Admiral Merchants Motor Freight, Inc.

National Labor Relations Board - Board DecisionsOct 19, 1982

265 N.L.R.B. 134 (N.L.R.B. 1982)

DECISIONS OF NATIONAL LABOR RELATIONS BOARD Admiral Merchants Motor Freight, Inc. and Auto- mobile Mechanics Local 701, International As- sociation of Machinists and Aerospace Workers, AFL-CIO. Case 13-CA-20679 October 19, 1982 DECISION AND ORDER BY MEMBERS FANNING, JENKINS, AND ZIMMERMAN On March 10, 1982, Administrative Law Judge Robert A. Giannasi issued the attached Decision in this proceeding. Thereafter, Respondent filed ex- ceptions and a supporting brief,' and the General Counsel filed an answering brief, cross-exceptions, and a brief in support thereof. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the Na- tional Labor Relations Board has delegated its au- thority in this proceeding to a three-member panel. The Board has considered the record and the at- tached Decision in light of the exceptions and briefs and has decided to affirm the rulings, find- ings, and conclusions of the Administrative Law Judge, as modified below, and to adopt his recom- mended Order, as modified herein. The Administrative Law Judge found that Re- spondent violated Section 8(a)(5) and (1) of the Act by circumventing the exclusive status of the Union as bargaining agent by attempting to deal, and deal- ing, directly with its represented employees regard- ing changes in their terms and conditions of em- ployment as set forth in the parties' collective-bar- gaining agreement, and by unilaterally implement- ing such changes without first notifying or bargain- ing with the Union. The Administrative Law Judge found Respondent's defenses for such con- duct to be "patently frivolous," and, in addition to the Board's traditional order requiring Respondent to cease and desist from any like or related con- duct, recommended that Respondent be ordered to, inter alia, reimburse the General Counsel and the Chlarging Party for all expenses incurred as a result of the instant proceeding. Respondent excepts to the Administrative Law Judge's finding that its direct dealing with employees and unilateral changes are unlawful, reiterates its asserted de- fenses, and contends that the extreme remedial relief recommended by the Administrative Law Judge is unwarranted in this case. The General Counsel, on the other hand, urges the Board to adopt the Administrative Law Judge's 8(a)(5) and (1) violation findings and his recommended Order I Respondent has requested oral argument. This request is hereby denied as the record, the exceptions, and the briefs adequately present the issues and the positions of the parties. 265 NLRB No. 16 with respect thereto. The General Counsel con- tends, however, that the Administrative Law Judge erroneously refused to pass upon two asserted inde- pendent violations of Section 8(a)(1) of the Act oc- curring during the course of Respondent's direct dealings with its employees. While we are in agree- ment with the Administrative Law Judge, and, for the reasons set forth by him, find that Respondent violated Section 8(a)(5) and (1) of the Act, we do not find the recommended extraordinary relief ap- propriate on the facts of this case. Additionally, we find, for the reasons set forth below, that the sepa- rate 8(a)(1) violations sought by the General Coun- sel warrant independent consideration and remedial relief. 1. The employees at Respondent's terminal are represented for purposes of collective bargaining by the Union. The parties' most recent collective- bargaining agreement is effective through April 20, 1982. On August 29, 1980, Respondent's president and owner, Robert E. Short, in a speech to the as- sembled Chicago terminal employees, stated that Respondent was having economic difficulties; that Respondent had been ordered by a district court in Minnesota to make certain payments to pension and health and welfare funds created pursuant to agreements between Respondent and the Teamsters Union representing Respondent's St. Paul terminal employees; and that a "debt reduction plan" had been devised whereby the employees at the St. Paul terminal had given up some of their benefits in order to help Respondent out of its financial dif- ficulties and pay its obligations. Short asked the Chicago employees to similarly forgo some of their benefits and stated that, if the employees did not agree to participate in the debt reduction plan, Re- spondent would not be able to operate and would probably close. Thereafter, Shop Foreman and Maintenance Supervisor Earl Berg2 distributed let- ters from Respondent to all unit employees seeking their written authorization for certain enumerated reductions in their contractually established com- pensation and benefits for a designated 12-month period. Berg explained the debt reduction plan to all employees who had not attended the meeting, including John Plaza, who was on layoff status at the time. Berg called Plaza into the terminal, pre- sented him with a letter describing the debt reduc- tion plan, and told him to sign it. Berg said that all of the other employees had signed similar letters, and, according to Plaza's uncontradicted testimony, 2 The uncontradicted evidence establishes that Berg gave the mechan- ics in the shop their work assignments on a day-to-day basis, and had the authority to hire and fire employees, reprimand them for misconduct, and grant them time off. We therefore find Berg to be a supervisor within the meaning of Sec. 2(11) of the Act. 134 ADMIRAL MERCHANTS MOTOR FREIGHT, INC. said "if I did not sign it I don't go back to work." Plaza signed the letter and about 2 weeks later was recalled. 