Steelworkers Local Union No. 2869

National Labor Relations Board - Board Decisions

Dec 22, 1978

239 N.L.R.B. 982 (N.L.R.B. 1978)

DECISIONS OF NATIONAL LABOR RELATIONS BOARD
United Steelworkers of America, AFL-CIO, Local
Union No. 2869 (Kaiser Steel Corporation) and
John H. Brown, Jr. and Dick L. Simon. Cases 31-
CB-2019 and 31-CB-2037
December 22, 1978
DECISION AND ORDER
On January 5, 1977, Administrative Law Judge
James S. Jenson issued the attached Decision in this
proceeding. Thereafter, Respondent filed exceptions
and a supporting brief.
The Board has considered the record and the at-
tached Decision in light of the exceptions and brief
and has decided to affirm the rulings, findings, and
conclusions of the Administrative Law Judge only to
the extent consistent herewith.
The Administrative Law Judge found that Re-
spondent acted arbitrarily in limiting the distribtuion
of proceeds arising out of a settlement of grievances
filed on behalf of all unit employees to those employ-
ees actually in the unit as of the date of the settle-
ment, thereby violating Section 8(a)(1)(A) of the Act.
We disagree.
The Employer operates a steel manufacturing
plant in Fontana, California. From February I until
March 15, 1972, the Employer's production and
maintenance employees, including its approximately
200 tin mill maintenance employees, were engaged in
a strike. At the termination of the strike, the Em-
ployer recalled its most senior employees, but the
maintenance crew did not reach prestrike level until
on or about June 1, 1972. On or about April 10, 1972,
Respondent filed three grievances, in the nature of a
class action, protesting the Employer's failure to
maintain its established crew size in the tin mill
maintenance department following the termination
of the strike and further requesting compensation for
"all moneys lost."
Between March 21 and June 20, 1975, the consoli-
dated grievances were processed to arbitration. At
the suggestion of the arbitrator, the parties entered
into a written settlement agreement on July 18, 1975,
pursuant to which the Employer agreed to pay
$67,500 to "the bargaining unit employees designat-
ed by the Union." Respondent subsequently com-
piled a list of 193 employees to share in the settle-
ment proceeds which list consisted of all unit
The complexity of the Employer's wage and incentive system precluded
a determination of individual losses in wages. Accordingly, Respondent's
representatives devised a formula whereby work schedules were used to
determine how much time had been lost by the tin mill maintenance em-
ployees. That figure was then multiplied by an hourly wage figure to arrive
at an approxim tion of the total amount owed. Respondent's initial propos-
al for settlement negotiations was S145,000.
employees who were employed at the time the griev-
ances were filed in April 1972 and were still em-
ployed in the unit at the time the grievances were
settled in July 1975. The list thus excluded 19 em-
ployees who, between April 1972 and June 1975, had
retired (11), accepted supervisory positions (2), quit
(3), been transferred out of the unit (2), or been dis-
charged (1).2
By letter dated July 21, 1975, Respondent submit-
ted the list of 193 names to the Employer. Each of
the employees designated by Respondent was paid a
pro rata share of the settlement proceeds, amounting
to $349.75 per employee.
It is well settled that Section 8(b)(1)(A) of the Act
prohibits unions, when acting in a statutory represen-
tative capacity, from taking action against any em-
ployee upon consideration or upon the basis of clas-
sifications that are irrelevant, invidious, or unfair.3 It
is, however, equally well settled that a wide range of
reasonableness must be allowed a statutory bargain-
ing representative in serving the unit it represents,
subject always to complete good faith and honesty of
purpose in the exercise of its discretion.4 Thus it is
not every act of disparate treatment 5 or negligent
conduct 6 which is proscribed by Section 8(b)(l)(A),
but only those which, because motivated by hostile,
invidious, irrelevant, or unfair considerations, may
be characterized as "arbitrary conduct."
Applying these principles to the circumstances of
the present case, we are unable to conclude that Re-
spondent's decision to limit the division of the settle-
ment proceeds to those employees in the unit as of
the time of settlement was either arbitrary or unrea-
sonable. We note that Respondent, in attempting to
recover compensation for the Employer's alleged vio-
lation of the collective-bargaining agreement, en-
countered many problems of computation which all
parties concede precluded a precise determination of
individual losses in pay sustained by the employees
in the bargaining unit. Thus, the settlement figure
agreed upon by the parties represented a composite
loss of the unit as a whole. Since it was impossible to
ascertain precisely which employees suffered losses
in pay or the amount of such losses,7 it devolved
upon the Union to adopt administrative guidelines
2 Eighteen of the nineteen individuals thus excluded were recalled by the
Employer either immediately after the strike ended or, in the case of three
em3ployees, shortly thereafter.
Miranda Fuel Company, Inc., 140 NLRB 181 (1962).
Ford Motor Co. v. Huffman, 345 U.S. 330, 337-338 (1953).
See, e.g.. United Steelworkers of America Local Union 2610 (Bethlehem
Steel Corporation), 225 NLRB 310 (1976).
6 See, e.g., General Truck Drivers, Chauffeurs and Helpers Union, Local No.
692, International Brotherhood of Teamsters, Chauffeurs, Warehousemen &
Helpers of America (Great Western Unifreight System). 209 NLRB 446
(1974).
Indeed, it appears that such a computation may well have been impossi-
ble due to the complexity of the Employer's wage and incentive plan.
982
STEELWORKERS LOCAL UNION NO. 2869
by which to resolve the problems as to distribution.
