there were eight months before the
effective date of the change, providing plenty of time for the Union and Respondent to bargain
about the announced change.

In summary, I find that Respondent gave the Union sufficient notice of its intention to
decrease the base contribution to the Savings Plan for 2003 and 2004. The notice was timely,
as it was given more than eight months before the change took effect. The Union did not
request bargaining about the decrease in the base contribution. I find, therefore, that
Respondent did not violate Section 8(a)(5) of the Act, as alleged in the complaint.

CONCLUSIONS OF LAW

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

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

3. Respondent has not violated Section 8(a)(5) and (1) of the Act as alleged in the
complaint.

On these findings of fact and conclusions of law and on the entire record, I issue the
following recommended7
7 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.

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ORDER

The case is dismissed in its entirety.

Dated, Washington, D.C., September 3, 2004.

____________________
Jane Vandeventer
Administrative Law Judge