3 The Administrative Law Judge refused to pass upon whether Short's statements about closure and Berg's remarks to employee Plaza constituted inde- pendent violations of Section 8(a)(1) of the Act be- cause, as urged by the General Counsel, they would have a tendency to coerce employees into forgoing collective-bargaining rights. The Adminis- trative Law Judge reasoned that there were no such allegations in the complaint that any potential violation in this regard is encompassed by the de- rivative 8(a)(1) violation found by him and that an independent 8(a)(1) violation finding would not likely significantly alter the remedy. We disagree. While the Administrative Law Judge is correct in stating that the statements of Short and Berg were not specifically alleged as independent viola- tions of Section 8(a)(l) in either the complaint or the amended complaint, these issues were fully liti- gated at the hearing and are in accord with, and closely related to, the substance of the complaint. Further, at the close of the hearing, counsel for the General Counsel made an oral presentation during which he argued that Short's statements in question and Berg's remarks independently violated Section 8(a)(l) of the Act. Accordingly, in these circum- stances, we find no basis for concluding that Re- spondent would in any way be prejudiced by a ruling on the merits of these additional allegations. 4 As to the merits, we find that Short's prediction of plant closure if employees did not accede to the debt reduction plan and Berg's suggestion that Plaza's recall would be predicated on his waiver of existing contractual benefits constitute threats of reprisal and therefore conduct which would have a tendency to coerce employees into abandoning their Section 7 right to bargain collectively through a representative of their own choosing. The statements of Short and Berg conveyed the clear message to the employees that failure to accede to Respondent's request to waive their con- tractually established benefits would result in the loss of their jobs, in the case of the employees then working, through closure of the terminal, and, in Plaza's case, by not being recalled from layoff. In 3 We take administrative notice of the fact that concurrent unfair labor practice charges were filed against Respondent alleging that it had un- lawfully engaged in direct dealings with union-represented employees at its Omaha, Nebraska, facility; sought their acquiescence in the above- mentioned plan agreed to by the St. Paul employees; and pressured the Omaha employees by various means, including layoffs, until they agreed to modifications in their existing benefits. 4 E.g., Electri-Flex Company, 228 NLRB 847, fn. 6 (1977); Clinton Corn Processing Company, a Division of Standard Brands Incorporated, 253 NLRB 622, fn. 1 (1980). Behring International. Inc., 252 NLRB 354, 363 (1980); Pilgrim Life Insurance Company, 249 NLRB 1228, fn. 1 (1980). the context of the employment relationship, few statements would tend to be more threatening and thus coercive than these. Indeed, the employees' subsequent accession to the request evidences as much. Accordingly, we find that Respondent vio- lated Section 8(a)(1) of the Act by such state- ments. 5 In so finding, we reject the Administrative Law Judge's conclusion that the 8(a)(5) and derivative 8(a)(1) violations found by him and his recom- mended remedy for those violations are sufficient to reach and remedy any independent violations which might be found based on Short's and Berg's statements. The coercive statements in question are not a necessary element of the unlawful bargaining conduct of Respondent. Thus, Respondent could have omitted these statements from its conduct in bypassing the Union as the employees' representa- tive, and it still would have violated Section 8(a)(5) and (1) of the Act. That the statements were in- tended to further such conduct and help Respond- ent to achieve the desired end of having the em- ployees agree to a reduction in benefits does not detract from this conclusion. The statements are no less coercive or incapable of being sorted out from Respondent's other unlawful conduct merely be- cause they were part of Respondent's derogation of the Union's statutory bargaining rights. Further, the traditional remedy for Respondent's failure to bargain with the Union will not enjoin Respondent from coercively threatening its em- ployees, the nub of the independent 8(a)(1) viola- tions found herein. Accordingly, in order to ade- quately remedy the additional unfair labor prac- tices, we find it appropriate and necessary to spe- cifically order Respondent to cease and desist from threatening employees with plant closure and denial of recall from layoff status unless they indi- See Don Brentner Trucking Co., Inc. and Jon's Leasing Co., Inc., 232 NLRB 428, 434 (1977). Member Fanning does not agree that Respondent's statement that it would close down absent modifications of its contract constituted an in- dependent violation of Sec. 8(aXl). Rather, such statement was illegal only as a function of Respondent's attempts to bypass the Union and deal directly with employees. Had the statement been made to the Union in bargaining and not directly to the employees, it would not have been il- legal. Member Fanning does agree, however, that the statement to Plaza did constitute a threat of reprisal in that Plaza was told that he would not be recalled unless he personally agreed to the proposed contractual modi- fications. Plaza had a Sec. 7 right to oppose contract modifications and his employment rights could not be conditioned upon his personal deci- sion. Members Jenkins and Zimmerman find it irrelevant that the statement if made to the Union alone would not be illegal. The illegality turns on the context in which the statement was uttered. Here, it was said to em- ployees in an attempt to get their approval of contractual modifications without the participation of the Union, and in derogation of the latter's status as bargaining representative. As such, it clearly was coercive and tended to interfere with and restrain the employees in the exercise of their Sec. 7 rights. 