Tammy Sportswear Corp.

National Labor Relations Board - Board Decisions

May 7, 1991

302 N.L.R.B. 860 (N.L.R.B. 1991)

860
302 NLRB No. 149
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
1 In Member Oviatt’s view, there may be limited circumstances, not present
here, in which an employer’s financial inability to pay may constitute a de-
fense to an allegation that it unilaterally and unlawfully ceased contractually
required payments to union benefit funds. To make this defense successfully,
an employer must establish that it continued to recognize—and did not repu-
diate—its contractual obligations. To satisfy this requirement, an employer
must prove that its nonpayment was followed by its request to meet with the
union to discuss and resolve the nonpayment problem. In so doing, an em-
ployer demonstrates its adherence to the contract and the bargaining process.
In such circumstances, Member Oviatt would find that an employer’s non-
payment of contractually required benefit fund payments would not violate
Sec. 8(a)(5) of the Act.
Tammy Sportswear Corporation and Joint Board
Cloak, Skirt and Dressmakers’ Union, Inter-
national Ladies’ Garment Workers’ Union,
AFL–CIO. Case 1–CA–27095
May 7, 1991
DECISION AND ORDER
BY MEMBERS DEVANEY, OVIATT, AND
RAUDABAUGH
On a charge filed by the Joint Board Cloak, Skirt
and Dressmakers’ Union, International Ladies’ Gar-
ment Workers’ Union, AFL–CIO (Union) on February
23, 1990, the General Counsel of the National Labor
Relations Board issued a complaint on April 2, 1990,
against Tammy Sportswear Corporation, the Respond-
ent, alleging that it has violated Section 8(a)(5) and (1)
by failing and refusing to make contractually required
contributions to employee benefit funds. Copies of the
complaint were served on the Respondent. The Re-
spondent filed a timely answer admitting all the factual
allegations in the complaint and asserting an affirma-
tive defense.
On July 27, 1990, the General Counsel filed a Mo-
tion to Transfer Proceeding to the Board, To Strike
Respondent’s Affirmative Defense, and for Summary
Judgment. On July 31, 1990, the Board issued an order
transferring the proceeding to the Board and a Notice
to Show Cause why the motion should not be granted.
The Respondent filed no response.
The National Labor Relations Board has delegated
its authority in this proceeding to a three-member
panel.
On the entire record, the Board makes the following
Ruling on Motion for Summary Judgment
The Respondent’s admission to all the factual alle-
gations in the complaint establishes that (1) the Union
was the recognized and exclusive collective-bargaining
representative of the Respondent’s employees in an ap-
propriate bargaining unit composed of all the Respond-
ent’s nonsupervisory production, maintenance, packing,
and shipping workers; (2) the Respondent was obli-
gated under the terms of its collective-bargaining
agreement with the Union to make monthly payments
to the Union for and on behalf of the Union’s Health
and Welfare Fund, Retirement Fund, and Health Serv-
ices Plan; and (3) the Respondent stopped making
those contractually required contributions without prior
notice to or consent of the Union.
It is well established that an employer who is a
party to an existing collective-bargaining agreement
violates Section 8(a)(5) and (1) of the Act when it
modifies the terms and conditions of employment es-
tablished by that agreement without obtaining the con-
sent of the union. Rapid Fur Dressing, 278 NLRB
905, 906 (1986). Here, the Respondent has admitted
that it has unilaterally discontinued making its contrac-
tually required payments to the Health and Welfare
Fund, the Retirement Fund, and the Health Services
Plan. The Respondent raises as an affirmative defense
that it lacks the financial ability to make the required
payments. Such an economic necessity claim, even if
proven, does not constitute an adequate defense to an
allegation that an employer has unlawfully failed to
abide by the provisions of a collective-bargaining
agreement. Raymond Prats Sheet Metal Co., 285
NLRB 194, 196 (1987); International Distribution
Centers, 281 NLRB 742, 743 (1986); and Hiysota Fuel
Co., 280 NLRB 763 (1986).1 Accordingly, the Re-
spondent has admitted all the facts material to a resolu-
tion of the unfair labor practice issues raised by the
complaint and has not raised an adequate defense to
the complaints allegations.
Because we find the affirmative defense submitted
by the Respondent to be inadequate, we grant the Gen-
eral Counsel’s motion to strike. Because there are no
material facts in dispute, and in the absence of any
cause to the contrary having been shown by the Re-
spondent, we grant the General Counsel’s Motion for
Summary Judgment.
On the entire record, the Board makes the following
FINDINGS OF FACT
I. JURISDICTION
The Respondent is a corporation with an office and
place of business in Boston, Massachusetts, where it
annually provides stitching services valued in excess of
$50,000 for various employers located in Massachu-
setts who sell and ship garments valued in excess of
$50,000 to points located outside the Commonwealth
of Massachusetts. We find that the Respondent is an
employer engaged in commerce within the meaning of
Section 2(6) and (7) of the Act and that the Union is
a labor organization within the meaning of Section
2(5) of the Act.
II. ALLEGED UNFAIR LABOR PRACTICES
The following employees of the Respondent con-
stitute a unit appropriate for collective-bargaining pur-
poses within the meaning of Section 9(b) of the Act:
861TAMMY SPORTSWEAR CORP.
2 Because the provisions of employee benefit fund agreements are variable
and complex, we leave to the compliance stage the question whether the Re-
spondent must pay any additional amounts into the benefit funds in order to
satisfy our ‘‘make-whole’’ remedy. Merryweather Optical Co., 240 NLRB
1213 (1979).
