Wind-Chester Roofing Products

National Labor Relations Board - Board Decisions

May 10, 1991

302 N.L.R.B. 878 (N.L.R.B. 1991)

878
302 NLRB No. 137
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
1 The Respondent excepts, inter alia, to a finding of liability after July 5,
1989. On that date, the Respondent contends, the parties reached an impasse
in bargaining over the health care benefits and the Respondent was free to im-
plement its last position.
The Respondent did not raise the impasse defense in its answer or at the
hearing. The issue, therefore, has not been litigated. The Board finds a conten-
tion untimely raised and waived when a party raises it for the first time in
exceptions to the Board. See Yorkaire, Inc., 297 NLRB 401 (1989). Accord-
ingly, we find that the impasse contention was waived, and we will not con-
sider it.
2 The judge’s decision omitted jurisdictional findings in this matter. As al-
leged in the amended complaint and admitted in the answer, the Respondent
is a corporation, with a place of business in Chester, West Virginia, that en-
gages in the manufacture and nonretail sale and distribution of asphalt roofing
products; the Respondent annually sells and ships from West Virginia prod-
ucts, materials, and goods valued in excess of $50,000 directly to points out-
side the State of West Virginia; the Respondent annually purchases and re-
ceives at its West Virginia facility products, goods, and materials valued in
excess of $50,000 directly from points outside the State of West Virginia; the
Respondent is an employer engaged in commerce within the meaning of Sec.
2(6) and (7) of the Act and the Union is a labor organization within the mean-
ing of Sec. 2(5) of the Act.
The General Counsel has excepted to some of the judge’s credibility find-
ings. The Board’s established policy is not to overrule an administrative law
judge’s credibility resolutions unless the clear preponderance of all the relevant
evidence convinces us that they are incorrect. Standard Dry Wall Products,
91 NLRB 544 (1950), enfd. 188 F.2d 362 (3d Cir. 1951). We have carefully
examined the record and find no basis for reversing the findings.
3 All subsequent dates refer to 1989 unless specified otherwise.
4 Although the parties apparently never signed an agreed-upon reopener
amendment to the contract, the issue of the Respondent’s insurance obligations
did not prevent completion of the reopener agreement and the parties’ under-
standing on this issue remained unquestioned.
5 We find that the Union’s decision to hold in abeyance the processing of
a grievance filed after the first bargaining session (at which time the Respond-
ent assured the Union that it would provide equivalent medical coverage) evi-
dences that the parties reached an understanding about the medical coverage.
Wind-Chester Roofing Products, Inc. and United
Steelworkers of America, Local 6252, AFL–
CIO–CLC. Case 6–CA–22079
May 10, 1991
DECISION AND ORDER
BY CHAIRMAN STEPHENS AND MEMBERS
CRACRAFT AND OVIATT
On October 2, 1990, Administrative Law Judge Ber-
nard Ries issued the attached decision. The Respondent
filed exceptions, a supporting brief, and a reply brief;
and the General Counsel filed limited exceptions, a
supporting brief, and a reply brief.
The National Labor Relations Board has delegated
its authority in this proceeding to a three-member
panel.
The Board has considered the decision and the
record in light of the exceptions1 and briefs and has
decided to affirm the judge’s rulings, findings,2 con-
clusions, and remedy as modified, and to adopt the
recommended Order, as modified.
The judge found that the Respondent failed to ad-
here to its contract with the Union by failing to pro-
vide the required medical insurance, or its equivalent,
at the time the Respondent assumed the contract on
December 14, 1988. The judge further found that Sec-
tion 10(b) bars finding a violation or providing a rem-
edy more than 6 months before the filing of the charge
on September 11, 1989.3 Accordingly, he dated the
remedy from March 11. On exception, the General
Counsel contends that the remedy should date from
December 14, 1988. We agree with the General Coun-
sel.
Pursuant to the contract provisions, the Union gave
notice of a midterm reopener to negotiate certain
issues. The parties discussed health insurance coverage
during the negotiations. At the first bargaining session
in January, the Respondent asked to be allowed to sub-
stitute an ‘‘equivalent’’ health care plan, which could
be obtained at less expense than the Blue Cross and
Blue Shield Flex-Care III plan required by the con-
tract. The Union agreed to accept an alternative plan
if it were ‘‘equivalent.’’