135 DECISIONS OF NATIONAL LABOR RELATIONS BOARD vidually agree to modifications of their existing contractual benefits. 2. Respondent asserted before the Administrative Law Judge, as reiterated in its brief to the Board, that its direct dealings with employees and its uni- lateral implementation of benefit changes were compelled by the above-discussed district court order to pay off its debts to the Teamsters benefit funds and its dire economic straits. We agree with the Administrative Law Judge's analysis which led him to conclude, as do we, that Respondent's de- fenses have no basis for support in either fact or law. We find, however, that the extraordinary rem- edies recommended by the Administrative Law Judge are not appropriate on the facts of this case. At the outset we note our adherence to the prin- ciple expressed in Tiidee Products, Inc, 6 that the Board, in appropriate circumstances, is capable of providing other than the usual remedial relief in order to rectify particular unfair labor practices. However, the extent and character of the unfair labor practices committed by Respondent do not warrant directing Respondent to reimburse the General Counsel and the Charging Party for ex- penses incurred as a result of litigating this pro- ceeding. This record establishes that Respondent has a history of a collective-bargaining relationship with at least two different unions, yet there is noth- ing to indicate that Respondent is a repeat offender of this statute. Nor can it be found on this record that Respondent has engaged in a pattern of unlaw- ful antiunion conduct for the purpose of denying all of its employees the exercise of the rights guar- anteed employees by Section 7 of the Act.7 And, while Respondent's proffered justifications for its conduct may be specious, this is not a situation where the offending party has intentionally used defenses meritless on their face in a clear attempt to burden the processes of the Board and the courts.8 In sum, we find 8(a)(5) and (1) violations with an order requiring Respondent to cease and desist from bypassing, and refusing to bargain with, the Union, but shall delete in our Order and notice the extraordinary relief recommended by the Ad- ministrative Law Judge. 6 194 NLRB 1234, 1236 (1972). 7 See Heck's, Inc., 191 NLRB 886 (1971). Compare J P. Stevens d Co., Inc., 239 NLRB 738, 772-773 (1978), enforcement denied in pertinent part 623 F.2d 322 (4th Cir. 1980), cert. denied 101 S.Ct. 856, 90 LC 112,552 (1981). While Respondent unilaterally implemented benefit changes in reliance upon the debt reduction plan at more than one of its facilities, such action does not amount to the same pattern of obstruction of employees' Sec. 7 rights exhibited by employers in cases where extraordinary remedies have been imposed. Accordingly, we do not find that Respondent has dis- played the requisite defiance of the Act which is necessary to warrant such remedies. 8 Fetzer Broadcasting Company, 227 NLRB 1377, 1389-90 (1977). AMENDED CONCLUSIONS OF LAW Insert the following as paragraph 4 and renum- ber the subsequent paragraph accordingly: "4. By threatening employees with closing the Chicago terminal unless they agreed to modifica- tions of existing contractual benefits and by threat- ening not to recall an employee from layoff unless he agreed to modifications of existing contractual benefits, Respondent violated Section 8(a)(1) of the Act." ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Re- lations Board adopts as its Order the recommended Order of the Administrative Law Judge, as modi- fied below, and hereby orders that the Respondent, Admiral Merchants Motor Freight, Inc., Chicago, Illinois, its officers, agents, successors, and assigns, shall take the action set forth in the said recom- mended Order, as so modified: 1. Insert the following as paragraph l(d) and re- letter the subsequent paragraph accordingly: "(d) Threatening employees with closure of the Chicago terminal unless they agree to modifica- tions of existing contractual benefits and threaten- ing not to recall employees from layoff unless they agree to modifications of existing contractual bene- fits." 2. Substitute the following for paragraphs 2(e) and (f): "(e) Preserve and, upon request, make available to the Board or its agents, for examination and copying, all payroll records, social security pay- ment records, timecards, personnel records and re- ports, and all other records necessary to analyze the amount of backpay due under the terms of this Order. "(f) Post at its Chicago, Illinois, facility copies of the attached notice marked 'Appendix.'4 Copies of said notice, on forms provided by the Regional Di- rector for Region 13, after being duly signed by Respondent's authorized representative, shall be posted by Respondent immediately upon receipt thereof, and be maintained by it for 60 consecutive days thereafter, in conspicuous places, including all places where notices to employees are customarily posted. Reasonable steps shall be taken by Re- spondent to insure that said notices are not altered, defaced, or covered by any other material." 