Only its decision to limit distribution to unit employ-
ees is attacked.! We find that Respondent's decision
to limit distribution to those affected employees in
the unit as of the date of settlement (which, we note
occurred some 3 years following filing of the gliev-
ances) simply constituted one of a series of reason-
able, practical administrative determinations regard-
ing those employees entitled to share in the
settlement proceeds.9 We thus conclude that the con-
duct of Respondent alleged herein does not consti-
tute a breach of the duty of fair representation in
violations of Section 8(b)(1)(A).'° Accordingly, we
shall dismiss the complaint herein in its entirety.
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, it is ordered that the
complaint be, and it hereby is, dismissed in its en-
tirety.
MEMBERS JENKINS and PENELLO, dissenting:
We disagree with our colleagues' reversal of the
Administrative Law Judge's decision in this case. In
our opinion, the Administrative Law Judge was cor-
rect in his conclusion that Respondent breached its
s We cannot agree with our dissenting colleagues that the settlement pro-
ceeds herein are "wholly analogous" to backpay in unfair labor practice
cases. Unlike backpay proceedings, the parties made no attempt to compute
actual earnings lost by individual employees. Rather, the proceeds are being
divided equally without regard to such considerations and, as noted infra,
some of the employees being paid actually may have gained as a result of
the Employer's alleged breach of contract. Neither our dissenting col-
leagues, the Charging Party, nor the General Counsel contends that the
failure to compute such individual losses, or conversely the decision to dis-
tribute settlement funds in equal shares, was arbitrary or unreasonable.
9To expand the distribution beyond those presently in the unit would
have required Respondent to undertake the additional administrative task
of trying to locate the individuals who had left the unit since the grievance
arose.
We also note that 18 of the 19 employees who were no longer unit mem-
bers on the date of settlement were recalled by the Employer within 2 weeks
following the termination of the strike on March 15, and of those 18, IS
were recalled on March 16. Thus, except for employee R. A. Miller (who
returned to work on May 5, 1972), none of the individuals excluded from
the distribtuion suffered other than minimal losses in wages, if they suffered
any at all. Indeed, it would appear that 18 of the 19 individuals may have
received greater compensation than was normal as a result of increased
incentive pay during the period in which the Employer failed to restore crew
sizes to prestrike levels.
10 Our dissenting colleagues assert that Respondent's conduct is "substan-
tially the same as executing a 'members only' contract." Here the Union
distributed the settlement funds equally to all unit employees. Union mem-
bership or activity was not considered in determining which employees were
eligible or the amount they would receive. Therefore, we cannot agree that
the activity is substantially the same as limiting distribution to those who
are members of or who support the Union.
Our dissenting colleagues rely on District 65, Distributive Workers of
America (Blume Associates, Inc.), 214 NLRB 1059 (1974). That case is inap-
posite since there, the union dispersed settlement funds to striking employ-
eea who engaged in picketing in support of the strike but not to striking
employees who refrained from picketing. Thus. contrary to the situation
presented here the union's distribution of funds in District 65 was based
solely on union activity.
duty of fair representation, in violation of Section
8(b)(1)(A) of the Act, by arbitrarily excluding the 19
employees from participation in the grievance settle-
ment. The decision of the majority is contrary to the
prevailing line of Board and court authority concern-
ing the union's duty to fairly represent all of its mem-
bers.
Some brief background is necessary for an under-
standing of the legal issues presented. On or about
April 10, 1972, approximately I month after the ter-
mination of the strike, Respondent filed grievances
in protest over the Employer's failure to bring the
crew size in the tin mill maintenance department up
to prestrike levels. Respondent also sought full com-
pensation for those employees who lost earnings as a
result of the Employer's action. After unsuccessful
attempts at resolving these consolidated grievances
first through the contractual grievance procedure
and then through arbitration, the parties discussed
the possibility of a settlement. In negotiating the set-
tlement, Respondent, utilizing work schedules, sub-
mitted to the Employer a dollar figure based upon
the estimated amount of earnings lost by the unit
employees, including the 19 employees involved
herein. The Employer apparently proposed a signifi-
cantly smaller amount, and on July 18, 1975, the par-
ties agreed on a settlement figure of $67,500.
Pursuant to the agreement, which reads in perti-
nent part "the Company agrees to pay the sum of
$67,500 to the bargaining unit employees designated
by the Union," Respondent, working from seniority
listings, submitted a list of 193 employees to share in
the settlement agreement. The individuals who com-
prised this list were employees who were employed in
the bargaining unit, both at the time the grievances
were filed in April 1972 and at the time the griev-
ances were settled in July 1975. Thus, 19 employees,
who, between the end of April 1972 and June 1975,
had retired, accepted supervisory positions, been
transferred out of the bargaining unit, quit their em-
ployment, or been discharged, were excluded from
sharing in the settlement even though Respondent
included their projected earnings in presenting a set-
tlement figure to the Employer.
The settlement money represented wages lost by
the employees wrongfully denied work and was
made for the purpose of reimbursing them. A part of
the settlement money was attributable to wages lost
by the 19 employees who have since left the unit, and
this part of the money was designed to reimburse
them. The settlement proceeds are thus wholly analo-
gous to backpay in an unfair labor practice case.
Would our colleagues award to an employee still in
the unit the backpay of an employee who had left the
unit by the time of our decision? Of course not. No
983
I>DECISIONS OF NATIONAL LABOR RELATIONS BOARD
rational basis exists for depriving an employee of
money paid on account of wages he has lost and
giving the money to an employee who has not lost
those wages. Apart from caprice, such an allocation
of the money has nothing to sustain it except the
Union's desire to gain support of those still in the
unit, at the expense of those who had left .t but
whom the Union was still obligated to represent fair-
ly as to matters arising from their employment in the
unit. This sort of invidious, self-aggrandizing deci-
sion by a union has been unlawful probably since
Radio Officers Union of the Commercial Telegraphers
Union [A. U. Bull Steamship Co.] v. N.L.R.B., 347
U.S. 17 (1954), and certainly since Vaca v. Sipes, 386
U.S. 171 (1967), and Miranda Fuel Company, Inc.,
140 NLRB 181 (1962). The majority's characteriza-
tion of this invidious distribution of the settlement
money as "simply ... reasonable, practical adminis-
trative determinations" leaves unanswered the ques-
tion of why it is reasonable and permits as reason-
able whatever the Union asserts to be so.