3 If this Order is enforced by a judgment of a United States court of appeals,
the words in the notice reading ‘‘Posted by Order of the National Labor Rela-
tions Board’’ shall read ‘‘Posted Pursuant to a Judgment of the United States
Court of Appeals Enforcing an Order of the National Labor Relations Board.’’
All non-supervisory production, maintenance,
packing, and shipping workers employed by Re-
spondent at its Boston, Massachusetts location,
excluding office clerical employees, professional
employees, guards and all supervisors as defined
in the Act.
At all material times the Union has been the des-
ignated exclusive collective-bargaining representative
of the employees in the unit and has been recognized
as such by the Respondent. Recognition has been em-
bodied in a collective-bargaining agreement, effective
from June 15, 1988, to June 15, 1991. By virtue of
Section 9(a) of the Act, the Union is the exclusive rep-
resentative of employees in the bargaining unit for the
purposes of collective bargaining concerning rates of
pay, wages, hours of employment, and other terms and
conditions of employment.
The parties’ collective-bargaining agreement requires
the Respondent to make monthly monetary contribu-
tions to the Union for and on behalf of the Health and
Welfare Fund, the Retirement Fund, and the Health
Services Plan. Since about September 20, 1989, the
Respondent has failed and refused to make the month-
ly payments to the above Funds and Plan, and has not
obtained the Union’s consent. By those acts and con-
duct, the Respondent has engaged in, and is engaging
in, unfair labor practices affecting commerce within
the meaning of Section 8(a)(5) and (1) and Section
2(6) and (7) of the Act.
CONCLUSION OF LAW
By ceasing during the term of the contract to make
contractually required payments to the Union’s Health
and Welfare Fund, the Retirement Fund, and the
Health Services Plan on and after September 20, 1989,
the Respondent has engaged in unfair labor practices
within the meaning of Section 8(a)(5) and (1) and Sec-
tion 2(6) and (7) of the Act.
REMEDY
Having found that the Respondent has engaged in
certain unfair labor practices, we shall order it to cease
and desist and to take certain affirmative action de-
signed to effectuate the policies of the Act.
We shall order the Respondent to make whole the
Health and Welfare Fund, the Retirement Fund, and
the Health Services Plan for all contributions that
would have been paid but for the Respondent’s unlaw-
ful discontinuance of payments2 and to make unit em-
ployees whole as set forth in Kraft Plumbing & Heat-
ing, 252 NLRB 891 fn. 2 (1980), enfd. 661 F.2d 940
(9th Cir. 1981), the amounts to be computed in the
manner set forth in Ogle Protection Service, 183
NLRB 682 (1970), with interest as computed in New
Horizons for the Retarded, 283 NLRB 1173 (1987).
ORDER
The National Labor Relations Board orders that the
Respondent, Tammy Sportswear Corporation, Boston,
Massachusetts, its officers, agents, successors, and as-
signs, shall
1. Cease and desist from
(a) Failing and refusing to bargain with Joint Board
Cloak, Skirt and Dressmakers’ Union, International La-
dies’ Garment Workers’ Union, AFL–CIO, by failing
and refusing to make contractually required monetary
payments to the Union’s Health and Welfare Fund, the
Retirement Fund, and the Health Services Plan.
(b) In any like or related manner interfering with,
restraining, or coercing employees in the exercise of
the rights guaranteed them by Section 7 of the Act.
2. Take the following affirmative action necessary to
effectuate the policies of the Act.
(a) Make all contributions to the Health and Welfare
Fund, the Retirement Fund, and the Health Services
Plan that have not been paid and that would have been
paid in the absence of the Respondent’s unlawful dis-
continuance of the payments, and make unit employees
whole, in the manner set forth in the remedy section
of this decision.
(b) Preserve and, on request, make available to the
Board or its agents for examination and copying, all
payroll records, social security payment records, time-
cards, personnel records and reports, and all other
records necessary to analyze the amount of payment
due under the terms of this Order.
(c) Post at its facility in Boston, Massachusetts, cop-
ies of the attached notice marked ‘‘Appendix.’’3 Cop-
ies of the notice, on forms provided by the Regional
Director for Region 1, after being signed by the Re-
spondent’s authorized representative, shall be posted
by the Respondent immediately upon receipt and main-
tained for 60 consecutive days in conspicuous places
including all places where notices to employees are
customarily posted. Reasonable steps shall be taken by
the Respondent to ensure that the notices are not al-
tered, defaced, or covered by any other material.
(d) Notify the Regional Director in writing within
20 days from the date of this Order what steps the Re-
spondent has taken to comply.
862 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
APPENDIX
NOTICE TO EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
The National Labor Relations Board has found that we
violated the National Labor Relations Act and has or-
dered us to post and abide by this notice.
WE WILL NOT refuse to bargain in good faith with
Joint Board Cloak, Skirt and Dressmakers’ Union,
International Ladies’ Garment Workers’ Union, AFL–
CIO, by failing and refusing to make contractually re-
quired monetary payments to the Health and Welfare
Fund, the Retirement Fund, and the Health Services
Plan.
WE WILL NOT in any like or related manner interfere
with, restrain, or coerce you in the exercise of the
rights guaranteed you by Section 7 of the Act.
WE WILL make all contributions to the aforemen-
tioned Funds and Plan that have not been paid and that
would have been paid in the absence of our unlawful
discontinuance of the payments, and make unit em-
ployees whole, with interest.
TAMMY SPORTSWEAR CORPORATION