Prior to July 5, on several occasions the Respondent
reiterated the parties’ understanding that the Company
would obtain equivalent health care coverage and that,
in the meantime, employees should submit qualified
medical bills to the Respondent for payment.4 Al-
though the Respondent stated that it was unsure where
it would locate the funds, the Respondent assured the
Union that it would pay the bills and obtain equivalent
health care coverage, i.e., comply with the under-
standing reached during bargaining.5 The Respondent’s
secretary-treasurer testified, however, that on July 5:
I told [the Union president] that Wind-Chester
recognized its liability to pay qualified bills from
the 14th of December 1988 and subsequent; how-
ever, there were no monies available to pay those
bills, and they promptly would be paid from funds
available when they become available, whenever
that is, without stating when that would be, or
whether that would be. [Emphasis added.]
As of the time of the hearing, the Respondent had
failed to provide its employees any medical insurance
and the Blue Cross and Blue Shield Flex-Care III plan
was not in effect. All of the employees’ medical bills
that have been submitted as directed by the Respond-
ent remain unpaid. At least 16 employees have sub-
mitted medical bills which exceed $20,000 in total.
We find that the Respondent’s July 5 statement sig-
naled a retreat from the parties’ understanding regard-
ing the payment of the medical bills. Before July 5, the
parties had an understanding that the Respondent
would pay submitted bills and provide an agreed-on al-
ternative plan. The Respondent, by suggesting for the
first time on July 5 that the bills might not be paid,
retreated from its assurances that qualified bills would
be paid and equivalent health care coverage would be
obtained.
We conclude that the unfair labor practice in viola-
tion of Section 8(a)(5) initially occurred on July 5
when the Respondent first indicated that it considered
879WIND-CHESTER ROOFING PRODUCTS
6 In Member Oviatt’s view, there may be limited circumstances in which an
employer’s temporary inability to pay may constitute a defense to an allegation
that it unilaterally and unlawfully ceased contractually required payments to
union benefit funds. To make this defense successfully, an employer must es-
tablish that it continued to recognize its contractual obligations and thus did
not repudiate the contractual provisions. To satisfy this requirement, an em-
ployer must prove that it requested to meet, or did meet, with the Union in
a good-faith attempt to resolve the problem. The Respondent here excepts to
the judge’s reasoning that the Respondent was not under ‘‘financial con-
straint’’ because the Respondent’s owner could have supplied additional funds.
Assuming for the sake of argument that the Respondent is correct in its claim
that its owner cannot be required to honor the Respondent’s obligation under
the Act, Member Oviatt finds that the Respondent has not adequately dem-
onstrated its good-faith adherence to the contract and its bargaining obligation.
It does not assert that it honored its bargaining obligation other than by a neb-
ulous undertaking, as stated in its brief, ‘‘to pay medical claim only when,
if ever, it had the financial wherewithal.’’ Thus, regardless of whether or not
the Respondent was in fact financially constrained, it has not, in Member
Oviatt’s view, done that which it could have to demonstrate its adherence to
the contract and the bargaining process. To the contrary it declines to acknowl-
edge that obligation.
7 We shall also modify the judge’s recommended Order to conform to the
violation found.
itself free to renege on the understanding to pay quali-
fied bills and provide equivalent health care coverage.6
Although Hrkman’s July 5 statement is not an outright
repudiation of the parties’ contract, it clearly violates
the understanding arrived at by the parties in negoti-
ating the reopener agreement.
Because the unfair labor practice occurred on July 5,
the 10(b) period did not begin to run until that date,
and the September 11 charge was filed within the
10(b) period. See Universal Enterprises, 291 NLRB
670 (1988) (where the parties bargained for postpone-
ment of a contractual obligation, the violation occurred
at the respondent’s later unilateral refusal to comply
with the new agreement). As the Respondent’s failure
to pay all qualified medical bills dating back to De-
cember 14, 1988, constituted a violation of the Act as
of the refusal, it follows that the remedy for this viola-
tion is that the Respondent pay all those bills, and we
amend the judge’s remedy section accordingly.7
AMENDED CONCLUSION OF LAW
Substitute the following for the judge’s Conclusion
of Law 3.