The majority's position would have the effect of
broadening even further a union's discretion to de-
termine when it has responsibly met its duty of fair
representation. We are troubled by the prospect of
extending a union's authority in this regard because
we fear that, as in the instant case, it may lead to
arbitrary union action and a resultant failure to serve
the interests of all of its members.
Furthermore, the majority's decision does not find
support in the case law. It is well established that a
bargaining agent is under a duty to serve the interests
of all bargaining unit employees fairly, in good faith,
and without hostility or discrimination against any of
them on the basis of arbitrary, irrelevant, or invidi-
ous distinctions." In Vaca v. Sipes, the Court made
continual references to "arbitrary" union conduct
and noted that "the duty of fair representation has
stood as a bulwark to prevent arbitrary union con-
duct against individuals ... ." It noted further that
a union "may not arbitrarily ignore a meritorious
grievance or process it in a perfunctory fashion
.... " In Miranda Fuel, which the Supreme Court
approvingly referred to in Vaca v. Sipes, the Board
adopted the concept that this duty is "in a sense fidu-
ciary in nature" and, in Associated Transport,' the
Board held that once a union undertook to present
an employee's grievance, it became bound to act as
the employee's advocate and present his grievance in
a manner most favorable to him.
See, e.g., Vaca v. Sipes, supra; Miranda Fuel Co., Inc.. supra.
12 Truck Drivers, Oil Drivers and Filling Station and Platform Workerr Lo-
cal No. 705, International Brotherhood of Teamsters, Chauffeurs, Warehouse-
men and Helpers of America (Associated Transport, Inc.), 209 NLRB 292
(1974), ptn. for review denied 532 F.2d 1169 (7th Cir. 1976).
By upholding Respondent's decision to limit distri-
bution to those affected employees in the unit as of
the time of settlement, the Board has encouraged
unions to arbitrarily set up standards whereby they
may easily evade their duty of fair representation. In
our view, once the Union undertook to assert the
rights of all active employees, its duty of fair repre-
sentation toward those employees arose and contin-
ued until the matter was resolved through the settle-
ment of the grievance.
Respondent's conduct here is substantially the
same as executing a "members only" contract, which
the Board has consistently found objectionable. Ra-
dio Officers Union, supra, Local Union No. 450, Inter-
national Union of Operating Engineers, AFL-CIO
(Tellepsen Construction Company), 122 NLRB 564
(1958), enfd. in relevant part 281 F.2d 313 (5th Cir.
1960), cert. denied 366 U.S. 909 (1961); cf. Bob's Big
Boy Family Restaurants, 235 NLRB No. 174 (1978).
Thus, the Board has found unlawful the allocation of
benefits which flow from the existence of a collec-
tive-bargaining relationship on the basis of member-
ship in or activity supportive of a union. District 65,
Distributive Workers of America (Blume Associates,
Inc.), 214 NLRB 1059 (1974). It is logically inconsis-
tent to proscribe such activity, and yet permit a
union to buy the loyalty of current unit members at
the expense of those to whom benefits have accrued
pursuant to the collective-bargaining relationship but
who have left the unit prio: to their distribution.
Both situations involve discrimination based on arbi-
trary criteria which encourages union membership
and thereby restrains and coerces employees in the
exercise of their rights guaranteed by Section 7 of the
Act. Would our colleagues sustain a union-negotiat-
ed requirement that wage checks delivered after, but
earned before, an employee left the unit should be
canceled and his wages distributed among those re-
Inaining on the job? Surely not; and this situation is
no different.
By answering our argument with the response that
no violation occurred because the distribution was
made to all employees then in the unit instead of
being based on union membership, the majority mis-
conceives the thrust of our argument. In the
majority's view, the only "unit employees" to whom
the Union owed a duty were those currently on the
employment rolls. This is contrary to the well-estab-
lished principle forbidding discrimination in hiring,
based on union membership considerations, even
though the prospective employee is not yet a member
of the unit. If discrimination is unlawful at that
point, it is afortiori unlawful it if is fastened upon the
employee only because he has left the unit. These
employees were, and are, part of the unit for de-
984
STEELWORKERS LOCAL UNION NO. 2869
termining the amount of the settlement; they must be
similarly treated in the distribution of the moneys
collected on the basis of their work as members of
the unit. We consider the Union's duty of fair repre-
sentation to extend to all matters occurring while the
Union represented the employees, rather than ending
as to unresolved matters at the time an employee
leaves the unit. Respondent's freedom, and obliga-
tion, to collect the sums due to those who earned it is
neither greater nor less than its obligation to distrib-
ute it to those same people. To permit Respondent to
make the distribution only to current employees
from whom its support may be derived now and in
the future is similar to, though of course not identical
with, obtaining benefits for "members only." It is
equally unlawful.
We dissent from the majority's decision to reverse
the decision of the Administrative Law Judge.
