Bay Shipbuilding Corp.

National Labor Relations Board - Board DecisionsAug 27, 1980

251 N.L.R.B. 809 (N.L.R.B. 1980)

BAY SHIPBUILDING CORPORATION 809 Bay Shipbuilding Corporation and Local 449, Inter- national Brotherhood of Boilermakers, Iron Shipbuilders, Blacksmiths, Forgers and Helpers, AFL-CIO. Case 30-CA-4558 August 27, 1980 DECISION AND ORDER BY MEMBERS JENKINS, PENELLO, AND TRUESDALE Upon a charge filed on February 15, 1978, by Local 449, International Brotherhood of Boiler- makers, Iron Shipbuilders, Blacksmiths, Forgers and Helpers, AF-CIO, the General Counsel of the National Labor Relations Board, herein called the Board, by the Regional Director for Region 30, issued a complaint on January 25, 1979, alleging that Bay Shipbuilding Corporation, herein called Respondent, violated Section 8(a)(1) and (5) of the National Labor Relations Act, as amended, by uni- laterally changing insurance carriers and by refus- ing to bargain in good faith with respect to a change in insurance carriers and/or benefits. Copies of the charge and complaint and notice of hearing before an administrative law judge were duly served on the parties to this proceeding. On January 30, 1979, Respondent filed its answer, admitting in part and denying in part the allegations of the complaint, and submitting sepa- rate affirmative defenses, asserting, inter alia, that the complaint should be dismissed because an arbi- tration award resolved the issue underlying the charge herein in a manner compatible with the standards set forth in Spielberg Manufacturing Com- pany, 112 NLRB 1080 (1955). On February 22, 1979, Respondent filed directly with the Board a Motion for Summary Judgment and a memorandum in support thereof, with exhib- its attached. Based on its contention that the allega- tions of the unfair labor practice complaint have been resolved in an arbitration proceeding and award, Respondent requests that the Board defer to the arbitrator's award and enter summary judgment in its favor. On February 26, counsel for the Charging Party and counsel for the General Counsel filed their op- positions to the motion.' On March 15 Respondent filed a reply to the oppositions. Thereafter the par- ' Contrary to the contention of the General Counsel, the motion is properly before the Board. Although the motion was not immediately served on the General Counsel. it was served later. We see no reason to require Respondent to refile the motion. The motion is based on Re- spondent's affirmative defense that the case should be deferred to arbitra- tion and is. thus. hased on the pleadings. As the authenticity of the award. attached as an exhihit to the motion. is uncontested there are no factual disputes material to the motion In addition. the General Counsel does not object to a ruling on the deferral issue 251 NLRB No. 114 ties filed additional statements in support of or in opposition to the motion. 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. Upon the entire record in this proceeding, the Board makes the following: Ruling on the Motion for Summary Judgment Respondent and the Union have been parties to a series of collective-bargaining agreements. The cur- rent contract contains a provision which states: The parties agree to the present insurance coverage for the duration of this Agreement unless changed by mutual agreement of the parties. Under the prior collective-bargaining agreements between the parties, Wisconsin Employers Group (W.E.G.) was expressly designated as the insurance carrier. On January 18, 1978, Respondent met with the Union and announced that it intended to change insurance carriers by replacing W.E.G. with an employer's self-insurance plan. The Union filed a grievance which was denied and, on Febru- ary 15, the Union filed charges with the Board al- leging Respondent had violated Section 8(a)(5) and (1) by its unilateral conduct in changing insurance carriers. On April 25, Respondent wrote the Board's Regional Office in Milwaukee, Wisconsin, and stated that Respondent was willing to submit to arbitration the following questions: Whether the Company violated the said col- lective bargaining agreement by, on or about March 1, 1978, changing the carrier of certain negotiated insurance benefits from W.E.G. (Wisconsin Employers Group) to a self insur- ance plan administered by Employers Mutual of Wausau? If so, what is the appropriate remedy? On April 26, the Regional Director issued a letter stating that further Board proceedings would be deferred because the parties had agreed to arbi- trate. In so doing, the Regional Director relied on Board policy as expressed in Collyer Insulated Wire, A Gulf and Western Systems Co., 192 NLRB 837 (1971). A hearing was held before an arbitrator on June 14 and 15, and the arbitrator issued an award on December 1, 1978. The arbitrator found, inter alia, that Respondent did not violate the current con- tract when it unilaterally replaced insurance carri- ers. Respondent requests that we defer to this award. 