‘‘3. By failing to adhere to its agreement with the
Union to pay employees’ qualified medical bills dating
back to December 14, 1988, and to maintain the health
insurance program provided for in the collective-bar-
gaining agreement or its equivalent, the Respondent
violated Section 8(a)(5) and (1) of the Act.’’
ORDER
The National Labor Relations Board adopts the rec-
ommended Order of the administrative law judge as
modified below and orders that the Respondent, Wind-
Chester Roofing Products, Inc., Chester, West Virginia,
its officers, agents, successors, and assigns, shall take
the action set forth in the Order as modified.
1. Substitute the following for paragraph 1(a).
‘‘(a) Failing to adhere to its agreement with the
Union to pay employees’ qualified medical bills dating
back to December 14, 1988, and to maintain the health
insurance program provided for in the collective-bar-
gaining agreement or its equivalent.’’
2. Substitute the following for paragraph 2(a).
‘‘(a) Make whole unit employees for any uncompen-
sated medical expenditures, pay any unpaid medical
bills, and forthwith institute the Blue Cross and Blue
Shield Flex-Care III plan provided for in its collective-
bargaining agreement or any equivalent plan accept-
able to the Union, in the manner set forth in the rem-
edy section of the judge’s decision, as modified by the
Board’s decision.’’
3. Substitute the attached notice for that of the ad-
ministrative law judge.
APPENDIX
NOTICE TO EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
The National Labor Relations Board has found that we
violated the National Labor Relations Act and has or-
dered us to post and abide by this notice.
WE WILL NOT fail to adhere to our agreement with
the Union to pay employees’ qualified medical bills
dating back to December 14, 1988, and to maintain the
health insurance program provided for in the collec-
tive-bargaining agreement or its equivalent.
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 whole unit employees for any un-
compensated medical expenditures, WE WILL pay any
unpaid medical bills, and WE WILL forthwith institute
the Blue Cross and Blue Shield Flex-Care III plan pro-
vided for in our collective-bargaining agreement or any
equivalent plan acceptable to the Union, in the manner
set forth in the Decision and Order of the National
Labor Relations Board.
WIND-CHESTER ROOFING PRODUCTS, INC.
Kim Siegert, Esq., for the General Counsel.
Donald Lucidi, Esq. and Donald J. Humphreys, Esq. (Hum-
phreys & Nubani, P.C.), of Pittsburgh, Pennsylvania, for
the Respondent.
Tim Neal, of Wheeling, West Virignia, for the Charging
Party.
DECISION
BERNARD RIES, Administrative Law Judge. This case was
heard in Wheeling, West Virginia, on March 28, 1990. The
880 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
1 The charge was filed on September 11, 1989, and was amended on Octo-
ber 26. The complaint issued on that same date and was amended on March
9, 1990 (the ‘‘1989’’ date shown on the amended complaint is obviously an
error).
2 Although the complaint and Respondent’s pleadings and brief spell the
first word in Respondent’s name as ‘‘Windchester,’’ the company’s stationery
(and its personnel director) hyphenate it as shown above. See G.C. Exh. 9.
Accordingly, I have, sua sponte, amended the caption to reflect what seems
to be the correct spelling.
3 Unless otherwise indicated, all dates hereafter refer to 1989.
4 There is a good deal of testimony about exactly what word the parties in-
tended to use to describe the proposed substitute insurance. Lamb, an impres-
sive witness overall, says that he consistently employed the word ‘‘equiva-
lent,’’ and because that same term appears in several documents authored by
Respondent, I think it quite likely that both sides used it. It further seems clear
that neither party meant that the program must be identical in all respects, but
rather that the coverage should be virtually the same.
gist of the amended complaint1 is that Respondent2 violated
Section 8(a)(5) of the Act in one of two ways: by notifying
the Union on or about July 5, 1989, that it would not provide
any health care benefits for unit employees, whether incurred
in the past or in the future, Respondent either failed to con-
tinue in full force its December 14, 1988, contractual obliga-
tion to provide health benefits or failed to fulfill verbal and
written assurances given between January and June 1989 to
provide health care benefits equivalent to those set forth in
the December 14, 1988 contract.