DECISION
STATEMENT OF THE CASE
JAMES S. JENSON. Administrative Law Judge: Hearing in
this matter initially opened on March 30, 1976, before Ad-
ministrative Law Judge Richard D. Taplitz, and was ad-
journed indefinitely on that date upon the Respondent's
agreement to submit to arbitration before Arbitrator How-
ard S. Block the question whether the employees named in
the consolidated complaint had been properly excluded
from the distribution by the Union of $67,500 which the
Employer agreed to pay to bargaining unit employees des-
ignated by the Union in settlement of certain grievances
filed by the Union. On April 30, 1976, Arbitrator Block
ruled that "the matter presented was not an appropriate
issue for an arbitrator. The problem at hand was one that
fell entirely within the National Labor Relations Act, as
amended. The issues raised do not involve the interpreta-
tion of a collective-bargaining agreement nor a dispute be-
tween the Company and the Union." Upon the General
Counsel's motion to resume hearing, this matter was tried
before me in Los Angeles, California, on September 9,
1976. The consolidated complaint was issued on January
27, 1976, pursuant to charges filed on September 8 and 16,
1975, by John H. Brown, Jr., and Dick L. Simon, re-
spectively. The consolidated complaint alleges, in sub-
stance, that the Respondent, for arbitrary and unfair rea-
sons, failed to perform its duty of fair representation by
excluding from the coverage of the settlement of three
grievances filed on behalf of all bargaining unit employees
those employees who were no longer in the bargaining unit
at the time the settlement was reached by reason of the fact
they had retired, had been promoted to supervisory status,
or for some other reason had left the bargaining unit.
While admitting that those classes of individuals were ex-
cluded from participation in the benefits of the grievance
settlement, the Respondent denies that the exclusions vio-
lated the duty of fair representation. All parties were af-
forded full opportunity to appear, to introduce evidence,
and to examine and cross-examine witnesses. Briefs were
filed by the General Counsel and Respondent and have
been carefully considered.
Upon the entire record in the case, and from my obser-
vation of the demeanor of the witnesses, and having con-
sidered the post-hearing briefs, I make the following:
FINDINGS OF FACT
1. JURISDICTION
Kaiser Steel Corporation, herein called the Employer, is
engaged in the manufacture of steel and related products at
a plant located in Fontana, California. The Employer an-
nually purchases and receives goods and services valued in
excess of $50,000 directly from suppliers located outside
the State of California. The Respondent admits, and I find,
that Kaiser Steel Corporation is an employer engaged in
commerce within the meaning of Section 2(6) and (7) of
the Act.
II. THE LABOR ORGANIZATION INVOLVED
The Respondent admits, and I find, that United Steel-
workers of America, AFL-CIO, and its Local Union No.
2869 are labor organizations within the meaning of Section
2(5) of the Act.
ill. THE ALLEGED UNFAIR LABOR PRACTICES
The Employer operates a steel manufacturing plant in
Fontana, California. For an unspecified number of years,
the Employer and Respondent have been parties to a series
of collective-bargaining agreements covering the Employ-
er's production and maintenance employees, including the
200-225 employees in the tin mill maintenance depart-
ment, which is divided into electrical, mechanical, and ma-
chine shop maintenance crews. The collective-bargaining
agreement involved in these proceedings was in effect from
August 1, 1971, to July 31, 1974.
From February 1, 1972, until March 15, 1972, the
Employer's production and maintenance employees, in-
cluding those in the tin mill maintenance crews, were en-
gaged in a strike at the Fontana plant. As soon as the strike
ended, the Employer commenced recalling the tin mill
maintenance employees. While some of the more senior
employees were recalled to their former jobs immediately,
others were assigned to job classifications below their craft
positions, and others were not recalled until the prestrike
complement was reached about June I, 1972. George Ba-
nacky, chairman of Respondent's grievance committee,
was dissatisfied with the number of employees being re-
called for the tin mill maintenance crews, and between
April 10 and 14, 1972, the Respondent filed grievance nos.
72-173, 72-174, and 72-175 in protest of the reductions in
the sizes of the tin mill maintenance crews. Each of the
grievances requested that the Employer bring the involved
maintenance crew up to prestrike levels, and grievance no.
72-173 further requested the Employer to compensate the
985
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
mechanical maintenance employees for "all moneys lost." '
After processing the three grievances through the first
four steps of the contractual grievance procedure without
success, on March 13, 1973, the Respondent requested ar-
bitration. On March 21, 1975, arbitration of the three con-
solidated grievances commenced before Arbitrator How-
ard S. Block. Between March 21 and June 20, 1975. there
were 5 days of hearing on the grievances. It was agreed
between the parties that the issues to be arbitrated were:
(1) Were there established crew sizes in tin mill mainte-
nance within the meaning of the collective-bargaining
agreement prior to March 16, 1972? (2) If so, were any of
those crew sizes violated in the period following March 16,
1972? (3) If the answer to issue no. 2 is yes, what is the
appropriate remedy?
George White, the Respondent's representative, advised
the arbitrator that the Union was "asking for the former
crew size practices to be reinstated and those employees
who lost earnings because of the company action be made
whole." On June 20, Arbitrator Block encouraged the par-
ticipants to consider settlement of the disputes since it ap-
peared to him that each of the parties would prevail in
some but not all of their positions. Representatives of the
Employer and the Respondent then met to discuss possible
settlement. In order that they might come up with a dollar
figure to negotiate from, the Respondent's representatives
endeavored, by using work schedules, to determine how
much time had been lost by the tin mill maintenance em-
ployees. After arriving at a rough time-lost figure, the Re-
spondent multiplied the time lost by an hourly wage figure
and arrived at a "ballpark figure" of $145,000. The Em-
ployer, apparently, proposed a much smaller figure. At the
suggestion of Arbitrator Block, however, on July 18, 1975
the parties agreed on a settlement figure of $67,500 and
entered into a written settlement agreement providing in
pertinent part that "the Company agrees to pay the sum of
$67,500 to the bargaining unit employees designated by the
Union." 2
The task of determining which employees would receive
payments in accordance with the settlement agreement was
assigned to George Banacky, chairman of Respondent's
grievance committee. Banacky in turn enlisted the aid of
the assistant grievance committeemen for the three tin mill
maintenance crews. Working from seniority listings, these
men compiled a list of 193 recipients, which consisted of all
employees who were employed in the bargaining unit, both
at the time the grievances were filed in April 1972 and at
the time the grievances were settled in July 1975. Thus,
excluded from the list of employees destined to share in the
grievance settlement funds were 19 employees who, be-
I Each of the gnevances alleges violations of article 2B of the collective-
bargaining agreement, entitled "Local Working Conditions." Article 6 pro-
vides that the chairman of the grievance committee may file grievances
alleging, inter alia, violations of article 2B. A booklet entitled "Plant-wide
Agreement and Letters of Understanding Between Kaiser Steel Corporation
and United Steelworkers of America," dated November 13, 1971, contains a
clarification of "Local Working Conditions" found in article 2B
2 While the agreement settled all monetary liability up to and including
June 19, 1975, the parties agreed that the "settlement shall not prejudice the
position of eit er party with respect to the existence or non-existence of
protected crew sizes in tin mill maintenance."