810 DECISIONS OF NATIONAL LABOR RELATIONS BO)ARD In their respective oppositions to Respondent's motion, the General Counsel and the Charging Party argue that deferral to the award is inappro- priate because the arbitrator failed and refused to pass on the unfair labor practice issue, and because the award is contrary to unfair labor practice deci- sions under the Act. In its reply to the oppositions filed by the General Counsel and the Charging Party, Respondent concedes that the arbitrator did not address the statutory issue but maintains that the Board should defer to the award because the matter is essentially one of contract interpretation and the arbitration award resolved the underlying unfair labor practice issue. We agree with Re- spondent. The issue submitted to the arbitrator was wheth- er the Company violated the collective-bargaining agreement by changing the carrier of certain insur- ance benefits. The arbitrator found that the Compa- ny, after some discussion with the Union, discon- tinued its prior coverage under Wisconsin Employ- ers Group and Rural Security Life Insurance Com- pany and instituted a self-insurance plan adminis- tered by Wisconsin Employers Insurance Compa- ny. The change did not result in any diminution of insurance benefits but did result in lower premiums to employees. The Company contended that the change was permitted under the recently negotiat- ed 1977-80 contract; the Union contended that the change violated the contract. Insurance benefits had been a subject of the ne- gotiations leading to the new contract. Ultimately the parties agreed to the following provision: The parties agree to the present insurance cov- erage for the duration of this Agreement unless changed by mutual agreement of the parties. As clarified by the abitrator, the question is what the parties meant by the term "coverage." In the previous contract the pertinent language read "the parties agree to the present insurance coverage and carrier...." The arbitrator found that the parties, thus, did not define "coverage" to include carrier but to mean only benefits. In addition, as the carri- er issue had been "a very significant issue" in the negotiations for the new contract, the Union was given effective notice that the new contract failed to designate the carrier. Thus, the arbitrator found, "The absence of the phrase 'and carrier' in the 1977-80 contract therefore supports the Company's position." The arbitrator found further support for the Company's position in statements made during ne- gotiations for the new contract. At one session the Union asked, "Do you plan to become self-in- sured?" The Company said, "This is one of the points we are considering." The Union then stated, "We figured that and that is why we mentioned re- cently that coverage be no less than it is now." As the term "coverage" was used by the parties to mean benefits, the arbitrator concluded "there is considerable merit in the Company's position that the Union [at that session] agreed that the Compa- ny was free to change carriers, provided only that the level of benefits remained the same." Accord- ingly, the arbitrator concluded that the Company did not violate the contract and denied the griev- ance. We find that the arbitration award fully meets the Spielberg standards for deferral. The proceeding was fair and regular, all parties agreed to be bound, and the result is not clearly repugnant to the pur- poses and policies of the Act. Although, as recog- nized by the arbitrator, the Union never expressly agreed that Respondent could alter the insurance carrier and the contract provision lacked precision, the conclusion that the contract permitted Re- spondent to make the change is not unreasonable as there was a significant change from the prior con- tract, the matter was an important issue in negotia- tions, and union statements during negotiations may reasonably be considered a concession on the point. The lack of precision is a frequent occurrence in collective-bargaining agreements and not altogether undesirable. A bargaining agreement is "a code for the government of an industrial enterprise" and must necessarily at times lack precision. In addi- tion, the process of collective bargaining, of pro- posals, counterproposals, give-and-take, and com- promise, leads to imprecise and sometimes conflict- ing provisions. In recognition of these problems, parties