Briefs were received from the parties on May 2, 1990. On
consideration of the briefs, a review of the transcript of pro-
ceedings and the exhibits, and my recollection of the de-
meanor of the witnesses, I make the following
FINDINGS OF FACT
I. THE FACTS
The facility in question manufactures roofing products,
having done so for several years under the ownership of dif-
ferent entities. The plant closed in 1982, but was reopened
(operating as Chester) under an employee stock option plan
in April 1988, and the new company executed a 3-year col-
lective-bargaining agreement with the Charging Party Union.
The agreement stated, in article 14, ‘‘The Company will pro-
vide without cost to the employees the Blue Cross And Blue
Shield Flex-Care III Comprehensive major medical benefits
insurance program effective December 1, 1987. Copy at-
tached hereto marked Exhibit B.’’
The ESOP was not a success, and in September 1988,
Blue Cross notified the Chester employees that their cov-
erage under the Flex-Care III plan was being terminated be-
cause of failure of the employer to pay premiums. Chester
gave up the ghost in October 1988, but found a buyer, a con-
glomerate named SME Industries, Inc. The latter agreed to
hire the Chester employees and to ‘‘reinstitute the USW
union contract.’’
Ownership of the assets and property was transferred ef-
fective December 14, 1988, to a new, wholly owned sub-
sidiary of SME named ‘‘Wind-Chester Roofing Products,
Inc.’’ Most or all of Chester’s 45 employees were hired by
the new company, and Respondent admits that it is a ‘‘suc-
cessor’’ to Chester and that it assumed the collective-bar-
gaining agreement between Chester and the USW, subject to
certain presently irrelevant modifications.
The agreement contained a reopener clause authorizing ei-
ther party to ask in February 19893 for further negotiations
‘‘with respect to wages, insurance, pension and other issues
as determined by either party.’’ The Union evidently invoked
this right, and at a meeting on January 18, presented a wide-
ranging summary of proposals to Respondent. The only ref-
erence contained in the proposal to ‘‘Insurance’’ merely stat-
ed, ‘‘Information forthcoming.’’ Larry Lamb, the president of
the Charging Party, testified that when the subject of insur-
ance arose, Respondent’s secretary-treasurer Nick Hrkman
stated that the Company believed it could get ‘‘equivalent’’
coverage to the currently inapplicable Flex-Care plan at a
cheaper rate if it had the opportunity to shop around for dif-
ferent providers. Lamb said that the Union did not care ‘‘as
long as we had the equivalent coverage.’’4
On January 26, as a ‘‘protective measure,’’ the Union filed
a grievance asserting the failure to reinstate the Flex-Care
plan to be a violation of the bargaining agreement and asking
that the benefit be reinstituted and made retroactive to De-
cember 14, 1988 (but also noting that the grievance should
be held in abeyance because of ‘‘SME Corp. willingness to
comply with the insurance provision in the contract’’).
At the next negotiating meeting on January 31, Respond-
ent made a written counterproposal which, inter alia, ‘‘[re-
quested] the right to choose alternative carrier offering equiv-
alent coverage,’’ and also told the Union in the interim to
turn medical bills into the office, ‘‘that they would take care
of them.’’ The Union apparently acquiesced.
At the February 15 meeting, Lamb asked Personnel Man-
ager Mark Sharpe if a provider had been found; he said no,
but the employees should continue turning in bills to the of-
fice. Respondent also made another written counterproposal,
which included ‘‘Insurance benefits will be equivalent to
those previously provided under the contract but will not be
Blue Cross Blue Shield.’’
At the February 28 meeting, the Union brought up the
health care question and was told that no provider had been
found. Respondent instructed again that bills should be
turned in to the office, which would pay them.
The next meeting took place on April 3. When the Union
asked about the health benefit plan, it received the same neg-
ative reply. On April 8, the Company offered, and the Union
accepted, a 3-percent raise. A few weeks later, Respondent
prepared a draft revision of the existing contract, which pro-
vided, in pertinent part, the following:
Subject to the terms and conditions of the respective in-
surance plans and policies carried with the NOBEL’ [sic]
GROUP BENEFITS Insurance Company, the Company
agrees to make the following benefits available to each
employee . . . .