3. Substitute the attached notice for that of the Administrative Law Judge. 136 ADMIRAL MERCHANTS MOTOR FREIGHT, INC. APPENDIX NOTICE To EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government After a hearing at which all sides had an opportu- nity to present evidence and state their positions, the National Labor Relations Board found that we have violated the National Labor Relations Act, as amended, and has ordered us to post this notice. WE WILL NOT refuse to bargain collectively concerning wages, benefits, hours, and other terms and conditions of employment with Automobile Mechanics Local 701, Internation- al Association of Machinists and Aerospace Workers, AFL-CIO, as the exclusive bargain- ing representative of the employees in the fol- lowing unit: All head mechanics, leadmen and/or fore- men, automotive machinists, mechanics, trailer mechanics, helpers, skilled tiremen, stockmen, journeymen, stockroom utility ap- prentices and apprentices employed by us at our facility currently located at 5504 West 47th Street, Chicago, Illinois, but excluding all other employees and guards and supervi- sors as defined in the Act. WE WILL NOT bypass the Union and deal di- rectly and individually with any of our em- ployees in the aforesaid unit with respect to any changes or modifications in existing or contractually established wages, benefits, hours, and other terms and conditions of em- ployment. WE WILL NOT refuse to bargain collectively with the above labor organization by unilater- ally and without consultation with, or prior notification to, such labor organization, chang- ing or modifying existing or contractually es- tablished wages, benefits, hours, and other terms and conditions of employment of em- ployees in the aforesaid unit. WE WILL NOT threaten employees that we will close the Chicago terminal unless they agree to modifications of existing contractual benefits. WE WILL NOT threaten employees that we will not recall them from layoff unless they agree to modifications of existing contractual benefits. WE WILL NOT in any like or related manner interfere with, restrain, or coerce employees in the exercise of the rights guaranteed them by Section 7 of the Act. WE WILL, upon request, bargain collectively with the Union as the exclusive bargaining representative of our employees in the appro- priate unit with respect to wages, hours, and other terms and conditions of employment. WE WILL notify, meet, and bargain with the Union before modifying, changing or eliminat- ing any existing or contractual benefits of em- ployees in the appropriate unit. WE WILL reinstate the contractual benefits of employees in the appropriate unit in the manner, form, and amounts which existed prior to September 1, 1980, consistent with the collective-bargaining agreement between us and the Union. WE WILL make whole employees for any loss of wages and other benefits they may have suffered as a result of the unlawful modi- fication of contractual benefits to which they were entitled, with interest. ADMIRAL MERCHANTS MOTOR FREIGHT, INC. DECISION STATEMENT OF THE CASE ROBERT A. GIANNASI, Administrative Law Judge: This case was heard on September 3, 1981, in Chicago, Illinois. The complaint alleges that Respondent violated Section 8(a)(5) and (1) of the Act by failing to notify and bargain with the Charging Party Union and dealing di- rectly with employees in modifying existing benefits set forth in a collective-bargaining agreement of the parties. Respondent, in its answer, denies the substantive allega- tions of the complaint. The General Counsel made an oral presentation at the conclusion of the hearing and Respondent thereafter filed a written brief. Based upon the entire record in this case, including the testimony of the witnesses and my observation of their demeanor, I make the following: FINDINGS OF FACT I. THE BUSINESS OF RESPONDENT At all times material, Respondent, a Minnesota corpo- ration, was engaged in the business of interstate trucking. It maintained its principal office in St. Paul, Minnesota, and maintained terminals in about nine States, including one located at 5504 West 47th Street in Chicago, Illinois, the site of the instant dispute. During a representative 1- year period, Respondent derived gross revenues in excess of $50,000 from the transportation of freight and com- modities from the State of Illinois directly to points out- side Illinois and performed services valued in excess of $50,000 which were performed outside of Illinois. Ac- cordingly, I find, as Respondent admits, that it is an em- ployer engaged in commerce within the meaning of Sec- tion 2(2), (6), and (7) of the Act. 137 DECISIONS OF NATIONAL LABOR RELATIONS BOARD 11. THE LABOR ORGANIZATION The Charging Party Union (hereafter the Union) is a labor organization within the meaning of Section 2(5) of the Act. 111. THE UNFAIR LABOR PRACTICES A. The Facts Since about 1955, Respondent and the Union have been parties to successive collective-bargaining agree- ments, the most recent of which is effective through April 30, 1982. Respondent recognizes the Union as the exclusive bargaining representative for the following unit of employees: All head mechanics, leadmen and/or foremen, automotive machinists, mechanics, trailer mechan- ics, helpers, skilled tiremen, stockmen, journeymen, stockroom utility apprentices and apprentices em- ployed by Respondent at its facility currently locat- ed at 5504 West 47th Street, Chicago, Illinois, but excluding all other employees and guards and su- pervisors as defined in the Act. The