to collective bargaining have agreed, as here, to grievance and arbitration procedures to re- solve the problems. In the instant proceeding, the arbitrator has resolved a dispute over the meaning of a contract provision-the very function labor ar- bitration was designed to fulfill. Our dissenting colleague declines to defer be- cause the arbitrator refused to pass on the statutory issue and because, in his view, the award is con- trary to the Board's unfair labor practice decisions. With respect to the first point, the arbitrator spe- cifically stated that he was not deciding whether Respondent violated Section 8(a)(5) of the Act. Nevertheless, he made factual findings, in the course of resolving the contractual issue, which re- solve the unfair labor practice issues. This is all that is necessary for deferral. The pivotal unfair labor practice issue herein is whether Respondent's change of insurance carriers constituted a modification of the contract or was BAY SHI'PBUILDING CORPO)RATION .I I simply an action permitted by the contract. Here the arbitrator found that the contract permitted the Company to change carriers, a determination he clearly had the authority to make. As the action was permitted by the contract, it does not consti- tute a modification of the contract and is not uni- lateral action in violation of the Act. Thus, the ar- bitrator's factual determination of the meaning of the contract has resolved the unfair labor practice issues herein. Our dissenting colleague also argues that the award is contrary to the Board's unfair labor prac- tice decisions. First he cites cases holding that it is an unfair labor practice to unilaterally modify in- surance benefits. Second he cites cases holding that waiver of a bargaining right must be unequivocal. The award, however, is contrary to neither line of cases. The arbitrator found that Respondent made a contractually permitted change. There was, thus, no unilateral modification of insurance benefits. Second, this is not a waiver case because the par- ties bargained over insurance benefits and the matter was covered by the contract. As stated in Elizabethtown Water Company, 234 NLRB 318, 320 (1978), erroneously relied upon by the dissent, "An employer must bargain . . . in regard to a manda- tory subject of bargaining not specifically covered in the contract or unequivocally waived by the union." (Emphasis supplied.) In sum, Respondent acted on its view of the con- tract provision, the Union disagreed and filed a grievance pursuant to the procedure set up by the contract to resolve such disagreements, the matter was pursued through arbitration, and the arbitrator, acting on his authority to interpret the contract, ruled in favor of Respondent. 2 Accordingly, we defer to the arbitration award, grant the Motion for Summary Judgment, and dismiss the complaint in its entirety. ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Re- lations Board hereby orders that the complaint herein be, and it hereby is, dismissed in its entirety. MEMBER TRUESDALE, concurring: B' y insisting that the Board decide the dispute over he meaning of one contract provision, our dissenting colleague ignores the clear mean- ing of another provision-that all such disputes are to be resolved through the grievance and arbitration procedure. In so doing he not only belittles the very real contribution of grievance arbitration to industrial peace but also discourages the parties from relying on bargaining and their own bargaining agreement Labor relations stability has been achieved in his country through collective bargaining in which the par- ties determine their own fate. For the Board unnecessarily to impose its solution to disputes between the parties. as our dissenting colleague would do, discourages the parties' reliance on themselves and erode, the industrial stability achieved under the Act Although I join Member Penello in the majority decision, I am concurring separately because I find that this case is governed by Atlantic Steel Compa- ny, 245 NLRB No. 107 (1979), a case in which Member Penello and I set forth separate opinions. In Atlantic Steel, I pointed out that: A review of the decisions shows that, while it may be preferable for the arbitrator to pass on the unfair labor practice directly, the Board generally has not required that he or she do so. Rather, it is necessary only that the arbitra- tor has considered all of the evidence relevant to the unfair labor practice in reaching his or her decision. I also relied on evidence in Atlantic Steel that the arbitrator's findings were "both complete and com- prehensive and factually parallel to the unfair labor practice question." Here, as in Atlantic