(b) The Company will provide without cost to the em-
ployee a medical benefits package equivalent to the
Blue Cross and Blue Shied [sic] Flex-Care III Com-
prehensive Major Medical Benefits Insurance Program
previously in effect. Copy attached hereto marked Ex-
hibit B.
There was, however, no ‘‘Exhibit B’’ attached to the draft.
At a union meeting on April 26, the union negotiators
handed out a summary of the subjects to which it had ten-
tatively agreed, including:
881WIND-CHESTER ROOFING PRODUCTS
Insurance benefits will be equivalent to those pre-
viously provided. As of this date the committee has yet
to recive [sic] an insurance contract from the company.
This contract will not be signed until such a time that
the company delivers to us an acceptable health benefit
package.
The employees voted to ratify the contract. At this meeting,
there were also some complaints from members that the
medical bills which, as instructed, they had handed in to the
office, and of which none had thus far had been paid, were
being turned over by their physicians to collection agencies.
The next day, Lamb told Respondent that the Union was ac-
tivating the January 26 grievance, and he did so in written
form on May 12.
On May 15, the Union prepared and signed a summary of
the agreed-on amendments to the existing contract, which in-
cluded:
(7) Insurance benefits will be equivalent to those pre-
viously provided under the January 1, 1988 contract,
but will not be Blue Cross-Blue Shield.
The Respondent never signed a copy of this document.
Lamb testified that at the next negotiating meeting, in
early June, Respondent spoke of its inability to find a pro-
vider, although it was ‘‘still looking for a policy to provide
us with insurance.’’ Reference was made to the Nobel Group
Benefits Plan, a third-party administrator for insurance, and
Respondent ‘‘presented that policy to us at that time.’’ By
‘‘that policy,’’ Lamb evidently meant a brochure which
briefly summarized the manner in which the Nobel Plan
worked, as later described. The Nobel Plan had first been
mentioned in April.
Around June 13, at a meeting, Personnel Director Sharpe
‘‘gave us his word that he would have the Nobel Group In-
surance Package in effect by July 1’’ and, according to
Lamb, that was ‘‘sufficient for us.’’ On cross-examination,
however, he added that the union representatives agreed to
institute the Nobel Plan only ‘‘[i]f it was an equivalent pol-
icy,’’ and they had asked for further information about Nobel
as far back as April. Respondent presented cards to the em-
ployees at that time for enrollment in the Nobel Plan, and
they were passed out to the unit employees, but because the
Union asked the employees to hold the cards until the Union
was ‘‘sure of the actual benefits that the plan had to offer,’’
no signed cards were turned in. This disabled Respondent
from enrolling in the Nobel Plan.
In testifying about the next meeting, on July 5, Lamb said
that the meeting originated because ‘‘[a]s of July 1st, we had
heard nothing about the Nobel Group Benefits Plan being put
into effect as promised by the company,’’ so Lamb requested
a conference with the Company. At the meeting, Respondent
was represented by Secretary-Treasurer Hrkman. According
to Lamb, Hrkman said that ‘‘the company, at this time, had
no intention of providing insurance for us due to financial
reasons.’’ Hrkman added that he had to do what Frank
Carlow, owner of SME, told him, but ‘‘he was on our side.’’
Hrkman mentioned the Union’s ‘‘options,’’ the first being a
strike, but the union representatives replied that such an ac-
tion would violate the contract. Hrkman also spoke of the
Union’s right to pursue ‘‘legal means,’’ which the union
agents said they would investigate. James Miller, a member
of the Union’s negotiating committee, substantially corrobo-
rated Lamb’s testimony.