tween the end of April 1972 and June 1975, had retired,
accepted supervisory positions, been transferred out of the
bargaining unit, quit their employment, or been dis-
charged. The lists of employees who were to receive pay-
ments pursuant to the settlement agreement were posted by
the Respondent on the bulletin boards in the machine shop
and mechanical maintenance department for approximate-
ly 3 weeks prior to their submission to the Employer, and
there was testimony to the effect that the assistant griev-
ance committeemen discussed the lists with employees in
their respective craft groups. There is no evidence to estab-
lish that any of the 19 employees who had left the bargain-
ing unit between April 1972 and June 1975 were contacted
either about the terms of the grievance settlement or about
the proposed list of recipients.
By letter dated July 21, 1975, the Respondent submitted
the list of 193 names to the Employer. Shortly thereafter,
each of the individuals designated by the Respondent was
paid a proportionate share of the settlement amount,
amounting to $349.75 per employee. There is no evidence
to show that the Respondent received any complaints re-
garding the proposed list of recipients prior to the distribu-
tion. John L. Brown, Jr., and Dick L. Simon, the Charging
Parties, first learned that their names had been excluded
from the list of individuals receiving payments in August.
Brown, who had become a supervisor on March 1, 1974,
was advised by Banacky that he had been excluded from
the list because he was a supervisor. Simon contacted
Union Representative Tom Raybone and was informed
that he had been excluded from payment because he had
retired. Simon argued, without avail, that he had been em-
ployed when the grievances had been filed and was entitled
to his share of the grievance settlement. As neither Brown
nor Simon was able to obtain the relief they sought, they
filed the two charges initiating these proceedings.
The parties stipulated to the following facts regarding
the 19 individuals employed at the time of the strike who
were excluded from the list of employees receiving a share
of the proceeds of the grievance settlement: K. T. Pilchard
returned to work March 17, 1972, and retired January 5,
1974; Claude Zehnder returned to work March 16, 1972,
and became a supervisor on March 1, 1974; John H.
Brown, Jr. returned to work March 27, 1972, and became a
supervisor on March 1, 1974; F. W. Shaffer returned to
work March 18, 1972, and was transferred out of the unit
on August 8, 1972; R. A. Miller returned to work May 15,
1972, and quit his employment on June 9, 1973; A. M.
Pascal returned to work March 16, 1972, and was transfer-
red out of the unit on May 6, 1974; H. Watt returned to
work March 16, 1972, and quit his employment on August
19, 1972; G. W. Clark returned to work on March 16, 1972,
and quit his employment on February 23, 1973; G. E. Da-
vis returned to work March 16, 1972, and was discharged
August 13, 1972, upon his failure to return from vacation;
J. Yarborough returned to work March 16, 1972, and re-
tired February I, 1973; S. A. Corre returned to work
March 16, 1972, and retired April 30, 1972; T. Ashurst
returned to work March 16, 1972, and retired January 31,
1973; S. Partyka returned to work March 16, 1972, and
retired March 30, 1973; M. F. Dean returned to work
March 16, 1972, and retired March 31, 1973; C. L. Booth
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STEELWORKERS LOCAL UNION NO. 2869
returned to work March 16, 1972, and retired July 28,
1973; R. P. Beard returned to work March 16, 1972, and
retired October 31, 1974; T. Amicucci returned to work
March 16, 1972, and retired January 4, 1975; Dick L. Si-
mon returned to work March 16, 1972, and retired January
31, 1975; D. C. Rothfolks returned to work March 16,
1972, and retired January 31, 1975.
No effort was made by the Respondent to contact indi-
viduals not working in the plant in July 1975 regarding the
list of individuals designated to participate in the settle-
ment funds. No attempt was made to compute the actual
individual losses in pay sustained by the employees in the
bargaining unit. Such a task, it appears, may have been
impossible, in view of the complexity of the Employer's
wage and incentive pay plans.
Contentions of the Parties
While the General Counsel does not contend that the
Respondent Union violated the Act by entering into an
agreement settling the three tin mill grievances, he asserts
"that Respondent did violated Section 8(bXIXA) when it
excluded former members of the bargaining unit from pay-
ment of money to which they were entitled by reason of the
settlement of the grievance which Respondent had initially
filed on their behalf, as well as on behalf of other adversely
affected tin mill maintenance crew employees, at a time
when they were clearly Section 2(3) employees. The settle-
ment award was money which these ex-employees would
have received from the Employer while still statutory em-
ployees (i.e., prior to retirement or promotion to supervis-
or) but for the Employer's breach of its contractual obliga-
tion. Accordingly, Respondent's action must be viewed as
an arbitrary denial of a benefit owed to these individuals
while they held the status of statutory employees. Since
these individuals should have received the monies when
they were statutory employees, the monies, in law, belong
to them when they were statutory employees. The Union
had a duty to represent them when they were statutory
employees, and this duty, insofar as it relates to the re-
covery of money owed to individuals from the time when
they were statutory employees, continues to exist even after
the individuals have ceased to be unit employees."