Steel, it is clear that the arbitrator "has considered all of the evidence relevant to the unfair labor practice in reaching his . . . decision," and that the contrac- tual and statutory issues are parallel. My dissenting colleague, however, argues that this case should be governed by Suburban Motor Freight, Inc., 247 NLRB No. 2 (1980). With all due respect, I believe that my dissenting colleague mis- apprehends the holdings of Suburban Motor Freight and Atlantic Steel, respectively. Contrary to the in- stant case, in Suburban Motor Freight the parties had not presented the arbitrator with the evidence relevant to the unfair labor practice. For this reason, I joined a majority of the Board in finding that deferral was inappropriate. And, on this basis, we overruled Electronic Reproduction Service Corpo- ration, 213 NLRB 758, 761 (1974), a case in which the Board deferred to an arbitration award even though the evidence relevant to the unfair labor practice, at least with respect to two employees, had been intentionally withheld from the arbitrator. We are not presented with a Suburban Motor Freight issue in this case, for here the arbitrator was presented with the evidence relevant to the statutory claim. The issue here, as in Atlantic Steel, is whether there is a parallelism between the con- tractual and statutory issues, such that, by resolv- ing the contractual issue, the arbitrator implicitly resolved the unfair labor practice." We find that there is parallelism, and that he did implictly re- solve the unfair labor practice. Atlantic Steel re- ' Like .4lantic Steel. Suburban fotor Freight does not require that an arbitrator pass on the unfair labor practice explicitlv Rather, he Board stated that it would not defer to an aard "which hears no indicationll that the rbitrator ruled on the siatutory i,,ue "Here. the award does indicate. b irilue of the arhitralt r', factual findinlgs anid the rluall- Is identical nature of the contract;al and legal issues that the arbitrator passed in the unfair labor practice questin 812 DECISIONS OF NATIONAL LABOR RELATIONS BOARD quires no more. For this reason, and those stated in the majority opinion, I find deferral to be appropri- ate. MEMBER JENKINS, dissenting: I find deferral to the arbitrator's award is inap- propriate. Hence, I would deny Respondent's Motion for Summary Judgment. 4 Deferral to the arbitrator's award is inappropri- ate here because the arbitrator did not address him- self to the unfair labor practice issue and because his award is contrary to unfair labor practice deci- sions under the Act. That the arbitrator refused to pass on the statutory issue is clear. Here the arbi- trator specifically stated: . . . as the letter 5 does not elsewhere state that the Company was willing to arbitrate the stat- utory issue, and inasmuch as the Company at the hearing objected to the arbitrator consider- ing said statutory issue, it must be concluded that said issue is not properly before the arbi- trator. In Suburban Motor Freight, Inc., 247 NLRB No. 2 (1980), the Board expressly overruled Electronic Reproduction6 and held that "we will no longer honor the results of an arbitration proceeding under Spielberg unless the unfair labor practice issue before the Board was both presented to and considered by the arbitrator." In the arbitration de- cision to which my majority colleagues defer here, the arbitrator stated that the statutory "issue is not properly before the arbitrator." It is plain, there- fore, that the majority's decision in the instant case to defer to the arbitrator's ruling is directly at odds with the standard announced in Suburban Motor Freight. While Member Penello dissented in Suburban Motor Freight, I note that Member Truesdale joined Chairman Fanning and me in forming the majority to expressly overrule Electronic Reproduction. Member Truesdale here distinguishes Suburban Motor Freight on the ground that the "contractual and statutory issues are parallel" in the instant case. Nowhere in Suburban Motor Freight did the major- ity indicate that the standard that the issue "was 4 In view of the fact that the General Counsel does not object to a ruling on the deferral issue and my disposition of Respondent's motion I do not pass on the General Counsel's contention that the motion failed to comply with the Board's Rules and Regulations. I Respondent's letter of April 25 to the Regional Director stated that Respondent was willing to submit to arbitration the following questions: Whether the Company violated the said collective bargaining agreement by, on or about March 1, 1978, changing the carrier of certain negotiated insurance benefits from W.E.G. (Wisconsin Em- ployers