Hrkman testified that when he met with the Union in July
(on the 12th, according to his diary), Lamb asked him if the
employees had insurance coverage. When Hrkman said they
did not, Lamb reacted ‘‘emotionally’’ and was ‘‘visibly
upset,’’ expressing his inability to understand how SME’s
Carlow could treat employees in such a manner. Hrkman de-
nied saying that ‘‘Wind-Chester had no intention of pro-
viding health insurance.’’ He says that he told Lamb that Re-
spondent recognized its liability to pay qualified post-Decem-
ber 14 bills; that there was, however, no money available for
that purpose; and that the bills would be paid when the cash
flow permitted, ‘‘whenever that is, without stating when that
would be, or whether it would be.’’ Hrkman denied inviting
the Union to strike, but ‘‘recognized that they could strike,’’
which concerned him because Respondent was working with
a customer to develop a new line of products. He admits
having expressed empathy with the employees. When the
union representatives said they would not strike, but would
deal with the matter otherwise, Hrkman replied, ‘‘You have
got to do what you have got to do.’’
Although I do not think the issue is a critical one, I doubt
that Hrkman said unequivocally that Respondent would not
provide insurance; I do believe, judging from Lamb’s con-
ceded emotional and distraught reaction, and from Hrkman’s
own testimony, that Hrkman said that the contract would not
be honored until Respondent considered itself to be in a fi-
nancial position to do so. The record shows that on July 11,
the Union filed another grievance protesting the failure to
provide an insurance program in accordance with the bar-
gaining agreement and to pay medical claims which were
turned in as promised. Sharpe’s reply on August 3 was
‘‘Wind-Chester Roofing Products, Inc., will pay any quali-
fying medical claims filed by its employees at the Chester,
West Virginia plant whenever the Company achieves a finan-
cial condition whereby it can meet its current obligations
without additional capital subsidy by its owner.’’
It appears that after the July 5 meeting, when it became
clear that the Nobel proposal was not on the table, Respond-
ent made no effort to find other coverage until sometime
after October 26, when the complaint issued in this case. As
of the hearing, Respondent had still paid none of the out-
standing bills submitted by employees to its office, even
though Hrkman admitted that there were bills which quali-
fied for payment under the terms of the Flex-Care plan.
There is in evidence a seven-page document said by Per-
sonnel Director Sharpe to be a proposal from the Nobel
Group to ‘‘provide us with . . . third-party administration for
a partially self-insured insurance program.’’ Sharpe testified
that the proposal was first provided to the Union at the April
3 meeting, which Lamb attended. Lamb was not recalled to
rebut this testimony, and I shall therefore credit Sharpe. The
proposal provides life insurance, accidental death and dis-
ability insurance, and ‘‘Duplication of in force plan of med-
ical and short-term disability benefits.’’ The proposal is no
more explicit about the medical insurance program to be pro-
vided.
It appears from the proposal that Nobel is the adminis-
trator of the plan, charging certain fees for its services; and
that, under the proposal, Respondent would self-insure a
maximum of $10,500 per employee each year for medical
expenses, and thereafter Life Insurance Company of North
882 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
5 Sharpe testified at one point that the Union had ‘‘requested that they give
us the approval’’ to any new plan selected.
6 As Respondent states on brief (Br. 9), it ‘‘regarded itself as having an obli-
gation to obtain Union approval of any new insurance plan, even one dupli-
cating the Flex-Care III plan.’’
7 The carelessly drawn complaint only alleges a violation beginning July 5.
See par. 22. General Counsel’s brief, however, seeks a remedy commencing
December 14, 1988, and Respondent’s brief seems to recognize the logic of
such an extension of the principle involved (Br. 20). The matter has been fully
litigated, and the remedy should provide for payment of qualified medical ex-
penses incurred after December 14. However, because the 10(b) period of lim-
itations would normally preclude any findings of violations prior to March 11,
1989, 6 months preceding the filing date of the charge, I shall limit my find-
ings accordingly. Although Respondent has not invoked Sec. 10(b), which fail-
ure is normally considered a waiver, there was no reason in this case for it
to do so, because the complaint only alleged a violation date beginning July
5.
America would pay any excess amount. Sharpe testified that
under this plan, ‘‘We would have given the Nobel Group a
copy of the Flex-Care III summary plan, and they would
have administered it from that plan booklet.’’ The Union re-
fused, however, to get the necessary cards filled out by the
employees when Sharpe handed them to the Union in late
June because ‘‘they weren’t certain about whether or not it
satisfied their needs, or whether it satisfied what they thought
were their contractual rights.’’