bargaining agreement of the parties is a typical one which covers a wide range of benefits, wages, hours, and terms and conditions of employment. On August 29, 1980, Robert E. Short, the president and owner of Respondent, visited the Chicago terminal and gave a speech to assembled employees. No repre- sentatives of the Union were present. Short told the em- ployees that Respondent was having economic difficul- ties. He also explained that a Federal district court in Minnesota had ordered Respondent to make.certain pay- ments it owed to pension and welfare funds created pur- suant to agreements between Respondent and the Team- sters representing other of its employees. He explained that a so-called debt reduction plan had been devised whereby employees at the St. Paul terminal had given up some of their benefits in order to help Respondent pay its obligations and help it out of its financial difficulties. He asked the Chicago employees similarly to forgo some of their benefits and stated that if the employees did not agree to this debt reduction plan, Respondent would not be able to operate and would probably close. After the speech, letters describing Respondent's debt reduction plan were distributed to employees. The letter written by Respondent was to be signed by employees who agreed to "changes in [their] terms of compensation .... " The letters read as follows: As a concerned . . . employee of Admiral Mer- chants Motor Freight, Inc., who is interested in the continuing operation of the trucking company, I hereby offer that you make the following changes in my compensation during the twelve (12) month period beginning September 1, 1980 and ending August 31, 1981: (1) No paid holidays during the period involved. (2) No paid sick days during the period involved. (3) Reduction of paid vacation pay to two (2) weeks. (4) Reduction of gross weekly wages by the com- bined amount of the weekly Health, Welfare and Pension contribution to the Labor funds. (5) Road drivers to be paid mileage or hourly pay only, which ever is applicable. (6) No Contract wage increase during the period involved. (7) No overtime pay during the period involved. It is understood that the continued Operation of Admiral Merchants Motor Freight, Inc. will be re- viewed from time to time to make certain that Man- agement is successfully re-organizing the carrier. The letters were distributed to the bargaining unit em- ployees by Shop Foreman Earl Berg and signed by all of them within a day or two after the speech. When Berg distributed the letters to employees who had not attend- ed the Short speech, he explained the debt reduction plan to them. According to Berg, no one objected to signing the letter. However, employee John Plaza testi- fied that he was at home on layoff status when the August 29 speech was given. In early September he was called at home by Shop Foreman Berg and told to report to the terminal. He did. Berg presented him with the letter incorporating the debt reduction plan and was told to sign it. Berg said that all the other employees had signed similar letters. Berg also told him that "if I didn't sign it I don't go back to work." Plaza signed the letter. About 2 weeks later he was recalled from layoff status and worked continuously until the second week in Janu- ary 1981.1 It was stipulated that the changes set forth in the let- ters distributed to and signed by employees were put into effect and continued in effect until January or February 1981 when Respondent ceased active operations at its Chicago terminal. The employees did not receive a wage increase which was due under the collective-bargaining agreement on November 1, 1980. At no time between January 1, 1980, and January 1, 1981, did Respondent ever request bargaining or actually bargain with the Union over modifications of the collec- tive-bargaining agreement with respect to wage in- creases, overtime or holiday pay, vacation time or days off, or contributions to health, welfare, or pension funds. Nor did Respondent notify the Union of proposed or actual changes in employee benefits. Sometime in mid-September 1980, Union President Donald Gustafson instructed Business Representative Smith to go to the Chicago terminal and investigate a report that the collective-bargaining agreement was being violated. As a result of the investigation, on Sep- tember 17, officials of the Union sent the following letter to Respondent: It has been brought to our attention that manage- ment representatives of your company have recent- ly been attempting to convince Local 701 members Berg did not controvert Plaza's testimony in this respect. 138 ADMIRAL MERCHANTS MOTOR FREIGHT, INC. employed as mechanics of Admiral Merchants to work under lesser conditions and benefits than those specified in the current labor agreement. I caution you that such action constitutes an unfair labor practice and further advise that Local 701 expects your company to fully comply with the terms specified in the current labor agreement. The letter was signed by Gustafson and Smith. Respond- ent did not respond to this letter. A day or two before the letter was sent, Smith visited the Chicago terminal and spoke with Berg and two other employees. At this time the letters had already been signed by the employees and Smith learned about Re- spondent's difficulties and the alteration in employee benefits. According to Smith, the meeting lasted 15 min- utes. Both Berg and Smith testified that Smith protested that Respondent's debt reduction plan was not in compli- ance with the collective-bargaining agreement. Berg could not recall this conversation in