Group) to a self insurance plan administered by Employers Mutual of Wausau? If so, what is the appropriate remedy? Electronic Reproduction Service Corporation. et L.. 213 NLRB 758 (1974). both presented to and considered by the arbitrator" would be relaxed where such issues "are parallel." In addition, it is plain that the arbitrator's deci- sion here does not comport with our decisions in cases such as Bastian-Blessing, Division of Golconda Corporation, 194 NLRB 609 (1971); 195 NLRB 1108 (1972), and Wisconsin Southern Gas Company, Inc., 173 NLRB 480 (1968). Even accepting my colleagues' standard, I do not find that the arbitra- tor has considered all of the evidence relevant to the unfair labor practice in reaching his decision. Thus, the arbitrator's decision offers no indication whether the new carrier has adequate unencum- bered funds to pay claims or interprets the limits of coverage as did the old carrier. Such matters were important considerations in the cases cited supra, which cases the Charging Party and the General Counsel rely on in urging that the arbitrator's deci- sion does not comport with Board Decisions. I also note that, to the extent the instant award turns on the arbitrator's apparent finding of an im- plied waiver of the Union's right to bargain over the identity of the insurance carrier, such a result plainly is at odds with our unfair labor practice de- cisions resolving such an issue under the Act. See, for example, GTE Automotive Electric Incorporated, 240 NLRB 297 (1979); Elizabethtown Water Compa- ny, 234 NLRB 318 (1978); and N L Industries, Inc., 220 NLRB 41 (1975). My colleagues' holding is not only inconsistent with accepted Board decisions but also fails to rec- ognize that the complaint allegations here include two separate issues. The primary complaint allega- tion is that "Respondent unilaterally changed insur- ance cariers and . . . has failed and refused to bar- gain in good faith with respect to the change in in- surancecarriers. ..-. "7 It is settled that the identity of an insurance carrier is a mandatory subject of bargaining. It is undisputed that the identity of the insurance carrier is not specifically covered in the contract. And it is admitted that Respondent changed the insurance carrier during the term of the contract without notice to or bargaining with the Union. The statutory issue is, therefore, wheth- er the Union waived its right to bargain over the change in the insurance carrier. In answering that statutory question, the Board looks to see whether 7 The complaint allegation in full states: 7. Commencing in or about January 1978, the exact date being un- known to the Regional Director, Respondent unilaterally changed insurance carriers and since such date has failed and refused to bar- gain in good faith with respect to the change in insurance carriers and/or benefits It is readily apparent that the primary allegation here relates to the change in insurance carriers and that the additional issue of any change in benefits is raised by the phrase "and/or benefits' at the end of the allega- tion. BAY SHIPBUILDING CORPORATION 813 the waiver was explicit and will not imply such a waiver. 8 The resolution of the statutory issue over the change in insurance carriers has nothing to do with whether the change in carriers had any effect on employee benefits. This latter matter presents a " Unless Member Truesdale does not subscribe to the Board's holding that a waiver must be explicit. I am unable to understand why he consid- ers this case to be governed by Atlantic Steel. It is clear that the arbitra- tor's legal conclusion (resting on an implied waiver) is inconsistent with the result that would be reached when the Board's standard of unequivo- cal waiver is applied. Thus, the subject case appears to be more like Sea- Land Service. Inc.. 240 NLRB 1146 (1979), than Atlantic Steel. In both Sea-Land and here, the arbitrator's legal conclusions are not consistent with Board law. See Member Truesdale's analysis in fn. 16 of Arlantic Steel and fn 8 of Sea-Land. separate and distinct issue raised by the other com- plaint allegation before us. There again it is undis- puted that the arbitrator's decision offers no indica- tion as to whether the new carrier has adequate un- encumbered funds to pay claims or interprets the limits of coverage as did the old carrier. But these are matters the Board considers in determining the second complaint allegation of whether an unlaw- ful unilateral change in benefits has occurred. By treating the complaint allegations solely as a change of carrier issue, my colleagues have not cri- tiqued the dance but only the change of dancers in the middle of the dance. I dissent.