II. DISCUSSION AND CONCLUSIONS
Without, as far as I know, any deviation, the Board has
held time and again that a party’s sustained failure to comply
with a provision of a collective-bargaining agreement, with-
out regard to motivation, violates Section 8(a)(5) of the Act.
Oak Cliff-Golman Baking Co., 202 NLRB 614, 616 (1973);
Martin E. Keller Roofing Co., 297 NLRB 787 (1990).
In the present case, the Respondent admittedly failed to
comply, after December 14, 1988, with the health insurance
requirement contained in the bargaining agreement which it
concededly had adopted. It argues, however, that during the
reopener negotiations which began in January, the Union in
effect (l) agreed to accept something less than the Flex-Care
III Plan specified in the contract, and (2) then made this bar-
gain impossible to fulfill by declining to cooperate in secur-
ing the Nobel Plan.
I must first disagree with the suggestion that the Union
agreed to accept any substitute program which provided
meaningfully different coverage or processing than the Flex-
Care Plan afforded. It is quite clear that the Union was sim-
ply being cooperative in allowing Personnel Director Sharpe,
who boasted of being able to obtain a cheaper plan with the
same coverage, to look for one and present it to the Union
for approval. It was surely understood by the parties, how-
ever, that there would be no substitution until the Union had
unmistakably agreed with any program that the Respondent
proposed as an alternative.5
It is true that certain evidence can be read to indicate that
the Union had agreed to accept the Nobel plan. Thus, as
shown above, Lamb testified that the genesis of the July 5
meeting was that ‘‘[a]s of July 1st, we had heard nothing
about the Nobel Group Benefits Plan being put into effect as
promised by the company.’’ However, given the other evi-
dence of Union reluctance to blindly substitute the Nobel
Plan for the Flex-Care III program (including Hrkman’s testi-
mony that the Union did not get cards signed because ‘‘they
weren’t certain about whether or not it satisfied their needs,
or whether it satisfied what they thought were their contrac-
tual rights’’), I do not believe that the record supports a
claim that the Union had agreed to the Nobel Plan.
Although the Union did imply that the plan might be ac-
ceptable, it plainly was not willing to settle for such a suc-
cinct description of the new health insurance as ‘‘Duplication
of in force plan of medical and short-term disability bene-
fits’’ (what plan was ‘‘in force’’ after the Flex-Care coverage
lapsed in 1988? what sort of coverage of ‘‘short-term dis-
ability benefits’’ was contemplated?). An obvious additional
complication was the fact that the Nobel Plan was to be
heavily self-insured. Given the Respondent’s utter failure to
pay bills submitted directly to it since January, the Union’s
circumspection about accepting such a plan would not be
surprising.
In my opinion, the Union probably had no legal obligation
to accept any new plan which deviated in the slightest from
the Flex-Care program, either under common law or the
NLRB. All it agreed to do was to consider any new plan pre-
sented to it by Respondent and, if it deemed the plan appro-
priately equivalent, to accept a substitution.6 As events mate-
rialized, however, the Respondent did not come close to sat-
isfying the Union that it had offered a program which was
equivalent to Flex-Care, and the Union’s position is fully un-
derstandable.
I find, therefore, that the Union acted within its rights by
refusing to cooperate in the adoption of the Nobel Plan. This
being so, the Respondent violated Section 8(a)(5) after
March 11, 1989, by failing to maintain in force the Flex-Care
Plan or a Union-approved equivalent. I do not find, however,
as discussed above, that on July 5, Respondent stated that it
would refuse to provide insurance in the future. Not only am
I unsure that such a stark repudiation occurred, but I also
conclude, under the precedents earlier cited, that a simple
failure to comply with the contract constitutes a violation of
the Act.7
Whether such a failure of compliance should violate the
Act in all circumstances is a question addressed here by Re-
spondent to the wrong tribunal. Board law is quite clear that
unilateral modifications ‘‘mandated by factors beyond the
employer’s control’’ (R. Br. 20) nonetheless abridge Section
8(a)(5). I have some personal sympathy with the view that
an employer’s ‘‘financial constraints’’ should not necessarily
result in a finding of unlawful unilateral action; I am not
sure, however, that this is the case in which to press that ar-
gument.