any meaningful detail, although he remembered telling Smith "a half of a loaf of bread [is] better than none." Smith was pressed by leading questions on cross-examination to admit that he gave tacit approval to the plan. He denied approving the plan, although he candidly stated that, in response to a question from an employee about what he would do if the company he worked for was going "down the drain," he may have said it was up to the employee as to what he should do in the circumstances. Smith, however, emphatically denied that he told Berg or any official of Respondent that it was free to make changes in the con- tract. Any suggestion by Respondent that Smith ap- proved, after the fact, Respondent's changes in working conditions and benefits of employees is completely un- founded. B. Discussion and Analysis Sections 8(a)(5) and 8(d) of the Act create an obliga- tion on the part of an employer to bargain with an in- cumbent union as the exclusive bargaining representative of its employees in the matter of wages, hours, and terms and conditions of employment. It may not attempt to cir- cumvent the exclusive status of the bargaining agent by attempting to deal directly with its represented employ- ees. Medo Photo Supply Corp. v. N.L.R.B., 321 U.S. 678, 684-685 (1944). And where a valid bargaining relation- ship is in effect, an employer may not unilaterally alter terms and conditions of employment without first afford- ing the bargaining representative of its employees the op- portunity to bargain about such changes until either agreement or impasse is reached. N.L.R.B. v. Benne Katz, et al., d/b/a Williamsburg Steel Products Company, 369 U.S. 736, 747-748 (1962); Harold Hinson d/b/a Hen House Market No. 3 v. N.LR.B., 428 F.2d 133, 136-137 (8th Cir. 1970). The evidence is clear that Respondent undertook to deal individually with employees, and actually dealt with them, by securing signed agreements from them in order to obtain a diminution in their existing benefits secured by contract. The evidence shows that it even coerced one employee to agree to a decrease in benefits by threatening that he would not be recalled to work if he did not agree. The changes were thereafter implemented. At no time before the implementation of benefit changes did Respondent notify the Union or seek to bargain with it over the changes. Nor does Respondent even claim it did. The Union did not acquiesce in Respondent's con- duct. Accordingly, by its failure to notify and bargain with the Union in such circumstances, Respondent vio- lated Section 8(a)(5) and (1) of the Act. 2 Respondent's defense for such a clear violation of the Labor Act is that its conduct was compelled by a district court "order" to pay off a debt it owed to a pension and health and welfare fund created pursuant to a bargaining agreement between Respondent and another union and that the order required the Chicago employees represent- ed by the Union to participate in the payment along with Respondent. This contention, clothed in a mish-mash of legal jargon, borders on the ridiculous. Here are the facts of the Minnesota district court pro- ceeding. Trustees of a Teamsters pension fund and a health and welfare fund sued Respondent in the United States District Court in Minneapolis, Minnesota, for de- linquent payments required under Respondent's collec- tive-bargaining agreement with the Teamsters. On August 7, 1980, the court issued a decision in which it granted summary judgment in favor of the Teamsters pension fund against Respondent in the amount of $576,251.99 and in favor of the Teamsters health and welfare fund and against Respondent in the amount of S380,920.79. The court also enjoined Respondent from failing to pay all moneys due the employee benefit funds under existing agreements. Judgment was entered on August 14, 1980. The judgment of the district court was affirmed by the United States Court of Appeals for the Eighth Circuit. Subsequently, on April 8, 1981, the par- ties to the district court action-the Teamsters funds and Respondent-entered into an agreement for a settlement of the original claims because of the initiation of involun- tary bankruptcy proceedings against Respondent and the institution of judicial compliance and debt reduction plans by Respondent in order to comply with the district court's judgment. The district court, in effect, accepted the settlement and dismissed the proceedings without prejudice on May 18, 1981. Respondent argues that all of its employees, including the Chicago mechanics represented by the Union, were bound by the district court order of August 7, 1980, and that operation of that judgment excused it from bargain- ing with the Union. The argument is preposterous. The district court's order states that "defendant Admiral Mer- chants Motor Freight. Inc., acting through its directors, officers, agents, servants, employees, shareholders, and all persons acting in privity or in concert with defendant, is enjoined from failing to pay all monies due" the Team- In his oral presentation. but not in his proposed order and notice, the General Counsel argues that Short's speech of August 29 and Berg's re- marks to employee Plaza constitute an independent violation of Sec. 8(aXI) of the Act because they tended to coerce employees into forgoing collective rights. I do not make such a finding because there was no such allegation in the complaint and the derivative violation of Sec. 8(aXI) en- compassed by my findings sufficiently reaches this conduct. It is unlikely that the remedy for such an independent violation would be significantly different than that ordered herein. 