The Respondent contends (1) that the settlement pro-
ceeds distributed to the recipients were in the nature of a
"penalty" assessed against the Employer for its alleged vio-
lation of the collective-bargaining agreement, as opposed
to a backpay settlement; (2) that the denomination of the
settlement proceeds by the General Counsel as "backpay"
does not support an award of damages, since only one of
the alleged discriminatees, Miller, actually suffered any
loss in pay during the period encompassed by the.three
grievances, and therefore none of the others are entitled to
any backpay award even if a violation of the Act is found;
(3) that Respondent acted in a reasonable manner in com-
piling the list of recipients, exhibiting good faith and hon-
esty of purpose throughout, and was neither arbitrary nor
negligent; (4) that the individuals excluded from participa-
tion in the settlement agreement proceeds were not em-
ployees and that the Respondent's designation of the recip-
ients of the moneys was reasonable in the light of the
unique circumstances of the case; and (5) that a violation
of Section 8(b)(l)(A) may not be found unless the griev-
ances are proven to be meritorious. Respondent further
argues that its conduct did not violate the Act, since the
Respondent's implementation of the terms of the settle-
ment agreement was within the wide range of reason-
ableness afforded the collective-bargaining representative
in serving the unit it represents.
Conclusions
Much has already been written regarding the Union's
duty of fair representation. As has been pointed out by the
Board on numerous occasions, although an employer may
discharge an employee for no reason at all without violat-
ing the Act, unions have obligations to employees they rep-
resent that employers do not. Among these is the avoid-
ance of arbitrary treatment.
The "duty of fair representation" was first announced by
the Supreme Court in Steele v. Louisville & Nashville Rail-
road Co., 323 U.S. 192 (1944), involving racial discrimina-
tion under the Railway Labor Act. In Ford Motor Company
v. Huffman, 345 U.S. 330, 338 (1953), the doctrine was ap-
plied to a case under Section 301 of the Act. In repre-
senting its members, the Court stated, a union is permitted
"a wide range of reasonableness," but this latitude is "sub-
ject always to complete good faith and honesty of purpose
in the exercise of its discretion." The doctrine was further
clarified in Vaca v. Sipes, 386 U.S. 171, 177 (1967), where
the Court stated "[The doctrine of fair representationl in-
cludes a statutory obligation to serve the interest of all
members without hostility or discrimination toward any, to
exercise its discretion with complete good faith and hones-
ty, and to avoid arbitrary conduct." (Emphasis supplied.)
The Court made repeated references to "arbitrary" union
conduct, and noted that "the duty of fair representation
has stood as a bulwark to prevent arbitrary union conduct
against individuals .... " It noted further that a union
"may not arbitrarily ignore a meritorious grievance or pro-
cess it in a perfunctory fashion .... " In Miranda Fuel
Company, Inc., 140 NLRB 181, 185, 186 (1962), which the
Supreme Court approvingly referred to in Vaca v. Sipes,
the Board held that a union breaches its duty of fair repre-
sentation and violates the Act by "taking action against
any employee upon considerations or classifications which
are irrelevant, invidious or unfair" or when "for arbitrary
or irrelevant reasons . . . the union attempts to cause or
does cause an employer to derogate the employment status
of an employee." And, in finding that the union breached
its duty of fair representation in violation of Section
8(bX I XA) of the Act when it caused an employee's reduc-
tion in seniority for considerations which were irrelevant,
invidious, or unfair, the Board characterized the union's
conduct as "arbitrary conduct." In Miranda, the Board
also adopted the concept that the duty of fair representa-
tion is "in a sense fiduciary in nature," which "connotes
some degree of affirmative responsibility with regard to the
987
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
allocation of benefits the union has secured for the em-
ployees in a collective-bargaining agreement." '
The prevailing line of court authority is to the effect that
a union's duty of fair representation includes the avoidance
of arbitrary conduct; and in Truck Drivers, Oil Drivers,
Filling Station and Platform Workers Union Local 705 (As-
sociated Transport, Inc.), 209 NLRB 292 (1974), enfd. 532
F.2d 1169 (7th Cir. 1976), the Board stated that once a
union undertook to present an employee's grievance, it be-
came obligated to represent him fully and fairly, including
the duty to act as his advocate.
Applying these legal principles to the present case, it is
concluded that the Respondent failed in its duty of repre-
senting all the employees in the unit fairly, and that its
exclusion of the 19 named employees from participation in
the proceeds of the grievance settlement was for an arbi-
trary and unfair reason. As stated by the Court in Kesner v.
N.L.R.B., 532 F.2d 1169, 1175 (7th Cir. 1976): "It is one
thing for a grievant to attempt to pursue his remedy with-
out [union] assistance and opposed only by one adversary.
When that situation is compounded by two opponents, one
of whom is supposedly his 'own people,' the bearing on the
likelihood of his success assumes substantial significance.
When one's own representative . . . proclaims a lack of
merit, it is indeed likely to be a coup de grace to the claim."