As noted, the record suggests that Respondent’s owner
was not without funds to pay the medical bills which were
piling up; Sharpe’s August 3 response to grievance 22 mere-
ly stated that Respondent would pay the claims when it was
able to meet its current obligations ‘‘without additional cap-
ital subsidy by the owner.’’ The implication is that the owner
was simply choosing not to honor his obligation to cover the
medical expenses of his employees, amounting perhaps to
thousands of dollars, and requiring their payment by the
workers instead of by the insurance coverage for which they
had bartered their labor.
CONCLUSIONS OF LAW
1. Respondent is an employer engaged in commerce within
the meaning of Section 2(2), (6), and (7) of the Act.
883WIND-CHESTER ROOFING PRODUCTS
8 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 objec-
tions to them shall be deemed waived for all purposes.
9 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.’’
2. The Charging Party is a labor organization within the
meaning of Section 2(5) of the Act.
3. By failing to maintain, after March 11, 1989, the health
insurance program or its equivalent provided for in the col-
lective-bargaining agreement adopted by Respondent, Re-
spondent violated Section 8(a)(5) and (1) of the Act.
4. The foregoing violation affects commerce within the
meaning of Section 2(6) and (7) of the Act.
THE REMEDY
Aside from the traditional cease-and-desist order and post-
ing of notices, Respondent should be required to make finan-
cial amends in order to restore the status quo ante effective
March 11, 1989.
There are unresolved issues pertaining to such restoration.
At the hearing, Respondent raised a question as to whether
all of the medical bills submitted to it qualified as compen-
sable under the Flex-Care Plan, and this question may in turn
depend on whether there is a waiting period of exemption
under the Flex-Care Plan which applies in these cir-
cumstances. Because we do not know enough about these
issues, they should be deferred to the compliance stage of
this proceeding.
Once it is determined which medical expenses are com-
pensable under the terms of the Flex-Care Plan, Respondent
shall reimburse its employees with interest for any losses
they suffered by virtue of Respondent’s failure to maintain
in effect the required health benefit plan. See New Horizons
for the Retarded, 283 NLRB 1173 (1987). Respondent shall
also immediately pay any outstanding unpaid qualified med-
ical bills and forthwith institute the Blue Cross-Blue Shield
Flex-Care III Plan referred to in its collective-bargaining
agreement or any equivalent plan acceptable to the Union,
compensating employees, in any interim period, for qualified
expenses.
On these findings of fact and conclusions of law and on
the entire record, I issue the following recommended8
ORDER
The Respondent, Wind-Chester Roofing Products, Inc.,
Chester, West Virginia, its officers, agents, successors, and
assigns, shall
1. Cease and desist from
(a) Refusing to abide by and adhere to its collective-bar-
gaining agreement with the Union by failing to maintain the
terms of the Blue Cross-Blue Shield Flex-Care III Com-
prehensive Major Medical Benefits Insurance Program or any
equivalent plan acceptable to the Union.
(b) In any like or related manner interfering with, restrain-
ing, or coercing employees in the exercise of the rights guar-
anteed them by Section 7 of the Act.
2. Take the following affirmative action necessary to ef-
fectuate the policies of the Act.
(a) Make whole unit employees for any uncompensated
medical expenditures, and pay any unpaid medical bills, in
the manner set forth in the remedy section of this decision.
(b) Post at its facility in Chester, West Virginia, copies of
the attached notice marked ‘‘Appendix.’’9 Copies of the no-
tice, on forms provided by the Regional Director for Region
6, after being signed by the Respondent’s authorized rep-
resentative, shall be posted by the Respondent immediately
upon receipt and maintained for 60 consecutive days in con-
spicuous places including all places where notices to employ-
ees are customarily posted. Reasonable steps shall be taken
by the Respondent to ensure that the notices are not altered,
defaced, or covered by any other material.
(c) Notify the Regional Director in writing within 20 days
from the date of this Order what steps the Respondents has
taken to comply.