139 DECISIONS OF NATIONAL LABOR RELATIONS BOARD sters funds. (Emphasis supplied.) The injunction runs against Respondent and all persons acting on its behalf. In no way could employees with no connection to Re- spondent's corporate management or the underlying law- suit be held to be required to pay the corporation's judg- ments. Nothing in the judgment of the district court re- quired Respondent to extract from its employees the money required to pay the judgment. Nor does the court's subsequent approval of Respondent's so-called ju- dicial compliance or debt reduction plan constitute either a confirmation that innocent employees were bound by the judgment or a sanction of the means by which Re- spondent went about getting employees to satisfy its obli- gation. Even apart from its inherent lack of merit, Respond- ent's argument that the Chicago employees were bound by the district court's judgment against Respondent misses the point. In order for Respondent's argument to provide a successful defense to the unfair labor practice herein, one would have to conclude that the district court both had the authority to, and actually did, order Respondent to bypass the bargaining representative of employees completely unconnected with the suit and to extract payment for the judgment from those employees. Clearly the court had no such authority. It did not pur- port to pass on the bargaining obligation of Respondent with respect to a wholly different group of employees nor make any finding concerning the bargaining obliga- tion of Respondent under the Labor Act. Nor does the order of the district court in any way require Respond- ent to avoid bargaining with the exclusive bargaining representative of the Chicago mechanics and deal direct- ly with these employees in modifying an applicable bar- gaining agreement. Indeed, the order of the district court did not specify how or by what means Respondent should pay the judgment or comply with the order. Re- spondent's contention that it was incumbent upon the employees and the Union to enter an appearance in dis- trict court and argue that it was not bound by the judg- ment is specious. Since the judgment of the district court did not suspend Respondent's bargaining obligation under the Labor Act, there was no requirement that the Union or the employees do anything to protect their rights. Respondent also points to its dire economic condition in arguing that it was justified in acting unilaterally. This again is wholly without merit. It is exactly at such times when employees need their bargaining agent the most. For example, even where an employer properly ceases or closes operations, it is required to bargain over the ef- fects of such cessation or closure. See First National Maintenance Corp. v. N.L.R.B., 452 U.S. 666 (1981). Re- spondent was not going out of business in August 1980. It was seeking to continue operating and was seeking to do so by altering the contract and extracting from indi- vidual employees concessions to help pay money which it owed to another group of employees. The violation is clear notwithstanding the alleged dire economic circum- stances which Respondent argues entitle it unilaterally to suspend the employees' right to speak through their chosen and exclusive bargaining representative. See also Airport Limousine Service, Inc., et al, 231 NLRB 932, 934 (1977). CONCLUSIONS OF LAW 1. The Union is the exclusive bargaining representative of the following appropriate unit of employees: All head mechanics, leadmen and/or foremen, automotive machinists, mechanics, trailer mechan- ics, helpers, skilled tiremen, stockmen, journeymen, stockroom utility apprentices and apprentices em- ployed by Respondent at its facility currently locat- ed at 5504 West 47th Street, Chicago, Illinois, but excluding all other employees and guards and su- pervisors as defined in the Act. 2. By modifying and otherwise changing existing and contractually established wages, benefits, hours, and terms and conditions of its employees in the unit set forth above, unilaterally and without prior notice to, or consultation with, the Union, Respondent violated Sec- tion 8(a)(5) and (1) of the Act. 3. By disregarding and bypassing the Union and bar- gaining and dealing with its employees over modifica- tions and changes in their established wages, benefits, hours, and terms and conditions of employment, Re- spondent violated Section 8(a)(5) and (1) of the Act. 4. The above violations constitute unfair labor prac- tices affecting commerce within the meaning of Section 2(6) and (7) of the Act. THE REMEDY Having found that Respondent violated Section 8(a)(5) and (1) of the Act, I shall order it to cease and desist from the conduct found to be unlawful. I shall also order it to undertake affirmative action which will effectuate the policies of the Act, that is, to bargain collectively with the Union, to apply the collective-bargaining agree- ment to its employees and to make them whole for any loss of pay or other benefits they may have suffered by reason of Respondent's unlawful conduct. Such losses shall be reimbursed, with interest, in accordance with Isis Plumbing & Heating Co., 138 NLRB 716 (1962); F W. Woolworth Company, 90 NLRB 289 (1950); and Florida Steel Corporation, 231 NLRB 651 (1977). In addition, I believe that Respondent's defense in this case was patently frivolous. There were no factual issues in the case and the basic "legal" defense advanced by Respondent is absurd. There is no basis in fact or in law or in commonsense for Respondent's argument that the district court suspended its bargaining obligation