Following the termination of the strike, the Respondent
was dissatisfied with the manner in which the Employer
was manning the tin mill maintenance crews. Accordingly,
pursuant to authority granted it under the "Plant-wide
Agreement and Letters of Understanding .. ." dated No-
vember 13, 1971, it filed the three grievances on behalf of
all three tin mill maintenance crews. At the time of the
filing, and throughout the entire period encompassed by
the grievances, the 19 individuals subsequently denied par-
ticipation in the settlement funds were statutory employees
of the Employer in the unit represented by the Respondent
and toward whom the Respondent owed a duty of fair
representation, which included the obligation of repre-
senting them fully and fairly, including the duty to act as
their advocate. Once the Respondent undertook to bargain
and present grievances for the unit employees it repre-
sented in April 1972 pursuant to rights claimed under the
collective-bargaining agreement, the Respondent was obli-
gated to treat all of those employees fully and fairly, and
the later forfeiture of the rights of the 19 employees on the
ground that they left the unit, albeit long after their con-
tractual rights had arisen and been asserted by the Respon-
dent, constituted an arbitrary abandonment of the griev-
ances with respect to those 19 individuals. By so doing, the
Respondent exceeded a legitimate union purpose in clear
violation of those employees' rights to fair and impartial
treatment from their statutory bargaining representative
and thereby violated Section 8(b)(IXA) of the Act. The
Respondent's action, in these circumstances, is nothing
more than an arbitrary imposition of a rule of its own mak-
ing which has no justification in either the collective-bar-
gaining agreement or reported cases.
Respondent's arguments that the proceeds distributed to
See General Truckdrivers, Warehousemen, Helpers and Automotive Em-
ployees, Local 315, Teamsters (Rhodes and Jamieson, Ltd.), 217 NLRB 616,
617, (1975).
the employees pursuant to the settlement agreement were
in the nature of a penalty payment instead of reimburse-
ment for lost wages, and that, since only Miller actually
suffered any loss as a result of the Respondent's action, the
other 18 individuals are not entitled to any recovery are not
persuasive. The record shows that from the very inception
of the three grievances and during the hearings before Ar-
bitrator Block, the Respondent asserted that it was seeking
the restoration of earnings lost by employees. Moreover, it
is clear that the Respondent based the "ballpark" figure
which it used in negotiating the settlement upon the esti-
mated amount of earnings lost by the unit employees, in-
cluding the 19 employees involved herein. Thus, it is clear
that the Respondent sought to compensate the unit em-
ployees for moneys lost, and the fact the settlement re-
covery was for only 50 percent of the amount initially
claimed does not detract from that fact. Nor does the fact
that each of the employees in the unit received an equal
share of the settlement compel a contrary conclusion. As
conceded by both the General Counsel and the Respon-
dent, the task of determining the amount of each individ-
ual unit employee had lost was virtually impossible, in view
of the wage and incentive system in effect. Moreover, it is
noted that none of the current unit employees apparently
registered any complaint concerning the Respondent's dis-
tribution of the settlement funds on an equal basis.
The Respondent, citing Allied Chemical & Alkali Work-
ers of America, Local Union No. I v. Pittsburg Plate Glass
Co., Chemical Division, 404 U.S. 157 (1971), seeks to draw a
distinction between the duty owed employees who re-
mained in the unit and those who left the unit prior to the
settlement of the grievances. Respondent argues that, un-
der Pittsburg Plate Glass, retired employees are no longer
employees within the meaning of Section 8 (aX5) of the Act,
and, presumably its duty to represent them ended with
their retirement. Respondent then rationalizes that, since
retirees are no longer employees, transferees from the unit
and those who had moved to supervisory positions "could
also be properly omitted [from settlement benefits] for the
same reason." The General Counsel argues "that the 're-
tired' individuals in this case are now true 'retirees' as dis-
tinguished from individuals who have retired from an em-
ployer's employment but who still remain active members
of the nation's workforce. The latter group would still be
considered statutory employees with a sufficient nexus to
the unit to be owed a duty of fair representation by the
Union. Thus, in Pittsburg Glass, supra, the Supreme Court
noted that persons who had quit employment or job appli-
cants, unlike pensioners, continued to be members of the
workforce available for hire and may be considered 'em-
ployees.' Thus, as regards the retirees, N.L.RtB. v. Pittsburg
Glass, supra, must be distinguishable from the instant case,
since in the former case, the retiree benefits which had
been unilaterally modified by the Employer became due
and payable only after the individuals have retired and had
therefore ceased to retain employee status. In the instant
case, the monies were due and payable to the individuals
from the time they were unit employees."
In Pittsburg Plate Glass, the Supreme Court was con-
cerned with the employer's obligation under Section 8(aX5)
to bargain over the benefits of retired employees. Noting at
988
STEELWORKERS LOCAL UNION NO. 2869
footnote I I that "nothing we hold today precludes permis-
sive bargaining over the benefits of already retired employ-
ees," the Court went on to find that retiree benefits were
not a subject of mandatory bargaining: hence, the em-
ployer had not unlawfully failed to bargain by unilaterally
proposing a change in the retiree benefits. The instant case
is not concerned with retiree benefits, as such, but with
ongoing contractual rights possessed by active emp'ovees
and with a duty which arose when the collective-bargaining
representative of those active employees sought to as:;ert
those rights. As noted at the outset, unions have obliga-
tions to employees they represent that employers do not,
among which is the avoidance of arbitrary treatment. Once
the Union undertook to assert the rights of all active em-
ployees under the contract, whether they fall within the
ambit of either mandatory or nonmandatory bargaining
subjects, the Union's duty of fair representation toward
those active employees arose and continued until the issue
was resolved through the settlement of the grievance. In
my view, Pittsburg Plate Glass does not stand for the prop-
osition, as the Respondent seems to contend, that once an
individual has retired or otherwise left the collective-bar-
gaining unit, he has lost all rights which he acquired, or
duties owed him, which arose during the period of his ac-
tive employment.' In sum, I find that the Respondent
breached its duty of fair representation in violation of Sec-
tion 8(bXI)(A) of the Act by arbitrarily excluding the 19
employees from participation in the grievance settlement
benefits.5
IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON
COMMERCE
The activities of the Respondent set forth in section III,
above, occurring in connection with the operations of the
Employer, as described in section I, above, have a close,
intimate, and substantial relation to trade, traffic, and
commerce among the several States and tend to lead to
labor disputes burdening and obstructing commerce and
the free flow of commerce.