under the Labor Act and permitted direct dealing with employ- ees. Indeed, the argument is so lacking in substance that it could not have been made in good faith. The same is true with respect to Respondent's argument that its eco- nomic situation justified unilateral action. Congress has expressed its view that Government ought not proceed against certain respondents in frivo- lous cases and has thus created machinery for recovery of litigation expenses against the Government in such cases. (Equal Access to Justice Act, Public Law 96-481, 140 ADMIRAL MERCHANTS MOTOR FREIGHT, INC. 94 Stat. 2325 (October 21, 1980).) Respondents likewise should not be permitted to make a mockery of the ad- ministrative process by interposing frivolous roadblocks to the enforcement of public rights. The Board and the Courts have recognized the Board's authority to tax a re- spondent for litigation expenses in cases where a re- spondent's defenses are "patently frivolous." See J. P. Stevens & Co., Inc., 239 NLRB 738, 772 (1978), enfd. in part and modified and remanded in part 623 F. 2d 322, 328-330 (1980); District 65, Distributive Workers of Amer- ica v. N.L.R.B., 593 F.2d 1155, 1167-70 (D.C. Cir. 1978) (Bazelon, J., concurring and dissenting). This is such a case. Accordingly, I shall recommend that Respondent be ordered to reimburse the General Counsel and the Charging Party for all the expenses incurred by them in the investigation, preparation, presentation and conduct of this case "including the following costs and expenses incurred in . . . the Board . . . proceedings, reasonable counsel fees, salaries, witness fees, transcript . . . costs, printing costs, travel expenses and other reasonable costs and expenses." J. P. Stevens, supra, 239 NLRB at 773. Upon the foregoing findings of fact and conclusions of law, upon the entire record, and pursuant to Section 10(c) of the Act, I hereby issue the following recom- mended: ORDER3 The Respondent, Admiral Merchants Motor Freight, Inc., Chicago, Illinois, its officers, agents, successors, and assigns, shall: 1. Cease and desist from: (a) Refusing to bargain collectively concerning wages, benefits, hours, and other terms and conditions of em- ployment with Automobile Mechanics Local 701, Inter- national Association of Machinists and Aerospace Work- ers, AFL-CIO, as the exclusive bargaining representative in the following unit: All head mechanics, leadmen and/or foremen, automotive machinists, mechanics, trailer mechan- ics, helpers, skilled tiremen, stockmen, journeymen, stockroom utility apprentices and apprentices em- ployed by Respondent at its facility currently locat- ed at 5504 West 47th Street, Chicago, Illinois, but excluding all other employees and guards and su- pervisors as defined in the Act. (b) Bypassing the Union and dealing directly and indi- vidually with any of its employees in the aforesaid unit I 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 find- ings, 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. with respect to any changes or modifications in existing or contractually established wages, benefits, hours, and other terms and conditions of employment. (c) Refusing to bargain collectively with the above labor organization by unilaterally and without consulta- tion with, or prior notification to, such labor organiza- tion, changing or modifying existing or contractually es- tablished wages, benefits, hours, and other terms and conditions of employment of employees in the aforesaid unit. (d) In any like or related manner interfering with, re- straining, or coercing employees in the exercise of their rights set forth in Section 7 of the Act. 2. Take the following affirmative action which will ef- fectuate the policies of the Act: (a) Upon request, bargain collectively with the Union as the exclusive bargaining representative of its employ- ees in the appropriate unit with respect to wages, hours, and other terms and conditions of employment. (b) Notify, meet, and bargain with the Union before modifying, changing, or eliminating any existing or con- tractual benefits of employees in the appropriate unit. (c) Reinstate the contractual benefits of employees in the appropriate unit in the manner, form, and amounts which existed prior to September 1, 1980, consistent with the collective-bargaining agreement between it and the Union. (d) Make whole any employees for any loss of wages and other benefits they may have suffered as a result of the unlawful modification of contractual benefits to which they were entitled, with interest, as set forth in the remedy section of this Decision. (e) Pay to the Board and the Union the reasonable costs and expenses incurred by them in the investigation, preparation, presentation, and conduct of this proceed- ing, as set forth in the remedy section of this Decision. (f) Post in conspicuous places at Respondent's Chica- go, Illinois, facility, including all places where notices to employees are customarily posted, for a period of 60 consecutive days, copies of the attached notice marked "Appendix." 4 Copies of said notice, on forms provided by the Regional Director for Region 13, shall be signed by Respondent's authorized representative and Respond- ent shall take reasonable steps to ensure that said notices are not altered, defaced, or covered by any other materi- al. (g) Notify the Regional Director for Region 13, in writing, within 20 days from the date of this Order, what steps Respondent has taken to comply herewith. 4 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 Pursu- ant to a Judgment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board." 141