V. THE REMEDY
It having been found that the Respondent failed in its
duty to fairly represent the individuals named in Appendix
A, it is recommended that Respondent make them whole
for any loss of settlement benefits they suffered by reason
of the Respondent's violation of the duty to fairly represent
them by payment of a sum of money to each of them equal
to what he normally would have received as his proportion-
ate share of the grievance settlement, had their names not
been excluded by the Respondent, with interest added
4 In Teamsters Local 315 (Rhodes and Jamieson), supra, the Board found
that the union had breached its duty to fairly represent an employee even
though the employee was deceased at the time the charge was filed
5 While the Respondent disagrees with the Board's holding in The Buffalo
Newspaper Guildt Local 26, 220 NLRB 79 (1975), that the General Counsel
is not required to show that the grievance is prima facie meritorious, but
only that it is 'not clearly frivolous," I am bound by the Board's ruling. As
is clear from the evidence, the grievances involved herein were not frivolous
thereto in the manner set forth in Isis Plumbing & Heating
Co., 138 NLRB 716( 1962).5
CONcI LUSIONS OF LAW
I. Kaiser Steel Corporation is an employer engaged in
commerce within the meaning of Section 2(6) and (7) of
the Act.
2. United Steelworkers of America, AFL CIO, and its
Local Union No. 2869, are labor organizations within the
meaning of Section 2(5) of the Act.
3. By causing Kaiser Steel Corporation to fail to pay the
individuals listed in Appendix A a proportionate share of
the grievance settlement agreement, the Respondent failed
to fairly represent said individuals, in violation of Section
8(b)( )(A) of the Act.
4. The aforesaid unfair labor practices are unfair labor
practices affecting commerce within the meaning of Sec-
tion 2 t6 ) and (7) of the Act.
Upon the basis of the foregoing findings of fact, conclu-
sions of law, and the entire record, and pursuant to Section
10(c) of the Act, I hereby issue the following recom-
mended:
ORDER7
The Respondent, United Steelworkers of America,
AFL-CIO, Local Union No. 2869, its officers, agents, suc-
cessors, and assigns, shall:
1. Cease and desist from:
(a) Restraining or coercing employees in the exercise of
their rights guaranteed by Section 7 of the Act by failing to
represent them in grievances in a fair and impartial man-
ner.
(b) In any like or related manner restraining or coercing
employees in the exercise of their rights guaranteed by Sec-
tion 7 of the Act.
2. Take the following affirmative action which is neces-
sary to effectuate the policies of the Act:
(a) Make whole the individuals listed in Appendix A for
any loss of settlement benefits incurred as a result of the
Respondent's failure to accord them fair and impartial
[rievance representation to which they were entitled, in the
manner set forth in the section entitled "The Remedy."
(b) Post at its business offices and meeting halls copies
of the attached notice marked "Appendix B." 8 Copies of
said notice, on forms provided by the Regional Director
for Region 31, after being duly signed by Respondent's
authorized representative, shall be posted by Respondent
6 But for the Respondent's arbitrary exclusion of the 19 individuals listed
in Appendix A. 212 employees would have shared equally in the $67,500
settlement. Hence, each of the 19 is entitled to receive $3 18.40 plus interest
thereon from July 23. 1975
In the event no exceptions are filed as provided by Sec. 102.46 of the
Rules and Regulations of the National Labor Relations Board, the findings,
conclusions, and recommended Order herein shall, as provided in Sec.
102.48 of the Rules and Regulations. be adopted by the Board and become
its findings, conclusions. and Order, and all objections thereto shall be
deemed waived for all purposes.
8 In the event that 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 Relations Board" shall read "Posted Pursuant to a judg-
ment of the United States Court of Appeals Enforcing an Order of the
National Labor Relations Board"
989
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
immediately upon receipt thereof and be maintained by it
for 60 consecutive days thereafter in conspicuous places,
including all places where notices to employees and mem-
bers are customarily posted. Reasonable steps shall be tak-
en by Respondent to ensure that said notices are not al-
tered, defaced, or covered by any other material.
(c) Sign and mail to the Regional Director for Region 31
sufficient copies of said notice, on forms provided b) him,
for posting at the premises of Kaiser Steel Corporation, if
the latter is willing.
(d) Notify the Regional Director for Region 31, in writ-
ing, within 20 days from the date of this Order, what steps
the Respondent has taken to comply herewith.
APPENDIX A
K. T. Pilchard J. Yarborough
Claude Zehnder S. A. Corre
John H. Brown, Jr. T. Ashurst
F. W. Shaffer S. Partyka
R. A. Miller M. F. Dean
A. M. Pascal C. L. Booth
H. Watt R. P. Beard
G. W. Clark T. Amicucci
G. E. Davis Dick L. Simon
D. C. Rothfolks
APPENDIX B
NOTICE To MEMBERS
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
WE WILL NOT fail to represent unit employees in a fair
and impartial manner.
WE WILL NOT in any like or related manner restrain or
coerce employees in the exercise of their rights guaranteed
by Section 7 of the Act.
WE WILL make whole the following named individuals for
loss of settlement benefits suffered as a result of our failing
to represent them in a fair and impartial manner:
K. T. Pilchard
Claude Zehnder
John H. Brown, Jr.
F. W. Shaffer
R. A. Miller
A. M. Pascal
H. Watt
G. W. Clark
G. E. Davis
D. C. Rothfolks
J. Yarborough
S. A. Corre
T. Ashurst
S. Partyka
M. F. Dean
C. L. Booth
R. P. Beard
T. Amicucci
Dick L. Simon
UNITED STEELWORKERS OF AMERICA, AFL-CIO
LOCAL UNION No. 2869
990